Yesterday, public sector workers dealt a body blow to the Government's austerity agenda with an overwhelming majority of unions saying "No" to Croke Park II. The truth of this matter is that workers correctly calculated that this was an unfair deal. They recognised that it would be bad for public sector workers and their families, bad for the public services on which we all depend and bad for the domestic economy. Our nurses, teachers and emergency service workers refused to be intimidated by the bully boy threats of the Minister, Deputy Howlin. They have sent the Taoiseach a very clear signal. They are telling him that he has taken enough from them and they do not have any more to give.

The idea that €1 billion would be sucked out of public services and not hurt the schools that educate our children or the hospitals that care for our sick family members, was always absurd. Equally absurd is the claim by the Minister, Deputy Howlin, that he will run out of money before the end of the year. Anyone with the wit to read the NTMA's Exchequer balance figures knows that is simply not true.

Could the Deputy circulate the script, please?

Everyone knows that we have to address the deficit but the Taoiseach's approach is unfair and unworkable. There are alternatives. If he is so concerned about making payroll savings, he should tackle the issue of excessive pay at the top of the public service and Civil Service. He should get a real deal on generic drugs, or why not a third tax rate on individual incomes over €100,000?

Give everyone a first-class ticket.

These alternatives would raise the revenue the Taoiseach says is required to meet the troika target. Never mind reflecting or considering, will the Taoiseach respect the outcome of the unions' vote on Croke Park II? Will he now withdraw his threat of an across the board cut of 7%? Will he go back to the drawing board and look at the alternatives to raise the revenue he says he requires and come back with a deal that is fair to workers, their families and the domestic economy?

What the Deputy is proposing is complete and utter hypocrisy from what she put forward just a short time ago, which was €3 billion of extra income tax which would be a lethal injection for the economy, driving thousands and thousands of jobs out of our country. The Sinn Féin proposition for the economic development of this country is simply and utterly catastrophic.

Where is the Taoiseach heading?

Hold on a second and settle down.

Some 87% of public sector workers had their pay absolutely protected under the negotiations that were conducted here. Deputy McDonald will be aware that the top 5% of income earners pay 44% of tax at the moment.

All the taxi drivers in Castlebar.

In February, Deputy McDonald asked the Minister for Public Expenditure and Reform what the outcome would be if everybody's income was capped at €100,000, including those in local authorities and State agencies. The estimated net savings would be less than €110 million, which would give a marginal tax rate for a public servant on €100,000 per annum, or higher, of at least 62.5%.

Last night, Deputy McDonald was asked what her alternatives were and she said she would put on her thinking cap and that a 48% tax would bring in €300 million.

They need a bigger hat.

That party needs to get a lot more thinking caps because what the Deputy is proposing would be the ruination of this country. As I told Deputy Martin, the Government will now consider the outcome of the ballot as announced by the LRC. We will consider the truth of the bottom line expressed repeatedly by Government, particularly by the Minister, Deputy Howlin, whom we absolutely support in this, of achieving €300 million of extra savings from within payroll this year, amounting to €1 billion by 2015. That is absolutely necessary for the economic salvation and development of our country as we retrieve our economic sovereignty, improve the public finances, run systems efficiently and provide jobs for our people. In addition, it is necessary to protect and develop the front-line services to which Deputy McDonald referred, in respect of which we are borrowing in excess of €1 billion every month at the moment.

May I politely suggest to the Taoiseach that for the 426,000 people on the live register and the 1,600 people who emigrate each week, it is the Taoiseach and his Administration that are delivering the so-called lethal injection? The Taoiseach really has shown his hand in his response because he will not countenance levying the burden on those who have more. He simply will not do it.

Hear, hear. Go after the fat cats.

He will not look at the high earners in the public sector or the private sector. He simply will not do it.

Does the Deputy want jobs?

Sorry, please-----

Stay quiet please, thank you.

If the Taoiseach or his colleagues thought for one second that middle and low-income workers in the public sector were a soft touch for the Government's lethal injection-----

65K plus.

-----they got it very wrong.

A question, please.

I suggest the Taoiseach puts on his thinking cap. That was my point last night and I am glad the Taoiseach was tuned in. He clearly is averse to any sort of thinking outside the box. The Government must find €300 million and Sinn Féin has given it concrete examples of where those moneys can be raised.

Where?

Go and find it-----

Thank you.

-----but back off public sector workers who struggle to heat their homes and to pay their bills.

What about private sector workers?

This is the reality of what the Government has delivered thus far. Could the Taoiseach please answer my questions?

What is the Deputy's question?

Will the Government back off the threat of the 7% across-the-board cut-----

Deputy, you are over time. Will you please put your question?

-----"Yes" or "No"? Will the Government really respect the democratic verdict of the unions and their workers, "Yes" or "No"? These are pretty clear-cut questions, which even in-----

Thank you. Please resume your seat.

-----the absence of a thinking cap, even the Taoiseach should be able to answer.

As I already told the Deputy, the Government has a clear fiscal programme set out, which requires it to achieve €300 million of additional savings from within payroll this year in 2013, amounting to €1 billion in additional payroll savings by 2015. This is what the Government must deal with now.

Will the Government legislate for that?

The Government obviously will consider the outcome of the ballot-----

So it will not.

-----and will make its decisions as to how those €300 million of additional savings can be achieved. The Government's door is and always has been open to unions and their representatives to make known their views. The discussions and negotiations that took place under the direction of the Minister, Deputy Howlin, with the Labour Relations Commission, LRC, and the trade unions were extensive, full and truthful. I again repeat for Deputy McDonald that 87%, that is, the overwhelming majority of public servants, had their pay untouched by the proposals on the table.

That is not true and the workers know that.

For the Deputy's information, she is aware of this but will not say it.

Sorry Deputy, would you allow-----

She will not recognise it.

Sorry, Deputy McDonald, you are the very one who demands silence when you are speaking.

I rarely get it.

Would you please allow the reply without interruption?

There are ways of making people keep silent.

As I stated, 87% of public sector workers had their core salaries and core pay protected under the negotiations and the LRC proposals.

That was the reason the Government got such a resounding result yesterday.

Yes, as evidenced by the results.

It is perfectly obvious that when, in her vision for the new Ireland, the Deputy proposes to tax those on higher levels out of existence-----

Hardly out of existence.

Yeah right.

-----the Association of Higher Civil and Public Servants voted overwhelmingly against this proposal, simply because its members were targeted by the Government for bigger contributions from higher salaries. Consequently, it is blatantly untrue for the Deputy to state there is or has been no focus on those who earn most to pay most. As I told the Deputy, the marginal tax rate and the pension-related deduction for a person now in receipt of a salary of more than €100,000 is 62.5%. The Deputy simply seeks to tax people out of existence with some vision-----

Some fairness?

-----of hers that this will sort out all our problems.

Instead, the Government taxes the poor out of existence.

Thank you Taoiseach.

Sinn Féin knows all about fairness.

The Taoiseach should answer the questions.

The challenge now is to achieve €300 million in additional savings this year. Allow me to reassure Deputy McDonald there is absolute unanimity in the Government on this matter and unity of purpose in the Government in achieving those additional savings.

Does the Labour Party share that view?

Thank you. I call Deputy Halligan.

Does that answer the Deputy's question?

Could we have Deputy Halligan without interruption please?