Brian Cowen (Laois-Offaly, Fianna Fail)

I made clear to the Deputy that the reductions we have introduced and for which we had to legislate stand. They are part of a reduction in the overall pay bill that is necessary in the context of trying to stabilise the public finances. That situation has not changed on 1 February as compared to 1 December. The Government had to make those decisions because of the necessity of the situation that faced us and in recognition that if one was to seek to reduce expenditure, to avoid a situation where a contribution of approximately €1.3 billion would be made on the public pay side, would have meant seeking further savings of that magnitude on the services side, which would have greatly affected the quality and level of services that would be available to citizens in the course of the current year. That was not an option. It was a question of requiring a contribution to be made on the pay and non-pay side in order to meet the budgetary parameters that were set out and which were necessary. There was overall agreement in the House that such a level of saving was necessary. It was not an avoidable issue for the Government. We had to confront that issue, and we did so in a progressive way.

I do not accept the contention made because the pay rates of the category to which Deputy Ó Caoláin referred had taken into account in previous benchmarking exercises the fact that a bonus scheme was in place. Once one got rid of the bonus scheme, that was another consideration that had to be taken into account. The Government's actions, both in terms of the levy, taxation and pay reductions, in the series of three budgets discussed amounted to wage reductions of 24%. The reductions are 11% for people on lower wages. That is as it should be. It is a progressive system.

The continuing contention being made by Deputy Ó Caoláin is in an effort to be divisive and to suggest that the system is unfair. The reality is that the wages of a person at the lower end of the scale, which are still considerable, have reduced by 11%, one tenth, the income of another person who is higher up the scale has reduced by almost one quarter, and a person who is higher up the scale again has reduced by one third. That is the way it should be. I do not accept the contentions Deputy Ó Caoláin makes and I do not believe the facts bear them out.

The reasons that were given by the Minister on that issue have been well documented and set out. I similarly set out matters in great detail. There is no point in me repeating them. I refer the Deputy to the Official Report. We had considerable discussion on the breakdown of the talks on 9 December. At that time I set out in great detail the Government's position on those matters. The issue now is whether we can devise a way forward.

It must be asked if a breakdown in industrial relations will result in any benefits for public servants. I do not believe it brings any benefits to public servants or to citizens. I do not see what benefits will emerge from it. While I am aware people are unhappy that pay cuts were necessary, the reality is we have to move on, get more from less and recognise that the present budgetary situation requires us to look at other areas now. We need to do that in a shared way on the basis of re-engagement. However, we can only re-engage when we have the proper context and an agreed agenda. It does not involve what the Deputy is proposing because the economic realities are the same now as they were on budget day.

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