Feargal Quinn (Independent)

I regard my experience in running a business as not unlike the experience of running a Government. It is so easy to do in the good times and it is so easy to be critical in the bad times. In the good times of running either a Government or a business it is easy to explain that challenges exist which need to be faced but that everything is going well and the profits can be divided and shared. However, when the business or Government hits the wall, so to speak, we need something like a short, sharp shock, as Senator MacSharry said. It is very easy for those in Opposition to criticise the Government and to say it is not doing the right thing and that it should delay. I do not believe a business could survive in that way and neither could a Government or the economy. I think of the criticisms made when the Government backed down on the suggestion of unpaid leave. The very people who criticised the Government for backing down are the very ones who now say it should have been accepted. This does not make sense.

I refer to the economic situation in countries such as Greece and Dubai. As late as yesterday the Greeks were saying they would not take the same actions as Ireland did and now they are paying far more for their money and they do not enjoy the confidence of the international markets. We need the honesty to face our challenge. We have to take these cuts. We have to sell these cuts to our own people by saying we do not have a choice and that it is better to do it now rather than to put off. These cuts are not easy. The Minister for Finance has said that those at the top in the public sector will lead by example in the national readjustment of pay, which I welcome. The private sector has already endured massive reductions. I know the public sector has had to endure two substantial pay cuts this year but those in the public sector have relatively secure jobs and secure pensions as well while at the same time almost half a million people are unemployed, mostly from the private sector. We must ensure a balance.

According to a survey carried out by Marsh and McLennan, the human resources consulting unit of Mercer, released yesterday, half of all companies in Ireland plan pay freezes this year and seven out of ten companies reduced payroll costs in 2009. It is never easy.

When I was in business I remember one occasion when I had to explain to the 90 people employed in one section that the business was not doing as well as expected and they would have to go. At least this was at a time when jobs were easy to come by and it was not disastrous for those people. This is what a business has to do in those circumstances and this is what a Government has to do when it hits the tough times.

According to the ESRI, average pay in the public sector remains higher even after the cuts announced in the budget. If the Government did not show leadership or the appetite to reduce these costs, competitive adjustment would have to be shifted to the private sector by having it take even bigger pay cuts. We must bear in mind the stark situation that if unions succeed in their plan to resist the cuts, the next cuts will not be by the Government but by the IMF.

In regard to the manner in which unions behave in such circumstances, the case of British Airways, which is losing €800 million per year, comes to mind. When it told its staff that some steps would have to be taken to overcome this problem, the union's response was that its members would effectively close down the company by striking for 12 days over Christmas. I do not understand the logic of unions behaving in that way. I hope it is only a negotiating tactic on that union's part.

I do not understand the mindset of people who do not recognise the situation we are in and who do not agree that we have to act. If the IMF intervened here, the situation would be stark and cruel for all of us. We must do our utmost to avoid that. We are able to control our own destiny now. I realise many people are complaining about the pay cuts but they also have time to complain about our massive deficit. Such commentary is inconsistent. How can they do both? The pay cuts are being implemented to enable us to reduce our massive deficit.

In 1985 the then Government was slow to react to the fiscal crisis and it allowed spending to rise by 7.5% in that year. Ireland was the only EU member state to go into recession the following year, in 1986. By contrast, the Government took decisive action in 1988, with the support of the Opposition, and cut spending by 1.3%. The following year the economy grew by 4.7%. We can take great inspiration from our determination and experience of turning around our economy but we need a to have a fighting spirt. We need to be able to say we can do this, that we cannot put off doing it and that we must do it now.

Instead of focusing on what has happened with the banks and asking where is our bailout, we should do our utmost for this country if we are avoid having to be bailed out by somebody else, such as Dubai has experienced. We need selflessness, which is so often absent from the debate on ways to get the country back on track. We have very high unit wage costs. That makes it more difficult for our economy to grow quickly and to generate tax revenue. Therefore, there is no option but to address that in some form or other.

I will mention again what is happening in the private sector and I am conscious of repeating myself. I said to some people in Dundalk who were being made unemployed that they would have to go work in Newry and they said that the pay there only one third of what they earn here. We must become competitive and examine how we can do so in a manner that includes wage costs. How can we manage to do that in the private sector if we do not at least attempt it in the public sector?

I support this Bill as I believe the Government has shown a fighting spirit with these budget measures. Our future situation remains in our own hands and our future economic growth depends on the cutback measures we introduce now.

The question at issue is the semi-State sector and how we should handle it. Clearly, there is a difficulty there. I had the experience of managing An Post many years ago. It is useful to recognise that when An Post, which was part of the Department of Posts and Telegraphs, became a separate organisation, the then Government gave to the new board of An Post the responsibility of looking after its ability to survive. Therefore, I understand the Government faces the challenge of how it will handle semi-State bodies, particularly semi-State utilities that are not necessarily in the front line of competitiveness. That is a very difficult one. What is required will not be easy to experience. Those who have worked in a State body that becomes a semi-State body still wear the hat of a State body and believe that they are part of the State. We must recognise that is a challenge. I urge the Government to pay particular attention to that. We have semi-State bodies to which we have given independence and we should ensure we do not interfere too seriously with that. However, we have to balance the books. We have to be jugglers and to keep those two balls in the air.