Private Members' Business. - Public Service Pay: Motion. – Dáil Éireann (24th Dáil) – Wednesday, 23 Oct 1985

Private Members' Business. - Public Service Pay: Motion.

Mr. B. Ahern:

I move:

That Dáil Éireann condemns the Government's mishandling of public service pay.

The issue of public sector pay increases has been handled in a bungling fashion by the Government. There are many reasons why we decided to move this motion on the first day of the Dáil after the recess. Public service pay was one of the major issues during the recess and it is appropriate to discuss the matter in the Dáil rather than in the media. Last Tuesday, for the first time 150,000 public servants took strike action and tomorrow, the public services committee of the Irish Congress of Trade Unions meet. Tonight's debate gives the Minister an opportunity to outline the present position in regard to the reappointment of the arbitrator and other matters. If the Minister's plans remain unchanged further marches and stoppages will take place over the next few weeks. Last Tuesday's public service strike over the Government's handling of a number of pay related issues involved hardship for many people. Schools were closed, air services were brought to a standstill, Government Departments were unmanned except for a few senior staff, county councils and corporations closed, refuse collection, road works and maintenance services ceased, customs staff stayed away, thus losing revenue for the State, hospitals operated restricted services, court sittings were disrupted, meat factories ceased production, prison officers staged a protest. These and the lack of many other services affecting the old, the infirm and unemployed brought the country to a standstill. It is of paramount importance to discuss why this strike took place and put to the Government a case which would avoid a recurrence of this strike because of the damage caused to the nation as a whole.

The breakdown in negotiations between the Government and the public service trade unions, and the trade union movement in general, in recent months has occurred because of, amongst other things, the Government statement of 14 August which set out to impose a pay freeze in the public service for 1986, to refuse to honour special grade claims/pay findings and the non-appointment of the public service arbitrator. When the Minister, on the day preceding the strike of 15 October, said that he was prepared to negotiate a 25th round general pay agreement covering 1986 and beyond, to negotiate on other pay related matters and appoint an arbitrator in the context of agreement being reached on the first two proposals, provided that the public service committee agreed to enter into discussions about the various methods of public pay determination and to discuss any other matter which might be perceived as causing difficulties for the unions or their members, he acted far too late and after damage had been done to good industrial relations in the Civil Service and the public service generally.

It is vitally important to look at what developments occurred in the negotiations in the months prior to 15 October. On 14 October last in the news analysis page of the Irish Independent the Minister stated that the Government were extremely taken aback that several days before the public service stoppage began, the leaders of the unions involved were not able to respond in any meaningful way to the positive initiatives which could have diverted the strike and that to his astonishment he had discovered that the public services committee delegation did not have the authority to negotiate pay rounds. The Minister knew exactly the position in the public service on that date. The reason they did not respond at that stage was that the public services committee did not seek a centralised 25th round because for most of the public service the 24th round does not end until the end of this year, and only the most preliminary steps had been taken to process the 25th round claim. In the early summer, the public services committee resolved to discuss the 25th round and the committee's likely approach to it at the September meeting. However, the Minister's statement of 14 August meant that the priority for the committee was not the arbitration system and the Labour Court as in 1984, but the removal from the negotiating table of the 12-month pay pause for 1986. Even if they had wanted to have discussions on the centralised 25th round they would have needed the mandate of the individual unions followed by a majority decision of the public services committee. When the Minister made his various statements on 11 October and thereafter he knew that they had neither, yet he tried to make capital out of the fact that he had a mandate from the Government and was prepared to make an offer on the 25th round. It is clear that the unions just wished to get an indication that the 25th round would not include a Government imposed pay freeze.

I am astonished at what has happened because the warning signals were clear as far back as last April when the Civil Service general staff panel wrote to the Minister asking about the position on the arbitrator. There was various correspondence after that in which the Minister seemed to say that they were delaying. However, it was clear from that correspondence what was the position of the central staff general council panel. They separated the two matters of the arbitrator and the negotiations on conciliation and arbitration. In a letter to the Minister I understand that the general staff panel said that they saw no connection between the appointment of the arbitrator and possible discussions on the operation of the present machinery for pay determination and accordingly they requested that the views of the Government regarding the appointment of Mr. Geoghegan, SC, be conveyed to the panel as a matter of some urgency. It is unreasonable of the Minister to say that he was not absolutely clear as to the unions' position until the last minute. Relations with the unions were also clear from a number of statements made on 20 April 1985 at the annual meeting of the Union of Professional and Technical Civil Servants at which their secretary, Mr. Greg Maxwell, said that the Government were trying to dismantle the system of comparability and to abolish independent arbitration and rejected any invitation from the Minister to enter into the "spider's web," as he put it. The chairman of the same union, Mr. Alan Craig, told the same conference that they must be ready to take action at any time to protect their vital interests and the fundamental base where pay determination is threatened. What would happen later in the year was quite clear. On 18 September, almost a month before the strike, the Government reported that they were surprised at the decision of the Irish Congress of Trade Unions to back out of the 1 October meeting on the jobs crisis. The congress decided not to talk to the Government because of the Government's demand for the 12-months pay freeze and the non-appointment of the arbitrator. For the Minister to try to give the impression that he was unaware of what might happen on the non-appointment of the arbitrator is silly. The build up of hostilities did not only stem from the 14 August statement, though clearly the Government's indication that they accepted that the basis for determining conditions of pay and employment should be free collective bargaining and that the Government concluded that apart from existing commitments under the national plan there should be no increase in the public service for at least 12 months from the expiry date of the 24th round, indicated a conflict of interests.

The present Minister for the Public Service when appointed was the first Cabinet Minister with full responsibility for the Department of the Public Service, and much play was made of that at the time. He commenced his task in a manner which spoke of effectiveness and efficiency. I leave others to judge whether he has achieved those. Time and time again he decided to adopt terrier-like tactics of confrontation and bringing people to the battle lines rather than consultation and conciliation which would be more appropriate in matters as delicate as industrial relations. I am sure that his colleague, the Minister for Labour, would agree with me on that.

I will give a few examples of the many attacks on the public service. At the 1983 Fine Gael Ard-Fheis the Minister made a hard hitting speech on the public service and stated among other things that he had enough pious rhetoric about reform of the public service and that the great stumbling block to change had been an attitude most often prevalent amongst senior management based on the traditional approach which was, "If it works, why change it?". That is an unfair way to attack senior civil servants.

