Budget 2010: Statements.

The budget for 2010 has been formulated in the context of an unprecedented rate of economic decline which we have experienced in the past year and a half. As a small open economy, we could not escape the full impact of the severe global recession, but it has been compounded by purely domestic factors. As a result, our GDP this year will decline by approximately 7.5% and an Exchequer deficit of more than €25 billion is projected. The Government's strategy in the last 18 months is working and we can now see the first signs of a recovery in our main international markets. We have taken decisive action to manage our way through the crisis. Our concern has always been to protect jobs, provide a functioning banking system and return the economy to the path of sustainable growth. We have sought to do all of this in a manner which is fair and protects the most vulnerable.

The measures we have taken have been commended by international bodies such as the European Central Bank, the European Commission, the IMF and the OECD. They have also won the approval of the international markets. Tangible evidence of this is the reduction in our premium on borrowing in recent months. The European Commission has proposed a one year extension to 2014 of the deadline to bring our deficit below the 3% of GDP threshold under the excessive deficit process. However, this additional year, while easing somewhat the adjustments required in the later years, does not change the focus of our need to stabilise our very large deficit.

There is widespread agreement that an adjustment of €4 billion to the public finances is necessary next year so as to put them firmly on the road to recovery by narrowing the gap between income and expenditure. In this next phase of the Government's plan we must stabilise the deficit in a fair way, safeguard those worst hit by the recession and stimulate crucial sectors of the economy to sustain and create jobs.

We cannot borrow our way out of our deficit problem. Debt service costs are rising rapidly and absorbing a large and growing share of tax revenue, which is not sustainable. We cannot tax our way out of this problem. We will not create jobs by increasing penalties on work and investment. The marginal tax rate is now 52% for PAYE earners and higher for the self-employed. It is also clear that our income tax system has become unbalanced. Next year almost half of income earners will pay no income tax and 4% will pay almost half of the total yield. This is not viable or sustainable if we want to fund the range of services we expect the Government to provide. We must transform how we tax incomes, making the system simpler, fairer and more broadly based.

The Government wants high earners availing of tax incentive schemes to contribute more. For the tax year 2010, the effective rate of income tax for those benefiting from reliefs will increase from 20% to 30%, on top of which they will also pay PRSI and levies. The Minister for Finance, Deputy Brian Lenihan, will examine the curtailment and removal of further reliefs in the context of the finance Bill. He also aims to introduce a new system of just two charges on income in 2011. A new universal social contribution will replace employee PRSI, the health levy and the income levy and income tax will apply on a progressive basis to those with higher incomes, reflecting their capacity to make a greater contribution.

We must ensure every wealthy Irish domiciliary who pays little or no income tax makes a contribution to the State. Measures will be introduced which will impose on all Irish nationals and domiciled individuals whose worldwide income exceeds €1 million and whose Irish located capital is greater than €5 million a requirement to pay an Irish domicile levy of €200,000 per annum, regardless of where they are tax resident.

In the renewed programme for Government we have accepted the recommendations of the Commission on Taxation on the need for a property tax. A good deal more preparatory work has to be done before this can be introduced. The renewed programme also contains a commitment to introduce a system of water metering for homes. Preparations are under way in this regard and when they are completed, it is intended to introduce water charges based on consumption above a free allocation. These charges, like the charge on second homes, will finance the provision of local services by local authorities.

In the light of the enormous economic and social implications of climate change, the Government aims to change behaviour to reduce our greenhouse gas emissions. The budget will introduce a carbon tax equivalent to €15 per tonne. The yield from this tax will be used to boost energy efficiency, support rural transport and alleviate fuel poverty. The tax applied to petrol and diesel from midnight. Increases in the case of home heating oils and gas will apply from next May.

In the future the limited scope for raising further tax revenue should be clear. The only remaining option is to reduce our spending and the aim of the budget is, overwhelmingly, to reduce spending. The current cost of providing public services is not sustainable. Without any correction, day-to-day spending would be approximately €58 billion in 2010, an increase of some €2 billion over the figure for 2009. Given that public service pay and social welfare each account for about one third of all day-to-day spending, reductions in these two areas are unavoidable.

Of significance in considering such matters is that we are in a period of falling prices. The current decline in consumer prices has had the effect of supporting real income levels, thus giving some scope to adjust public spending, while still protecting the living standards of those most in need. The measures announced in the budget amount to savings of more than €1 billion on the pay bill, €760 million on social welfare, €980 million on day-to-day spending programmes and €960 million in savings on investment projects. Combined with other adjustments, these amount to a saving of more than €4 billion in expenditure compared with the pre-budget estimates.

The Government has considered the recommendations of the review body on higher remuneration in the public sector and intends to apply reductions to all public servants in the higher pay bands, including hospital consultants. There will be a reduction in pay of 8% to 15% for those with salaries from €125,000. These are permanent reductions which will be reflected in future pension entitlements. The salary of the Taoiseach will be reduced by 20%. This reduction, together with the pension levy, means the Taoiseach's salary will be cut by close to 30% in total. Ministers and Secretaries General of Departments will take a pay cut of 15%, which comprises an overall cut of close to 25% when the pension levy is taken into account. For the most part, it transforms temporary, voluntary cuts into permanent ones and, in these examples, goes beyond this.

Public servants, including ourselves, have already made a substantial contribution to the necessary reduction in public expenditure. The pension levy has reduced pay by an average of nearly 7%. Public service numbers have been reduced by the moratorium, the incentivised early retirement scheme and career breaks. Like many other workers, public servants have forgone pay increases, but, regrettably, more is required. The reductions we must now make do not reflect any lack of recognition of public servants or the quality of the work they do for all of us. This House will have often heard me spring to their defence. Their pay will be reduced with effect from 1 January 2010, with reductions ranging from 5% to 8% in the case of salaries of up to €125,000. The pay of Members of the Oireachtas will be reduced in line with that of the equivalent public service grades. RTE keeps talking of public servants on €15,000 a year. To the best of my knowledge, there is no full-time public servant on less than €20,000 a year, not a cleaner nor a night watchman on the starting point of the scale.

Exchequer spending on public service pensions will be more than €2 billion in 2010. With improved life expectancy and an ageing population, the State's pension bill will grow from approximately 5% to 13% of GDP by 2050, with one third of the increase on public service pensions. The Government needs to respond not just to the current problems but to make far-reaching reforms to secure our economic future. It has decided to introduce a new single pension scheme for all new entrants to the public service, to bring public service pension terms more in line with private sector norms such as the calculation of benefits based on career average earnings. The minimum pension age for new public servants will also be increased from 65 to 66 years and then linked to increases in the State pension age. As part of the reform of public service pension arrangements, the Minister for Finance will review the current arrangements and consider linking pensions to increases in the cost of living. Pending that review, the pay cuts already outlined will not be applied to existing public service pensioners.

We have a generous social welfare system. The Government is proud of its record in this regard. In the past 12 years we have increased pension rates by approximately 120%, unemployment benefits by almost 130% and child benefit payments by more than 330%. The cost of living has increased by approximately 40% in the same period. We extended coverage, removed barriers and increased entitlements such that the level and extent of social support payments has been transformed beyond recognition. However, we put all this at risk, if we do not make savings now. As the House will know, the overall cost of living has fallen by close to 6% in the past 12 months, including very sharp declines in the prices of the basic necessities of food, clothing and accommodation. This sharp fall in price levels is the background to the reduction of 4.1% in most social welfare working age rates of payment. In other words, the reduction is less than the fall in the cost of living.

Unemployment among the young is a particular concern to the Government. We want to encourage them to stay close to the labour market, while at the same time providing a rate of assistance that compares very well internationally, particularly with our close neighbours. We are making targeted reductions to the rate of job seeker's allowance and supplementary welfare allowance for new applicants aged 20 and 21 years of age who have no dependent children, which is being reduced to €100 per week, and for those aged between 22 and 24 years to €150 per week. For all other cases, the rate will be reduced to €150 per week, where job offers or activation measures have been refused.

Child benefit this year will cost €2.5 billion or 12% of social welfare spending. This universal benefit is inequitable but also unaffordable in current circumstances. For legal and logistical reasons, it was not possible to introduce greater equity at this time by making child benefit taxable or means tested. Accordingly, the lower and higher rate of child benefit will be reduced by €16 per month, bringing these rates to €150 and €187 per month, respectively. Welfare dependent families will be fully compensated by increasing the qualified child allowance by €3.80 per week in order that they will not be affected by this measure. Low income families in receipt of family income supplement will also be fully compensated.

In the budget the Government has decided to reduce spending on public services by almost €1 billion in 2010 compared with the pre-budget estimates. Savings are being sought through efficiencies rather than through reductions in services. Some €400 million of these savings arises in the health area where various measures, including a prescription charge of 50 cent per item under the medical card scheme, are being introduced to reduce the State's medicines bill.

An efficiency review of local authorities will be undertaken. This work will begin immediately and a report is expected by mid-2010. The full details of the review will be announced by the Minister for the Environment, Heritage and Local Government.

The renewed programme for Government includes a commitment to introduce new measures to protect families having difficulty with their mortgages, a matter frequently raised in this House. As a first step in the process, the Minister for Finance has asked the Financial Regulator to examine the extension of the six-month moratorium on legal proceedings already in the code of conduct on mortgage arrears to 12 months for all lenders. Certain transitional arrangements for mortgage interest relief will apply which will extend it for two years to those who bought at the peak of the market, but the intention is to abolish this relief entirely by the end of 2017. The review of the Government's mortgage interest subsidy scheme which provides help and support for families in difficulty with their mortgages will be completed early in 2010. There is an incentive up to 2013 to buy homes to qualify for relief.

The Government intends to introduce a national solidarity bond to enable ordinary citizens to provide money for the State to stimulate economic recovery and create employment. The details are being worked out, with the scheme expected to be open for investment early in the new year.

Although public investment spending is being reduced next year, it will still be €6.4 billion or 5% of GNP for 2010 and €5.5 billion each year for the years 2011 to 2016. Tender prices for many new projects have also fallen back significantly, thus enabling us to get better value for money. Since the national public procurement operations unit, NPPOU, was established in my office earlier this year, it hasoverseen savings in the order of €23 million across the public sector. It has researched and analysed the public procurement spend with a view to completing a spend profile for the public service. Research identified specific markets appropriate for an aggregated or collaborative approach to market intervention by the NPPOU. It has been actively engaged in a review of competition documentation and general conditions of contract with support from the Office of the Chief State Solicitor and the Office of the Attorney General in streamlining all tender, competition and contract documents used across the various parts of the public sector. It is working closely with the Department of Environment, Heritage and Local Government to produce the country's first green procurement action plan.

In 2010 our investment projects will focus on labour intensive areas such as schools building and maintenance, energy efficiency measures and investment in tourism infrastructure. Other key investment priorities will include science, technology and innovation; the promotion of environmental sustainability; implementation of green enterprise initiatives; housing and urban regeneration; the health sector; public transport and finishing the interurban motorways.

The budget was framed against the background of severe difficulties in the labour market. Unemployment has risen considerably, with the construction, retail and manufacturing sectors the worst affected, and stands now at 12.5%. While it is anticipated to rise into next year, recent labour market developments suggest the rate of increase in unemployment has slowed. Against this background, the creation and protection of jobs, including helping people back to work, remain a priority of Government policy. All aspects of active labour market policies are required to ensure work rather than unemployment remains the norm.

To provide an additional 26,000 individuals with training places and supports, nearly €136 million in funding is being provided, bringing the total number of places available for the unemployed to more than 180,000. The €136 million is being allocated as follows: €56 million to FÁS for short-term courses; €20 million to an activation fund involving an open call for innovative proposals with the capacity to provide work, education and training; €14 million, additional to €26 million from the European Union, for supports for redundant workers in eligible companies under the European Globalisation Adjustment Fund; €9.5 million in support measures to enhance the competitiveness of the food industry, a key indigenous sector, and to encourage employers to take individuals off the dole; €36 million to an employers job incentive scheme providing for a PRSI exemption. The stabilisation fund and the temporary employment subsidy scheme which will cost €165 million in 2010 are already providing substantial supports for employers.

While these measures are important, we must also reposition the economy on a more sustainable, export-led growth path through regaining our international competitiveness. Part of the strategy to improve competitiveness must include reducing labour costs — through some combination of nominal pay reductions and enhanced productivity. At EU level, work is under way to agree a new and ambitious successor to the Lisbon Agenda to be called EU 2020. We are strongly supportive of this process and the intention to keep the focus of EU 2020 firmly on the core issues of growth and employment. Ireland is committed to the view that the key aspects of the new strategy must be a well functioning Internal Market, higher labour market participation rates, increased research and development investment, a more business friendly environment, a more skilled, flexible workforce, and the fostering of innovation within the public sector. Sustainable economic growth will be built on information-based services, energy and environment-related businesses. The new strategy will also need to help sustain this growth through measures designed to increase competitiveness, innovation and entrepreneurship.

