I move:—
"That the Bill be read a Second Time."
It appears to me that the principle which has to be considered in this Bill at this stage, and which is embodied in this Bill, is a simple one—I have already stated it in reply to some of the remarks of Deputy Cosgrave— whether we do or do not think it expedient to reduce public expenditure in the manner provided in this Bill. I do not want to go into all the points which have already been raised from the Opposition benches in regard to the measure, because I do not think they are points which would properly arise at this stage. They are merely Committee points.
As to whether proposals are equitable between one section of the public service and another is a matter which would more properly be discussed in the debate on the schedules to the Bill rather than at this stage. What we have to consider is whether, in view of the financial position of the State and of the community generally, we should make some attempt to reduce the burden of public expenditure. These proposals which the Government is putting before the House now are proposals which have been long deferred but have also been long demanded. Last year in submitting my Budget statement on 11th May I said: "I shall have to ask for sacrifices from those who are engaged in public employment to help me to find the remainder. I propose to find by reductions in salaries and allowances in the various branches of the Public Service, and I hope I may be able to say later that this has included the Judiciary, the sum of £250,000. In the light of the community's urgent need this cannot be regarded as too large a sum to ask." It was hoped at that time to secure these reductions by agreement, and a large part of the time not only of the Minister for Finance but of other members of the Executive Council was taken up in endeavouring to secure what would be in all the circumstances a fair reduction and one acceptable to the various branches of the services concerned. Unfortunately, after prolonged negotiation it was not found possible to secure the necessary acquiescence. Having satisfied myself that nothing was to be hoped for from negotiation, I appointed a Committee of independent persons to consider proposals afresh. I cannot speak too highly of the zeal and public spirit with which the members of that Committee approached a very difficult task. They were asked to work within a time limit, and to consider all the relevant circumstances. I regret to say that the reports received disclosed such a difference of opinion among them and, I am sorry to say, such an inability to appreciate the requirements of the Exchequer, that their labours have not been of the assistance to me which I hoped.
Accordingly, the Government was thrown back on this position. Having failed to secure these reductions by negotiation, and an examination of the problem by an independent Committee having shown such a divergence of views as to what was proper in regard to these matters that no less than three reports substantially and radically different from each other were presented—to one of these three reports a reservation on a matter of vital principle was appended which constituted in effect a fourth report— the Government had to consider the position from its own point of view. Unaided by the services concerned and unassisted practically by the reports of the Committee which had been presented to it, it had to formulate its own policy in regard to these services. That policy, so far as we have been able to ensure it, is, I believe, an equitable one and is enshrined in the schedules to this Bill.
I do not think it is desirable at this stage to discuss the schedules. As I have already indicated, I think if there is to be a debate it should confine itself entirely to the question of principle as to whether there should or should not be some reduction in public expenditure of the kind adumbrated in the measure now before the House. I think what I have said in that regard applies with particular force to the amendment which I understand appears on the Order Paper in the name of Deputy Dillon. If I may suggest so, I think that amendment might be more properly moved at a later stage of the discussion after the House has decided first of all whether there should be economies and secondly, as to how the sacrifices which such economies will exact should be distributed over the several services. Then the House might consider whether the measure should be allowed to proceed further until the particular economy which Deputy Dillon thinks desirable should be made.
I do not know whether the House would like me to go through the Bill in detail. Section 1 is merely the short title. Section 2 is the definition section. Section 3 is a special section defining the word "salary" to include "all salary, pay, wages, commission, fees, and other remuneration, whether fixed or paid under statute, order, or regulation or otherwise howsoever, and whether calculated by reference to a period of time or by reference to work done." It provides that salaries which include "allowances and benefits (whether paid in money or given otherwise than in money) forming part of the remuneration attached to an office, but does not include any payment made by way of allowance for or reimbursement of specific expenses incurred nor any payment (whether separate or included in other remuneration) which is expressly made as an allowance (other than a uniform allowance) for or towards necessary equipment." That is to say, that travelling and hotel expenses which may be incurred by public servants in the discharge of the duties of their office are excluded from the definition of "salary" as they most properly should be. This section also provides that "where a person holds two or more offices from the salaries of which deductions are required by the same Part of this Act to be made, his salary for the purposes of such deductions shall be taken to be the aggregate amount of the respective salaries of those offices." Section 4 is a saving section which provides that "nothing in this Act shall affect the amount of salary by reference to which the amount of any compensation, superannuation allowance, pension, or gratuity is computed." That is to say, that as this is a temporary measure and will run for a period of one year, a civil servant who should retire in this year will not be prejudiced as regards the pension which will be properly payable to him because his salary in the year of his retiral has been subject to the deductions set out in this Bill. Section 5 is a safeguarding clause. It provides that the making under this Act of a deduction from salary shall not terminate a contract of service.
