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Dáil Éireann debate -
Wednesday, 8 Apr 2009

Vol. 680 No. 1

Financial Resolution No. 11: General (Resumed).

Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
—Minister for Arts, Sport and Tourism (Deputy Martin Cullen).

I propose to share time with Deputies Timmins, Enright and Coveney.

Speaking about the objectives of the budget yesterday, the Minister indicated that one such objective was to impress the international markets and persuade them that he was doing something. While he has certainly done something, the real test is whether he had done the right thing. I fear he has not done so. For instance, if the objective was to restore confidence and encourage the resumption of semi-normal spending in the economy, the budget has already failed. If wallets were zipped up last week, this week they have been put away under lock and key.

The massive increase in the tax take will mean that people will have no money available for discretionary spending. This will cost jobs, as restaurants, shops and small businesses fold. Increases in taxation, whether on work on business, will account for 60% of the entire adjustment, while public expenditure, which was ramped up by the Taoiseach when he was Minister for Finance at twice the rate of economic growth, will account for only a fraction of the adjustment. Public expenditure, which is at the core of the structural deficit, is being left largely in place. Even where cuts have been made, they have been imposed on direct services such as services to parents and are not being introduced in a manner that reforms the public service.

The only example of reform cited by the Minister was the change in work practices in the area of social welfare where an efficiency drive has resulted in the allocation of new staff to meet increased need. If that is the best we can expect in terms of reform of the public service, God help us all. By failing to reform, the budget does nothing to improve competitiveness or reduce costs. It does not mention changes in FÁS or the Health Service Executive, nor does it address the issue of regulatory reform or tackling monopolies in the economy.

If the objective is to restore confidence and get public spending moving again, the budget has been a complete failure. Middle income earners, primarily parents, have been hammered in the budget. Those worst affected will be in survival mode at best for many years and will certainly not be in spending mode. If the objective was to create employment or even sustain existing jobs, the budget has also failed. The VAT increase introduced in the previous budget, which the Minister has since described as folly, remains in place. Moreover, the lower rate of VAT remains unchanged, notwithstanding the Fine Gael Party proposal to reduce it for labour intensive export industries such as tourism, an area which falls within my brief.

The departure tax has been proven to be a counterproductive tax but the Government did not grasp the opportunity to abolish it in the budget. Aer Lingus, Ryanair, Dublin Airport and Shannon Airport are in trouble owing to this tax and jobs are being lost as tourists turn away in their thousands. The departure tax was the final straw because it sent out a message that we do not want tourists to come here.

The allocation to support those who are losing their jobs is a joke. It amounts to 23,000 places for the unemployed, which is less than the number of people losing their jobs each month. The budget does not provide a stimulus to the economy. The capital budget, for instance, has been slashed. Even the suggestion that the private pension funds could be used to fund capital projects has some merit. It came from the construction industry. That idea is completely unformed and there is no idea about how it will actually work. It is simply thrown in as a red herring.

This budget is not about restoring competitiveness or confidence or sustaining jobs. Employers, workers, parents and the unemployed are not happy but the bankers, God bless them, cannot believe their luck. I believe they are the only group celebrating today. Not only have they found a patsy in the form of the taxpayer to take over their bad debts and manage them for them, but this patsy will pay them for the privilege. With one bound our bankers are free to go back to the same old ways. A line is drawn in the sand and it is as if nothing has happened. Their feckless risk taking is forgiven and there is not a single word spoken about the €7 billion the taxpayer gave them to recapitalise the banks which is now worth nothing. It achieved nothing. We are now back to square one, but are now faced with mortgaging not just our future but our children's future to buy these bad debts, at a price of which we have no idea.

Imagine the Minister coming into the Dáil and telling us, "We will buy bad debts. We will send our debt to GDP ratio into the stratosphere and we have no idea how much it will cost us". If that is not enough, the removal of those impaired assets from the banks balance sheets may require, as the Minister has told us, further recapitalisation. Every which way they turn the taxpayers will lose.

I am afraid commentators and the media have fallen for the spin and are reporting this move as a risk-free technical arrangement whereby impaired assets will be transferred to a new agency. Let us be clear. They are not being transferred, rather, they are being bought by the taxpayer. This is not a risk-free solution. It is no device to magic away those best-forgotten loans. It is a time bomb, albeit one with a long fuse.

The Minister accepts the value of these loans may not be realised but tells us not to worry because he has a great idea to put a levy on the banks. What a joke. Who owns the banks? We will own the banks by the time we will know the loans will not be realised. We will be putting a levy on ourselves. We have already half-recapitalised them and we are admitting there will be further recapitalisation, assuming we do not nationalise them. The only solution to recoup those loans is to put a levy on the banks we own. It is circular thinking at its best and the taxpayers lose again.

The reality is that the markets have already realised that is what is being planned here and the bank shares have tumbled again today. I reiterate what Deputy Kenny said this morning. This budget sets out to achieve a lot but what it mortgages and sacrifices the futures of not just one but several generations.

The responsibility for the economy lies not with bankers, the regulator or the Department of Finance but with the Government. This Government blew the boom and only history will tell us why and how. We can talk and speculate about the Galway tent but with the passing of time we will almost certainly establish all the facts.

One of the most serious errors the Government made was extending the bank guarantee, which Fine Gael supported at the time, to Anglo Irish Bank. The Minister for Finance, Deputy Lenihan stated it was in the interests of the economy and to hold up our international reputation to inspire confidence in international investors. I firmly believe if we had let Anglo Irish Bank go international investors would have said the Government was responsible and prepared to take difficult decisions. It did not justify keeping this guarantee but it was the soft option and sent out an image to the international markets that politicians, bankers and developers were all one and the same.

I realise this is a small country and is different from France, England or America and has a small cohort of people who interact with one another but it is something we must get away from, irrespective of who is in Government. No-one can trust this Government any longer and people will not have trust in the political establishment again until they have the opportunity, through the forum of a general election, to pass judgment on what has happened.

This budget reminds me of the Don McLean song "American Pie". In this case it is bye-bye to the Irish pie. There was feasting at the table of Fianna Fáil and its cohorts in Government, the Progressive Democrats and Independents. They feasted on the fruits of a nation and a generation that will now pick up the tab in the darker years ahead. We have a health levy, an income levy and a pension levy, and as the song states, "I drove my chevy to the levee but the levee was dry". Why did the Government not have the courage to come forward and say it will increase taxes to 51% or 52%?

Does the Deputy want a guitar?

It is the only source of entertainment we will have in the years ahead because we will not be able to afford anything else. We will be strumming a lot of guitars. Unfortunately this Government has been the equivalent of a one stroke banjo player for the last decade as it feasted on the surplus and did not put anything away for a rainy day. Why did it not say it would introduce a tax rate of 51% or 52%? In effect that is what we have here.

I know Deputy Power well. He is a decent respectable face of Fianna Fáil and I would never doubt his honour. Last night I drove home and it was a very bad winter's night. I thought it was a gloomy dark day for Ireland as the realisation slowly begins to dawn on the public. Fianna Fáil and its partners will suffer for it in the time ahead, as will the public. In inflicting pain yesterday there was an opportunity to try and give some hope but none was given.

I listened to the Taoiseach's great speech at the chamber of commerce dinner in Dublin and it mentioned jobs, jobs, jobs. We have realised the most important thing at the moment is to try and keep people in jobs and get people into jobs. There is nothing in this budget which will do that. It is a tax and spend budget. It is reminiscent of what happened in the 1980s in this country when we made the mistake of taxing and spending. That is what we are doing here.

A tax package comprising 60% of its proposals was produced by the Government. Fine Gael produced an alternative programme incorporating a tax package of 32%. There is no stimulus package. What is in this budget for an employer? Why did the Government not decide to put a moratorium on employer PRSI for any new employee taken on between now and the end of the year? It is a simple measure.

Deputy Mitchell mentioned VAT. The Minister for Finance said a short time ago he made an error in increasing VAT. Why did we not reduce it? Fine Gael had a proposal to reduce the lower VAT rate of 13.5% to 10%. There are some 30,000 or 40,000 houses not sold and it is to be hoped that when banks start lending again people will have access to loans. It would act as a kick-start to get those houses off the market.

An issue I have come across in recent months is that businesses who took on students to work are not now doing so. We will have a generation of students who will be unable to get summer jobs. We should have looked at doing something about the minimum wage paid to students and perhaps lift the barrier from 18 to 20 years of age.

I would like to have seen the Minister for Finance discuss services yesterday. If I went to avail of a professional service tomorrow and discovered my bill was 20% less than it was last week I would say we are all cutting our cloth. However, there is a section of our society that has not cut its cloth. The Minister spent a lot of time discussing the optics of Oireachtas reform, most of which I agreed with and was required. However there was nothing to deal with the spin doctors and vast array of staff at the disposal of Ministers. That issue needs to be addressed.

The Road Safety Authority at 4.15 p.m. yesterday, when the Minister for Finance or Deputy Bruton was speaking in the Dáil, issued a statement that the cost of the driving test was increasing from €38 to €75, an increase of almost 100%. That was a cynical exercise. Why is it increasing at a time of deflation? I am sure its CEO, an honourable man, will argue Government has perhaps withdrawn a grant it got in the past and he had to sanction an increase in the fee accordingly. It is a cynical exercise which does not restore confidence in the establishment.

There are two issues in my own area. The €100 million in overseas aid is a soft target in many respects. The more vulnerable have suffered. I would like to see the situation evolve and perhaps people who are unemployed could be seconded to aid agencies to do work and use the money in a productive manner. Many aid agencies will be against it but it should be considered as a pilot scheme. I hope the Minister will spell out the implications of the budget, if any, for funding for North-South bodies. Many of them are waiting to hear this.

The Leas-Cheann Comhairle will be familiar with Arklow as he drives past it, and I am glad the Minister for the Environment, Heritage and Local Government is here to hear this. I was first elected to the Dáil, as was the Minister, in 1997. At the time the Arklow sewerage scheme was high on the agenda. Twelve years later, it has gone to the High Court, the Supreme Court and the European Commission, and back and forth across the Irish Sea, St. George's Channel and wherever else. I would love the Minister to give a commitment to consider, as a case study, what has happened here. We talk about the rights of individuals, but when they can suppress the common good for a long period there is something radically wrong with our system. This needs to be addressed.

This budget is effectively an attack on Irish families. Several measures have made life far more difficult for young families in particular, and I dread to think what slightly more mature families will have to face when the Minister for Education and Science, Deputy O'Keeffe, is finished with his proposals. We must see these families as real people and not simply as cash cows for the Government. I will give a real example of the impact of its decisions.

The average family with both parents working will pay at least €2,500 in extra taxes, and many will pay significantly more. However, we must remember this couple bought their property at the height of a boom that the Government blew and now live in a house that is no longer worth what they paid for it, which they will be paying off through a mortgage for up to 30 years. Now they face losing the mortgage interest relief on which they rely, depending on when they purchased their house. The same couple may have thought their home was a first step on the property ladder onto which people were almost coerced into climbing — a one-bedroom or, if they are lucky, two-bedroom place they had planned to move out of when they had a family. Now they find they cannot sell the house as nobody can afford to purchase it, and they are in negative equity. In the meantime they have had two children and are paying €1,300 a month in child care costs. They have relied on the early child care supplement even though the Government has already chopped it twice. Now it is being abolished across the board. For this couple, that is another €2,000 gone, even though their child care costs have not changed. They also have been told that child benefit will be taxed or means tested next December. The Government has hit them in every way possible. This young family has no voice. They are not represented by any interest group or trade union. They were struggling to get by anyway, and now they are sinking.

What does the Government plan to do to alleviate the burden on this family? What is the sop to make things seem less harsh? It will give them one year of free pre-school. It is estimated that approximately 81,000 children fall into this age bracket. The Government is promising to have these places available next January. How on earth can it achieve this? This promise is coming from a Government that is already spending €50 million a year on prefabs in schools. Now it is telling us that in eight months it will create 81,000 pre-school places. Nobody believes that. I ask the Minister to tell us how it will actually work. Where will these places be available? What spare capacity is out there in the pre-school sector? Will it be a mix of public and private? Will it be available in every locality? How many fully trained pre-school teachers are free to do this work at the moment? The ratio of children to adults in pre-schools should be 10:2, and the Government is committing to having 16,000 adults providing this service by next January. That is a lot to ask and I doubt it can achieve it. The space requirement is 2 m2 per child, so at a minimum we must provide 160,000 m2 of space as well.

The principle behind this measure is one I and Fine Gael have long espoused. I remember the former Minister for Education and Science, Deputy Hanafin, saying a few years ago that it had no educational value. After 12 years of having the money to implement such a measure and not doing so, the Government has decided to introduce it, not because it suddenly believes it to be worthwhile but because it allows a bigger saving to be made somewhere else.

I wish to deal with comments from Government members — and from the Minister opposite and other Government Ministers — that there have been no cuts in social welfare. I heard the Taoiseach say last night the Government would not countenance cutting social welfare rates. What do people think the cuts in the Department of Social and Family Affairs are? They are cuts, plain and simple. It is time people realised that the Christmas bonus for families on social welfare is not beer money. For many — including carers, pensioners and the disabled — it is the only little bit extra they get. Today I spoke to representatives of the Society of St. Vincent de Paul, who said that many use it to buy coal or fuel to fill their tanks and thus cannot use it for any extras over Christmas. For some it is a decent Christmas dinner; for a carer, it may go towards paying for somebody to help with caring for a few hours. For families with children, it allows Christmas actually to happen. This year, is Santa, instead of leaving presents, supposed to leave a note saying "Sorry, children, I have no Christmas presents this year, but don't worry, the Taoiseach says things will pick up in 2011 — something to do with green shoots in America"? That is what the Government is telling these families.

This payment is crucial. Its abolition is a social welfare cut, pure and simple, and it is mean. What is the alternative for these families? There is none, except to turn to moneylenders. Someone from my own credit union told me this morning that is what they are seeing already. What will it be like without the Christmas bonus? There will be deeper debts, and the prospect of debt collectors, which this Government last week refused to regulate, calling to doors in January. There were alternatives open to the Government. It did have a choice. How about tackling waste in a few more quangos and monopolies, or in FÁS? The Taoiseach said this was the fairest possible path, but it is not.

I welcome to some degree the changes in the back to education allowance, but they did not go far enough. It is a pity the Minister took so long to make these minor changes. In changing the access time for this allowance from 12 months to nine months for third level, the Minister said the allowance could be accessed after nine months only if this was recommended by one of the facilitators from the Department of Social and Family Affairs. Next year there will be 500,000 people — half a million — unemployed in this country, and only 60 facilitators. The three months people will save due to this measure will be long used up waiting to see one of these facilitators. The Government cannot explain its way out of that one.

Some of the changes to the back to work enterprise allowance are an improvement and some are the opposite. Yes, it is good that the Government has reduced the time by which the allowance is available to unemployed people, although not by enough. What stopped it from changing it to six months? Can it not see the lack of logic in how it is approaching these allowances and the way in which it is depriving people of hope and opportunity? Why has the Government made the decision to give the allowance for only two years when it was previously four, especially in such a difficult climate for business? It is difficult for someone trying to start a new business to make it work in only two years. The Government is pulling the rug out from under people before they even start.

The Government members keep saying "Jobs, jobs, jobs", but yesterday they did nothing to make this a reality. There was no stimulus package, no job-creating tax changes, and minimal changes to these valuable and useful allowances. There were choices open to the Government. It made decisions yesterday, just as the colleagues of the Minister opposite, although not the Minister himself, have made the decisions over the past 12 years. Yes, we are where we are, as the Government loves to say, but it brought us here, and this budget will not point us to a way out. It has chosen the soft options and asked already hard-pressed families to pay for the mistakes made by this Government — or most of it — in the past 12 years.

I am glad to have a chance to speak on this debate, which is quite crowded as many people are trying to have their say before we break for Easter.

If the Government wants to introduce a budget such as that introduced yesterday, it must have an effective communications strategy if it expects people to accept the kind of hardship it is imposing on them. It expects people to have a bond of trust with the Government over a period of four years during which we will go through great hardship and it will be asking for more and more sacrifice. This year we have saved €3.5 billion; next year it will be €4 billion and the year after another €4 billion. The way in which the Government started this process yesterday was extraordinary. It stuck to the firm line that Ireland is experiencing the same hardship as all other countries in the Western world, that this is a global recession and that we have just hit a wall, as the Minister for Foreign Affairs, Deputy Dermot Ahern, says. A bit of humility would have gone a long way towards building a sense of honesty in Government. If in this budget it is asking families on middle incomes to take an income reduction of €4,000 or €5,000 after asking them to take a cut of about €2,500 last September, the least it can do is to be honest with them in terms of how we got here and who made the mistakes that have resulted in our having to slam on the brakes now. However, it does not seem to be able to do that.

I am pleased the Minister here is a Green Party Minister, who is largely not responsible for the mistakes that have been made in the past five to six years. I appeal to the Minister, Deputy Gormley, to reach out to the public with that type of honesty. People are not fools. They know mistakes were made in particular domestic policy decisions. They know this country was excessively reliant on the property sector for taxation revenues and that current expenditure was built on the back of this entirely unsustainable income. They know Ireland has become uncompetitive and sloppy and that it is expensive to do business here. They know we have allowed this to happen in the last four to five years. Ten years ago, we were highly competitive. People are aware of the wasteful expenditure that has taken place. They know that in the boom times, when we were lucky enough to have surpluses, we should have been preparing for a downturn or for the deep recession we are now experiencing. However, that is not what happened.

Is it too much to ask that a Government which expects the populace to shoulder the burden of its own mistakes should at least be honest about those mistakes? I acknowledge that the current crisis is being added to in a significant way by a global banking collapse and a difficult exporting environment to which Ireland is particularly vulnerable. We are all aware of these realities. However, if the Government is asking people to accept the need for hardship and for everybody to come together in a unified effort to bring about national recovery in a time of emergency such as we currently face, the least people deserve is a dollop of humility and honesty from the Government. Instead, all we have had is the type of arrogant speak we heard yesterday which saw fit to refer to the budget as evidence of the Government's leadership, courage and vision. What a load of waffle. The measures announced yesterday are decisions into which the Government has been forced. Leadership and vision were required last September when the Government bottled it in introducing its unsuccessful first emergency budget. It was only in view of collapsing revenues and the realisation that the country is heading towards the abyss in terms of our ability to borrow to meet the deficit requirement that the Government was forced into making the decisions it made yesterday. So much for vision, courage and leadership.

The budget includes some measures that I support, including several of the initiatives on taxation. There is undoubtedly a need to bring more money into the Exchequer and to close the widening deficit. However, other challenges were totally ignored in this budget, the main one being job creation. We in Ireland are faced with a dual challenge. Like most countries in the western world, we must find a way to put in place a new banking structure that can ensure credit flows into the economy so that economic activity can be sustained and rebuilt. There is new thinking in the budget in this regard. I may not agree with the specific proposals but I recognise that there is at least an effort at new thinking.

The problem Ireland has which other countries do not is our massive and increasing revenue deficit. We must deal with this at the same time as we deal with other issues. The limit of the Government's imagination is evident in that its response has merely been to engage in a cash grab, largely from the middle income families who are always hit when there are tax increases. How can the Government expect that making up 68% of a required saving of €3 billion or €3.5 billion through tax increases will be of benefit to an economy that is on its knees? Such measures will merely ensure that consumers are brought to their knees. Any fragile remnant of confidence in terms of the willingness of consumers to part with their money will disappear with the introduction of this budget. Moreover, people know the situation will get even worse. Who will buy a television, a laptop computer or a new car when average annual incomes are dropping by €4,000 to €5,000, with even more severe reductions expected next year?

Is this the Government's economic strategy for recovery? Crises always bring opportunities but there is no evidence of imaginative thinking on the part of the Government in this crisis. For example, there is an opportunity to bring about dramatic and fundamental reform in the way the public service does its business in terms of rewarding initiative and performance and cutting out the fat and keeping the muscle. However, there is no evidence of such a necessary initiative. We still have an entire layer of middle management in the Health Service Executive, comprised in large part of staff who are not required, while staff are desperately needed in other areas of the public service and Civil Service. The budget contains no measures for flexibility in public sector staffing.

We have an opportunity to put people back to work on infrastructural developments in areas of the new economy which are of particular concern to the Minister, Deputy Gormley, such as energy, information technology and water. New State companies should be set up and there must be an examination of new structures of finance that would not impact on Government deficit. We put our cards on the table and asked the Government to consider such measures, but we got nothing in return. This budget will anger people not because it is tough but because it is unfair and because it takes Ireland in the wrong direction. It will deepen and prolong the recession rather than lead us in a new direction with new thinking.

