Martin Mansergh (Tipperary South, Fianna Fail)

The Government has adopted a middle course between those who want us to be even tougher in terms of borrowing and expenditure and those who want us to reflate the economy and forget about the public finances for the moment. I agree with Deputy Noonan that the 10% gap is not something that can be ignored. It is politically convenient to suggest that all service cutbacks can be avoided and that public sector employment can bear the entire weight, in the short term, of reducing borrowing even more stringently. Many are not particularly impressed with the notion put forward at the weekend of extending a pay freeze from 11 months to 12 months. With regard to freezing increments, it needs to be realised that the top grades in the Civil Service — Secretaries General, second secretaries, deputy secretaries and so on — and their equivalents in many State services do not get any increments. A clerical officer, on the other hand, is on a scale of 14 increments.

Middle ranking and lower paid public servants would be most affected by a freeze. Some of the figures that have been thrown around amount to throwing shapes but they do not begin to add up as an alternative. Social partnership is a cornerstone to getting through the difficulties and to real and meaningful public service reform. One analysis of the failure of Government between 1982 and 1987 to get a grip on the public finances was the absence of social partnership. I do not think we should talk, as have some Members of this House, about scrapping social partnership or thinking that we can ride roughshod over it. We are going to need social partnership in the period ahead. There is a lot of realism to be found in the social partners and a lot of help that can be given through that process.

With regard to reflating the economy in the present situation, this was attempted in 1980 and 1981 and before that in 1974 and 1975. It did not work except for a relatively short period and higher indebtedness created much greater problems. The reflation being attempted across the water and which is being recommended to us from some quarters as the course that we should be following, takes place in a certain political and electoral context.

A Financial Times opinion piece this morning claims that the UK's budget deficit could soon be the largest in the developed world and that the present stimulus package will still fall far short of the desired effect. It pointed out that the UK consumer is now too stunned by the housing crash, stagnant wages and fears of unemployment, to be coaxed into resuming the insane credit-funded binge of yesteryear.

I am sure what was said about the UK would apply equally here if that were the course of action that we were following. As Deputy Noonan referred to one dimension of it relating to the public service, there is a blame game. I would regard the past 20 years in many respects as being the best years of our history, from an economic point of view. Of course the Celtic tiger period would sooner or later come to an end. The laws of economic gravity were not being suspended——

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