A number of stimulus measures are provided for in the budget to aid economic recovery in the short term and help to ensure sustainable growth for the future. They include a reduction in excise duty on alcohol products with the aim of reducing losses to the Exchequer and the retail sector due to cross-Border shopping. The standard VAT rate will be reduced by 0.5% from 1 January, reversing the increase imposed in October 2008. The British Government yesterday confirmed it would be reinstating its 17.5% VAT rate, reversing the 2.5% VAT cut implemented last year; therefore, the difference across the Border will be roughly halved from 1 January. However, I appreciate that exchange rate differences are the main factor in cross-Border shopping.

The rate of corporation tax must be seen in terms of international markets and our ongoing ability to foster enterprise and future job creation. Our corporation tax rate of 12.5% will not change. A car scrappage scheme, providing VRT relief of up to €1,500 per new car, is being introduced to run throughout 2010. VRT exemptions and reliefs for electric and hybrid vehicles are also being extended by two years, until the end of 2012.

Credit is essential to support healthy Irish businesses and jobs. The Minister for Finance is establishing a credit review system. Under the NAMA legislation, he proposes to issue guidelines to all banks participating in NAMA which have business with SMEs to ensure SMEs, sole traders and farm enterprises will have recourse to an independent external review of decisions of credit refusal by the banks. It is hoped banks not participating in NAMA or covered by the Government guarantee will also decide to participate. Mr. John Trethowan, an experienced banker with a demonstrated commitment to public and social service, has been asked to oversee the establishment of this credit review system, with initial administrative support from Enterprise Ireland.

A growing area of innovation with major commercial and employment potential is boosting energy efficiency. This is good for the environment and the economy. We are allocating about €130 million for energy efficiency measures which will include a new multi-annual national retrofit programme in 2010. Of the carbon tax yield, €50 million will be used to fund measures such as help for households at risk of fuel poverty to make their homes warmer. Local authorities will receive additional funding to retrofit the social housing stock. This represents a significant boost to the plan to retrofit more than 1 million homes by 2025.

Support is also being provided for agriculture and tourism, both important sectors of the economy. We remain committed to supporting an environmentally sustainable agriculture sector and are in discussions with the European Commission with a view to introducing a new five year agri-environmental scheme. A total of €50 million will be provided from within the existing allocation to support the scheme. More than €121 million will be provided for forestry and bio-energy. This includes a capital provision of €116 million to plant a further 7,000 hectares of trees next year. The total tourism budget will be increased in 2010 to enable a marketing drive aimed at increasing tourism numbers and revenue by 3%. Investment in visitor attractions will be increased threefold to €22 million.

I wish to refer briefly to the recent flooding in the west and south of the country which has had such devastating consequences for everyone affected. The scale and magnitude of the flooding have not been seen before in living memory. The impact of the flooding would have been even more severe had it not been for the tremendous efforts of the emergency teams; thanks to them, no lives were lost. We witnessed a co-ordinated and dedicated response from all the emergency services, including local authorities, the Defence Forces, Civil Defence, the Garda and local volunteers, for which we are very grateful. OPW engineering staff have provided technical and additional material backup. While it is too early yet to assess the full scale of the damage caused, it is clear that the economic and social damage has been substantial. Some insurance industry sources are speculating that the cost of flooding damage to homes and businesses around the country may exceed €250 million. There is also the issue of premises that were not insured and not insurable.

In late 2004 the Government decided that future flood management policy would be to minimise the national level of exposure to flood damage through the identification and management of existing and, in particular, potential future flood risks in an integrated, proactive and river basin-based manner. The OPW will be commissioning catchment flood risk assessment and management studies for all river catchments, to be completed in the next six years. The planning and development process is critical in avoiding the creation of further flood risk. The OPW has worked with colleagues in the Departments of the Environment, Heritage and Local Government and Agriculture, Fisheries and Food to develop guidelines on the management of flood risk in planning and development. Development in flood plains should be avoided where possible.

I have given the highest priority to the OPW's programme of major structural flood relief schemes to reduce the flood risk in areas which have a long history of flooding and where non-structural measures would not offer protection. The OPW has spent nearly €190 million on capital projects since 1996, with more than €100 million spent in the last five years. It was announced in the budget that more than €70 million would be provided in the remainder of 2009 and into 2010 to help those affected by recent flooding and fund works to minimise the risks of future incidents. This total is made up of €50 million for major flood relief schemes, the €10 million in humanitarian aid already announced, €10 million to assist local authorities in dealing with the cost of the crisis and an additional €2 million to assist the agriculture sector. The review of investment priorities to be published shortly will also provide for continued substantial investment in flood relief. The Government is keeping the situation under review and will commit further resources as required.

We are facing tough challenges and to succeed in dealing with them, we must continue to pursue appropriate policies to position the economy to benefit from global recovery. The Government is acutely aware that businesses, families and almost all of society are affected by the deterioration in economic conditions. In the budget we have brought forward measures that will ensure the burden of adjustment is spread as evenly as possible. The Government has taken and will continue to take action that will enable the economy to return to a more sustainable growth path in the medium term. This will facilitate a return to employment growth and a sustainable improvement in the living standards of all. I look forward to hearing the views of Senators on the budget.

When listening yesterday to the Budget Statement by the Minister for Finance, Deputy Brian Lenihan, an image came to mind of Frank Kelly who played Fr. Jack in the comedy series "Father Ted". He was known for using only three words during the course of the programme — "feck," "arse" and "drink." This budget should be called the Fr. Jack budget. The first word could refer to the public sector, widows and those on social welfare who have borne the brunt in the last 12 years of the Government's mishandling of the economy. When we see that members of the public sector on €30,000 or less a year, widows and those on social welfare have taken exactly the same percentage cut in their incomes as the Minister for Finance, we know he has taken the blunderbuss approach in dealing with the mess that has been made of the public finances.

Fr. Jack's second word comes to mind when one remembers the Minister stating, with great fanfare, "The worst is over." As Deputy Bruton pointed out, the same was said by President Bush about the Iraq war while on board an aircraft carrier in 2003. Either the Minister is totally deluded or he is trying to mislead the general public and provide a feel-good factor about the budget. The only thing that would bring a smile to Fr. Jack's face in an otherwise dull budget is the fact that the price of a pint has gone down significantly. That is about it for the budget. There was very little in it.

Not enough was said during the course of announcing the budget about job creation and job retention. What is important is to bring down unemployment and invest in the long term. When we spoke in the House last week during our pre-budget statements, the Minister of State accepted this. It is included in his own pre-budget speech and even in the document he published yesterday. Export-driven and technology-based industries are the only ones that will save the country in the future — not slash and burn budgets which the Minister has started this year and, I am sure, will continue next year. We need a clear policy to get people working and keep them in work. That will make the difference to this country. We must consider people who are working and young people who will come into the workforce in the next couple of years. We need a clear policy on job creation — especially export-driven job creation — or we will all be up the Swanee.

There is nothing for people who have retired or are about to retire if the country continues on its current path. We will not make significant savings but continue borrowing billions of euro every year for the foreseeable future, which will have a knock-on effect. When those who saw the Celtic tiger grow and who made the sacrifices in 1992 and 1993 come up to retirement, what will be there for them if this country is in debt in excess of 100% of its GNP? Pensions will be seriously affected. I do not get the sense from the budget that the Government is out to protect jobs or has a clear plan over the next couple of years to do so.

Many are giving out about the cuts to disability payments, widows' pensions and payments for those who are blind. It will only get worse if we do not sort out issues around unemployment. By the end of next year the Government could be paying €2 billion extra in interest repayments on its loans with international banks, plus it will be expecting to pay out another €1.5 billion for social welfare payments and other payments to the 75,000 it expects will lose their jobs next year, that is, €3.5 billion in total. If we continue on that road, there will be stagnation in the public finances. While there may be much talk that the Minister is going the right way and has done a great job, and international bankers will clap him on the back the next time they meet him in London or wherever else he is going, it will not solve our problems at all. The Government is not giving the sort of direction for which we are looking.

On a matter that directly affects myself, County Wexford was excluded from the natural gas pipeline system set up by Bord Gáis Éireann a number of years ago. At the time the company published a report stating the amount of energy usage in County Wexford would not justify extending these pipelines and it now transpires that even within Wexford town there are a number of industries that would use four times the figure published in that report. This is important because there are a number of industries in Wexford, for instance, the creamery and Celtic Linen, which must operate in a national or international environment, which have no access to natural gas and therefore will be hammered by the carbon tax on their fuel used. No matter how efficient these companies are, they will pay that penalty. They have no alternative. They cannot access natural gas. Does this mean that in order to fulfil the green agenda, we will see more unemployment in County Wexford because Government policy makes the county's industries uncompetitive in comparison to industries in Dublin, Cork or Galway, or will the Department of Finance adopt joined-up government and ensure that natural gas can get to these companies so they can compete on an equal footing? The tax, amounting to €15 for every 1,000 litres of fuel used, is quite a significant burden on the companies concerned.

The Minister for Finance is considering bringing in a property tax at some stage and is starting up a process of registration of ownership and valuation of lands and houses across the country. If he is seriously committed to the prospect of a green agenda and reducing our carbon footprint, maybe he should also look at the energy ratings of all these houses he will register. Somebody in County Wexford put it to me that maybe the Minister should have linked the tax on second houses to their energy ratings so that if the houses have a good energy rating or if their owners go to the trouble of ensuring their energy ratings are as high as possible, that should be reflected in the taxes the Minister imposes on these individuals. The Minister has applied property tax to second homes and is planning to impose it on all properties across the country, but maybe he should adopt such joined-up thinking and put this into play right from the beginning. That would be useful. People understand that property taxes will come and they will be higher than the current tax on second homes, but maybe the Minister can make it possible for people to be proactive in energy use by linking such taxes to how energy efficient these properties are. It would encourage people to do the right thing.

I was concerned by how in the budget statement the Minister presented linking pensions increases to the consumer price index. There is a need for more clarity on that as soon as possible rather than stating that it will be done at some stage next year. This could cause significant problems, especially for those on public sector pensions or who plan on getting public sector pensions in the future. They need to know clearly whether that linkage between pay and pensions is gone, and what potential effects that could have for them in the future. There will be downward pressure on pensions if the economic situation remains poor in future and that is something people understand instinctively. The Minister needs to make it clear. He stated he is not touching pensions next year, but he should make clearer exactly what would be the outcome for those on public sector pensions in the future if this linkage is broken.

When the Minister is thinking about this linkage of pension increases with the consumer price index, maybe he should also look at other aspects of it. One of the issues thrown up by this budget is that the Minister has slashed jobseeker's allowance, in particular for young people. The inference is there are young people from Northern Ireland drawing jobseeker's allowance in the South and the Minister is trying to equalise somewhat the rate being paid in the South with that being paid in the North.

There was an interesting programme on social welfare fraud on RTE on Tuesday night last. The Government could do a great deal more to limit social welfare fraud. There is substantial anecdotal evidence in discussions among the general public on who is participating in social welfare fraud and maybe the Minister should issue a statement, or get the relevant Minister, Deputy Mary Hanafin, when she contributes in the Lower House, to refer to it. People are saying there are individuals flying back from Eastern European countries to collect child benefit in this country. A European-wide ruling states we must pay child benefit if one or other of the parents is working in this country. Although fair enough, that might be a historic European-wide ruling. It is so easy now for families to live in Eastern European countries and one parent to work here flying back and forth on cheap Ryanair flights, that maybe the Minister should also ask the European Union to have these child benefits linked to the country where the children are being reared rather than have the child benefits, which are being paid by the State, linked only to the parent involved. This is a matter at which the Minister should look over time. Maybe we will get a chance to discuss this in greater detail as time passes.

A few of the matters in the budget about which I was quite concerned which need to be fleshed out a little more are the changes to the PRSI dental and optical benefit scheme, and the changes to access to dentistry for PRSI contributors. A significant percentage of those who pay PRSI only have access to good dental care because of this scheme. The Minister stated the scheme is only suspended, but there is a need for us to ensure this access is not suspended for a lengthy period. It will only lead to further complications and further misery for the individuals involved if this scheme is shut down for a significant period. The Minister should have a look at that.

