["When I presented the supplementary budget to this House last April, I said we could work our way through this period of severe economic distress. Today, I can report that notwithstanding the difficulties of the past eight months, we are now on the road to economic recovery.\n\nIt is of enormous benefit that the main political parties in this House share a common understanding of the extent of our difficulties and even if we disagree on how to solve our problems, our agreement on the amount of savings required sends a powerful signal to the rest of the world that we are able and willing to put our own house in order.\n\nToday, I want to tell the Irish people that even though our economy is still in a weakened condition, and our self-confidence as a nation has been shaken, 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.\n\nWe have taken bold, decisive and innovative steps to manage our way through this crisis. In all our actions, our concern has been to protect jobs, to provide a functioning banking system and to return this economy to the path of sustainable growth. We have sought to do all of this in a manner that is fair and that protects the most vulnerable.\n\nThe 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.\n\nWe now have the confidence of knowing that our plan to return this country to prosperity is working. Yes, we have had to make some very difficult choices in framing today's budget and in doing so, we have tried to be as fair as possible. However, by taking the difficult but necessary measures now, we will rebuild our nation's self-confidence here at home and our reputation abroad.\n\nNEXT STEPS TOWARDS RECOVERY\n\nThe Government over the past 18 months has made budgetary adjustments of more than €8 billion for this year. Had we not done so, the deficit would have ballooned towards 20% of our annual wealth, a level at which the very financial survival of this country would have been at risk. As a result of these decisive actions, we are now in a position to stabilise the deficit.\n\nA total of €4 billion is the scale of adjustment that we planned for 2010 in the supplementary budget where we set out details to reduce the deficit over the coming years. The European Commission approved that plan but recently recommended a revised deadline of 2014 by which to reduce our deficit below 3% of GDP. We welcome this revision, but it does not change what needs to be done in this budget. The amount of €4 billion is still the right target and our strategy is on track.\n\nIn 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 our economy to sustain and create jobs. The worst is over.\n\nThe international economy has exited recession. Recent indicators suggest that economic activity in this country is turning the corner, and my Department expects a return to positive growth within the next six to nine months.\n\nGDP has fallen by approximately 7.5% over the past year, which is the largest fall since records began. Average GDP for 2010 as a whole is projected to be down by approximately 1.25% from the average level in 2009. Consumer prices have tumbled this year, and a small decline is forecast for next year. By helping to restore competitiveness, falling prices will allow us to take advantage of the improving global economy. Falling economic prices will also cushion the effects of reduced pay and social welfare payments\n\nThe effort demanded of every citizen in this budget is substantial, but it is the last big push of this crisis. Further corrections will be needed in the coming years, but none will be as big as that being introduced today. Having already provided for an adjustment of €1 billion in capital spending, we have pencilled in an adjustment in day-to-day spending of approximately €2 billion for 2011, as strengthening economic conditions begin to assist in closing the deficit.\n\nOur overriding objective has been to strive for fairness. Unpalatable choices will always be met with opposition. The job of Government is to distinguish between the common good and narrower sectional interests. The response to the recent flooding throughout our country has shown what we can achieve when we all pull together in times of adversity.\n\nIf we work together now and share the burden, we can deliver sustainable economic growth for all.\n\nThe economy went into reverse for three reasons: first, a steady loss of competitiveness during a prolonged boom; second, the bursting of the property bubble; and, third, an international banking crisis which triggered a worldwide recession. In the past 18 months we have put in place a range of far-reaching measures to stabilise the banking system. We took those measures not for the sake of the banks but for the sake of our economy.\n\nWe have gone through a severe and painful correction in the property market. I know this has dealt a heavy blow to individual homeowners, many of whom are now in negative equity and some of whom are experiencing difficulties meeting their mortgage repayments. However, the collapse of the property bubble has also impacted on our public finances by greatly reducing the tax take and increasing the demand for welfare payments. In the two most recent budgets, I sought to address this shortfall by introducing a highly progressive income levy and various other taxation measures. A key feature and focus of today's budget is regaining our international competitiveness.\n\nRESTORING OUR COMPETITIVE EDGE\n\nUnless we regain our competitive edge, we will be unable to return to the tried and tested strategy of export-led growth that ushered in the boom in the early 1990s. We must be able to compete and win again in the international marketplace.\n\nIn the recent referendum on the Lisbon treaty, the people reaffirmed Ireland's place at the heart of Europe. This was the right decision for our economy, for our future and for our children. The single currency has provided huge protection and support to Ireland in the current crisis. It has prevented speculative attacks on our currency and provided funding to the banking system. However, membership of monetary union also means devaluation is not an option. Therefore, the adjustment process must be made by way of reductions in wages, prices, profits and rents.\n\nSome progress has already been made. Consumer prices in Ireland are now declining at the fastest rate in the entire euro area and the European Commission has forecast that - uniquely in the euro area - our unit labour costs will fall this year. However, our prices are still among the highest in Europe. During the past decade wages have gone up 70%, well above the euro area average. Put simply, we have priced ourselves out of the market. We will not be able to stem the haemorrhage of jobs until our prices and the costs of doing business here move down in line with those of our main trading partners.\n\nWHY BORROWING MORE IS NOT THE ANSWER\n\nSome have argued we should continue to borrow and wait for the economy to grow again before tackling the budget deficit. There are three reasons this is not a viable proposition. First, we know from the 1980s how large deficits, left unchecked, can lead to a dangerous spiral of mounting debt and ever increasing interest payments. Never again should we return to a position where all of our income taxes go to pay interest on the national debt. Second, international debt markets have become more crowded and more fragile. If lenders were to lose faith in our ability to restore order to the public finances, the consequences for our economic well-being would be profound. Third, only decisive action will restore confidence. Consumers will only start to spend and business owners will only invest and create jobs if they believe we are tackling our deficit problem now.\n\nIn our everyday lives we do not borrow to pay our household bills. We cut back and seek to live within our means. The same strictures apply at national level. Borrowing hundreds of millions of euro a week to pay for day-to-day spending is just not on. Stabilising the deficit is the next key milestone in our plan to deliver economic recovery for this country.\n\nWHY WE CANNOT TAX OUR WAY OUT OF THIS\n\nOthers have argued for increases in taxes as a means of stabilising the deficit. However, those who demand higher taxes fail to recognise what I have already done. The tax increases contained in the two most recent budgets have placed the heaviest burden on those best able to pay. For example: a single person earning €25,000 now pays €500 more in tax and levies than in 2008; a single person on €100,000 pays around €5,500 more, or 11 times more than the person on €25,000; and at €250,000, the additional taxes and levies amount to almost €17,000 or 33 times the contribution of the person on €25,000. The progressivity of these changes is beyond doubt, but we have reached the limit. We will not create jobs by increasing the penalty on work and investment.\n\nREFORMING HOW WE TAX INCOME\n\nIt is also clear that our income tax system has become very imbalanced. Next year, almost half of income earners will pay no income tax and 4% will pay almost half of the total yield. If we want to sustain high levels of Government services, this imbalance must change. The time has come to transform how we tax incomes and to simplify the position and make it fairer and more broadly based. It is my objective to introduce in 2011 a new system of just two charges on income. A new universal social contribution will replace employee PRSI, the health levy and the income levy. It will be paid by everyone at a low rate and on a wide base as a collective contribution to public services.\n\nIncome tax will apply on a progressive basis to those with higher incomes reflecting their capacity to make a greater contribution. These changes pose a challenge but we cannot continue with the current system, with its myriad anomalies. I look forward to working with my colleagues in the Government on this reform and the closer integration of the tax and social welfare system.\n\nBROADENING THE TAX BASE\n\nIn the renewed programme for Government, we have accepted the recommendations of the Commission on Taxation on the need for a property tax. Considerable groundwork will need to be done before a site valuation tax can be introduced. Work will shortly begin on the registration of ownership and the valuation of land.\n\nThe renewed programme for Government also contains a commitment to introduce a system of water metering for homes. Preparations are under way in this regard. Water charges, when introduced, will be based on consumption above a free allocation. Further details will be announced by the Minister for the Environment, Heritage and Local Government.\n\nThese charges, like the charge on second homes, will finance the provision of local services by local authorities.\n\nHigh Earners Must Pay Their Fair Share\n\nWe have set our face against increasing the burden of income tax. However, the Government wants high earners who avail of tax incentive schemes to contribute more in the current difficult circumstances. Accordingly, 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. This represents a significant tightening of the restriction and it will yield approximately €55 million in a full year. The entry point to the restriction will now occur at an adjusted income level of €125,000, with the full restriction applying at €400,000. I will examine the curtailment and removal of further reliefs in the context of the finance Bill.\n\nOur tax treatment of non-resident individuals is broadly in line with that of most other OECD countries. However, we must ensure that every wealthy Irish domiciliary who pays little or no income tax makes a contribution to the State, especially during times of economic and fiscal difficulty. For this reason, we will introduce measures 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.\n\nFull details in this regard will be set out in the finance Bill. I am also introducing a package of measures to improve the effectiveness of the Revenue Commissioners in tackling the shadow economy, addressing smuggling and excise frauds and dealing with tax avoidance schemes.\n\nCarbon Tax\n\nThe economic and social implications of climate change are immense. It is the responsibility of every Government to change behaviour to reduce greenhouse gas emissions. The most effective way to proceed in this regard is to put a price on carbon. This will encourage innovation by incentivising companies to bring low carbon products and services to the market. Changing behaviour takes time but a start must be made. I am introducing a carbon tax equivalent to €15 per tonne. The detail is set out in the summary of budget measures. The tax will apply to petrol and diesel from tonight. Increases in home heating oils and gas will apply from next May.\n\nThe application of the tax to coal and commercial peat will be subject to a commencement order to allow a robust mechanism to be put in place to counter the sourcing of coal and peat from Northern Ireland where lower environmental standards apply. A vouched fuel allowance scheme will be developed to offset the increases for low-income families dependant on such fuels. The yield from the carbon tax will be used to boost energy efficiency, support rural transport and alleviate fuel poverty. The tax will also allow us to maintain or reduce payroll taxes.\n\nCarbon taxes will be a feature of economies across the world in the coming years. Today's announcement sends a positive signal to those gathered in Copenhagen - working for an ambitious agreement on global climate change - with regard to Ireland's capacity to show leadership in this area. The tax changes I am introducing reflect my belief that tax can make some contribution to the reduction of the deficit and will make a larger contribution in later years. As we know from our recent history, we cannot rely solely on taxing our way out of our difficulties.\n\nSTABILISING THE DEFICIT IN A FAIR WAY\n\nIf we cannot tax our way out of our difficulties, and we all agree in this House that we cannot borrow our way to recovery, then the only remaining option is to reduce our spending. No one wants to cut spending but the cost of providing public services has to be reduced to bring it in line with sustainable revenue levels and to help restore our international competitiveness. Since 1997 we have made great strides in expanding the level of public service provision. We did so out of the best of motives and in response to public demand. Indeed many in this House criticised us for not doing more. 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 approximately €2 billion over 2009.\n\nGiven 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. The measures I am announcing amount to savings of over €1 billion on the pay bill, about €760 million on social welfare, some €980 million on day-to-day spending programmes and about €960 million in savings on investment projects. Combined with other adjustments, this amounts to more than €4 billion expenditure savings compared to pre-budget estimates.\n\nADJUSTMENTS TO PUBLIC SERVICE PAY AND PENSIONS\n\nIn my supplementary budget, I announced my decision to have top level pay rates examined by the review body on higher remuneration in the public sector and benchmarked against those of other EU countries of comparable scale. The Government has considered the recommendations of the review body and intends to apply reductions to all public servants in the higher pay bands including hospital consultants. Based on the recommendations of the review body I propose to apply a reduction in pay of 8% for those with salaries from €125,000 to €165,000, 12% for those earning between €165,000 to €200,000 and 15% for those earning more than €200,000. These are permanent reductions that, in time, will be reflected in 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.\n\nMinisters and Secretaries General of Departments will take a pay cut of 15% or an overall cut of close to 25% when the pension levy is taken into account. The review body concluded that the Constitution precluded it from recommending a reduction in judicial pay. Had it not been so precluded, the review body would have considered a downward adjustment. For the same reason the pension levy was not applied to the Judiciary although many judges have contributed an amount on a voluntary basis. The Chief Justice and the presidents of the courts have urged all judges to make the appropriate pension contribution. I will make provision in the finance Bill to facilitate these payments. Since the review body would have considered a reduction of judicial salaries, I have decided that there will be no increase in judges' pay during the lifetime of this Government. Future Governments may choose, as in the past, to continue this course of action.\n\nThose at the top will lead by example in this national downward readjustment of pay. Legislation to give effect to these substantial reductions in senior level pay will be published shortly. I thank the review body for its work. The report will be published later this week.\n\nIt must be acknowledged that public servants have already made a very substantial contribution to the necessary reduction in public expenditure.\n\nThe pension levy has reduced their pay by an average of nearly 7%. Their numbers have been reduced by the moratorium, the incentivised early retirement scheme and career breaks. Like many workers they have forgone pay increases. Unfortunately, more is required. The country can no longer afford a pay and pensions bill that accounts for more than a third of all day to day expenditure. Any reduction in the pay bill must be sustainable, must be applied in a progressive manner and must address the position beyond 2010.\n\nAs the House knows, there were lengthy negotiations with the public service unions in recent weeks. The Government wanted to achieve the necessary reductions by agreement and the unions earnestly sought to conclude a deal.\n\nI thank the public service unions for accepting the need to reduce the public service pay bill and for their constructive and strenuous efforts to reach an agreement on how this would be done. Regrettably, a deal was not possible. The reductions we must now make do not reflect any lack of recognition of public servants or of the quality of the work they do for all of us. They are simply a matter of budgetary necessity in these extraordinarily difficult times. Accordingly, the pay of public servants will be reduced with effect from 1 January 2010 by a reduction of 5% on the first €30,000 of salary - a reduction of 7.5% on the next €40,000 of salary and a reduction of 10% on the next €55,000 of salary.\n\nThe reductions range from 5% to 8% in the case of salaries of public servants of up to €125,000. The pay of Members of these Houses will be reduced in line with that of the equivalent public service grades. Provision for these reductions will be included in legislation that I will publish shortly.\n\nIn order to avoid a destabilising rate of retirement among older public servants, the pension entitlements of those retiring in 2010 will not be affected. I accept the recommendation of the Commission on Taxation that pension lump sums below €200,000 should not be taxed. The treatment of sums above this level and the tax treatment of pensions, including the consolidated 33% rate of relief, will be considered in the Government's national pensions framework to be published shortly by the Minister for Social and Family Affairs.\n\nPublic Service Pension Reform\n\nExchequer spending on public service pensions will be over €2 billion in 2010. As life expectancy improves and the population ages, this cost is set to rise. The State's pensions bill will grow from approximately 5% to 13% of GDP by 2050, with two thirds of the increase in spending going on social welfare pensions and the remainder on public service pensions. Cost increases on this scale cannot be ignored by any responsible Government determined to secure our economic future. The Government has decided to introduce a new single pension scheme for all new entrants to the public service. The legislation will be introduced in 2010 and the scheme will be in place by the end of the year. The new scheme will bring public service pension terms more in line with private sector norms. Among other things, it will change the calculation of benefits so that pensions are based on career average earnings rather than final salary on retirement as at present. This will be more equitable than the present system, which favours those with higher earnings later in their careers. The minimum pension age for new public servants will also be increased from 65 to 66 and then linked to increases in the State pension age. More details of the main elements of the new scheme are given in the summary of budget measures.\n\nThe link to earnings or pay parity basis for post-retirement pension increases is a feature of Irish public service schemes. The recent special report by the Comptroller and Auditor General estimated that the present actuarial cost of these pensions is €108 billion. A change to a CPI basis for post-retirement increases would reduce that cost to €87 billion, a reduction of 20%. On average, pay increases have been significantly greater than increases in the consumer price index. As part of the reform of public service pension arrangements, I will review the current arrangements and consider linking pensions to increases in the cost of living. Pending that review, I do not intend to apply the pay cuts I have already outlined to existing public service pensioners. These are significant changes. The Government is determined to meet the immediate fiscal problems Ireland faces and, at the same time, to make far-reaching reforms for the future.\n\nADJUSTMENTS IN SOCIAL WELFARE\n\nThe Government is proud of its unrivalled record in increasing the level of social welfare payments. Over the past 12 years, we have increased pension rates by approximately 120%, unemployment benefits by almost 130% and child benefit payments by over 330%. The cost of living has increased by about 40% over 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.\n\nWe are determined, where possible, to maintain that progress in inflation-adjusted terms but we can either safeguard the generous system we have by making these savings now or we can put it all at risk by extending it beyond what resources will allow. We did not reduce welfare rates in April's supplementary budget but I signalled that rates of payment might be reduced if the cost of living fell. The overall cost of living has fallen by about 6.5% over the past 12 months, including very sharp declines in the prices of the basic necessities of food, clothing and accommodation.\n\nIn the case of working age rates of payment there will be a reduction of about 4.1%. 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 payments in Britain and Northern Ireland.\n\nWe know from the bitter experience of the 1980s how a welfare system out of step with labour costs in the rest of the economy can trap people in protracted joblessness. That is why we are making the following targeted changes: for new applicants, the rate of job-seekers allowance and supplementary welfare allowance for persons aged 20 and 21 years of age who have no dependent children is being reduced to €100 per week and for those aged between 22 and 24 to €150 per week; and for all other cases, the rate will be reduced to €150 per week where job offers or activation measures have been refused. In making adjustments to social welfare rates, we recognised that consumer prices have not declined at the same rate for all groups. Older people have experienced by far the smallest reduction in living costs. For that reason and in recognition of the contribution they have made to the State the Government has decided to leave the State pension unchanged.\n\nChild Benefit\n\nIn the supplementary budget, I raised the issue of the unfairness of paying the same level of child benefit irrespective of the level of income of the recipient. Not only is this unfair but it is also unaffordable in current circumstances. Child benefit this year will cost €2.5 billion or 12% of total social welfare spending. I had hoped to be able to introduce greater equity by making child benefit taxable or means tested but there are legal and logistical reasons I cannot do so at this stage. For that reason, the Government has decided to make the changes on the spending side.\n\nAccordingly, 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 so that they will not be affected by this measure. Low income families in receipt of family income supplement, FIS, will be also fully compensated. \n\nThe summary of budget measures gives further details of these and a number of other more limited changes on social welfare entitlements. Social welfare spending rose in 2009 to €20.4 billion. The measures announced today will reduce social welfare spending by €760 million in 2010. Despite this reduction social welfare spending will reach €21.1 billion next year due to the sharp rise in unemployment during 2009. Of the major adjustments I am announcing today across all areas of spending, welfare is making the smallest contribution.\n\nAs a result of these deductions, rates of payment will revert to 2006 levels in the case of child benefit and just below 2008 levels in the case of working age rates for those aged 25 and over.\n\nIt is the Government's firm intention to maintain the comparatively generous level of social provision we have in this country but we are in very difficult circumstances and everyone must make a contribution. Government is about taking decisions, taking responsibility, and making choices that not all will welcome. Cutting public spending in the abstract is easy; deciding where cuts will fall in reality is an entirely different matter. Those opposite have the luxury of the former. We have the duty of the latter.\n\nADJUSTMENTS IN DAY TO DAY SPENDING\n\nOver the last year we have been running to stand still in terms of spending on public services. Reductions have been offset by increases mainly due to increased unemployment and higher debt servicing costs. In this budget the Government has decided to reduce spending on public services by almost €1 billion in 2010 compared with the pre-budget estimates. We have sought to make savings through efficiencies rather than through reductions in services, €400 million of these savings arise 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. The Minister for Health and Children will provide details.\n\nThe remaining savings in day to day spending will be achieved across other Departments, details of which are set out in the summary of budget measures.\n\nREVIEW OF LOCAL AUTHORITIES\n\nIn framing this budget I have been guided by the McCarthy group's report. This group did not examine spending in the local authorities which provide critical services to communities and businesses at local level. Local authorities are a key driver of cost for business. The Government has decided to undertake an efficiency review of local authorities. This work will begin immediately and report by mid 2010. The full details of this review will be announced by the Minister for the Environment, Heritage and Local Government.