On 31 August 1983 the Minister was compared to Adolf Hitler and Margaret Thatcher by the leader of the Civil and Public Service Staff Association over a dispute on computerisation involving clerical assistants. At one stage in those negotiations the Minister decided to take away the right of the staff to stop the automatic deduction of union dues and stated at the time, "If the other side will not abide by the rules and refuse to accept an independent referee, they cannot expect us to play ball". This is an extraordinary remark by a Minister who within a year was to attempt to take away the referee altogether. He told the Association of Higher Civil Servants at their annual conference in early May this year that the Civil Service does not exist for the benefit of civil servants. Is it necessary to tell any civil servant that? At the same conference, although a motion had been withdrawn by the relevant branch and by the executive, he spoke of motions on anarchy.

At the Fine Gael Ard-Fheis on 6 October 1984 the Minister, speaking on pay, stated as Government policy that there would be no further increases for public servants in 1984 and a nominal increase in 1985. He said that any new demands for special increases during the life of the plan could not be countenanced and, having regard to the very special advantages public servants enjoy at present in the way of security of employment, they should refrain from taking any action which might be seen to threaten the success of the Government's plan for the restoration of public finances. He stated that by and large civil servants have recession-proof jobs but they cannot expect at the same time to have inflation-proof pay, that any such demands could not be countenanced by any member of the Government and that if the Government's plan did not succeed public servants would, more directly than any other group, have to suffer the direct consequences. He told them also that it was not an exaggeration to say that their jobs were at risk. If those were not warmongering statements and attacks on the public service then I do not know what they were. The Minister made several other statements of a similar nature and eventually, in face of the threat of a strike in October 1984, he gave in. The arbitrator was appointed, and the Minister continued to make statements that nothing outside the plan could be paid.

On the eve of the 1985 budget, having set aside £20 million for public service pay, the Government said that they would pay the arbitrator's award, that they accepted it and that £88 million would have to be found overnight. As I pointed out at the opening of the debate on the budget, this gave rise to a very strange coincidence. I remind the House and those outside it of that £88 million because if I have heard the Minister once I have heard him a hundred times this summer saying that the only way an increase in public service pay can be got is through taxation or foreign borrowing. That £88 million was obtained by revenue bouyancy. An estimated £58 million was just stuck into the budget and the extra £30 million was estimated savings on staff costs. That is how the books were balanced. After all the talk about how sacrosanct the figures in the national plan for public service pay were, £88 million could be got overnight and it is difficult to accept that the only way it could be got was by additional taxation or borrowing. Events this year are following the same pattern, except that because of Government mismanagement and indecision a more serious dimension has now been introduced. The Government and the Minister for the Public Service, in particular, succeeded in arousing the anger and hostility of virtually every man and woman employed in the public service. Whether in the Civil Service, the local authorities, schools, hospitals or elsewhere, that anger and hostility more than anything else brought the thousands of public sector employees on to the streets last Tuesday week. The Minister for the Public Service has been engaged in Civil Service bashing since he took up office, as I have outlined. It would seem that he deliberately sets out to paint a picture of the Irish Civil Service as comprised of people with cushy jobs who do little or no work and are no better than parasites living off the taxpayer. The Minister likes to present himself as the great crusader who would like to change that.

Civil servants rightly regard this as a libel on themselves which they and all who have first hand knowledge of the capacity and calibre of the Civil Service resent bitterly. The many thousands of civil servants who have been characterised, as I have just described, by the Minister for the Public Service over the past three years must have smiled cynically to themselves when the Minister went on television to say that he was against those who were involved in Civil Service bashing and to pay tribute to the staff. Public servants will have little difficulty in identifying the real civil servant basher.

The Minister for the Public Service and the Government must realise the damage they have done to the Civil Service in the way they have constantly kicked it around and because of the shape and manner in which they have continued to portray it. Every Minister and ex-Minister of this House will testify to the high competence and total integrity of our Civil Service. This has been one of our country's great assets at home and abroad down the years, and that any Government should set out as this Government have done to degrade the Civil Service is nothing short of disgraceful. Not to be unfair to the Minister for the Public Service, let me say that the Minister for Education made probably some of the worst remarks of all and they will be dealt with by some of the other speakers to this motion. Apart from her morality speech, she said when talking about the loyalty of civil servants, "They give that kind of service because they appreciate the special conditions of employment they enjoy, the most advantageous being permanency as well as very generous pension rights." Nobody could agree with that comment. They give because of dedication to their job and nothing else. That remark was totally unfair as was the rest of the speech which she made in O'Shea's Hotel.

Civil servants have no voice in this Chamber and I would like to put down some facts here. Since 1981 we have had the 22nd, 23rd and 24th pay rounds which commenced on 1 December 1981 and ended on 31 December. Inflation is about 37 or 38 per cent and the civil servants received an increase of 24 per cent, 14 per cent less than the inflation rate. The Minister for the Public Service and others in the Government say that public servants have got all their increases in line with inflation. If that is wrong the Minister can correct me later, but on my figures they have lost 14 per cent, which surely pays for their permanent, pensionable and recession-proof jobs. Was it not the Taoiseach who when this House met last on 11 July this year said that, this is now one of the healthiest economies in Europe with a growth rate higher than anywhere else; that this year the after tax income of workers will be up rather than down, that purchasing power will rise for the first time in six years, that private consumption and living standards will rise for the first time in years? Shortly afterwards the Dáil went into recess. On 14 August the Government stated that there should be no pay increase in the public service for at least 12 months after the expiry date of the 24th round. That is an extraordinary change about in a few weeks.

There is no argument about this country's economic difficulties, but on the question of pay determination it is essential that some conditions exist to determine public servants' wages. An agreed and independent neutral party to whom disputes between employers and workers can be referred is also essential. The alternative which we now have is confrontation in which the winner is the group who can inflict the most damage.

Comparison with the pay of workers in outside bodies doing comparable work has been the principle in determining pay for the public sector since the fifties. The Labour Court and the Public Service Arbitration Board are the independent third parties to whom disputes in the public service are referred for recommendation. The arbitrator, usually a senior counsel, is agreed by both unions and Government. It was to maintain this system that thousands went on strike on Tuesday of last week. During the week I read the Official Report of 30 March 1938, column 1196, volume 70 when Deputy Costello moved:

That the Dáil is of opinion that the Government should immediately establish machinery whereby conditions of employment in the Civil Service and other matters which may from time to time be in dispute between the Government and the Civil Service would be settled by agreement between the representatives of the Government and of the Civil Service associations, and, in default of such agreement, would be submitted for decision to an independent arbitration board, the awards of which, subject to the overriding authority of the Oireachtas, the Government would undertake to implement.

He went on to fight the case for arbitration and he ended up by saying, and I quote from column 1210 of the same volume:

For these reasons I believe that this machinery of arbitration should be set up in the public interest — not in the interest of a Party or even of the personnel of the Civil Service, but in the interest of an incorruptible Civil Service, an efficient Civil Service, and an independent Civil Service and, ultimately and in the last analysis, in the general interests of the public — of the people of this country at the present time and of the generations to be in the future.