I want the Minister of State to refer in his response to some of the cost-cutting measures within the HSE, one of which is transport costs. I have a feeling that transport costs may include the transfer of patients to hospital by taxis and buses. I accept there is a certain amount of abuse of the system, but the service is vital for counties like Wexford which has a general hospital. Most of the patients in County Wexford who require regional or specialised services must go to Waterford or Dublin. Their only means of access is that type of transport system, so I do not want to see a blanket reduction in access to such services when the HSE is making cuts. I want to see what the HSE is proposing in order to stop abuses of the system and ensure continued access to regional and specialised hospitals.

There are also concerns about cuts in the educational system, some of which will apply to the VTOS and Youthreach schemes. These schemes allow young people to remain in education who otherwise could not access mainstream academia for financial, academic or family reasons. Such people may be lost from the educational system completely if the cuts are imposed, thus placing an additional burden on the social welfare system in future.

I am glad to have the opportunity to make a few points on yesterday's budget. Two days ago Goldman Sachs stated:

While the situation in Ireland remains severe, the Government and, more importantly, the Irish public have shown an impressive resolve in responding to the economic and budgetary crisis. Although the Government, the opposition and the trade unions continue to debate where and how the knife should fall, there is no dispute about when and by how much the budget should be cut. This contrasts with the situation in a number of other European countries where, despite similar budget problems, there appears to be a reluctance to acknowledge, let alone confront, the problem.

This was evidenced on Tuesday when we saw Greece having its credit rating downgraded to the lowest in the eurozone, Triple B plus, with a negative outlook. The same has happened in Spain today. There can be little doubt that there is international agreement that the appropriate action is being taken here.

Our tax revenues have fallen close to 2003 levels, which means the deficit is €22 billion. To bridge this gap, we are borrowing €400 million a week, but we simply cannot continue in that vein. Nobody would set out by design to contemplate the kind of budget announced yesterday, including wages cuts and reductions in social welfare. I regret that circumstances have changed to the extent that these have become necessary. It would be good if social welfare payments had not been affected and if those earning less than €30,000 per annum did not have to take a cut of 5%. These measures are severe and will bring pain to every household in the country, which is highly regrettable. That does not dilute, however, the necessity for such measures in these difficult economic times.

The ambition of the budget is to stabilise the deficit in a fair way. I agree with Senator Twomey that we must focus on the creation of employment, but it is important to stabilise our current financial situation. The budget sets out to begin restoring our competitiveness, foster sustainable employment and safeguard those worst hit by the recession. As these measures begin to take effect, we must be extra vigilant to ensure less well-off families receive support under the various schemes in place. If we can identify anomalies, we must take the appropriate steps to address them. I am sure the Government agree with this.

The steps taken in the budget will inspire confidence domestically and internationally. We have seen the reaction today from quite a few quarters abroad. The Financial Times reported:

If there was any doubt about Ireland's seriousness in hauling its budget deficit, nudging 12% of GDP, below the eurozone 3% limit by 2014, Mr. Lenihan's last big push speech put paid to it. Such measures are an example to other eurozone countries, such as Greece, Portugal and Spain that have refused to grasp their deficit problems by the horns.

The Wall Street Journal commented:

Ireland has delivered what many commentators billed as the most painful budget in a generation. Budget cuts by the European Union's economic success story are likely to please Brussels but alienate voters and particularly public sector workers who have been asked to contribute a serious amount.

There can be no question about this, but we have gone way beyond politics in the last few years in terms of the steps that need to be taken to address the deficit and the many difficulties we have been experiencing.

The Minister of State has gone through in detail a number of measures introduced in yesterday's budget. I want to touch on a few of them. As regards income tax, I welcome the fact that from 2011 a universal social contribution will be introduced replacing employee PRSI, the income and health levies. It will be paid by everyone at a low rate on a wide base. I also welcome the levy of €200,000 per annum on wealthy Irish domiciles, regardless of tax residency status. That is very important. To the extent that anyone can, I welcome the wage reductions throughout the public service, by which we are all affected. It would be great if we were in a position to avoid such reductions below the €30,000 income level. It is regrettable, but it is necessary and must be done. However, there remains scope for including individuals earning over €150,000. The Minister might consider this in preparing the finance Bill, whereby such persons earning in excess of that figure could make an additional contribution. They are in a position to do so and I believe they would accept it.

I welcome the initiative to extend mortgage interest relief to 2017, including for new applicants up to 2011. Obviously, there will be transitional arrangements in place after that date. In his Budget Statement the Minister said that, as part of the code of conduct on mortgage arrears, he would ask the Financial Regulator to examine extending the moratoriums to 12 months. I would welcome such a move. While the Irish Bankers Federation and MABS protocol seems to be operating for the mainstream banks, it certainly is not for those not covered such as Start Mortgages and Springboard. According to the court lists, that is where all the applications for repossessions are coming from. I ask the Minister to consider if it is possible to introduce legislation to bring other lenders under the protocol. Other appropriate measures could also usefully be introduced. They include the reintroduction of an insurance scheme for mortgages, as was in place pre-2000. The problem of mortgage arrears and the threat of families losing their homes are likely to increase in the coming months as we see interest rates rise in the eurozone. That will undoubtedly put additional pressure on mortgage holders.

The new carbon tax provides a good incentive to think green and contribute more to the sustainability of our environment. The automotive industry should move a little faster on options such as electric cars and other new modes of transportation. In that context, the Minister should bear in mind the rural transport initiative and ensure it has the maximum possible reach. I am pleased the scheme will continue, but we should seek to improve it because it is an exceptionally good one. Rural areas do not have the benefit of Luas or DART services; therefore, the rural transport scheme is vitally important.

I welcome the reduction in excise duty to tackle cross-Border shopping. It is not to exacerbate any problem with the levels of alcoholism, but it seems most of those travelling to shop in the North are doing so to achieve better value for money due to the sterling exchange rate and the lower VAT rate. As they tend to buy alcohol, I welcome the new measures as a first step to stem the loss of €500 million in revenue. The Minister should be vigilant in this respect and consider if there are other ways by which the situation can be improved. Naturally the 0.5% reduction in VAT is also to be welcomed in this regard. Again the six Border counties have been suffering greatly in terms of retail employment in recent months. This may help somewhat, but further measures may need to be taken.

As regards VRT, I also welcome the relief of up to €1,500 for cars over ten years old. In terms of reducing the cost of the public service, I welcome the fact we are having substantial reductions. I am glad the Taoiseach, senior Ministers and Secretaries General of Departments are taking a substantial reduction. I do not accept that this is, effectively, only 5%, since it will involve pensions and everything else, and I believe it is an appropriate level of cut.

It was impossible not to go below the €30,000 figure. As severe as that is, we shall all have to face into it and get on with it. In terms of capital investment I am glad there is still a commitment of €6.4 billion this year and €5.5 billion in each of the two subsequent years. It is very important we ensure we focus on labour intensive projects such as schools to maximise employment throughout the country and focus on schemes that will contribute in some way to our competitiveness. In that regard I would like to see more investment in education and people.

The national solidarity bond is a very good initiative. We shall see many people availing of the possibility to buy five-year, seven-year or ten-year bonds and obviously a dividend will be paid annually and investors will be entitled to a final redemption bonus on maturity. In terms of cuts in social welfare, it is regrettable we have had to take 4% off payments. As the Minister pointed out, there has been a reduction of 6% or thereabouts in the cost of living in recent times, but nonetheless, €200 a week is not a great deal of money when people are trying to run a home. I hope we can be vigilant in identifying other supports that families may need to counteract this loss of income.

While the employment subsidy scheme is a good initiative, I ask the Minister to expand it to cover other service areas and other employers. Many employers could afford to keep on a receptionist or other member of staff if there were some supports. They might not be contributing in terms of high growth industry, but right now it would be of some help if that initiative could be expanded. I would like the Minister to focus on the housing stock all over the country in light of the overwhelming numbers there are on local authority housing lists. If we were to build the houses this could not be done for the price at which they can be bought. While there were no measures in the budget to do that, I believe it is something we could usefully address.

On banking generally, the lack of steps being taken to provide against the type of catastrophe we have witnessed in the last couple of years concerns me greatly in an international context. At a recent G20 meeting the British Prime Minister proposed that the banks should pay into a fund to have resources for when this might happen again. It is crazy that we should even contemplate such an eventuality. We should be agreeing a basic set of regulatory parameters on a global basis which could prevent this type of thing happening again and I would like to see Ireland taking a lead in trying to push that. However, there has not been much evidence of this to date.

It has been a severe budget. It is regrettable that some of the steps have had to be taken, but they are necessary. I am confident as things come right that success will become self-sustaining, jobs will be more readily available and we will have a stronger economy in which to improve conditions again.

I am sorry the senior Minister is not here. The Minister of State, Deputy Mansergh, may raise his eyes to heaven, but I am sick and tired of having debates in a vacuum here, where the Minister for Finance and other Ministers do not come in.

He comes here quite frequently.

We would be prepared, I believe, to fit into the Minister's timetable, in the event. It is a farce that continuously for debates on important subjects senior Ministers do not come here, and there is no point in pretending. I wish Deputy Mansergh was in the Cabinet. I am sure he would be a very fine Cabinet Minister, but he is not——

In all my years in the Seanad the budget debate was taken by the Minister of State at the Department of Finance.

I do not give two hoots what happened during the Minister of State's years in the Seanad.

It was during Senator Ross's time also.

It was wrong then and it remains wrong. We want to see the senior Minister here to debate important matters of this sort. That is the reality and it is downgrading this debate to have a junior Minister in here, however able and ambitious.

I am not in the least ambitious.

It is an extremely important point and it is in the interests of this House that we have the senior Minister here for these issues.

The senior Minister listens to debates in this House. He listens to suggestions and it would be more complimentary and amount to taking these debates more seriously if he were here and had not despatched a Minister of State to take on board the suggestions, proposals and criticisms of Members of this House. I make no apology for saying this to the Minister of State, to his face, rather than saying it behind his back. It seems important to say it to his face.

I am entertained by the fact that already today, as Senator MacSharry justifiably said, the Government is saying, in effect, "Have a look at the wonderful things that Goldman Sachs and the Financial Times are saying about us”. It is true that the spokespersons for the financial markets already agree this is a good budget. As Senator MacSharry said, we are leaving Greece, Spain and Portugal behind in the ha’penny place. That is true as well. The Minister should be credited with the fact he has met his targets. He has not funked them, nor has he even fudged them. The figures, as spelt out yesterday, make perfect sense. There is no evidence that the figures have been stuffed or massaged in any way. They are somewhat crude, but he has shown the political will and determination that were necessary. There has been a general welcome outside Ireland from people who have a very clinical approach to these matters for this budget. They are saying we are tackling the problem. That it is true, it should be recognised and it is a characteristic of this Minister which certainly should be applauded. The figures make sense, they may well be met and the markets may be right. However, one or two things are somewhat worrying, as touched on by Senator Donohoe this morning.

Where is the figure for the further recapitalisation of the banks? It is not there. What are we going to do if we have to find several more billion euro in the middle of next year to recapitalise the banks? Are we going to borrow it? In the event, that will cost money in debt servicing. Are we going to sell State assets? Fair enough, but let us hear about it. Are we going to have another budget to do this?

The reality appears to be that the banks will blow these figures apart, one way or another. If, as announced last week, AIB is not paying on its corporate bonds to various people, this will trigger the Government not getting its preference dividend. That will mean it will be paid, not in cash but in shares. If it is paid in shares it will mean the Government's income will go down and these figures are not as accurate as they should be. It will also mean it will probably need more money to recapitalise them very quickly. If this is to be done, we are entitled to be told from where the money will come. We are certainly entitled to a provision in the budget arithmetic for recapitalisation of the banks, which is almost certain to happen. We already know that the valuations placed by NAMA on the so-called assets held by the Government which they bought from the banks are greatly over-stated. All the evidence from valuers, estate agents and others involved is that the price which the taxpayer paid for these assets is ridiculously high, way higher than ever anticipated. What is going to happen in this regard?

The budget, while it makes sense in a cursory way, has been produced in a vacuum in the sense that the banking monster has been omitted. After all, that banking monster is responsible for the fact that we are introducing a budget in these circumstances. We are now pretending it does not exist. Budget 2010 is a bankless budget. This is the elephant in the room. We cannot have a budget without providing therein for the biggest problem facing the State and which has brought it to its knees. These figures represent a flaw which I find enormously depressing and unrealistic, despite that they have been welcomed by many absolutely independent observers, as must be admitted.