\n\nINVESTMENT FOR RECOVERY AND EMPLOYMENT\n\nAlthough public investment spending is being reduced next year, it still will 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.\n\nIn 2010, our investment projects will focus on labour-intensive areas such as schools building and maintenance, energy efficiency measures and investment in our tourism infrastructure.\n\nOther key investment priorities in 2010 will include science, technology and innovation; promotion of environmental sustainability; implementation of green enterprise initiatives; housing and urban regeneration; the health sector; public transport and finishing the inter-urban motorways. I want to draw particular attention to an initiative in the health sector. I am providing for a multi-annual investment programme in important mental health projects which are in line with the strategy set out in A Vision for Change. This investment programme will be funded from the sale of surplus HSE assets and I am allocating an additional amount of €43 million for this purpose in 2010. Further funding for mental health will be provided as asset sales allow.\n\nNational Solidarity Bond\n\nI have received a number of proposals to establish a medium-term national savings product as an additional source of funding for capital investment. A product of this kind would enable ordinary citizens to provide money to the State to stimulate economic recovery and create employment. I am announcing today the Government's intention to introduce a national solidarity bond aimed at small investors. The National Treasury Management Agency and my Department are working on the details of the bond and I expect it will be open for investment early in the new year.\n\nSAFEGUARDING THOSE WORST HIT BY THE RECESSION\n\nSome have suffered more than others in this economic downturn: those who have lost their jobs or whose jobs are at risk; those who have concerns about meeting their mortgage repayments; and those affected by the recent flooding.\n\nHelping People back to Work and Protecting Jobs.\n\nProtecting jobs and providing opportunities for those who are unemployed to return to work and avail of education is a key priority for Government. I am providing nearly €136 million in funding to provide an additional 26,000 individuals with training places and supports; €56 million is being made available to FÁS for short-term courses €20 million will go to an activation fund which will involve an open call for innovative proposals that have the capacity to provide work, education and training; €14 million is being made available, in addition to €26 million from the EU, for supports to redundant workers in eligible companies under the European globalisation adjustment fund; €9.5 million is being made available as support measures for the food industry to enhance the competitiveness of this key indigenous industry; and €36 million will be allocated to an employers job incentive scheme giving PRSI exemption to encourage employers to take people off the unemployment register. The Minister for Social and Family Affairs will announce further details.\n\nThis will bring the total places available for the unemployed to more than 180,000. We are already providing substantial supports to employers through the stabilisation fund and the temporary employment subsidy scheme which will cost €165 million in 2010. In line with the Government's commitment to enhance the efficiency of the State's investment in science and technology it is my intention to create a single stream of funding in this area. To advance the smart economy, it is essential that the State secure the maximum commercial return from its substantial investment in research, science and innovation. Details of the new arrangements will appear in the Revised Estimates volume to be published in the early part of the newyear.\n\nMortgages\n\nAll sides of this House share a concern for those who face difficulties meeting their mortgage repayments. It is important to remember that only 20 homes have been repossessed by the institutions covered under the Government guarantee in the first three quarters of this year. Mainstream mortgage lenders have adopted a responsible position towards their customers. Most recently the Irish Banking Federation issued a statement of intent which provides that where a customer in difficulty adheres to a mutually acceptable arrangement with theirlender, the lender will not initiate any form of legal action against them in relation to their mortgage.\n\nThe renewed programme for Government includes a commitment to introduce new measures to protect families having difficulty with their mortgages. As a first step in this process I have 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. 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. In the supplementary budget, I refocused mortgage interest relief on those who bought their homes at the peak of the market. As a support to homeowners who now find themselves in negative equity, I am providing that where entitlement to the relief would expire in 2010 or after, they will now continue to receive it up to the end of 2017. To encourage those who want to buy a house over the next three years, I will provide that qualifying loans taken out before 1 July 2011 will continue to get relief at current levels for seven years, and transitional arrangements will apply to loans taken out in the subsequent 18 months at a reduced level and duration. It is my intention to abolish mortgage interest relief entirely by the end of 2017. Full details will be set out in the finance Bill.\n\nThe Government already provides help and support for families in difficulty with their mortgages through the mortgage interest subsidy scheme. A review of the operation of this scheme will be completed early in the new year.\n\nResponding to the Flooding\n\nThe recent flooding has brought severe hardship on communities in the affected parts of the country. I am announcing today that in excess of €70 million will be provided in the remainder of 2009 and into 2010 to help those affected by the recent flooding and fund work to minimise the risk of future incidents. The review of investment priorities which will shortly be published will also provide for continued substantial investment in flood relief. The Government is keeping this situation under review and will commit further resources as required.\n\nSTIMULATING THE ECONOMY TO HELP SUSTAIN AND CREATE JOBS\n\nThose in business understand the connection between fiscal sustainability and business confidence but they also understand that delivering economic recovery is about more than cutting the deficit.\n\nWe must invest in every sector to create jobs and secure sustainable growth. Today, I am announcing a number of stimulus measures to aid the economic recovery in the short term and help ensure sustainable growth for the future.\n\nSupporting the Retail Sector: VAT and Excise Changes\n\nOur retail sector has been battling a steep currency depreciation on its doorstep. The main reason for the increase in cross-Border shopping is the currency differential. This is outside our control but it is within our power to reduce our consumption taxes which are among the highest in the European Union. Recent CSO data show that 44% of cross-Border shoppers buy alcohol. To protect Exchequer revenue and stem the flow of cross-Border shopping, I have decided to reduce excise duty on alcohol products. The reductions will be as follows: 12 cent per pint of beer and cider; 14 cent per half glass of spirits; and 60 cent per standard bottle of wine. All of these reductions are VAT inclusive. I expect the drinks industry to play its part in making the cost of alcohol more competitive. If I find this reduction has not been passed on to the consumer, I will reverse today's reduction. In response to many calls on all sides of the House, I have looked again at the standard rate of VAT and I have decided to reverse the 0.5% increase imposed in October 2008. This measure will take effect from 1 January 2010 and is estimated to cost €140 million next year.\n\nI have decided not to make any changes to excise on tobacco in this budget because I believe the high price is now giving rise to massive cigarette smuggling. My responsibility as Minister for Finance is to protect the tax base. I have full confidence in the effectiveness of the current multi-agency approach but early in the new year I want to explore what further measures we may need to stem the illegal flow of cigarettes into this country.\n\nImproving the Energy Efficiency of our Cars\n\nThe Government wants to encourage the increased use of environmentally-friendly electric cars and the development of new technology in this field. To that end, the VRT exemption for electric vehicles and the VRT reliefs of up to €2,500 for plug-in hybrid electric vehicles are being extended by two years until 31 December 2012. We will also provide support to offset the initial battery costs for such cars. This will help in fulfilling our ambitious goals to reduce transport-related emissions.\n\nI am also introducing a car scrappage scheme, to run from 1 January until 31 December 2010. VRT relief of up to €1,500 per new car purchased will be made available under the scheme, where a car of ten years or older is scrapped under certain conditions. The scheme will have the environmental benefit of removing some older, potentially less safe and polluting vehicles from the road. Details of the scheme are provided in the summary of budget measures.\n\nGetting Credit Flowing\n\nIn light of the massive State commitment to the banking sector, I am determined that there will be a return to the taxpayers of this country in the form of credit which supports healthy Irish businesses and jobs. This is why I am establishing a credit review system. I will use my powers under the NAMA legislation to issue guidelines to all banks participating in NAMA who have an SME business, to ensure that SMEs, sole traders and farm enterprises will have recourse to an independent, external review of decisions of credit refusal by the banks. I hope also that banks not participating in NAMA or covered by the Government guarantee will also decide to participate. My aim is to have a simple, effective appeals process, run by people with experience and credibility. The banks must comply with the recommendations of the appeal process, or explain satisfactorily why they cannot do so.\n\nIn addition to dealing with individual cases, the credit review system will examine the credit policies and practices of the banks for all SME sectors. It will pay particular attention to sectors, such as the retail sector, including car dealerships, tourism and agriculture, where particular stresses have been reported. This will help me to decide what further action might be necessary to secure the flow of credit. I intend to publish the analysis from the review process so that the performance of the banks participating in NAMA will be clear to all.\n\nI have asked Mr. John Trethowan, an experienced banker with a demonstrated commitment to public and social service, to oversee the establishment of this credit review system with initial administrative support from Enterprise Ireland. I expect he will start his work shortly.\n\nAssisting Agriculture and Forestry\n\nAgriculture is an important component of our economy and this Government has not hesitated to offer this crucial sector support where it was most needed. We responded rapidly to the pig dioxin crisis last year, where we provided some €200 million to save that industry and the jobs within it. We have made a large investment in agricultural infrastructure through the farm waste management scheme. 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. I have agreed to provide €50 million from within the existing allocation to support this scheme.\n\nI am also providing more than €121 million for forestry and bio-energy. This includes a capital provision of €116 million to plant a further 7,000 hectares of trees next year. This demonstrates the Government's continued commitment to this vital sector as set out in the renewed programme.\n\nRetaining a Pro-Enterprise Tax Policy\n\nOur corporation tax rate of 12.5% has become an international brand, known the world over. It is a powerful expression of our enterprise ethos and continues to attract new business and new jobs to this country. In a time of great uncertainty for international business, it is important that we send out a clear message. The 12.5% corporation tax rate will not change. It is here to stay.\n\nOver the last two years, I have significantly enhanced the incentives for research and development and intellectual property. I look forward to receiving the report of the innovation task force and I will explore its recommendations in the context of the finance Bill. In budget 2009, I introduced a three year corporate and capital tax exemption for start-up companies in 2009. I propose to extend this scheme to new start-ups in 2010.\n\nSignificant opportunities exist in the international financial services sector for centralising high value added activity in Ireland as this sector restructures itself around the world after the global financial crisis. Big opportunities also exist for Ireland to become the European hub for the international funds industry following recent European legislative changes. I will bring forward changes in the finance Bill which will strengthen Ireland's competitive edge in this important sector.\n\nBoosting Energy Efficiency to Stimulate the Economy\n\nBoosting energy efficiency is good for the environment and for the economy. It is a growing area of innovation with huge commercial and employment potential. We are allocating about €130 million for energy efficiency measures which will include a new multiannual national retrofit programme in 2010. This will build on the success of existing schemes delivered through Sustainable Energy Ireland and has the potential to create up to 5,000 jobs next year alone.\n\nSome €50 million of the carbon tax yield will be used to fund measures such as help for households at risk of fuel poverty to make their homes warmer. The local authorities will receive additional funding to retrofit the social housing stock. This represents a significant boost to the plan to retrofit over 1 million houses by 2025. In addition, the scheme of accelerated capital allowances for energy efficient equipment is being enhanced to include refrigeration and cooling systems, electro-mechanical systems and catering and hospitality equipment. This measure will improve energy efficiency while also helping companies under strong competitive pressure in sectors such as food and drink, retailing and distribution.\n\nSupporting the tourism sector\n\nThe tourism sector is a critical, labour intensive indigenous sector. The overall tourism budget will be increased in 2010 to enable a marketing drive with the objective of increasing tourism numbers and revenue by 3%. Investment in visitor attractions will be increased threefold to €22 million.\n\nAs an imaginative initiative to increase tourism numbers next year, Iarnród Éireann has agreed to participate in a new scheme, to be developed by Fáilte Ireland, aimed at senior citizens visiting Ireland from abroad. This group will be offered vouchers for greatly discounted rail travel throughout Ireland. More information on this initiative will be given by Fáilte Ireland and Iarnród Éireann in the coming weeks when the details have been finalised.\n\nCONCLUSION\n\nI want to recall the death earlier this year of Senator Ted Kennedy. Senator Kennedy was unquestionably one of the best friends Ireland ever had on Capitol Hill. Today, in a modest way I would like to honour the memory of a great man from a great family. The Government will provide funding for a project at the Kennedy Homestead in Dunganstown, County Wexford, from which his forefathers emigrated in the early 19th century. The development of this important visitor attraction will be a welcome boost to tourism in the south east.\n\nThe inauguration of John F Kennedy as President of the United States in 1961 gave a powerful sense of hope, possibility and self-belief to Irish people all over the world. A recent survey commissioned by The Irish Times found that 84% of those surveyed think Ireland needs to start believing in itself again.\n\nYes, we have endured a traumatic 18 months. The speed and ferocity of the recession has knocked us off our stride but the innate advantages that brought us the boom have survived the downturn. We have taken a step back but we have in place a plan to take us forward on the path of sustainable economic growth. That plan is working. Unemployment will not be as high as previously forecast, our tax receipts have begun to stabilise, consumer confidence is beginning to revive and our export figures are the healthiest in Europe.\n\nAs we begin to emerge from the unrelenting economic gloom of the last 18 months, we need to rediscover our optimism and our self-belief. Now more than ever, we need that confidence on which business and work thrives. The measures contained in this budget, some of them unpalatable, will engender that confidence.\n\nWe have taken the hard decisions but we have been fair. We have preserved the real value of social welfare for those most in need. We have protected older citizens. We have reduced the cost of public services. We have taken action on credit to protect borrowers. We have cut taxes to protect jobs in retail and tourism. We have maintained significant investment spending to promote future growth. We have announced measures to save jobs, stimulate employment and protect the environment. Our plan is working. We have turned the corner. I commend this Budget to the House.","This draconian budget should not be happening today. It is happening, however, because Fianna Fáil failed to heed the warnings and drove this economy on to the rocks. Even now, the thinking behind this budget is short-sighted. It is sucking us into a cycle of more job losses and higher debt. People will hurt badly after this budget, people who had no hand, act or part in creating the problem that we now face.\n\nThis is a jobless and a joyless budget. It offers no vision that would rebuild confidence, it serves only to get the Taoiseach and his Ministers to the end of this week.\n\nThe only way to break out of the cycle that has been created is with a convincing jobs strategy and that strategy is simply missing. This requires real leadership from Government. We saw that sort of real leadership 50 years ago from Lemass and Whitaker, who offered a clear vision of how Ireland could be different, who had the determination and the courage to take action to overcome vested interests, to confront problems with bold vision. Such vision is sadly absent from their successors. That is the tragedy we face today.\n\nMany will feel the force of this budget pushing them down. None, however, will nurture the belief that it will put the country back on its feet. We expected to hear Ministers lead by example. The supposed cut of 15% in Ministers' pay and 20% in the Taoiseach's pay is a sham. It ignores the 10% we were told they were taking in April. The truth is that the real cut Ministers are taking is 5%. By comparison, someone earning €45,000 in the public service is expected to take a bigger cut than Ministers. Those on social welfare with two children are expected to take a bigger proportionate cut than Ministers. This is a deception.\n\nWe are still waiting to hear from the Minister what Anglo Irish Bank will suck out of next year's budget, an issue on which he has remained deafeningly silent.\n\nPeople are approaching this budget with anger and fear. They are angry about the warnings that were not heeded and the prevarication that failed to address problems. They are angry at the negligence that underpinned this and that no one has been held to account for the catastrophic failures that have brought us to this pass. They are fearful for their futures and the futures of their children.\n\nThey expected to see in the budget the start of a real transformation, an attempt to transform politics, to transform our economy and public service, all with the purpose of creating jobs. That is what people expected and they have been dismally disappointed by what we have seen today.\n\nInstead of the Minister taking the radical steps to recondition an engine that this Government has brought to a standstill, ordinary people are being told to get out and push. That is not fair and is not sufficiently visionary to address the scale of the problems we now face.\n\nThe actions taken in today's budget will do more to prolong this recession than to shorten it. Once again, we see the Minister go back to the old reliable of slashing investment not only this year and last year, but next year and the following year. We have never seen an economy come out of depression by slashing investment, the sort of investment that should be creating infrastructure fit for a modern age. The Minister is standing back and allowing that infrastructure to be neglected.\n\nThe Minister is failing to confront the cost problems that are dragging business down. Where is the radical idea to cut PRSI on employers, to give those employers who are hanging on by their fingernails a chance to survive and to see out this Christmas in the hope of something better in the new year? The Minister has failed those employers.\n\nThe Minister is also pretending the credit problem is solved and setting up a review. The people did not want to hear that; they wanted to see concrete action that would transform the credit situation. The banks came in here last week and told us the transfer of money to NAMA would not make a cent of difference to availability of credit. That is a catastrophe that will destroy strong businesses, businesses that will be sucked down by the failure of credit.\n\nThe Minister is ducking the challenges we face by offering an accountant's budget. This budget is a recipe for staying in this hole for the next year, looking to the same people for the same sacrifices - the carer, the family struggling on low income and the public servant on low income. That is what the Minister for Finance has dressed up today as a positive contribution. The truth is that creating and sustaining employment should have been the be-all and end-all of this budget. That is the sole challenge we have to face. It would have been a far more fitting tribute to President Kennedy to have tried to stem emigration from this country than to come up with a shallow gesture of recognition. In the past two years 12% of Irish employment in business has disappeared, 22% of people, one in five, have taken a cut in their working hours. Some 90% of those job losses have hit people under the age of 30. These are the people who are carrying the can of the bad management of this economy. Those young people are the building blocks for the future. We cannot afford to allow, by the Minister's inactivity, those people fall prey to unemployment and emigration as occurred in the past. This budget is one where his courage has failed him. He has refused to take on the challenge of recreating a strong economy in Ireland. That could have been done by the type of policies our party has put forward, a radical programme to bring in private money to invest in the infrastructures we need to get out of the hole we are in.\n\nWe need a modern electricity network, a strong broadband system, a modern water system and we need to put sound energy efficient systems into our housing and building stock. These are things we need and the money is not there to provide them unless the Minister creates a vehicle to drive it. He has stepped back and failed in that area. That is the tragedy.\n\nWe should have seen the Minister start to address the challenge of regaining the competitiveness of Ireland and that has failed. He has offered the rhetoric of the smart economy. I heard him use words such as e-enabled, renewably resourced, smartly networked, carefully husbanded. These are words that trip off the lips of Ministers but the truth is that 40% of the water we produce leaks out of the system. We have 5% of the broadband speeds of our competitors. We fail to realise the potential of renewable energy compared to countries that do not have a fraction of what we have available to us. That is a failure of vision. It is possible for the Minister to address those issues if he had the vision to do it but that vision has failed him.\n\nWe have to break out of this vicious cycle in the public finances. Slide rule accountancy will not crack it. The Minister has made provision today for €4 billion in cuts but the 75,000 extra people he forecast will be on the dole will cost €1.5 billion in lost revenue, re-impacting the deficit. He has admitted that interest on the debt will rise by €2 billion next year, that is €3.5 billion of the €4 billion that he has pushed people so hard to deliver, has just been wiped away. We are in a vicious cycle that we are not breaking out of because the Minister sees only the narrow issue of correcting the public finances and not the wider issue of addressing the economic weakness and how we rebuild our economic strength. That has failed us in this budget.\n\nThe Minister surely had to face up to the situation regarding Anglo Irish Bank. The dogs in the street say that €6 billion will be needed for the bank during the course of this year. Where is that provided for in this budget? One cannot pretend it will come from thin air. It has to be provided for and we have to budget for it. We have to know where it will come from and if it will be added to the national debt? It is not credible until the Minister addresses those issues.\n\nAt the end of this budget the Minister will borrow close to last year's amount. We will be funding an incredible 29% of our net current spending on tick, on borrowing, which is an appalling figure. That is what the Minister has achieved having asked so many people to take pain. By 2013 his own predictions say that 71% of our income tax will be absorbed in paying interest, that is 71% of the sacrifices people make to pay income tax will be wiped away. That is a cycle the Minister has to break but it can only be broken if he has a strategy to address economic growth.