We are in that future and the Minister for the Public Service is trying extremely hard to dismantle the conciliation and arbitration machinery which has served the country well for 30 years.

I shall conclude by making some constructive suggestions by way of trying to overcome the impasse. The road the Minister is taking is not leading anywhere, but I do not think that the unions, public service employees or any of us in Opposition have any wish for further strikes. It was a shame that last week's stoppage occurred. It was caused by delay, procrastination, arrogant statements and so on. Action must be taken now to avoid any further national stoppage.

The adoption of the following recommendations would not cause any loss of face to anyone and would solve the dispute quickly. These recommendations are, first, the re-appointment of the arbitrator and the continued operation as before of the conciliation and arbitration scheme. Secondly, the Minister should invite the public service committee to discuss at an early date a possible 25th round pay agreement for the public service which would take into account any pay related matters other than awards made already. Thirdly, with regard to the special grade findings which have either been signed by the arbitrator or are pending signature, the Government should negotiate with the individual unions concerned and with the public service executive of the ICTU a solution which would be acceptable both to the Government and to the unions. If that is not possible the Government should bring their proposals to the Dáil. At that stage the House could decide whether to accept or reject the proposal. Lastly, as a matter of urgency, the Government should call on the public service unions to enter into meaningful discussions on the present conciliation and arbitration system for public pay determination. In the meantime the present system should continue as before.

There is much room for discussion on the conciliation and arbitration system which may be both in the interest of the Government and of the public service unions. The conciliation and arbitration schemes for the public service, local authorities, teachers and the Garda are similar, with the exception that the Civil Service and the teachers have a clause whereby a decision must be brought before this House if agreement cannot be reached. Perhaps it would be in the interest of the nation if a pay research board, to which there has been reference frequently, for the public service and the private sector were established.

Invariably what happens is that the public service accept the minimum and then must endeavour by way of grade claims to keep in line with people in comparable positions in the private sector. On that basis the various findings of the board either in the public or the private sector could be examined and in that way a clearer indication could be given as to what increase the country could or could not afford at any time, taking into account the different and varying circumstances of the sectors involved. If such a board were established and functioning properly, the conciliation and arbitration scheme might not be as overburdened with grade claims as it is now.

I ask the House to support the motion, to re-appoint the Arbitrator and restore the proper machinery for the resolution of disputes. This is the key issue in the present impasse. By acting in this way the Minister would not be prevented from seeking and entering into discussions on machinery for the future. The Minister's argument can be compared to that of his colleague, the Minister for Labour, entering into discussions on his industrial relations document by asking first that the unions shut down the Labour Court in order to concentrate the minds of the unions. The success of the Minister for Labour in such action should be self evident and I contend that the same fate faces the Minister for the Public Service. He should acknowledge his misjudgment and announce to the House this evening the appointment of the Arbitrator. Then we could move forward. Otherwise the country will face many difficulties and much argument. The Minister never thought matters would reach the stage they are at now. He was advised badly and he adopted an arrogant approach. He should avail of this debate to end the matter now rather than waiting until several more national strikes have taken place.

Minister for Labour (Mr. Quinn):

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann approves of the Government's action in authorising the Minister for the Public Service to offer to negotiate, within the unavoidable Exchequer constraints an agreement with the Public Services Committee of ICTU covering the 25th pay round and other pay-related issues."

The Opposition spokesperson for the Public Service and Labour has said that the last thing the country needs is confrontation and argument. I wish to begin my contribution by agreeing with that sentiment. We do not need that kind of confrontation. As Minister for Labour I regret very much last week's stoppage. However, it is very important that we keep a sense of perspective. The constraints on the Exchequer at this time are very severe. The fact that annual debt servicing needs now exceed annual PAYE receipts is one measure of the dimension of the problem. The difficulties faced by employees in meeting their own and their families needs are severe also as the Government are all too well aware. In such circumstances there are bound to be tensions and difficulties between the Government and public service employees, but these difficulties are not in any way unique to this country.

There is scarcely a country in western Europe which has not had to effect some measure of retrenchment in the area of public service pay and in some of those cases the retrenchment has been far more severe than anything experienced here. As recently as Tuesday of last week, the entire employment of Greece was closed following such severe type of action. When the extent of our problems in relation to public finances is compared with theirs, the comparison is worth noting. I regard these tensions and problems not as a curtailment of free collective bargaining but as fit subjects for resolution within the context of free collective bargaining.

I wish to turn now to something the Opposition spokesman said at the outset of his historical review. He referred to a pay diktat. There is no basis for assertions about a pay diktat. The 24th round award for the great majority of public service employees is not set to expire until 31 December 1985, more than two months away. It is far from uncommon for employees to have received no firm offer from their employer two months after a pay award has expired, but it is very uncommon indeed for employees to have received a firm offer from their employer two months before an awared is due to expire. Yet not only have the Government indicated their intention to negotiate a 25th round agreement but the Minister for the Public Service has offered also to table an opening pay offer on behalf of the Government. In these circumstances I suggest that use of the inaccurate and inapplicable term, "diktat" should cease immediately.

Much of the recent comment about public service pay seems to reflect little more than a misunderstanding of the role of the Government in this area. The Government have a responsibility to the 170,000 or so employees in the public service but they also have a much wider responsibility to 3,500,000 citizens, which figure includes also those public servants. The Government's responsibility for the public finances cannot be shut off totally from their responsibility as an employer.

Just as the Government understand the role of the public service unions and do not expect them to abandon claims because of the problems in the public finance, so also the role of Government should be understood and they should not be expected to concede claims without regard to their financial circumstances. It would be an abnegation of the Government's responsibility, not just to the country as a whole but also in a real way to their own employees, for them to take the course of action that some people have suggested. More than most people, the position of public servants is dependent on the health of the public finances. If the health of the public finances is critically undermined, the stability or standard of employment of public service workers will suffer sooner or later. The former Chief Whip of the previous Administration, Deputy Ahern, is well aware of what I am referring to.

While public servants may oppose particular restrictions imposed by Governments at a given time, they will have far greater cause for complaint if this Government concede demands without regard to the capacity of the Exchequer to bear them. I noted with interest in relation to the machinery available to the public service that, among the quotations which Deputy Ahern read into the record of this evenings debate, he referred to a quotation from as far back as 1938, when a Fianna Fáil Government were in power. A prominent member of the Fine Gael Party at that time, Deputy John A. Costello, was arguing on behalf of the public service that the Fianna Fáil Government should establish a C & A scheme. It is extraordinary that that Government and, indeed, successive Fianna Fáil Governments, did not see fit to establish such a scheme. It was not until the inter-Party Government were in office in 1954-57 that the Leader of my party, Deputy Norton, put on the Statute Book the very kind of scheme to which Deputy Ahern was referring. History can be very selectively quoted for the purposes of opposition and debate.

