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Measures contained in Acts continue to make significant and vital contribution to public finances

The Minister for Public Expenditure and Reform, Paschal Donohoe T.D., today (Thursday) confirmed he has undertaken a review of the operation and effectiveness of the Financial Emergency Measures in the Public Interest (FEMPI) Acts 2009-2013 and considered whether the measures implemented by the Acts are still required.

In accordance with his statutory obligations under the FEMPI Act 2013, the Minister has submitted a report on his findings which has now been laid before each House of the Oireachtas.

Speaking in relation to the outcome of his considerations – which are detailed in the report – Minister Donohoe said: ‘I am satisfied that the Financial Emergency Measures Acts (FEMPI) 2009-2013 (as amended by the Financial Emergency Measures in the Public Interest Act 2015) continue to be needed in 2016. The measures provided for under the Acts have made and continue to make a significant contribution to the difficult but necessary programme of fiscal consolidation.’

“The provisions of the Financial Emergency Measures in the Public Interest Act 2015, which also implements the terms of the Lansdowne Road Agreement (LRA), partially unwind the pay and pension reductions imposed on public servants, and are prudent and sustainable in the fiscal space currently available to Government. There is a strong view held by Government that continued economic recovery is predicated, particularly in these uncertain times, on continued prudent management of the public finances, and pay and pensions for public servants continues to account for some 33% of gross voted expenditure.

“We are making real progress in terms of tackling unemployment, driving our debt and deficit levels down and securing our public finances, however we are not there yet and it must be remembered that as a country we are still borrowing more than €13 million per day to fund expenditure commitments. In unwinding FEMPI, we must be mindful of competing demands on the Exchequer as we work towards putting better public services in place and building a more cohesive and fairer society for all.”

Ends

Note to Editors
1. The pay cuts (2010 and 2013), pension levy (PRD), and Public Service Pension Reduction (PSPR) are measures provided for under the Financial Emergency Measures in the Public Interest (FEMPI) Acts 2009 – 2013.

2. Collectively, the savings from these measures amount to approximately €2.2 billion annually and have been a crucial part of the stabilisation of the public finances.

3. The impact of these measures is being ameliorated by the FEMPI Act 2015 which amends the previous Acts and also gives effect to the terms of the Lansdowne Road Agreement (See Below).

4. Under the Acts, the Minister for Public Expenditure and Reform is required to undertake a review of the operation and effectiveness of the Acts and consider whether the measures implemented by the Acts are still required.

5. The Review has been laid before both Houses of the Oireachtas and will be published on the Departmental website shortly.

6. The provisions of the Financial Emergency Measures in the Public Interest Act 2015, which implements the terms of the Lansdowne Road Agreement, partially unwind the pay and pension reductions imposed on public servants, and are prudent and sustainable in the fiscal space currently available to Government. The estimated overall gross cost of these pay measures (inclusive of the previously committed costs attributable to the Haddington Road Agreement) in each year of the Agreement is €267m in 2016, €290m in 2017, and €287m in 2018, or a full year cost of €844m in 2018. In addition, measures reducing the impact of the Public Service Pension Reduction are costed at €30m in each of the years 2016-2018, amounting to a full year cost in 2018 of €90m.