Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

We are not going to agree a new public service pay deal here; it will only be done at the WRC. Those very issues the Deputy legitimately raised are the subject of discussions at this very moment. We need to allow that process to take its course and conclude and, hopefully, it will reach a successful conclusion. I want a deal. It is in everyone's interests to have industrial peace and reach a settlement that is fair to public service workers and that takes account of the level of pressure people are experiencing in respect of cost of living.

The Government and I must also take into account wider considerations, however. We are seeing the cost of borrowing rise for all of us. It is now up at approximately 2.5% for the Irish State. Not too long ago, it was essentially zero. Therefore, there are changes in the wider economic outlook here which, unfortunately, has deteriorated globally. We must make sure whatever we do is affordable.

We have levers other than pay, some of which we have used so far. We acknowledge that we will need to do more in the budget to address the cost of living. It will not solely be addressed through pay mechanisms and we must watch the competitiveness issue. It is important for the future of our country. We have seen the employment growth we have experienced in recent months. We want that to continue but we must also make sure that work pays for people.

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