Fiona O'Malley (Progressive Democrats)

It is not fair to say it bears most heavily on the poor. It is regrettable that people of limited and fixed means will have to make a contribution, but the Government in its wisdom has decided that everyone must make a contribution, however great or small. I was delighted to see Senator Harris back in the House and listened to him with great interest. I agree with him that part of the problem is the required public sector reform. I agree too with Senator Ross that it is unfair that people who became a success or benefited from the Celtic tiger are being vilified. It should be acknowledged that these people took risks and made investments on behalf of the country.

With dramatically reduced revenue available, the challenge for the Government is to meet the cost of running public services. These services have seen significant investment during recent buoyant times. It is regrettable that we must scale back some of these services and delay targets such as reduced teacher-pupil ratios. However, we must act now to contain further decline and arrest the decline in public finances. That is the reason we needed this tough budget, which is only the beginning of the plan to restore the economy and put it on a sound footing.

During the prosperous years the economy delivered resources which allowed successive Governments to invest heavily in enhanced public services to which we have all got used. There is, however, no easy way to make tough decisions. I listened to Fine Gael's response and felt there was an element of disingenuousness in it and in its proposal to reduce borrowing further from €6.5 billion to €5.5 billion. This would involve, in addition to the measures outlined in the budget, sacking 10,000 public service workers before Christmas or cutting 500,000 medical cards from poor people. That is the reality of such decisions. Fine Gael should acknowledge that is the case.

Senator Twomey made the point earlier that it is not Fine Gael's responsibility to come up with the good solutions because it is the Government that is in charge. We must be responsible and consistent. We cannot say on one side we would not cut public expenditure and at the same time criticise the Government for doing such a thing. The situation is difficult and the Government has a tightrope to dance. Perhaps Fine Gael will learn about that one day.

Rationalisation of the public service must be carried out sooner rather than later. The Minister has indicated that in a matter of months he will set to work on reducing public service numbers. We need to establish where the cuts are needed and how to redeploy people. If nurses or therapists are needed in the community rather than in a hospital, we need to have flexibility and co-operation from them so that they will work where required. I am concerned by the chasm that is growing between workers in the public and private sector and the level of resentment that could boil over if public sector reform does not take place. The public sector represents 17% of the workforce. It is paid for by the resources generated by the other 83%, the private sector. The public service cannot be allowed to operate in a different sphere. It will damage itself enormously if it is perceived to be immune to the vagaries of the economy, particularly by the people who finance it in the private sector. The public sector is not immune and cannot remain immune. The change required in the public sector is not a demonstration of the capacity to change and be flexible by imposing performance and productivity targets on itself. It must convince the public at large and the private sector — the people who pay for it — that it can operate in a way that makes sense.

The Minister knows, and demonstrated in the budgetary arithmetic he presented yesterday, that he is not in a position to delay this reform. I understand he is about to undertake reform, which needs to get under way sooner rather than later. Ultimately, the public will not support sustaining an inflexible public service which is not affordable. As a Government, we need to send out that message. I look forward to the reforms that are under way and which will go a long way to restoring the public finances to where they were in previous years.