I respect the state workers and I respect their unions but we simply can't afford to pay benefits and pensions that are out of line with economic reality.

Remember our proud history of social justice universal health care public pensions and making sure no one is left behind. Let's continue to move forward.

If you look at things that really affect people's lives - sport the arts charities - they were always at the back of the queue for government money - health social security defence pensions were all way ahead. And each of those areas - sports the arts the lottery - got relatively petty cash from the government.

They said it was impossible to touch the third rail of politics to take on public-sector unions and to reform a pension and health benefits system that was headed to bankruptcy. But with bipartisan leadership we saved taxpayers $132 billion dollars over 30 years and saved retirees their pensions. We did it.