Taoiseach Brian Cowen has said the bonuses paid to senior public servants should not be equated with the discretionary bonuses that were paid to bankers.
He was responding to concerns raised by Fine Gael TD Fergus O’Dowd who received information via parliamentary questions about such payments in the public service.
Mr O’Dowd noted a circular had been issued by Minister for Finance Brian Lenihan in 2008 calling for an end to the bonus culture in the public and semi-State sectors.
He said most Government departments had complied, but there were “key exceptions”.
“The awards paid out are staggering,” Mr O’Dowd said.
The former chief executive of the National Treasury Management Agency Michael Somers was paid a bonus of €200,000 and the chief executive of the Personal Injuries Assessment Board received €31,395.
According to the information received by Mr O’Dowd, bonuses totalling €55,670 were paid to 27 staff members in the Department of Finance last year, with a further €53,394 paid out to 19 staff in 2008.
“And this year some 52 principal and assistant principal officers in the Department received seniority allowances totalling €115,395,” Mr O’Dowd said.
“Welfare recipients have lost their Christmas bonus. Frontline staff like nurses, teachers and gardaí have taken severe pay cuts. The country is still reeling from the most unfair Budget in Irish history, which penalised lower income workers but allowed loopholes for very highly paid individuals.”
Speaking during Leaders’ Questions in the Dáil today, Mr Cowen said an additional discretionary bonus system had been in place in the banks, which amounted to a “large addition” to basic pay.
The amounts referred to by Fine Gael were paid to middle-ranking public servants at principal officer and assistant principal officer level. “To conflate those two things, I think, is not correct.”
Mr Cowen said the Programme for Competitiveness and Work partnership agreement in 1994 had given a 1 per cent award to senior public servants as part of the overall pay settlement.
In some departments, it had been incorporated into the “full pay pot” for those grades. In other departments, it was used to reward people for “exceptional merit”.
“This is against a background where those grades have seen a reduction in their pay over the last two years of 17 per cent under the Government decisions which have been made. So I do think it’s important not to conflate those two issues as being the same – they’re not,” Mr Cowen said.
He said there was an arrangement in the Department of Finance arrangement where a special service payment was made to some staff based on the demands of their jobs in the previous year. The average payments were of the order of €2,000 or €2,500 per annum.
“It’s not a bonus – it’s part of the overall pay bill,” Mr Cowen said. “To conflate that with what has been happening in the banking sector, I think, is not to compare like with like at all. Because it is not a discretionary payment.”
The Taoiseach said a situation where 10 per cent of the pay bill was held for higher grades, at secretary and assistant secretary level, had been discontinued.
“In relation to non-commercial semi-state bodies, again the decisions on such payments are a matter for the boards concerned or are often built into the contracts of the individuals concerned,” Mr Cowen said.
The Department of Finance had written to Government departments about performance-related payments for chief executives or other senior staff of non-commercial bodies indicating it would be appropriate to suspend bonus payments. “That remains our position and will be followed up,” he said.
Fine Gael leader Enda Kenny said he had “no problem at all” with public servants being fairly and equitably paid and that such salaries should be in line with best practice.
“But within the ranks of the public service itself and the public sector itself, there is absolute outrage at the apparent and in some cases proven level of performance pay or bonus allocated to particular sectors and particular individuals in some sectors,” he said.
“That’s what’s causing the real anger here - where people were told by the Minister for Finance that the Budget was fair, that it was equitable, that it was just.
“And they don’t see that. Where people looking after individuals with mental health problems or carers at the lower levels, are being asked to pay increased taxes, levies and charges of one sort or another when they see evidence of serious money being paid as either performance related increase or bonus to particular individuals.”
He said he was glad to hear the higher payments for those at assistant secretary and other grades had been discontinued.