The salaries of members of the Oireachtas will be reviewed and benchmarked against the rates of pay for politicians in EU countries of a similar size, Minister for Finance Brian Lenihan has announced.
In his budget speech this afternoon, Mr Lenihan announced a number of changes to the remuneration of TDs and Senators, including the abolition of pension payments to serving Oireachtas members in respect of previous ministerial positions.
The changes will lead to annual savings of about €2 million, the Houses of the Oireachtas Commission said, in addition to the estimated €20 million in savings it had already committed to making by the end of 2009.
Mr Lenihan said fairness must be the "cornerstone of all our efforts to achieve economic renewal".
"Everyone wants fairness but there is less agreement about what it means. For many, it means the next person should pay. But the reality is everyone must give according to their means.
"Those who have most must give most. But before we ask anyone else to give, we in this House and in this Government must examine our own costs. Those of us in politics have been entrusted with a great privilege by the people. We must lead by example."
The Minister announced a 10 per cent cut in Oireachtas members' expenses other than mileage rates, where a 25 per cent reduction has already taken place.
Deputies will no longer receive long-service payments or increments.
Mr Lenihan said the arrangement whereby former Ministers are paid ministerial pensions while they are still members of the Oireachtas will be discontinued.
Oireachtas members who are on paid leave of absence as teachers may no longer avail of the arrangement whereby they can keep the difference between their teachers’ salary and the cost of employing a replacement.
The allowances paid to Oireachtas committee chairs will be halved to €10,000 and the payments to whips and vice-chairs will be abolished.
Overall, this change will lead to annual savings of €640,586 - or nearly 74 per cent - in the allowances paid to members of Oireachtas Committees, the Houses of the Oireachtas Commission said.
Mr Lenihan noted that Ministers had reduced their salaries by 10 per cent last October and that Ministers of State had made a similar reduction.
"The public service pension levy was applied to members of the Government and Ministers of State. As a result, Ministers have seen a reduction of one fifth in their incomes."
But he said he had asked the Review Body on Higher Remuneration in the Public Sector to undertake "a fresh review of top level pay rates".
This would take account of the "changed budgetary and economic circumstances, and the changed private sector pay environment and to benchmark rates against those of other EU countries of comparable scale".
"This review will be completed by July. I believe pay at leadership levels in the public sector should be more in line with pay in other countries rather than with top level private sector pay in this country which had become over-inflated in recent years and is now falling in any event."
He noted the Taoiseach had already announced a reduction in the number of junior ministers from 20 to 15.
Mr Lenihan said some of the changes announced today will require legislation, which would be introduced shortly.
Chairman of the Houses of the Oireachtas Commission, Ceann Comhairle John O'Donoghue said: "The measures outlined today by the Minister are in line with the amendments proposed by the Houses of the Oireachtas Commission in February. The adoption of these proposals demonstrates the willingness of the Oireachtas to provide leadership in challenging times."