Jim Walsh (Fianna Fail)

He did not tell us that is was like going to an ATM to withdraw cash using the taxpayers' PIN and not their own. Benchmarking should not have happened without benchmarking across other states in the European Union and any productivity which would accrue from it should have been clearly defined in advance. Unfortunately, we are now in a very difficult situation from which we may find it extremely difficult to extricate ourselves sensibly in the future, given the global economic background. One thing any company has to do when it hits turbulence is to take corrective action immediately. Pay is one way of doing it, and it is difficult. I recognise that people in the public and private sector have entered into financial obligations and commitments in the expectation of a revenue stream, and when it is reduced it has consequences and poses difficulties for people. However, the one thing companies do is downsize the numbers.

I complimented the CPSU this morning. It has highlighted clearly the significant dysfunction in our public services. People who worked in the Passport Office have telephoned to say they were willing to come in and give of their time voluntarily to issue passports in order to meet the demands of the people who are left in extreme difficulties because of the action in the Passport Office, which nobody could stand over, given the difficulties it is posing for people. That needs to be said.

In our public services we are extremely fortunate to have excellent people who work very hard and without whom the system would collapse. However, beside them are many people who are not functioning at all. A public servant contacted me today and talked about the holidays people have which, in some instances, extend to 45 or 50 days a year. It is unheard of and one could not achieve it in the private sector. There is reaction to the pension levy and we have all been affected by it. The reality is that one could not buy the pension scheme which we enjoy in the public service in the private sector, and there is no recognition of that.

We also cut social welfare. All of it is highly regrettable but necessary if we are to restore any shape to our public finances. One thing that troubles me is that there is great division between economists as to what is likely to happen in the short to medium term. There is a view that because we are seeing growth at present, this will continue and we shall reap the rewards by next year. Economists have been expressing serious concern about China, which has been relatively unaffected, and the Asian countries. At the moment they are providing a high degree of stimulus not just for their own economies but elsewhere by their transfers and investments abroad, particularly in the United States in which there are some concerns in this regard.

Last week I had the opportunity to meet a prominent economist in the US, Dr. Arthur Laffer. He is famous for the curve he did at the Washington Hotel some years ago. He talked about the various stimulus packages in the US and I had not realised there were so many. There is a farm Bill, a housing Bill, the Larry Summers Bill, which is costing $170 billion, the AIG Bill costing $185 billion, Bear Stearns, Fannie Mae and Freddie Mac, which he reckons at some $5.5 trillion. There is the $700 billion Paulson package, which was President Obama's initiative. Dr. Laffer said that all of this indicated an overreaction. He estimates that the stimulus initiative comes to $3.3 trillion and because that will expire towards the end of this year as well as the tax increases triggering in from 1 January next, while the US economy may grow by around 3% this year, it will decline by about 6% next year, which means it could be 6% down on 2010. Obviously, if he is right this will have global consequences.

I am only saying this as a background to where we are. We need to be very careful and ensure, in so far as we can, that we correct as much of the public finances as possible. I honestly believe this means a significant reduction in numbers and greater productivity. I shall finish by saying that the early retirement schemes we have had in the past have tended to be an avenue for the really good people in the public service to get jobs in the private sector. If that continues, it will have an effect on quality within the public service. Again, this is just another challenge that needs to be watched in the context of everything we are considering at present.