Mr. B. Ahern:

The Fianna Fáil Party lost the election on that debate.

Mr. Quinn:

What public servants want is not just exhortations from people in Opposition but evidence of what they do in office and the Labour Party's record in this regard is there for people to see.

Mr. N. Treacy:

It is hard to see.

Mr. Quinn:

Having regard to the time allotted to me by agreement on both sides of the House, may I conclude as Minister for Labour by saying that the Minister for the Public Service on behalf of the Government has given the public services committee of the Irish Congress of Trade Unions a firm commitment to negotiate the 25th round and other pay-related issues? As Deputies will be aware, it is an article of faith with Ministers for Labour that there are few differences that cannot be resolved through negotiation. There is nothing whatsoever about the present situation that would make me depart from this conviction. I urge the Public Services Committee to accept the Government's offer to begin such negotiations without any further delay.

An Ceann Comhairle:

I call Deputy O'Rourke. She has 15 minutes.

Mrs. O'Rourke:

I wish to support the motion in the names of Deputy Ahern, Deputy O'Kennedy and myself that we condemn the Government's mishandling of public service pay. I could not help paying attention to a statement by the Minister for Labour that what the public service did not want to hear were exhortations about pay or any other issues. I refer now to exhortations which were addressed particularly to our teachers. I was glad to hear the Minister say he was of the opinion that the public service did not want these exhortations. It has been very noticeable in the debate so far, from the Government side, that no specific reference has been made to the C & A scheme already leaked to the media but which had not yet reached the Government. The Minister said that everything was on the table, to put it in more ordinary parlance.

I speak tonight as Opposition spokesperson on Education. When I was appointed nearly three years ago by the Leader of our Party — and I digress a little, but there is a point to my digression — I made a speech about the introduction of charges for school buses. I was lectured very firmly by the Minister for Education to the effect that it was not my duty to oppose and that she would regard it as a reprehensible step were I to stand up for my constituents or for my area of responsibility throughout the country. On several occasions since then she has adopted a hectoring, lecturing tone of voice when speaking of her duties, and, as she would see them, my duties. I have quite firmly, and may I say with modesty, consistently resisted such exhortations. In my party, Fianna Fáil, I represent educational interests. I represent goodwill for education and, while I continue in this position, I shall say what I have to say.

I want to make it perfectly clear that it is the Minister's deliberate arrogance and calculated contempt for teachers which have caused the proposed confrontation between teachers and herself. It is important to put clearly on the record of the House for future reference that, if there are educational stoppages over the coming months, it will be because the Government have deliberately brought them about and have acquiesced in the Minister's blundering and her bombastic statements on Monday 19 August and Tuesday 20 August.

I refer to what has been called, infamously, her morality speech. I think that the Minister for Education was on a high at that time. She had been given, correctly I am sure, a good rating in TAM polls. There was talk that she might become Minister for Finance. Does that not seem hilarious now? What happened to her then, as has happened to Ministers on both sides of this Chamber, was that she got caught up in the belief that what was said in the papers was true and that she would become "macho female" as the Minister Deputy Boland had become "macho male," if such a discrepancy were possible. She decided to give her famous speech to the country and to the nation. It would be correct for me at this time to quote the words that cause the rift. They were spoken in O'Shea's Hotel, Bray, to Young Fine Gael, mark you:

It is vital that all those organisations who publicly clamour for increases should address themselves to the morality of what they are about.

That was the speech which started the fire, which launched the rift and resulted in the clamour which has since arisen. I want to repeat many of the things said by Deputy Ahern about the conciliation and arbitration scheme. It has been accepted by the Government, by employers and by teachers for the settlement of disputes. It is quite ridiculous for the Minister for Education to allege that teachers have behaved immorally in submitting themselves to a process of machinery set up by the Government. One might as well say that everybody else involved in that process was also immoral. The Minister may not like the result. Indeed, the Government may not and lots of people may not. However, the charge of immorality is offensive. Every time I speak on this issue to anybody I put on my two hats, that of Education spokesperson and my previous career as a teacher. I say categorically to this House that for a Minister for Education to issue offensive statements about people's morals is beyond her brief and should not be tolerated. Such statements should be withdrawn.

The current scheme of conciliation and arbitration representative of all bodies involved in the management of primary, second level and other schools was agreed upon and signed by then Coalition Government in 1973. The present claim by the teachers' unions was first presented in December 1982. The claim is now being loudly disclaimed but it will be three years in gestation this coming December. During last August a leak occurred in the national media giving the terms of the draft report which had been sent to Mr. Geoghegan. All the indicators are that it was a Government-inspired leak.

Mr. Bell:

We all know who leaked it.

Mrs. O'Rourke:

I think I am at one with Deputy Bell. I am constrained by my position and I cannot say it but everybody knows who it was. Right on cue with the leak we have the moralistic Minister with her halo clamped firmly on speaking to Young Fine Gael and later to the nation on the radio and saying that this arbitration award would not be paid. Today I listened to a replay of the tape so that it would be quite fresh in my mind. We know the Biblical quotation "Let those without fault cast the first stone". The Minister cast the first stone and committed a grave indiscretion in rushing to the battlements and hurtling down the first stone. The report had not been presented to the Government and has still not been presented. The Minister breached the confidentiality of such a document. It is nonsense for the Government to put hand on heart and declare that they cannot pronounce on the teachers' conciliation and arbitration issue because they have not yet received the report. A Minister who, we are told, is one of the leading lights of this Government, went on radio and was not refuted by the Minister for the Public Service or the Minister for Labour or any other eminent people. Therefore we must take it that she spoke with the imprimatur of the Government. This foolish action by the Minister has directly provoked the present impasse.

It is reasonable to expect that any Minister will argue for his or her Department. We always think in paternalistic or maternalistic terms of a Minister pleading for his or her public servants and arguing their case skilfully and well. This Minister for Education has seen fit on more than one occasion to denigrate and castigate teachers in a thoroughly unpleasant and malicious fashion. She is malicious about teachers. I feel outrage welling up in me when one can discern the snideness and contempt with which she treats teachers. Two years ago there was a half-day stoppage and the remark by the Minister was that the teachers were lucky to have jobs. The Minister is not taking into account the educational needs of the children who are for practical purposes in her care.

Teachers do not want to go on strike, as shown by the long number of strike free years. It was with great reluctance that many of the teachers I know took to the streets with their placards on that day. Many of them would never have wanted to indulge in such behaviour but it had been forced upon them by precipitated action and by the unilateral decision of the Minister which has not been repudiated by the Government. Nine or ten weeks have passed since that speech to Young Fine Gael in the Minister's constituency and her comments on the radio programme the following morning but there has been no sign from the Government as to whether they agree.

