Larry Butler (Fianna Fail)

I welcome the Minister of State. We have had to put together a very difficult budget. I am sure the Minister spent much time on the budget to ensure we got as fair a one as possible. It is fair to say we were forced to do things we probably should have done earlier. We should have looked at our public sector, which we have now been forced to do. That is the one criticism I have that we should have done this two or three years ago.

It is also fair to say the public sector has been extremely good and has been diligent in the work it has done. Those in the public sector are investing in this country and in their jobs, which is vitally important. We have only started to look at the public sector.

It is important to bear in mind that when we looked at the wage bill in the public sector, we found it was far too high. Once wages go over 51% in any company, alarm bells must start to ring. That is exactly what has happened here. For example, the wage bill in the health service is 51%, which cannot be sustained. Senator Hanafin gave us examples of what teachers, doctors, consultants and so on earn in the neighbouring island. We cannot ignore that under any circumstances.

This is an opportunity to reform the public sector. In the negotiations which broke down, the unions said they were prepared to look at the reform of the public sector. I suggest to the unions that now is the time to do that and not to be dragged screaming to the table 24 hours before another budget. That would be wrong. We must ensure we get the best value for taxpayers and give an efficient service to people who pay their taxes.

If one was asked to take a 5% pay cut in the private sector, one would certainly take the hand of one's employer because we all know people in the private sector have been taking 25% and 30% pay cuts and that many people have lost their jobs. We know that those in the public sector are angry, that it is difficult to lose money from one's wage packet and that it is not what we like to do.

However, good housekeeping would not allow us to continue to borrow at the current rate. The people lending to us would soon tell us it is not possible to continue to borrow. Where would we go then? There would be no money to pay the public sector. The taxes we are getting in have sharply dropped from €55 billion to €32 billion. It would be unsustainable to keep borrowing the difference over the next five years. The unions' proposal that we extend borrowing over a longer period would cost us €2 billion to €3 billion per annum to fund. Surely, that does not make sense.

That is why the Government had to take very difficult decisions in the budget. It looked at the public and private sectors and at social welfare, including old age pensions. As reasonable a job as possible was done.

It was important to send a message to our European counterparts and the people buying our bonds on the international markets who are looking at how we are conducting ourselves. I believe that message was well received in the international markets.

It was good the Minister mentioned that it was probably one of the toughest budgets we will have to present. There is still much work to be done before the next budget. Now is the time for the unions and the public sector to look at finding the best system before the next budget. It is an opportunity for us to have a well organised and well motivated public sector. That is what we need because the public sector plays an important role in any country. The public sector in this country has not been found wanting.

It is important to mention that unemployment has stabilised at approximately 12.5%. Senator Hanafin said there was a very slight upturn of 0.03%. Although it is very slight, it is important to see us turn the corner. We are at the bottom currently and we can only improve.

I take this opportunity to wish a happy Christmas to my colleagues opposite, the Minister of State, the Acting Chairman and the staff, who work diligently to ensure every operation goes well.