\n\nThe Minister talks about having better economic growth and says the worst is over. That is a like George Bush announcing \"Mission accomplished\" when he went to Iraq. The truth is that these numbers are purely speculative. He has not addressed the strategies that can bring us that growth, create the employment opportunities, give us the competitive infrastructures and bring down costs. That is the tragedy. Restoring confidence is vital to our recovery. People will not invest if they are fearful and they are fearful. The Minister has forecast that next year private investment will fall by 40%, a catastrophic figure. It illustrates that people are not confident the Government has a strategy that will bring this economy on a road where they can see where they are heading and have a credible belief in what is being done. We cannot break the cycle if investors and families do not have the confidence to go out and spend. That is the position we are in. One needs more than vacuous claims that the worst is over, one needs to see action, a strategy, a plan. That is the void that has been left unaddressed.\n\nFront-line services have been hit hard in this budget because the Minister was not willing to face up to the much more radical change demanded by the McCarthy report. That is the incredible part of it. The Minister commissioned a report that demanded that he address issues. Some 43 rationalisations were identified by the McCarthy process and not one of them has been taken on. I suppose that is not surprising because in last year's budget the Minister announced that there were to be 30 rationalisations involving 41 agencies. What happened? Half of them have not been touched. The total savings to date from those rationalisations is €3.4 million, less than 1.5% of the budgets involved. The Minister has failed to create the tools to make rationalisation happen. He has failed to move staff from where they are not needed to where they are needed. He does not have a system for doing that and he does not have the tools to give managers the power to rationalise the way they do their business. He has left it to the 11th hour to try to address those changes. We come back to this budget and see that the focus has been on the front line and not on the changes we should have seen. These changes will be hard on people.\n\nThe Minister is asking people on the drug refund scheme to pay €120 per month whereas at the last general election the amount was €85. He is asking people on medical cards to pay 50 cent per prescription. In the UK when such a cost was introduced it exempted the lowest one-third of the income profile. Patients do not decide what is prescribed on their medical chit, doctors decide that. That patients on €180 per week, according to the means test, are being asked to pay up to €10 per month will not save us on our drugs bill. To do that one has to be radical about using generic drugs and look at new prescribing practices, not asking the weakest in our community to contribute.\n\nThe Minister is asking carers who are saving the State a fortune to take a cut of €8.50 in the amount of money they receive. Where is the fairness in that? He is asking widows and invalids to take that cut, simply because they are under the age of 65. Why were such people not exempted? The value of the work of a carer, for which the Minister will pay €212 per week, runs to €1,000 per week. That is what a carer means to a family, and it does not mean simply a monetary saving. It means that the patient is in an environment in which he or she wants to be and getting the care they want.\n\nThe Minister needed more imagination. He has hit people who are down. The fact that he has hit child payments is very short-sighted because young families have borne the brunt of the recession. They are the people who paid excess prices for houses in the upswing and are now in negative equity. Some 35,000 of them face repossessions. There are 350,000 families in negative equity and the Minister's gesture to them is inadequate, it is pathetic. Where is the work of the Government group that was address these problems?\n\nWe were told in the programme for Government that this would be a priority but this has not been reflected in the budget. What other group is more important than families who are under threat of losing their homes? We expected to see provision for them and we expected to see the needs of the victims of this recession addressed. The Minister has provided for 26,000 job placements for the 420,000 who are out of work and this is welcome but far more welcome would be a radical economic plan to drive employment growth. Fine Gael's economic plan to do this builds to a potential of 175,000 jobs after four years. That is the sort of vision we needed, the sort of commitment that was possible for the Minister to take on. He has short-changed people who ought to have been at the heart of this budget. Time and again we have heard the former Minister for Finance, Deputy Cowen and again as Taoiseach, talking about the seismic shift of reform in the public service. We have heard all the rhetoric but it has produced nothing. Today we see the evidence of this. The McCarthy report set out cuts that could be achieved in the area of social welfare and there was a shock and a sharp intake of breath from people who hoped we would not be reduced to such action. The report also looked at areas other than social welfare; it considered efficiencies in the spending system and in rationalisation. The Minister has adopted none of the rationalisation. What is worse, he has adopted 42% of the savings on the social welfare side but only 25% in the non-social welfare areas. This was the difficult area, the area that required Ministers to apply a bit of imagination, to actually invest their intelligence in changing the way they ran their system, to get more with less. The Minister shirked that responsibility to make those reforms and as a result it is the front line, those low-paid public servants who will pay from the very first euro. It is people on social welfare under 66 years who will pay. The Minister has asked them to pony up because he was not willing to confront the sort of change that is needed.\n\nThe Government should have adopted each proposal in the McCarthy report as it came, and be seen to be driving a rationalisation programme from the outset, sitting down and negotiating with trade unions from the very start and announcing that this was part of a jobs strategy. It should have appealed for solidarity from all those working in the public service as well as the private sector in order to create an employment strategy. Instead the Government has disastrously mishandled those negotiations and it has left us with the public service that is angry and demoralised. This is a tragedy. Most people I talk to in the public service know that costs in the public service will need to be cut if we are to trade our way out and rebuild a strong economy that creates employment. They know that but they want to be part of a strategy that shows solidarity with something bigger that is being created, a real employment strategy. The Minister did not go to them with an employment strategy in which they could believe, in which they could see that their sacrifice was going to be contributing to a bigger picture, an agenda of change, not just in the public service but reinvesting in the economy and reinventing the economy. The Minister went to them with a demand for pay cuts alone but where was the wider strategy to bring down costs, where was the commitment to confront boardroom pay, the rip-off that we see in our shops every day? Where was the commitment to drive down utility prices, to freeze Government charges? Where was the commitment to cut commercial rents that are killing businesses by the day? The Minister needed to show that the effort he was asking for from public servants - which was valid - was matched by an equal determination to confront costs right across the economy. We have lots of people in the sheltered sector who are not confronting those costs and who are making businesses go to the wall. If the Minister could have enlisted people's support behind such a strategy, they would respond but the Minister lacked the ambition and the determination to take on those interest groups who have been too cosy, too close to Government in the past. This is what has let us down. We have been left with damaging cross-fire between the public and the private sectors. The public sector will never succeed without a vibrant private sector and the private sector will never succeed unless the public sector can be reformed and become more effective. We work together. We needed a sense of togetherness and willingness to confront these problems together and instead the Minister has left a residue of bitterness and division which is doing us no good.\n\nIt was vital that people should regard this budget as being fair. We expected much more in terms of asking people who are better-off to contribute to the cost. Fine Gael proposed that those earning over €75,000 would pay the full 4% PRSI levy all the way up but that was not adopted. We proposed radical reform in pension relief, targeted at the higher paid and that has not been adopted. We proposed the wiping out of many of the tax shelters but that has not been adopted.\n\nI agree the Minister has adopted the residency rule and set a maximum tax but the figures tell it all. Nothing will be achieved from that measure this year and even next year it will only be €55 million. We were targeting a contribution of 600 million contribution from the better-off in our community. That balance was needed and it has been missed. However, there is a greater unfairness in this budget. Where is the fairness in the way the banking crisis has been handled? How could it be fair that those who created this problem still circle the wagons and appoint two insiders to run those banks that brought us to our knees? How can it be fair to ask the taxpayer to shoulder an extra €7 billion in paying for these impaired assets simply to protect the professional investors in these banks? How can it be fair that good businesses are now perishing because what the banks are doing is using the money the Minister gave them to protect their interests, not to rebuild a strong economy that is conscious of the needs of small business? They say that is what they are doing and that is what one would expect them to do unless the Minister intervenes to make it different.\n\nWho is being brought to book for all this? That is what people ask me every day and I am sure they also ask the Minister the same question. Who is being brought to book for the appalling things that were done in our banks? No one has yet been brought to book. Where is the change so that we can be sure that what happened in the past will not occur again? We still do not see that change happening.\n\nThere is a void at the heart of this Government, a void in the nerve centre of this system of governance that should be driving Ireland to have a revitalised public sector at the heart of economic growth. This is a unique time of opportunity for the public sector. It controls assets that are vital to our recovery and it controls budgets that have to be managed effectively. It needs leadership in this budget and it has not happened. Fundamental changes have to start with politics and we have not seen that here. We have not seen it in the way Ministers are dealing with their own pay nor have we seen it in a willingness to confront the fact that the Oireachtas has become too big. Fine Gael has proposed getting rid of the Seanad and reducing the size of the Dáil. We should start by reforming these Houses as part of a bigger, ambitious plan to reform the country.\n\nThis is the 50th anniversary of the Lemass and Whitaker economic plan for development. Things were very similar because then as now, Ireland had years of failed policies and then as now, there were powerful interests that did not want to see change. However, what happened then did not happen now; then we had Ministers who were willing to set ambition out to be determined to confront change, to take the actions that were necessary. That is the sort of leadership we need again. The Government has failed to seize the moment. I suspect that because it is the architect of much of what has gone wrong, it has spent too much time in denial, too much time in explaining and pretending it was not its fault, to actually have the courage to make the changes we need. This budget has not started to shape the authentic economy to rebuild this country. It has not started to shape a modern public service that could rebuild the lean, fit and quality public service that is needed for the future. It has not started to mould a social contract which people could believe in, a social contract built around reform in our health system so that the two-tier service could be ended, a social contract around reforming the pensions system so we would not have people abandoned - as happened the workers in Waterford Crystal - with nothing. We need to see that thinking coming from the heart of Government. We need that sort of leadership. History has taught us the folly of many armchair generals who were too preoccupied with themselves to keep up with changing technology and who were oblivious to warnings, who produced moth eaten strategies as if they were a modern way of fighting wars.\n\nWhat did they do? They sent young people over the top into the teeth of gunfire which mowed them down. In many ways, we are in an economic war. Our defences are weak, our equipment is not modern and our generals have failed us. We need real leadership from Government. At its core, what is wrong with this budget is that leadership has been lacking. It is further proof that those who got us into this mess do not have the ability to fix what they have broken. They do not have the vision, authority, courage or policies.","The other day, Goldman Sachs circulated a note about the Irish budget which referred to the remarkable degree of consensus in Ireland about the necessity for budget adjustments. I will cite one sentence from the document. It states: \"Although the government, the opposition and the trade unions continue to debate where and how the knife should fall, there is little or no dispute about when and how much the budget should be cut\". The Minister had a remarkable consensus available to him, from the Fine Gael Party and Labour Party as well as the trade union movement. One could never have imagined one's party giving such an advantageous start to any Government. This could have been a consensus budget as it was a classic \"all jump together\" moment, an opportunity for burden sharing by everyone but the Minister blew it. The budget is straight out of the Leona Helmsley school of thought in which burden sharing, like taxation, is only for the little people. Social welfare payments have been reduced by €8.30 per week for carers, widows and widowers aged under 66 years, lone parents, people on disability and even blind people.\n\nThe Minister has some nerve quoting Ted Kennedy, the champion of the poor and fairness in America who, like Warren Buffet and Bill Gates, was not afraid to say that rich people in a republic should pay their fair share of tax. He estimates the contribution from the wealthy will be €55 million or approximately 1.5% of the total budget adjustment package of €4 billion. That is the fairness and burden sharing in the budget. It is the cleaner with two children working in the public services who will carry the bulk of the burden, although she will undoubtedly be delighted to have a job, as I am sure the Minister will not stop reminding her.\n\nThe Minister barely mentioned the National Asset Management Agency or banks. Last month, we had the establishment of NAMA which was, in many ways, the bailout of the guilty who, aided and abetted by the Fianna Fáil Party, drove the economy to ruin. Today, we have the slaughter of the innocents. This morning, I heard Ryan Tubridy ask listeners to suggest titles for a Christmas hit single. Fianna Fáil's hit single for Christmas will be, \"I saw NAMA killing Santa Claus\". Parents should know that child benefit is being cut to pay for the bailout of the banks and developers. That is where the hole is in the budget. The Government had to borrow €7 billion extra this year, €4 billion of which was given to Anglo Irish Bank while €3 billion from the National Pensions Reserve Fund was given to the two largest banks. Let us not be under any illusion; the ghost at the feast, the unmentionable, is the bailout of the banks and developers.\n\nI am glad the Minister came into the House with his tail between his legs and reversed the 0.5% increase in VAT, the single most disastrous action he took in the early budget for 2009. His half point VAT mistake sent shoppers scurrying over the Border to queue in ASDA in Enniskillen and Sainsburys in Newry.\n\nThe Minister also reduced excise on alcohol and introduced a scrappage scheme for cars. Reading the leaked details of the budget in newspaper reports, I concluded that the Minister's decision to cut the cost of drink and cars makes his budget a kind of \"Top Gear\" budget for lads, of which Jeremy Clarkson would approve.\n\nIt is not that these measures will not act as a stimulus, it is that budgets are about choices and the Minister chose to impose the burden of pain on families with children and those on social welfare aged under 66 years. As I stated, the burden sharing introduced in the taxation measures for the higher paid amounts to less than 1.5% of the total €4 billion adjustment.\n\nIt is a heartbreaking time for parents of young graduates and apprentices in many trades. The saddest aspect of the Minister's pre-budget outlook was his acceptance that unemployment would increase by a further 75,000 next year. Employment in agriculture has declined by15%, whole classes of nurses, all of whom were trained at considerable cost to the State, have departed to work in hospitals in the United Kingdom and elsewhere, and newly qualified architects, solicitors, civil engineers, trainee teachers, construction apprentices are finding it impossible to find jobs at home. If this is the fate of those with qualifications, how much worse is it for the early school leaver and young unemployed person? This is a nightmare scenario for the individuals affected and their families and no less a nightmare for the whole country.\n\nHistory teaches us the lesson that youth unemployment and unemployment among people aged under 25 years causes permanent scars, its effects last a lifetime and economic recovery does not guarantee that the scars will be healed. Employment must, therefore, be the main focus of policy. The Labour Party accepted the €4 billion adjustment so as to protect our country's international credit rating and make the cost of borrowing as cheap as possible. We added an additional €1.8 billion in our document to allow scope for a jobs initiative. The Minister is so obsessed with rescuing banks at any cost that he cannot face the awesome jobs and employment challenge that should engage his attention night and day.\n\nJohn B. Keane wrote a great play titled, \"Many Young Men of Twenty Said Goodbye\". Today, many young men and women will say goodbye after Christmas because they must take the decision to leave, as people all over rural Ireland and every town and city know. Is this the legacy the Minister wants from his time in office?\n\nThe Minister claims to have a smart economy strategy. Where is it now, a full year after its launch? He devoted enormous energy and resources to protecting the property economy through NAMA but has not devoted a fraction of that energy to the knowledge economy. Where are the internships that can offer a bridge for young graduates and apprentices? If a newly qualified person becomes unemployed for a long period, it is difficult to reintegrate him or her in the labour force when the recession ends two or three years later. If they are unable to secure job experience on leaving college, younger graduates will take up the opportunities to acquire experience when the recession is over. The way the Minister is treating young, unemployed people is a real problem and the measures in the budget today hardly touch the surface of the issue.\n\nI refer to child benefit. The Minister flagged this issue very well and has decided to make this cut in respect of women and children the centrepiece and the heart of his strategy, aside from the reduction in public service pay. I recall the day early in May 2007 when the professor, Deputy Bertie Ahern, called an election. The Minister, Deputy Brian Lenihan, had an early morning job to do. It was a Tuesday morning in May 2007, the monthly child benefit payment day, but there would be no ordinary payment that day; it would be a bumper payment day. The previous December, the other Brian, the then Minister for Finance, Deputy Cowen, had made a special budget day announcement that child benefit was to increase in 2007 by €10 per month per child. This would not happen immediately and mothers would have to wait for several months. They would have to wait until May to get the increase which, by coincidence, would be the election month. Mums in the post office queue in Blanchardstown were looking forward to a bumper payment, and to make the day extra special, there was the then Minister of State with responsibility for children, Deputy Brian Lenihan, walking along the queue shaking hands and kissing babies - I am unsure about that part of it as I did not see him doing that - and reminding everyone that Fianna Fáil was the party that looked after child benefit.\n\nIt would be something for them to remember on election day some weeks later, and they did so. That day in May 2007 the Minister, Deputy Brian Lenihan, was top of the Blanchardstown post office walk. Today, what has the Minister to say to those mothers? I can inform the Minister, Deputy Brian Lenihan, that mná na hÉireann are not fooled that easily. It was exactly the same five years earlier. The Minister and other Fianna Fáil Deputies could boast to senior citizens over 70 years that they would automatically get medical cards.\n\nThat promise helped the Minister to win power in the 2002 general election. Later, he figured he could play ducks and drakes with those people but, as it turned out, that was not the case. Perhaps it will not be the case with mná na hÉireann either but we will have to wait and see. Women might think about this matter at some length and let us see what they decide to do.\n\nI hear sports shops are doing a roaring trade in single golf clubs this Christmas. With a possible election next year, one never knows when a club might come in handy to deal with men who break their promises. The Minister should ask Tiger Woods about it.\n\nI have read scores of articles by people who argue that child benefit payments are of little importance, including journalists and academics who argue it would make no difference if the payment were restricted. Most of these articles were written by men, none of whom could state absolutely that he spoke for his wife or partner. I have yet to meet a mother of young or teenage children who says casually that child benefit has no importance to her. Perhaps I do not mix in circles where this benefit is a trifle. Certainly, I do not represent a constituency that places no value on the advantages of universal child benefit.\n\nAlmost every day I hear the voice of Marian Finucane on radio advertisements for the Simon Community, as I am sure everyone here does. She tells us that the current crisis has brought community services to breaking point. I hear the same message from Professor John Monaghan of the Society of St. Vincent de Paul. Are these societies lying? Is the Simon Community faking its message this Christmas? Is the Society of St. Vincent de Paul out of touch? Are they saying social welfare in Ireland is so generous that it can be cut? I have yet to hear a person who is genuinely in touch with ordinary families in the community who will say up-front that social welfare in the Ireland of 2009 is excessively generous and ought to be cut.\n\nThe Minister, Deputy Lenihan, should note that in this budget he looked for soft options and he believes child benefit is a soft option. He believes the recipients of social welfare are soft options. The Minister had a choice. There are thousands of tax exiles in Ireland, super-wealthy individuals. They boast of their contributions to charity and good causes. That is all very admirable but in a republic it is no substitute for paying one's fair share of income tax. I welcome the measure but I note the very careful phrasing of the reference to the possibility of a levy on tax exiles. We will know more when we examine the finance Bill.\n\nThere are poor bankers - God love them - struggling through the business pages with the awfulness of €500,000 per year. They do not have to contribute anything extra as a result of this budget in so far as I figure it. I am not aware of from where their extra contribution comes. The Minister, Deputy Lenihan, had a simple choice today of who to face down. Would it be the tax exiles, the poor bankers on only €500,000 per year or the mothers of Ireland? He made the choice and it says a good deal about the Minister, his values and his priorities.\n\nChild benefit has been a success story, lifting the most vulnerable group of children out of consistent poverty. I congratulate Fianna Fáil on past increases in child benefit, as does everyone in the Opposition. Child benefit has succeeded in lifting children out of poverty because there was no means test. Ireland did away with tax allowances for children many decades ago. Universal child benefit has been the principal policy to help families with children and the principal recognition by society that raising children deserved financial support and recognition by the Government. As Members are aware, in the tax code a person with two children pays the same tax as a person with no children. A family or couple with three children pays the same tax as a couple with no children. However, we recognise children and the cost to their parents of rearing them through child benefit. I am perplexed that every time in the recent series of crises, budget adjustments and emergency measures that the Minister appears to pick on children.\n\nThe Minister increased class sizes. He slowed down the building of schools. He slashed support for child care. He abandoned plans for preschool education. We know that during all the years of our prosperity, we succeeded in lifting one child in every five who lived in consistent poverty in Ireland out of that poverty, from just below the poverty line to just above it. That is an important success in this country, because we are not a very equal society. Income is distributed very high up and there are very many people congregated at very low levels of income.