Colm McCarthy also said some civil and public servants were “out of touch with reality” and a large chunk of the €400 million the Government was borrowing each week was going on their pay.
His warning came as Taoiseach Brian Cowen was met by protesters dressed as robbers as he arrived at a conference of senior public servants where he stated that low priority services faced the chop.
Mr McCarthy, speaking at the Institute of Public Administration’s national conference on national recovery in Dublin, also called for a “Benchmarking III” public pay review. The current public sector wage bill is €17.5 billion annually. “I think there should be a proper review and I think public officials are entitled to be paid similarly to people in the private sector but that might involve reductions.”
He hit back at public servants who this week announced the setting up of a group of frontline workers to oppose his report.
“This country is bust. The Government is not short of compassion, it’s short of money. We’re borrowing €400m a week, a big component of that is the public service payroll.”
The Taoiseach yesterday admitted there was a need to root out “inefficiency”. Services of “lower priority will have to be discontinued or scaled back.”
Benchmarking was open for discussion with the social partners, he added.
“When you look at the scale of the issues that have to be addressed, there’s no part of [any] public expenditure programme that’s being excluded from consideration.”
However, the general secretary of the Public Sector Executive Union, Tom Geraghty, warned any move to further cut public servants’ pay could create a “conflict situation”.
Meanwhile, at a party think-tank in Waterford, Labour leader Eamon Gilmore said he was in favour of capping pay for top earners in the public sector, but it would be “unacceptable” to cut pay for those on low wages.