Part II of the Bill sets forth the general powers to make deductions from the salaries of those who are directly employed in the public service. As will be seen from sub-section (1) of Section 6 this Part of the Act applies to every person who is employed as (1) commissioned officer in or a chaplain to the Defence Forces of Saorstát Eireann; (2) as a member of the Gárda Síochána; (3) as a teacher in a national school; (4) in any capacity in a preparatory college; (5) in any other civil capacity, whether permanent or temporary, in the public service of Saorstát Eireann, and is remunerated wholly or partly (whether directly or indirectly) out of the Central Fund or moneys provided by the Oireachtas or a fund under the control of a Minister.
Sub-section (2) provides that "this Part of the Act applies to a person whether his employment is whole-time or part-time, or is for particular work or a particular occasion, and whether the amount of his salary is fixed by statute or otherwise." Of course this Part of this Act only applies "to a person only so long and in so far as he is employed and remunerated in a manner mentioned in the foregoing sub-section of this section." That is, remunerated out of the Central Fund or moneys provided by the Oireachtas or a fund under the control of a Minister.
Sub-section (3) of this section provides that nothing in this part of the Act shall apply to any Judge of the Supreme Court, the High Court, or the Circuit Court, nor to any Justice of the District Court. I should not like any impression to be created in the public mind, or in the mind of the Oireachtas, that it is not proposed to ask the judiciary to accept deductions of a like magnitude to those which we are proposing to impose upon the other public servants by this measure. A separate Bill will be introduced in the House to deal with those. The necessity for separate proposals arises from the fact that that Bill will have to make provision for amending the Constitution.
Section 7 provides that the deductions will only be made from salaries earned and payable during the coming financial year—that is, during the financial year which will open to-morrow. I should like to emphasise the words "earned" and "payable." There are salaries which will be payable after the 1st April but which will have been earned prior to the 1st April. It is not proposed to make any deductions from these. On the other hand, there are salaries which will be payable after the 1st April, 1935, which will have been earned prior to the 1st April, 1935, and such payments will not come within the scope of this Bill. I am not saying that, if the financial position should not improve, it might not be imperative to deal with those salaries in another measure; but, at any rate, they are definitely excluded from the scope of this measure which proposes to make temporary reductions for a year only.
I should like to call the attention of the House to sub-section (5) of Section 7, which provides that "every deduction made before the passing of this Act from salary paid to a person to whom this Part of this Act applies which would have been a lawful deduction under this section if this section had then been in force shall be deemed to have been made under this section and to be and always to have been lawful accordingly." It is not anticipated, and it was not contemplated that the House would take all the stages of this measure in one day. Necessarily, it is a measure which merits a good deal of discussion in view of the many interests which it affects. It was not proposed, so far as discussion in detail was concerned, to limit that discussion in the House; but, at the same time, it is imperative, in view of the position which will confront the House next year, that economies should begin and be made at the earliest possible moment, and the most appropriate moment is at the opening of the financial year. Otherwise, if they are deferred beyond that, the Exchequer is going to suffer and the ratepayers and the taxpayers are going to suffer also.
However, I should hesitate, even though this sub-section were in the Bill which would give me power to do so, to apply the Act now and would prefer to await full legislative sanction at a future date. I should hesitate certainly to enforce that section, desirable and all as it is that it should be enforced—essential almost as it is—I should hesitate to enforce it unless the House had first of all accepted the principle of this measure, and it is in order that the Department of Finance may feel itself at liberty to enforce this section that the House has been asked to accept the principle of this Bill to-day.
