Richard Bruton (Dublin North Central, Fine Gael)

Yes, that needs to be addressed. We need to see that up front. Not only has the Minister hit people immediately, but he has also created the fear that he will now dramatically change the terms under which they get pensions. At a time when they are still smarting from the payment of a pension levy, it seems less than fair that the Minister would not address this wider agenda.

We need to have a good debate about this on Committee Stage. This is a time of great risk to our community and the challenge to employment in this State is enormous. We have already lost one eighth of our private sector jobs and many people have been affected as a result. We run the risk of doing untold damage to our economy. I can understand - indeed, I accept - that public pay was going to be part of an adjustment factor. However, the way in which the Minister has pitched this does not illustrate to people that the success of this economy is when the public and private sectors are working together to a common purpose. It is vital to have that sense of an economic plan that we can all get behind, but such a plan has been singularly absent from the Minister's thinking.

As far as I can gather from those I have met in the trade union movement, the greatest frustration for them is that the Minister does not have a vigorous employment strategy to get us out of here. Many people, including trade union leaders, were willing to accept pain if it was in the service of a greater purpose. The Minister has let that opportunity slip through his fingers, however. We needed to have that greater purpose at the core of this budgetary adjustment. The Minister should have said: "Yes, we have fiscal constraints, but we have a plan which is about creating a strong, export-driven economy." The Government destroyed that by allowing a property bubble to get pumped up.

The core of his strategy should have been to examine how a strong, export-growth economy could be rebuilt. Within that, adjustment of public service pay was one brick in a foundation of many other elements. It was reduced to one element, however, solely for political reasons. The Minister found the reform agenda too broad to push through, so it was easier to reduce it to one group who were being asked to take the pain. That was a major mistake. Everyone must have a sense that we are under siege and that we are fighting for our economic independence. We are also fighting to keep young people employed at home, rather than taking the emigrant boat. We must obtain a broad-based strategy to address this problem.

The Minister bottled the reform agenda and failed to deliver fairness. I defy anyone on the Government backbenches to say his structure of pay cuts is fair. The after-tax impact of this is greater on the lowest paid than on the highest paid and that is not fair. The Minister has damaged the sense of cohesion we need in this community to address our problems. He should have taken the harder road of more reform. I agree he should cut some public service pay, but there should be a greater contribution from wealthy people in the private sector. Taking more from these people is not about chasing the economy down with higher taxes. The problem last year was the Minister looked for taxes from everyone, even from those on the lowest levels of pay. There are people who could have taken more pain, but the Minister did not ask them to do that. He squandered the chance to get the community working behind a programme people felt was worth the effort. This is what has gone wrong. The Minister has left us with a situation where many in the public service are furious, angry and pained and not in a mood to contribute to the adjustment.

We will have to persuade people that change is important and that change can prevent us from being back in the same hole next year and having to hit people at the front line in regard to their entitlements. We need to get people back into negotiations, but the Minister has jeopardised that. This was a foolish mistake that came about as a result of not enough thinking going into the budget. It was all a last minute, midnight effort and that is what undermines it.

See this speech in context