Brian Cowen (Laois-Offaly, Fianna Fail)

The exercise in which we are engaged today was not about providing an economic plan for the country. We are trying to ensure today that we react responsibly and sensibly to the changed situation that arose as a result of the Exchequer returns last week. Based on the most up to date information available to the Department of Finance, it is clear that tax revenues will be down €3 billion. That being the case, we must make sure that we do whatever we can to ensure that we work within the spending limits we set ourselves. We must use this as the first phase in an exercise in devising a budgetary strategy for 2009 and beyond. I believe it is timely and appropriate to come forward with this set of measures within a week of the publication of the Exchequer returns. On the question of this not being directed to people at work, quite the contrary is true. The most important way for us to maintain levels of employment and return to potential growth rates in the economy as soon as possible is to have a sustainable public finance position. The public finance position has deteriorated this year. We are not alone in respect of that public finance deterioration. Deputies can look at any other country they wish where similar issues arise. It is precisely because we have in mind those who have lost their jobs or those who are at risk of losing their jobs that we are taking the corrective action as quickly as was possible. This is our assessment based on the information available at the moment.

Deputy Gilmore asked about the rest of the year beyond what we have done here. This is what we believe is the minimum required. The Government has also undertaken to continue to monitor on a monthly basis the ability of Departments to provide the savings that have been agreed this morning. He asked about what a 3% pay bill reduction by 2009 would provide. I would estimate from memory that it would be approximately €250 million. That is not important. What we are doing there is not applying a blunt uniform inflexible embargo instrument, but are providing the necessary manoeuvrability at local level for local management in the light of local circumstances to identify appropriate measures, which would include in some cases non-recruitment of non-frontline staff or non-essential staff, based on the present situation, or considering the question of premium pay, management of vacancies, the organisation of work processes etc.

We are seeking to ensure we devise a framework which is clear about the outcome we need to obtain, but is prepared to work with those with this difficult task ahead of them in a way that gives them the best possible means of achieving it according as they would determine given their knowledge of the local circumstances and for the purposes of avoiding a greater disruption of services than would otherwise be the case had the more blunt mechanism been utilised. That is the thinking behind what we have proposed today. It is not regarded as a panacea or the ultimate answer to all the challenges that face us. As I have said to colleagues — and they have agreed — we have further challenges in the context of the Estimates campaign in preparation for 2009. We need to be as imaginative and as determined regarding that wider exercise as, I am glad to say, the Government has proven itself to be this morning regarding this particular exercise.

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