I welcome the opportunity to contribute to the debate on the supplementary budget. I do so both as leader of the Green Party and as Minister for the Environment, Heritage and Local Government. It has been an exceptionally tough six months for the Irish people since the October budget. We are faced with the biggest economic challenges in the State's history just as the world is experiencing the worst recession in 70 years. We have seen job losses increase on a daily basis and our tax revenues reduce dramatically. As a result, we are relying far too much on borrowed money to run public services in the current year. This is not sustainable.

It is the inescapable duty of the Government to provide clear leadership and to ensure that the necessary corrective action is taken in this supplementary budget. We must put the public finances on a sound footing in the interest of long-term economic recovery. The Government is resolute that the actions and measures announced by the Minister for Finance are essential and proportionate. This is a very tough budget but it is a fair one. In this regard, I particularly welcome the decision to maintain social welfare payments at current rates. In preparing this budget, the Government's priorities are to ensure economic and environmental sustainability. We are promoting economic competitiveness so that we will be able to respond quickly when the global situation improves. Above all else, we are protecting the most vulnerable in our society to the greatest extent possible.

In my own Department, the effect of the measures taken in this supplementary budget is quite marked. The expenditure level now determined for 2009 presents us with significant challenges in managing scarce resources in the most effective manner. I am confident, however, that we have examined every expenditure line critically. We will ensure that the overall investment of some €2.6 billion is put to the best possible use for the public in the programmes and services provided by my Department, by local government and by our partner agencies.

Our overall budget of €2.6 billion cannot be dismissed as insignificant. It will help deliver essential services throughout the State. Capital spending of more than €1.6 billion will sustain thousands of jobs while also delivering vital infrastructure. We are continuing to invest in environmental protection in regard to water, waste management and natural and built heritage. A provision of €500 million is provided for water services infrastructure which, even in these adverse economic times, represents an increase of 2% on our high 2008 outturn. This reflects the Government's ongoing commitment to infrastructural and environmental investment in water services. We will continue to preserve and protect our water resources as a key priority in environmental policy by vigorously pursuing our programme to meet European Union standards for drinking water and waste water treatment.

Investment will also enhance competitiveness by providing the infrastructure necessary for sustainable economic development. We will continue to sustain the priority we attach to housing, particularly against the backdrop of increasing social housing need. Within our overall housing expenditure, we will continue to maintain a strong focus on the needs of the most vulnerable, including the homeless. I will return to and provide greater details on these issues later.

The Green Party and our partners in Government believe that the smart economy is the green economy and that green economy cannot prosper until such time as green thinking is fully integrated into the social partnership model. Today, I wish to announce that the commitment given in the programme for government for the introduction into partnership of an environmental and sustainability pillar is being acted upon. Henceforth, environmental NGOs will participate fully in social partnership. That no such pillar existed during the boom years was a grave oversight, one which worked to the detriment of the economy as a whole. Social partnership has, for the most part, worked well and will continue to work if it is remodelled in the longer term interests of our society and economy.

The environmental pillar will ensure that economic decisions have at their very core the concept of sustainability. If sustainability is not worked into economic decision-making, one has to question its longer term validity. Had the environmental sector been involved in social partnership, we could have avoided the worst excesses of the Celtic tiger in terms of planning and transport. Having the Green Party in Government will undoubtedly mean many of these issues will be addressed and that those difficulties can be ameliorated. The Green Party involvement will result in these long-term structural changes. It is precisely this type of structural change that will be our legacy.

Having an environmental pillar as part of social partnership will also mean that no one will question the wisdom and efficacy of a carbon levy. The Minister for Finance has given an unequivocal commitment that this carbon levy will be a major feature of the next budget. It is reasonable to say that the majority of Green Party taxation ideas will be implemented during the lifetime of this Government, going far beyond anything negotiated and contained in the programme for government.

I stated during my Leader's speech at the Green Party convention last month that we would emerge from this crisis with a fairer and more just society, with a leaner, greener and smarter economy. The Green Party has long argued that our tax model needed to be radically restructured. It is worth recalling, when listening to the jibes from the Opposition benches, that these parties were trying to outdo each other during the last election with their tax reduction plans. I do not include in that Sinn Féin as it at least maintained some level of consistency in that regard. The two main Opposition parties now claim to have answers to the crisis. Even a cursory examination of the ideas put forward by them show they lack real substance.

Fine Gael, in supporting the bank guarantee scheme last October, displayed an admirable sense of responsibility. Sadly, this was lacking in the Labour Party which opted for cheap politics.

The Minister was in bed on the night.

To put it bluntly, had this House not supported the banks that evening our country was finished. There would have been no money for our Garda, teachers, nurses or other public servants, absolutely nothing.

It is a wonder then that the Minister did not wake up.

The Labour Party continues with its innuendo and even more direct comment that the proposals for NAMA is a bail-out for bankers and builders.

I note Deputy Shortall is nodding in agreement. I support the measures not because I am in any way supportive of bankers and builders but because I and my colleagues have received the best possible advice from the National Treasury Management Agency, NTMA. It is also worth noting that internationally the idea is considered extremely innovative. Is the Labour Party questioning the competence and integrity of the NTMA? I speak as the Leader of a party that has never taken——

We are certainly questioning the integrity of Government.

——a cent from any bank or building company. I regret the same cannot be said of the Deputy's party.

What is the Minister talking about?

With all due respect, this issue is not about the Green Party but about the country. We are speaking about the people the Government is asking to bail it out.

It is. With respect, I have had to listen today and yesterday to nonsense from the Labour Party, in particular.

The Minister should direct his remarks through the Chair.

I apologise. We can contrast our record in Government with the Labour Party's record in Government. We have been in Government for only 20 months and have overhauled the political system.

We have reduced the number of Ministers of State——

That is a joke. What is the Minister talking about?

——while the Labour Party increased the number when last in Government.

A Chairman of a committee, no longer spokesperson on education, continues to hold his €20,000 allowance.

Please allow the Minister to make his contribution.

We have abolished ministerial pensions for sitting Deputies while Labour Party in government did nothing in that regard.

The Green Party has not done anything.

The Minister is posturing again as if this is a debate on Dáil reform.

We have introduced a cap on spending on local elections. The Labour Party did nothing. We will go much further when it comes to curbing and policing political donations. The Labour Party had a chance to do that but did not do so.

We did not sell the country down the Swanee.

I understand that a Minister of State post was created for Deputy Rabbitte on that occasion. Deputy Shortall should take a look back at the record of that time.

I imagine those comments hurt.

We will continue with a major reform of the banking system and will introduce the most rigorous form of regulation. When the Labour Party was in Government, this did not happen. That is a fact.

We did not make the type of announcements being made here.

I am more than happy at any stage to compare and contrast our record of achievement in a short space with that of the Opposition parties.

This Government's record of achievement is that it has driven the country into recession.

When I presented the carbon budget in October——

All interventions must be addressed through the Chair.

Deputy Gormley has a cheek to even refer to this Government's record.

Deputy Coveney, please allow the Minister to make his contribution.

Deputy Coveney rightly pointed out a few moments ago that we were not responsible for this crisis and that is a fact.

The Government has been in office for two years and Ireland is in crisis.

As are many countries in the world.

Not as bad as us.

The Minister, without interruption please.

When I presented the carbon budget in October, I pointed out that the projections available at that time in terms of greenhouse gas emissions were likely to overstate the position for the Kyoto period, given the rapidly changing economic outlook. This has been confirmed in the most recent analysis by the Environmental Protection Agency, EPA, published on 13 March. This analysis takes account of a macro-economic scenario prepared by the ESRI which assumes that GNP will contract by 7% between 2007 and 2010. Based on this information, the EPA has projected that with full implementation of all of the emission reduction measures already announced, the distance to target for Kyoto compliance will now be between 1.3 million and 1.8 million tonnes per annum over the 2008-12 period.

Deputies will be aware that the distance to target is the gap which must be bridged by further measures or by Government purchases of credits under the flexible mechanisms of the Kyoto protocol. It is now clear that the deterioration in the short-term macro-economic outlook will exceed that scenario, thus even these latest greenhouse gas projections are already out of date. Some commentators have suggested that we may now achieve Kyoto compliance without any recourse to carbon credits. Definitive judgment in this regard must be informed by further analysis by the EPA. In the meantime, I want to inform the House that I have asked the NTMA to put on hold its programme of carbon purchasing for the foreseeable future. Those purchases to which we are already committed should be certainly adequate to meet whatever need is likely to arise in the Kyoto period. Also, any surplus can be carried forward for use after 2012.

Our climate change policy needs to look far beyond Kyoto compliance. It would be a profound misunderstanding of the realities of climate change to see these recent developments as a reason to ease off on our efforts to drive down emissions across the economy. Under the new EU climate package, we must by 2020 reduce our emissions by 20% from their 2005 level. We will have an even more ambitious target when there is a new global agreement on climate change. For this reason, side-by-side with the Government's work to secure our economic recovery, we have maintained our focus on climate policy. The home insulation incentives announced recently will generate employment while reducing emissions from the sector. This has proved extremely popular with up to 94,000 households now registered. The smarter travel strategy provides the framework for a more sustainable transport future. We are placing a major emphasis on the role of green technology in our economic recovery.

Last week's signing of an agreement with Nissan and Renault is an important sign of our intent to exploit the potential of electric vehicles. Work is continuing, under the Joint Committee on Climate Change and Energy Security, on the development of further measures. Every crisis must be turned into an opportunity. Our response to this crisis must be to ensure that when economic growth resumes it will be on a low-carbon trajectory.

Not everything is about how much we spend on this service or that project. We must also look at the way we do things to ensure we are effective and sharply focused in the right direction.

We must ensure our policies are well grounded and targeted to new realities and that those who must operate within these policy spheres can do so with the minimum of regulation. There have been numerous calls for better planning regulation. I am happy to inform the House that I will act to streamline the planning system through a new planning and development (amendment) Bill which I hope to publish shortly. My primary aim is achieve a greater coherence between the national spatial strategy, regional planning guidelines and development and local area plans, in particular in so far as the zoning of land is concerned, to secure a better return from our investment on infrastructure.

I will also take this opportunity to modernise the foreshore consent process and the legislation underpinning it to provide for an accelerated timeline for the granting of licences that will facilitate the achievement of high renewable energy targets. I refer to the target of achieving 40% by 2020, for example. This will be an important step forward. The key objective will be to offer a better service to all stakeholders, including Government infrastructure providers, State bodies and the public, through a model that fully integrates and streamlines estate management on the State-owned foreshore with the strategic planning consent process. I am examining a range of measures to support a speedier planning appeals process. I am exploring the possibility of allowing the larger local authorities in the Dublin region to act on an agency basis when preparing reports for An Bord Pleanála appeals. That would help the board to deal more speedily with the backlog of cases that are currently before it. I will also allow the board's quorum to be reduced from three to two for routine cases. The measures I am taking in the planning area will be welcomed by everyone involved.

In a time of recession and belt-tightening, it is more important than ever to look to the future. We need to plan effectively and strategically if we are to do what we can, individually and collectively, to grasp the opportunities and build on the advantages at our disposal. An Economic and Social Research Institute report that was published last month, Macroeconomic Context for a Sustainable Recovery, signalled that the economy will continue to need a high level of public investment in infrastructure over the coming decade. If we are to optimise the resources available to us, investment must be clearly co-ordinated and prioritised in locations with the potential to drive regional and national competitiveness and the capacity to grow.

The national spatial strategy must remain the principal basis for this. This view is shared by the National Competitiveness Council and the National Economic and Social Council, both of which acknowledge that strong cities act as economic engines to drive growth and enhance regional and national competitiveness. The Department of the Environment, Heritage and Local Government is finalising a review and update of the national spatial strategy. It is assessing how the strategy is being implemented. The review will underline the key infrastructural and organisational priorities that are necessary if we are to improve our national competitiveness, contribute to economic renewal and support future economic development.

Some €500 million is being provided for water services infrastructure this year. Even in adverse economic times, that represents an increase of 2% on the 2008 outturn. This provision reflects the Government's ongoing commitment to preserving and protecting our water resources as a key element of environmental policy, meeting EU standards for drinking water and waste water treatment and putting critical infrastructure in place that will ensure ongoing support for industrial, commercial and other development. Investment under the water services programme will support over 4,000 jobs in the construction sector this year. It will support many additional jobs in manufacturing and in operating and maintaining the new infrastructure. We are determined to maintain and build on the good progress that has been made with the water services programme in recent years. Some 150 schemes are in progress and we expect 40 of them to be completed this year. We are planning to start at least as many new schemes later in the year. Momentum will be maintained on the delivery of priority projects. The tighter economic situation that now prevails means we must redouble our efforts to ensure that key environmental and economic objectives are delivered. We will benefit considerably from the more competitive tender pricing that is being obtained in the current operating environment.

There is an ongoing need to expand and improve our water and waste water treatment capacity so that environmental standards can be attained. Improvements are needed to anticipate future economic and social development needs and align investment decisions with other national priorities within the framework of the national spatial strategy. Water services investment will be at the core of future economic development. I attach considerable importance to the future direction of investment in this area. Therefore, I have asked my Department to undertake a review of the priority rating of all new projects over the coming months. This will form the basis for the next phase of the water services investment programme. While I reiterate that the Government will maintain a strong level of investment in water services, I emphasise that critical assessment criteria will single out the highest priority projects for future investment.

Allocations amounting to €100 million have been notified to local authorities under the rural water programme for 2009. The ongoing work under the programme will see compliance with national drinking water standards in group water scheme households rise to 98% by the end of the year, compared to 95% at the end of 2008. This programme has made huge inroads in improving rural water supplies across the country. It deserves due recognition for its practical achievements in recent years. It has improved the water supply quality of many rural communities. Many Deputies will be familiar with the extent of progress under this programme. I am happy to recognise this achievement. The Government is determined to build on the success of recent years, when a great deal was achieved in the water services sector. The level of compliance with the requirements of the EU urban waste water treatment directive on secondary waste water treatment facilities now stands at 92%, compared to 25% at the start of 2000. In the intervening period, some 442 water and waste water schemes have been completed, delivering an increase in waste water treatment capacity that is equivalent to meeting the needs of 3.2 million people. Water treatment capacity has increased by 838,000 over the same period.

The Government's commitment to housing is well established. In the more accommodating budgetary environment of recent years, substantial resources were invested in the broad spectrum of social and affordable housing measures and a range of improvement and regeneration programmes. We used those resources well. Record levels of activity were achieved last year. The needs of 19,500 households were met through the full range of social and affordable housing programmes. As is the case in many other areas of activity, the record levels of resources that were available in previous years are not available for 2009 and will not be available for a number of years. We must make significant adjustments across a range of housing programmes. Most importantly, over €1.4 billion will be available to us for housing in 2009. That is a significant level of investment at any time. It is crucial that we deploy such resources in as flexible and imaginative a manner as possible so that we achieve the optimum outcomes in terms of meeting housing needs.

The Minister is cutting €200 million from the budget.

We will focus on a number of specific objectives.

The Minister should tell us about the €200 million he is cutting from the social housing budget.

It is much less than the amount that would have to be cut to meet the cost of Fine Gael's plans.

While we recognise that the pool of resources available to us has reduced, we will continue to prioritise activities that focus on meeting the needs of the most vulnerable and disadvantaged in society.

We are still waiting.

We intend to make the most significant adjustments in areas where we believe the changed housing market environment provides the greatest opportunity for new and flexible approaches to programme delivery. This will allow us to lessen the impact of our more constrained resource environment to a greater extent than would otherwise be possible. The roll-out of the new long-term leasing initiative for social housing is a prime example of this. It will allow us to match social housing need with the increased availability of good quality homes on the market. The Government recognises the significant labour intensity of particular programmes and their capacity for maintaining and supporting employment and yielding a significant environmental dividend. To the greatest extent possible, we reflect social and employment considerations in our ongoing commitment to regeneration and remedial works projects.

Will the Minister commit to the regeneration project in Limerick? What effect will the €200 million cuts have on that project?

This includes a number of energy efficiency measures targeted towards improving performance in the social housing stock and a number of regeneration programmes that will continue to be driven by an ambitious agenda of social, economic and physical renewal.

Will the Minister give a commitment to provide money for the regeneration of Limerick?

What about Ballymun?

Looking beyond 2009, there will be a continued need for further flexibility and imagination in how we meet housing needs.

I ask the Deputy not to intervene.

In delivering its social housing policy, my Department will work in close co-operation with our partners in the local authorities and the voluntary and co-operative housing sector.

I published the Green Paper on Local Government Reform in April 2008. Other changes have informed our approach to policy development since then. A significant shift was prompted by the publication of the OECD's review of the Irish public service and the report of the task force on the public service, Transforming Public Services. The Government recognises that local government must have a stronger and more meaningful role in public sector activity at local level. The economic challenge and the work of the Commission on Taxation are clearly of direct relevance to the future of local government. The forthcoming White Paper will reflect these developments. Since the beginning of this process, my goal has been to strengthen local democracy. This objective is now more pressing than ever. A local government system with stronger democratic leadership at its heart will be an essential element in assisting local authorities to take local initiatives to respond to economic recovery and, where possible, drive and lead local development to hasten that recovery. I am finalising the content of the White Paper on local government for Government consideration and subsequent publication. It is my intention to see a stronger, more vibrant and more accountable form of local government at the end of this process.

The local government sector alone is responsible for a total spend of some €12 billion this year and with its democratic mandate and broad range of responsibilities the sector is pivotal in promoting and facilitating economic development at local level. Like all sectors, local councils are facing significant financial challenges resulting from the economic downturn and are acutely aware of the importance of mitigating costs borne by business in the present climate.

At the end of last year, I urged all local authorities to exercise restraint in setting any increases in commercial rates in their 2009 budgets in order to support competitiveness in the economy, nationally and locally, and to protect the interests of communities. Local authorities have responded positively, and the national average increase in annual rates on valuation is limited to 1.15%. In addition, I have written recently to local authority managers in respect of the contribution that can be made by local authorities to the maximisation of economic activity and employment at local level. In particular, I asked them to strengthen business support structures to facilitate local business initiatives and developments, with speed and flexibility in the current difficult operating environment.

The local government fund will receive an Exchequer contribution of €417 million in 2009, together with the proceeds of motor taxation of some €1,040 million. Although the income from these sources is reduced from what was available in 2008, it will be supplemented by the pension-related deduction, estimated at €80 million, which local authorities will retain. Deputies will also recall that the Government decided in last October's budget to broaden the revenue base of local authorities by the introduction of an annual charge of €200 on non-principal private residences. Good progress has been made with the drafting of the legislation necessary to underpin this charge, and I expect to be in a position to bring it before the House shortly after Easter. The Government remains committed to implementing the charge in order to realise a revenue yield projected at €40 million in the current year. This will be retained by the local authorities which collect it. Local authorities are gearing up to implement the charge, and payment will be accepted electronically through a website being developed by the local government computer services board.

It is particularly important now for everyone in the local government sector to work together to ensure that we achieve value for money. Although it is clear that local authorities have made significant strides over recent years in pursuing efficiency and value for money in their operations, there will always be scope to obtain better value. I look to management and elected members alike to continue to pursue the efficiency agenda in conjunction with their business and other partners through the improved governance structures that have been put in place in recent times.

The Environmental Protection Agency received a significant increase of over 40% in funding from the Exchequer in 2008. The reduction in the 2009 allocation reflects the fact that work on the construction of the agency's new headquarters building has progressed well and will require less capital expenditure this year. Like all public bodies, the EPA will need to seek further efficiencies and reduce costs in the year ahead. Nonetheless, I am satisfied that the 2009 provision for the agency will enable it to continue to carry out its important environmental functions.

The allocation to the built heritage still represents a significant investment in the conservation and protection of our rich heritage resource. This will allow for financial support to be provided for the various schemes even though at some reduction. I am conscious of the value of this support in terms of employment in the conservation sector, regeneration of our historic buildings and the contribution to sustainability and tourism. My Department will also continue with the national inventory of architectural heritage, its architectural advice series booklets and the World Heritage programme.

With regard to the National Parks and Wildlife Service, the reduction in available resources will necessitate a sharp focus on the priority objectives we have set ourselves in nature conservation, as well as honouring declared and statutory commitments. I will give priority to ensuring that we meet our obligations under the EU directives on birds and habitats. Concerning the protection of raised bogs, which are designated as special areas of conservation, SAC, we will do all we can to achieve the protection of these sensitive habitats. A new working group will report back to me as a matter of urgency on how to acquire management control of these peatlands and how to address the financial resource implications in 2010 and beyond. It is well recognised that our national parks are a much valued and utilised resource both for the national population and for tourists. The NPWS will strive to ensure that these facilities continue to attract visitors and it will provide the highest level of visitor facilities possible within the current financial and staffing restrictions.

