Larry Butler (Fianna Fail)

I am delighted to speak on the commitments to which we must adhere in the budget. It is important to set out the parameters and guidelines of what we would like to see. We all want to see as much support as possible for education, people on fixed incomes and social welfare. That is a reasonable approach when dealing with difficult times. Ireland faces a very important budget because we have committed to the European Commission to cut the deficit by €4 billion, which amounts to 2.5% of GDP. It is reasonable for a country currently overspending to correct its spending. We cannot continue or this country will be unsustainable in terms of the budget deficit. Recent suggestions by the unions of a slash and burn policy with regard to public servants is total nonsense. The unions gained so much in the past 11 years by being partners with the Government. We had great engagement with the unions over that period to the unions' benefit and it is nonsense to see that, when the unions must take a little pain, the highly paid members of the unions will take no pain. Union leaders ordered union members onto the streets over a week ago but it does not get away from the fact that we must make these decisions. We would prefer to make these decisions with the social partners rather than outside of social partnership. It is possible to do this. If unions get down to real negotiation we could come up with a solution to accommodate unions, workers and the Government. It is vitally important that we do so. The unions are going into negotiation even though they have a strike planned for the following week. That is not the way to do business. The gun to the head never produces good policies.

It is vitally important for the country to have a good public service, as without it, it is not possible to run the country. The public service is equally as important as the banks are to the economy. Deputy Mullen is right that the reality is we will hang together or we will hang separately. If the IMF comes in, it will not be too worried about the public service, social welfare recipients or pensioners; it will simply make a 35% cut across the board. We do not want it to do our business for us. We have to do our own and should do it together. Everybody benefited from the partnership process during the past 11 years. If we run into bad times, we have to work together to find our way out. In thar regard, we are confronted by a serious flooding problem.

Union members went on strike on a day of protest last week. Some 15,000 people had hospital appointments on that day and will not receive another for the next two or three months. As a result, there will probably be a build-up of 45,000 patients on waiting lists. A pork plant in County Offaly had to let its 200 employees go home on the day of the strike because there were no inspectors on duty to inspect meat. I do not believe anybody has examined the cost of the strike. It must be phenomenal, running into hundreds of millions of euro. If we do not work together to find a solution, we will face a very bleak future because we will not be able to borrow money from the institutions from which we are now borrowing. Therefore, a reasonable approach should be taken.

The figure of €4 billion appears to comprise a cut of €2.5 billion in current spending, a hike of €750 million, mainly derived from a carbon tax, and a cut in capital spending of €750 million. That is a reasonable approach to how we will balance the books, which we must do, as we are taking in €32 billion but spending €55 billion. That cannot continue. We must ensure old age pensioners, child care services and education services are part of the consideration. To continue investment in these areas, we will all have to reduce our expectations. If income is €32 billion and X amount has to be borrowed against that figure to balance the books, hard choices will have to be made, such that those who can afford to pay should pay a little more. The people who cannot afford to pay have to be looked after. The smart economy programme will play a major role during the next seven or eight years. A good education system, of which I am all in favour, is necessary to produce the people who will work in the smart economy.

It should be noted that the teachers who teach our children have longer holidays and are better paid than most teachers elsewhere in Europe. These are two important points to bear in mind. Teachers here do not put in the hours worked by teachers elsewhere in Europe. The same applies to nurses. Nurses here are paid well above what nurses in England and elsewhere in Europe receive. The same applies to those who deliver professional services such as consultants and doctors. If we are to drive down the public sector pay bill, bearing in mind that there has been a 20% to 30% reduction in the private sector, we will have to drive down the prices charged for professional services. The €60 charge for a visit to the doctor and the €75 or €100 charge to have one's teeth cleaned or for an extraction cannot continue. Neither can hospital consultants continue to have an annual salary of €250,000, when their counterparts across the water and in Germany are on a salary of €80,000 to €100,000.

Pay costs account for 50% of the budget in the health sector. Alarm bells would ring in a private company at the point where pay accounted for 35% of the budget. Account must also be taken of middle management. I have pointed out to the Minister that there is room for at least €1billion in cuts in the health service without affecting the delivery of health services. The cost of middle management should have been examined four years ago when the health boards were broken up, but that did not happen. Half of the staff concerned do not know what they are supposed to be doing. I know a number of them and their biggest task is to get out on the golf course two or three times a week to amuse themselves. That cannot be good for any organisation. Nobody seems to be taking action in that regard. It was a misjudgement when the decision was made to remove authority from the Minister. Those who pay the bills are the ones who should make the decisions.