Now that the latest Exchequer returns and the second quarter economic data have been published, we are entering a period of intense political negotiation around the budget, which will be announced in 12 days' time. Fianna Fáil fully accepts the imperative to continue to reduce the budget deficit until we get to the point at which the Minister for Finance of the day is able to stand up in this House and announce a balanced budget.
People welcome any evidence that there is an improvement in the economy, but the Tánaiste would be the first to admit that they are not seeing any evidence of that yet in their daily lives or in their pockets. The truth is they will not see that evidence for some time to come, because any recovery in the economy will be gradual and budgets will be tight for a number of years yet in this country. We believe it is possible to achieve our deficit target in the forthcoming budget while also protecting vital areas such as education and mental health and disability services. This will not be easy, but it can be done. It is about minimising the inevitable damage inflicted on an economy when more money is taken out of it, while at the same time protecting the essential public services on which people rely. Above all else, the budget must be fair. Unlike the last two budgets, its impact must be progressive in nature.
As the Tánaiste knows, the ESRI independently verified that the last two budgets disproportionately affected those on low and middle incomes. Those people cannot afford a repeat of that in 12 days' time. The Minister for Finance has now confirmed that the budget adjustment will be somewhat less than the anticipated €3.1 billion.