Taoiseach Brian Cowen has said the Government will carefully consider the McCarthy report and that none of its recommendations are ruled out.

View the full report and appendices
Read a summary of the proposals
Watch Prime Time interview with Colm McCarthy

Asked about the proposed 5% cut in social welfare payments Mr Cowen said ‘you cannot begin this process by stating that some areas cannot be touched’.

Mr Cowen said the scale of the situation is such that no area is immune.

Mr Cowen said he believed the scale of the problem had been fully understood by all Government TDs and the Government had to sit down now and work through this process.

Mr Cowen said the McCarthy report would now have to feed into the Estimates and Budget process.

He said his initial reaction to the report was that everyone would have to carefully read and consider it.

The Taoiseach said this was a challenge that the country as a whole has to face, and that the Government had a duty to ‘do the right thing by the country’.

He said the Government had to sit down and consider the report, and listen to the views of people affected by the recommendations, but that process could not be about people protecting their own patch.

Mr Cowen welcomed the fact that the report would be considered by the Oireachtas Finance Committee, saying it would set the parameters for the debate, which needs to be real.

He added that he hoped the Committee would ‘rise to the challenge’.

Unions widely condemn report

Detailed political consideration of the report by 'An Bord Snip Nua', published yesterday, is continuing.

Unions and representative groups have already widely condemned the report's recommendations, which include major cuts across a wide range of Government spending.

The report identifies €5.3bn worth of savings, including more than 17,000 job losses in the public sector.

The country's largest public service union, IMPACT, yesterday threatened widespread industrial action over the proposed pay cuts and lay-offs.

Government backbench TDs are expected to express particular concern at proposed social welfare and education cuts.

Environment Minister John Gormley has said there is no doubt that very difficult decisions will have to be made by the Government, but that the Greens were not ruling anything in or out at the moment.

Among the Opposition, Fine Gael's Richard Bruton said the McCarthy report was doing what his party had been seeking for years and was looking to re-engineer the public service to do more for less.

Labour leader Eamon Gilmore said the report is a 'shocking commentary' on the Government that has been in office for 12 years, given the identification of such huge savings.

However, he said threats of industrial action in response to the proposed cuts are not helpful.

Speaking on RTÉ's Morning Ireland, Mr Gilmore suggested there should be a benchmarking exercise. He said there could be a cap on salaries at the higher end of the spectrum in the public sector.

He also said that in the private and public sector there could be a higher rate of tax for people earning higher salaries.

Padraig Walshe of the Irish Farmers Association said 'the Report clearly demonstrates the narrow mentality of some civil service mandarins and others who have no appreciation of the importance of the rural economy beyond the Pale and the complex economic fabric of rural Ireland.'

Fianna Fáil TD Mary O'Rourke said the Government should choose report recommendations that did not hit the weaker sections of society.

Sinn Féin's Aengus Ó Snodaigh said the report targeted the most vulnerable in society by slashing social welfare rates.

He said the report was politically motivated and 'ludicrous'.