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Lenihan to slash pay of ministers by 20pc

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FINANCE Minister Brian Lenihan has said the salaries of senior government ministers and top civil servants will fall by up to 20 per cent as part of a downward benchmarking process to be published in September.

Mr Lenihan is now keen to see Irish wages, including those of senior ministers and top civil servants, reduced in a move to improve Ireland's competitiveness.

Last April, on Budget day, the minister announced that he had asked the Review Body for Higher Remuneration body to begin the process of looking at the inflated wages of ministers and top civil servants, and, according to the minister, that process is at a well-advanced stage.

On average, Irish ministers whose pay is indexed linked to civil servants are paid up to 40 per cent more than comparable politicians in Europe.

Mr Lenihan said that he was adamant such downward revisions on his wages and those of his colleagues would definitely proceed.

At present, Taoiseach Brian Cowen gets paid €231,000 a year, while senior ministers get €160,000 a year. In comparison, UK Prime minister Gordan Brown is currently paid a total of £194,250, including his salary as an MP. Cabinet ministers in the Commons get £141,866.

"Pay was left out of the McCarthy group scope, but pay issues are not indivisible," said Mr Lenihan.

"In relation to the Higher Group, they are specifically charged with examining comparable public service pay rates in other comparable EU countries, including the UK. The government made a decision that it is appropriate to benchmark against other comparable European countries, because we have to improve our competitiveness in the eurozone and smaller European countries are appropriate benchmarks for us to look at," said Mr Lenihan.

A recent independent report by international pay consultants Hay, which is conducting the current review, suggests the politicians could face cuts of up to 40 per cent. In a review of pay levels for prime ministers, ministers and senior civil servants across eight EU countries by the Hay Group, Mr Cowen's salary of €231,700 was €40,000 ahead of the Belgian prime minister and almost twice the €123,300 paid to the head of the Dutch government -- two EU countries which it is understood will be used to benchmark our politicians' pay. A pay cut of 20 per cent to 40 per cent could be on the cards for Mr Cowen, though politically this is considered unlikely to happen.

Ministers do not fare as well when compared to other European countries -- but at an average of €155,600, they are still paid €33,000 more than their counterparts in the Dutch government, according to the Hay report.

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Elsewhere, former finance minister Ray MacSharry said that he was in favour of raising the income tax levy for people who earn more than €150,000 a year, saying it would send a clear signal to the country that those at the top are paying more.

Mr MacSharry, speaking at the MacGill Summer School, said he would double the tax levy for wage earners in excess of €150,000. He said that while the amount of money raised would be relatively small, only €60m, by increasing the rate, it would give the government cover to introduce other painful measures for those on lower wages.


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