\n\nWhy did the Minister dump a winning formula? Those who advocate social welfare cuts have it back to front; instead of cutting social benefits, we should protect them, especially for those at the bottom of the benefit scale. In this crisis, precisely because it is universal and efficient, social welfare offers an immense advantage in a recovery strategy. This is acknowledged by people in the Treasury and the Federal Reserve in the United States. Social welfare spending in European economies is a unique stimulus package that allows people on the very bottom to be able to spend. Today, the Minister has cut their spending power across a significant spectrum. The sum of €8 a week does not sound too much to people in this House but it is an awful lot to a widow. Likewise, a €4 cut in child benefit does not sound too much in this House but it is an awful lot to people who are buying sliced pans and sausages as the mainstay of their shopping trolley to feed their children. When one goes shopping, one can see the differential in different trolleys; who has the fresh meat and who has the sausages and the sliced pans piled up in the trolley.\n\nIt is not a good day for the people with the cheaper trolley. Let us not fool ourselves that it is; it will be tough on them. They will have to make hard choices about their children. Protecting benefits is simple, direct and progressive. It is a highly efficient way to prevent poverty and sustain purchasing power for the vulnerable in our population. Reducing benefits will save money. A rough calculation of the budget indicates that €778 million of the €4 billion cut is from the social welfare package and approximately €500 million has been cut from education. Those are the headings that are taking the brunt of today's cuts. It cannot be good for the economy that the Minister has cut purchasing power and it is certainly not good for the health of our society at this point.\n\nOne thing that scares me about the Minister is that he seems to be crushed by economic dogma that essentially comes from the right. He is a pleasant man but he seems wedded to a right-wing view of society and recovery. I prefer to think outside the box. The dogma that is coming at us, day in day out, is from the same people who cheered on the calamitous building boom for years and ignored the early warning signs of a banking collapse. I cannot understand why so many economists in this country deride the idea of stimulus. Why are many European economies showing some modest signs of recovery while ours continues to lag behind? The Minister promised the previous Fianna Fáil Ard-Fheis that, on his watch, Ireland would be the first country out of recession. That has not happened and it is not going to happen.\n\nWhy are we still in deep recession with growth prospects stubbornly elusive? It is because the Government's policies are very much at variance with the formulas pursued by many others. Unlike countries that have poured money into consumer demand and public projects, the Government has preferred to give our money to banks in the hope that some of it trickles through to the general economy and to businesses and enterprises; trickle down, that old favourite tune of the right wing. It has not done so and there is no prospect of any change in bank policies. Good luck to the new committee set up by the Minister. We met with Mr. Boucher and Mr. Sheehy for several hours approximately two weeks ago and they stonewalled on every single demand from Deputies on all sides about credit flow. Mr. Sheehy was the most frank because he is close to retirement. He just said that it is not going to happen. All that has happened is that bank debt has been converted into taxpayer debt with catastrophic effect on our sovereign debt capacity.\n\nAll around Ireland businesses are closing. Businesses need customers but customers need confidence to get out and spend. Confidence is the most elusive but most vital ingredient of economic policy. One cannot bottle it or buy it and there is precious little in today's budget that will inject any ray of confidence into the households of this country. I am sure the Taoiseach is aware of an amazing fact, namely, that there are savings in this country of €81.5 billion. The savings have been galloping up, just like in Japan in its lost decade, and in Germany for a long period, which is where much of our cheap credit came from. Germans did not want to buy new kitchens and the Japanese did not want to buy anything new at all. We are doing now what they did; we are saving more.\n\nAs a result, customers have stopped going to shops. People are nervous about the future. They have stopped going to shops in the Republic because they know they are being ripped off, for example, on the sterling exchange rate. There is footfall in shopping centres and shopping malls in Dublin and its outskirts and in towns around the country. People walk around the shops but one sees very few shopping bags. In previous years at Christmas time people were laden down with shopping bags. If one walks over to Grafton Street one will see only one or two stores with big crowds. The budget ought to have been directed at those people. Let us imagine if just 10% or 20% of those savings that are building up were released for spending into the economy. It would transform the Minister's take from VAT and other taxes. However, the budget had just one focus and that was just too narrow for the times we live in. The economy certainly needs medicine. The virus injected by successive Fianna Fáil Ministers for Finance into our economic bloodstream has made painful medicine a necessity, but the patient needs nutrition as well as medicine to stage a full recovery. Today's budget is strong on medicine but sadly thin on nutrition.\n\nI wish to address the issue of fairness and tax. Fianna Fáil made a conscious decision today not to in any way change the tax burden, except to a limited degree, on high income earners. Fairness is probably the most vital ingredient that can unite people in the challenge we face to restore national solvency. Fairness unites; the Minister's package will divide. More than ever, we need a one-Ireland mentality, a one-nation vision that can demand burden sharing on the understanding that it is shared by all in proportion to their ability to take the pain.\n\nI have been appalled by the vicious smearing of public sector staff in recent weeks in which Ministers have connived. If there is to be a blame game, they want to have someone else in the firing line. They have let loose the dogs of war on every public employee. Why should the private sector go down this cul-de-sac? It is private sector businesses who benefit most from public spending. It is private businesses that build the schools, supply the hospitals and sell computer services to the State. The State is the biggest customer of indigenous private business. The campaign to denigrate the public sector is no great help to business. In a way, it is biting the hand that feeds one. If one cuts public funds, it is private business that takes the biggest hit. Let us make no mistake; we are genuinely all in this together. The Government that divides our people at a time of crisis does not deserve to govern.\n\nI said in the House recently that there was a lesson to be learned from the peace process. Nothing is agreed until everything is agreed, and we all jump together. The word \"all\" is one of the simplest in the English language. It means the public sector, every rank and every grade. It means the professions in the law, medicine and accountancy. It means the well-paid executives in the banks, commerce and industry. It means those who did exceptionally well from the boom years, of whom there are many. Did the budget ask a fair amount of sacrifice from all those people? I do not think it did. Many of the tax shelters remain firmly in place. A feature from a recent edition of The Sunday Business Post promoted a holiday home scheme in County Wicklow. It is in a beautiful part of the garden county, however, the focus of the feature is not the gorgeous scenery but the attractive tax breaks that come with the purchase. There is no sign there of any let up in the availability of this and other kinds of breaks that so corrode our tax code of its progressive character and fairness.\n\nThe reports of the Revenue Commissioners still tell amazing tales of high earners with incredibly low effective tax rates. The restrictions in the 2006 budget only scratched the surface. I welcome the further restriction today. However, I remind the House of what Mr. Cliff Taylor wrote in the The Sunday Business Post last Sunday.\n\nA study of those who were aggressively claiming tax reliefs - many of them related to property - showed that the €500,000-plus income group [that reference is to persons who each have an income of 500,000 or more] had increased their tax contribution, but just to the bare 20 per cent.\n\nThe Minister has proposed to increase that by another 10%, but as he said at the start of his contribution, the marginal rate of tax on the average civil servant or private sector worker who earns above €60,000, €37,000 in the case of a single person, is approximately 53% and their average rate of tax is much higher than what the Minister is proposing today.\n\nIt is an ancient tale. When these people call for low taxes, they often mean simply no taxes. If we take the relief for pensions, we had startling and valuable information from the ESRI last week on this topic which revealed a staggering €2.9 billion cost for this heading on its own. That is €2.9 billion per year in tax reliefs for pensions. Deputies should know that the top 20% of earners take two thirds of all the pension-related tax reliefs. A miserable 1.1% goes to the bottom 20% of earners. We allow a pension pot to go as high as €5.4 billion. In the UK, it is less than half of that. Why not reduce the limit to €3 million? It would still be very generous. We allow tax free lump sums up to € 1.3 million. That could be capped at €150,000 or €200,000. The ESRI identified savings of €500 million.\n\nThe Labour Party did not go that far in its pre-budget plan. We suggest a yield from savings - reductions for the people at the very top - of €330 million. As long as these tax expenditures remain such a dominant feature of tax policy, the goal of tax justice will remain a fantasy. The measures taken so far to remedy this injustice have been half-hearted in the extreme and this tepid approach has been repeated in today's budget.\n\nThis Government has no reputation to lose but it has choices to make. Tax justice decisions are always hard to make - hard choices that Ministers pretend to make but which they never stop dodging. The Minister for Finance dodged many of the hard choices today.\n\nOne of the difficulties is that our economy is experiencing the worst recession most people alive have ever experienced or, I hope, will ever experience. It is already worse than the 1980s and it is not over yet, certainly not in this country. Fortunately, the remedial measures adopted by the European Central Bank and other central banks have so far staved off a full slide from recession into total depression. That might change if the ECB takes a harder line on credit or on interest rates. It could also change if we go too fast down the road that the Minister has mapped out today.\n\nThe consequence of cutting back on everything in sight is to push the country into a depression. That is a mad recipe for rising unemployment, social disruption, deeper poverty and falling living standards. The philosophy behind this budget has the potential to push our economy into a death spiral of decline. Above all else, there is no clear message of hope from this budget for the hundreds of thousands of people on the live register and the 75,000 additional people who Fianna Fáil plan to have on the live register next year.\n\nTaxes are down and the deficit is out of hand. What does Government do? It cuts spending power in the economy even more. Immediately, consumers spend less and less. By cutting welfare payments and child benefit, families have less to spend and tax yields drop further. That is the death spiral and it haunts this budget like the ghost of Mr. Micawber.\n\nWe have an economic crisis on our hands, we have an unemployment crisis and we have a credit famine. However, this Minister is dealing with these crises solely as national debt and banking crises. That is too narrow a focus.\n\nThere is a character in Roman mythology called Janus who showed two faces to the world looking in opposite directions at the same time. This Government is like Janus. One face tries to be the responsible and prudent manager of the nation's wealth, stabilising the budget and coming to grips with a new cold financial reality. Then we have the opposite face, the obedient agent of a reckless gang that brought this country to bankruptcy and ruin.\n\nThis gang has to be rescued and bailed out at any price. The Minister uses every device under the sun to hide the cost from angry citizens of the bailout of his gang. We have NAMA, special purpose vehicles, off-balance sheet borrowings and direct injections of scarce capital with no prospect of return. The National Pensions Reserve Fund has been raided to support the rescue and annual interest payments on the money borrowed runs to hundreds of millions. This is the cost we, the people, must pay in the vain hope of getting this gang back to business as before. This set of Ministers has no notion, no vision whatsoever, of an economic revival that has a focus other than the dream of restoring this small group back to the dominant place it had before. That is the real face on display here today. The Government ran the country pretty much entirely for the benefit of this group. Now it plans the budget entirely to pay the cost of the clean up and restore the gang to its commanding position.\n\nIt cost us €4 billion to rescue Anglo Irish Bank in 2009, money we had to borrow and pay interest on. The interest cost alone in 2010 for the €4 billion for Anglo Irish Bank will probably be as high as €200 million. That is almost as much as the amount to be raised in cutting child benefit. Another way to look at the cut in child benefit is to say that it is just to pay the interest on the Anglo Irish Bank injection of €4 billion in 2009.\n\nWe know from newspaper reports today that there will be more borrowing for this bank and other banks. We hear the banks could need another €9 billion from the State next year - €4.8 billion for AIB, €2.8 for Bank of Ireland and €2 billion for Irish Nationwide Building Society, which is a tiny building society. We are taking €8 billion in toxic debts and we are talking about putting €2 billion into a tiny building society which was meant to help people get mortgages to acquire a home.\n\nIt is stunning. All told, the taxpayer could be on the hook for a cool €15 billion over the next two years to fulfil Fianna Fáil's strategy for the banks. This assumes NAMA breaks even and does not become a multi-billion euro drain on the taxpayer each year. The what may be termed the \"washing one's face exercise\" about NAMA is only for the first few months to the first year of its operation. These numbers put today's horror budget in the ha'penny place.\n\nThe Minister should not pretend there is no link between the rescue of Anglo Irish Bank and the budget crisis we face. That pretence is at the heart of his budget strategy. It has those two faces - one is the harsh discipline for every citizens, including social welfare recipients and public servants, and the other is the blank cheque to transfer the debts of bankrupt developers to the taxpayer.\n\nThe bond market and not the EU Commission will make the call on our national solvency. Bond investors are fully aware of Government borrowing under every heading. A borrowed euro is a borrowed euro no matter how it is described. The issue for bond investors is the risk of default. Borrowing to shore up a zombie bank commands a higher risk premium than borrowing for reflation. The Government should think about that.\n\nIn the past few months, the Government has relied heavily on an echo chamber of sympathetic voices to make its case in the media. This echo chamber has drowned out the voices of anyone who wished to make a sane case for a different approach to economic recovery. It is not healthy in a pluralist society to have only one set of opinions repeated day in, day out as gospel truth. We are paying a ghastly price for allowing this to happen in the boom years when all sanity went out the window and any dissenting voice got short shrift and when a Taoiseach suggested the suicide option to anyone who did not like what was happening in our country.\n\nThe echo chamber recycles the same mantras, namely, there is no alternative, it is the only game in town, we are where we are and the blame game will get us nowhere. We hear these repeated ad nauseam and any deviation from the line is rejected out of hand. We experienced it heavily in the debate on the bank guarantee and when we hear the green jersey slogan trotted out by Fianna Fáil, we know something dodgy is afoot; so it proved in the case of the Anglo Irish Bank shenanigans which has cost us so much in cash and reputation.\n\nLet us have no more of this. Cuts are not the only option for national recovery and there is a case for stimulus and an alternative to NAMA. It is time to restate the case for equality as a major force in policy. Societies that value equality and promote it in their economies have succeeded best, and the evidence has been painstakingly collected over 30 years and published in the past year. It promotes better health, a better quality of life, better educational outcomes, a better sense of security and well-being.\n\nThis budget does nothing to make Ireland a more equal society. It goes in exactly the wrong direction. It will increase personal stress, erode confidence, and damage social solidarity. Its economic effects may well be calamitous and its social effects certainly will be.\n\nI recommend that the Labour Party vote down this budget. In the examples at the back of the budget we have Eileen and Dominic, one of whom is a civil servant and the other is a house husband. They face a cut in their gross pay of €2,625 a year, or approximately €50 per week. In this example there a child in the pre-school age group so they are credited with a gain from the Government of nearly €2,500. In a second example, of Kate and David, their losses are €2,600 a year, which is over €50 per week or 4% of their income. There is no adjustment at the upper end of the scale.\n\nMany civil servants are willing to make sacrifices but the mantra that everybody wants to hear is about fairness. Those who have the most should bear a proportionate share of the burden that they are better fitted to carry. It is a regrettable budget for carers. The cut of €8.30 a week in respect of them does not mean an awful lot to many in here because Deputies are well paid and we can take our share of any cuts imposed on us. I feel sorry for people like carers and widows. I know the McCarthy report felt that widows seemed to have it easy but many widows, particularly younger widows, do not have it that easy. The reduction of €8.30 a week will come hard to them on top of a reduction of €4 per week in child benefit for each child.","We have heard it now. So the worst is over, as we have been told by the Minister for Finance. He did not say for whom the worst is over. It may well be over for the corrupt bankers and the golden circle of speculators protected by the Government. The worst is not over for the almost 500,000 people on the live register. It is not over for those people who are living through the worst every day and struggling to keep families together and buy clothes and food for them. These are people who have lost their job in the construction sector or who were involved in small businesses. The worst is not over for them.\n\nI wonder did the Taoiseach or his Ministers speak with real people to find out what the worst really is in this State. Have they spoken to people in towns around the State, from Cork to Mayo, Dundalk to Donegal and Galway to Dublin to find out what is the worst for them? The worst is not over for those people.\n\nHave members of the Government spoken to people in rural Ireland about how even as we speak they are preparing to head to airports with children or going to meet ferries so that their children can go overseas to find the jobs which the Government has allowed to be destroyed in this State? Have they spoken to parents who are worried about sons and daughters falling into despair and depression because of the hopelessness currently experienced? Where is the hope for them and when will the worst end for them?\n\nThe Government has told us it is too complicated to bring in a taxation system to capture those people earning more than €2,000 a week or it is too complicated to standardise tax reliefs. I meet people all the time, particularly in recent months, who are widows, who have disabilities or who have lost jobs and businesses. They wish it could be too complicated for the Government to cut their welfare income, such as the €204 per week or the Christmas bonus. Of course, that is not too complicated and it can easily be accomplished. The Government is shaking ordinary workers and the unemployed to try to get the last few cent from their pockets. It is grossly unfair. The Government is driving people into poverty and into the hands of money lenders. It is driving people to the offices of the Society of St. Vincent de Paul.\n\nThis budget goes against young people, who are experiencing the highest rates of unemployment in any sector. Young couples who took out mortgages and bought homes in the past few years are now suffering significant negative equity but the Government has attacked them again in this budget by cutting child benefit.\n\nYoung people have been threatened that if they do not take part in education and training, social welfare payments will be cut. Some of those young people have spent three, four or five years in education; some have master's degrees, are engineers or are otherwise well educated but there are no jobs for them. One of the reasons for this is the Government standing by without any stimulus package and allowing those jobs to haemorrhage across the State.\n\nNo job retention fund was put in place and there was stimulus package to try to deal with the reality. We were told banks had to saved and that was the poor priority.\n\nI will briefly discuss the other measures which have been introduced. The Minister is deluding himself and trying to delude us as well. Funding for primary schools has been slashed by 27%, which will have some effect on schools across the State. We should think of how principals will try to manage on 20% less when they were already struggling in their economic position before this budget.\n\nThis budget has targeted cuts at disadvantaged communities, and funding for education for the disadvantaged is to be cut by 62%. We should think for a moment about this impact on one of the most disadvantaged sectors in society. That is nothing short of scandalous. The drugs task force funding is to be cut by 11%. I meet people involved in such task forces in my constituency in Drogheda and Dundalk and they need all the help they can get. If this funding is cut, people will be off the rehabilitation scheme and back into a cycle of drugs and robbery to sustain the habit. It will cost the State significantly more in the long run as there will be court cases, imprisonment and pensioners being attacked in their homes and terrified. Nevertheless, the Government believes it is wise to cut those programmes by 11%.\n\nThese cuts show us that the poor are being made to pay the highest price for Fianna Fáil's recklessness. The 11% reduction in the local government grant will have serious implications for the provision of local service. Service charges and rates will be forced up, again hitting low-income families disproportionately harder than those who are comfortably off.\n\nThe proposed changes to the PRSI for 2011 will see any progressiveness taken from the system. We need a general election and allow the people decide if this Government has the capacity to govern the State. It does not have a mandate for what it is doing in handing over €54 billion to the banking sector and €4 billion in particular to a zombie bank in Anglo Irish Bank. This is crazy stuff. This should not be going on. The Government has no mandate to do it. If the Taoiseach had the courage of his conviction, he would have put the NAMA proposal to the people and let them decide. There should always have been a referendum on NAMA in any event.\n\nThis savage budget is the economic equivalent of kicking an injured man when he is down. The economy is on the floor and along come the boot boys of Fianna Fáil to give it another good going over. This budget will cause poverty and deflation, driving our economy into deeper recession because of the selfishness and short-sightedness of Fianna Fáil and its pathetic partners in the Green Party. The huge budget deficit is a result of the Irish economic recession, which was caused by their disastrous policies and gross mismanagement. The deficit is the symptom, not the cause. The Minister has chosen to treat the symptom in the most brutal fashion while doing nothing about the cause. This recession is as much one of ideas, as it is of resources.\n\nOver the past two years the Taoiseach dragged us to the edge of economic doom and today he pushed us over it. I have one hope for this budget - that it will serve as a wake up call for the people. Over the past 12 months, we as a people have witnessed the Government committing a series of con jobs, ranging from the levies and social welfare cuts in April to the €54 billion NAMA rip-off. It is unfortunate that the Taoiseach could not stay to hear the rest of my contribution because I am sure it would have been educational for him.\n\nThe Government has been helped by sections of the media and, unfortunately, by Fine Gael and the Labour Party, in convincing people that the savagery of this budget is necessary but it is not. There was another way but we could never expect Fianna Fáil to take us the fair route considering it caused the problems in the first place. This budget was an opportunity to show some vision. Even now it is not too late to put Ireland on the road to recovery. It is not beyond us financially to stimulate this economy. A programme for jobs, an investment in people and a commitment to protect the most vulnerable as we turn everything around is all possible. Sinn Féin has shown that it is possible. Our pre-budget submission, The Road to Recovery, carefully considered by like-minded economists and costed by the Department of Finance, proved here was an alternative to what the Minister has done, a way in which to raise money through bringing fairness to an unfair and unequal taxation system, cutting State subsidies to the private sector and ending the greed among high earners fostered and encouraged by the Government.