In making the hard choices required in the current economic circumstances, the 2009 Supplementary Budget Statement was prepared in a responsible way. It will protect environmental and economic sustainability while protecting the most vulnerable of our society. The choices have been hard but the Government is resolute in its determination to put our public finances on a sound footing for the good of the country and our future prosperity. My party's involvement in Government is to the public good. We are in Government to achieve the policies for which we stand. The Green Party has clearly demonstrated its capability in Government of facing up to huge challenges whose likes have not been seen for generations. I and my colleagues are firmly committed to securing our policies into the future.

With the agreement of the House, I wish to share my time with Deputies Jack Wall and Mary Upton.

That is agreed.

I say to the Minister, Deputy Gormley, that for somebody who could not get himself out of bed on that fateful night last September when the Government decided to bail out the banks, he has a brass neck to come into the House and boast about his record in Government, particularly when one considers that this country is in the throes of the worst recession in the history of the State. The economy has been brought to the brink of collapse.

The Deputy is talking nonsense.

I remember the comments of the Minister and those of his colleague, the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan last October. He stated he was very proud of the budget that hit the pensioners. Last night the Ministers' colleague, Deputy Mary White, spoke of how the Supplementary budget was a wonderful one that had the fingerprints of the Green Party all over it.

This shows how out of touch the Green Party is with the real world. The Minister is other-worldly. That is the best way of describing it. He is out of touch and in time he will discover that he will pay a serious price for that.

The Deputy should look at the record and contrast it with that of her own party.

Over the past weeks and months we all have had to endure a significant campaign of spin by this Government concerning what it proposed to do in this budget. The main thrust of the spin was that we were all in this situation together and that everybody must pay, from top to bottom. The Government was at this from two months out when it began to brief all the political correspondents to the effect that 40% of people did not pay any tax and, on grounds of fairness, these people must be brought into the tax net. By and large, most of the political correspondents fell for the notion that there were 40% outside the tax net.

That was a fact.

The reason 40% were outside the tax net is that so many of them are on incredibly low incomes. That 40% includes over 100,000 pensioners, for example.

We have the second highest minimum wage in Europe.

It includes large numbers who are accurately described as being the "working poor". These are people who are working in minimum waged jobs and are really struggling to keep their heads above water. It includes the many thousands of people who are dependent on welfare who are just about getting by. It is outrageous to say to these people that somehow it is their fault the economy is in a mess and they must pay while at the same time we continue to see significant numbers of people getting away with paying little or no tax.

Is the Minister, Deputy Gormley, proud that the Government of which he is part, has done nothing to tackle the problem of tax exiles? Is he proud that nothing has been done——

We did do so, more than the Deputy's party did. That is nonsense.

——about the considerable tax relief on pension schemes for high rollers? What about all the property-based tax relief schemes?

The Deputy's party let them get away with the "Cinderella" clause.

The same rules apply to the Minister as apply to others when they heckle him, if he gets my drift.

The Minister should not talk to us about fairness. He does not understand the meaning of the word. This Government speaks in the House about hitting people who are earning €20,000. It claims that this is fair while it lets high-rollers off with paying little or no tax. It is just outrageous. The public has not bought that, for all that the Government's spin machines were in action over recent weeks. They do not accept that. There is no reason families on low and middle incomes, which are struggling to get by, should have to feel pain in contributing to solving a problem that has nothing to do with them. The Minister is not staying. He is slipping out again. The amount of time he spends in the Chamber is minute.

The Deputy should address her comments through the Chair.

There is no Green Party representative in the Chamber on a regular basis. This supplementary budget is savage in the manner in which it targets families and people on welfare and lets the better off completely off the hook. It will not be tolerated by the public. It is fundamentally unfair; it fails on the grounds of fairness.

This budget is being introduced against the backdrop of all that has gone on in the banks in recent months and years. The question of a bad bank or national asset management agency is highly suspect. There is grave concern that ordinary people are being targeted because of the behaviour of senior management in the banks, who have been highly irresponsible, greedy developers and, in many ways, the Government parties, which have mismanaged the economy in recent years. There is no reason under the sun that ordinary working people or those dependent on welfare should have to pay for their mistakes. There is palpable anger about this proposal for that reason. It is an outrageous concept that the State, through the taxpayer, should take responsibility for between €80 billion and €90 billion of bad debt run up in recent years. It is a high risk strategy. There is no reason for the public to have confidence in the Government in tackling the problem and dealing with it in a transparent way, given the unethical record and the corrosive relationship between Fianna Fáil in government and the business community. The jury is very much out on this and massive risks are involved for the country.

I refer to the manner in which the Government has targeted working families through this budget. The increases in various levies and PRSI are the greatest blow of all to such families. The income and health levies have been doubled and their thresholds lowered and, just in case anybody in the middle income bracket might get away with not paying these levies, the PRSI threshold was increased to bring in people earning between €52,000 and €75,000. Anyone on a low, moderate or middle income will still be hit by the budget with one income and dual income families with small children, in particular, being hit.

They will pay through the imposition of these levies, the loss of the early child care supplement and the changes in mortgage interest relief. The Government's proposal regarding such relief represents a major attack on family budgets. The decision to abolish this relief after only seven years is incredible, given the way many people are struggling. Their mortgage is worth more than their house and they are in negative equity. They are struggling to repay their mortgage but the Government will remove this tax relief, which, up to now, eased the burden on them. In addition, this will be introduced with immediate effect. The Minister of State does not realise the difficulties many families face in just getting by from month to month. There is no flexibility in their budgets to meet these additional demands. Many people will find themselves in serious difficulty next month as a result of the abolition of this relief without any notice. People had a reasonable expectation that the rules that applied when they took out their mortgage would continue to apply but the Government has cut the small relief that was in place in midstream. This will add greatly to the hardship people are experiencing.

We would never make changes on that basis.

What the Government is doing will save money.

Give us a proposal. The Deputy has done nothing but criticise since she began her contribution.

I am about to do that. The Government parties had choices regarding mortgage interest relief. They chose to hit families that are struggling to get by. The choice was to do that or examine the relief available to landlords.

The Deputy had chances. She is taking the populist route and sitting on the fence.

The Minister of State must allow the Deputy to make her contribution without interruption. Anything he wishes to say must be said through the Chair.

The Government had the choice to hit families or remove the relief currently available to landlords, but it chose to hit families over landlords. On the basis of the figures provided to us, there was potential to save €500 million by cutting tax relief for landlords but the Government chose to ignore that and hit ordinary families instead. There is no justification whatsoever for that. The reduction in mortgage interest for families will save €65 million but the Government could have saved a multiple of that if it had tackled landlords.

There will be major problems for those who are experiencing or who face unemployment. Where one member of a couple becomes unemployed, they have difficulty repaying their mortgage. When they seek assistance from the community welfare officer, they are staggered that so little help is available. A ridiculous, arbitrary rule applies whereby if one's partner works 30 or more hours a week, one is automatically precluded from any assistance. That rule needs to change. The means test must be eased because the mortgage interest relief acts as a disincentive to work. The other problem relates to those who are stuck on fixed rate mortgages, which is like a life sentence for them. Many people who have sought to change over to a variable rate mortgage with their provider are being quoted between €12,000 and €14,000 to make the switch. In exchange for the bank guarantee, flexibility should be shown to people who find themselves in this impossible situation.

One of the worst aspects of the budget is the cut in the Christmas bonus. It is wrong of the Government and the Minister, as she did earlier, to claim there have been no cuts in social welfare. The cut in the Christmas bonus amounts to a 2% reduction in real terms for social welfare recipients. There is a great deal of spin about the consumer price index showing the cost of living has reduced by 4%. That is not the case for those depending on welfare payments. When one examines their expenses, one sees there has been no reduction in their cost of living and, therefore, there is no justification for cutting payments. Payments will be cut by 2%, which is reprehensible because the Government is hitting those dependent on welfare at a vulnerable time — the first week in December. There are major demands on the household budgets of pensioners and families with young children in providing for Christmas, whether that involves buying presents for grandchildren or putting money aside for Christmas cards or buying clothes or toys for Christmas. Social welfare recipients are absolutely dependent on the bonus payment at the start of December to have a Christmas and it is Scrooge-like to cut it when the Government had many other choices. It could have tackled tax relief for the rich on a range of fronts but chose to hit the most vulnerable families when they are most vulnerable. That is a reprehensible decision and will drive families into the hands of moneylenders. There is no question about that. That decision will reverse the progress the Government has made in recent years in removing people from the clutches of moneylenders.

Early child care supplement will be halved from next month. This is regressive. It shows no consideration for the fact that families try to plan and budget but suddenly from next month their money is down. For many years the Labour Party has promoted the idea of free preschool education for all three and four year olds, which is necessary. The Government's measure, however, announces a subsidy for preschool education as cover for cutting a welfare payment to children. It is making savings on the backs of young children and saying that instead it will return less than half that sum as a contribution towards the cost of child care. This is not a child care initiative because it takes no consideration of the fact that the existing ad hoc system does not have the capacity to cater for the 60,000 three year olds who will be looking for places from next January. The Minister for State at the Department of Health and Children, Deputy Barry Andrews, should not pretend that this a child-centred measure. It is merely a cost-saving measure on the backs of children under the cover of returning half the money as a contribution to the cost of child care.

The Government's proposal to pull back child benefit is another threat to family budgets and to the welfare of children. This is a universal payment. The tax system does not recognise the expenses involved in having children and child benefit is the only measure that exists. It would be regressive to go back on that.

One wonders what we will say about this budget when we talk about it in the future. My constituents will remember it as a budget of fear, of the future and the unknown. Some old age pensioners even fear for their lives because the Minister for Community, Rural and Gaeltacht Affairs has stopped the grant for safety mechanisms for older people. This grant was in its infancy and for many it was a way to ensure a safe home and a safer community and helped them to live out their lives in a happy state. In the first year 10,000 people got the grant and 11,000 in the second year. I do not blame the Minister of State at the Department, Deputy Curran, because he is new to the game but I do blame his line Minister, Deputy Éamon Ó Cuív.

This type of grant improves community life. It is imperative that we examine community life. This has to move beyond a house on an estate, on a street or even a rural house. We must ensure that we provide a sense of care for and attention to these people and show that safety in their own homes is important. The Minister has cut this small sum of money at source and says that he will review the applications in situ and deal with them, depending on the funding available. We know that none of those grants will be paid in the present environment.

That the Government says this budget is fair makes one wonder about the caring society. I can see no logic in the Minister's cutting this grant to senior citizens. There is no care, attention or fairness in that because it puts fear into these people. Everyone in this House could quote examples from their areas of people whose lives have been threatened or who have been intimidated and so on but the best the Minister could do to reduce his budget was to cut this grant.

Time and again in this House on budget day when the Minister for Finance spoke about taking people out of the tax net those on the Government benches exulted. It gave people an expectation of their income and they planned a future for themselves and their children on that basis. They looked for joint ownership loans because they were going to provide the ultimate, a house for their families but then greed took over as developers increased the costs of the houses so that joint ownership became a joke. The Government did nothing about that, apart from allowing the banks and lending agencies to issue 100% loans. We have seen what happened due to the lack of control in that area.

Everyone here has met people who say how hard it is to deal with these lending agencies where the interest increased by 3% or 4% almost weekly due to failure to pay. Those homes are under threat. Now the Government is saying that everyone must pay but it will not accept that it created that expectation when it took people out of the tax net. They built their hopes for the future on that expectation.

The Government is further increasing those people's problems because it is doing away with the mortgage relief scheme and increasing the insurance on their mortgages so it is hitting them at every possible point. That is what young couples who contact me are worried about.

I went to talk to some of the civil servants who were on strike recently and they told me about their problems arising from decentralisation and the cost of child care etc. Those problems will increase by thousands of euro. That is where fairness comes in. The Government can ask what the Labour Party has to offer, but when we tried to offer something and come forward with proposals, we were met with a closed door at the Department of Finance on Merrion Street. We received a note from the Department asking us not to contact it any more because it was preparing a budget. That is the assistance we got in trying to put our case forward, so the Government should not come the heavy with us and say we had nothing to propose, because we did not get the necessary help. Every Minister has ten or 12 people in their offices to do this while we have one or two. We cannot compare. When we sought parity we were refused. Maybe we were getting too close to resolving some of the problems. There was no credit in this budget, but the Government was not going to allow us any.

The last budget irked me to despair when I saw the clawback on the rent subsidy. That has hit again. I ask the Minister to look at that and the mortgage interest relief, which would make life somewhat easier for those who are unfortunate enough to be in that position.

One of the biggest difficulties with this budget is the sharpness with which these vicious cuts are being introduced. Perhaps the Minister's friends have war chests stashed away that they can draw on at the drop of a hat, but the vast majority of the people who come to my advice clinics and whom I represent are already on a very tight budget. There is no planning time for them. These cuts are being introduced almost immediately and they have no way of coping with that. I do not know whether anybody has given any consideration to the short-term impact it will have, never mind the impact it will have as we go through another year of these cuts. There are realities that have not been taken on board regarding low and middle income earners, the elderly and families with young children.

Initially, in yesterday's budget speech the Minister for Finance acknowledged to some extent the damage done by the Government and its friends to the economy with the scandalous overheating of the property market, but this was simply a token acknowledgement. Again, those who benefited least from the property boom and what is now the carcass of the Celtic tiger were targeted. We got a reduction in mortgage interest relief from ten years to seven when we should have had an extension of the mortgage interest supplement rules with the purpose of helping families where one income has been lost; Deputy Shortall referred to that matter.

We were told that the rent allowance would be cut, where instead we should have had a promise to act on the ever-increasing waiting lists for social housing. Yesterday, the Minister said rent allowance payments will be reduced to reflect the drop in the cost of rent. It is true that statistics suggest rents have reduced, but the people who come to my advice clinics are in a very weak position to negotiate a lower rent. They are very much at the mercy of landlords. How will we police the drop in rent? How will we say it is appropriate that rent supplement is reduced because there is a drop in rents? I do not think we can do that unless we hear there is some plan in place to identify exactly how that will be done. Otherwise, we will have the landlords we have always had exploiting the unfortunate and poorer people who are in no position to fight their corner and negotiate a drop in their rent.

Yesterday, we got a bail-out for the developers and bankers when we should have had protection for families who are unable to pay their mortgages because they have lost their jobs. There is a glut of unsold properties on the market. These have been hoarded by the developers and they are being rewarded by the Minister. They are quite comfortable in the knowledge that the properties will be taken off their hands and they will not have to worry about repayment or repossession. Nobody is standing over them breathing down their necks as they are over the people we all have at our advice clinics whose houses are at risk of being repossessed. People come in crying, they do not know where to go or where they can possibly get some mortgage support. This is an appalling situation and I do not know if anybody has taken account of the numbers likely to be involved if this situation continues.

There might be a glut of houses in Tullamore that will take rent allowance, but that is not true in areas such as Crumlin or Harold's Cross. How will we find out where the drop in rent has happened, who can avail of it and how they can do that and ensure that it is referred back to the tenant who is trying to rent from a landlord? The nightmare scenario arising from this is that these people, because they do not have the capacity to pay the rent, will end up in homeless accommodation with their children. We do not want to think about that, but the Minister must address it and take account of it. So much for the socialism of former Taoiseach, Deputy Bertie Ahern, and the fairness of the Taoiseach, Deputy Cowen. That is where we have reached.

There was an opportunity in the budget to tackle inequality. We all knew it would be tough, but it certainly was not fair. The Labour Party advocated ending various tax reliefs, for example, all tax reliefs for landlords, and ending tax exile status and the Cinderella clause whereby one turned the clock back for an hour or two. Some effort was put into that. We hoped for a moratorium on home repossessions, but there is no moratorium. We put forward the suggestion a number of times that there was an opportunity to allow people to pay what they could and to hold onto their houses over a reasonable period of time and not end up homeless. Unfortunately, that is what will happen. They will end up without a home to call their own.

Deputy Wall raised another point and I want to refer to it because I have had a number of telephone calls about it all day. It is about the basic security provisions for the elderly. This is one of the meanest and sneakiest cuts in the budget.

It was buried deep in the Department's website. Only because some of the representative agencies were enterprising and dug it out did we, and, in turn, our constituents, become aware of it. It reflects utter meanness. Elderly people want to stay in their own homes and we want them to do so. However, we want them to know they are safe and secure in their homes, and they and their families also want that. The very small, modest contribution that was made towards this over the past three years is being pulled immediately. It is being cut. There is a token recognition that those on the list will be looked after, but there is fallout all over the place from this. People who administered the scheme will lose their jobs and there is a loss on VAT and tax from the people providing the service. It is a loser all round. Will the Minister at least reconsider this miserable cut, which has to be one of the sneakiest and meanest? I am concerned that there are more such hidden slices off the budget that we have not heard about yet and that there are further awful surprises or shocks down the line for all of us.

From what we were told in yesterday's budget, we face a pretty miserable and stressful couple of months, and beyond that we do not know. However, the likelihood is that things will not get better. From everything we hear and recognise, that will be the case. I started by saying the suddenness with which these cuts are being introduced will leave many very vulnerable people in very deep trouble financially. They will have no way of meeting their debts and will find themselves forced into borrowing money. The banks will not lend them money so they will turn to the usual scoundrels who provide the money at extraordinary interest and will come and make them pay the price over and over again. Once again they are the weakest, the most vulnerable and most at risk and we are once again neglecting them.

Today, I spoke with a young married man who is on a fairly reasonable income and has two children under the age of five and a mortgage for over seven years. He is hit by all the levies. For a person in those circumstances, it seems that everywhere he or she turns involves the payment of money. How is a person like that expected to be able to cope and to plan? There is no way such a person can be expected to deal with this.

I urge the Minister of State to examine the impact of what is happening and to bear in mind that it was the greed of the bankers and developers that caused all of this but they appear to be getting off scot free. We have all heard this and will continue to hear it, and rightly so. People contact us every day and say they did not cause this problem but they are being made to pay for it. They also say that they are prepared to take their share of grief and the pain but they are not prepared to tolerate the fact that the people who caused it are getting off scot free.

That is agreed.

The budget measures introduced by my colleague, the Minister for Finance, are very much a necessary response to the economic turmoil we currently face. Ireland has experienced a dramatic economic downturn against the backdrop of a collapse in the world financial order. This, in turn, had a major adverse impact on the resources available to the Government in framing the supplementary budget. It has been a major challenge to frame a budget in such circumstances, but I firmly believe the budget represents the best possible balance in these difficult times.

Unemployment numbers, which have been increasing in recent months, bring their own challenges. While numbers alone never tell the real story, the unemployed are individuals who face a difficult situation, one which many of them had not envisaged 12 months ago. The challenge that brings presented difficult choices for the Government and difficult decisions had to be made. By reducing the take home pay of many families throughout the country, we are in a position to provide assistance to the people who now find themselves unemployed. I acknowledge, as has a number of colleagues, the hardship and the difficulties people now face, the increased taxes and levies that have been placed on them and the changes that will make to running their homes and to the lifestyle to which they have become accustomed. I accept that is a problem faced by many households throughout the country as a result of the position and the decisions taken in the budget.

The Opposition has been critical of many of the budgetary provisions and decisions made. While some constructive proposals were presented, calls are made frequently to end the tax exile status of citizens. If one were to raise that issue in any pub in the country tonight, I would say that people would agree that it should be ended but addressing it is not as simple as merely abolishing that status. We have benefited enormously from tax exiles from other countries coming to this country.

Many people from other countries have come to work in the IFSC. If a person decides to move to live in Switzerland or another country, we cannot stop that person at the airport and tell him or her that he or she cannot leave the country.

There is one law for the rich and another law for everybody else.

It is easy to make the point in this House that we should end the tax exile status of citizens. People have the right to free movement, as provided by the European Union.

If they want to be Irish citizens, they should pay their taxes here.

We have arrangements with other countries. Addressing the matter is not as simple as people portray it to be, but such an argument sounds good.

I acknowledge people such as Mr. Michael O'Leary who, while he has come in for considerable criticism on occasions, has stayed here. He is providing much needed employment and pays his taxes. I acknowledge what he has done for the country.

Why can the others not do that?

As the Minister for Finance, Deputy Brian Lenihan, said yesterday, the budget has been constructed with six broad policy objectives, namely, to place the public finances on a stable and sustainable path, to restore our banking system to ensure that credit is available to both businesses and consumers, to regain our economic competitiveness, to protect employment, to stimulate economic confidence and to restore our international reputation. I must emphasise the importance of restoring our banking system. Some Members have criticised the Government for trying to tackle what is a very difficult situation not only in Ireland, but throughout the world. We have seen the attempts made in the USA and in Britain to deal with the crisis. If we could successfully tackle the banking system and restore it to what we were used to and provide the confidence that is very much missing, that would be the biggest and best protection we could provide to employment in this country. The Taoiseach and the Minister for Finance have explained that on several occasions. Members understand the lack of credit that is available to businesses throughout the country. The banking system must be our priority, namely, to restore confidence in it, to get credit flowing again and to give businesses the opportunity to survive during this difficult time and to flourish later on.

