Martin Mansergh (Tipperary South, Fianna Fail)

Oversimplified caricatures are being painted of past events.

I agree with Senator Twomey that we should use GNP as a gauge and made sure such a reference was inserted in my contribution. I also agree with Senator MacSharry that one of our main aims must be to try to secure as many as possible of the underlying gains made since 1987. We will have to take one or more steps back in order to ensure we can take steps forward in the future. I also agree with him in his comments about broadening the tax base.

There were contributions on indirect taxes and the Border. My comments are without prejudice to decisions that might be made one way or another in the budget. A 2.5% increase in the rate of VAT in Northern Ireland is due to take effect in January, as the cut in the British VAT rate was temporary. There is speculation that further into next year, possibly following a change of government, the rate will rise even further. One of the main difficulties with the 0.5% increase in the VAT rate last year was that it might have advertised differences with the rate in Northern Ireland but underlying differences include the exchange rate and price factors independent of tax and exchange rates. That point has been well demonstrated.

I agree with Senator Hanafin in his contention that we can bounce back and we will do so more quickly if we take the right action now. I also agree with Senator Boyle that incomes have become too high in comparison with those in other places. That was part of the logic in joining the single currency. There is little doubt, however, that incomes have fallen in the public and private sectors.

As Senator O'Toole acknowledged, there is no antagonism towards the public service. That is true of the vast majority of Government Members. We recognise the great contribution it has made, as we have seen recently in the response to the flooding throughout the country. Volunteers and various branches of the public service have come together and done a fantastic job in dealing its effects.

Senator Alex White expressed a sentiment which almost sounded like a sound bite but I agree that our measure of success should not be the suffering of the people. This is not a gratuitous or masochistic exercise; we are only doing what is absolutely necessary. If one likes, it is being done to secure the future viability of the State, economic independence and control over our own decisions.

I am delighted the strike has been called off, or at least that is the information passed on to me. When the second day of action was announced last week, I felt the unions were putting pressure on nobody but themselves.