The Minister for Finance has said that increased efficiency should be linked to any public service pay increases recommended by the Public Service Benchmarking Body.

Mr McCreevy said the implementation of the body's report, at the end of the month, would be the subject of negotiations between the public service employers and trade unions.

The Government, he added, would have to consider the cost implications of the recommendations in determining its approach to the discussions.

"Benchmarking will establish appropriate levels of pay and the budgetary outcome will determine the levels of increase we can afford in any one year. If the public are to get maximum value from the taxes they pay for the increases, ongoing modern work practices and flexibilities must be part of the resultant package.

"We have to proceed on the basis that a euro devoted to higher pay rates is a euro not available otherwise to improve services. Unless public servants can deliver greater efficiency and effectiveness, the taxpaying public will rightly ask why should they pay more unless they get more in terms of the quality of public services." The Minister said the economy would grow this year in line with predictions.

"I expect that growth this year will live up to expectations after a slow start in the first half of this year.

"Achieving this relies on sustained expansion in major international economies. Despite the continuing uncertainty on the part of some commentators, the consensus view is that the US economy is in recovery and that the first quarter of US GDP data supports this." Mr McCreevy was replying to Fine Gael criticism of the Coalition's programme for government in a private member's motion. The motion dismissed the programme "as largely aspirational, containing no costings, few measurable timeframes and no clear targets". He said that any five-year programme depended on the medium term outlook for the economy.

"We have the capacity to deliver healthy growth rates provided we continue to secure our competitiveness.

"This will be an important challenge, made all the more relevant by the recent appreciation of the euro. As a small open economy, with a very large reliance on trade and foreign investment, our fortunes depend very much on the international outlook. They also depend on us maintaining a competitive economy in terms of wage costs, productivity, quality of goods and reliability of services."

The Fine Gael spokesman on enterprise, trade and employment, Mr Phil Hogan, said major problems existed relating to planning and development because of the Government's delay in implementing the National Development Plan.

"The programme, regrettably is not costed, and will be the hallmark of the Government's ineptitude over the next number of years," said Mr Hogan.