It has been necessary to take very hard decisions on both the expenditure and tax fronts, but in making these decisions fairness has been the cornerstone of our efforts. Notwithstanding the tough decisions taken, the Government has still made some provision for productive investment and this includes important provisions in the communications, energy and natural resources sectors. My ministerial colleague, Deputy Ryan, outlined to the House details of some vital investment projects in the areas of energy efficiency, renewal energy and broadband and this will play a major role in promoting sustainable development and competitiveness.

Ireland is not alone in facing this severe economic crisis. Recent events show that we are in a situation of almost unprecedented international economic and financial volatility. As a small open economy, we are particularly vulnerable to the international situation. All the experts would indicate that global trade will reduce by at least 9% this year. As a small island nation that is very dependent on exports, that has to have a serious impact on our country.

However, the firm and prompt action already taken by Government in response to the financial situation has now been complemented by equally decisive action taken in this supplementary budget. It has been necessary to take additional steps to achieve savings in the departmental budget and in the budgets of agencies under its aegis in 2002. The Department has further reduced gross current expenditure by more than €12 million since the October budget. In addition, a reduction of €15 million has been announced in capital expenditure.

With regard to the allocations for this year, the area of current expenditure will demand substantial efficiencies and these efficiencies will be delivered to ensure that we live within budget. It should be noted that the overall allocation for the Department's administrative costs is down, reflecting savings in respective consultancy, procurement and an 8% reduction in professional fees. The allocation for consultancy in the Department's administration budget is down 27% per cent on last year's spending. This reflects the cuts in consultancy expenditure.

As Deputies are aware, as part of the agencies restructuring programme approved by the Government, the central and regional fisheries boards are to be replaced by a single national fisheries authority. This move is generally in line with the 2005 Farrell Grant Sparks report on the sector. It will over time promote the conditions for greater flexibility in the use of inland fishery resources while ensuring that the regional focus remains. I compliment the people who have served on the boards and the support we have received from all involved now that the new authority is being created. The rationalisation of the boards will strengthen this valuable sector, which fulfils an important role as a guardian of our inland fisheries environment. Implementation is currently under way to ensure a smooth transition to the new structure. The restructuring is being designed to consolidate and strengthen the service, improving its efficiency and effectiveness.

I am happy to report that the 2009 budget makes provision for the continuation of the INFOMAR project, Ireland's national seabed survey. This important strategic programme provides vital baseline mapping for a range of initiatives in the offshore, chief among these are the marine renewable energy developments supported by my Department, but the project also underlines offshore exploration, fisheries, aquaculture, aggregates and safety. This project is acknowledged as the best practice worldwide and it is carried out by the Geological Survey of Ireland jointly with the Marine Institute. The first three years of work on this project have been carried out very efficiently and within budget. It is the envy of several other countries. We are aware that a number of them are trying to replicate what we doing here.

With regard to the communications sector, I am acutely aware of the importance of encouraging and facilitating more people to participate in the knowledge society and what we call e-inclusion has the potential to be positive in many ways.

Information and communication technologies, ICTs, have transformed the lives of many people. They make it easier, quicker and sometimes cheaper to access services. They also make it easier to search for information, goods and even jobs. People who use the Internet can avail of on-line shopping. They have access to more purchase choices and thus can often avail of better value. The same holds true when it incomes to communication, with a range of excellent value on-line options available. However, it is clear that people right across the country are missing out on that opportunity. The full extent of the potential benefits technology can deliver for society will only be realised when its use is more widespread. This will be tackled on a number of fronts.

The national broadband scheme will bring broadband to those parts of the country that would not be able to have it without some assistance. This will result in all parts of Ireland being connected. There is also a need for the rapid growth we are experiencing in broadband uptake to continue so that people may have the very real benefits that will follow. The e-inclusion fund has achieved some significant positive impacts. Last year, grant allocations were made to 87 organisations amounting to just under €2.25 million. The reduced 2009 allocation in the current fiscal climate facilitates continuation of this important programme with focused interventions to achieve maximum benefit from the resources available. We will have less funds to allocate, but I am confident that we should be able to make as much impact as possible.

I started off by talking about Ryanair. It is very much acknowledged as a company that provided cheap air travel. Almost inadvertently, it has, too, played a major role in encouraging people to use technology. People came to realise that they could make savings by booking on-line. This encouraged more and more people to use the Internet. By using this technology, people were provided with great opportunities and this has led to increased confidence among the public. It is important to build on this and give people right across the country the opportunity to use information communication technology on a daily basis.

In conclusion, I do not take any great satisfaction from supporting yesterday's budget. It is very much with regret that we had to take the decisions we did, but we had no option as regards those difficult choices. I hope the sacrifices we are asking the Irish people to make will be very much of a temporary nature and that by all of us working together and playing our part, we can make this country great again.

I thank the Ceann Comhairle for affording us the opportunity to speak on this particular resolution.

It is important to say at the outset that the Taoiseach and the Government have been commendably frank in this debate and throughout the crisis besetting this country since the international economy tipped into recession. We have tried to be frank, open and honest with the public and that is illustrated by the Taoiseach's statement, very clearly enunciated on a number of occasions, that we will see a 10% erosion in Irish living standards over the next 18 months to two years. It takes something to admit that, to be honest with the public and say, in effect, that this is not going to be easy or nice, but rather very difficult — perhaps the greatest and toughest challenge any Government has had to face. It is not an easy time to be in government, and I suspect that many of the Members opposite, in Fine Gael and Labour, would have to do virtually the same things we are now doing with public spending and taxation were they in power. Privately, many of them, I believe, will admit to that outside the Chamber.

I had the privilege of sitting beside the Taoiseach this morning when this debate opened. It was remarkable, in many ways, to listen to the comments and speeches emanating from the Labour Party leader, Deputy Gilmore, his predecessor, Deputy Ruairí Quinn, and his immediate predecessor, Deputy Pat Rabbitte. It struck me very forcibly that the Labour Party is the least reformed left wing social democratic party on the European landscape. It has not, or does not appear to have, got the message that even the British Labour Party has got. I was a member of the British Labour Party in the 1980s, when——

I bet the Deputy wishes he had stayed there.

——Neil Kinnock and the late John Smith were reforming that party, bringing it into what was then the 20th century.

In deference to the Labour Party, how reformed is Fianna Fáil?

All the reform that occurred in the social democratic movement in Britain and right across Europe has simply not happened in the Irish Labour Party. It appears from some of its pronouncements in this and other debates in this House that its members are still cheerleaders for State ownership and big union power, even though all of the mainstream social democratic movements in the UK and elsewhere have departed from that particular policy mix. It is noticeable also that when one hears Tony Blair, Peter Mandelson and Gordon Brown, the lineal successors of John Smith and Neil Kinnock, they are not enthusiastic cheerleaders for the nationalisation of banks. They do it as the least desirable choice when it comes to dealing with banks and the banking system. One senses a degree of relish almost in the Labour Party speakers at the fact that we are actually in recession. One can only compare this to the relish one sees on George Lee's face on television at the mention of the word "recession" and what disaster might next beset us.

Socialists have always opposed big capital and banks and we see a good deal of this in statements emanating from the left wing parties at the moment. The budget announced yesterday is the first step in our economic recovery. It is a supplementary budget and a response to the political and financial situation which is changing literally by the day and by the month. One can no longer introduce a budget in this House and say: "That will be it." We know, for example, that the Government has taken on the very difficult task of paring back public spending. This particular supplementary budget must be viewed against the background and in the context of the earlier full-scale budget and——

I apologise for interrupting the Minister of State, but I must ask the Ceann Comhairle for a ruling. I believe it is somewhat unfair to use the name of somebody outside this House while inferring that he enjoys talking about a recession. It is somewhat objectionable and I believe the Minister of State ought to withdraw his remark.

While we do not allow a disparaging remark to be made about a person outside the House——

It was not intended to be disparaging. I know George Lee very well.

If it was not intended to be disparaging, then it probably was not. As long as we all understand that it was not disparaging, that is fine.

It was a light-hearted comment about one of our best known commentators, who, as many have said outside the House as well, sometimes has a look of relish about him when he reports on catastrophe. That is, perhaps, a well known fact I would have thought for many people.

The important point about this budget is that it sets out a balance between our borrowing requirements, the need for spending cuts and the need for extra taxation. Before I was interrupted by Deputy Reilly, I was saying that this supplementary budget has to be seen in the context of what had already occurred in terms of the last full budget as well as the fact that there is to be another budget at the end of the year. Some people have suggested that perhaps we did not go far enough as regards spending cuts, favouring increases in taxation, but——

People on €500,000 a year.

——it is not over yet. There will be another budget before the end of the year. We will have to move, in a very programmed and planned manner, towards a situation where we get our costs under control. We have the time and space to do this between now and 2013. Thankfully, the European Commission has, under the Growth and Stability Pact and in accordance with the rules governing how we manage our financial affairs in the European context, given us until 2013 to get our affairs in order and reduce the deficit——

Have families got that length of time?

It has formally given us until 2013 to bring our deficit back into line with the 3% guideline figure that is required. The ECB and its president in particular, Mr. Jean-Claude Trichet, have been enormously supportive. All of us, certainly, in the main parties, Fianna Fáil, Fine Gael and Labour, are of one voice on this matter — without the European Central Bank and the input, influence and affluence of the European Union, we would be facing a very difficult and much worse situation.

I must emphasise that spending cuts cannot be effected all at once. There is a very delicate balance between how much can be taken out of an economy by way of extra taxation and additional spending cuts. Spending has been reined in and, as I said, there will be another budget in October. There has been an imaginative effort by the Minister for Finance to introduce a programme of better early retirement options for civil servants and I believe that will be taken up. That scheme will appeal to civil servants in a certain age bracket who might be encouraged to leave the service.

The exercise of the early retirement option and the embargo on further recruitment will result in a leaner and, I hope, more efficient Civil Service. Our work on public service reform will continue and we expect to receive an important report in that regard. Simply because we have announced a budget does not mean the reform process for the public service has been cast aside. I suggest these efforts will gather pace in the years ahead. The Minister has introduced further positive measures in terms of the three year career break for younger civil servants who do not qualify for early retirement. That will appeal to many people in the current economic climate. The Minister was correct to mitigate the effects of the pension levy on lower paid public servants. Although the levy had to be imposed, many people felt it was unfair on that category of workers.

It is important that we send a message to the taxpayers and citizens of this country that the political class, including Members of this House, is making a profound contribution to the cost reduction programme and the austerity package presented in this budget. Particularly in recent years, a degree of cynicism has been directed at this House and its Members. We should let the public know when we are interviewed on the radio or speak to our constituents that we are also feeling the pain. It is not the case that the political class is out of touch with the mood of austerity and the need for radical reductions in public expenditure.

We have to broaden the tax base. I acknowledge that Fianna Fáil-led Governments over the past ten years might have been overly ambitious with regard to tax reductions. The tax base has been narrowed to the point where 40% of the workforce do not pay taxes and 77% of the tax yield comes from the top 20% of earners. That is a very unusual situation. In some ways it is a reflection of the success of the Government in reducing the tax burden since we came to power. Perhaps we reduced tax rates by too much, but I did not hear many complaints. It is remarkable that prior to the 2007 election even the Labour Party felt compelled to announce that it would not impose additional taxes. Labour Deputies would like to accuse us of reducing taxes by too much, but they also joined the party.

The Minister of State appears to be preoccupied with the Labour Party.

Their competitive offer to the electorate attempted to match ours at the very least. I am not surprised that they did not win the election, however.

That is when the tragedy started.

The approach of the Government to the structural deficit is critical. Certain areas of the tax yield have been reduced primarily because of our dependence on property and construction related transactions. Other substantial structural issues within the economy are creating deficits that must now be repaired if we are to be a more seaworthy ship when the good times return.

The Minister has taken the initiative to visit key markets around the world to reassure them that the Irish economy is being taken in hand. We have been the subject of negative commentary from our old friends across the water in the UK. It was no accident that the Commissioner for Internal Markets and Services, Mr. Charlie McCreevy, made a public statement recently on the negativity expressed by British commentators regarding the Irish economy. While we have heard such comments before and know the motives from which they spring, they are deeply inaccurate. Our workforce comprises 1.9 million people, we are hugely competitive and have one of the wealthiest economies in the world. We have become a great trading country in the past ten years and export 80% of what we produce. Our export figures remain positive, even if the balance of trade has been influenced by the decline in imports. Many of our exporters are holding their own.

We had good news in the past several weeks in regard to a Hewlett Packard investment which will create between 500 and 1,000 jobs in the medium term. If I might digress to speak about my portfolio, it was interesting that one of the reasons given by the chief executive of Hewlett Packard for his decision to invest in Ireland was the ready availability of language skills. The Irish have not been great linguists in the past but the mass immigration we have experienced in the past decade is paying dividends. I was contacted today about the callers to the "Liveline" show who projected their fears and anxieties, understandable as these may be, onto vulnerable immigrants. It is important that we avoid lapsing into a sterile rhetoric which ignores the enormous contributions immigrants have made to our economy. Our health sector would collapse without the contributions of immigrant workers.

Some would say it has already collapsed.

Our hospitality sector might not survive without the non-Irish workers who comprise 40% of the staff in the hotel sector.

There is a tendency during recessions to be constantly negative about our prospects as a nation. A little reported event occurred this week when the UK attempted to sell Government bonds worth £1.5 billion to the international markets. There were no takers for the offer, however. Contrast that with the €1 billion bond offer by the NTMA a few days later which was oversubscribed by a factor of between two and three. The bond comprised a €300 million offering over a three year period with the balance being offered over ten years. In regard to the views of external rating agencies, there is nothing better than an offer to put money down as a sign of confidence in a country. That bond issue indicates strong confidence internationally in what we are doing in Ireland. Matters are not as dismal as some would like to claim in response to pronouncements by rating agencies. It is also instructive to note how lucky we have been to be members of the euro at this particular time. One may contrast that with the situation in the UK, which I suspect——

The Minister of State has one minute remaining.

I do not want to appear to be picking on the Labour Party, as some of the Fine Gael Members seem to be making out here.

But he will anyway.

He never left them alone today.

In fairness to Fine Gael, I acknowledge that they do recognise the seriousness of the situation we are in.

That is good for us.

We have adopted some of their ideas. Broadly speaking, the approach of attacking the structural deficit is one that is shared by Fianna Fáil and Fine Gael, certainly from the pronouncements by their spokesman.

One of the funniest politically correct requests in this House was made by Deputy Ruairí Quinn, who was once referred to as Ho Chi Quinn by the former Tánaiste, John Wilson.

The Minister of State's time is up.

He asked Fianna Fáil to apologise for the last ten years of growth and boom in the country.

That is a rather odd request to make. It does not do much for them or for politics in this country that people are expected to apologise for a period of unprecedented growth.

He will know all about that on 5 June.

At the end of the day, Fianna Fáil did not cause the international recession or the domestic recession.

They did their best, I will say that for them.

Fianna Fáil did not cause the international recession. It is an important fact, which may be inconvenient for some of the Members opposite, but, nonetheless, it has to be stated on this occasion.

I wish to share time with the esteemed Deputies Deenihan, Ring and Connaughton.

Is that agreed? Agreed.

I thank the Minister of State for his amusing discourse, but I will have to comment on one or two things. He said the Taoiseach was trying to be honest this morning, but was he honest when he said the fundamentals were sound at the last general election? He talked about the degree of cynicism in the country, but that has come because his Government has been in office for 18 of the past 20 years. I do not think anybody doubts that. Political currency is at a low ebb because of all the scandals that have affected Fianna Fáil over the years, but I will not waste any time on that issue.

It is great to hear of the bond floatation, but I wonder how well it would do today. Bank shares were up last night, but are on the floor today. That is the reality out there. Coming up to this budget everybody knew that things were bad, but that is because of mismanagement by the Government. The Taoiseach's assertion some weeks back that nobody could have seen this coming is simply untrue. Many economists, including David McWilliams and the aforementioned George Lee, warned about this from quite a way back. They may take some comfort from being right, but they certainly do not take pleasure or glee in it.

Back in 2002, Deputy Richard Bruton warned about the over reliance on property as a way of creating wealth, but the Government was deaf to these calls for a change of tack. Indeed, those who raised their voices were accused of sabotage and treachery. We are where we are, however, so one could only hope that this budget would address the issues in a fair, equitable and sustainable fashion. Fine Gael asked that the emphasis should be on spending cuts and to a lesser extent raising more through taxes by broadening the tax base, but the Government steadfastly failed to listen.

We now have a situation where middle income families who took a €3,500 hit last October are now faced with another €4,500 hit in this budget. That is an €8,000 hit on a €60,000 income. That is just hammering middle earners and the pain they feel will not result in any improvement in services — rather the reverse. I will return to that point.

There is nothing in the budget to create new jobs or stimulate the economy and, most frightening of all, we are now committed to up to €90 billion to bail out the banks and developers. Notwithstanding that, the very same banks are now charging people arrangement fees for new loans when their existing facility comes to an end. The banks are failing to pass on interest rate cuts from the European Central Bank. Never mind a moratorium for people in difficulty with mortgages, which was mentioned earlier, the banks will not even give them a fair break in moving from a fixed to a variable interest rate.

Somebody recently e-mailed me after asking their lender how much it would cost to change their mortgage. They were quoted €17,000 and could not believe it, so they rang back and were told by another person that it would cost €25,000. They asked for the quote in writing and the letter said €27,000. The banks are a law unto themselves and we are bailing them out. The Government is giving them taxpayers' money, yet they seem helpless and hopeless in instructing the banks to behave in a responsible fashion. The modus operandi seems to be that we bear the pain while they take all the gain.

This morning, I spoke to an estate agent with several deals on the table who said that the banks are going through a process, but that is all it is — there is no intention to complete the loan agreement. There are continual questions to give an aura or impression of real activity, but there is none.

Where is the stimulus to help people hold onto their jobs at SR Technics? Meanwhile, metro west is gone, but the Minister says metro north will go ahead. We have not seen much about it in the budget, however. This is one of the NDP's infrastructural developments that should go ahead because it would yield a huge amount of jobs and further potential development in the north Dublin area, where there are many young, educated people. It also forms the spine that integrates the entire Dublin rail network.

We have heard the Government talk the talk about jobs, but it would not walk the walk with the staff of SR Technics. It has not walked the walk with the people of Balbriggan either, where the unemployment rate is just under 4,000 — that is up 9.5% — yet there is no dole office there. There has been a lack of forward planning. Even though they knew the people there were going to retire and the contract was up, they made no arrangements to put a second facility in place. The main street of Balbriggan is full of property that could be used for that purpose.

The area that concerns me most is health. A few weeks ago, the Minister told us that we are spending €4 billion on private health care. Add that to the €15 billion spent by the HSE and another €1 billion in the Department of Health and Children, and the total health spend in this country is now €20 billion. The HSE is currently looking at a shortfall in funding. It will make up €160 million in a health levy, which is being doubled. That is another tax on people, many of whom did not even know they were paying it, but they will know now when they see it doubled.

The HSE is hoping it will have a supplementary budget, which will be another hit somewhere in the tax system, for the increasing number of medical cards for those who have lost their jobs due to the Government's mismanagement of the economy. There will still be a €147 million deficit, but the Minister has said the HSE will have to meet this itself within its own budgetary allocation. The history of the HSE concerning what it calls budgetary readjustments is that patients suffer, waiting lists lengthen, operations are cancelled and more people lie on trolleys around the country. That has been the stark reality in the past. It is clear that €147 million in savings will mean exactly that again, only worse.

What is so disappointing about the budget in general, and the health budget in particular, is that there is no attempt at reform, despite what the Minister said. There will be no redundancies and no attack on waste in our hospitals or on the inherent inefficiencies. Nowhere is this better demonstrated than in the greater Dublin area where hundreds of patients are lying in hospital beds when their acute phase of treatment is over. They need community facilities but they are not getting them. Nursing Homes Ireland has told us that 250 beds are available in the greater Dublin area, but these patients are not being discharged. In a recent letter to the newspapers, one hospital consultant said that while the front door is open and people are coming in, the back door is locked and they cannot get out. That is what is happening here, so instead of a smooth transition of patients through accident and emergency, into the hospital for treatment and then discharge to complete their recovery in the community, they are stuck in a hospital bed. That backs up the whole system.