\n\nThe Minister has shown us that Fianna Fáil and the Greens are still wedded to the fiscal policies of Charlie McCreevy. To save €4 billion from the deficit, the Government has shown itself willing to further impoverish low-income families. The cuts to social welfare will deepen inequality in Ireland, already one of the most unequal states in the OECD. The cuts to education make a laughing stock of our so-called knowledge economy. Will the Minister outline how we can build a knowledge economy in damp and freezing prefabs and with inadequate IT equipment? The cuts to health services will be the difference between life and death for thousands of people across this land and that is no exaggeration. A charge for medical card prescriptions is despicable. It attacks the principle of free health care for those most in need and, though the charge may seem low, the worst hit will be those most dependent on medication. Once introduced, it will be increased year on year.\n\nThe Minister and the Government are like Robin Hood in reverse in that they are robbing the poor to give to the rich. Shame on each and every one of them. Worse still, the Minister has made sure recovery will take longer than it should because he has hit the lifeblood of the economy. He has hit the spenders in an economy reliant on consumption taxes and he has hit the education system, the building blocks for a turnaround. For a party that has long prided itself on its alleged ability to manage the economy, Fianna Fáil has outed itself with this budget. Had the Minister made even one tough decision, for example, the introduction of a third tax rate, standardising tax reliefs, capping the pay of high end civil servants, he would have saved himself and the State many tough decisions next year. He has done nobody any favours by going after the easy targets in this budget such as welfare recipients and low-income families. His half-hearted gestures of pay cuts for himself and a small number the highest earners do not go far enough in terms of what they should contribute to get the economy up and running. Their high salaries contributed to the deficit, not the payments to social welfare recipients. His failure to see this has only delayed and worsened the inevitable.\n\nIt is essential that we develop a fair taxation system in this State. We will have to review the billions spent on tax reliefs. We will have to put an end to the State propping up private banks and the Government's schemes for socialising debt and privatising profit. In addition, we will have to address the economic insanity of partition and the damage it is doing to the potential of both parts of this island. Fianna Fáil and the Green Party have shown themselves completely incapable of tackling any of these issues and, God knows, they have had more than enough chances.\n\nThe sad reality is that I have little faith in Fine Gael or the Labour Party handling the State's affairs much better. Both parties have wholeheartedly bought into the Government's analysis of the economy and provided their own proposals for cutting social welfare, public spending and workers' pay. All of this can be expected from Fine Gael on any given day but the Labour Party has veered to the right, bracing itself to get into bed with Fine Gael. It would seem from reading its pre-budget submission that the Labour Party is pro-jobs but leaning towards anti-worker. Perhaps the Labour leadership is attracted by the bright lights of IBEC's annual conference, leaving their former trade union comrades in the dark in these times when real struggle will be required.\n\nEvery citizen in this State should be aware that replacing Fianna Fáil and the Green Party with Fine Gael and the Labour Party will make no difference to economic recovery. The Minister for the Environment, Heritage and Local Government is nodding in agreement. Fine Gael and the Labour Party would implement the same policies in a different package, with the same bad results for the economy. While the establishment parties close ranks and display a disturbing uniformity in their policies, we are the only party that stands up for working people, whether they are in jobs or not. We are unique because we are the only party with an alternative analysis of the situation. We address the problems in the economy with the aim of eventually reducing the deficit. The other parties set out proposals to reduce the deficit without ever dealing with the problems of the economy.\n\nWith this sentiment, I will analyse what the Minister for Finance has delivered to the House and to the country. I will examine the areas where he chose to slash and burn and explain how it could have been done differently and a better result delivered. I hope the people at home will listen and decide from the contributions to the debate who they would rather have introducing the next budget.\n\nWhen the Minister introduced the emergency budget in April last, he stated the economy would need to adjust by a further €4 billion over the course of 2010 and he would set out how that figure would be raised and saved in this budget, which he has done. The elephant in the room is that in April the €4 billion was planned as an adjustment to a much smaller deficit of approximately €20 billion. The fall in tax revenue over the last seven months means the deficit is wider now, yet he still maintains a €4 billion adjustment is necessary and other parties agree. Why is €4 billion needed? Why should we believe the Minister when he has go it wrong up to now? The European Commission has had to extend the period for economic recovery offered to the Government by a year. His plan has unravelled before it has even started.\n\nfor a stimulus package. We believe a stimulus package and investment in the economy would not only recover confidence at home, but also abroad. The Government can repeat ad nauseam that it believes international investors are responding well to its plans to slash spending but, in reality, international investors can see a government sinking beneath the waves. The Department of Finance's forecasts are adjusting downwards by the month, as are Exchequer returns. This does not inspire confidence. The rest of the world is responding to economic woe with ambitious stimulus plans. The response of the Government and the Opposition parties other than us is to return to the constrictive right-wing economic policies of the 1980s. They are determined to make this situation worse and see us waste more years before recovery begins.\n\nOur pre-budget proposals would raise more than €7.5 billion. Our figures were designed to stimulate the economy, not to deflate it. Our tax-raising measures were aimed at high earners to ensure they did not hit the spending power of the middle and lower earners. Let me be clear that by \"high earners\" I mean individuals - not households - earning in excess of €100,000. People on incomes below that were exempt from our consideration. That thinking is conspicuously absent in the Government's strategy for fiscal adjustment and it is telling. Every measure taken over the past 12 months has further contracted the economy. This budget will be no different.\n\nThe Minister has taken €4 billion out of the economy in the most damaging way. The scenario that will be played out in 2010 will be more job losses, further falls in property prices and decreasing revenue returns, and we know that all this will happen because we have seen it happen throughout history. The Minister also knows this will happen so his budget today can only be seen in one light - he is delaying recovery because he wants to protect the golden circle in the State for a longer period. He is also determined to protect those in the silver circle - the very high earning households. That is why he has taken these harsh and vicious measures, such as cuts to social welfare.\n\nA fundamental principle divides Sinn Féin from other parties in the State as we see social welfare as a right and not a luxury payment that can be cut at will, depending on the economic climate. Families depend on it for their food and for survival. They have no other income. When the Government is abandoning those people, it is essential they have this minimum threshold for food and some level of existence. In approaching this budget, there was much talk about the need to reduce the social welfare bill. The Government and some media commentators have acted shamefully towards the social provisions of this State.\n\nNot once, in all the talk about the social welfare bill, was reference made to the possibility of reducing social welfare spend by keeping people in jobs and creating new jobs. Instead the focus was on rates of pay, and the argument was made by Fianna Fáil, the Green Party, the leader of which has joined us in the Chamber, other establishment parties and some in the media that €204 per week is too much for people to live on. I wish some Ministers would try to survive on €204 per week for a few weeks to see how they get on. Then they would get a dose of reality and would appreciate what people are going through. What type of people think it is acceptable to take money off someone on €204 a week but not from someone earning in excess of €2,000 a week?\n\nWe do have problems in our social welfare system. There is definitely fraud and ridiculously complicated administration involved. The system is a bureaucratic nightmare. All of this has increased under the Government's watch. There is no area its incompetent hands have not reached into and ruined. However, the problems in social welfare that end up costing the State extra money should be dealt with and rates of payment should not be cut.\n\nCutting social welfare payments will have a detrimental effect on the economy and society. Social welfare payments are always returned to the economy on a weekly basis. They are not saved or invested abroad. They are spent on rent, mortgages, food, utilities and other essentials. Cutting welfare expenditure is a false economy and one that will ultimately only cause misery for those on the receiving end of the policy. We do not accept the argument of deflation in favour of welfare cuts. The fall in the cost price index this year includes mortgage interest. A number of items have not decreased in price, they have increased and they disproportionately target the less well off. The cost of bus fares, child care, primary and secondary school education, doctor's fees, dental fees, hospital services and insurance have all increased and no one on the other side of the House has addressed this. These costs make a lie of the argument that people on social welfare and low wages can afford to live on less.\n\nWe have already seen the effects of cuts made to social welfare payments this Christmas. The loss of the Christmas bonus, a double payment which affected 1.3 million people, is money that would have been spent in our shops on the high streets on Santa presents and Christmas food. The Government's Scrooge measures will come back to haunt it when it counts its VAT pennies at the end of this month and will see a substantial reduction. It will also have an effect on the retail sector, possibly increasing the number of job losses and adding more people onto social welfare queues.\n\nGrading the rate of job seeker's allowance by age further to the measures taken in the supplementary budget 2009 is an abuse of power by the Government and shows just how out of touch it really is. The proposal to reduce the rate of social welfare to €100 and €150 a week for those between 20 and 24, which represents a cut of 25%, undermines what should be the main focus of economic recovery, which is getting Ireland back to work. The social welfare bill should be reduced by giving those people the opportunity that they want. They do not want to lie about their homes or scrounge from family and neighbours. They want to go back to work and the Government is doing nothing to deliver this.\n\nDiscriminating against young adults in their welfare entitlements is grossly unfair. It is necessary to frame this in realistic terms, rather than from a top-down budgeting perspective. Young people finish college after three, four or five years of education. There is a freeze on public sector employment, little if any employment in the private sector and they have most likely accumulated debt during the course of their studies. Many of these young adults are on the margins. They may not have qualified for a local authority grant and, as such, would have accrued debts through student loans. They are now expected to come out of college and live on €150 a week. Ministers should try it some time and let us know how they get on. The remaining cuts are equally punitive. If there was any justice in this world all Members on the other side of the House would lose their jobs in the next election and then we would hope to see them live on those amounts.\n\nThe measures taken on child benefit will do nothing to fix the economy. They are further evidence of a sticking plaster approach displaying the Government's inability to leave any social provision protected from its grubby claws. Child benefit is a universal payment made to every child in the State in recognition that every child is born equal and that the State provides children with nothing after they turn six weeks old, when free health care for children in this State ends. When children are six weeks old the State walks away and they are left without child care, without the financial ability in many cases for their parents to stay at home and without a fully functional education system. The Minister for Finance attacked every child in the State today and I hope he is proud of it.\n\nThe cuts to the public sector pay bill offer another unimaginative approach to fixing this recession. In our pre-budget proposals we identified savings in the public sector pay bill. We identified those savings by capping the pay of individuals earning more than €100,000 per annum. That is a reasonable salary for people in the public sector. Deputies, Ministers and Senators should have their salaries capped to the same degree. How can the State afford to pay any civil servant in excess of €100,000 a year when, as Deputy Mary Harney told \"The Week in Politics\" programme recently, the IMF is breathing down our necks because of the mess the public finances are in? These people need to get real. Brendan Drumm, if one takes into account his bonus last year, received €450,000 for helping to run the health service into the ground. That is 19 times higher than the basic salary of a civil servant at €24,000. The Minister, Deputy Gormley, used to advocate social justice when he was on this side of the House. Deputy Gormley and his party sit there smug, comfortable and happy with this situation. If his party is not satisfied with the current position, it should indicate that this is the case and it should leave Government and give the people what they really need, namely, the holding of a general election in order that the country might obtain some form of leadership.\n\nThe Government and some Opposition parties are of the view that canteen workers, ushers and office workers should all bear the pain for this recession in equal measure to Professor Brendan Drumm. The Government's cuts do not recognise this madness. Instead they look at pay across the board and slash it accordingly. Its cut of a further 5% - in addition to the pension levy - on people earning below €30,000 is a pay cut of €1,500 per annum. These individuals already extended their budgets to full capacity when they chose to carry out home improvements, bought additional educational materials for their children or whatever. They have made commitments which they must honour and the Government is now putting its hand into their pockets and taking €1,500 away from them at a time when they cannot afford it, when they cannot seek alternative employment in order to improve their circumstances or when they have no prospect of obtaining part-time work in order to supplement their incomes. The Government is robbing them of €1,500 per week. Shame on the Minister.\n\nThose on €70,000 a year will lose €4,500. It is worth remembering that in its pre-budget proposal, Sinn Féin advocated that incomes below €75,000 should remain untouched. The only penalty we would have imposed on people with earnings above that amount would be to abolish the PRSI ceiling. The real threshold would have been €100,000 in respect of which we would have introduced a new tax band of 48%. Why did the Minister not listen to what we had to say in that regard? When he was on this side of the House he often advocated similar policies. Why did the Green Party collapse into the arms of Fianna Fáil and go along with the whole \"jing-bang\", Galway tent approach to running this State?\n\nWhat has happened in this regard is grossly unacceptable.\n\nWhat will be the long-term achievement of Government policy in this regard? It has taken away the spending power of a group whose members we need to spend their money in order to turn the economy around. It wants people who have 2009 costs to live on 2004 wages. It has achieved the agenda of Colm McCarthy and company of driving down the standard of living and the rights of the majority. However, it has done little to encourage economic recovery.\n\nAs already stated, Sinn Féin's pre-budget proposals would have succeeded in raising and saving in excess of €7.5 billion, a good deal of which would have come from simply introducing more fairness to the taxation system. There are some paltry measures included in the budget. The tax on exiles does not go far enough. The raising of the effective tax rate goes some way towards what is necessary but, again, this will not be nearly enough in the overall scheme of things. There are no wealth taxes or third rate of income tax included in the budget. In addition, the PRSI ceiling has not been abolished. What will be the benefit of the universal contribution, at its low rate, for high earners? The Government and its minions have conducted a great deal of PR in respect of why taxation is untouchable. I believe none of it.\n\nThere is still a great deal of inequality in the taxation system. On one hand, the Government informs us that it cannot afford to increase taxes. On the other hand, however, it is informing all and sundry that Ireland remains a low-tax economy and that the latter is one of the Government's greatest achievements. Which statement is correct? This is nothing of which to be proud. We have a €22 billion deficit and the Government is still refusing to create a fair taxation system. We must stimulate the economy and to do that further revenue will be required. Taxation cannot continue to be untouchable and the Government cannot continue to laud our low-taxation economy as being job creation-friendly. If the latter is true, then where are the jobs? Why have we reached a position of stalemate?\n\nI wish to outline the facts. Low taxes at the top are not stimulating the economy and for the bulk of PAYE workers at the bottom, ours is not a low-tax model. The bottom percentage rate of income tax is low, but there is a huge degree of stealth taxation and a lack of service provision that makes Ireland, for this group, a very high-tax economy. These are the people who should not be touched for more tax. However, the Government is determined to have it both ways: high taxes at the bottom; and low taxes at the top. Such a system is not sustainable.\n\nThe Government will soon have no option but to address the inefficiencies in the tax system. The Commission on Taxation identified 245 tax reliefs that between them pay back almost as much as is taken in income tax. Many of these reliefs are abused by high earners. The Minister is nodding in agreement. Perhaps he will indicate what he has done about this. I am not a member of the Cabinet but he is. Could he not have negotiated more strongly in respect of some kind of fairness in the taxation system? Does he not realise that people throughout the country, and not merely those in his constituency, expect that of him? What is certain is that the Green Party did not negotiate strongly in respect of this budget.\n\nThere is no sophistication in the system. Ireland has two tax bands while most other countries have between three and five. Are we incapable of developing a fair and progressive taxation system or is it a lack of political will to ensure those at the top pay their fair share? The Government claims that there is progressivity in the tax system. There is no progressivity in the system for those earning over €75,000. If anything, one can progressively pay less tax the higher up the earnings scale one goes, particularly if one has access to the services of a good tax accountant, of whom there are quite a few.\n\nThe sad reality is that when the Government is eventually obliged to reverse the inequalities it wrote into the tax code, the public finances will have spiralled out of control. I predict the Government will look to lower earners first when it seeks to increase taxes.\n\nThe carbon tax will not bring fairness to the system. If such a tax is to work effectively, it should be revenue-neutral in nature. The Government will use the carbon tax in order to raise revenue. Members of the Green Party appear to have lost much of their thinking capacity. Surely, however, they realise Fianna Fáil has only committed itself to this measure as a way of plugging the financial hole. Fianna Fáil is no more interested in saving the world than it is in saving the economy.\n\nIn all likelihood, this tax will have the effect of inflicting greater fuel poverty on the vulnerable and the country will be no closer to achieving its Kyoto targets.\n\nI welcome the initiative on excise duty, which I hope will save some jobs. However, a considerable number of jobs have already been lost in the retail trade. As Deputy Ó Caoláin is aware, Border counties have been particularly badly hit in this regard. However, it is not just these counties that are affected. People from all other counties are also travelling across the Border in order to shop. The price of alcohol in Northern Ireland is one of the factors which encourages them to do so. I hope this measure will encourage people to adopt a common sense approach and shop in their own communities and support the local retailers who depend so heavily upon them.\n\nIt is an inescapable fact that there has been a huge loss of excise duty and VAT as a result of the partition of this island. There is a considerable market of some 6 million people across the island. Since the signing of the British-Irish Agreement, trade between North and South has increased steadily. Progress towards creating a truly all-Ireland economy is being made through the newly developed all-Ireland energy market and the activities of Tourism Ireland and InterTradeIreland, which since 2003 has benefited over 1,300 businesses and created hundreds of jobs. However, much more must be done.\n\nAn all-island economy is an imperative. Differences in VAT, corporation tax, excise duties and currency create barriers to economic development on both sides of the Border and cost millions in tax revenue. The removal of such impediments will create efficiencies, employment, wealth and opportunity across this island. Sinn Féin proposes the establishment of an all-Ireland economic committee, comprising Members from the Dáil and the Northern Ireland Assembly and tasked with harmonising taxes across the island; a joint North-South ministerial approach to promote our international food brand; and an all-Ireland agricultural body to implement all standards that safeguard the reputation of Irish agricultural produce.\n\nThe stimulus of a couple of hundred million euro contained in the budget is a joke.\n\nThe Government has invested €54 billion into the banks and ensured that we will be back here again next year in an even worse position. This eventuality could have been avoided if a proper stimulus package had been put in place in respect of enterprises which are struggling. These are vulnerable but viable enterprises which are haemorrhaging jobs and which would require only a small and temporary injection of financial support from the Government to assist them in overcoming their current difficulties. Such financial support should have been provided in order that the people employed by these enterprises might have remained in employment. I have met many of the employers who could have sustained those jobs with some support from the Government. It is most unfortunate the Government looked the other way. There is no easy way out of this recession but there is a better way. The Government's way is to slash spending. Our way is to save and create jobs and protect the most vulnerable. Our way is better for the economy and better for people. The only jobs the Minister will create with this budget are in debt collecting agencies.\n\nSinn Féin's pre-budget submission proposed a stimulus package costing approximately €4 billion, roughly 2.5% of projected GDP in 2010. That is a considerable difference to the paltry few millions of euro offered to job creation and retention today. There was not even a decent nod in the direction of what it should have done. The €54 billion allowed to NAMA is approximately 33% of GDP. This makes quite a comparison. Our stimulus is equivalent to the investment made in Anglo Irish Bank, which was some investment in a zombie bank. Our proposals have the potential to save more than 100,000 jobs in 2010 and to create more than 100,000 more, as well as better positioning the economy to increase jobs in 2011. According to trade union estimates, the cumulative cost of new jobs will be €10 billion. If we spend in 2010, we could see positive growth in the Exchequer in 2011. If we do not, we will see further contraction.\n\nThere are 425,000 people on the live register. This number is likely to grow and there is no Government strategy to deal with it. The Government claims that saving the banks will fix the economy. Proving them wrong will be cold comfort to the many people who lose their jobs, who face this Christmas in debt, in poverty and with the prospect of the very small payments made to them by the State, being cut. Emigration is already on the rise. This year was the first in a long time that saw emigration outpace immigration. Sinn Féin believes there is a better way forward. We do not have to return to the 1980s. Our suggestions are immediate, and if invested in, should see a return to the Exchequer by way of saved social welfare payments and tax by the end of next year.\n\nWe have raised money for our costed proposals and propose transferring some €2 billion from the National Pension Reserve Fund, which should be accessed in this exceptional period of need. Our rationale regarding use of the NPRF is simple. At this point in time, the State cannot afford to keep money in reserve for future pensioners when the current generation of pensioners are being asked to live in poverty. Does this not make sense? Can the Minister not see the sense in it? We could access this money now to help the State recover and when we have recovered, we would begin saving for the future again and implement a new system of decent universal pension provision that does not see billions spent on the private pension industry while State dependent pensioners suffer.