Martin Mansergh (Tipperary South, Fianna Fail)

I detest Thatcherism and have almost as much distaste for neo-liberalism as Deputy Michael D. Higgins.

Leadership is about spelling out those facts clearly, and about maintaining an iron resolve to face up to the problems facing our country and finding the necessary solutions, of which this can be only one instalment.

The major change in our circumstances, to which we have to adjust, is our membership of the eurozone. Its advantages are that we are no longer exposed as a small country to currency speculation or exorbitant interest rates, and of course it has immense convenience. The downside is that uncompetitiveness and excessive income levels cannot be levelled out by devaluation disguised by domestic inflation. What is required is that we accept income reductions. The market will face this to a considerable extent in the unprotected sector, but the public sector has to take corresponding action.

When benchmarking was introduced, it was designed to achieve two things, namely, to match the perceived rapid increase in rewards in the private sector and to eliminate industrial disputes based on rigid relativities. The era of social partnership has brought about a highly beneficial improvement in industrial peace, with the number of disputes and days lost reduced to negligible levels compared to earlier decades. Benchmarking was confined to the public sector and created, as we are well aware, considerable resentment in the private sector. The second exercise was largely neutral and made very few changes.

What is taking place at the moment, and what is contained in this Bill, is in effect benchmarking in reverse, a rebalancing exercise. It recognises that on a cost-benefit basis public sector pensions are on average worth a great deal more at the present time than the average private pension. The pension levy, though unpopular, is an attempt to establish greater fairness across different sectors of the economy, but is above all designed as the least unacceptable way to relieve what has become an unsustainable level of Government expenditure.

Historically, many measures, including income tax, have been introduced on the falsely optimistic understanding that they were temporary. The Minister for Finance has correctly given no such assurance in relation to the pension levy.

Any unexpected fall in living standards is likely to put most people under considerable or even great financial pressure. Few of us have uncommitted income and are debt free. Reducing outgoings is difficult and painful, and the cri de coeur coming from people at this time is overwhelmingly genuine. Unfortunately, as a country and as a society, we have little choice in the matter, although I note with satisfaction the comment from Age Action that the elderly are least affected by these measures.

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