Michael Noonan (Limerick East, Fine Gael)

The public service reform section of the plan is weak when compared with Deputy Bruton's document on reinventing politics. Again, the Government does a magician's trick by claiming the numbers employed in the public service will be reduced by 24,750 based on 2008 levels. If one works from 2010, however, the reduction will only be 12,000 out of 300,000, or 3,000 per year over the lifetime of the plan. How is that a plan for reducing public service numbers?

The Government's entire strategy for the public service is very weak. A functioning and motivated public service will be crucial to revitalising this country but the plan is very tentative in this regard. We will face additional taxes and cuts to front-line services because it is so lame on public service reform. Everything is joined together in public administration and we will pay elsewhere for an overly heavy public service.

The labour market initiatives are very weak. The plan waves the flag of abolishing the minimum wage to impress the bond markets of Europe. Thank God, nearly 1.9 million people continue to work in Ireland and fewer than 4% of these are on the minimum wage. Minimum wage earners are for the most part young people, students or immigrant labourers. They are all vulnerable and this measure will do nothing for them. There are other ways to address the issue. In speaking about labour market initiatives several weeks ago, the UK Prime Minister, David Cameron, put it succinctly when he stated that his primary objective is to ensure work is always more valuable than welfare. The first thing one should consider is tax on work. If, for example, we reduced employers' PRSI contribution, we would get a better bang for our buck than reducing the minimum wage. The real issue is the poverty trap. We must make it easy for people to move into and out of the workforce. Leaving aside temporary blips, it must always be worthwhile over the long term for an individual to go to work rather than stay on welfare. Once that principle is applied, we can get labour market initiatives up and running and we will not have to touch the most vulnerable in society.

When this debate started six months ago, Fine Gael laid out two principles for fiscal correction, which we acknowledged was necessary. The first principle is that it should be fair across society, with no easy ride for friends of the Government in the Galway tent. The second principle is that it should protect the most vulnerable. Those on the minimum wage are vulnerable people and they should be protected.

The provisions on pensions are narrow in focus and they run counter to the submissions made by the industry. The effect of reducing tax relief to the standard rate of 20% will be to discourage people from making provision for their pensions.

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