It was a very conscious decision by my party to wait and see what the Government intended to do on this matter. I could have been as strident as the Minister but we decided to see how the issue would be treated by the Government. There has been total silence. I discern among leading Ministers on the Government side an attempt to divide and conquer, an attempt within the trade union movement to separate the public service issue and the conciliation and arbitration matter. To divide and conquer was an old colonial trick and I should not be surprised at the people who would purport to put it forward again. That trick will not succeed.

During the past few months and years we have had major changes and initiatives, many of which I have publicly praised, especially in relation to the curriculum and examinations system. Teachers and civil servants have been extraordinarily supportive of the Minister in these moves. Will all of this now founder on the obstinacy of this woman? If this happens, the cause of education in Ireland will have been very badly served. Far from being known as an historic Minister for Education, this Minister will be seen as the worst this country has known. On her head must it be if these actions continue.

In the course of the speech I have mentioned, the Minister said that the executive of the teachers' unions were media crazy, starved for media attention. That is a lark, coming from the Minister for Education who, I have heard from very reliable sources, if she is not in the daily paper summons her advisers to know why. The papers are rung madly and the photographs must go in the next day or she will be equally very cross and will proceed on another lecturing binge. Yet she proposes to lecture the teachers' unions on looking for media attention. She is media mad herself.

Education services have been massively cut back by this Minister during the past three years. At the same time she has initiated many worthwhile programmes. Are all now to be thrown away because the Minister for Education has decided that she wants to go down in history as the strong woman, the Gráinne Mhaol of Ireland. She will not be known as that; she will be known as the person who destroyed education and for ever lost the trust of the teachers, the children and their parents. I beg her, for the sake of the educational future of this country, to take back what she has said.

Proinsias De Rossa:

Our amendment No. 2 states:

To delete all words after "Dáil Éireann" and substitute the following:

"condemns the attempt by the Government to impose a 12 month pay freeze for civil and public servants; deplores the arbitrary nature of the announcement of the Minister for the Public Service which has seriously undermined the procedures for negotiation and arbitration, carefully built up over many years; notes that public sector employees have already suffered greatly through cutbacks, recruitment embargoes, and increases below the rate of inflation; and therefore calls on the Government to (a) re-appoint the public sector arbitrator, (b) honour all awards made by the arbitrator, (c) enter into serious negotiations with public service unions with a view to reaching agreement on adequate increases for public servants, and particularly for the many workers in the public service, who at present earn below the average industrial wage."

It would not have been necessary to put down that amendment if the pathetic Fianna Fáil motion had not appeared on the Order Paper in such a form. It can only be compared to the pathetic handling of the public pay issue by the Minister for the Public Service and the Minister for Education. The Fianna Fáil motion seeks only to condemn the Government's mishandling of the public service pay issue and contains no suggestion as to what the Government should be doing and offers no indication of what Fianna Fáil would do if returned to office. Deputy B. Ahern fudged the whole issue of awards already dealt with by the arbitrator and I do not think it will be possible to find a solution to the problem which the Government face on the basis of fudging that issue. It is significant that the motion proposed by Fianna Fáil lets off the hook all those Deputies on the Government side who have indicated that they oppose a pay freeze being pursued by the Government and who support the reappointment of an arbitrator. Deputies, particularly in the Labour Party, would have no problem in opposing the Fianna Fáil motion, but it would be only reasonable for them to support the amendment which I have tabled. Indeed, I ask Fianna Fáil to accept the amendment.

At the root of this dispute is the right of public sector workers to be accorded equal treatment with their colleagues in private employment, that is, the right to negotiate freely within procedures of arbitration and conciliation established over many years and to which they have applied themselves and agreed to abide by. It is totally unacceptable, when agreements have been arbitrated, for the Government to decide that they want to change the rules. It is totally unacceptable for the Government to blame public sector workers for the state of the public finances, to blame people who are struggling to provide public services in very difficult circumstances as a result of cutbacks and so forth.

The records show that the public sector have been highly responsible in their approach to negotiation and arbitration. However, there is growing frustration at the arrogant attitudes of certain Ministers. It should be pointed out that the vast majority of public servants are relatively poorly paid, many of them being below the industrial national average. It is a popular misconception that they are well paid.

I will give some examples of public service pay, taken from the 1985 State Directory. I will give gross figures, before deductions for PAYE and PRSI. A clerical officer earns as little as £104 per week; a clerical assistant has as little as £102; a messenger gets between £126 and £133; a cleaner gets £109 per week; and a private in the Army can earn as little as £103. That dismisses the myth thrown around that public service workers are well paid, living off the fact of the land. It is totally erroneous.

The Government must accept the need to restore collective bargaining procedures in the public sector. They should reappoint the public service arbitrator, agree to pay the awards already recommended by him and enter into realistic negotiations with the public service unions. Therefore, I earnestly call on Fianna Fáil to accept my amendment. They would then clearly show where they stand and it would enable those Members of the Coalition parties who feel the way we feel to support a realistic proposal. We must not hold our public servants to ransom.

The Minister, Deputy Boland, and other Ministers ask frequently where the money will come from. The answer, given by various Ministers in the House during the years, shows that up to £700 million remains uncollected in taxes. In his statement today the Taoiseach admitted that ten times the amount which this pay award would cost in real terms is outstanding in uncollected taxes. That is where the money can be found to pay realistic wage levels to teachers, nurses and civil servants in general.

Minister for the Public Service (Mr. Boland):

Deputy Ahern read out an interesting script, including references going back to 1938, long before either of us was born and before a number of Deputies in the House came into existence. I do not want to invite the House to go back that far but I ask the House to remember 1982 when the Government of which Deputy Ahern was Whip made a unilateral announcement in the summer that the Government had decided that the employers would not agree to pay any further special increases in 1982 or 1983. The statement went on to say that the Minister for the Public Service would enter discussions with the public service committee of congress with a view to securing agreement to the postponement until 1 January 1983 of payment of the third phase increase in basic pay provided for in the current agreement between the committee and the Minister. Discussions to defer a phase of a general round increase negotiated just seven months previously by the same Government would be initiated.

I invite Deputy Ahern to recall — he must remember discussions at Cabinet meetings which he would have attended as Whip — the reaction of the public services committee. The committee totally rejected the Government's freeze on public service pay and demanded that the Government cease their unprecedented interference with the operation of the agreed industrial relations machinery throughout the public service. The public services committee recommended the unions' participation in a co-ordinated campaign of industrial action to defend all pay agreements.