We have apparently begun the process of restructuring the tax system. This issue was mentioned in the House earlier in the context of preparations for the introduction of a property tax, which may or may not be a good measure. While I believe it is a bad idea, it is certainly an attempt at radical thinking. The tax system has been tackled in a more radical way for the first time in many years. New taxes have been considered and the Government may shortly introduce a carbon tax. However, in terms of spending, there has been no radical thinking. As I stated on the Order of Business, I cannot understand how we can give €56 million in extra funding to FÁS, while at the same time cutting child benefit. Situations of great financial stress present opportunities for the introduction of radical measures, rethinking how one taxes and spends and taking an axe to those areas wherein there is the greatest waste. What Fianna Fáil Members did not and do not understand when I mention FÁS — it always touches a raw nerve — is that while it does an enormous amount of good and there is a need for further spending on training and for this area to be supported, nobody has ever explained where the budget of €1 billion is spent. Senators Ó Murchú, Cassidy and others said this morning that community employment schemes were doing great work. They are correct, some of them are doing great work. However, nothing is being done to explain where that €1 billion is spent. That is the problem and it has never been explained. We are to invest €56 million in new training courses at FÁS. It emerged last week that a FÁS centre built in County Offaly at a cost of €6.7 million was not being used.

It is the Taoiseach's new office.

It is in the Taoiseach's constituency.

It is his office.

What is happening in that regard? No one has tackled this problem. The quangos have got away with murder in the budget, the reason for which I cannot explain. The level of current spending in CIE has been reduced from more than €300 million to €276 million, although I am open to correction by the Minister of State on that figure. It has been reported in an independent report that there are corrupt practices, kick-backs and enormous waste in CIE. It is a type of semi-State body which has run amok, yet at a time when we desperately need money, it is getting away virtually scot free in the budget. What is going on? One must believe it is easier to make crude cuts in child benefit than to tackle political protectorates such as FÁS and CIE. The Minister of State can puff all he likes, but there are on the boards of these agencies political appointees to beat the band. The other day the Government rejected a Bill in this House dealing with this issue. There is an industry of political appointees and money wastage that should have been tackled. Almost all appointees to semi-State bodies are paid handsomely for doing, in some cases, an extraordinarily bad job and for obeying the instructions of their political masters. This is the reason many of the semi-State agencies are monopolies and in such an appalling financial position. What is deeply lacking is an attempt to tackle the waste of enormous sums of money. We know there is waste in this sector; that is undisputed. Neither the Minister of State today nor the Minister yesterday made any acknowledgement of this waste because they are frightened to tackle this political protectorate which they have for so long protected.

I would like to hear more about the so-called solidarity bond, of which I am deeply suspicious. We are, apparently, to have a solidarity bond which will be open to investment by ordinary citizens to support the nation in some way. This sounds like a sucker punch. I do not believe "ordinary" citizens should be made this offer. It is either a commercially viable bond or it is not. It either has commercial appeal or it does not. The last bond of this type of which I am aware was the so-called War Loan introduced by the UK Government, a bond subscribed to by British citizens in a fit of patriotism. It sunk year after year and the people who were sucked in lost an enormous amount of money.

Budget 2010 will be seen as pivotal. It will be ranked alongside other infamous budgets such as the Ernest Blythe budget of the 1920s, the 1969 budget which commenced the process of deficit borrowing and the 1987 budget which is probably the most comparable in terms of our attempts to restore and correct the nation's finances. It is the responsibility of any Government where public expenditure is seriously out of line to ensure it is brought back into line as quickly as possible. The onus is on the Government to ensure the country is being run in an appropriate and prudent manner. This sends signals to those whom we wish to attract to the country to invest and engage in job creation.

That is the principle underlining budget 2010. Owing to the state in which we find ourselves, we must, first and foremost, correct the public finances. We have submitted proposals to the European Commission outlining how we propose to do this by 2014. We must take appropriate, albeit unpalatable and unpopular, decisions in this regard. These are decisions members of all political parties who believe themselves to be responsible public representatives have to consider in the context of the public finances. The Government has sought to distribute the burden in the most equal manner possible. There are cuts in our capital expenditure programme and in the cost of the public service. There are also cuts in the non-pay elements of the public service. Most controversially, and for the first time in a long time, there are cuts in social welfare.

This is our third budget in 14 months. The budget of October 2008 was brought forward early in an attempt to instill confidence in reaction to the severe local and international crisis that had arisen. Bringing that budget forward led to some of its elements being ill-considered, which led to the need to introduce a budget last April. In December 2009, we are dealing with the next instalment in the budgetary situation. With this budget we have, and the Minister for Finance has striven to do this, made most of the difficult decisions that are required in this four to five year process. If these measures are successful, next year's budget should have a smaller deficit to tackle, the adjustment will be smaller and the way of dealing with the adjustment will be different.

In his Budget Statement yesterday, the Minister indicated how much of the money will be delivered in budget 2011, particularly in the taxation area. The promise to get rid of the PRSI ceiling, to take action on pensions by taxing pension pots over €200,000, to come to an adjusted standard rate of pensions, taxes on property such as a site value tax and the introduction of additional local service charges indicates the focus of the next budget will be less on public expenditure and more on taxation receipts. I believe there will be variations in the four or five budgets up to 2014 to get the balance right.

Last year we removed €8 billion from the economy. Approximately 50% of that or €4 billion was in the form of cuts to public expenditure and €4 billion was in additional taxation measures, particularly with the imposition of the income and pension levies. While they are known as levies they are obviously taxation instruments. Although the scale of what we are asking people to pay in income tax has increased enormously, we have also introduced a great deal of equity and proportionality into the income tax system that did not exist previously. There are smaller scale measures to be welcomed in the budget. There is the introduction of a minimum tax rate of 30% on the highest incomes. The Finance Bill when it is introduced next year will start the process, indicated by the Commission on Taxation, to reduce and remove many of the now unnecessary tax reliefs in the income tax system. That in itself will further increase the tax take from higher income earners.

The Minister for Finance has sought to achieve a balance and he has been relatively successful in doing so. The social cost of budget 2010 must be addressed. The 4.1% cut in social welfare other than in pensions, which is welcome, and for those who are over 66 years and are carers is hard to justify, but it has unfortunately been necessary in the context of the job that must be done. If we are honest, the increase in October 2008, while given for the right reasons, cannot subsequently be seen to have been justified. The country could not afford it and what is happening now is an adjustment to the decision that was made then. However, it must be clear that for those on the lowest incomes in our society this adjustment can only be a once-off and that we are starting a process, beginning with next year's budget, that restores and works toward improving income levels for people on social welfare and in low income employment. I am confident that can and will be done.

The debate we are likely to have next week on the Social Welfare and Pensions Bill will be important in the context of how we see social protection in this country developing. There was an interesting "Prime Time" programme on RTE this week about the scale of social welfare fraud and the abuse of PPS numbers. The measures that have been particularly criticised, the lower payments for younger entrants into the job market who find themselves unemployed, require wider debate. Socially, many people would agree that, in terms of discouraging dependency, it is not proper to give young people who have not had any experience of paid employment rates of social welfare akin to the rates that are paid to people who have lost employment. This is a debate the House has not had, and a wider debate on it is necessary in society.

Questions that need to be raised about other aspects of social welfare and which require continuing public debate centre on child benefit payments. The various options that were available were examined. The best way of dealing with the fact that child benefit is given to some families who do not need it financially is to provide it through an integration of the tax and social welfare system. The Government has given a commitment to bring about such an integration. However, in dealing with the current financial situation the across-the-board cut and providing compensatory payments through the child dependant allowance for those on social welfare and those dependent on family income supplement to ensure people on the lowest incomes are not affected by that change, was the best and wisest course of action open to the Minister.

I wish to comment briefly on Senator Ross's remarks about the banks. It is true that at least €7 billion of the €25 billion we are dealing with is the result of capitalisation measures undertaken by the Government, and there is uncertainty about what their future capitalisation needs will be. However, the debate we had about the National Asset Management Agency, NAMA, has missed part of the point regarding the most serious problem we are dealing with economically. If there is a catastrophic failure with the NAMA approach, I am convinced that any such loss will be fully covered by the financial institutions, and a catastrophic loss, at best, would be in the region of €10 billion to €15 billion over a ten year period. That must be put into the context of the deficit in current expenditure, which dwarfs that and occurs on an annual basis. If we do not treat the deficit as the most serious political issue in putting the nation right, we will do the country a disservice.

The budget is a sincere attempt to meet our immediate needs in correcting our public finances. However, subsequent budgets must address the other side of the balance sheet and ensure further additional taxation measures, which have been flagged by the Minister, are adopted as quickly as possible and that the burden is borne by all in society.

I am grateful to Senator Boyle for his acknowledgement, which members of the Government find it difficult to make, that at least part of the problem the Government, and by extension the people, must deal with and the deficit itself are attributable to what has occurred in the banks. That is unquestionably the case. From time to time and mainly in the context of NAMA, Ministers attempt to suggest that, in a roundabout fashion, it is not real money or real borrowing. However, the borrowings are real and will constitute an exposure for the people in respect of the bonds that banks will be given in exchange for loans.

More immediately, the deficit has increased since September when the Department of Finance acknowledged that it amounted to just over €20 billion compared with €9.4 billion at the end of September in the previous year. The statement reads: "The year-on-year deterioration in the deficit of some €10.8 billion is primarily explained by a decline in tax receipts of €4.8 billion, the €4 billion payment to Anglo Irish Bank and €1.7 billion in respect of the frontloading of the annual contribution to the National Pensions Reserve Fund." It is no use that Government spokespersons attempt to convey the impression that the issue of the banks and the extraordinary exposure of the taxpayer in that respect is off line and has nothing to do with the budgetary crisis. These matters are connected in a substantial way, meaning that there has been an element of dishonesty in the remarks of some Government spokespersons.

Senator Boyle, similar to Senator MacSharry, stated that these budget decisions would have been made by any political party in power, but I do not accept that the decision to reduce the pay of public servants earning €30,000 per annum would have been made by any party in government, certainly not mine. I do not accept that the decision to cut child benefit or social welfare would have been made by any party in government, as was suggested by Senator Boyle more in hope than in a belief that it was the case.

This is about politics. Perhaps I am approaching politics from a slightly different perspective than Senator MacSharry who stated that the issue has gone way beyond politics, which is an extraordinary phrase. The current situation signals the arrival of politics, not its departure. I do not know what my colleagues understand or believe politics to be, but it is my belief that politics is about making choices and deciding, for example, whether one agrees, as parties did in recent weeks, on the appropriateness of reducing the 2010 deficit by €4 billion. Politics is about where to make the savings and what choices to make, be it on cutting public expenditure and, if so, where, or on increasing taxes and, if so, where. People should not be afraid of this. When there is an argument on these issues, people refer to it as being all politics. In my respectful submission, the problem with the current system is that there is not enough politics or calm, measured and careful debate, contest and disagreement on issues. I am not calling for disagreement for its own sake, but the only way to determine what will next occur in any society, particularly one in paralysis and crisis like ours — I am referring to wider society, not just the economy — is to have a free flow of debate and interaction. This is called politics. I am not looking to get away from this fact. Rather, I am looking to embrace it.

The Minister for the Environment, Heritage and Local Government, the leader of the Green Party, indicated his belief that the budget was fair. His phrase was "by and large". How he could possibly view it as being fair is beyond me. Most of those on the Government side who have spoken about it have called it difficult, draconian and so on. They could not have done otherwise. However, few have been so bold as to claim it is fair. It is anything but a fair budget. Cutting the weekly earnings of people who are on as low an income as €30,000 per annum is not only unprecedented and extraordinary, it is unacceptable in a country which relatively speaking, while I will not say it is wealthy, is certainly not poor. There is no question that ours is a country in which there are deep inequalities. Many people earn considerable sums and could be called upon to pay more in the current circumstances. From the many leaks in recent weeks, I understood the Green Party was pressing in Cabinet for a robust attempt to spread the burden more fairly across all earners, but there has been no such attempt.

The Labour Party advocated something that I will repeat now. Ours is a relatively low-tax economy. According to OECD figures, we are relatively undertaxed. No one takes pleasure in standing up and asking for taxes to be raised. No one wants to raise or pay increased taxes. However, we need to be able to have an adult debate on what level and quality of public services we want and on how to pay for them. We seem unable to allow such a debate to be held. Perhaps holding it now would be difficult, as this is not an ideal time to increase taxes. In the past ten or 12 years, the so-called low-tax economy became something of a sole objective of economic policy. In many ways, it has left us where we are. We could have reordered our taxation system and widened its base when the opportunity presented, but we did not.

The carbon tax is the budget's only taxation measure of which I am in favour, but what are our priorities in a crisis? This tax is a priority, but it would not be at the top of my list of priorities. I make this distinction because one should consider the budget's other provisions. Take the decisions on stringent cuts in respect of low-paid workers, child benefit and social welfare as examples. At the same time, a report of the Commission on Taxation has been available to the Government since the summer. Again and again, we were told that it would form the basis for budgetary decision making, but it has been cast aside with suggestions that some of its elements will be introduced at some future stage. Having received the report, why could the Government not have got down to work on the proposed measures in late summer and autumn?