\n\nOur proposals include establishing a jobs retention fund available to SMEs worth €600 million per year. We want to reduce the cost of doing business by freezing the cost of State-controlled services for one year. We want to use the public sector and direct public employment to kickstart the economy. The national development plan must be completely redrawn to focus on the more labour intensive and necessary infrastructure, such as schools, hospitals, energy savings in homes and public transport provision. This infrastructure will improve the State and provide jobs in construction, architecture, engineering and all other trades. It will kickstart the economy, which is what we need. We also want to build the State child care and pre-education sector through fully-trained accredited child care workers, infrastructure provisions and State subsidies for employees in this sector.\n\nJust like with the taxation system, the need for a stimulus must be addressed. I do not have any faith in the Government's ability to address it. I fear the Minister and others like him will have run this State into the ground before anyone with vision is in office to turn things around. Sinn Féin has set out its vision. We may have a while to wait before a general election but I am afraid there is much more damage Fianna Fáil and the Green Party can do before then. My party will continue to set out the alternative. I hope this budget serves the purpose of waking up the Irish people. The Government may be afraid to put itself before the Irish people any time soon but they have long memories.\n\nThis was a missed opportunity. The Government could have turned its back on its crazy policies of depending entirely on the banks and supporting only the banks while not dealing with enterprises, workers or a proper job stimulus package. Young and old will suffer as a result. The budget has done nothing to help the economic crisis created by the mismanagement of this Government and its failed policies. I look forward to further debate on this matter.","This country has to address probably the biggest challenge to its economic independence it has ever had to face, even though this is now in the context of our membership of the EU and the Eurozone. The budget will demonstrate to ourselves and to others that we are succeeding in mastering the challenge. It is no time for half-measures, evasion or long-fingering. While others can suggest and propose, or oppose, the Government has the responsibility with the support of the Dáil for taking the measures that the public interest requires at this time. Even in these most difficult financial circumstances, we need to keep moving forward, and to provide a targeted stimulus to support and create employment. There are many projects and programmes under way or near completion that will improve our competitiveness and quality of life in the years ahead. We also need to open up new areas of enterprise and jobs in the smart economy.\n\nFairness is a key criterion of the corrective measures. The main burden of adjustment has to be borne by those who are in a better position to bear it, even if some contribution is sought from most sectors of society. Over a number of years now, particularly since 2004, the income tax system has been made steadily more progressive. Ireland can come through these testing times, strengthened for the future, having absorbed the lessons of the unexpected full-scale crisis, both domestic and global, that we have had to face. Realism and solidarity, qualities which exist in abundance among our people, will help us through the difficult times, and renew our confidence for the future.\n\nThe Irish economy has been particularly badly affected by the present crisis, and is going through an adjustment of a magnitude that has few modern international parallels among developed countries. We will have lost more than 10% of our national income in a two-year period. In a relatively short time, we have gone from a thriving economy with budget surpluses regarded as a model to a sharply contracting economy that has opened up unsustainable budget deficits. Even though we prudently put a lot of money into the National Pension Reserve Fund, and reduced the national debt to a low level, we did not have the safety margins we imagined. Competitiveness was eroded, and with the international loss of confidence resulting from the banking crisis and our vulnerability at the end of a construction boom, suddenly a huge gap opened up at frightening speed in 2008 and early 2009 between what we spend and what we borrow. Now for every €30 of income, we are spending more than €50. That has to stop. We have to stabilise it, we have to correct it, and we have no time to waste.\n\nOur tax revenues have fallen back sharply to 2003 levels. This means that next year, if we did nothing, we would have a deficit in the region of €22 billion in our public finances. To bridge this gap, we are borrowing more than €400 million per week and that clearly cannot continue. The choice that confronted us in this budget is that, if we take the correct policy choices, we can emerge from recession, despite its breadth and severity. If we tried to duck the choices, to wait it out, or to postpone the pain, it would be worse in the long run. In any case, the loss of confidence in that approach might be such, that decisions would be rapidly taken out of our hands. Even if that did not happen, the pain would be prolonged, and it could be the 2020s, before Ireland saw any gain.\n\nOur strategy over the coming years is to bring back expenditure to 2006-07 levels. As the world economy recovers and demand for our exports increases, there will be more people in jobs, and our tax revenues will rise. This combination of cutting expenditure and increasing revenue has the aim of restoring our deficit to a sustainable level by 2013. In order for this strategy to work, we must take resolute action to increase Ireland's international competitiveness. Since the crisis erupted 18 months ago, we had to make adjustments amounting to €8 billion. Inevitably, out of short-term necessity, at least half of them came from raising taxes and levies. Next year, 2010, we are making adjustments of €4 billion. In 2011, an improvement on our last April's forecasts, reductions of €3 billion will be required.\n\nActing decisively now will bolster confidence in our capacity to climb out of the crisis. Our actions in the budget are already improving international perceptions of Ireland, and will help us continue to attract the investment on which we depend. Equally important, it will help bring back domestic consumers' confidence that we are getting on top of the problem - increasing consumption and helping to create jobs again. Our recovery will be also underpinned by the recent enactment of the NAMA legislation. This Oireachtas debate was the most extensive and intense I have seen over a quarter of a century in national politics. We are now among the first countries in the world to address impaired assets systematically, and to make the banks face up to the scale of their problems.\n\nThis budget is one of the most crucial steps on our road map to recovery. It is not an ordinary budget in ordinary times. On the scales it is nothing less than our whole economic future. Confidence is the gold standard in today's global economy, as we can see, if we look about us. Whether we like it or not, we have to show the international markets that we are capable of getting our economy back on track, and our fiscal house in order. This budget is a defining moment for Ireland. However, it does involve decisions, which for obvious reasons will be unwelcome to many people around the country.\n\nAs the Minister stated yesterday, this budget has three key objectives: to stabilise the deficit in a fair way; to protect those worst hit by the recession; and to stimulate the sectors of the economy that will lead to additional and sustained employment. Reducing our deficit, curtailing expenditure and restoring balance to the public finances will not come easy. This budget is difficult for everyone but these steps must be taken, and taken now. It would certainly not be fair to saddle future generations, our children, with more debt burdens, even assuming the markets would grant us that latitude.\n\nI am acutely aware of the difficulty and the pain cuts will cause people, but Government has had to take these decisions so that we can move forward again. We do this, not because we want to, but because we must. The Government's approach in framing this budget was guided by a number of questions, such as, is it necessary, is it fair, and will it assist recovery? The answer in each case is, yes.\n\nI have seen with my own eyes what happens when a Government tries to put off necessary action. I entered Dáil Éireann in 1984, at a time when the public finances were under similar strain to that being experienced today. The Government of the day had initially planned to phase out the deficit in a four-year period, but soon backtracked. The result was that by the time that Government's term came to an end in early 1987 the budget deficit was as high as it had been four years previously. Delaying recovery is just spreading the pain over many more years. We did that in the 1980s and the short-term unemployed became long-term unemployed; there was a lost generation. To repeat that would be the most unfair policy of all.\n\nMembership of the Eurozone limits our options for making the adjustment. We cannot devalue our currency, which would conveniently disguise a loss of real income. Instead, the logic of the single currency compels a country overtly to reduce its costs, including incomes, to restore competitiveness. As against that, the value and purchasing power of money will hold. The only difference between keeping the same nominal income in devalued money and income reduced by the same real amount in a strong currency is psychological. We have had many periods of falling incomes before, but we have yet to adjust to the more transparent way it is now happening. The Consumer Price Index, the cost of living, has fallen by 6.6% in the 12 months to October. There also has been a large fall in construction costs, which is reflected in lower tender prices under the capital programme and housing costs. The reductions in this budget are part of this general adjustment. Social welfare, public service pay, professional fees, public spending and capital allocations are being brought closer into line with the new level of prices.\n\nIt is tempting to claim that all our problems can be solved simply by increasing taxes on the wealthy, without the need for contributions from others, or expenditure cutbacks. It ignores the reality that taxes on higher earners have been increased very substantially over the past year. As my record as Minister for Finance will show, I am a strong supporter of a progressive system of taxation. It is estimated at present that the top 4% of earners pay some 48% of income tax, while half of income earners will pay no income tax, although they may pay the income levy. The top marginal tax rate is 52%. To raise, for example, an extra €1 billion from high earners would mean the marginal rate would have to rise to more than 65%, a level it last stood at in the mid-1980s. As experience has shown, such a move would be counterproductive. All of the available evidence suggests that high marginal tax rates will discourage high-skilled workers from remaining in Ireland, as well as discouraging high-skilled workers from locating here in the first place. It is not a good policy.\n\nWhile we are committed to broadening the tax base, the Commission on Taxation has independently established that there is no pot of gold through the curtailment or abolition of tax reliefs and incentives. Nevertheless, we have raised the minimum threshold for the effective rates of income tax for top earners from 20% to 30%, on top of which come PRSI and levies, and this will yield an additional €55 million in 2010.\n\nWe have also decided on an annual domicile levy of €200,000 on non-resident Irish nationals with substantial worldwide income and valuable assets here to ensure they make a substantial non-discretionary contribution to the Exchequer, particularly at a time when everyone in the country is so hard-pressed. Past experience here and the international evidence are clear. Economies recover more quickly from a fiscal crisis by cutting expenditure rather than increasing taxes.\n\nThree years ago, Ireland could boast full employment. The most recent live register figures show there are now more than 423,000 of our citizens without full-time jobs. We must do everything we can to stop this trend and reverse it. The Department of Enterprise, Trade and Employment will spend more than €900 million in 2010 protecting jobs and providing training and activation supports, and more than €200 million in enterprise supports through IDA, Enterprise Ireland and other agencies, making a total package of €1.1 billion.\n\nWe will directly and indirectly support approximately 80,000 jobs through the employment subsidy scheme. Through the social welfare system, we are helping more than 73,000 people to maintain part-time jobs or casual work, at a cost of well over €600 million. Altogether, this comprehensive package will enable 180,000 individuals to receive training or supports in 2010.\n\nA key goal of this budget is to put Ireland firmly on the road to recovery. Within the financial constraints we face, we are providing for a stimulus which will create job opportunities and lay the foundations for developing the smart economy. This stimulus contains the following parts: a €40 billion investment over the next six years in infrastructure that will provide jobs and support economic growth - at 5% of GNP, this is twice the European average; a €6.4 billion spend next year to support more than 60,000 jobs; a national energy-efficiency retrofit programme and tax incentives for energy efficiency, creating 5,000 jobs next year; a car scrappage scheme and tax incentives for electric and hybrid vehicles which will support up to 2,000 jobs; reductions in excise duties on alcohol and lower VAT to assist hotels, catering and the retail sector; support for a marketing drive and investment in visitor attractions in the tourism sector; assisting agriculture and forestry; retaining a pro-enterprise tax policy; continuing to invest in research and development, science and technology; and measures to get credit flowing to support businesses and jobs.\n\nThe Government's framework for sustainable economic renewal has the objective of creating a smart, high-productivity economy. Increasing productivity is the key building block for economic growth. A key driver of enhanced productivity is investment in infrastructure that stimulates the economy and improves the competitiveness of Irish business. Investments in infrastructure support employment and stimulate economic activity. There is still a strong pipeline, with projects being completed and coming on stream over the next couple of years.\n\nThe Government has revised its capital programme, and will invest close to €40 billion between now and 2016 to enable a return to robust economic growth over the medium term and advance the goals of the smart economy framework. We are prioritising projects with the most immediate positive impact on the economy and employment which also lay the foundations for sustainable growth. Next year, the level of public capital investment - at about 5% of GNP - will be proportionately the highest capital investment programme in the EU.\n\nOur consistent approach over many years has been to prioritise the social benefits of investing in our social infrastructure as well. Despite the difficult economic circumstances we face, we are committed to continuing to invest in areas such as health, education, public transport, housing and urban regeneration as part of our overall approach to serve people's needs. Investment projects will include more than €500 million on school building and maintenance and more than €800 million on local authority housing, including special needs accommodation and the retrofitting of public housing. Some €625 million is being invested in key public transport projects such as the Luas extension to Cherrywood in South Dublin, phase 1 of the western rail corridor, the completion of the Kildare route and phase 1 of the Navan line.\n\nAt nearly €500 million, the investment in our health infrastructure next year will achieve continued, sustained improvements in the quality of our health services despite the ongoing budgetary adjustment we have to make in current economic circumstances. It will enable us to continue projects already under way and to start a number of new ones, including the development of the new, single national paediatric hospital as a key priority; the development of substantial additional radiotherapy capacity as part of the national cancer control programme; the construction of critical care facilities in the Mid Western Regional Hospital in Limerick; the opening of a new accident and emergency department in Drogheda and the construction of new ward accommodation during 2010 equipping and operation of new cardiac and renal facilities in Cork University Hospital; the planning of a new facility at Sligo General Hospital, using the public private partnership funding model, to include a new surgical department, intensive care unit and other developments; the major development of a new Mater adult teaching hospital; St. Vincent's phase 2 development, including new cystic fibrosis facilities; the upgrading of paediatric critical care facilities at Crumlin Hospital; the planned upgrading or replacement of many facilities, including many public long-stay nursing homes and community hospitals, such as Kenmare community hospital Loughrea, Navan, Fairview, Farnlea and Ballincollig in Cork and the development of new primary care centres through lease arrangements to include Kinnegad, Moate, Gorey, Waterford, Carlow, Callan and Trim early in 2010, with a further 37 centres during the remainder of the year. All of these developments will support new services and better patient care, at the highest international standards, and continue the progress we are making in improving outcomes for patients.\n\nOther key investment priorities will be science, technology and innovation, the promotion of environmental sustainability and the implementation of green enterprise initiatives. All of these initiatives will help to drive productivity improvements. Within this envelope, we are reallocating funds to provide an immediate stimulus in several key areas.\n\nA new national energy retrofit programme will create an efficiency fund to stimulate investments in energy efficiency and greenhouse gas mitigation. We are allocating €130 million for energy efficiency programmes in 2010. The scheme will also focus on providing information, via the utilities, to all households on the possibilities of reducing their building energy rating, BER. This way, the grant investment will leverage further investment from higher-income households. The carbon tax will provide a further incentive, as will the impact of an improved BER on house values. This will, in time, allow more funds to be targeted at fuel poor households and the elderly. Some €90 million will be allocated directly to the programme in 2010 with a substantial proportion of the funds ring-fenced for those suffering from fuel poverty. This will be augmented by approximately €125 million in private investment. We expect this to result in 60,000 homes and several hundred commercial and public sector buildings being upgraded in 2010.\n\nThe programme will provide an estimated economic dividend of more than €400 million net benefit to the economy in 2010; an employment dividend of around 5,000 jobs next year; a health dividend in that warmer homes will reduce deaths and illness from cardiovascular and respiratory diseases, which have a particularly negative effect on the elderly; a fuel poverty reduction dividend; and an environmental dividend of CO2 savings of 115,000 tonnes per annum, which will assist Ireland in meeting its greenhouse gas reduction targets. In addition, a scheme of accelerated capital allowances for energy efficient equipment is being enhanced. This will improve energy efficiency and help companies under competitive pressure, such as food and drink, retailing and distribution businesses.\n\nWe have introduced a 12-month car scrappage scheme from January 2010. Subject to conditions, VRT relief of up to €1,500 per new car purchased will be made available under the scheme, where a car of 10 years or over is scrapped. It is estimated that this will safeguard approximately 2,000 jobs and provide a net benefit to the State in terms of tax revenue and reduced social welfare of between €30 million and €100 million. Moreover, it will provide a significant net environmental dividend in terms of reduced CO2 emissions, assisting Ireland to meet its international obligations regarding climate change.\n\nTo assist the retail sector in competing with the sterling area, we are reducing excise duties on alcohol and are reversing the 0.5% increase in VAT imposed in October 2008. The British Government has confirmed that it will raise its VAT rate by 2.5% from January next.\n\nThe tourism sector, which is employment intensive, has been under great pressure as a result of the global downturn. Investment in visitor attractions will be increased three-fold to €22 million, and the overall tourism budget is being increased in 2010 to enable a marketing drive to increase tourist numbers and revenue by 3%.\n\nWe continue to be committed to the agriculture sector as a vital part of the economy. We have made a large investment in agricultural infrastructure through the farm waste management scheme. We are committed to supporting an environmentally-friendly agriculture sector, and are in discussions with the European Commission with a view to introducing a new five-year agri-environmental scheme. We have re-allocated €50 million for this scheme. We are also providing €120 million for forestry and bio-energy.\n\nCentral to our smart economy vision is that Ireland will become an innovation hub, a country that is an attractive home for innovative multinationals as well as being an incubation environment for the best entrepreneurs at home, from Europe and further afield. We must get more for less across all sectors of the economy, public and private.\n\nWe are continuing to invest heavily in research and development and are establishing a single funding stream for the strategy for science, technology and innovation to maximise the efficiency and focus of our investment and ensure that Ireland's effort is strategically targeted on those areas where we can achieve greatest impact, including through close alignment with industry needs and a strong commercialisation effort. \n\nAs a first step, it will involve combining the funds currently administered by Science Foundation Ireland, research funds administered by the HEA, the research funding of the HRB and, as appropriate, funds related to research calls of sectoral Departments. We will retain and enhance the significant incentives we introduced in the past two years in research and development and the intellectual property environment. We have committed to retaining the 12.5% corporation tax rate and we are extending to new company start-ups in 2010 the three-year corporate and capital tax exemption.\n\nWe are retaining the patent royalty exemption, which is an important support for research and development intensive indigenous and multinational companies. The Government looks forward to receiving the report of the innovation taskforce on its recommendations in regard to further measures for creating a positive environment for entrepreneurship, innovation and intellectual property and the Minister for Finance has committed to considering these in the context of the Finance Bill.\n\nWe are establishing a credit review system to ensure a flow of credit from the banks to support healthy Irish businesses and jobs. In a small open, economy like ours, we must trade to thrive. That is how we will protect existing jobs and create new jobs. The Government will continue to support the enterprise sector as it adjusts to the severe competitive pressures it currently faces, in particular, from currency movements against our main trading partner, Britain.\n\nMuch of our effort in the past year has been on stabilising the economy, with short-term measures to help business survive and support those who lose their jobs. We have already introduced a range of measures to support firms through the crisis including the enterprise stabilisation fund, the temporary employment subsidy scheme and interventions to apply downward pressure to energy costs. We are also introducing a new employer PRSI exemption for new employees, which will reduce the cost of creating new jobs, helping to get the economy moving again.\n\nThis budget is the start of a new phase where we begin to create sustainable jobs as the global economy begins to pick-up. Last week, we published a report showing how we could create 80,000 new jobs in green enterprise in the coming years. It contains proposals for green enterprise zones, renewable energy and a green IFSC. The innovation taskforce is developing ideas for job creation by making Ireland the best location in Europe to start a high potential innovative company.\n\nWe already have one of the best concentrations of high-tech multinationals in Ireland. Our plan is to incentivise them to invest further in high-value research and development areas, and in the convergence of technologies that provide well-paid jobs that will stay in Ireland. We will publish a new action plan on trade and investment early in 2010, prioritising our links with new and fast-growing markets in Asia and elsewhere. We will continue to pursue new opportunities in international services, including financial services. Following the budget, through the Cabinet committee on economic renewal, I will drive forward our efforts in all these sectors, ensuring that all Ministers, Departments and agencies prioritise these opportunities so we can get people back to work as quickly as possible.\n\nThe recent floods have further underlined the necessity of building better flood defences, where appropriate, and undertaking other non-structural measures to mitigate the risk of flooding. An increased allocation of €50 million has been provided, so that planned works in a number of towns can be completed, new risks addressed and better warning systems put in place, with a particular focus on some of the worst affected areas, including Cork, Galway and the Shannon, Lee and Liffey river catchment areas\n\nThe second and third phases for Clonmel are due to start in March of next year thanks to the Minister of State, Deputy Mansergh. I will ask the Minister of State to keep the Deputy informed.