Paying increments to those public servants entitled to them will cost €170m next year according to Public Expenditure Minister Brendan Howlin.
The minister told the Oireachtas Committee on Finance, Public Expenditure and Reform that the government could not simply refuse to pay increments.
The only way increments could be removed was either through agreement or by introducing new legislation, he said.
Minister Howlin rejected the assertion by Socialist Party TD Joe Higgins that the Croke Park agreement was "leading to the destruction of the public service".
The minister said reform had to happen. He said many people wanted to cause conflict between the public and private sectors but that "the country was in a mess and some big changes had to be made".
He said the issue of the cost of paying pensions to former office holders was a "disquieting" one. He said he has gone as far as his legal advice would allow, in how he has dealt with them but he agreed that pensions for senior figures were still very high. He said there were still reforms, though, that he hoped would deal with this situation in the future.