Tax reliefs and tax breaks are endemic in our taxation code. Recently, I read that the average level of tax breaks across Europe would, in proportion to our economy's size, equates to approximately €2.2 billion or €2.3 billion. However, our tax breaks amount to approximately €7 billion or €7.5 billion. These issues could have been examined, as advocated by the Labour Party previously. Particularly in circumstances where people's pay, basic social welfare and child benefit are being cut, it is not good enough to claim that one will get around to tax breaks next year.

Regarding pay, it is worth revisiting what really happened last week. Yesterday the Minister for Finance stated that, although there had been negotiations, "regrettably, a deal was not possible". We know that is not true and that a deal could have been reached last week. Instead of reaching agreement with the trade unions, elements within the Government led by the Minister, wanted to drive down wages across the economy, sending the signal, initially to the public sector, that wages needed to be reduced. We know the argument, although I would prefer to hear people state it more honestly, as we cannot devalue our currency, we must, therefore, reduce wages in some other manner. Why can that not be said? It is clearly what the Minister thinks and, let it be said, intends to do. We are reducing pay in the public sector in order that we can make it easier for the private sector and assist it to do the same. That is what happened last week. I do not believe the line that the talks broke down because the figures did not add up to the required €1.3 billion. As described, we were gaining on the figure of €1.3 billion. Yesterday the Minister announced that the savings in pay amounted to approximately €1 billion. The figures were adding up, but there was another agenda.

I welcome the Minister of State. I am conscious that it is difficult to make cuts at any time. It is very difficult to accept them, but I am sure the people will find themselves resilient and understand that what was undertaken yesterday was necessary. That is the criterion to move forward. However, we had a choice. We could have borrowed again and seen the rates go up in the bond market. We could have pushed out the number of years it would take to repay the debt and have had another year in which the economy would not work in the way it should, that is, being prudently managed. That was the difference yesterday. The Government decided the economy would have to be managed prudently and took effective steps. There has been a positive response, both internationally and in the bond markets. That is not to say, however, that people are not making sacrifices.

When we look at benchmarking and the huge increases achieved in the good years, the reality is that it was never acceptable that benchmarking awards could only move upwards. All of us who took a cut yesterday have to understand that when the private sector is hurting in a severe way, we must do our bit to be part of the social partnership. That is exactly what happened. It was not as if we were preparing the ground for wage cuts in the private sector, as suggested. The private sector has taken wage cuts already. Businesses are in trouble and cutting back. More than anything, what helps confidence in an economy is knowing the people who are looking after it are doing the right thing. That is what happened yesterday.

It was suggested there was a pot of gold to be saved in social welfare, although an Oireachtas joint committee and the Comptroller and Auditor General found the sum to be nowhere near €2 billion. Therefore, Opposition Members have agreed already that there is nothing like €2 billion to be made in savings. It does not serve any media outlet to make exaggerated claims at a very sensitive time. Similarly, there are suggestions huge sums of money go to east European countries to pay for children living in those countries whose parents work in Ireland. Under EU law and the treaties we signed, we are obliged, where a non-national is working in this country whose children are living in an east European country, to pay the difference. People imagine there are vast sums involved but the total figure is €20 million. The numbers claiming are down from 10,400 last year to 9,900 this year. Trade is a two-way street. We export approximately €86 billion worth of goods and import goods to a value of €60 billion; therefore, we are doing substantially well. The European Union has been a very positive feature in Ireland's economic growth.

Yesterday the Minister ensured the less well-off were protected. For those on social welfare, child benefit is protected, as are the vulnerable and the old. Even those who took a cut, those of us who rightly had to share in what was happening in Ireland inc. have seen more than a 6% decrease in prices in the past year. Those of us who buy goods in supermarkets know it is possible to obtain great value. Shopping has become much less expensive and there is much more competition.

The budget was fair and necessary. It contained practical items which were misrepresented. It was not a budget to assist people who like to have a drink, but one that stabilised the price in the Republic in order that the money spent north of the Border — €475 million between January and July — would not continue to be spent there. I support the North of Ireland and what is happening there in every way but not at the expense of what is happening in the Republic. Already, it is being said the North of Ireland has had a growth rate of perhaps 1.25% in 2009. Unfortunately, that was driven by the difference in prices between North and South. The Minister only did what was necessary by adjusting the amount of tax in order that revenue would remain in the Twenty-six Counties.

Another misrepresentation is that there is a huge big pot of money that has been uncharged and there are people who are not paying their fair share. The reality is that in this State the top 1% pay 26% of income tax; the top 4% pay 48%; and the rest, some 81%, pay 18%. In fairness, this was recognised by the Opposition. Vis-à-vis the rest of Europe this is a very low tax economy with high standards in the public service. We hope that will continue, but we will have to pay our way.

As a small open economy, we are dependent on world markets. What would have happened if we had not taken all the trouble to ensure stability in banking services? In April 2008 we were not even sure whether we would use paper money in the future. Banks were failing in the United States, including Lehman Brothers, AIG, Fanny Mae and Freddie Mac, and in the United Kingdom, including Northern Rock and Bradford and Bingley. None of us knew what the future would bring. However, we started to stabilise, using a three-prong method. First, we had to stabilise the banks in order to stabilise the economy. Second, we had to stabilise the public finances and, third, institute job creation, to which we will look in the next two budgets. It is no harm to note that when we took the decisive step to ensure every deposit in every bank in the country, one of the two main Opposition parties did not support this very necessary measure which ensured the stability of the banking sector. Funds that were flowing out of Irish banks stopped flowing. Initially our neighbours said this step should not have been taken, but nonetheless other major European economies followed suit very quickly and began to stabilise.

Other measures in this budget include measures to protect and create jobs. Despite the criticism of FÁS, and people in this House have been forthright in ensuring that high standards are maintained in FÁS, it is important to recognise that the money being allocated to FÁS is going where it is needed, namely, to training and to support important projects in town and country areas. That is work that must be done, and it is work that is well done.

Other measures in the budget include a one year employers' PRSI exemption for all new jobs and close to €10 million support for the food industry.

I refer to an important factor often overlooked when people ask what the Government is doing about the banks. Yesterday, the Minister, and it was not widely commented on, announced a review system to examine credit refusal decisions by the banks. The purpose of that is to get credit moving again. That is important because in the National Asset Management Agency legislation we ensured the Minister could regulate the way the credit system works. Due to the mistakes of the past I ask the Minister to consider for the future a measured amount being the maximum a bank can lend in each sector. In other words, private credit — 30%; mortgages — 30%; commercial — 30%; and perhaps a floating 10% to allow for any variations that could occur. That would ensure we would never again see a situation where banks were giving out billions of euro to developers but the ordinary investor could not get money for a small and medium enterprise. Ireland could be innovative in that regard. It does not happen. I note the United Kingdom yesterday put a very large tax on bonuses for bankers, which is no harm.

The budget was tough, fair but, most importantly, it was necessary to get us on a sound financial footing to go the next step, that is, the next two budgets which I have no doubt will focus on job creation.

On the day he became leader the Taoiseach, Deputy Brian Cowen, stated:

This is what the Government wants and needs. Its responsibility is to fuel the engine of community and to lead the charge away from the promotion of exclusive self-interest towards a superior value of a wider community interest. The pre-eminence of community and participation over self promotes social harmony and a better quality of life for all. This is what will allow us to develop a society of social inclusion.

In those words one gets a sense of a man who knows how unique it is to be Irish, who recognises the unique values that have been passed on to us by our parents and grandparents, and who must have a deep understanding of that community spirit that has bound us together many times in the face of adversity.

Having heard the Taoiseach speaking in those terms last year it makes it difficult for me to establish the value system that underpinned the delivery of yesterday's budget. This budget undermines and effectively dispenses with the unique value system our Taoiseach so eloquently described on the day he was elected. Rather than promoting social harmony and a better quality of life for all, this budget has driven a wedge between the public and private sectors and has sent a strong signal to our vulnerable that when times get really tough our Government does not have the compassion or the ingenuity to protect them from the brunt of an economic disaster. The disabled, the blind and our hard working carers were not spared but instead led up the steps to be sacrificed on the altar of fiscal rectitude. The Minister for Finance, Deputy Brian Lenihan, seemed to be more interested in pleasing the columnists of the Financial Times and the gurus in the European Central Bank than in protecting those who deserve our protection.

I called to the store room in the basement in Leinster House last week and had a long chat with one of the men working there. He queried me on my opinion as to whether his pay would be subject to a cut in the budget. He told me he was working eight years in the Oireachtas yet his gross salary was only €28,000 per annum. A neighbour who is a special needs assistant telephoned me during the week asking me that same question and pointing out that she, her family and her children could not sustain any cut in her salary or in her child benefit. I did my best to assure both of those people that no matter how bad things were it was highly unlikely that they or others like them would suffer any cuts. In the alternative budget proposed by Fine Gael last Friday, anybody in the public sector earning less than €30,000 would have been protected yet those same people were afforded no protection by this Government.

In that inaugural speech last year the Taoiseach stressed the importance of representing the interests of our young. He stated:

...the character of the generations that will build this century is still being formed. These generations will decide the shape of the future. It is the youth of this nation who will determine that our peaceful island remains a safe and secure place for all our people to live. It is our youth who will determine how 21st century Ireland meets the challenges of an increasingly globalised economy. It is our young people who will help to shape the environmental destiny of our island, this Continent and the wider world.

How do those same young people feel this morning? I only spoke to one, unfortunately, an economics graduate who had worked hard to top his class in college and who was only too willing and eager to play his part in staging our recovery. He told me he was booking a ticket to New Zealand to follow his brother who went there last year. What was our Government's response yesterday to this young man and others like him? Nothing more than a drop in unemployment assistance and a youth employment programme that has been inadequate in terms of imagination, scale and effort. Our young people want to work but there are no jobs. They want to get into further training and education, evidenced by a 60% increase in those contacting FÁS this year compared to 2008.

In April this year the Government announced 2,000 places on a new workplace scheme, 500 of which were supposed to be ring-fenced for those aged under 25. This morning, however, the National Youth Council of Ireland confirmed that the workplace programme scheme is not working as it has placed only 129 people in the workplace since its inception. That abysmal failure amounts to only one work placement place for every 3,282 people on the live register. Is it any wonder our young people are disillusioned? Rather than providing them with hope for a brighter future their social welfare supports have been slashed and they are relying on harebrained training schemes for jobs that are not available and are provided by a deeply discredited organisation. Next year's biggest export will be those same young people whom our Taoiseach believes we must rely on to meet the challenge of an increasingly globalised economy. They will face up to that challenge but a huge number of them will do it many thousands of miles from the families and communities that shaped them.

In a ham-fisted effort to stop the haemorrhage of shoppers across the Border the Government once again bottled it, displaying a lack of courage in implementing only a small change in excise duty that will lead, for example, only to a drop of 60 cent in the price of a bottle of wine. Such a tiny price drop, coupled with the remaining gulf in VAT, will not stop visits to Newry, Banbridge or Derry, and retailers across the country will close their doors forever at the end of January. This excise duty measure will result in a loss of revenue when a courageous step to reduce the duty significantly would have eliminated the price difference once and for all, with millions of euro of revenue returning to our badly depleted tax coffers.

The bad timing of this approach and its implementation has also left a large number of drinks wholesalers with a huge deficit that they will have to sustain and some, including the small family businessman I spoke to last night, will not survive this change.

The budget has failed miserably to inspire hope among our people. As the Minister resumed his seat in the Dáil, any hope of a carefully crafted job creation strategy and vision for recovery went up in smoke and we were left clinging to what Deputy Richard Bruton aptly described as a jobless and joyless offering.

The capital budget for the 2010 to 2013 period has been reduced by more than €15 billion. This will lead to the cancellation of a large number of school building and other infrastructural projects. When this drop in investment is coupled with the major increase in transport costs that will be driven by the introduction of a carbon tax, it is clear that the outlook for Irish business is bleak.

One of the sad aspects of this budget is that other options were available. Speakers on the Government side in this House asserted again in this debate that the Minister had no alternative. I remind them that Fine Gael proposed a well thought out, fully detailed, costed and, above all, fair alternative last Friday. We found methods of protecting the vulnerable. Our plan did not dispense with our value system. On last night's "Prime Time", the Minister for Finance rather condescendingly dismissed our plan as fanciful and magical. Earlier this year, Fianna Fáil spin doctors decided to rename the Fine Gael good bank plan as a magic bank plan. Perhaps this country needs its Government to show a little magic, a little sparkle of confidence and a little lateral thinking. More than a little hope would be generated through such thinking. It is apparent that such ingenuity and vision will never emanate from this jaded and disjointed Government.