This is a management issue, over which doctors, nurses, porters and health care assistants have no control. It will not be improved by a new hospital consultant contract and will certainly not be improved by the recent suggestion that temporary staff will be let go in the HSE. Of the 14,000 temporary staff who it is proposed not to rehire, approximately 4,000 are nurses. This represents more than one tenth of the nursing complement in the health service. Has anyone done a health impact assessment on this decision? Will Beaumont Hospital, for example, lose 10%, 20% or 30% of its beds? A similar development in England gave rise to a scandal involving hundreds of deaths and the launch of a major investigation.

In the brief time remaining to me, I will provide some statistics on the Dutch health system, which is ranked number one in Europe for quality compared to Ireland's ranking of 11th place. It is also ranked second for value for money, whereas Ireland is ranked number 24 for value for money. The Netherlands does not have waiting lists or GP charges, whereas in Ireland 40,000 people are on waiting lists and the burden of GP care costs is prohibitive for some families in the current climate. The Netherlands has one universal health system with choice for all, while Ireland has a private-public mix with choice for some and none for others. While patients do not lie on trolleys in Dutch hospitals, more than 380 patients regularly wait on trolleys in our hospital system. The Dutch spend €60 billion per annum on the health care of 16 million people, while Ireland spends €20 billion per annum on a population of 4.2 million. We are not getting value for money.

We cannot protect our young children against cervical cancer or provide medical cards for our elderly. We also insist on putting young people with cystic fibrosis at risk in open wards, with the result that such patients die many years younger here than they do 40 miles up the road in Northern Ireland. It is now proposed to remove the other grant available to older people, that is, the scheme used by community groups across the country to provide a variety of services, including monitored personal security alarms. Having removed the security provided by a medical card, the Government is proposing to remove elderly people's sense of personal safety.

The final insult is the decision by the Minister for Health and Children to form a new quango to advise her on the allocation of health resources. This is a clear admission of the Government's cluelessness in recent years about how billions of euro should have been spent on health. This is a lazy budget which takes the soft option of hitting taxpayers and patients. On that basis, I must oppose it. It is a classic case of billions for our bankers but not even a few million for our children.

The package of measures in the supplementary budget is the fourth attempt to correct the budgetary arithmetic this year and, as previous speakers have hinted, it will probably not be the last attempt. People have asked whether the budget will restore the reputation of Ireland abroad. The markets spoke this morning when the value of Bank of Ireland shares declined by 35% from 96 cent to 66 cent in the first two hours of trading — it recovered to 90 cent his evening — while that of Allied Irish Banks fell from €1.28 to 81 cent earlier, although it rebounded this evening. The markets have spoken and are not convinced.

On a visit to New York and the Silicon Valley a few weeks ago, I found that Ireland's reputation is in tatters. It is embarrassing to speak to people who have a genuine interest in this country and have helped us in the past. They ask what the Government has done wrong and how we could have arrived at the current position, having received every opportunity from the European Union and United States in the past 12 years. When one reads in a reputable newspaper such as The New York Times that the Irish banking sector is the wild west of banking, one knows we are in trouble. Another recent headline, this time in The Economist, stated: “Ireland’s economy: The party is definitely over.”

Our international reputation has been in tatters for some time and the problem precedes the banking crisis. The tribunal saga, for example, has done immeasurable and irreparable damage to our reputation abroad. We are no longer trusted or believed and the country is no longer regarded as a good place to do business. Good news stories such as that of Hewlett Packard, to which a speaker alluded, are set to become increasingly scarce.

On the issue of banking, local banks have generally behaved in a responsible manner. The entry into the market of Anglo Irish Bank and other banks introduced competition and put pressure on the Bank of Ireland and Allied Irish Banks to respond. Customers told managers in these banks they could obtain large sums of perhaps €2 million from Anglo Irish Bank in two hours and asked why AIB or Bank of Ireland was not prepared to provide similar facilities. These banks were placed under extraordinary pressure and, unfortunately, they responded in some cases.

During another visit to New York in March of a previous year, a person involved in real estate in the city asked me where Irish people were getting money to buy property in the city. He pointed out that the activities of Irish and Chinese buyers were inflating the price of property in Manhattan by between 20% and 35% and he could no longer compete. He was amazed by this and asked what was the source of the new found wealth being used to buy trophy buildings. New York was a microcosm of what was taking place all over the world, with Irish people buying trophy properties in many other countries.

If the money used for such purchases had been spent on infrastructure and buildings here, for example, in the tourism industry, we would at least be able to benefit from them but these trophy buildings are located around the world. According to the Government, we must now bail out the individuals who embarked on adventures all over the world because they could access easy money through Anglo Irish Bank and other banks. Many people are angry that taxpayers have been placed in this position. Their anger is only beginning to manifest itself. The budget is not balanced, as the Minister of State and her colleagues on the Government benches will soon discover.

I have been asked several times recently to explain the reason Ireland has such a negative credit rating. Deputies will be familiar with the Irish Credit Bureau. If one defaults on payments, perhaps only two or three times, one's bank will submit one's details to the bureau and one's name will appear on a blacklist. Those blacklisted in this way will find they cannot secure funding for any other purpose, including to purchase a motor car. This is a serious matter and I ask the official present to note it because when Members raise practical problems, no one listens. I raise this issue because I know someone who has been affected by the problem.

While I am aware that some schools building projects are proceeding, a tender approved project in Ballybunion has been delayed. The school authorities have been informed the project will proceed. Is that the case? Is a list available setting out the building projects which will proceed?

On the income levy introduced some months ago, I am aware of a case of a couple with three children who have €100 per week to feed and look after their family. They outlined their expenses exactly. They had €100 a week to clothe the five of them, send the children to school, entertain them and provide any furnishings, household purchases or repairs. They earned €50,000 per year. Having now been hit by another €3,000 by this budget, what will they do? They will simply not survive. They are a typical example.

I will now hand over to Deputy Ring who got a standing ovation at the Fine Gael Ard-Fheis last weekend when he made a tremendous speech.

I thank Deputy Deenihan for his comments on the Ard-Fheis. It is one of the issues I wish to raise. Last week, I was at a wedding in Portugal. One could get a three course meal for €9.90 in every restaurant one went to. I hope the media will pick this up. I went to Ard-Fheis last Saturday evening which was held at the Citywest Hotel. It was rip-off Ireland at its worst. One sandwich cost €5.25 and two teas cost €5.20, a total of €10.45. We wonder why this country is in the mess it is in. I hope such conferences will go elsewhere because when hotels get a crowd in, they have to rip them off. That is why we are in this situation.

I want to discuss the budget. It is anti-family, anti-women and anti-children. It is an attack on the family, women and children of this country. It taxes the engine of this country, the men and women of the country who work and who have been taxed into such a state they will hardly be able to live. I listened to the Government and Ministers talking about another budget and saying it was a great idea. Where was the Department of Finance? Where were all the advisers in the Department? The Taoiseach was the Minister for Finance and created the problem for the country.

There is a world economic problem, but we now have the worst problem in the world because our Ministers and Government did not do what was right. In any family or home, everybody puts a bit away for a rainy day. What did the Department of Finance do? It funded quango after quango and allowed staff to be employed by the State. It never thought a bad day would come where such staff would have to be paid by the State. It spent and spent and it could not get the correct figures when things were going well. It cannot get the correct figures when things are going badly.

If one is lost, one asks for directions on how to get to a place. If one does not know where one is going, there is no point asking anybody for help. This Government does not know where it is going. There is no point asking the people of the country to help it with taxation because it does not know what to do. It has lost control of the economy and the country. It has let the people of the country down badly.

I wish to raise another issue regarding Minister for Community, Rural and Gaeltacht Affairs, Deputy Éamon Ó Cuív's Department and the elderly. The home security support scheme was put in place for the elderly. It provides alarms to put around one's neck to those who live in rural Ireland who are afraid they will be robbed and murdered by thugs from all over the country. The scheme has now been scrapped. It was only three weeks ago that Minister of State at the Department of Community, Rural and Gaeltacht Affairs, Deputy John Curran, announced, with a big fanfare, that €300,000 had been allocated to the scheme. What is wrong with the Department? Three weeks ago it had €300,000 and today the scheme has been scrapped.

It is no wonder the people out there are angry. It is no wonder "Liveline" and "Today with Pat Kenny" feature people who are angry because there is no leadership from the other side of the House. No Minister and no Government Department knows what they are doing. Previous speakers have said the same.

The Minister for Foreign Affairs, Deputy Micheál Martin, has come into the House. If he stayed in the country more instead of travelling all over the world he would know what was going on. The people out there are angry, sick, tired and are weary of this Government. The people do not mind putting their shoulder to the wheel if they get some leadership but there is none. The Government is in place too long.

The Government is putting a toxic bank in place. It will save the builders, developers and the bankers. The poor divils who renege on their mortgages find themselves in court while the bank puts them out of their homes and repossesses them. The people who created the problem, the bankers and the builders, now have to be bailed out and saved by the taxpayer. No banker has been put in jail for what they have caused and hardly any of them have lost their jobs. Who is bailing them out? The answer is the Government. The people who bought property not too far from here and hotels to develop will be saved by the Government and the taxpayer. The poor taxpayers do not know how they will rear their families, educate their children and if they will have a job next week, yet we saved the bankers and builders who are the people who created the problems in the country.

When the Ministers go home this weekend, they will hear anger; people will tell them what they think of the Government. I am a member of the Opposition and received many calls today. People are frightened about what is going on in the country and feel they have been let down by the Government who have sold them down the drain. When they hear a bank will be set up to protect the bankers and builders, it is no wonder there is anger out there.

The Government needs to get its act together. The people cannot pay any more tax. They have just enough money. The people working out there hope their jobs will be secure. The Government needs to get its act together because if it thinks it can have a budget every day and week, it cannot.

I have only five minutes and I am sorry I do not have 25. I will begin where Deputy Ring left off. I am glad the Minister for Foreign Affairs, Deputy Micheál Martin, is here. I remember when we came in here last September to save the banks. Fine Gael agreed with the Government at the time to save the deposits. The Government has spent the time since congratulating itself on the action it took on that occasion.

The record will show what happened that day. At the end of that debate, when all was said and done, I asked the Minister for Finance, Deputy Brian Lenihan, how much bad debt he thought was in the nominated banks. It was the first time he started talking about toxic loans. He said as far as he could see from the information he got from the banks it was €16 billion. That is on the record of the House. Yesterday, it amounted to €90 billion. Who is running the ship?

In the long time I have been here, one was always told never to criticise the governor of the banks or have a critical word for the regulator because, somehow or other, one would be seen as sabotaging the future of the country. I guarantee the Minister, Deputy Micheál Martin, that another Minister, in answering a question from, I understand, the Labour Party, asked if we were questioning the ability of the new board set up to fund the national treasury agency. I do not know who is on that board and I could not care less.

I will not believe everything I hear. Not alone will I not believe it, but there are four million people out there who will not believe it either. There are now two senior Ministers in the House. The €16 billion the Minister, Deputy Brian Lenihan, thought was toxic last September now amounts to €90 billion. It is there for all to see.

It is like sending the money to limbo during Holy Week. If it spends long enough there, it will be cleansed and can go somewhere else. When it comes out of limbo, the Minister reckons there will be a good bit left from the €90 million. However, I have news for him. He does not have a clue what is there. The banks do not have a clue; nor does the Financial Regulator or the Government. I guarantee one thing: if we live long enough over the next four or five years, the same families who got hit yesterday — the middle income families of Ireland — will carry the can. They will pay for the fellows who went into the Galway tent. They will pay for the banks and the developers and, ultimately, the Government will sit back and say it was the only thing it could do to save the country.

The Deputy has one minute.

I am sorry I cannot develop this——

I would be very interested to hear the Deputy's thoughts.

——because I know exactly what is going to happen.

I wish he had an hour.

I can guarantee the Minister he will get plenty of this before 5 June.

People have been fooled for long enough, and there will be much more intensive scrutiny of all these measures, including the toxic bank. We are following models around the world. We know this is happening in many other places. However, nobody can tell me the financial backup is as good in Ireland as it is in the United States, for example, or Germany or Italy. They are far more secure than us in certain ways. We are just a pebble on the beach. If the Government is allowed to continue on its current course, we will see the biggest ever buy-out of bad developers' loans over the next five years. I hope this does not happen, but I ask the Minister to remember he heard it here — I will not be hoodwinked by anyone.

I wish to share time with the Minister, Deputy Éamon Ó Cuív, and Deputy Cyprian Brady. I ask the Acting Chairman to interrupt me at ten minutes to allow time for the others.

The primary rationale behind this budget was to demonstrate both domestically and to international markets that Ireland has the capacity to deal from within with its own budgetary difficulties and challenges and to show that we have the resolve and determination to put in place a programme of recovery that is sustainable and that will earn the confidence of those who continue to invest in Ireland and intend to invest in the future. The situation is particularly serious and we need to stop indulging in unnecessary political scaremongering.

The Minister would not know anything about that.

There is a global crisis of unprecedented proportions. We are talking about the worst economic depression worldwide since 1929. It is worth going back to look at what happened in 1929. Thankfully, this time the world powers are working collectively to deal with the crisis. That is something that did not happen back then, but with the co-operation of all states it may lead to a shortened depression this time. We must prepare for a global economic upswing and make sure we do the right things in this regard. That is why we have put significant supports into the smart economy, small businesses and enterprise over the years. It is why we transformed the research landscape of this country in the past ten years.

I recall that the budget for research in the Department of Education and Science in 1997 was nil. Through the programme for research in third level institutions and Science Foundation Ireland we have transformed the research landscape in this country. We did this because we want research to lead, ultimately, to new products and services and new ways of doing things. We want people outside Ireland to see it as a place to come to, where one can discover new products and new solutions to global problems. In addition, we can achieve much in the emerging world of climate change and the green economy. We already have many companies, supported by Enterprise Ireland, who provide solutions to challenges that arise as a result of the need to reduce CO2 and deal with climate change. There is a need for greater emphasis on renewables, recyclables and so on.

Is that how we are seen around the world today?

The progress we have made in the area of wind energy, for example, has been quite dramatic in a short space of time and will be even more dramatic in the coming decade.

We are committed to this, and the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, and his Department are leading the charge on alternative approaches to energy as well as the broader agenda. We are quite focused in this regard.

We have built up a strong cohort of indigenous companies and we need to protect them and enable them to survive in the global downturn, because Ireland is a small open economy. If we consider those economies that have suffered the most we will see they are the Asian economies and our economy — any economy that is small, open and depends on export growth. We must export 85% to 90% of everything we produce in this country, be it services or merchandise. All of our best markets are depressed at the moment and this is a challenge. The currency differential between the UK and Ireland is a further serious blow to our indigenous companies. That is a significant challenge to our export sector, which requires support. We must keep the focus on that.

However, we must also get the public finances right. The bottom line is that prior to the budget yesterday the deficit and borrowing requirement for this year was €23 billion, and now it is €20 billion. I acknowledge that it has been a very tough budget and the impact on working families is significant because of the amount of tax levied and the savings we have put in place. When we add in the public service pension levy, which was introduced in February, and the October budget, we are looking at significant moves in 2009. It is a tough budget, but we are saying to people that if we stick with this plan over the next three years we can make a significant difference and pull the country out of its difficulties. We have done it before and we can do it again.

The last ten years were not wasted. There is a tendency to rubbish all the achievements of that time. In 1997, our debt-to-GDP ratio was in the high sixties, while in the late 1980s it was close to 100%. We brought that down to 20% by 2007. It is now going back up because of the current difficulties.

The Minister should say a few words about the construction industry.

I will come back to the banks shortly.

That was an example of how we used the funding and the wealth we created wisely. That is never acknowledged. We created a pension fund to which we allocated 1% of GNP. If we did not have that pension fund we would not have been in a position to recapitalise the banks, for example, or take further measures.

In addition, we have transformed the infrastructure of this country in the past ten years. I invite anyone to travel on the Cork to Dublin road, which is a different road today from the one we had ten years ago. The roads from Dublin to Galway, Waterford and Limerick have all been improved, as have railways and bus routes. Schools have been modernised, and we have dramatically increased old age pensions, child benefit and so on. There has been a dramatic transformation, all paid for by surpluses due to the wealth created in the economy over the past ten years. I do not buy the notion trotted out by Opposition spokespersons that we wasted or blew the boom. We did not.

The Government wasted a lot of money.

We did many effective things that transformed the country and improved it considerably. This will help us deal with the significant difficulties we have now.

It has the highest levels of cost.

The highest cost levels in Europe.

People have talked about the budget and its impact on enterprise and so on. I will explain why we put forward the banking proposal. By the way, we are not talking about a toxic bank. It is an asset management agency.

That is another name for it. The Minister knows that.

Allow the Minister to continue, please.

Banks take deposits from the public. They have banking licences. This agency will not be taking deposits. It is not a bank but an asset management agency.

It will be taking loans with a smell off them.

The Fine Gael Party and the Labour Party, in previous policy incarnations, called for radical change in the banking system.

Not for this much.

Fine Gael called for the creation of good banks and bad banks.

Within the one bank.

Indeed, a bad bank-good bank scenario.

I ask the Deputy to stop interrupting.

Not at all. The Minister will not tell us what we were doing, I can assure him.

Deputy, please.

I ask the Minister to go ahead.

Let him be straight and honest, anyway.

Good God, Deputy Connaughton.

In a policy statement, Fine Gael called for an examination of creative alternatives to recapitalisation which, it argued, might offer a better chance of success and greater protection to the taxpayer. Fine Gael went on to propose the creation of "brand new good banks with clean balance sheets" and so on. Meanwhile, the Labour Party has argued that we must get credit flowing to business, identify the scale of bad assets, write down impaired assets, establish an Irish banking commission, initiate regime change in banks, cap executive pay, oversee a full investigation of Anglo Irish Bank and so on.

The reality is that we have two choices. We can allow the status quo to continue, which is not an option——

That is what I am coming to.

What the Minister announced yesterday amounts to a creative and radical proposal. It has nothing to do with saving banks or developers. That is an outrageous political slant to put on this debate.

God help the Minister, what he has said is outrageous. What other reason can there be for these proposals?

It is disreputable for Opposition Members to put forward that claim. They are doing so for base political reasons. Their innuendoes are disgraceful.

The Minister should examine the Official Report from 1995 if he wants to see what constitutes base innuendoes from an Opposition.

The Minister has made an outrageous statement.

It is not in the best interests of the country to put forward this false and dishonest presentation of the proposal.

Business people know that credit is not flowing to business.

We all know that.

The Government is doing nothing about it.

The reason for this is the overhang of bad debts. What we are proposing is a creative solution to take out that bad debt and develop clean banks that can begin once more to lend to the economy. If lending is not flowing to the economy, we will not have jobs and we will not have the facility for people to create jobs and develop the economy. Innovative companies need investment in order to develop new technology and so forth. People with ideas need access to money. If we do not deal with the banking issue, we cannot deal with the broader needs of the enterprise sector of the economy.

What is paralysing the situation is the inability of people to face reality, be they bankers or developers, in terms of the overhanging debt and the size of that debt. A vehicle or mechanism is required to deal with that, which is fundamentally what the Minister proposed yesterday in the House. The national asset management agency will work on a commercial mandate and will take a strong line to ensure the taxpayer is protected.

Who will undertake the valuation of assets?

The Minister has said that if the scheme does not make a profit in the next decade——

We can be sure it will not.

——then the banks will be levied to ensure the taxpayer is protected. A similar model was successfully implemented in Sweden in the early 1990s. I urge the Opposition to cease resorting to base political innuendo in regard to this proposal. I welcome any contribution to genuine political debate but Opposition Members should avoid the temptation, which is clearly evident, to drag in other issues and to ignore the common good.

I assure the Minister that we will continue to point out errors in Government policy.

I am often disappointed at the tone of debate in this House. I recall speaking as an Opposition Deputy during debates on budgets past. On those occasions, a genuine effort was always made to engage and analyse constructively and to offer positive feedback and praise where such were due. We also tried to propose alternative solutions. Therefore, I am very disappointed at the tone of the remarks by Deputy Connaughton.

The proposal put forward by the Government is worthy of detailed examination. We are all agreed that there is a major problem in the banking sector. One of the issues that surprises me somewhat is that the money lent by our banks was, in its turn, loaned to those banks by large financial institutions outside the State. A question that tends to be ignored in the debate is how these institutions managed to get their risk evaluations so wrong. One would have assumed they had top-ranking experts monitoring the Irish market into which they were lending billions of euro. One would assume these institutions would do everything possible to make sure their money was safe. That is one of the great mysteries of the situation in which we find ourselves. That particular mystery is not confined to this island. It seems that top bankers lending money on the inter-bank market made tremendously bad calls in recent years, despite all the available modern technology, the required risk analysis processes and so on.

