The Finance Minister might think "the worst is over" but union leaders said today that his problems are only beginning.

Budget 2010 has ensured that next year will be a turbulent one with widespread industrial unrest now inevitable.

Minister Brian Lenihan yesterday slashed public sector wages in a move that has been praised by some, but attacked as “unfair”, “divisive” and “callous” by those who will have to bear the brunt of the cuts.

From January 1, teachers, nurses, firemen, gardai and clerical staff will see their monthly pay packets fall by a minimum of 5pc.

The decision to cut the pay of workers earning less than €30,000 has infuriated union leaders. The Civil and Public Services Union, which represents lower-paid workers, said that the move was “driven by an agenda”.

Asked about the possibility of industrial action, deputy general secretary Eoin Ronayne said: “That is now unfortunately the last resort that is left open to the public sector unions.

“The social partnership process has been thrown aside and we face the only other vehicle that is available to the trade union movement and we are unfortunately looking at a period of industrial action.”

ARGUING

Arguing that cuts taken by the Taoiseach and Ministers didn't go far enough, Mr Ronayne said that it was impossible for people on €100,000 to understand those living on €23,000.

As first reported in the Herald yesterday, the Budget set out a system whereby salaries would face cuts on a graduated basis.

Public sector workers will lose €1,500 off their first €30,000, with another 7.5pc taken off the next €40,000 and 10pc on the next €55,000, if they earn that much.

Many of those taking the pay cuts will also be hit by the €16 reduction in child benefit.

Peter McLoone of IMPACT also sent out a battle cry, warning that industrial action is on the way. “All existing and former public servants must now mobilise to protect their incomes,” he said.

Labour's Joan Burton told the Herald today that a severe public sector backlash is now inevitable, but she urged union leaders to “think outside the box”.

Ms Burton added: “I would be pretty surprised if they opt for general strikes but there is already a lot of resentment among workers. “It was clear from his demeanour yesterday that Brian Lenihan never had any intention of reaching agreement in the talks.

“It was a furiously right-wing budget. There was no balance,” she added.

‘CALLOUS’

ICTU president Jack O'Connor said it was “the most callous, unjust and uncaring” budget since the 1930s.

But Colm McCarthy, who scripted the An Bord Snip Nua document that formed much of the basis for the Budget, defended its measures.

“There is nothing more callous and uncaring that pretending that we don't have a problem,” said Mr McCarthy.

He added: “I think if it emerges through 2010, firstly that the real economy has stopped getting worse and that figures are plausible ... I think that people will begin to feel that we've seen the bottom.”

The Dail last night approved the immediate financial changes arising from the Budget.

The votes were passed with comfortable majorities, despite the recent disquiet among Government backbenchers.

Taoiseach Brian Cowen had a majority of 88 to 75 on the reduction in excise duty on alcohol after Sinn Fein decided to vote in favour of the move.

With Labour abstaining, the majority was even bigger on the new carbon charge, which saw petrol rise by 4.2 cent a litre, and diesel by 4.9 cent from midnight last night.

A 0.5pc reduction in the top VAT rate was approved without a vote.

Today the debate was focusing on the changes in social welfare rates, including a 4.1pc reduction in dole payments.

However, ex-Fianna Fail member Joe Behan has said that he will be voting against the Budget, noting: “It's as bad as the budget that I left Fianna Fail for a year ago.”

- Kevin Doyle