I welcome the Minister of State, Deputy Mansergh, to the House. Senator Ross was totally disrespectful to the Minister of State who has given substantial time to this House on all subjects. I thank the Minister of State for the work he is doing in the Department of Finance. I am happy he is here because he has an excellent grasp of economics and his portfolio.

This necessary budget is one of three budgets that will create confidence in Ireland at EU level and in the market place in which we borrow. Davy Stockbrokers has given the budget a good report. If we had not taken action yesterday to bring the GDP figure under control, the 11.7% rate would have increased to 17%, which would have been unsustainable for a country of Ireland's size. Those figures need to be taken into consideration.

Young people in the public service have made an investment in this country. We will have to make it up to them when things get better. They have invested their time and their wages in this country. It is important that they be looked after when things get better. Having said that, not one job has been lost in the public sector, whereas 450,000 jobs have been lost in the private sector. Most of the people to whom I speak every day have had their wages cut by between 20% and 30%. That is the reality. We owe it to those who can ill afford to pay, such as those on social welfare and the pension, to ensure they suffer the least damage. The Minister for Finance, Deputy Brian Lenihan, has done a good job in striking the right balance in that regard.

I would like to ask the Minister of State about an important document. Yesterday the Minister said, "Everyone has to play his or her part and I will require the banking industry to engage with Government to find innovative solutions to ease the burden for affected homeowners." Those lines are very important. The EBS and Bloxham Stockbrokers have made a number of proposals. Perhaps the Minister of State will raise them with the Minister when this situation is being considered. They have suggested that home owners should be able to avail of a repayment moratorium of two years, with that period being added on to the mortgage at the end. That is important because it would give mortgage holders who are out of work time to retrain and get back into work.

It is also important for mortgages that are taken out to be supported by a system of compulsory insurance, as we used to have. I suggest there could be three-way participation, on the part of the Government, the lender and the borrower, in such a system. It would create €100 million a year on the basis of a small fee of €5 from the borrower, the lender and the Government. It is a very worthwhile proposal. We did not come up with this quite thought-out document ourselves. We ascertained whether these proposals are bankable. It is important we can bank these things. It has been suggested that if people can only afford to make payments at a certain level, equity could be taken in their house over a period of six years. If the borrower is in a better position after six years, he or she will be able to take on the full mortgage once more. The mortgage support scheme, which is costing us approximately €60 million, is not a permanent situation. We cannot continue to support that.

I suggest that some of the proposals I have made should be taken up. The introduction of the insurance policy I have advocated would help people who get into trouble and would reduce the liquidity required by banks and building societies. In other words, there would be a guarantee for the mortgage. It is very important for us to deal with this sector because 35,000 mortgages are in trouble. This is the time to legislate in this regard, in co-operation with the banks. The banks we control have accepted the need to do everything by the book, which is fine, but we need to do this across the entire banking sector. Lenders are taking people to court. They are ignoring the regulations we have asked the banks to observe.

I have given a copy of the document to all Members of the House and to the Fianna Fáil policy committee. It is important for us to take this issue seriously. I would like the Government to provide for some protection of mortgage holders before it signs off on the budget. I suggest that three guidelines be added to the list of guidelines by which the banks are currently abiding. That would make a big difference to the whole situation. It would help to prevent further problems from arising in this sector. I do not believe we should close our eyes to these proposals. We should implement them.

I disagree with the suggestion, made by those who have dismissed some of the key aspects of the budget, that not enough is being done to stimulate job creation. The budget provides for many projects that will create jobs. Job creation will happen as the economy improves. I thank the Minister for providing €130 million for retrofitting, which will create an additional 5,000 jobs. I mentioned that this morning. The retrofit scheme has employed approximately 15,000 people since its inception. This will rise to 20,000 people as 5,000 additional jobs will be created. Were a multinational company or companies to announce their intention to create 5,000 jobs, money would be provided. This constitutes money well spent. It will save on energy and avoid the obligation to pay carbon tax to the European Union. It also will ensure homes are much warmer and that energy is used much more efficiently.

I will conclude by saying well done to the Minister. I believe those on low pay have been protected as well as possible. It should be noted that a supplementary payment is available to the low paid that brings up their pay to a reasonable standard and many people have not picked up on this Many people in the public sector whose pay is low also are in receipt of supplementary benefit when children or other factors are involved. Consequently, a safety net is in place for the low paid. This is an investment that the public service and all Members have made in the country we all love so much. I acknowledge the difficulties involved and thank everyone who has been able to support the budget. I believe the correct decision is being taken.

I welcome the Minister of State, Deputy Mansergh, to the House. I am not under any illusion that the debate in this House will materially affect the financial course of this country. However, it is important that Members make a contribution as they are an essential part of the democratic mix and it may be that some points made in the House will be listened to. The Minister of State has a capacity to listen and to pass on what is said.

My first point pertains to the budget itself. I was present in the Lower House yesterday and as usual was impressed by the demeanour of the Minister for Finance, Deputy Brian Lenihan. He appeared to be someone who was confident and in control. He knew what he was doing and was clear and decisive. However, I am not quite so sure about the speech's preamble or coda. Perhaps the former was a little optimistic and I would have liked to have heard some further justification for such optimism for which everyone is hungry. He stated "the Government's strategy over the past 18 months is working and we can now see the first signs of a recovery here at home and in our main international markets". I would like to know what are these signs of recovery as I have not yet seen much by way of tangible and concrete indications of recovery in this economy. If green shoots exist, they should be exhibited to the faithful to allow them to ascertain the position. Were such green shoots to exist, I would rejoice, and perhaps they do. However, it may be somewhat early to anticipate spring.

In his Budget Statement, the Minister for Finance also stated "The worst is over." I hope this is the case because it is politically dangerous to make such a statement, which gives a hostage to fortune. If the worst is not over, people will become more disillusioned. If there is worse to come, he should let people know as they can take it. However, they must be prepared.

The Minister also gave some fairly grim statistics in his next paragraph in which he stated "GDP has fallen by approximately 7.5% over the past year, which is the largest fall since records began." This highlights the scale of the difficulty. Interestingly, he went on to discuss reasons we cannot and should not tax our way out of this position. There is an intellectual justification for this point and there are some clear facts on the ground.

I listened to the Minister again this morning on the wireless when he made the point that if one considers the profile of the fall in tax revenues, it shows there is a law of diminishing returns in operation and that one could tax the economy into a recession. However, some people could be taxed more, of whom I am one. Another such individual appeared on Joe Duffy's radio show this afternoon. The man in question is employed in the public service, as is his wife, and they do not have any children, which is part of the catch. He stated that his mortgage, which must be fairly fat, had fallen by €1,000 a month over the past 18 months or so. He had anticipated receiving a bit of a whack and would have paid it gladly. Moreover, others in his office felt the same.

While I cannot say whether he simply was a financial exhibitionist, I certainly could take a whack. In addition, I could take a whack on the lump sum of €100,000 I have just received from Trinity College and which I stuck in the prize bonds. Were everyone else in the same position, I would have been prepared for €10,000 to have been taken from it. Moreover, I do not agree with the suggestion that lump sums of less than €200,000 should not be touched. I do not believe this is right because they should be. I also wish to know how much is being deducted from those in receipt of lump sums of €200,000 or more.

The difficulty is that there are so many variables in the human equation. It is not simply one mathematical figure of €100,000. I can afford it because I have no detectable dependants and largely live for myself. My life is not entirely unsustained by joy, mirth and companionship but apart from that, I am not in a financially difficult position.

Can they be taxed?

Consequently, it is all fine for me. While I can volunteer, what about other people who have other entanglements? It is not simply a straight mathematical figure because one must take into account the possibility of other variables. Nevertheless, people like me would be prepared to consider a sharper haircut.

When I consider the situation pertaining to Newry, I am unapologetic in finding this phenomenon to be utterly repellent. As far as I am concerned, the people who travel up on that roadway to load up their SUVs with €500 worth of wine, beer and spirits deserve everything that is coming down the line to them. Were it in my remit, I would establish a toll road system going to the north of Ireland. I would charge them €1,000 for going up and €750 for coming down. If they did not have the cash on them, I would possess the car and sell it in Belfast. While I will not invoke patriotism because Johnson described it as the last refuge of a scoundrel, there is a lamentable lack of ordinary, decent, human solidarity. People who allow themselves to be lured across the Border to squander their money while their neighbours in small Border towns are finding that their businesses are going bust are contemptible. Moreover, I do not give a damn whether they are Trinity voters. That does not bother me because I feel repulsion towards this practice as well as a complete lack of solidarity with such people.

There are other fat cats such as the Judiciary. While it does not matter financially, it matters greatly in respect of presentation and appearance. The Government has not handled this issue very well. I listened to the former Supreme Court judge, Donal Barrington, on radio recently. He has a fine mind and made a very good point in respect of the present system. First, he does not agree with the opinion of the Attorney General, who I consider to be extraordinarily conservative. What is happening is that the decent judges are being penalised for fairness because the scheme is voluntary. The others simply get away with it. It is not a good system in which one insists that the good-hearted individuals who have some loyalty are penalised for their virtue.

The Minister also referred to the sensitive area of child benefit. People are highly sentimental about children, with the exception of the late Jonathan Swift who was notoriously unsentimental in that regard. However, it is a sensitive area and the good old left wing principle of giving to those according to their need and taking from those according to their capacity should be operative. For that reason, it is highly regrettable that the blunt instrument of across the board cuts has been used. It should have been taxed and means-tested.

Intriguingly, the Minister said he had hoped to be able to introduce greater equity by making child benefit taxable or mean-tested, but that there were legal and logistical reasons why he could not do so. In a democracy, I would have anticipated that the House would have been told the reasons. Unless there is a specific technical or legal reason why the Minister cannot do so, I ask him to let us know, in simple form, the logistical and legal reasons. I support the Government's view on this matter. I am in favour of tax, means testing and the introduction of university fees on a properly means-tested basis. I have made that clear, even though it would make me very unpopular.

The national solidarity bond is a good idea which needs to be fronted. The Government needs to get out and sell it. Reference was made earlier to war bonds. I do not remember them but I remember the publicity surrounding them. People such as Bing Crosby and our own Count John McCormack developed a massive programme of sales of war bonds in America by dint of personality. There is an opportunity for people to show their confidence by buying some bonds. I would put myself forward.

He could cash in the prize bonds.

I fundamentally disagree with some of my colleagues, including one in particular whom I will not name because he is not here. Of course, FÁS should get €56 million in funding. We have to make sure it is properly spent. That should be a matter of course, particularly after the recent scandals. It is vitally important that people are retrained and up-skilled. I do not mind if some people are cleaning graveyards or doing the kind of work which greatly benefitted the James Joyce Centre in North Great George's Street. They were superb. I have come across scheme after scheme in deprived areas of this city. The Minister of State has my full support for the allocation of €56 million to FÁS. We should be spending money in such areas during this kind of economic crisis.

The area of mortgages is very difficult. Senator Butler provided me with some information which I have not had time to digest. As I heard him give it, there is no need for me to do so. I note the Minister said in the other House that it is important to remember that only 20 homes have been repossessed by the institutions covered by the Government guarantee scheme in the first three quarters of this year. So bloody what? It is a disgrace. Not one single home should have been repossessed by the institutions which are fuelled by taxpayers' money. I would like a further explanation on this, which banks were involved and the circumstances of each case. Some people may have been grossly irresponsible and thumbed their noses at the authorities and so on, but it is questionable. This situation does not cover the fact that many hundreds of homes have been repossessed by companies such as Start Mortgages, which is the heart of the sub-prime market. It is a point which must be taken into consideration.

I welcome the fact mortgage relief for those who find themselves in negative equity has been extended to 2017, which is a humane, decent and good gesture. I do not think it is good that the tax on booze had been reduced. It is madness. I heard the Minister, Deputy Hanafin, speak on this issue and she was completely wrong. She said this morning that there was no correlation between the accessibility and price of drink and alcoholic disease. That is nonsense. Not a single international scholarly paper supports that view; they all go in the other direction. The rate of VAT should have been reduced because of the movement in the other direction by the United Kingdom, and the fact we have a land border which cannot be patrolled.

I would like to address overseas development aid. It is a pity it has been cut by, I understand, €25 million. The Government solemnly declared on several occasions in various international fora that it would meet its target but it shows no sign of doing so. There is a lot of pain, which one listens to, understands and empathises with, as people are being squeezed by the budgetary measures taken by the Government, but there is a difference between pain and mortality. For some people in Africa and other countries which are marginalised, to be hit by the effects of climate may be a death sentence. I would like the Minister of State to go back and consult urgently with all the voluntary agencies, of which we can be enormously proud, to make sure no fatalities are caused by this measure.

