Brian Cowen (Laois-Offaly, Fianna Fail)

The question of fairness can be an objective or subjective matter. I do not deny for a moment that this is an imposition on public service workers. It is set against a context in which adjustments are being made across all sectors of the economy, including the private sector, to deal with an unprecedented situation.

I must emphasise the seriousness of the situation in which we find ourselves and the need to continue working through it. The €2 billion in savings that were announced are a signal of the further measures which will have to be taken. We have indicated how we will go about doing that both in terms of the committee looking at public service numbers and expenditure in all areas in the public service and the report of the Commission on Taxation, which I am sure will make important recommendations.

What is important for us to realise is that we are in a new situation and are unlikely to return to the high levels of growth we saw in the past. We can return to growth as soon as the upturn comes provided we take the right steps in the meantime. One of the matters we have to address is the position of the public finances. This is not only important in its own right — we had this debate last week — but also in terms of retaining the maximum number of jobs and maintaining and rebuilding confidence in the economy both internally and externally. The issue of external confidence is important in the context of the financial crisis with which we are all trying to contend.

We have to take these steps and send these signals. Although they represent an imposition, they are progressive in the sense that the levy increases from 3% to 7.5% on average and almost 10% at the highest end. While there was no agreement at the end of the day, it was agreed in principle that €2 billion is the amount with which we need to deal at present, that the question of public service pay and pensions provided us with the means by which many of these savings would be identified and that we need to continue working on a range of other necessary issues as we try to identify further savings and taxation measures which can help us address the gap in the public finances. That was the motivation behind what we did and why we did it, and why this is an important part but not the full response. It is mirrored in other sectors of the economy where job security is at risk and jobs are being lost.

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