However it came about, we have a major problem, namely, underperforming loans and assets that are no longer valued at the amount accorded to them as security. I ask the Opposition to study fully the exact nature of our proposal. I will welcome criticism from Opposition Members when I am confident they understand what we are trying to do. Something I find disconcerting, and something which did not happen when I was last in opposition, is that it seems to be commonplace now that rather than Opposition Deputies using their own intelligence to review critically proposals by the Government——

The Minister should not patronise us.

——speaker after speaker is sent in with a party line——

The Minister is a fraud.

——which he or she continues to pursue even if it is proved that what is being said is not fact.

Is the Minister the judge of that?

I am entitled to use my critical faculties.

The Minister has made a statement.

I used the word "seems". What I have described seems to me to be the case.

The Minister is a fraud.

Sin é do bharúil.

What we must do is get businesses back to business. Under the current arrangement, it is virtually impossible for small and medium-sized companies and for individuals to get credit from banks. We should all be able to agree on one issue, namely, that the status quo is not working. Fine Gael has proposed that there should be two banks in one bank. The weakness I see in this proposal is that there is still one bank in charge of the two banks. Moreover, the same people who are currently in charge of the assets of impaired value would remain in charge of those assets. I am open to explanation from the Opposition but I see no logical reason that the governors of the various two banks in one, who would be the same governors as those currently in office, would not treat the impaired assets as they currently doing. They are slowing down the write-down or impairment because they must do so for commercial reasons.

Our argument is that separating out the asset portfolios and giving them to an agency that is independent of the management of the banks is the best way to ensure that the banks' balance sheets are clean and that they can return to the markets to borrow money. In other words, by cleaning out their balance sheets in this way, the banks will be in a position to raise money on the inter-bank markets which they can then lend to businesses and the wider economy.

I would like a constructive debate on the relative merits of the different proposals. We are convinced that our proposal is right although we know there are risks attached to it. Various Members have asked who will be responsible for valuing the assets. It is important to clarify that we do expect to appropriate lots of properties; these properties are the security for the relevant loans. In the event that a loan continues to be repaid, the security is not taken. If the security is liable to be taken, there are standard procedures to follow. For example, in the case of a bank foreclosing on a mortgage, it would take the security, realise the value and, after costs are paid, that value would be set off against the loan. It is a standard procedure. We are proposing that the national assets management agency will value the assets.

Obviously, it will require expertise in valuing the assets and, in particular, the loan in terms of the person's capacity to repay. The ideal solution is that people repay their loans. Security is only a default position. The agency will then make an offer that will ensure real value in respect of the assets. The advantage then is that bonds are issued, the loans are placed in an agency that manages them, at arm's length from Government and the banks, and it seeks to obtain maximum payment for them.

The Minister for Finance signalled yesterday in the Budget Statement that the first instruction is to get performance of the loan. In default of this, securities will be pursued. I believe, having looked at both proposals, that the Government proposal is better than the one put forward by the Opposition. Rather than hearing the type of speeches we have heard from the Opposition, I would be interested to hear Opposition Members outline logically the flaws in our proposal and the aspects of its proposal which they believe are better.

I wish to refer to the public service and to once again put on the record of the House that I believe it has been badly served by some political commentary, which gives the impression that most public servants are not earning their wages or working efficiently. Having worked with public servants within the political system and prior to my entry into politics, I believe the vast majority of our public servants serve our country well. I do not believe there are many who are not delivering. I also believe that, because of changed circumstances, opportunities now present to downsize. I welcome in particular the decisions made in this regard. The Government decisions in regard to early retirement and allowing people to take extended leave and to obtain a payment for so doing is good. These are voluntary options which provide people with real life choices which they can take up only if they wish to do so. In this way, we get the best of both worlds, namely, we get the downsizing we need and we do so on a voluntary basis.

It was important to listen to what low paid public servants had to say about the pension levy. This has been adjusted significantly, in particular, for those on lowest pay in the public sector. The current measure provides that no levy will be paid on the first €15,000 earned, thus reducing the levy to 5%. The net saving for workers, particularly low paid workers, is €500. This means that a person earning €30,000 per annum will pay considerably less. We listened and adjusted the levy accordingly. The counterbalance is that high earners will pay a little more, which I believe achieves a better balance.

I call Deputy Cyprian Brady who has eight minutes to make his contribution.

I welcome the opportunity to speak on these important Financial Resolutions. Unfortunately, Members opposite do not have a monopoly in terms of susceptibility to the pain and worry being endured by our population. We, too, are speaking to people, our work colleagues and our families about this issue. We, too, know exactly how people are feeling.

The Deputy should be aware of it. His constituency colleague, former Taoiseach, Deputy Bertie Ahern, bankrupted this country over the past ten years.

Last December, a plan was laid out. As many Members on the opposite side of the House appear to have missed it, I will repeat it. There were four cornerstones to the plan as laid out by the Taoiseach last December.

We missed the Galway tent.

They are addressing the banking situation in order to restore credibility and confidence and to get credit flowing; attacking the gap in our public finances by increasing revenue and cutting spending in a planned way over the next couple of years; protecting as many jobs as we can, restoring competitiveness in terms of the way we do business and supporting viable but vulnerable enterprises; and investing in those who are out of work to ensure they can return to employment as soon as possible. A number of these steps have been already taken.

Where are the results?

The Government recapitalised two banks and nationalised another. It imposed a stiff pension levy on our public servants. Yesterday's supplementary budget was another step towards achieving what is contained in that plan. For us to continue to function as a country, we must ensure that we return to where we were when we were competing way above our weight internationally.

As the Minister for Foreign Affairs, Deputy Micheál Martin, pointed out we must export between 85% and 90% of what we produce in this country. For us to compete as we used to, we must concentrate on the areas over which we have control. They are public spending, taxation and investment. Yesterday's supplementary budget was necessary to show our people and people outside this country, from whom we must borrow money to sustain ourselves, that we can manage our way out of the current downturn and that we will be in a position to take advantage of the inevitable upturn which all commentators say is on the way.

We can all play politics and, if we want, make cheap political points. I have listened to a great number of history lessons during the past two days in regard to where we where, what we did, what we should have done, who did what and when, and so on.

We must address the gap in our public finances by increasing taxes and reducing our expenditure in a fair and sustainable manner. If anything, yesterday's budget must be seen as sustainable into the future. Some of the measures are painful——

We read about the disaster in yesterday's Evening Herald.

——and they affect people's daily lives. Not alone are our constituents affected, but so too are our colleagues and families. Some of the decisions made are painful. The Government does not like associating itself with decisions that are tough on people. The Minister for Finance accepted yesterday that this budget will affect people directly. We must all go out there on a daily basis and meet people and talk to them about this budget, as we did yesterday.

The conversations will be shorter in the future.

On the banks, we need a banking system in this country. Everybody in this room has a bank account. Many people have credit cards and loans from banks.

People need banks to keep their business going and to pay their employees. We need a banking system. It was realised at an early stage that quick, efficient and drastic measures were needed and they were taken. There has been much commentary in regard to the establishment of the agency to deal with toxic assets. There appears to be some confusion on the part of the Opposition. Less than two weeks ago, an Opposition spokesperson suggested we deal with the toxic assets of banks through the creation of a good bank-bad bank system. Yesterday, the Minister for Finance announced details in regard to the establishment of an agency that will do exactly what was requested.

The agency will deal with banks' toxic assets.

It will force the banks' hand and will ensure that——

The Government has been unable to force the banks' hand thus far.

——we will not in the future have a situation whereby people are being written off by banks.

They are doing that now on a regular basis.

The new agency will ensure that banks have no excuse not to lend credit, provide overdrafts, increase mortgages if people request it or to repossess the homes of people who default on their mortgages. That is the purpose of this agency. This is what the Opposition called for less than two weeks ago.

That is not what we called for.

This is a difficult budget. Difficult decisions had to be made. This country is facing an unprecedented economic challenge. We have come through a good period of prosperity, from which all sections of our society have benefited.

Some €28.8 billion has been wasted and squandered.

We have improved transport infrastructure. We have increased investment in education. There have been unprecedented increases in social welfare payments. Every section of society has benefited, as I have said. We are now asking every section of society to contribute according to its means.

The Government is taking the money back.

This budget is based on fairness. We are asking people to contribute according to their means. As previous speakers have pointed out, this is the next step in the process we have to go through. None of us on this side of the House wants to take the Christmas bonus from anybody.

The Government is doing it anyway.

I have listened over the past two days as the most vulnerable people in society have been used as political footballs. They have been kicked around this Chamber.

The Deputy should read the records from 1987.

I have spoken to many pensioners, widows and widowers about the alternative to taking their Christmas bonus, which would be to take €10 or €15 a week from them. Which option does the House think such people would prefer?

The Government will probably do both.

While yesterday's budget was not easy for anybody, I support the measures that were taken.

I would like to share time with Deputies Deasy, Creighton, Bannon and Doyle.

Is that agreed? Agreed.

I understand that I will take six minutes and Deputy Deasy will take seven minutes. I am not sure what the arrangement is thereafter.

I welcome the opportunity to speak on this extraordinary budget. We all agreed that it was essential as a result of the mismanagement of the State's finances by Fianna Fáil-led Governments over the past six years. I remind the Ministers who have suggested that there has been a lack of constructive opposition from Deputies on this side of the House that I have been a Member of the Dáil long enough to remember the sort of opposition with which my then colleague, Ivan Yates, and others were confronted when Fine Gael was last in government. I will take no lectures from anybody on the other side of the House on that issue.

Unfortunately, the budget that was announced yesterday is not fair and will not bring about the renewal that is needed. It will not give any hope to those who have lost their jobs or those who believe their jobs are in danger. While the stabilisation of the public finances is vital, if we do not get people back to work, there is no way this country will recover from the doom and gloom that the Government has created. The budget will affect middle income families. A person who earns €50,000 and has to look after a spouse and two children will lose up to €3,500, or €70 a week, from his or her income. At the same time, developers and bankers will be facilitated by the provision of a new national asset management agency. It is clear from the Minister for Finance's comments in the House yesterday and the Taoiseach's comments in the House this morning that, six months after the banks were given a guarantee, they do not know whether the bad debt amounts to €40 billion, as originally suggested in the Dáil, or between €80 billion and €90 billion, as suggested by the Minister, Deputy Brian Lenihan, in yesterday's Supplementary Budget Statement. The Minister said yesterday:

The potential maximum book value of loans that will be transferred to the agency is estimated to be in the region of €80 billion to €90 billion . . . . . if the agency were to fall short of recouping all of the costs, the Government intends that (another) levy should be applied to recoup any shortfall.

Fine Gael's finance spokesman, Deputy Richard Bruton, was the first person to advise the Minister that bad debts needed to be removed from the normal banking system. However, many questions are raised by the Government's decision to expose the taxpayer in this way. If we are to avoid further collapse and further unemployment, it is vital that the banks once more start to lend to small businesses and other retail structures.

It is unforgivable that projects that could have provided much-needed unemployment have been removed from the capital programme. The decision not to proceed with the proposed investment of €150 million in regional and local roads is equally unforgivable. The roads in the Cavan-Monaghan constituency, which I represent, need to be improved to facilitate the access of the pig and poultry industries to the marketplace. The raw materials that are required to feed pigs and poultry need to be transported on the same roads. The removal of €200 million from the social housing and water services infrastructure budgets is just as difficult to understand. The provision of social housing, which is essential, could be done at a much lower cost at a time when builders are eager to tender. The development of small sewerage plants in our towns and villages is essential for our environment. It is impossible to understand why a Minister from the Green Party has agreed to curtail such projects.

I do not understand how the Minister for Education and Science, Deputy Batt O'Keeffe, has been able to announce that a school project costing €7 million is to proceed in Kingscourt, County Cavan. The project in question was not even being discussed during the years of plenty. The same Minister has agreed to withdraw €54 million from his budget, mainly under the primary and post-primary building programme. For the sake of the people of Kingscourt, I hope the school will become a reality and is not just another election pipe dream. That has happened on many previous occasions over the past 24 years. Building projects are needed in St. Aidan's comprehensive school in Cootehill, St. Mary's primary school in Virginia, another school in Laragh, two schools in Rockcorry and the model school in Monaghan. The campus of Castleblayney College continues to be divided by a national primary route. Surely it would be better to have people working on such building projects, rather than paying for the rental of prefabs and making social welfare payments to those who are unemployed.

Once again, agriculture has taken a hit on budget day. I refer to the reductions in REPS payments and in the forestry premium, which will be in addition to the ongoing delays in making REPS payments. Those who can get their farms inspected and passed under the farm waste management scheme then have to cope with the staged payments system. The House does not need to be reminded of the collapse of the dairy and beef industries. Never before have so many young farmers been so interested in staying at home and availing of the installation aid and farm retirement schemes. Fine Gael did not sit idly by in the weeks coming up to yesterday's budget. We produced proposals that would lead to the creation of 100,000 jobs over four years. We pointed out that electricity and gas prices need to be reduced.

For those of us who represent Border constituencies, the most depressing outcome of the budget was that no effort was made to use it to safeguard the retail or general trade south of the Border. The Minister for Finance admitted that his mistake in last October's budget caused €770 million to be lost to the State, but he completely ignored the situation on this occasion. Like other groups, the retail and motor trades are losing income and jobs. The Tánaiste and her agencies have made no effort to provide much-needed employment.

I would like to admit from the outset that I do not have anything constructive to say about the public finances. I wish to make it clear that my comments are intended to be totally partisan and completely political. I propose to examine the consequences of Fianna Fáil's participation in government. I intend to set out the practical costs it will have for families in my constituency of Waterford, and elsewhere in the country, over the next 30 years. The scale of the debt that has been built up during Fianna Fáil's 12 years in government is beginning to manifest itself. It is becoming clearly evident that generations of Irish people will be weighed down by such debt. Even if the State acquires the bad bank loans at a 40% discount — if it gets loans with a book value of €90 billion for €50 billion — we will be looking at a doubling of the national debt to over €100 billion.

Regardless of the level of industry that is demonstrated by Irish businesses and individuals in the years ahead, the debt that is being taken on by Irish taxpayers will have to be paid by Irish families for decades to come. It will not matter how ingenious our national and international transactions are, or how good IDA Ireland and Enterprise Ireland are. Fianna Fáil has turned Ireland into a nation of chronic debtors. I listened to the Taoiseach earlier when he expressed indignation at the suggestion that Fianna Fáil is responsible for this situation because of its relationship with developers. It was an interesting delusion.

My first experience of Fianna Fáil and planning and development happened in Dublin Airport about nine years ago. I sat with two earnest Fianna Fáil councillors who said to me, with straight faces, that taking money was the way of the world and I should accept it. It opened my eyes. I began to see the relationships between Fianna Fáil, developers and council officials within my own constituency. I began to become vocal about it. Apart from the abuse, intimidation and the threats — one of which occurred on the floor of this Chamber — I found this was a very unpopular action because one was questioning a system based on greed, on which hundreds of people feed. It works like this — the Fianna Fáil councillors protected and fed from the local authority officials who, in turn, fed off the developers. If one questioned the behaviour and activities of that golden circle, one was, and still is, branded as a person who is against jobs and development, who is consumed with negativity, and so forth.

What I know now, and perhaps did not understand fully then, is that I was jeopardising an ingrained relationship that existed between Fianna Fáil, council officials and developers. Many among the public knew about this relationship because it was quite open. For some of these people, especially for the Fianna Fáil politically minded, it was acceptable. As long as the wealth and perceived benefits continued there was no major concern about such relationships in Fianna Fáil quarters. We now realise the cost these relationships have had, and will continue to have, on Irish families. Irish families will pay for decades for the stupidity, the greed, the excess and the potentially criminal behaviour of which Fianna Fáil was part and parcel. In my constituency it was a willing, complicit participant and beneficiary.

As far as the €90 billion in bad assets is concerned, and because the Irish taxpayer is now responsible for it, I want to know the names and the amounts involved. I want the national asset management agency to release that information. I want the taxpayer to know who they have to thank for saddling their children with debt for decades.

Today some of my colleagues expressed the opinion that the Government should display humility, honesty and a sense of responsibility. I am not really bothered about that. Fianna Fáil's pathetic whimpering about a national Government is embarrassing. It should get on with its job. Considering the damage it caused to Ireland's economy and its citizens for the next couple of decades, Fianna Fáil deserves everything it will get in the local elections and in the next general election. As far as the Minister for Finance, Deputy Brian Lenihan, is concerned, I would prefer if he spared us the speeches on patriotism, fairness and national Government. Fianna Fáil has denigrated politics to an extent I never thought possible. It has broken this country and it deserves everything it will get. It deserves to be wiped out politically.

Like my colleague, Deputy Deasy, I offer no apologies for the comments I shall make, or for laying the blame for the current economic crisis and devastation firmly at the foot of the Government.

I shall address one aspect of this supplementary budget. The budget is the spawn of a failed and flawed social partnership system that has strangled competitiveness and dynamism in this economy. I am tired of the nod and wink culture, the golden circle, the cosy cartel which pulls the strings of Government from behind closed doors. It is a cosy arrangement between unions, employers and, no surprise, the Fianna Fáil Party, and has had unwarranted influence over Government policy for the past 12 years. This has led to our current spending growing out of all control and to the type of irresponsible budget which was laid before the House yesterday.

I wonder at a Government that sees this country on the precipice of spiralling unemployment and the destruction of small and medium-sized businesses. This Government is still beholden to the social partners and vested interests in our society. The budget ignores the reality of the problem, namely, that we face a deficit of €20 billion. Deputy Deasy referred very well to the level of national debt for which not only my generation but two or three generations to come will suffer the consequences. However, we have seen no meaningful approach to curbing public spending. This is extraordinary. A budget was laid before this House yesterday which bases two thirds of its savings on tax increases that will cripple small businesses and are unbearable for all those who struggle to provide for their families. It made negligible effort to tackle the lack of efficiency in the public sector and made a ham-fisted attempt to curb public spending.

I find it bizarre that organisations such as IBEC had the audacity to welcome this budget as providing a plan to get the country out of recession. Was there such a plan? I am sorry but I must have missed something. There is nothing in this budget designed to stimulate the economy. There is nothing in it to create jobs or to assist the SMEs up and down the country, in rural Ireland and in our cities. In my own constituency, Dublin South East, one can walk down any street and see the "For Let" and "For Sale" signs and the businesses that have been forced to close. What about all the companies that were teetering on the brink, struggling for the past eight or 12 months to hang on to the few employees they have? How are those businesses expected to stay afloat and keep those people in employment?

There was no relief for PRSI nor any measures in respect of VAT. I must compliment ISME on having the courage to come out and tell it as it is. There were increases on excise duties on diesel and in insurance levies, all of which impact directly on small companies around this country struggling to stay afloat. It is quite extraordinary. I would love to know who these organisations represent. They meet with the Minister of State, Deputy Ahern, and with the Taoiseach, and hammer out deals to keep everybody happy and everything kosher. They ensure that the Government buys a bit of time. Who do they represent? They do not represent the people who get on the telephone to me and my colleagues, concerned about letting go the workers they have barely managed to keep in employment over the past six months.

This is a punitive budget. Nobody has realised quite how serious it is in terms of the impact it will have on our economy. It is a deflationary budget. Nobody will be in a position to spend because everybody is terrified now. Everybody is hit by increased taxes, the health levy, the income levy and the cut to the early child care supplement. All these measures will impact on people's ability to spend. If they cannot spend, they will not buy products, use services, eat in restaurants and so on and we will be in a serious position in a short period. I shudder to think what will be the effects of this on ordinary people and businesses in particular, which are the lifeblood of our economy. By failing to address the massive and disproportionate expenditure on the public sector, the Government has failed to tackled the budget deficit in the responsible way it should. Cuts must be made in every Department and it is the only way the Government will get a handle on the public finances.

Any economist could tell the Minster for Finance that he cannot tax his way out of a recession because that makes the economy less competitive, people's ability to spend is reduced and small businesses are crippled. How can this message have evaded the Government for a fourth time? This is the fourth attempt since last September the Government has made to get a handle on the budget deficit but we still experience absolute denial on its part. This is extraordinary, given the projections provided by the Minister for Finance yesterday. Budgetary projections for 2009-13 provide for increases in gross and net current expenditure of approximately €5 billion a year while taxes will increase simultaneously. The Government is denying whatever ability people may have had potentially, through an imaginative budget outlining a jobs stimulus and a programme to get people back into the workforce. Instead the Government parties are creating a dead economy where more people will be forced on to the live register and queues will lengthen as the weeks and months pass with no solution provided to them.

