Social welfare spending must be reduced and public sector pay must be re-examined, the Minister for Education and Science Batt O’Keeffe told an economic conference in Kenmare, Co Kerry, last night.
Mr O’Keeffe said the next few months would “test our mettle as a nation”, but that “the experience of the 1980s shows us that delay makes the problem worse”.
He said that as 38 per cent of current spending by the Government was on social welfare payments: “it must be reduced”.
The Minister’s comments suggest that the Government will go ahead with recommendations that child benefit payments be cut by 20 per cent in the next Budget.
Speaking at the Dublin Economic Workshop’s annual policy conference, Mr O’Keeffe asked the economists present “to help people understand why a difficult Budget is necessary”.
Public sector pay would be benchmarked with pay in other countries, he said, while greater flexibility in work practices was required.
“The Taoiseach and the Ministers are willing to lead by example. It is not a prospect that anyone relishes,” he said. “We have to eliminate waste, we have to deliver flexibility and we have to use shared services across departments.”
UCD economist Colm McCarthy said the perception among the public was that Government spending was already falling, however spending was up 7.1 per cent over the past year.
This is largely the result of a higher social welfare bill, due to the soaring number of people who have lost their jobs.