\n\nAnother element of stimulus is to the housing market with not only the extension of mortgage interest relief for those who brought in 2004, 2005 and 2006 when the market was at its peak, but the incentive to buy a house in the next two years for anyone still anxious to avail of mortgage interest relief before it is abolished in seven years' time.\n\nThis budget has been framed at a very difficult time for Irish families. I fully understand the needs of those who depend on social welfare, and the Government has done its utmost to protect the most vulnerable people in our society. The reductions in many social welfare payments are a regrettable but necessary part of this adjustment. The reason we are reducing payment rates is to ensure that we have a sustainable welfare system which can continue to protect the most vulnerable. A State that is insolvent would be of no support to those who rely on it for their incomes.\n\nReductions in pay and welfare payments must be seen in the context of falls in prices. The CPI fell by 6.6% in the 12 months to October. In 2010, we expect the CPI to fall by 0.8%. Year-on-year, food is down by 6%, energy by 11% and clothing and footwear by 13%. The reduction in social welfare payment rates is less than the fall in prices. The value of the payments in people's pockets will, if anything, be higher than it was previously.\n\nThe support provided by the Irish State to those on welfare is one of the best in Europe. In recent times, there have been record increases in the level of social welfare. Welfare rates have doubled since 2000. In the past 12 years, we have increased pension rates by almost 120%, unemployment benefit by almost 130% and child benefit payments by more than 330%. It is worth pointing out, over the same 12 years, the cost of living has increased by less than40%. In the same period, Government also extended coverage, removed barriers and increased entitlements such that the level and extent of social support payments has been transformed beyond recognition.\n\nGiven that social welfare accounts for about one-third of all day-to-day spending, reductions in this area had to be found. The scale of savings required from public expenditure as a whole means that savings in the welfare bill are unavoidable. What is most important now is that we can sustain a strong welfare system into the future. If we do not cut back slightly, there might have to be more drastic cuts in the future.\n\nBearing in mind that we increased welfare rates by around 3% in Budget 2009, the net reduction is minus 1.1%. This brings social welfare back to around 2008 levels. However, the cost of living has come down by around 6% in the past year, and is back at what it was at the beginning of 2007. Child benefit is back to 2006 levels. Therefore, the changes we have made have ensured that, viewed over a three year period, the spending power of people who received welfare and-or child benefit remains broadly stable.\n\nWe have not touched the State pension. Older people do not have the same option of going back to work to supplement their income. They have worked all their lives and should not have to rely on their children to live in dignity.\n\nOur tax revenues are at 2003 levels but we have left welfare rates at 2008 levels so, in cutting back on spending, we are still prioritising those on the lowest incomes.\n\nTurning to broader issues, in the past year, I have made it clear that I would wish to continue the positive relationships with the social partners, which played a central role in our economic and social progress over the past 20 years. Good progress was made in developing a framework last January which set out shared perspectives on how the present crisis should be approached.\n\nIt is disappointing, but not wholly surprising, that it has not been possible to continue the pattern of wide-ranging partnership agreements we have seen in recent years, given the scale of the challenges and the speed of the economic and social deterioration which has overtaken the country. I would not rush to conclude that the social partnership model is dead, because we have failed to reach a formal agreement on this occasion.\n\nThere continues to be a social partnership agreement in place in Towards 2016, which sets out the medium to long-term objectives and principles for economic and social development. There is scope for that agreement to continue to shape the process of social dialogue, which inevitably will continue between the Government and the social partners, just as it characterises the overall European way of doing business, both at the level of the European Union and within individual member states.\n\nThe strenuous efforts made last week to conclude a pay agreement in the public service did not, regrettably, result in success. This was not for lack of effort or good faith on the part of the participants. I set out in the House on Wednesday, 2 December, the criteria which would have to be met if agreement were to be reached. Unfortunately, these were not met, not least because the certainty about the scale and permanence of the measures in reducing the cost of the public service pay bill were not sufficiently clear given the need to demonstrate that the measures taken in the budget would represent clear and structural change. However, I welcome the fact that the talks were marked by an acceptance of the need and the capacity to generate significant reductions in the public service pay bill in 2010.\n\nIt is also significant that the negotiators were able to identify agreed approaches to effecting change and increasing productivity in the various sectors of the public service. Ultimately, it is only through real and lasting change based on constant renewal, redesigning how we do our business, applying to the full the potential of new technology and challenging accepted ways of working and organisational structures that those who work in the public service will be able to sustain their standard of living. Unless public service workers demonstrate the same productivity growth as their private sector counterparts, inevitably incomes will fall behind over time. The surest route to secure and stable income levels, and to avoiding future pressures for further reductions is the embracing of change. Greater flexibility and new ways of doing our business should not threaten us; on the contrary, it should provide confidence and assurance about the viability of employment and living standards in the public service for the future.\n\nFor that reason, while recognising that the current situation of breakdown is an unhappy one and that we do not have an agreed basis for moving forward, I would urge public servants and their unions to reflect on the potential to build on the progress made last week, and to recognise the direct and immediate benefit of a positive approach to public service reform that liberates the talents of those who work in the public service, secures their incomes into the future, and provides a more efficient service for our citizens. Dialogue on this basis is the best way to deal with concerns about pay and conditions for the future.\n\nI acknowledge and welcome the fact that both Opposition parties have put forward budget proposals. In particular, I am glad that they agreed with the Government on the need for a €4 billion adjustment in 2010. However, both parties differ sharply on how to make up the €4 billion.\n\nMy apologies. However, both parties, in this respect, based on what I am talking about, differ sharply on how to make up the €4 billion. Fine Gael want headline salary cuts imposed on the public sector. The Labour Party is strongly opposed to such a measure. The Labour Party also wants to see an extra €2.3 billion in taxes in a full year. Fine Gael tell us that it is not possible to tax the way to recovery. As they were on the banks, the two Opposition parties are fundamentally divided on how to stabilise the public finances.\n\nThis is at the core of the issue facing us.\n\nWe need quick decisive action to put our public finances back on track. It is unclear whether - even in Government - the Opposition parties would be able to agree a coherent and credible economic policy for the country.\n\nWe do not want a repeat of the 1980s with the necessary action being deferred.\n\nThe Fine Gael assertion that it is not possible to tax the way to recovery is an empty mantra, given that the party proposes large hikes in employee PRSI to fund reductions in employer PRSI, and extending the health levy to incomes over €13,000, which is the same as a tax increase.\n\nThe Labour Party advocates a new top rate of tax which would mean an effective marginal rate of 59%, which is a reversion to the failed policies of a more socialist past.\n\nOver the next two years we will be spending over €100 billion in this country. Money will be invested in providing services from health to education to enterprise and jobs. We still have 1.8 million people at work - developing industries, producing the exports and services which will make our nation thrive.\n\nExternal confidence in Ireland is returning. It is that same confidence that Intel has shown in investing more in Ireland through its Open Lab initiative a fortnight ago. It is that same confidence shown by those who invest in our capacity as a country by buying our Government bonds. They would not be buying these if they did not have confidence in our capacity to recover and did not believe we possess the will to do so.\n\nAt the Global Conference in Farmleigh, speaker after speaker expressed confidence in Ireland to trade her way out of this recession. These were not starry-eyed returned emigrants; they were hard-nosed business people who have seen the ebbs and flows of economies all over the world. We live in a competitive global environment but we also should not forget that our Irishness gives us a distinct selling point in the world today. With an Irish Diaspora of over 80 million people claiming Irish descent, we have a natural worldwide network to tap into. We have experienced people who have dealt at the highest level of business internationally and built companies, developed products and opened markets the world over.\n\nWe must support these people now as they are the ones who will create the jobs we need to get our country moving again. We have the ability to turn the corner. The older people among us will have seen many ups and downs in their lifetime and know that, for all our difficulties, the vast majority of us are much better off today. With appropriate adjustment and proper appreciation, new opportunities and new ways of working, we have the assets and the ability to spring back and to move forward again. The economic and social progress we have made is something to be proud of. Our collective job is to restore momentum with the stimulus to go forward on a new and sounder footing.","At the end of his response the Taoiseach said that we have the ability to turn the corner. The Minister for Finance assumes we have already turned the corner, according to his dissertation yesterday.\n\nThe budget may or may not contain all the answers to our economic problems but it has the appearance of an honest and credible attempt to meet the country's need, that is, to kick-start the restoration of stability, opportunity and competitiveness. Nevertheless, Deputy Richard Bruton's accusation that the Government has leaned too heavily on a set of tax increases rather than concentrating on cutting the costs of running Government could yet prove correct. In such volatile times, nobody can be certain that the Government has found the complete solution to the crisis in the public finances. Nevertheless we now have a number of things we did not have last week. We have a five-year plan for economic recovery, a strategy to clean up the banks and a firm declaration of intent for public service reform.\n\nWe can only hope we will be able to look back on the Supplementary Budget of April 2009 as the first step in our recovery from economic disaster. That was the view of the editorial of the Irish Independent on the budget on 8 April 2009. That editorial set out the pious platitudes, the hopes and aspirations of the Government through the Minister for Finance on that date. All of these criteria have failed in the intervening period. If we were to believe all the Taoiseach has said we should go home and hope for the best.\n\nThe budget is one of figures and is not for people. It is a budget of necessity and not of choice. It is a budget of desperation, not of conviction. This a budget for an election day but like St. Augustine being made pure, it is a case of not just yet. A political choice was made by Fianna Fáil and the Green Party, backed by the Independent Members, in the hope that the fallout from the budget would pass over and that in 12 to 15 months, or some time within the next 100 weeks, they might have an opportunity to be judged by the people. Just as the Minister is unsure about having turned the corner I am equally sure that when the Government faces the wrath of the electorate in the next 100 weeks it will get its answer in no uncertain terms.\n\nThe background to this budget had been well set out and we should not forget why we have arrived at yesterday's decision. We have arrived at it because the three amigos, former Taoiseach, Deputy Bertie Ahern, the Taoiseach, Deputy Brian Cowen, and the Minister for Finance, Deputy Brian Lenihan, ignored all the warnings set out in recent years about the direction in which this country was heading, about the way we were heading down the slippery slope of putting all our eggs in one basket, and that a day of judgment would come followed by a day of necessity to make decisions. The good thing about this budget is that the main Opposition parties, the Fine Gael Party, the Labour Party and to a lesser extent Sinn Féin, now absent, did set out and agree on the broad parameters of the requirement for cuts in current spending of €4 billion.\n\nThe point made by the Minister for Finance in his pre-budget outlook was that the advice from the IMF, the OECD, the ESRI and every independent commentator was that it would be far better to deal with the deficit in the public finances by current spending cuts rather than taxation. What did the Minister do? He imposed €6 billion worth of tax on people's pockets last April with a consequential loss of €8,000 million in revenue up to the end of the year. He also got it wrong in respect of VAT which he reversed following persistent pressure from ourselves and others. His projections, and those of the Taoiseach when Minister for Finance, were wrong despite the fact that he had all the evidence from the Central Bank, the Office of the Financial Regulator and the Department of Finance that to proceed down that road was fraught with danger.\n\nThis budget neither deals with nor answers the questions of fairness, jobs or competitiveness. The Achilles heel of the Government is not just contained in yesterday's projections but is to do with Anglo Irish Bank. This is the fundamentally weak spot. I do not agree with the Taoiseach that the extent of €4 billion, €5 billion or €6 billion which he will come back looking for next year for recapitalisation of Anglo Irish Bank is a separate matter from actions taken yesterday. This is real money from the pockets of real taxpayers and it is going down a black hole. The problem is that the golden circle is still complete. While people are imprisoned in America we still have no evidence of any prosecution pending here either from reports of the Director of Corporate Enforcement or the fraud squad or anybody else. It is worse when it transpires that in some cases the developers were the bankers themselves. The circle is very complete here. Yet the Taoiseach expects to come back to the Irish taxpayer as a separate entity as if it is not money out of their pockets and say, \"Sorry, but we need another €4 billion, €5 billion or €6 billion to bail out Anglo Irish Bank\". That is the Achilles heel.\n\nThe other leg will be NAMA. I listened last night to the Minister for Finance speaking on RTE television and talking about nationalisation. The reason for setting up NAMA was to prevent nationalisation and now massive transfers of resources of wealth are being transferred to speculators and bond investors in these banks. It may well be that the Government may be faced with having to implement nationalisation. If that is the case, it is a catastrophic failure on the part of the Minister for Finance. In a small number of cases it appears as if the developers themselves are also bankers. I am getting reports every week of the extent of rolled up interest from Anglo Irish Bank that in some cases is up to €300,000 per week. I wonder if the Taoiseach appreciates how a person who is a full-time carer looking after a person with Alzheimer's and who will have €8.60 cut off their weekly payment feels about this. This is where the unfairness is and where this budget does not measure up from top to bottom. Those at the top have walked away scot free, as in the case of Mr. Neary and Mr. Molloy, with pensions of €100,000 or more, untouched, while the people who clean out the Taoiseach's offices - as has been pointed out today - take their 5% cut as the case may be. The choices being made yesterday had to be made. The good aspect about this discourse is the Fine Gael Party, in accepting the parameters of €4 billion, set out a very different alternative strategy and a very different kind of budget where those vulnerable people, the carers, the disabled, the blind, the widows, the pensioners and the children, were protected and those in the other area of welfare who are available and able to work and willing to work, will be provided with challenges and training opportunities and jobs.\n\nThe Taoiseach has made a clear political choice. He may believe that the private sector which represents 60% of taxpayers, may feel that they have been left untouched by this budget simply because there is no increase in income tax. The levies now appear to be permanent and they will become permanent because the Taoiseach has not put in sufficient stimulus to create jobs in the way the Fine Gael Party presented its alternative budget. The difference between the two approaches is that the Fine Gael alternative budget was much fairer towards those working in the public service, particularly those at the lower end of the public service where every single one of the 55,000 employees working for less than €30,000 would have no cut and with proportionate cuts above that. The Minister's budget means that those on the lowest wages, earning the minimum wage, are now being forced to take the same proportion as the deception brought in by Ministers when they say they are taking a 15% cut in their own salaries to share the pain and to show leadership. This morning on radio the Minister for Social and Family Affairs said it would formalise a legal agreement of Ministers taking pay cuts of 15% when in reality this is only a 5% cut.\n\nThis is budget is a blunt instrument. It is about figures and not about people. There is to be only a 1% reduction in the administration budgets of most Departments and the FÁS budget has actually increased. This is evidence of retrenching within all Departments, a regrouping, a case of getting back to the basics of self-defence in different Departments. Over the past four months, Ministers were working in parallel lines as to what contribution they were being required to make in order to meet this demand for a cut of €4 billion, to see what they could lop off and what could not be lopped off under any circumstances, without any view as to how they would get the country back to work, of how jobs could be created and how we can trade our way out of this mess the Government has led us into. They have arrived at the same conclusion which Fine Gael has been preaching for the past five years, that they cannot tax their way out of it and that we must trade our way back. A jobs stimulus package must be implemented. It is not just a case of lowering the price of drink or such like.\n\nThe Taoiseach could have used a broader and fairer approach. In respect of the public service he could have decided last April to promise to look at the question of effective reform in order to bring about a leaner, more efficient public service and the delivery of that service. Fine Gael will see to it that managers down the line are given the responsibility and the opportunity to account for and be rewarded for what they do and if they wish to be transferred to whatever Departments might need them. The Taoiseach did not do this and he now has a sullen, deeply resentful public service. I do not believe that a rash of strikes will solve anything but there are people who are very vociferous on this issue.\n\nDeep down within the public service there is now a realisation and an understanding that the structure of social partnership, inadequate though it was in many respects, is now dead and buried so far as Fianna Fáil, the Greens and the Independents are concerned. The retrenchment taking place in every Department is clearly seen as an act of self-defence, of regrouping and a hope that the difficult days will pass.\n\nThe message being sent abroad will be accepted by the international markets because it is about figures and not about people. It is not about fairness or otherwise. The Taoiseach has used a blunt instrument to reach a saving of €4 billion and this will be accepted by the international markets. What the Fine Gael Party proposed was so much stronger in the context of the private sector because it provided more stimulus for job creation, for young people, for those who have jobs and for those employers who want to want to hold on to those employees and for the rewarding of new initiatives and opportunities to create new jobs.\n\nThis is the way we will get out of this situation, not by talking about the Irish diaspora who are emigrants from our country and will work in Canada, America and Australia and Britain, like 100 nurses from the western region who have recently received letters of relocation to Whipps Cross Hospital and the Royal Berkshire Hospital in London and other places in Britain. The taxpayers have paid €90,000 to train each of those nurses and they will be giving their services abroad. There is no one to beat the quality, compassion and capacity of an Irish nurse and this is with due respect to other nationalities, yet they are being sent abroad because the Government presides over a health system which the Taoiseach knows does not deliver efficiency either for the patient or in terms of value for money. The system works very well once one is inside it but all the problems are associated with getting into the system.\n\nI disagree with the view expressed in The Irish Times today that this budget is above sectoral politics. When we all talk about accountability and transparency then I say, good luck to the people in Kenmare. The leopard has not changed his spots. In this regard the former Taoiseach, Deputy Bertie Ahern, said in effect, \"We get in here and we stay in here and we do whatever we have to do to stay in here and I will write whatever cheque I have to write for banks and I will do whatever I have to do to keep this going\". The community hospital could be in Kenmare, Sneem, Barraduff, Killorglin, Dingle or it could be in Dundalk, Cashel, Monaghan or wherever else. What the Taoiseach has done in the middle of the deepest recession this wonderful democracy has ever experienced, an economic crisis caused by his party, is send his Whip up the steps to speak to the Independents and do secret deals. This is about politics and it is the reason I disagree with the Taoiseach that it is above sectoral politics or local interests. In one way the Taoiseach has not changed because this is about holding on to the Independents who, as we all know, are always on the plank waiting for a bigger ferry to come by as it sails to cleaner waters and ready to choose when to jump. With no stimulus provided, the real problem is the lack of credit from banks to businesses. Mr. Sheehy from Allied Irish Banks informed the Joint Committee on Finance and the Public Service that when his bank receives the bonds from the National Asset Management Agency it will not translate them into credit for business. Since the deposit guarantee was introduced, the Minister for Finance, Deputy Brian Lenihan, has told us we are deeply embedded in the banking sector and he will see to it that the banks deliver credit to business. This is not happening. Day after day, Deputies, including those opposite, are receiving evidence that shopkeepers are unable to secure credit or overdraft facilities and in many cases are having cheque books withdrawn simply because they came close to their overdraft limit. This is not the way our country should be.\n\nA credit assessment procedure is being introduced under which people will be told they may be entitled to obtain credit from a bank but there is no guarantee they will get it. The timescale for introducing the measure means many thousands of businesses which are hanging on by their fingernails will go to the wall. I know of umpteen cases of solvent businesses which have never owed one bob and whose applications will not even be sent into the local bank manager.\n\nThere is no leverage on the banks. Ten more shops will close down every day. The belated decision to reverse the VAT increase, a measure the Fine Gael Party campaigned for, is welcome but is too little, too late. The Government had an opportunity to implement the reduction before Christmas. I do not know whether Deputy Perry heard a woman from Sligo speaking on radio this morning about how she made a saving of €500 by travelling to Enniskillen to do her shopping. People are not travelling across the Border to buy drink but to purchase a range of other goods, from prescriptions and medicines to baby products. If the Taoiseach does not get down to business and talk to his British counterparts about levelling the playing pitch, the surge in cross-Border shopping will continue.\n\nSix weeks ago, my party stated that whatever else the Government does, it should not tamper with the universality of child benefit. Every other country in Europe has an in-built mechanism in the tax system to address the cost of raising families. Ireland does not have such a mechanism. Child benefit is of major importance to many mothers. The Government has made a serious mistake in reducing it.\n\nI am reminded of a comment made by Deputy Connaughton, whose antennae are sharper than those of most other people, that there are many mean husbands in this country and some mothers must ask their husbands for every cent they spend in managing their household budgets. Implicit in this is a recognition of the value of paying child benefit directly to mothers. The benefit is not abused. What the Government has done is wrong and will come back to haunt it. The reduction in child benefit for children who need it is a mistake.