The author of the Bord Snip Nua report says any reduction in the public sector pay bill needs to be permanent – and not just a “band-aid” for next week’s budget.

Colm McCarthy – who was addressing a pre-budget lunch in Cork – says there are no concrete signs of the start of an economic recovery in Ireland.

He also predicts we’re three or four tough budgets away from the economy stabilising.

McCarthy says a firm decision is needed on reducing public sector pay.

“There’s no point coming up with schemes that will apply a band aid to dress up the budget figures for 2010 only – if those measures automatically reverse themselves at the end of 2010″ he said.

“We’ve a deficit that looks like it’s going to be 12% of national output, this year and next”.

“Most of that is structure in nature and we need permanent adjustments to both revenue and expenditure to get rid of it” he added.