Some days later, the General Purposes Committee of the Executive Council of the Congress of Trade Unions stated: "This was an arbitrary breach of a freely negotiated agreement reached only months ago and cannot be justified under any pretext". The statement went on:

This peremptory attitude on the part of the Government is unacceptable and poses a serious threat to industrial peace. To seek to operate by way of diktat spells the end of free collective bargaining.

Deputy Ahern was Whip to a Government who were accused of diktat in 1982 and he now comes in to deliver from a script suggesting that this Government are engaged in precisely the same thing. I will deal with that later. The Congress statement went on to refer to the tearing up of agreements freely entered into and stated: "This is the path to anarchy in industrial relations."

The statement blamed the Government for their cynical and dictatorial abrogation of agreements entered into with the trade unions. A letter from the public services committee some days later said it was the view of the committee that the Government were in breach of the current public service pay agreement. Since I became Minister I have not received any letter like that from anybody with whom I had entered into an agreement. Later in 1982 Congress went on to make a statement that the arbitrary breach of freely negotiated agreements was unjustified and totally unacceptable to the trade union movement. Congress warned that it would lead to confrontation and conflict, the responsibility for which lay wholly with the Government.

I wonder how, in the light of that episode just three years ago, Deputy Ahern could have had the gall to come into the House today to make the contribution he did. I can only say that the attitude by Fianna Fáil today at best is ambivalent and it would not be describing it at its worst to describe it as dishonest. I will leave out, in view of his usual contributions in the House, the personal nature of the attack on me as Minister responsible for the discharge of Government policies, but it was interesting to see his obsessive interest in speeches made by me over the years.

I would ask the House to consider and the nation to reflect on Deputy Ahern's suggestion that pay increases can be funded from somewhere other than borrowing or taxation. Perhaps when Deputy O'Kennedy speaks he will explain if pay increases are not to be funded from borrowing or taxation, how they will be funded.

Mr. O'Kennedy:

Revenue buoyancy.

Mr. Boland:

They come from cuts in or charges for public services. We have all seen just how politically unpalatable are those cuts and charges. At present pay accounts for 45 per cent, almost half of net current expenditure, three-quarters of the remainder being spent on social welfare. Therefore, the room for manoeuvre or the desirability to reduce further the other public services financed from the remainder is limited indeed. Presumably Deputy O'Kennedy will explain to the House in detail just which public services he wants cut or which public services he desires to be charged for if the raising of further borrowing or further taxation are not options.

There is no necessity, nor would it be helpful in the context of the debate, to make any reference to the contribution of Deputy O'Rourke, which was not relevant to the text of the motion nor to any matter before the Government at present, except to say that this Government have never leaked, or been party to the leak, of any arbitration finding or draft finding.

Mr. O'Kennedy:

If the Minister can do no better than this——

Mr. Boland:

Will I read out Deputy O'Kennedy's interview of last Sunday? The Deputy should not talk to me about doing better.

Mr. O'Kennedy:

It was as relevant as anything the Minister is now saying.

Mr. Boland:

I should like to outline the developments that have taken place on the pay front over the past few weeks. On 8 October 1985 the executive committee of the Irish Congress of Trade Unions declined an invitation from the Taoiseach to meet the Government on the issue of public service pay. In declining, they said that there was already an established mechanism for this purpose, that is, the public services committee of Congress. Their statement also urged all members of public service unions to support the one-day stoppage on 15 October called by the PSC and affiliated unions.

The Government expressed regret at the Congress response in view of the grave inconvenience to the public and the serious damage to our delicately-balanced economy which the public service strike would cause. Subsequently — on 9 October — I invited the public services committee to meet me as soon as possible for talks on all relevant issues relating to public service pay. Given that the state of the Government finances left little room for manoeuvre, I indicated that I would try to be as positive as possible in endeavouring to reach an agreed solution to the public service pay problems which faced the country.

Two days later, on 11 October, the public service committee agreed to meet me later that day "to establish the Government's present position on the Committee's demands:

(a) that in relation to negotiations on the 25th round there will be no pay freeze;

(b) on the honouring of all arbitration-Labour Court awards in full both in terms of the amounts of the awards and effective dates;

While I had doubts about the stance being adopted by the committee, nevertheless I approached the meeting in the most positive manner possible, given the constraints of the Exchequer. I explained to the committee the extremely difficult economic and financial situation which faced the country in 1986 — a situation which formed the background against which public service pay issues had to be considered. That background, a Cheann Comhairle, is the very same tonight as it was two weeks ago. I make no apology for again setting it out in some detail for the benefit of members of the House.

Before doing so I should like to say that I should very much like to be in a position tonight, earlier, or at any time, as Minister, to be able to offer large, even generous, pay increases to public service workers. It is not always remembered that members of the Government are also politicians. One of the things which politicians, perhaps with some degree of accuracy, are often accused of wanting to do is to please the majority of people most of the time. It is fair to point out to the House that when any Government decide that they must adopt a given policy of constraint in the area of spending in any particular way, that is only because the overriding demands of the economy, the public finances and, consequently, the real, long-term interests of the country so demand. I would love to be in a position to say that whatever a wage demand was — whether 10 per cent, 15 per cent or 20 per cent — I, as Minister for the Public Service, had been authorised by the Government to agree to its payment and for it to be funded from resources which were available. Unfortunately that is not the truth.

Equally, of course, I would love to be able to say that it was the intention of the Government to reduce personal taxation from a maximum rate of 60 per cent to 50 per cent. But I know that it would not be responsible in present circumstances to say that. I know that those who are responsible, who have had a conversion to responsibility, or who masquerade as having had a conversion to responsibility, would rap my knuckles and, rightly so, for making such offers. The difficulty is that some politicians, some public representatives, some of the time — and now all of the time — have to be responsible in an effort to redeem and redress the actions of previous Administrations who have led us into our present state.

Despite those difficulties in the public finances and the bleak outlook for 1986, the Government appreciate the aspirations of individual public servants. It was in an effort to reconcile those aspirations that the Government authorised me to offer to enter into negotiations with the public services committee. I was disappointed at Deputy Ahern's reference in this respect. I want to say again that the Government appreciate and pay tribute to the loyalty and dedication of so many individual public servants, who have their own family and personal responsibilities, so very many of whom are so concerned, so dedicated, have such a realistic attitude, realising the difficulties that beset the country.

An Leas-Cheann Comhairle:

The Minister has five minutes to conclude.

Mr. Boland:

The national plan set out the provisions for public service pay and the amounts of money available. In essence the Government's approach is based on a policy of curtailing the growth in average pay per head in order to avoid severe reductions in public service staffing. The planned targets set out for the years 1985 to 1987 permit a nominal increase in expenditure in 1985 followed by a moderate increase over the remaining period. They also permit the payment of special increases already sanctioned or committed under the 1983 Public Service Pay Agreement. The House will remember that agreement, the one in respect of which I have had to pick up the pieces of the debacle of 1982 created by Deputy Ahern and his colleagues at that time. It was stated, quite clearly, that it was not possible to provide for any further special increases for the period of the plan. That plan was published, debated — to my recollection on four different occasions — and adopted by the Dáil.

