Brendan Howlin (Wexford, Labour) | Oireachtas source

Earlier today, the Government agreed to my proposal to enter into discussions with the trade unions on the issue of public service pay. The pay reductions are governed by financial emergency legislation that requires me to carry out an annual review of the status of that emergency. As the economy continues to improve, the prospect of legal challenges to the financial emergency increases. It is prudent therefore to plan for an orderly unwinding of these emergency provisions. Not to do so would be foolhardy.

I do not intend to discuss the negotiations on the floor of the House today, but let me say this. All public servants have had their pay reduced significantly. Over the past two years, we have seen the beginnings of pay awards in the private sector. As the economy recovers, we need to ensure that remuneration and the cost of the public service generally are managed to ensure that they remain sustainable.

Of course, without the productivity gains made in recent years, we would not be in a position to discuss unwinding the financial emergency measures in the public interest. Given their value to the State, the unwinding of those measures will take time. To do anything else would jeopardise the public finances again, something the Government will not do.

In order to meet the challenges that we face, it is essential that we engage with people. This spring economic statement represents the beginning of that process. Every Government has a duty to engage with its citizens. The Government also has a responsibility to ensure policy making is consistent with broader societal and economic objectives. A national economic dialogue between Government and relevant civil society groups will discuss the most effective and equitable way to achieve our objectives.

Those groups will also have obligations. That holds not only for groups that want more expenditure in every area we can think of, but also of the parties opposite. We cannot meet all the demands of each and every person or group. To try to do so would bankrupt the State. Proposals for increased expenditure should be matched by genuine attempts to find matching funding, commensurate with the proposed expenditure. No party can ignore the general parameters under which public policy has to be made. Our engagement, as a Government, with all groups will be firmly rooted within these parameters.

While these discussions will inform the process, it is the Government of the day that will make the decisions. It will do so on the basis of what is in the long-term best interest of our people.

I repeat that we must not allow this country to return to the devastating cycle of boom and bust that has been the hallmark of previous Administrations. We must learn the lessons of the past decade and not repeat the mistakes that brought us, as a country and as a society, to the edge of ruin.

Our vision and plans for renewed prosperity will not be built on the sand of short-term and unsustainable increases in Government spending. They will be built on the rock of fiscal responsibility and investment in the productive capacity of our people. Since 2011, we have provided stable and responsible government. We have stood up for the people and charted a path to recovery.

We cannot and will not throw money at problems. Expenditure growth must continue to be linked to performance and reform. Any increases in expenditure and incomes must be in line with growth and productivity. Decision making must be evidence based with a strategic focus on improved outcomes for our citizens.

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