Dr. Tom Healy:

The document ICTU submitted to the committee is based on research carried out by the Nevin Economic Research Institute.

On the Deputy's question on public sector pay, it is true that public sector pay comprises a highly significant chunk of current spending, in the region of €18 billion per annum. Various adjustments and agreements over the years have seen a significant reduction in discretionary expenditure on public sector pay through both wage rates and public sector numbers. What was done in the research underlying this document was simply to take the working figures and assumptions underlying the most recent agreement - the Haddington Road agreement, as it is referred to - and incorporate them into the discretionary expenditure cuts that are identified in the document. Consequently, for example, it factors in a reduction of approximately €350 million in expenditure on public sector pay next year. I should emphasise that is the only area of public expenditure reductions that are foreseen in the document. Elsewhere, the proposal is that there should be no further discretionary cuts in overall spending in the areas of non-pay current expenditure and capital expenditure. As a consequence, other interventions and adjustments both on the revenue side and in the promotion of investment would actually help to reduce the Government deficit somewhat more than is actually planned at present by the Government.

I should add one further comment in respect of public sector pay. It is important to be aware of the evidence, such as it is, from work by the ESRI and by my own colleagues in the Nevin Economic Research Institute-----