Subsequent to those debates in the House I invited the public service committee for discussions on the public service aspects of the plan. I was anxious that the committee should have a clear view of the thinking behind these aspects, how the various elements were inter-linked and what this meant for the public service. I also sought discussions on the pay determination machinery in the public service. Regrettably that invitation was declined.

Our main economic problems can be summarised as follows:

(a) High Unemployment: Unemployment is currently running at about 230,000 which represents about 17 per cent of the total labour force. This rate is much higher than the average in the European Community (10½ per cent).

(b) Current Government expenditure has been persistently running ahead of revenue. The projected currect deficit of £1,234 million for 1985 seems likely to be exceeded — due to increased expenditure, mainly on social welfare, and shortfalls in revenue. Looking to the prospects for 1986 the gap between revenue and expenditure has widened considerably vis-à-vis the national plan targets, which already envisaged expenditure exceeding revenue by over £1,000 million next year.

Quite obviously the situation is a difficult one — one that cannot be resolved by any simple formula involving increased taxation or borrowing. On the taxation front everyone agrees that the burden of taxation is already too high by international standards and also when compared with countries at a similar stage of economic development. Tax revenue has increased substantially in recent years — from 26.3 per cent of GNP in 1979 to a prospective 36 per cent of GNP in 1985.

Tax rates have risen to very high levels. This is why the Government promised that over the plan period there would be no increase in the overall level of taxation and that so far as personal taxation is concerned there would be no increase in the overall income tax burden on taxpayers.

As far as borrowing is concerned, this year it will cost £2 billion to remunerate debt and this is almost 10 per cent more than the total amount collected in PAYE. More than one third of total tax revenue is absorbed in servicing debt and outstanding debt at the end of September 1985 at over £20 billion is the equivalent of 130 per cent of GNP.

With regard to public service pay and the attitude of the Opposition, it is appropriate at this point to allude to their document The Way Forward and to remind them of what was said at that time. If the projections in that document for moderate increases in public service pay were projected to 1986 one would find that it provided for a public service pay bill provision of £2,525 million, precisely the same amount that is provided for by the Government in the national plan. However, for 1986 we will have an overrun because of a £37 million carry-over cost of the 24th pay round, £25 million for the carry-over costs of special increases under the 1983 pay agreements, £20 million for retrospective payments to certain groups and £30 million for annual increments. The prospective pay bill in 1986 is already running at £2,570 million compared with the target of £2,525 million set out in the plan. At the meeting on 11 October I outlined all those difficulties to the public services committee and I indicated that, despite those problems the Government were prepared there and then to negotiate on all matters relating to public service pay. I, for my part, had secured from the Government a full mandate for negotiations on all relevant pay issues. In the interest of industrial relations harmony and the preservation of services to the general public, I asked the committee to enter into immediate negotiations with me on these issues. I indicated that I would be available for discussion at all times that night and throughout the weekend. I was extremely taken aback that three days before a threatened public service stoppage, the leaders of the unions were not able to respond in any meaningful way to positive Government initiatives which could have averted the strike. In effect, the PSC indicated that they had no mandate to negotiate an agreement on the various issues.

The Government hope that the PSC will reconsider their position and come back to the negotiating table as quickly as possible with a mandate to negotiate an agreement which would resolve all outstanding issues in the pay area. I now wish to reiterate what I said to the unions on 11 October. I told them that, on behalf of the Government, I was in a position to negotiate an agreement covering the 25th round and other pay related issues. Furthermore, in the context of such an agreement, I would be prepared to appoint an arbitrator under the existing schemes if the PSC would participate in discussions about the machinery for pay determination during the coming months.

As I indicated earlier, I have been seeking such discussions with the PSC for some time but the unions have declined my invitation. I would have thought it extremely reasonable that if one side indicates that it would like to discuss modifications or changes in the machinery, then the least the other side might do is to make themselves available for such discussions.

Much to the surprise of the Opposition party I would like to thank them for having tabled this motion, especially for discussion here this evening. I know — I am not sure if the Opposition do — that the public service committee are meeting tomorrow. I would like to take this opportunity to ask them to agree to a series of detailed and meaningful discussions so that we can secure the best possible solution to any of the difficulties which may be perceived as standing between each of the parties involved.

I trust that the House will endorse the Government's action to date and in particular their preparedness to negotiate in a positive manner on all pay related issues.

I would hope that the Opposition, when replying to this debate, will agree the reasonableness of my attitude and will agree with me in asking the public service committee to return to the negotiating table in the interest of industrial relations harmony, the nation, the taxpayer and the individual public servant.

Mr. O'Kennedy:

I wish to deal with one point made by Deputy De Rossa when he suggested that Deputy Ahern had not dealt with the question of special grade findings which are at present pending signing by the Government.

Proinsias De Rossa:

Deputy O'Kennedy should read Deputy Ahern's speech.

Mr. O'Kennedy:

If Deputy De Rossa had paid attention to what Deputy Ahern said he would find that he dealt with the issue specifically and made our position very clear. The issue we are facing is a direct and inevitable consequence of the Government's mishandling of the economy which has antagonised every section of the community. I can now call, in support of that case, the Minister who is now present.

I did not intend to burden the House or to depress the nation by repetition of what they know all too well but I will now repeat what the Minister acknowledged although he did not have time to read all his script because of the irrelevancies in which he indulged beforehand. Yes, we have the highest tax levels not just in Europe but in the world. Because of the policies of the Government out tax revenues have increased from 26 per cent of GNP in 1979 to 36 per cent in 1985. He is right in saying that our borrowing has now reached £21 billion and that unemployment has reached the unsustainable level of well over 17 per cent of the work-force, an average of 230,000 people. The Minister is right in all those assertions and it is because of the consequences of the Government's failure to deal with these problems that we are faced with this issue and that the public sector unions are faced with a breakdown of the most basic element in the whole issue of public sector negotiations — conciliation and arbitration.

Would the Minister now acknowledge that the central authority in all that has been, is and always will be, the arbitrator? The concept of arbitration was originally launched and promoted in the mid-fifties by a former leader of the Coalition. Is the Minister prepared, without preconditions of the kind he suggested this evening, to reappoint a public service arbitrator without whom we cannot have any reasonable or meaningful discussion on the issues before us? Who will bridge the gap and reduce the confrontation that he and his colleagues — in particular the Taoiseach — have generated over the last few months?

