Feargal Quinn (Independent)

The Acting Chairman is a disciplinarian and is keeping us on our toes.

I found this debate very interesting. I like to hear a Minister of State who is in control of his or her brief, knows what he or she is talking about and is determined to put it across. I do not think the Minister of State is right in everything he said, but he has asked those of us who are critical to be more explicit. Senator Mary Ann O'Brien was explicit in what she said.

I have argued that we should be running the country more like a business. If a business is in trouble, it renegotiates with suppliers in order to survive. The Croke Park agreement does not go far enough in this respect. It does not seem to be working and even if it was it would be very difficult to argue that we can afford it because things have changed since it was put into operation.

Now that the Central Bank has cut its forecast we are borrowing from month to month to keep afloat, as the Minister of State said. How are we still able to afford incremental pay rises? According to the CSO figures from last November, the growing pay gap means earnings for public servants are almost €300 a week higher than those in private companies. Weekly earnings in the public sector now average €906 compared with €617 in the private sector. Those figures are explicit.

A county manager who spoke to RTE said he tried to reduce the leave of local authority staff on the basis that "We felt that was consistent with Croke Park" and did not involve compulsory redundancies or reducing pay. He then went on to say "It eventually emerged that there was an increase in leave for outdoor staff, no change in leave for the bulk of staff, modest reductions at the very top and, perversely, for those staff for whom the State has decided their leave is too high they are to be compensated for the reduction in their leave by giving them more leave."

He said there was an attempt to raise hours from a modest 33.25 to just 35, which had been ruled out under Croke Park. He said they could not advance any reductions in premium pay and the view was that premium pay for staff, such as for overtime and weekend work, rendered them completely uncompetitive. He said it has been quite frustrating addressing the reform agenda. He was actively involved in this issue. It is a damning appraisal from someone on the inside. How is this a good deal for the consumer and taxpayer?

In addition, it seems that the coalition's public stance on the agreement may need to change. A survey of 520 city and county councillors, of whom 317 were from Fine Gael or the Labour Party, shows a desire for change. In all, 65% or 206, of the Government parties' councillors said the deal should be renegotiated. The majority of respondents also said the payout of an annual €250 million in bonuses or increments to public sector workers should also be stopped. A lot of the public may feel the same.

Jürgen Stark was a top German official in the ECB. He argued public sector pay in Ireland is too high by eurozone standards and should be cut to help restore order to the country's public finances. He said that by implementing changes the Irish Government has the chance to surprise the market positively. In this respect, it is interesting to study Lithuania. I have become a fan of its economic approach. It had reached a new low and was in a much worse situation than Ireland when the IMF was called in.

It has come back up very quickly. It implemented tough measures, such as a reduction in top level public sector salaries of more than 20%. That, along with other cuts, has seen it become one of Europe's success stories, just as Ireland, it is to be hoped, will be. It is one of the fastest growing economies in Europe with an annualised growth rate of 6.6%. When one compares that with Ireland, one realises how well it is doing. We must take heed of how targeted cuts can result in significant benefits.

We must tackle inefficiencies and consider unpopular measures like cutting public sector salaries. Lithuania has taken the hard medicine and many believe it is on the road to recovery. Its growth rate, at least, would point to this. Too often politicians are worried about re-election and do not want to touch taboo subjects. The Government must show real courage to further restore our competitiveness and fuel our recovery.

It is so interesting to listen to Senator Mary Ann O'Brien. She talks about running a business and says when things change in the outside world, the person running the business must also change. The Minister of State is running this business and things have changed. The expected growth rates have not materialised and on that basis he must go back to his employees and say we have a challenge on our hands. A good manager is able to convince the employees that they must make changes. There are enough examples in the Croke Park agreement that would allow him to say things have changed, we must also change and it would be to all our benefit to do that.

Senator Hayden said we must renegotiate because the lower paid are not paid well enough. That may be the case but we must renegotiate and see if there is a better deal. We do not want to end up in the same situation as Greece and we could do that if we do this wrong. A good manager, a good disciplinarian should be able to convince his employees that we must make certain changes in all our interests.