I am in favour of the carbon tax. I have said for years that the polluter should pay. It is a much better idea than increasing the cost of licences and vehicle tax, but the large energy generators have been let off the hook, which is daft. I am not crazy about the car scrappage scheme because it also contains a concealed pollutant element. I welcome the provision made for retrofitting homes and the relief on the purchase of electric cars, which is the direction in which we should go. The car scrappage scheme will have a momentary effect with regard to some garages, but that is all it will do.

On the issue of the windfall tax, I have communicated with the Minister of State or his senior colleague. I received communication from Lord Altamont, the owner of Westport House in Sligo which is in danger because he took on board an investment regarding some of the land which might fall under this provision. The Minister of State made some interesting comments about tourism in his contribution. It would be a tragedy if this house and estate collapse because of an unintended consequence of the windfall tax. I ask the Minister of State to examine its impact on heritage houses, many of which are threatened once again. The Knight of Glin put a very brave face on things recently, but he is under some difficulty.

I ask the Senator to conclude.

The Leas-Chathaoirleach can certainly ask. My final point concerns perception. Perception means a great deal when one is selling a tough situation. The Minister of State knows this; he is a sophisticated man. No one will believe the Taoiseach's salary cut. It may be 30% but nobody gives a tuppenny damn because it is too late. It may not be too little but timing is all. People are fed up. I would leave it aside. Nobody will be convinced. If he took a 70% cut people would still be on the radio bellyaching. The Government has lost that one. It should not worry about it but should just get on with the job.

I am glad Senator Norris mixes with lords and knights. It is nice to see the gentry still has a role in Irish life. I welcome the Minister of State. I enjoyed the debates between the Minister of State, when he was a Member of the Seanad, and Senator Norris. We miss them.

I compliment the Minister of State on his work on the serious flooding. His response to the my submissions was very quick in terms of the different regions concerned. Deputy Brian Lenihan has been extraordinarily effective as Minister for Finance. He has taken on a enormous task. It is one of the most difficult tasks in the history of the State.

The Minister of State, Deputy Mansergh, who is an expert on history, would confirm that Fianna Fáil has always supported people on social welfare. It is our ethos. To prove that point, in the past 12 years we have increased jobseeker's allowance by 129%, disability allowance by 129%, the carer's allowance for those under 66 has increased by 147% and the one parent family payment has increased by 129%. In the same period the cost of living has increased by 40%. It is clear that when we had the money we distributed it fairly and evenly. We gave and gave and now, unfortunately, we are taking it back to preserve the economy as best we can.

Large numbers of people are involved. Some 1 million people are affected by the cuts in social welfare. One individual's pay is irrelevant as far as the savings are concerned. In that regard while the amounts involved in pay for the Judiciary may be small, there is a principle involved. If it requires a referendum, we should have one. We will be having a referendum next year to amend the Constitution regarding child protection. The State is entitled to regulate all payments from the State coffers. While the amount will make little difference, a voluntary approach will not work just as it does not work for Senators, Deputies and members of the Government. One does not write one's own tax code.

This morning I pointed out that on 5 November 2008, when the Minister of State was in this House, I proposed the introduction of a national reconstruction bond. It has now been adopted and has been called the national solidarity bond. It is proposed to establish early in the new year a new national solidarity bond to assist in the financing of the capital investment programme underlying the budget, that is, the bond will not be used to fund additional spending. The bond will be in addition to the current range of State savings products — savings bonds, savings certificates, prize bonds, national instalment savings and the post office deposit account. The main features of the new bond will be that investors can choose to invest for a five, seven or ten-year period, interest will be paid annually, investors will be entitled to a final redemption bonus on maturity as an incentive to leave their funds invested, with the bonus being different for each investment period, full details of the tax treatment of the bond will be provided in the finance Bill, it will be possible to invest in the bond by lump sum or by occasional payments, and the bond will be available through the following channels: Internet, telephone, direct debit, and at local post offices. The bond will be sold by An Post on behalf of the National Treasury Management Agency. Further details will be announced early in the new year.

I very much welcome this announcement and also welcome the remarks of Senator Norris who would be an excellent person to front this on a voluntary basis to encourage people to invest. We can all encourage people to invest. The full range of services could be provided through the banking institutions. It would restore its credibility if Anglo Irish Bank, which is now a State bank, was given a role in this regard. There is no reason it could not be extended in the finance Bill and this is the time for suggestions. People have money and Senator Norris is correct to suggest that a number of people would be delighted to provide funding to help the State with reconstruction. A national solidarity bond is an excellent idea. I would support bringing in celebrities, some of whom are international actors and personalities, to sell the bond. As a national movement I believe it will be successful.

The Minister should consider another aspect to that bond. Many people do not have a pension scheme. The experts in the Department of Finance should investigate this. People investing €100,000 over ten or 20 years should be allowed to withdraw it on the basis of a pension over the rest of their lives. Actuaries could work out how it might work in reality. I do not have all the details but the Minister of State has experts with him. The Minister has already adopted the first part and there is a second part. Instead of paying out a lump sum in ten years' time with interest, the investor should be paid a pension over his or her lifetime. The pension might be €200 a week, which is €10,000 a year and is €100,000 over ten years. Whatever year an investor invests, he or she will know the amount he or she would get back. Even if it was €100 a week, it gives enormous security to know they would have that money on a regular basis for the rest of their lives. That would be worthwhile.

Senator Butler has proposed many ideas and has put working papers before our parliamentary party on the fitting out of houses to improve insulation. I congratulate him; it has worked. We are prepared to accept recommendations from the other side of the house. I read Fine Gael's document last year and it contained some interesting points in this regard.

The Irish Congress of Trade Unions has supported the idea of the bond. In a policy document it stated:

In terms of trying to capture a mood of public support for a Social Solidarity Pact there might also be an opportunity to launch a Domestic Savings Bond — a National Recovery Bond — which people would contribute to if they felt they were part of A FAIR and genuine effort to put the country back on its feet.

I shall not go through most of the details in the budget. The Minister's Budget Statement mentioned supporting tourism. The initiative in the budget mirrors the European Calypso programme, which is a programme in social tourism aimed at increasing mobility for target groups such as senior citizens, young people, disabled people and families facing difficult social circumstances, enabling them to go on holidays in other member states. In 2009 preparatory action on social tourism was launched under the name of Calypso, with a €1 million budget for 2009. It is intended to run for at least three years. Financing for the following years would need to be reconfirmed with the budgetary authority. This would encourage tourism activity, especially during the off-peak season, thus generating employment opportunities. As far as I know this has been operated in Spain.

We could provide a service of free travel within the State for every person over 55 coming to Ireland through State agencies, Bus Éireann, Iarnród Éireann and Dublin Bus. Between September and April they would be given particular incentives. For instance, the air travel tax would be reduced for that area to attract in an enormous number of people to avail of the rooms that are now available at a very reasonable cost. Last weekend I stayed at the Louis Fitzgerald Hotel in Clondalkin and it only cost €45 for bed and breakfast in an excellent hotel. That indicates the price reductions available in and around the city. That is what will attract tourism. People love to come to Ireland and we have a great package. Bus Éireann and Iarnród Éireann have a fantastic holiday package travelling around Ireland. It would be great if they could provide rates that would be attractive. Tourism is very important.

We should initiate a new campaign called "Come back to Erin — Come back to Your Roots" encouraging people to come back to their native country. We could start it with President Obama. If he comes back to Moneygall in County Offaly, it would be a step in the right direction. Around him we could have the largest movement of tourism attractions ever. We should initiate a new An Tóstal throughout the country close to St. Patrick's Day. Clan tourism is also a marvellous idea. There might be 100,000 Butlers all over the world who could come back. There would be no better man than chieftain Larry Butler, Senator of this State, to lead that campaign. We could all make that effort. We can write to relations to invite them to stay with us for a while to generate tourism in Ireland. There are opportunities and now is the time to take them when we are in trouble and under pressure, and it can happen. When I was Minister of State with responsibility for trade I targeted our trade to the Irish shops and Irish buyers all over the world. I found out who they were through An Bord Tráchtála. We went to them and got them to buy Irish products in their stores.

The change in the VAT rate is welcome but it should have been reduced from today and not from 1 January. Reducing the price of alcoholic drinks is vital regardless of whether one encourages drink. The reality is that a bottle of Jameson whiskey can be bought in Northern Ireland for approximately half the price charged in the South. How does it come about when it is made by Irish Distillers? How can Irish Distillers sell the product at a cheaper rate in Northern Ireland or Britain than in Ireland? I cannot understand it. There is enormous over-purchasing of drink in the North, in which regard there must be a clampdown by the Revenue Commissioners. Truckloads of alcoholic beverages are being brought to the South and sold to small pubs at a cut-price rate. This must stop. We must try to generate more activity in Irish supermarkets. This measure is a step in the right direction and I applaud the Minister for having the courage of his convictions. This is also the case in his introduction of the scrappage scheme which allows a €1,500 reduction in VRT in return for the scrapping of cars over ten years old. Again, this is a welcome move.

In the budget there is a great opportunity to show national solidarity and provide for reconstruction. The Minister will deliver another three budgets before the Government reaches the end of its term. I am also convinced that this party will be returned, with the Green Party and perhaps other smaller groups, in the next general election in 2012.

What an ending by Senator Leyden.

The Senator must follow him.

There is a distinct possibility there will be another two or three budgets announced by the Minister for Finance, Deputy Brian Lenihan, but we will see all of them next year. That could be the prospect faced by Senator Leyden's party. As for his claims that Fianna Fáil will be re-elected to Government in 2012, as a fellow politician, I must admire the gusto and conviction with which he can say that, but I assure him there will be some battle in the next election and whoever wins it and forms a Government will be focusing on issues relevant to today's discussion on the budget. One of the reasons the Senator's party has been so successful and in power for so long is that it has claimed the mantle of economic competence. However, it has now blown that reputation with the people. Yesterday we saw it throw away the possibility of being viewed as compassionate and caring. I refer to the cuts in social welfare and carer's allowance and its attack on those earning less than €30,000 per year in the public service. Thus, the loss yesterday of the Government's reputation for competence was accompanied by the loss of its reputation for compassion.

There are a number of points on which I will focus, including some that have not yet been mentioned by my colleagues. I emphasise a point I made this morning on the Order of Business. In the last week many have put forward different tests for the budget. We have heard of the fairness test, the jobs test and the Newry test, about which I read for the first time last Sunday. However, the most fundamental test faced by the budget was whether it would allow the country to maintain its economic independence and security. Regardless of what side of the political divide we are on — whether in government or opposition — the country, the Government and the political system must be united in ensuring that test is passed. I hear people, with whom I agree and whose point I made at the start of my contribution, talk about the attack made on their incomes. I have much sympathy with and, in many cases, support them. They talk about the changes made to their incomes. However, the most fundamental issue is whether in the next six to 12 months we will still have the ability to set that income, regardless of what those decisions will be.

For all our sakes, including those inside Leinster House and those we serve outside it, I hope the test is passed. I desperately want to see the country putting clear water between it and what is happening to countries such as Greece, Spain and Portugal. It has been a source of major distress for me in the last week, when reading about the Greek economy, to see commentator after commentator state Dubai and Greece are in trouble and that the next country to be in trouble will probably be Ireland. It is essential that the budget and the decisions made in the next three to six months steer the country away from such waters. None of us, regardless of the criticisms we level at the budget and at each other, has anything to gain from the country being in that position. We have a considerable amount to lose. I hope that in the coming weeks and as we move into the new year, we will begin to see the country and its reputation stabilise and move towards the firmer footing on which we all want it to be.

There are many aspects of the budget of which I am critical. The first is something on which Senator Ross touched — the estimates prepared for tax revenue and expenditure for next year. Based on my analysis of them — the Minister may correct me if I am wrong — my understanding is that no provision is made within these estimates for the provision of additional capital for Irish banks next year. The reason I bring up this issue is that in the December and November Exchequer returns published by the Government it was obliged to state the contribution to Irish banks from the taxpayer. It detailed the many billions of euro involved. For this reason, I would have thought it would be incumbent upon it to spell out what that contribution could be next year, or at least make a provision for it. Politically, I know why that was not done. The reason was the Government did not want to find itself in the situation where it would have to defend its action of imposing a wage cut on those with incomes below €30,000 while, at the same time, leaving aside €3 billion to €6 billion as a buffer for capital injections into the banks next year. This is a question that will have to be addressed at some point.