Section 8 provides that "every doubt, question, and dispute which shall arise as to whether a person is or is not a person to whom this Part of this Act applies, or as to the amount of the salary for the purposes of this Part of this Act of any person or the amount of the deduction to be made under this Part of this Act from any such salary shall be determined by the Minister, whose determination thereof shall be final."
Part III of the Bill is designed to give the principle of economy in the public service a wider application than, possibly, hitherto has been contemplated. Part I of the Bill, as I have pointed out, deals merely with the cases of those who are paid directly, whether wholly or partly, out of the Central Fund or out of moneys provided by the Oireachtas. Part III proposes to deal with deductions from statutory and other grants and from certain salaries.
Section 9 gives power, first of all, to make deductions from salaries paid by certain statutory bodies, and it is set out in sub-section (1) that this applies "to every board, commission, company, or other body—
(a) which was established by or under a special statute or for the establishment of which express provision was made by a special statute or which, though incorporated under statutes of general application, is regulated in part by a special statute; and
(b) the whole or part of the surplus revenue of which is payable to the Exchequer either specifically or in the form of dividends or of repayment of advances."
The purpose of that is to bring within the scope of the measures members of statutory bodies, such as the Currency Commission, the Agricultural Credit Corporation, the Electricity Supply Board, vocational education committees, and servants of agricultural committees, and a whole host of people who derive a large part of their remuneration either directly from the public by reason of the public duties which they discharge or indirectly from the Exchequer by reason of the grants which the committees or bodies which employ them receive from the Exchequer. In sub-section (2) of this section it is provided that "from all salary which, during the current financial year is earned by and payable to any member of a body to which this section applies in his capacity as such member, a deduction shall be made of such amount and at such times as the Minister shall, in each case, direct, having regard to the deductions from salaries to be made under Part II of this Act and to the circumstances of the case.
That is to say, every member of the Currency Commission, for instance, would be subject to such a deduction as I should determine, having regard to the deductions which are being made, and which will be made under the Schedule in Part I of the Act, from public servants discharging work similar to or fulfilling functions analogous to those fulfilled by members of the Currency Commission or other boards such as the Electricity Supply Board. Sub-section (2) deals with members of these boards or bodies. Sub-section (3) deal with the employees of these boards or bodies and gives the Minister the following powers.
Every body to which this section applies shall make, in such manner and at such times as shall be approved of by the Minister, such deductions from the salaries earned and payable during the current financial year by and to persons (other than members) in the employment of such body as such body shall determine after consultation with the Minister and having regard to the amounts of the deductions from salaries to be made under Part II of this Act.
I should like to point out that that provision has been introduced in order to ensure that any deductions which will be made by these bodies from the salaries of their employees will be equitable in all the circumstances of the case. That is to say, that it will not be possible for any board of the sort to which this section applies to impose an undue burden on certain grades of their employees. It also provides, as sub-section (2) provides, that in making the deductions the board shall have regard to deductions made from salaries under Part II of the Act. That is to say, where the State is deducting as far as possible the deduction made by these boards should conform. Sub-section (4) provides that
All deductions from salaries shall be disposed of in such manner as the Minister, after consultation with the body concerned, shall direct.
That is to say, it is not proposed to appropriate in every case for the general purposes of the Exchequer the results of the savings which may be made through the operation of this section. For instance, in the case of the Currency Commission, there is no reason whatever why any savings that might result from this measure might not be appropriated for the general purposes of the Exchequer. On the other hand, in the case of the Agricultural Credit Corporation, it might be better that such savings, instead of being brought into the Exchequer for the general purposes thereof, might be set aside to build up a reserve or a contingency fund to meet whatever losses might arise during a year of financial stringency of this sort. That is to say, so far as any economies which might be made in these services at the expense of the staff, they should be used to strengthen the concern as a whole, and not merely be used for the general relief of the Exchequer. Again, in the case of the Electricity Supply Board, if deductions were to be made there it might be desirable, so far as it could be significantly done, that they might be passed on to the general body of consumers. Accordingly, as the House will readily understand, it might be wiser than merely appropriating these moneys for the general purposes of the Exchequer that these moneys might be used to better purpose.