I echo Deputy Deasy's comments about this pathetic, whimpering Government coming to the Opposition with a begging cap to join them in a national government. We handed them a jobs package and a pre-budget submission that would have much more sense in getting the economy back on track. Unfortunately, this Fianna Fáil-led Government failed to take that opportunity and it has made a major mistake, which will affect the people detrimentally for a long time to come.

This supplementary budget will close down Ireland Inc. It is totally out of step with best practice in Europe and globally. There are no job creation measures in this budget. It is strongly anti-business, anti-competitive, anti-worker and anti-family. It will drive people out of work and I am hearing that message all day. The Minister for Finance opened his contribution blaming everyone and everything he could think of to explain away the economic deficit, while overlooking the obvious but while there may be no escape for the taxpayer, there will also be no escape for the Government.

Far from suffering a global problem, last week's Central Bank statistics indicate that the bulk of this year's unbelievable €23 billion deficit is down to the Government. This confirmed what we have known all along. This country was ideally placed to withstand a global downturn but the Government's mismanagement of our heretofore strong financial position has left us vulnerable and struggling. The Government is incapable of governing and incapable of learning from or taking advice. It is known across the world that there is nothing to be gained from trying to tax a country out of trouble. This ill-conceived budget will drive the economy deeper into recession and into depression. Confidence will not be restored and the business and commercial sector will not stabilise, let alone recover. Our health sector will continue to experience unnecessary deaths and our unemployed will continue to suffer from a lack of retraining or further education.

The Minister hit out yet again at the middle income earner who will bear the brunt of his savage unjustified tax impositions and cutbacks. This supplementary budget will close down Ireland Inc. Business and families will suffer savage cutbacks to give the Government another blank cheque to squander. The taxpayer has been forced to bail out the banks with an additional burden on every family as a result of the increased levies. What are the legal implications of removing tax relief on mortgages, which were entered into on the understanding that this would be in place? This issue needs to be clarified and it is, perhaps, open to legal challenge.

Clarification is urgently needed regarding the scheme the Minister announced for public sector staff aged over 50 to retire without "actuarial reduction of pension entitlements they have accrued to date". Does this mean those who avail of this offer will merely get a pension on entitlements up to the age of 50 and will have to forego the additional entitlements they would have built up if they worked to 60 or 65 years of age? Does it mean that the balance is assured? This is a grey area. What about the provision for payment of 10% of the relevant lump sum immediately with the balance paid later? This sets alarm bells ringing, as this will be paid without actuarial reduction and subject to current tax law provisions. Essentially, the 90% remaining of the pension taken at 50 years of age could be wiped out by tax in ten or 15 years. What sort of a deal is that? I will be interested in the Minister's explanation.

Despite the imposition of increased VAT rates last October, he failed abysmally to take the opportunity yesterday to stem the crossing of the Border, which has resulted in a €700 million loss to our retail trade or the exit tax with has destroyed our tourism industry. Farmers were badly let down in the budget with more cuts on top of those imposed last October. The cuts in the REPS payments and so on are disgraceful. Where is the input of the Minister for the Environment, Heritage and Local Government into this? He has let down farmers and the people he is supposed to represent in this debate. The only glimmer of hope in a dark day for the country is the fact that the Government benches did not rise as one as they did last October to applaud the Minister for Finance. Even Fianna Fáil and Green Party Members know when they are being sold a pig in a poke. They kept their heads down, hanging in shame. The electorate will hang them further on 5 June.

Last November when I contributed to the debate on the equivalent Financial Resolution, I concluded by saying, "There is speculation that the Minister for Finance will have to introduce a mini-budget in February. I submit that this mini-budget has already taken place and the real budget will be introduced in February". The only thing I was wrong about was the date. The object of the supplementary budget was to rein in the deficit to within 11% of GDP, as agreed with the European Commission and to restore confidence. The budget has achieved what it set out as a bookkeeping exercise. In spite of that, Moodys reduced the credit rating of all 12 Irish banks this morning saying there was an increased exposure to bad debts intensifying. An article on the back page of today's Financial Times states that “Ireland budgets again after the party” adding that this may result in its “young, well-educated flexible workforce” making a beeline for the exit. It adds that our construction-led recession has brought the economy to the point where it could contract by 8%. It comments that the Minister for Finance had very little room for manoeuvre but that he may have pulled the wrong levers in his haste to comply with the Brussels rules. The Central Bank had argued that we sharply reduce public expenditure rather than tax our way out. CNBC stated that the aim of the US Government was to stimulate the economy and one way to do that was to reduce tax. To increase tax is to stifle the economy. Caution has not been thrown to the wind. It was thrown to the wind when we had money to spare, when we had full employment and we abused and butchered the partnership model and process for electoral survival. The process was used in the past seven or eight years to ensure that everybody was kept happy and quiet in order to survive politically. It did not stand up to challenges, did not face facts and tell people the hard truths when they needed to be told. When I see members of that partnership process having their arguments on television every night instead of behind closed doors where they can get down to real business and try to put conditions on the table, it is obvious that it is a defunct model.

The Minister of State at the Department of Community, Rural and Gaeltacht Affairs, Deputy Curran, said yesterday that he regretted that he had to make some tough decisions and announced the suspension of the community support for older persons scheme. This scheme provides older people with socially monitored alarm systems which cost €300 per person. The bill for this last year was €4.3 million. On 6 April a press release was issued to the effect that "Curran announces further payment of Grants under the Scheme of Community Support for Older People" in which he is quoted as saying "I am delighted to announce funding to a further 49 organisations". The Minister for the Environment, Heritage and Local Government, Deputy Gormley, brought in new nitrates directives for local authorities to inspect farms when the Department already does these inspections yet we are trying to save money. Does the right hand know what the left hand is doing? Only 24 hours after announcing that he is opening up a scheme the Minister of State at the Department of Community, Rural and Gaeltacht Affairs closes it down.

I refer again to the Financial Times. This is not a red top or Sky news. It is a paper that people who are actively considering where they are going to invest their money read.

It is otherwise known as the Wicklow Times.

Yes, the North Wicklow Times. It contained two lines yesterday about a bond and some way of recovering pension money for investment in infrastructure. There was no mention of reducing VAT to stimulate local spending, or of employer's PRSI exemptions for new jobs that will not be created without some incentive. At least if the Government was not getting money it was not having to pay any in the form of the dole. According to the Financial Times, the Minister for Finance sees the future of the Irish economy in exports and may cause Irish history to repeat itself because Ireland may only succeed in exporting its best hope of recovery, its talent.

I wish to share my time with the Ministers of State from my Department, Deputies Jimmy Devins and Barry Andrews.

The scale of the challenges we face and the speed at which the economic environment has changed make this budget one of critical importance to our country's future well-being.

As the Minister for Finance pointed out yesterday, there is limited scope for additional expenditure reductions at this stage of the year. Savings had to be found, however, and the burden of these adjustments has been spread across Departments.

An adjustment of €81 million has been made to the education Vote as part of yesterday's budget. This is made up of a reduction of €27 million in current expenditure across several programme areas and a €54 million reduction in capital expenditure. This adjustment brings the gross allocation for the education Vote in 2009 to €9.49 billion, representing a total reduction of €134 million on the allocation in the October budget. The difference between the overall reduction of €134 million and the adjustment of €81 million in yesterday's budget is largely due to the transfer of funding for youth services to the Department of Health and Children and adjustments for general savings agreed by Government in February. The revised allocation still represents an increase of about 2% on the 2008 out-turn.

To achieve long-term reductions in the public sector pay bill the Government has introduced a series of measures aimed at reducing the number of people employed in the public sector. This includes a ban on recruitment and promotion. A major concession has been made for education whereby the numbers cap applying to teachers and special needs assistants, SNAs, will be applied only after the start of the new school year in September 2009. Vacancies arising after that date will continue to be filled, subject to the overall cap on numbers, so that the level of service being provided will be maintained.

While a moratorium on ‘post of responsibility' allowances in schools will apply generally, a concession also applies to the first allocation of these allowances for new schools. In addition, principal and deputy principal posts will continue to be filled under the delegated sanction arrangements for filling teaching posts. These arrangements illustrate the Government's commitment to maintaining front line services in schools.

A total of 80,000 people have lost their jobs since January. Unfortunately, we expect more jobs to be lost in the coming months. A priority for the Government is to support those who have lost their jobs through retraining and further education. A range of measures is being targeted at maintaining people in employment, re-skilling and facilitating better access to allowances.

The higher and further education sector has a key role to play in providing the type of up-skilling that will help unemployed people develop their workforce skills and avail of more sustainable employment opportunities as the economy recovers. As part of the budget measures almost 7,000 additional education places are being made available for unemployed people.

From September 2009, an additional 1,500 post leaving certificate, PLC, places will be made available nationwide, bringing the total number to nearly 32,000. The PLC programme provides successful participants with specific vocational skills to enhance their prospects of securing lasting, full-time employment, or progression to other studies. The allocation of these extra 1,500 PLC places is another step in expanding opportunities and broadening access to further education so that people can enhance their employment skills.

These additional places continue the significant progress we have made over the past 12 years in expanding further education provision. Investment in further education last year was €414 million, a 400% increase on the equivalent 1997 figure. This increased investment allowed 145,000 learners to receive education and training last year, an increase of more than 95,000 on 1997.

Applications through the CAO for entry to third level courses in 2009 show an increase of 6% over 2008, while applications from mature students, have increased by almost 20%. While the increased number of students entering the system at a time when further reductions are being imposed on already reduced budgets will necessitate difficult spending choices at the level of individual institutions, it is appropriate, in parallel, to target extra resources in supporting individuals who become unemployed to be given access to employment relevant skills.

This will involve a degree of redeployment of resources within the higher education sector according to that priority need. Notwithstanding the reductions in funding, it is expected that at least 2,000 unemployed will be accommodated on full-time third level courses starting this autumn.

Many unemployed people with good workforce skill recognise that embarking on a third level programme is a key stepping stone to changing career paths and want to be given the opportunity to start re-skilling as soon as possible after losing their jobs. It is recognised that a potential barrier in this regard is the fact that the traditional third level academic year runs from September to June and most places are filled through the CAO process. For a variety of reasons, however, students may either not take up a place that has been offered to them through the CAO or they may subsequently drop out of a course after it has started. A review by the institutes of technology of the scope to utilise this additional capacity to offer places to unemployed people concluded that filling these places midway through a course term could place both new entrants and existing students at a disadvantage. As an alternative means of utilising this spare capacity, a number of institutes of technology are providing unemployed people with the opportunity for direct entry into newly-developed accelerated level 6 certificate programmes. Under this initiative participants will be able to complete the first year of a standard two-year programme in an accelerated manner so that they can move to the second year of the programme in September 2009. Just under 300 places have been provided under this pilot initiative which commenced in February.

It is also recognised that unemployed people who may be out of the formal education system for some time may have concerns about their capacity to embark on a third-level programme of study. To help address these concerns, institutes of technology across the country are utilising spare capacity to provide over 900 places on a range of newly-developed, part-time transition programmes. The purpose of these programmes is to assist unemployed people to find out more about the type of courses that may be suited to them and to build their confidence by developing some of the necessary skills for studying at third level. It is hoped that having undertaken these courses, a significant number of participants will be encouraged to apply on a direct entry basis for a range of third-level certificate and degree programmes commencing in September 2009. Participation in the accelerated programmes and the third-level transition courses is free of charge and participants continue to be eligible for social welfare payments.

In recognition of the fact that a return to full-time education may not be appropriate to the circumstances of many unemployed people who want to engage in fundamental upskilling, 1,500 places will be provided to enable persons who are unemployed or who are on short-time working, to pursue third-level certificate or degree programmes on a part-time basis. The Department of Enterprise, Trade and Employment will fund these places and arrangements for the operation of the part-time programme will be agreed between officials in my Department and the Department of Enterprise, Trade and Employment.

As a result of the downturn in the construction sector, a significant number of apprentices are losing their jobs before they can complete their apprenticeship. The institutes of technology have been working closely with FÁS to ensure that apprentices are given every opportunity to complete their apprenticeships. Extra classes are being provided for apprentices who have to re-sit exams and a number of additional term blocks will be provided throughout the summer to facilitate over 300 apprentices to complete the education phases of their apprenticeships. I thank the Teachers Union of Ireland for its co-operation in this regard because it is facilitating this programme out of the normal school year in these exceptional circumstances.

A new 11-week certified education programme has been developed specifically for redundant apprentices. The programme, which will be delivered by institutes of technology, will commence in September 2009 and will cater for up to 700 redundant apprentices per annum.

It is only a drop in the ocean.

If Deputy Broughan were here in time he would have heard that a dramatic improvement has been made in the number of people who will be offered meaningful programmes which will provide a bridge for those people who have the ability to avail of them to progress to full-time education, degree courses, diplomas or certificates.

The two Cork constituencies.

Outstanding progress has been made. There were already 51,000 and we are putting together another 24,000. The co-operation I am getting from the institutes of technology, the VECs and FÁS has been outstanding and I commend their co-operation.

There are 400,000 people unemployed.

There can be very few people who are unaware of the difficult circumstances facing the Irish economy. This Government has had the unenviable task over the past weeks of taking some very hard decisions and making some very stark choices. We have remained resolute to our task and it has taken both courage and conviction to devise the package of reforms that has been presented in yesterday's budget. While the announcements contained in the budget include strong medicine, we are today in a much better position in that the diagnosis has been made of the ills of the economy and the prescription written. The economy has been put on the road that will, in time, lead to recovery.

While tackling the budget the emphasis has been on fairness, economic renewal and building a better future. In this context, the elements of the budget covering science, technology and innovation have sought to provide a proper balance between the scarceness of resources available and the need to keep up the effort to develop an innovation-driven economy that will allow Irish enterprise achieve competitive advantage and increase productivity and jobs in the future. This has been delivered. Funding has been concentrated in the areas where greatest economic benefit can be achieved speedily. In a difficult economic environment, the science and technology subhead of the Department of Enterprise, Trade and Employment Vote has been kept at a level above the level of spend in this area in 2008. What is being done is to hold the line in terms of the level of support provided to allow the consolidation of the investment made over recent years in the area of research, development and innovation.

I particularly welcome the introduction of a scheme of tax relief for the acquisition of intangible assets, including intellectual property. The details of the scheme remain to be worked out by the Department of Finance in conjunction with the Revenue Commissioners. This measure will help to attract high quality employment to this economy.

The expenditure provision for science, technology and innovation provided in the 2009 budget of my Department is €311 million, which is €2 million more than was spent under this heading in 2008. In addition, a further €6 million will be made available as capital carried over from the 2008 budget allocation, allowing for a total science, technology and innovation budget of €317 million for 2009, which is a 2.6% increase on last year's spend. The fund of €317 million will be used by the development agencies Enterprise Ireland and Science Foundation Ireland, and supplemented with IDA funding to do the following: provide an important support to Irish business in their efforts to be innovative and stay competitive by increasing in-company research and development; assist IDA Ireland in winning research investments for Ireland; promote the commercialisation of research and bring the outputs of Ireland's research base to the marketplace; and strengthen collaboration between industry and the education sector, and consolidate the investment made in Ireland's third-level research base.

Enterprise Ireland will receive a science, technology and innovation budget of €133.7 million. This, together with a capital carryover sum of €500,000, will give a fund which is a 3.5% increase over the 2008 spend. This funding will enable the agency to provide all-important supports to industry with a sharp focus on identified industry needs, and seeking to create a real impact in terms of the commercial spin-off from research and development. This level of support provided in the budget will drive industry-led research, enhance collaborations between third-level institutes and companies, and maximise the commercial potential of publicly-funded research. The development of a dynamic and innovative enterprise sector will be a key factor in creating and maintaining employment in these difficult times.

Enterprise Ireland will continue to promote and foster start-up companies with the potential to develop new products and services and create high-value jobs. Through its suite of research and development programmes, Enterprise Ireland is ideally placed to provide financial support and advisory assistance on the ground for young and innovative companies. This investment will stimulate growth of more competitive companies and ultimately create long-term sustainable employment.

Enterprise Ireland has adopted a lead role in driving the effective commercialisation of research in Ireland through stimulating collaboration between industry and the third-level institutes. Through its commercialisation fund, Enterprise Ireland will secure the commercial potential of the output from our investment in the Irish research community to the benefit of Irish companies. By encouraging greater collaboration between industry and third-level research through initiatives such as innovation vouchers and innovation partnership, Enterprise Ireland will further the development of an innovation culture among small and medium enterprises.

Science Foundation Ireland funding will be €170.5 million. In addition, a sum of €5.5 million in capital carryover will be available, giving a total budget of €176 million, which is a 3.2% increase on last year's spend. This allocation will enable SFI to continue to build a critical mass of internationally competitive research teams in the sciences and engineering underpinning biotechnology, information and communication technologies and energy. This funding will primarily assist SFI to continue to support and grow its centres for science, engineering and technology, known as CSETs, and the strategic research clusters, SRC, programmes. SFI currently supports a total of 26 centres with a number of new CSET and SRC awards anticipated later this year. It is through these industry-embedded research groups, which are formally linked to more than 150 multinational and small to medium high-tech enterprises in Ireland, that SFI supports the retention of employment of more than 60,000 people in high-value jobs here.

It is not getting much help from the Government.

It has been allocated funding of €170 million. We are leaders in the world and we have moved from a position ten years ago where we were way down——

You are not making a penny available in loans.

The Deputy should address his remarks through the Chair.

This employment figure will grow when new industrial partners become involved in the CSET and SRC programmes on the back of further SFI investment.

SFI funding provision will increase Ireland's global reputation as a location for excellent scientific research and as a source of human and knowledge capital in order that business creating next-generation products, services and related employment are attracted to and retained in Ireland. Overall, SFI funded activities are consistent with promoting research and development as a key part of the enterprise agenda, assisting as they do the retention and attraction of quality employment and thereby increasing the value of Irish industry.

The growth that has already taken place in Ireland's research base has brought to this country world-class researchers and made available high quality graduates and PhD graduate output. This has been of demonstrable assistance to IDA Ireland in its effort to win highly competitive research investments for our country.

It is still one of the worst in Europe.

In 2008, IDA Ireland provided funding for 56 internationally mobile research-related investment projects and in 2009 it will continue to support a similar number of research and development projects.

The Government's commitment to investment in science, technology and innovation has never been more relevant than it is today. While the current economic crisis is creating real challenges for businesses, continued investment in research, development and innovation is essential to maintain competitiveness, to address shifts in markets and to prepare for economic recovery. The development of a "smart" or innovation-based economy is a key opportunity we all must grasp. We require a sharp focus on the fundamental principle that a small open economy must compete and be competitive globally. We must continue to invest in Ireland's research base as an important cornerstone underpinning our future competitiveness.

In this difficult economic climate, the development of a knowledge economy in Ireland is key to maintaining competitiveness. A strong science base matched by a shift in the capacity of our enterprise sector to create knowledge, to innovate and to exploit new knowledge across global markets, is critical to Ireland's future.

In the current economic circumstances we will have to ensure the return on our investment in science, technology and innovation is maximised by a prudent application of resources, by active management and by careful co-ordination of the resources available. The structures to do this are in place and I have every confidence we will continue to build on the achievements to date.

What I wish to do today is to send a strong signal to Irish business that the way forward lies in staying competitive and maintaining an innovative edge over competition by developing new products and processes that will assist Irish enterprise to win new markets in the current challenging environment. This exhortation is backed by tangible financial support that will continue to be available through my Department's Vote and which will be a sound platform from which to spring forward to deal with the challenges facing us on many fronts.

I welcome the opportunity to speak on the debate on this budget.

This is a challenging time, as the Minister of State, Deputy Devins, and other speakers outlined. The challenge that faced us during the past few weeks in preparing this budget was to try to strike a right balance between showing the nerve and the political will to make the changes and fiscal adjustments necessary without doing damage to the economy that could not be recovered. I believe we have struck that right balance. Many people have acknowledged that we have done that. Clearly, that view is challenged politically in this House, and rightly so.

It is worth reflecting on the remarks of some of the people outside this House who have commented on the budget. Naturally, we will take a certain view, and Members opposite will take a certain view. Sometimes it is worthwhile reflecting on what others, who do not have a specific agenda, have to say.

The Minister of State should not be too selective.

The following quote is useful. It states, "The impact of the tax changes in this budget are progressive, those who have more will pay more, while those who have less will pay less." This is also the situation when we analyse the cumulative impact of all Government initiatives in this area for 2009. The quote goes on to state, "The changes introduced in the public sector's pension related deduction are progressive and welcome." This quote is not from IBEC, the Construction Industry Federation or the Irish Bankers Association. It is from CORI, the organisation led by Fr. Seán Healy. Not to quote it out of context, I acknowledge that CORI is critical of other aspects of the budget. I want to be fair to CORI. It is worth reflecting on what others have to say at this time.