During the early part of the discussion that took place on the banking sector, speaker after speaker spoke about the need to recapitalise the banks via the taxpayer. As I have said before, I thought too many were in a desperate rush to do this. The money that would be put into the banks was the same money needed for schools, hospitals and the tax system, yet, time and again, we heard people demand that it be given to the banks. I thought at the time that the Government had the timing of the decision right. However, in view of the juncture at which we find ourselves, it would have been in the Government's interest and that of the country to spell out the likely decisions that would have to be made with regard to the banks next year and offer clarity regarding its effects on the nation's finances.

The second point is on the decisions were made pertaining to young men and women in the social welfare system. This is something in which I have a major interest. In Dublin, one in three men under the age of 25 years is unemployed and the number is greater in the constituency in which I live and hope to represent in the future. I have a real concern that the machinery of government and semi-state bodies will not be up to the task of supplying the quantity and quality of training and job placement programmes needed to ensure people are offered a place on a programme without a reduction in their social welfare payments. Let us consider the language we use in this regard. We call such programmes "activation programmes". About what do we think we are talking? These are people; they are not zombies who will run out to work on the application of a spark of electricity. In all cases they are already looking for work. To speak of activation programmes does not do them justice. Is the Minister of State confident there is a sufficient variety of plans, well funded and run, to ensure those who may face a cut in their social welfare payments will have the ability to move into meaningful employment that will be funded by the State? This will allow them to maintain their current level of income.

My third point, which is one colleagues have made, relates to the position of public service workers earning less than €30,000. On Friday last my party published a fully costed plan of what we would do differently on the challenges facing the country's finances. We spelt out that reluctantly a reduction in overall earnings within the public service was necessary and warranted. We did that because we should always first protect the numbers employed in public services and the quantity of services they are providing before we look at wages.

However, we spelled out clearly that we would not ask those earning less than €30,000 to take a wage cut and make a contribution. This is essential, not only on social grounds and on the grounds of protecting those who could become the most vulnerable in our society, but also for sound economic reasons. What the people who are on those income levels have, they spend. The money they have coming in to their house tends to go out in shopping in local supermarkets, etc., and the level of savings which they generate from such levels of income are fairly small in the first place. Asking these people to take the proposed wage cuts is not right, nor will it be right economically for the economy as we try to reflate it and get it going again. The reduction in consumer spending as a result of what is proposed here will have a further negative effect on the VAT receipts coming into our economy and a further negative effect on the employment being generated.

The Minister of State and the Minister for Finance made much mention of the wage levels of those in the public service at the top level, but what about those earning €300,000, €400,000 or €500,000 per year running large semi-State organisations? Will we ensure that their salaries are reviewed to reflect the state of the nation's finance and how little money we have to pay them? It is absurd that those heading up semi-State bodies charged with implementing Government policies are paid multiples of what is paid to the Ministers determining such policy in the first place. It is madness. We should be using this crisis in which our country finds itself to bring common sense back into those wage levels. It will not necessarily generate significant savings, but it is the kind of signal that is needed if we are to get the costs and competitiveness of the country back into shape.

There are significant questions the Minister must answer. It was wrong to attack people earning less than €30,000 a year and to attack many of the social welfare allowances necessary to maintain a caring society. It could have been done differently.

I will conclude with a point on a local matter relevant to the Minister of State, one of whose many responsibilities is the Office of Public Works. I congratulate him on the fantastic work that office has been doing recently, particularly in Farmleigh House in providing much needed good cheer for the people who live around it.

I welcome the Minister of State, Deputy Mansergh, to the House as this is my first time here when he has been present. I look forward to his reply.

Yesterday's budget was tough but necessary. It would certainly not be fair to weigh down the generation in my age group in their 20s or the next generation with excess debt. By the end of this year, the national debt will be approximately €76 billion, double the level at the end of 2007. Delaying action accelerates the increase in the national debt and, consequently, the cost of funding will rise substantially. Every extra €1 billion in interest on the national debt would be the equivalent of the annual salaries of 21,500 new teachers or a 6% reduction in general social welfare rates, none of which we want to see. Postponing action would result in additional cuts of this nature in the years ahead, leaving future generations with the bill. This is what was done previously and it can never be allowed happen again.

There were positive elements in yesterday's budget. The car scrappage scheme is a win-win from an environmental and an economic perspective. At least €1 billion has been lost in tax revenue following the collapse of the new car market which resulted in the loss of up to 10,000 jobs. At least that number of jobs again is under serious threat in the sector. A scrappage scheme will have the dual purpose of increasing the number of more environmentally friendly cars on the road and help to stimulate the industry, protecting jobs and bringing much needed taxes into the Government coffers. The scheme will run from 1 January until 31 December next year. Those participating will be able to avail of VRT relief of up to €1,500 per new car purchased when trading in cars ten years or older. The Government will also focus on environmentally friendly cars and the development of new technology in this field. The Government needed to provide a strong stimulus package in conjunction with the necessary cuts introduced yesterday, and we need to provide every encouragement possible to get people spending again. A car scrappage scheme has the potential to go a long way in this regard. It has worked in both Germany and the UK and I am confident that it can work here also.

The provision of €130 million for energy efficiency measures, including a national retrofit programme in the 2010 budget will help create and maintain jobs in County Louth and east Meath, which I represent. Some €130 million is being provided in next year's budget for energy efficiency programmes, including a new national retrofit programme, which I mentioned in my speech on climate change. This is the future, at least in the short term, for the construction industry.

Boosting energy efficiency is good for the environment and for the economy and it has significant benefits at both local and national levels. It is a practical and forward-looking move because it will help create and maintain jobs and also lower energy bills in the future. It is hoped up to 5,000 jobs will be created across the country next year alone in this sector. This significant fund will help build on the good work done already. I have personal experience of the warmer homes scheme and the home energy savings scheme which have been an overwhelming success.

Obviously, not everything in yesterday's budget was ideal. We reduced jobseeker's allowance from €204.30 down to €196, representing a 4.1% decrease. The reality is the support provided by the State to those on welfare is far more generous than that of the neighbouring jurisdiction, the Border with which is close to my home. Welfare rates in the Republic of Ireland have doubled since 2000. What is most important is that we have a strong welfare system in the future and we do not sacrifice people now to maintain too high a level of benefit which would affect people in the future. Unless we cut back a little now, there would need to be drastic cuts in the future and nobody wants that. The Government's principle has been to try to protect the purchasing power of people on social welfare so that they are not made worse off, and this is vital.

The Government increased welfare rates by approximately 3% in the 2009 budget and they are being reduced by a little over 4%. This amounts to a net reduction of approximately 1.1% and brings social welfare back to around 2008 levels. However, the cost of living has come down by over 6% and is back at 2007 levels. Child benefit is being reduced while every effort has been made to ensure there is no decrease in the spending power of people who receive welfare and-or child benefit.

The essential message to go out from the Oireachtas this week is that we have not touched the State pension because older people have contributed so much to this country. They simply do not have the option of going back to work to supplement their income. They have worked all their lives, earned their living and got the country where it is. They should not have to rely on their children or grandchildren to live in dignity.

There were further boosts in yesterday's budget. These included a reduction in excise duties on alcohol, a lower VAT rate to assist hotels, catering and the retail sector, tax breaks for start-up companies and continued investment in research and development. There is additional funding for agriculture and forestry, including the capital provision of €116 million to plant a further 7,000 hectares of trees next year, which is a vital potential growth area for the agricultural sector.

There is also support for a marketing drive and investment in visitor attractions in the tourism sector. The Budget Statement's recognition of the importance of tourism is to be welcomed. I note that the tourism services budget is to be increased by 2% to €155 million. More than €44 million has been earmarked to promote Ireland as a domestic and international tourism destination. My home area of County Louth is a superb location for tourism. There is a fantastic product there and throughout the country. As I mentioned on my first day in the House two weeks go, my home parish of Monasterboice, with its round tower and high crosses, is a phenomenal resource, but its full potential remains untapped. I hope both the Minister and the Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs will take note of that great potential.

A few weeks ago, Deputy Seán Connick came up with the novel idea of possibly giving away €30 million worth of flights to get people to come into the country. Once here, they would spend multiples of that amount on food, drink and accommodation as well as all the accruing ancillary expenditure.

Those who have been hit hardest by the recession are those who have lost their jobs. Our main priority must be to get them back to work as soon as possible. We cannot delay recovery, as happened in the 1980s, and allow jobless people to become long-term unemployed. That was a lost generation. I have friends who have lost jobs, but I do not want to see them being forced to emigrate. To repeat that mistake would be the unfairest step of all.

I would normally call on the Minister of State to reply at 5.50 p.m. However, as a number of others speakers have indicated, the Minister of State will not be replying as, according to the Order of Business, we will finish the debate at 6 p.m.

I congratulate Senator Carroll on his maiden speech. It is interesting that the first one was on climate change while the second one concerned the budget. I suspect there is stormy weather on both fronts.

In recent days, on the Order of Business, we tried to preview the budget. Yesterday, I said I hoped it would be a redemption budget for the economy and the country generally. I also pointed out that from a political perspective there can be no redemption for the current Government because politics, like economics, comes in cycles. The people have already decided that the Government must be replaced at the first opportunity. While it remains in office, however, the Government should carry out the proper policies needed for economic recovery. Yesterday's budget was to be a step in that direction and, certainly from the agreed rebalancing figure of €4 billion, an effort was made in that respect. We must now address the measures that were taken, however. I agree with colleagues who expressed concern, particularly about the way in which the public sector pay bill was tackled. It was a problem that needed to be tackled. We could not remove ourselves from the reality that the public sector pay bill had reached a level which the taxpayer simply could not fund. Restraint had to be implemented, but I am disappointed by the methodology used, which was a 5% cut for salaries up to €30,000. I appreciate that, as incomes increase, bigger reductions have been introduced. None the less, it is difficult to explain to those earning €25,000 or €30,000 that they must face a 5% cut. They are not invisible. They work all around us, including in Leinster House. Last week, I spoke to some of them who are earning €28,000. It is disappointing that they are paying the 5% penalty.

The Minister should have reflected on Fine Gael's proposal for a pay reduction across the public sector. Under that proposed model, the pay of those earning less than €30,000 would not be altered. The Government chose a different route, however, and so be it. If the Government was trying to portray fairness and get everybody to work together, it should have sent a strong signal that those on low pay would not be penalised. I appreciate there is a taxation element and that figures show who does, or does not, pay tax. However, from the perspective of introducing severe restraint on public sector pay, it would have been preferable if those at the lower end of the scale had not been affected. The Government has decided otherwise. I appreciate that the Finance Bill will come to us for debate and we will discuss these matters again. I wanted to put on record, however, my disappointment that the model in question was chosen.

Public sector reform was on the agenda last week in the marathon talks between the Government and the unions. Some people have said that the breakdown in those talks marked the end of the road for social partnership. Over the years, the Minister of State was very involved in that process. The social partnership model was first put in place in 1987, but it is bizarre and deeply disappointing that it took 22 years for everybody to conclude suddenly that public sector reform was necessary. I welcome the statements by union leaders last week that there was scope for public sector reform. Those statements must remain on the record. The type of reforms promised as being possible last week must be enacted. I suspect that relations between the Government and union leaders may not be as strong now as they were heretofore, but this is about Ireland. It is not about Government, Opposition, unions, employers or employees. We must ensure the hundreds of thousands of workers whose jobs are funded directly by the taxpayer, operate in a system where absolute value for money is provided. The process must work by having the maximum required flexibility and transferability.

Last week Senator O'Toole highlighted the fact that in France, which has always had a slightly different social model, everybody whose job is paid for by the state is technically a public sector employee. According to the Senator's contribution — I cannot contradict him — there is total transferability within French Government Departments. If there appears to be an over-supply of staff in one Department, there can be a seamless transfer of staff to another which may be understaffed. If I recall correctly, Senator O'Toole requested that we should redefine public sector employees, including civil servants, in order that State employees would be willing to transfer between sections and Departments. That matter should be examined. We are not talking about making people undertake work they do not wish to do, are unable to do, or would not be paid for. We shall require that type of flexibility in Ireland.

I hope that, notwithstanding the messy row which seems to have arisen from last week's breakdown in communication between Government and the unions, these real issues will get on the table. I am certain where the broad political debates are concerned that the public is well ahead of the political classes. Likewise, public sector employees are way ahead——

As it is 6 p.m., I must ask Senator Bradford to conclude. Will the Acting Leader say when it is proposed to sit again?

At 2.30 p.m. on Tuesday, 15 December 2009.

The Seanad adjourned at 6 p.m. until 2.30 p.m. on Tuesday, 15 December 2009.