Pay expectations must be held in line, says Cowen

Every 1 per cent increase in public service pay costs about €180 million, according to Minister for Finance Brian Cowen who has told the Dáil that public service pay accounts for about half of expenditure.

But when Mr Cowen said it was important that "expectations are kept in line with the economic realities we face", in preparing to negotiate a successor pay agreement to the current deal, Fine Gael finance spokesman Richard Bruton asked "how is an increase of €38,000 for the Taoiseach in line with reality".

Criticising the Government's acceptance of pay increases, Mr Bruton questioned the value for money in the higher remuneration review body settlement.

"There is no demand for higher performance and no performance linkage," he said, and accused Mr Cowen of "allowing these increases without them meeting his criteria".

The next benchmarking review of pay report for most public service grades is expected by the end of the year.

Mr Cowen said "regard must be had to the need to maintain and improve our competitiveness, and in the case of the public service, of the need to maintain budgetary discipline".

"Everyone must tighten their belts except the Ministers," said Mr Bruton. "Where is the equity in that?"

Mr Cowen insisted successive governments had accepted the recommendations of the independent review body.

When Mr Bruton said "not universally", the Minister said in 1997 when Fine Gael were in government they accepted a recommendation of pay increases, but because an election was coming up, the question of "implementation of the rates" was to be considered later.

"There is a fair deal of political hypocrisy emanating from this House," said Mr Cowen.

"The hypocrisy is the Government telling everyone to tighten their belts," the Fine Gael spokesman replied.