2026-07-07

3. Deputy Mairéad Farrell asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation to give an update on the progress of a new public sector pay agreement; and if he will make a statement on the matter. [51703/26]

The Government’s approach to public service pay over many years has been to engage through an established framework of collective bargaining with public service unions and associations. This is a tried and tested approach that has supported sustainable improvements in pay for public servants and orderly management of the public finances, while also facilitating public service reform and changes to work practices. Before expiring at the end of June 2026, the Public Service Agreement 2024-2026 delivered headline pay increases of 9.25% and provided for up to 1% of basic pay costs for local bargaining. Importantly, like previous agreements, the public service agreement was weighted towards the lowest paid, who received increases of 17.3% inclusive of local bargaining. The final increase under the agreement was on 1 June 2026. The Government is committed to continuing to be a good employer and to providing competitive terms and conditions for public servants. This commitment is reflected in the significant investment made in public services in recent years. Since 2020, the public service pay bill has increased by €12 billion, reaching €34 billion in 2026, an increase of 55%. As well as providing for increases in pay rates, this investment has supported substantial growth in the public service workforce, with employment now exceeding 420,000, an increase of more than 70,000 employees since 2020. Against this backdrop, and in advance of the agreement's expiry, my officials met with public service unions and staff representative associations to initiate exploratory discussions on a successor agreement. Officials remain available to continue engagement, with Government seeking to progress talks as quickly as possible through constructive dialogue. As the Deputy will appreciate, it would not be appropriate to comment on the detail of discussions, which should remain confidential to the parties. They take place against an increasingly uncertain environment. Suffice it to say, therefore, that in an increasingly uncertain economic environment, a new public service pay agreement can play an important role in providing certainty and stability for public servants while supporting the effective delivery of public services. That is why I believe every effort should be made over the period ahead to engage and try to reach agreement. As is always the case, any agreement will have to be balanced, affordable and capable of being accommodated in the context of other expenditure priorities within the fiscal framework.

I completely agree with the Minister that this comes through dialogue. I am not expecting to have any information from inside the room coming to the outside. The question really relates to the fact that the previous public sector pay agreement ended last Tuesday without any deal to replace it. Of course, there will be public sector workers who are concerned about that. The Minister mentioned stability. That is what people will need and want. We know that we are in a cost-of-living crisis. We also know that the Central Bank is saying that real wages are going to fall by the end of the year. These are the people who look after us in our hospitals; they are nurses, doctors, those who drive buses and trains and so on. These are people who keep the economy ticking over. Does the Minister expect to continue with this work?

I fully share the Deputy's reflection on public servants and the huge role they play in our hospitals, schools and members of An Garda Síochána keeping people safe. That is why we want to a new agreement. As with previous agreements, we want to make sure that it is fair, equitable and ensures a fair deal for workers and rewards them for the work that they do every day on behalf of all of us. There have been exploratory discussions. We want further engagement. My officials remain open to progressing those discussions. We want to ensure that can happen without preconditions. We also want to ensure that any talks can progress and that we can try to reach an agreement that we can accommodate in the context of budget 2027. Having stability, certainty and a planned approach to public service delivery and public service pay has been important in terms of our wider management of the economy. I want to make it clear to any public servant who is watching this that we want to see a new deal and we want to progress those discussions.

I am not sure how many are looking in at 9.30 p.m. because there may be a World Cup match on, but for those who are watching these proceedings and who take an interest in this very important matter, the reality is that they will look back and see that the first thing Government Members voted on in the lifetime of this Dáil was a bumper pay rise for themselves and for Cabinet Ministers at a time when they, the people to whom I refer, are struggling to make ends meet and when the cost of everything, including housing, is increasing. I am sure that every week Deputies deal with people who simply cannot make ends meet, whether they be public sector workers or other workers, because of political decisions that were made in this Chamber and that have resulted in, for example, rents increasing and supports in terms of energy costs being removed. I urge the Minister to do everything in his power to reach a fair deal.

As with previous agreements, our intention is to ensure that we arrive at one that is affordable and planned and delivers fair pay for public servants. I am absolutely clear about that. I want to see discussions recommence. Exploratory discussions have taken place on two occasions. My officials remain open to engaging. On the issue of the wider workforce and the economy, we want to ensure that we bring forward a tax package in the budget that will support workers and that will reward work in the context of competitiveness and income tax. That is something that we advance, as well other critical priorities around housing and infrastructure delivery and everything else to which the Deputy referred in the context of the cost of living. The trade unions are balloting their members, which is an unnecessary escalation. We need to see engagement happen. Officials on the Government side are ready and willing to engage.