Sub-section (4) of this section gives us power to utilise these moneys in these ways. Section 10 deals specifically with grants
"made annually under statute or otherwise out of the Central Fund to a university, college or other educational institution (not being a secondary school) or to a board, commission, company, association, or other body (whether corporate or unincorporated) and such grant is wholly or partly available in the hands of such institution or body for the payment of the salaries of persons employed by such institution or body, there
It provides that in such cases there shall be a deduction from the amount of such grant:
such sum as the Minister, after such consultation with the governing authority of such institution or body as he shall think proper, shall determine having regard to the proportion of such grant ordinarily applied to the payment of such salaries, to the deductions from salaries to be made under Part II of this Act, and to the other circumstances of the case.
Section 11 of the Bill provides that where a grant is made out of the Central Fund to any local authority or to any committee or other body
... the members of which are appointed wholly or partly by a local authority and such grant is wholly or partly available in the hands of such authority or body for the payment of the salaries of persons employed by it, there shall be deducted from the amount of such grant which falls to be made in the current financial year such sum as the Minister, after consultation with every other Minister who appears to him to be concerned, shall determine having regard to the proportion of such grant ordinarily applied towards the payment of such salaries, to the deductions from salaries to be made under Part II of this Act, and to the other circumstances of the case.
We are setting up a normal standard in these matters according to the circumstances of the case.
Section 12 provides in like manner:—
(1) Whenever a deduction is made under this Part of this Act from a grant, the body to whom such grant is made may make, from the salaries earned and payable in the current financial year by and to persons in the employment of such body, such deductions as such body shall, with the approval of the Minister, think proper having regard to the amount of the deduction so made from such grant, the proportion of such grant ordinarily applied towards the payment of such salaries, and to the other circumstances of the case.
Sub-section (2) provides:—
Before giving an approval under the foregoing sub-section the Minister shall consult with every (if any) other Minister who appears to him to be concerned.
So that the matter will be done by agreement between the Ministers and the public authorities.
Section 13 is the section which provides that sums deducted under this Part of the Act from annual grants shall be retained in the Exchequer and be available for any purpose for which moneys in the Exchequer are lawfully available. I would like to point out the slight difference in the conditions between this section and sub-section (4) of Section 9. Sub-section (4) provides that where deductions are made from bodies under statutory power it is to these bodies any savings that may result from the operation of the Bill will be applied and be disposed of in such manner as the Minister for Finance, after consultation with the body concerned, shall direct. In this case, where salaries are paid partly by Exchequer grants, any savings which may result from the operation of this Bill will remain in the Exchequer and will be applied for the general purposes thereof.
With regard to the general scheme of the Bill and the deductions which are set forth in the Schedule of the Bill, the Government long ago laid down the principle that if exceptional economies were required so far as civil servants were concerned, they did not propose to enforce such economies upon those who were in receipt of inclusive salaries—that is, including that portion which is known as basic salary and the portion which is known as bonus—of the amount of £300. They definitely fixed that as the limit beyond which they would not impose a super-cut on the salaries of civil servants. The reason why the Government took that attitude was that, first of all, civil servants have endured considerable reductions in salaries as compared with other sections of public servants over the past ten years, and it was felt that in the circumstances of the present time, having regard to the manner in which civil servants' remuneration had been adjusted to the fall in the cost of living, a civil servant having a lower inclusive salary than £300 had no margin upon which it would be proper for the Exchequer to retrench. Accordingly, when considering the scales set out in Part IV of the Schedule which applies to civil servants, this fact was kept in mind, and it will be noticed that in regard to salaries for whole-time service, where the annual rate of salary does not exceed £300, no additional deduction is now being enforced. Where the salary exceeds £300 but does not exceed £400, a cut of 2 per cent. per annum on the salary is being effected. From that figure the cut is graded very steeply on each succeeding increment of £100 salary until, at the top of the scale, it reaches a figure of 25 per cent. on so much of the annual salary as is in excess of £1,600. In going up the scale the Executive Council naturally had to take into consideration this very important fact that the majority of civil servants——