The Government have killed the spirit of enterprise in the private sector and they have now brought about the unprecedented breakdown in relations with the public sector. The productive sector of the economy which has always worked in tandem with an effective and committed public service is not capable now of meeting the demands of public expenditure growth that the Government have failed to curb. They have imposed the burden of huge and suffocating taxation on a private sector which is suffering unprecedented burdens. The Minister for the Public service has attempted to justify the Government's confrontation with the public service unions and indeed last week he said that the situation that faces us from a budgetary point of view next year is just appalling. The public are all too well aware of the fact that the budgetary situation is appalling this year. The Minister for Finance, in his statement accompanying the last quarterly Exchequer returns, acknowledged that he is incapable of redressing the position of diminishing returns which are evident in revenue at this stage. In an unprecedented abrogation of responsibility he confined himself to saying, "where possible to realise savings so as to minimise the scale of the overrun". In an effort to minimise savings the Minister for Defence, of all people, was appointed to supervise public expenditure control at the beginning of the year and that nonsense can now be demonstrated for what it was. It is the role of the Minister for Finance, not the Minister for Defence, to supervise that matter.

Mr. Boland:

This contribution is by a man whose budget was 60 per cent off target.

Mrs. O'Rourke:

The Minister got his chance to speak but he only gabbled.

Mr. O'Kennedy:

If savings of any consequence can be realised at this late stage, I wish to put it on record that it is a damning indictment of the Government's wasteful expenditure up to now and of the failure of the Government to prepare realistic and accurate Estimates at the beginning of the year. Today in the great new hope that is now presented we are told the cost of the new package will be realised from savings from some undisclosed source. What were the Government doing at the beginning of the year when they were preparing the Estimates? They have now had to acknowledge that those Estimates were a wasteful expenditure with no clear purpose or priority.

The inevitability and scale of the difficult overrun the Government have now belatedly acknowledged was evident when Building on Reality was launched into the outer atmosphere of unreality a little over 12 months ago. Fianna Fáil pointed out within days of publication of that document what would be the consequences and we met the financial correspondents of all the newspapers. We pointed out that the unemployment average for 1985 on which the Government's projections were based was already at least 20,000 below the realistic target. Tonight the Minister for the Public Service has belatedly acknowledged that fact and, because of the cost of having to pay social welfare, we now have to tell our public servants we cannot meet our responsibilities. Was there ever such a craven acknowledgment of failure on the part of any Government?

Mr. Carey:

What about interest rates?

Mr. O'Kennedy:

This Government have lost their way in a most hopeless manner and the Taoiseach can only offer us jargon. Incidentally, I notice the Minister for the Public Service seems to think that if the Taoiseach uses these jargon phrases they are worth repeating. We are being offered jargon instead of action but the public are not reassured by self-contradictory nonsense such as "adjustments within the framework of the plan", or "the need to roll over the plan". The Minister for the Public Service was so infatuated with that phrase that he repeated it on the programme "Today Tonight". Adjusting the plan or rolling over the plan means jettisoning the plan and consigning it to the dungeons where it should have been in the first instance. In short, the plan has been abandoned to its own uncharted orbit and the technicians who launched it are now concentrating on disseminating false propaganda to save their own skins.

This Government are concerned only with public relations, packages, adjustments and whatever else will give them some faint hope of survival but the public sector and the private sector will pay the price for this preoccupation of the Government, their only preoccupation at this time. The Government are concerned only with attempts to prolong their own life, while prolonging the agony for the rest of the nation. For instance, they threatened to introduce punitive measures against the self-employed who apparently warrant this kind of punishment while, at the same time, castigating the public service for immorality and irresponsibility. The gratuitous comments of the Minister for Education, the Minister for the Public Service and, above all, the Taoiseach have so incensed the teachers and public servants generally that any prospect of reasonable negotiations have been gravely undermined even if there was a policy to sustain normal economic activity to fund the necessary programes for the public service.

The scheme of conciliation and arbitration is the bedrock on which wage negotiations in the public service are secured. If the Government deliberately undermine established procedures in the public sector, how can they reasonably expect adherence to established procedures in the private sector? What price appeals from the Minister for Finance, the Minister for Industry, Trade, Commerce and Tourism or anyone else to the private sector for a reasonable approach in negotiations when the Government themselves have undermined the basis of the most established procedure of all, that of conciliation and arbitration?

The Minister for the Public Service seems to be totally unaware of the procedures and this was exemplified in his challenge to the public sector unions to commence negotiations with him personally on the 25th round. It was an unprecedented challenge and an indication of his total ignorance of how such negotiations are conducted. When, if ever, did a Minister for the Public Service say to the unions that they should come to him to start negotiations on a wage round? Then, he presents this as being a reasonable position. He must be aware of the established procedures of conciliation and arbitration which, in the first instance, do not involve the Minister himself. If he is not so aware, it is time he learned.

The Government have brought about a state where the claim of inability to pay of hard pressed employers is the last refuge of the Government themselves. The harsh fact is that the private sector no longer can support the crushing burden of taxation. Investment is declining at an alarming rate. The economy has become debilitated to the point where it cannot generate any consistent activity. We are losing our top managers because of high taxation. We are losing our young people through emigration and unemployment is undermining the dignity and the character of the few who remain. A healthy and committed public service creating the conditions for growth and development in the private sector is essential to any national plan. They have proved it before but now they have been gratuitously offended by a Minister who does not even understand the whole basis for conciliation and arbitration.

Unfortunately the Government have succeeded in creating unnecessary tensions and divisions between the private sector and the public sector. This is happening at a time when what we require more than ever is a sense of common purpose and cohesion. The current levels of taxation which this Government have deliberately introduced and increased to the highest levels in the democratic world are the real cause of the problem and of the diminishing returns now evident from income tax, excise duty and VAT. That is why we cannot meet our obligations to the public sector or to the private sector. That is why we are talking now in terms of packages, adjustments, rolling over and rolling on while the nation continues to suffer.

This Government have so consistently changed course that by now they have abandoned all their original targets. A little honesty at this point could get some response. Could we please be told now about the original targets of the Government, about the targets in Building on Reality and the targets set out in the budget? Has what has been hinted at today regarding some undisclosed savings become the great new prospect? The Government now say that in this package, the cost of which has not yet been disclosed, they are going to give relief to the industries they have up to now crucified — the building industry by the imposition of extra VAT, and the tourist industry by the levels of excise duty and VAT. Is there any hope of consistency from a Government who behave like that?

The interest and well being of every section of the community takes second place to the survival of this Government. These adjustments and rolling over will not solve our problems. This Government can still make a major contribution by acknowledging not their inability to pay — and let us face it the Labour Party know this — but by acknowledging their inability to function as a Government, and let a Government take office that will face responsibilities and give new hope to all the people. This new Government would face their responsibilities particularly to the teachers who play a very special role in our society.