Fr. Seán Healy did not seem very happy with the budget when he gave his view on the news.

We tend to be partisan. With the best will in the world, we tend not to be generous with each other and somewhere in the middle perhaps the truth can be found. In a test of the fairness of this budget, I acknowledge Fr. Seán Healy's insight into these matters.

Let us hear the rest of what he had to say.

The Minister of State should tell us that in the interest of ensuring there is a balance.

I have been honest, fair and I have said that Fr. Healy had other things to say about it. Deputy Costello can quote as he wishes, but it is important that the key issue of this budget is the fairness of the tax regime. If Fr. Healy has said that it is fair, there must be some grain of truth in that.

The other major development in the budget is in regard to the banking issue. Everybody in this House would agree it is something that had to be done because credit is not circulating in this economy. The lack of credit is sucking the life blood out of businesses and threatening the security of jobs. Without a radical departure from where we were at, we would offer no lifeline to the various businesses that are trying to survive through this very deep recession. The details as to whether the system will be mandatory and how the various assets will be valued against EU rules and guidelines remain to be worked out and constitutional issues also have to be considered. Nevertheless, I believe we can all agree that an agency such as this is required. Rather than bailing out the banks as is the rhetoric we hear from time to time in this House, one need only note the value of bank shares this morning to realise it is not something about which the banks were delighted.

I want to devote the remainder of my time to referring to the proposal made by the Minister for Finance yesterday on an early preschool year to replace the early child care supplement. There are always arguments against any measure and I have often said that not being able to do everything should not be an excuse to do nothing. Replacing the early child care supplement with a free preschool year is obviously not without its challenges but it is an enormous step forward for the sector and it is a very far-sighted measure, which has been welcomed throughout the sector. I commend all involved, including the Minister for Finance, on agreeing to this measure. It will provide a lifeline for the sector.

With effect from 1 January 2010, a child aged between three years and seven months and four years and ten months will be able to avail of a free preschool year in the various facilities around the country. Thereafter, on 1 March each year, all children aged between three years and three months and four years and six months will be able to avail of the service. The age cohort was specifically designed to ensure flexibility for parents and to ensure the capacity would be able to be met by the existing provision of child care places, a point to which I will return later.

The year will be paid for by way of capitation paid by the Office of the Minister for Children to the various providers. For playschools operating 38 weeks per year, each child in the age cohort will be entitled to three hours per day, five days a week. The grant will be €64.50 per week for full-time and part-time centres operating 50 weeks. Two hours 15 minutes will be provided five days a week over the 50 weeks. In that case the grant will be €48.50 per week. In both cases this will aggregate to just over €2,400 per child. When it is considered that the early child care supplement at its half rate was worth €2,500 over the five years of a child's early years, the compensating measure, which is far more targeted, is welcome, progressive, radical and far sighted. The National Council for Curriculum and Assessment has developed a framework for early learning which will be launched in the next couple of months, so it is very fortuitous that this decision has been taken. This will provide a curricular framework throughout the country for all aspects of early childhood care and education, from birth to six years.

In addition to this, the Centre for Early Childhood Development and Education, CECDE, which is being subsumed into the office of the Minister of State with responsibility for children, developed a quality framework, known as Síolta. Síolta provides a complementary quality assurance measure——

It closed them down.

I want to pay tribute to the CECDE which is now being subsumed into my office for the work it has done. It was only set up for the purpose of developing this quality framework and again it is fortuitous that Síolta is now available to be rolled out and to ensure quality during the pre-school year throughout the country. In tandem with the curriculum and the framework for early learning, these two measures, again very fortuitously, will be available in time for the roll out of this measure.

As regards capacity, I have to take issue with a very ill-judged press release from Deputy Olwyn Enright, where she challenged the view that we would be able to meet the need in this area from January 2010. She based her figures on an incorrect assessment of the staff to children ratio and extrapolated therefrom that we would need something like 19,000 new staff in this area. The correct figures are as follows: extrapolating from the birthrate from 2005-06, if all the children in the cohort enrolled, the figure would be 77,000. Currently there are 15,000 in their preschool year in community child care subvented scheme provision. It is also assessed that 46,000 children are in preschool in the commercial sector, giving a total of 61,000. As Members of the House will know, community and, to a greater extent, the commercial child care sector are suffering in the recession because mothers and fathers are losing their jobs and minding their children at home. As a result, there is extra capacity within the system. It is assessed that this extra capacity on the sessional basis, referred to earlier, will add a further 22,000 places. This more than accounts for the number of places that will be required for the roll out of this service from January 2010.

I believe also that it will provide a lifeline for the sector. As I said, the child care sector is suffering from the downturn in the economy. If there are any gaps in provision, which may be on the geographical side, these will be addressed through the efforts of the county child care committees and my office. The benefits of this scheme have been noted by many over the past few years, particularly the National Competitiveness Council, the OECD, Barnardos and the Society of St. Vincent de Paul. Even the Children's Rights Alliance had something positive to say about it. The provision of this, as opposed to the ECS, is something we will all welcome.

The next step is that next month all preschools will be sent information packs and invited to participate. From June onwards parents will approach services to enrol with them and from September 2009, preschools will then make returns in anticipated enrolment. We are redirecting €170 million to this measure and, at a time of economic downturn, it stands out as an initiative that shows vision for the future. I am particularly passionate about this issue. The universal preschool year is a major step in the right direction.

Other steps included the setting up of the equal opportunities child care programme, EOCP, the national child care investment programme, NCIP, and the provision of places over the past ten years, as well as the setting up of the office of the Minister of State with responsibility for children and the community child care subvention scheme. That infrastructure allows us to roll this out, with the aid of the city and country child care committees and relying on our closer links with the national voluntary child care organisations. The real beneficiaries will be those on the margins, those who do not get into preschool years. We know that less disadvantaged parents always send their children to preschool, but those on the margins and the disadvantaged will now have that access and it stands out as a marked measure. I commend this budget to the House.

With the permission of the House I wish to share my time with Deputies Liz McManus, Tommy Broughan, Jan O'Sullivan, Brian O'Shea and Kathleen Lynch.

This second budget for 2009 is as big a disaster as the first. It savages the taxpayer, bails out the bankers and property speculators at home and abroad and does absolutely nothing to support small and medium-sized businesses, protect those in employment or create new jobs. Fianna Fáil and the Progressive Democrats brought us into this economic mess with their cronyism politics. They are still at it, even though the country and the economy are teetering on the brink. The Greens, God help us, are totally out of the loop. The banks, incredibly, are bailed out once more, with €500 billion guaranteed last year plus €7.5 billion this year in capitalisation and now an enormous €80 billion to €90 billion bad banks' loan, €30 billion of which, the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, tells us is held abroad — outside this jurisdiction. All of that is dependent on and tied up with taxpayers' money. That is gambling not just with the money of Irish workers, but with their livelihoods and families.

Imagine NAMA, the proposed new national assets management agency, having to commandeer the executive jet to fly to the four corners of the world to assess the property portfolios of Irish speculators so that the taxpayer can bail out the bad loans and investments which were created through unregulated irresponsible Irish banking for a golden circle of crony capitalists. Even now the Fianna Fáil leopard is unable to change its spots. Even in this budget it cannot stop putting itself first.

It is the Galway tent all over again, but this time it has gone global. The budget studiously avoided taxing those who pay no tax at all. The 6,000 or so tax exiles who flit between Ireland and exotic tax havens around the world have not been taxed one cent in this budget. The tens of thousands of private landlords, many of whom will not accept social welfare cheques which would identify them to the Revenue Commissioners, are getting off scot free too. Those artists who get Government contracts and play sell-out concerts in Croke Park retain tax exemption and an enormous part of their incomes. Indeed, some disgracefully combine their artists' non-tax status with tax exile status as well.

None of those has been touched by this budget which the Taoiseach and the Minister for Finance said was targeting the wealthy. The thrust of this budget instead is best seen in the treatment of a family comprising a father, mother and two children on one income and with a mortgage on the family home. That is the standard Irish family profile at present. They now have new income taxes and levies, a PRSI increase, plus the pension levy if they happen to be public service workers, as well as the loss of the early child care supplement by the end of 2009. Now, too, mortgage interest relief on their artificially overpriced home is being totally abolished. Compare that to the landlord who owns a second house or portfolio of properties, who can still claim 75% against interest payments. A mere reduction of 25% was all the Government introduced for the landlord, while the reduction in mortgage relief was 100%. This is outrageous and clearly the Government is doing what it has always done — putting profit before people and putting a property portfolio before a family home.

This budget is a shambles in every sense, from the way it deals with the banks to the way it deals with taxation and unemployment. Having got it wrong in its last four efforts, it is patently obvious that the Government cannot now do the job. Before it does irreparable damage to the country and economy, it should resign and go to the people.

This budget is exerting a terrible price on working families. The people who are rearing their children, paying their taxes and trying to do the right thing are paying for the sins of Fianna Fáil. The rainbow coalition Government gifted Fianna Fáil a growing, successful economy and the first budget surplus, thanks to the work of the then Minister for Finance, Deputy Ruairí Quinn. In the intervening years, Fianna Fáil destroyed a successful economy built on exports and the innovation and hard work of our people.

Fianna Fáil and the Green Party are not content with the burden now pressing down on families. Like a shoal of marauding sharks, they will come back in the next budget to tax children's allowances, impose a property tax and increase the tax burden. The most serious aspect of this budget is not its unfairness but the fact that it is merely an accounting exercise. It contains nothing that is constructive. We desperately need a jobs strategy but this budget means thousands more will join the dole queues. In Bray, the town where I live, unemployment has risen by 150% in 12 months. That is unsustainable. The county in which I live has 4,000 small and medium enterprises. If each was encouraged and supported to employ one additional worker, an enormous difference would be made. If a portion of the €21,000 required to keep someone on the dole was spent on delivering a job in the private sector, we would deliver value for money and help to rebuild the economy. While few of the country's 170,000 small businesses are in the high-technology sector, many could expand if given State support to take on workers.

Even in the public sector, the decisions made by this Government are hurting people badly. The Minister for the Environment, Heritage and Local Government, Deputy Gormley, has instructed local authorities not to renew temporary contracts. This has led to a ludicrous situation whereby my local recycling centre is threatened with closure and its six staff are facing unemployment. The Bray recycling centre won an award for the best centre in the country thanks to the dedication of its excellent staff. A Green Party Minister who lectures the rest of us about recycling is presiding over this disgraceful decision. It begs the question of what the Minister is for. He sits in his office while local authority staff are clearing off their desks and signing on the dole. Administrative staff, road sweepers, building workers and, now, environmental staff are losing their jobs. Have Green Party Members been reduced by their Fianna Fáil masters to cannon fodder to make up the numbers and take the blame for the loss of recycling facilities, disabled persons grants, local authority houses and cuts in water schemes and road improvements? That may be not the reason why the Green Party entered Government but it is clearly what it has become.

I intend to address transport issues and the bail-out of the banks. Earlier today I witnessed the pathetic attempts by the Minister for Communications, Energy and Natural Resources, Deputy Ryan, to explain his wretched party's decision to support the bail-out. Last night, the Green Party crossed the Rubicon. Not only is it propping up the efforts of Fianna Fáil to bail out its developer and banking friends but it has also sold out its key principle of sustainable public transport. More than €315 million was slashed from the transport budget. This reduces the 2009 public transport provision to €630 million, whereas the vast bulk of expenditure is still going on roads. Dublin Bus and Bus Éireann are set to lose nearly 300 buses from their fleets under the current programme of cutbacks overseen by the Minister for Transport, Deputy Dempsey. Commuters in communities across Ireland have been devastated by this news, which will particularly impact on low income families, senior and other vulnerable citizens. The Green Party backed the Minister's disturbing comment that the €10 million in cuts to CIE's subsidy will be offset by the sale of public transport lands. This fatally undermines any prospect for integrated public transport.

I was amazed to be presented this morning with a glossy copy of the Government's third annual report on Transport 21. This has become a work of fiction given that all the modest Transport 21 gains for the Dublin Bus and Bus Éireann fleets will be wiped out under the proposals to cut 300 buses from their fleets. In terms of critical bus services, therefore, the new report is obsolete. A further €150 million has been slashed from public transport funding.

The most alarming element of the supplementary budget summary presented by the Minister for Finance refers to deferrals and rescheduling of public transport projects. I am left with the suspicion this is just a fig leaf for the abandonment of key public transport projects. Public transport infrastructural projects which are set to be deferred or rescheduled this year reportedly include metro west, the electrification of the Maynooth line, the upgrading of the Dublin-Maynooth and Cherry Orchard-lnchicore lines, the Kilbarry rail station on the Cork-Blarney commuter line and Luas power upgrade works. The Navan rail line, the western rail corridor and, despite the Minister for Transport's assertions, the Dublin rail interconnector are also threatened. This budget represents an appalling surrender by the Green Party on public transport.

The national assets management agency or bad bank plan proposed in this budget is an unprecedented and outrageous assault on Irish families. In the words of Joe Stiglitz, "it is a win-win-lose proposal: the banks win, investors win — and taxpayers lose". Each Irish citizen will have a burden of as much as €100,000 placed on his or her shoulder as a result of the grotesque incompetence of the Taoiseach and the Minister for Finance.

It is such an appalling gamble with our future that it needs to be placed before the people in a general election. We need to see change throughout the banking structure and its senior management and we need more change on the benches opposite than a reduction in the number of Ministers of State. We need a new face in this country, as the rating agency rightly said, and a general election.

Irish citizens may face liabilities of more than €120 billion in bailing out property developers and speculators. The dodgy deals that span the globe are dangerous beyond belief. Why are the chief executives of AIB, Mr. Eugene Sheehy, and the EBS, Mr. Fergus Murphy, still in place? Why has Bank of Ireland promoted an insider to the position of chief executive officer? If this Government will not take the banking sector by the scruff of the neck, it must be replaced.

This toxic budget has injected a poisonous divide into society. I have listened both in person and through the media to the stories of people who have worked hard and are trying to stretch tiny budgets to pay their bills. Honest business people who are trying to keep their enterprises going realise that a small group of powerful bankers and speculators who made vast sums of money over the past 12 years are avoiding the consequences of their greed. It is obvious to the little people of this country that greed pays. Those who took out bank loans at the end of the bubble caused by property speculation are being bailed out and a special arrangement has been reached so that they can maintain their lifestyles.

I do not think anybody believes that these people who have been making money for the past 12 years, somehow or other, suddenly cannot pay back these bills. People genuinely do not understand what is going on. They hear figures like €60 billion, €80 billion and €90 billion, but it is beyond their understanding. What is happening as a consequence of this budget will cut them away from having to pay back. These are the same people who if they owe an ESB bill get their lights turned off. If they owe any other kind of bill people come after them and they must go to the money advice and budgeting service or the Society of St. Vincent de Paul. They must queue for the dole and in health centres to try to get supplementary welfare. They must pay back for everything they take on. Even families with an income as low as €289 per week will now be paying the 2% levy. Those people are trying to balance their budgets and struggle with an inadequate income. At the same time, however, they see no consequences arising for the big people in our society as a result of what they have done — the rich speculators who have been driving around in big cars, buying big houses and land. They sold those houses at inflated prices to young couples who are now struggling with mortgages. Couples who have had a mortgage for over seven years will now lose their mortgage interest relief, and will also have to pay health and income levies, as well as losing the early childhood fund. In addition, they will not qualify for medical cards or anything else. Those people are trying to balance their budgets, while they can see other people getting away with it.

I believe there will be a total breakdown in social cohesion and that there will be no morality left in this country. I make no apology for talking about morality because this is about justice. It is about those who speculate the most getting away with the most, while those who work hard get nothing. At the same time, people have seen promises broken. For example, promises were made to families with young girls who were supposed to get the HPV vaccine. They were promised it for autumn this year, but that promise was broken for the sake of €10 million. The promise to young people with cystic fibrosis was also broken because the HSE cut the capital budget. Another promise is being made now, but quite frankly they do not know whether to believe it or not. People cannot believe promises and neither do they believe that if they work hard they will get results for that work. The immorality of this budget is that the bigger the speculator, the more they will get away with, while the small people will have to pay.

Ba mhaith liom déileáil le dhá ghné den urlabhraíocht atá agam — an Ghaeilge agus an Roinn Cosanta. Bhí sé soiléir sa ráiteas a thug an t-Aire Airgeadais inné go bhfuil dearmad déanta ag an Rialtas ar an nGaeilge. Ní raibh focal Gaeilge, nó focal faoin nGaeilge, i Ráiteas gCáinaisnéise an Aire, an Teachta Brian Lenihan. Is é sin mar atá Fianna Fáil faoi láthair — ligeann a chuid Teachtaí orthu go bhfuil siad ag iarraidh Stát dátheangach a chothú ach, in aimsir an chruatan, déanann siad dearmad ghlan ar an nGaeilge. Nuair a d'fhéach mé ar na caipéisí iniata a bhí sna clúdaigh litreach a fuair Teachtaí inné, ní raibh faic ann i leith na Gaeilge. Chuir an t-Aire, an Teachta Ó Cuív, ráiteas amach inné chun cuir in iúl nach mbeidh a Roinn ag glacadh tuilleadh iarratais le haghaidh an scéim tithíochta Gaeltachta. I ráiteas eile inné, dúirt an t-Aire céanna go bhfuil €2 mhilliún á aistriúóna Roinn go dtí an Roinn Ealaíon, Spóirt agus Turasóireachta i leith clár forbartha réigiúnach Comhaltas Ceoltóirí Éireann.

B'fhéidir go bhfuil an Ghaeilge agus an Ghaeltacht ag éalú ó chiorraithe, ach ba mhaith liom é sin a chloisint ón Aire Gnóthaí Pobail, Tuaithe agus Gaeltachta é féin. Níl focal faoin straitéis 20 bliain, faoin phlean ghníomhaíochta don Ghaeilge sa Ghaeltacht nó faoin reachtaíocht i leith teorainneacha na Gaeltachta agus Údarás na Gaeltachta ráite aige. Ní raibh focal i ráiteas an Aire faoi thodhchaí meitheal forbartha na Gaeltachta, rud atá conspóideach go leor ag an nóiméad. Beidh an toghchán le haghaidh bórd Údarás na Gaeltachta ar siúl i mí Aibreán na bliana seo chugainn, ach níl aon rian ar an scéal go mbeidh na hathruithe atá le déanamh curtha in áit faoin am sin.

There is to be a saving of €30 million in the Department of Defence budget. Some €10 million will be achieved because of the recent transfer of the Chad mission from EUFOR to the United Nations. I am somewhat baffled as to why this saving has not been factored in before now because the transfer of the mission to the UN had been known about for some considerable time, as had the consequential savings. Savings of €6 million will be made on new buildings and €3 million on refurbishment. Savings of €4 million are to be achieved in pay and allowances. This brings me to the embargo on recruitment and promotion in the Defence Forces, which will deprive people of the opportunity to take up employment in what are time-honoured and worthwhile careers, both at home and abroad. We have had the postponement of the 12 Reserve Defence Forces personnel going on active service to Kosovo later this year. It is most regrettable that this worthwhile initiative has been abandoned.

A case has been brought to my attention whereby a member of the regular Army, who had been seeking the rank of sergeant for 30 years, had finally achieved his ambition and had his medical test last Thursday. He was to have that medical test, but the embargo came in a week previously. Meanwhile, the successful interview had been delayed for some time because a member of the interviewing panel was not available. As things stand that promotion will not go ahead, so I am calling on the Minister, Deputy O'Dea, to persuade his colleague, the Minister for Finance, to rectify urgently such an absolutely arbitrary and unfair decision.

To return to the Irish language, I was disappointed that there was not some reference in the Budget Statement to a review of the functions of the Official Languages Act, particularly in regard to translations. It is about time that we eliminated wasteful translations of documents——

——which nobody reads or wants to read in the Irish language. It would be much more in the interests of the Irish language and of the Gaeltacht for savings to be made in this area so that the much used schemes, na scéimeanna tithíochta Gaeltachta, could continue to accept applications in the normal way.

The Christmas bonus has been abolished, which is an awful departure. People under 20 in receipt of the jobseeker's allowance have had their payment halved. Tax exiles are getting another Christmas bonus because they will not be taxed. Social solidarity is totally absent from what the Government has proposed and there are major problems as a result. My colleague, Deputy Joan Burton, and our party leader, Deputy Eamon Gilmore, made the real point — that there is no basis here for a recovery. This budget amounts to cutbacks and nothing else.

Debate adjourned.