\n\nWhat message does the decision to reduce the carer's allowance by €8.60 send out to full-time carers? The message is that the work of people in full-time caring positions is not valued by the State. If carers did not have love and respect for their kith and kin, the people for whom they are caring would be in State institutions at ten times the cost. They provide full-time care for family members in their homes because of their love of family. The Government has sent out a message, through the Minister for Social and Family Affairs, that it does not value this care or the work carers do, which saves the State hundreds of millions of euro every year.\n\nThe Government has made a direct attack on the public service as a result of which public servants will hold a deep sense of resentment.\n\nThe Fine Gael Party proposed a real stimulus through the establishment of a new economic recovery authority under which progress would be made on water, broadband, green energy, a smart grid, etc. More than 105,000 jobs would be created in the coming years in Cavan, Monaghan, Dublin, Louth, Cork and elsewhere for young people, engineers, tradesmen, graphic designers and manufacturers of all types of products. This is the type of stimulus we need and it is not evident in the budget.\n\nThe Government may be pandering to the private sector on the basis that income tax has not been increased but the fact remains that levies are here to stay and the economic stimulus is not what it should be.\n\nI note the local government fund will be cut by 12.5% and road maintenance funding cut by 10%. While the road safety plans issued by the Road Safety Authority are very good, we will find that, with no money available in local authorities, there will be serious accidents and the county road structure will deteriorate at enormous cost. If the reduction in the local government fund is not recompensed no local authority will be able to balance its budget. The Government may have done this for political reasons given that the Fine Gael Party controls many local authorities or because the Minister for Transport, speaking on behalf of the Government, indicated that county and town councils will be abolished. I do not know if that is official Government policy.\n\nI listen to people speak of wonderful advances being made in technology and what the Government is doing for schools. Am I to hear shouts of acclamation from across the hills when a laptop arrives in a local school? Schools will be given laptops even though a broadband service may not be available. As they used to say in country and western music, the day Big Tom came to town was a day to remember. In this case, we are all supposed to say the day the laptop arrived in the school was absolutely wonderful.\n\nTraining courses must be dealt with. With respect, many of the young people, particularly young men between the ages of 18 and 23 years, who are attending training courses have serious literacy and numeracy problems. Providing training courses will not sort out their problems. My advice, which is given constructively, is that the Government should arrange an aggressive series of educational courses running over 12 weeks and with classes limited to 14 for this category of young people with an identified educational problem. Young teachers should be employed to take the courses which should come under the management of FÁS. This approach would be much more beneficial than placing these young people on useless training courses when there are serious problems with their literacy and numeracy capacity.\n\nI note €3 million has been allocated for a referendum on children's rights. While I support this measure, I suggest the Government accept the Bill introduced by Deputy Shatter on behalf of the Fine Gael Party and use the opportunity, at no extra cost, to have a simultaneous referendum on the matter of judicial pay to avoid having judges deemed an elite group and remove pressure on them to reduce pay as a consequence of not being subject to a normal pay decrease.\n\nThe Government should have increased mortgage interest relief, as Fine Gael proposed, for people who bought houses from 2004 onwards and are now in negative equity. These people have a real problem and will come under even greater pressure when interest rates increase next year as the German and French economies grow. If one job in a household is lost, couples will not be able to pay their mortgage. The problem for those who want to buy new houses is not mortgage interest relief but access to credit.\n\nThere is no sense of equity in the budget. It is a blunt instrument which was born out of desperation and a failure to agree public service reform. There is no stimulus in this for the jobs we need, there is no sense of capacity to reform or have a more effective public service. The Taoiseach will not get it now because he destroyed the goodwill of the leadership of the entire public sector. The private sector will not get the stimulus it should.\n\nThe Taoiseach had a glorious opportunity to bring about a situation inside five years whereby people would think of this country as energetic, vibrant and one that will climb to the top of the ladder again in terms of health, education, efficiency of public service, delivery of jobs and a place where people would wish to be. This should be a country of real vibrancy and energy which can climb back to the top but I do not believe the Taoiseach will be able to do this. He has wasted a glorious opportunity. When the people cast their verdict in due course, they will give a savage verdict on this Government of Fianna Fáil and the Green Party. It has been the worst Government in the history of the State as far as I am concerned.","I put on record that we are debating what is probably the most important budget in the history of the State, but we are not holding a proper debate. Many Members wish to contribute but the debate will finish in a short period. From speaking to my colleagues I am aware they are frustrated. We were elected to represent people. In his speech, the Taoiseach made reference to NAMA and the benefit of the long debate on that legislation but I do not see the benefit of a short debate on the budget. This budget is probably the most divisive ever and it will be cruel on young families and the vulnerable. The Taoiseach referred to the Government approach on framing this budget and that it was guided by three questions. It seems the Government puts everything in the form of three questions. It must be the magic number.\n\nI will address the three questions, the first of which was whether this was necessary. It is necessary because the Taoiseach has made it so. He ran the country into the ground. Before the last election, when the Taoiseach served as the Minister for Finance he informed the people that the economy was fine. He is trying to do the same now and the message is that the business has been done and there is no problem, but he should be honest with the people. He should inform them we are in a major financial crisis. However, we must be fair with people as well.\n\nA person who cares for an individual came to my clinic in the past two or three days. The person for whom he cares gets eleven prescriptions per week. They will now cost an additional €5.50 per week, which is the bones of almost €300 per year. Will such people begin to make decisions such as that they cannot afford to get these prescriptions? Will they end up in hospital with a cost to the health services? There is a complete lack of joined-up thinking.\n\nI refer to the position of a widow. The Taoiseach made reference to the fact that he understood. How can he understand that when someone has lost a spouse the cost of living does not go down. The Government will take €8.30 per week from a widow or widower. This shows a complete lack of understanding and that the Government is completely out of touch. We all agree there was a need for €4 billion of savings but the problem is the way in which it was done.\n\nAnother question put by the Taoiseach was whether the budget is fair. It is not fair. Let us consider the issue in terms of the public sector. Regardless of income, public servants will be paid 5% less straight off. There are 55,000 people in the public sector earning €30,000 or less. When the banks were handing out mortgages it was said these people were gilt edged and many such young couples have 100% mortgages they can ill-afford. They have taken a significant drop in income.\n\nWe seek fairness and our party agreed there was a need for public sector reform. We considered savings of €1.2 billion. However, we proposed the first €30,000 of income for a public servant would be exempt and that it would be graduated thereafter. If someone earned €40,000, only €10,000 of their income would be subject to a pay cut. That is fair whereas this is grossly unfair, shows a lack of understanding and it is divisive.\n\nWill the Taoiseach put on record what exactly happened at the pay talks? Why were there talks over several weeks but five days before this critical budget, the Taoiseach walked out from them? The problem is the Taoiseach is eroding trust and to govern properly, one must have trust. The Government has suddenly produced a public sector pay cut that hits everyone from the first euro. Not only that, the Government had the cheek to state that Ministers would take a 15% pay cut. They will take a 5% cut but workers in the public sector will be subject to a 5% pay cut and further cuts thereafter. The Taoiseach did not refer to the cut from pension levy they took previously. If we group these together it is clear the Taoiseach should have referred to a pay cut of up to 10% or 12%. He did not do so, but the members of the Government calculated it this way for themselves. We need honesty and proper, effective joined-up thinking. We do not need a Government stumbling from crisis to crisis and basically engaged in spinning. The key point is this budget is not fair.\n\nThe third question put by the Taoiseach was whether the budget would assist recovery. It will not. The fiscal stimulus consists of reducing the excise duty on alcohol and a change to the VAT rate. I repeat that there is nothing in that. The Taoiseach referred to the employers' PRSI exemption for taking on new employees. It is welcome but what about those currently struggling to retain existing employees? Why did the Taoiseach not consider our proposal to cut the lower rate of PRSI by a half, to 8.5% for an employer, and to cut the top rate by 2%? That would have cut costs for employers while retaining the minimum wage for employees. However, there is no joined-up thinking. It appears the Government has carried out a book keeping exercise with no thoughts of bringing the economy out of recession. I refer to NAMA. The Taoiseach remarked that he took a systematic view in terms of dealing with the banking crisis and that the Government was dealing with the banks. However, the former chief executive of AIB was before the Oireachtas Joint Committee on Finance and the Public Services last week and stated NAMA would make no difference. He also stated AIB would not use the NAMA bonds to access cheaper funds from the ECB to provide a stimulus to the economy. The Taoiseach, the Minister for Finance and their colleagues, came out and sold NAMA to the public as a fiscal stimulus that would get credit flowing. They stated they would make the banks face up to the scale of their problems but it is a case of the tail wagging the dog. There has been no change to top management or the practices of the banks.\n\nWe have travelled throughout the country with Deputy Enda Kenny to meet business people. The diaspora are very welcome but the people who will get the economy going are the small business people throughout the country, the person who employes two, three or four people. Many such people cannot take out of their businesses what is necessary to pay their employees. They wish to keep people in employment, to stay alive and they seek supports for existing employees which is not being provided.\n\nThe Taoiseach referred to tourism. One of the greatest issues in tourism at present is the travel tax. It did not yield any great income for the Exchequer but the Government did not see fit to remove it. Such countries as Holland realised the error of its way and removed it. The problem with bringing the economy out of recession is that it must be considered in a strategic way. One cannot sell a line to the effect that the troubled waters have passed. 2010 will be a very difficult year for people. We must give people hope but we must also give them a sound basis in terms of policy, to deal with the cost for employers for existing employees as well as new employees.\n\nThe Taoiseach referred to reducing the VAT rate, which is welcome but it should not have been increased. Once again, the same mistakes have been repeated. The VAT rate was increased. There is a rule in business that one never increases prices when business is going badly but the Government did that in the previous budget. The logic of that defies description. Now that the Government is reversing the decision, the change will not be effected until 1 January. That gives consumers and retailers no possibility to benefit from the change in the Christmas period. We suggested that the lower rate of VAT should be reduced. That would not be as costly as reducing the top rate and hugely labour-intensive businesses once again would provide a stimulus.\n\nHow can the Taoiseach use the words \"fairness\" and \"understanding\" in the context of taking €8.30 from widows and people on invalidity pensions and €8.20 from carers? The drug refund scheme has been increased by approximately 40% to €120 since I became a Deputy in 2007. The most vulnerable are affected. Once again, the Government has gone for the easy targets.\n\nI accept that everyone has to pay his or her fair share. An anomaly exists currently in the PRSI ceiling for employees. If one is currently employed and earning €75,000 or less, one pays 4% PRSI on the full income, but if one earns more than €75,000, one pays no employee's PRSI on income above that amount. Why did the Government not see fit to reduce that anomaly and make the higher earners pay their fair share to get the economy moving again?\n\nThe Taoiseach made a threat in terms of the public sector in his speech in the context of further pay cuts. The Minister for Social and Family Affairs referred on the radio this morning to further pay cuts for the public service. The Taoiseach should be mindful of the old adage that one catches more flies with honey. Bully boy tactics and pulling out of talks five days in advance of the budget does not inspire confidence. We need to spread the load and get everyone working together. A coherent plan is required to move the economy forward but the budget is sorely lacking in that respect.\n\nIf we were allowed to have a proper budget debate we would be able to consider the budget provisions in greater detail. The devil is always in the detail. I note that the Government has introduced cuts across a raft of areas. Deputy Kenny has referred to the local government fund and the roads budget. In my constituency of Limerick a significant cut has been made to the housing budget, it is down from €1.1 billion to €800 million. The Minister of State, Deputy Finneran, is aware of that. \n\nI question whether the regeneration of Limerick is under threat. The biggest problem is lack of joined-up thinking and a coherent plan which should be focused on jobs. The Taoiseach is well aware that the ESRI has stated that more than half of our general Government deficit is caused by unemployment. If we are to come out of the recession we must ensure that we retain existing jobs. It is difficult to reconcile the Taoiseach's statement that we have turned the corner when we will have 75,000 extra people on the live register next year. Unemployment in 2010 has been projected to be 13% and 12% in 2011. It is important to be honest and upright with people. The Taoiseach should tell it as it is to ensure that trust is retained. The problem with the budget is that the Taoiseach has done neither.\n\nYoung families are travelling the length of this country to go to the North because Pampers and baby food are significantly cheaper there, yet the Government is taking €16 from child benefit. That is the one payment that goes directly and exclusively to the mother and it is used for children's clothing and extra costs. While fathers are also important, mothers are the focal point for child rearing.\n\nThe Government has got it wrong. It has not allowed time for proper debate and subverted democracy in this House. We should have had time in the House to go through the budget. If the Taoiseach wants to hear our views he should extend the debate on the budget and allow every Member of the House to have an input to what is probably the most critical budget. Does the budget satisfy the Taoiseach's three tests? Is it fair? No, it is not. Is it necessary? Yes, but because of the Government's mistakes. Will it lead to recovery? Absolutely not, because it gives no proper stimulus in terms of retaining jobs, which is what the budget should have been about. The Government has missed an opportunity.","I agree with one thing the Minister for Finance said yesterday, namely, that the late Senator Ted Kennedy was one of the best friends this country ever had. I am pleased that his memory is to be honoured, but Ted Kennedy's name should not have been invoked to dignify a budget that flies in the face of everything that he worked for and fought for. Ted Kennedy spent his entire life trying to get a decent health service for the people he represented. The biggest cut in any of area in the budget is to health services. Ted Kennedy was a man who fought for the poor. He said the poor may be out of political fashion but they are not without human needs. He would never have supported measures that take money from the blind, carers, widows and people who have lost their jobs.\n\nTed Kennedy was a champion of public servants. He always spoke with pride and with respect of firefighters, police officers, teachers and local authority workers. I wonder what he would have thought of the campaign that was successfully conducted by Fianna Fáil for the past 12 months to denigrate abuse, belittle and demean the people who work in our schools and hospitals. I was saddened over the weekend when a hospital worker told me how she had to meet an abusive tirade from a drunken lout on a night out when she was described as a parasite. The same drunken lout now probably has something to cheer about from this budget given the reduction in the price of alcohol. All of that was done to harden public opinion against public servants to justify the cuts in pay that were announced yesterday, including the savage cuts in the pay of the lowest paid workers in the public service. The budget owes more to the thinking of Ronald Reagan than it does to the thinking of Ted Kennedy. It is a disgrace. The budget is built on bad economics and bad politics and delivered by a broken Government. It will divide the country not unite it. It will destroy jobs not create them, and it will push hundreds of thousands of families deeper into poverty. Every family is today paying the price for 12 years of incompetent, reckless, dishonest Government by Fianna Fáil and the wealthy interests that backed the party, but some families are paying much more than others. The people who pay for everything must pay again. The wealthy, greedy and feckless have again been protected. The feathers in their nests have been barely ruffled. The macro-economics of this budget were never in doubt. There was support in this House and across political parties for an adjustment of €4 billion. However, choices had to be made. What were the choices made by Fianna Fáil? A Minister will now take a smaller pay cut than an executive officer in his or her Department. The public servant on €50,000 loses at least 4% of after tax income while the banker on ten times that, €500,000, loses nothing at all.\n\nThe meagre payments for widows, the blind, carers and people on disability are hammered. A family with two children under six years of age could lose €1,380. Widows of working age will take a cut of €641, including the Christmas payment. A couple on invalidity pension suffers a cut of €1,100. Carer's benefit is cut by €648 per annum. Blind pensioner couples could lose up to €1,455. The cost of drugs for families will go up €240 per year. However, a mere 1% of the adjustment comes from the highest earners in the land, if we ever see it. Children are hit three times in this budget. Child benefit is cut. The early childhood supplement is abolished and for children whose families are on social welfare, the Christmas payment is gone. Earnest lectures on price statistics will not feed a hungry child or clothe him or her for school.\n\nThis budget was written by the silver spoon wing of a Cabinet that does not have the first notion of what it is to live on a widow's pension or to live in a house where the father has no work. There are cuts here that break new ground in political stupidity. When one cuts payments for Youthreach and similar schemes, one cuts off some of the most troubled young people in our society. Sadly, the price one will pay will be measured in units of €107,000 - the cost of a place in St. Patrick's institution.\n\nWhy has this been done? It has been done because Fianna Fáil has brought the economy to its knees. It was handed a fast growing competitive economy, driven by exports, creating jobs and with a budget surplus. It turned it into a property bubble which has come crashing down on all our heads.\n\nIn the past two years, 250,000 people have been put onto the dole queue. Fianna Fáil has created one of the longest and deepest recessions in the developed world since the Second World War. Fianna Fáil has created a structural deficit in the economy which, on its own figures, requires total corrections of €19.5 billion to put right. It has mortgaged our children's future through its gross incompetence in handling of the banking crisis - a crisis that was of its own making. There is a blanket guarantee wider than any other, exposing the taxpayer to €440 billion in liabilities. NAMA, a millstone round the necks of a generation, has created a debt of €12,000 for every man woman and child living in Ireland today. Last night the Minister for Finance finally acknowledged what the Labour Party told him all through last year, that is, that the banks would have to be nationalised. That should have been done upfront in the beginning rather than doing it now by default and probably at greater cost to the public and our economy.\n\nFianna Fáil has sparked a new wave of emigration. Once again this Christmas, we will witness the scenes of heartbreak and loss at airports and ferry ports as the cream of a generation depart these shores and their families are left behind to live with the void. Some 40,000 people are expected to leave Ireland next year. This is what the silver spoon wing of the Cabinet has brought on the heads of the sons and daughters of honest people who pay for everything and qualify for nothing.\n\nThat was the Ireland we should have left behind. That is the Ireland that does that not have to be but always when one puts Fianna Fáil in charge, it will buy votes until there is no money left. Twice in a generation, Fianna Fáil has brought this country to ruin. It is never the wealthy or the greedy who are forced to carry the can. For Fianna Fáil now to describe itself as a republican party is almost grotesque.\n\nThis budget is based not on national unity or common purpose or social solidarity but on division, conflict and greed. Fianna Fáil has turned its back on the people and on its own traditions. Seán Lemass believed in public service and in a strong State sector in the Irish economy. Fianna Fáil is no longer the party of Lemass. Fianna Fáil is the Celtic Tories. This budget is a Tory dream come to life. Hammer public services, attack public servants, kick the poor and let the wealthy and the influential off scot free. The ideology that got us into this mess is running riot again.\n\nIt could, and should, have been very different. The Government had the opportunity to secure a national agreement to deal with the economic disaster that it created. The Labour Party proposed and would have supported a national agreement to deal with the fiscal crisis and the jobs crisis in a coherent and comprehensive way. We proposed a set of five principles on which an agreement for national recovery could be based, namely, a coherent jobs strategy, protection for the family home, a negotiated reduction in the public sector pay bill of €1.3billion, a fair budget and a guarantee of industrial peace. Just as we supported the Government on Lisbon because it was right for the country, so too did we support a reduction in the deficit of €4 billion in this budget. We did so because we put the national interest first and it is important that, as a country, we demonstrate a collective commitment to dealing with this disaster even if it was of Fianna Fáil's making.\n\nAs is clear now, there would also have been support from the trade unions for a national agreement of this kind. We know now that there was an opportunity for major public sector reforms - measures I have been calling for since the spring of this year and which I have called for directly in addressing trade union conferences. Fundamental shifts in the terms and conditions of employment would have given the Government the tools it needed to rebuild and reform our public services.\n\nHowever, the Government spurned all that. Whether it was a heave, a coup or a split, all of this was thrown away for short-term political purposes. The system of national pay agreements which Fianna Fáil has lauded for so long is dead. The Taoiseach saying he will re-engage on the transformational agenda is wishful thinking because he has dismissed from the negotiating room those with whom he needs to engage. An unprecedented opportunity for reform has been lost. A signal has been sent to the outside world that Ireland is a house divided against itself. A system of industrial relations that worked well for 22 years has been discarded.\n\nBy this time next year, inflation will have returned to the European and Irish economies. That will trigger a round of private and public sector pay claims that there is now no machinery to address. There are many who will cheer that development. Some believe that national agreements were beyond repair while others believe that leadership is measured by a willingness to impose pain on others and that real leadership is measured by a willingness to impose it on the weak. Those voices, the pain brigade, know little of history and care less for the future.\n\nThe people who are sent away from the bargaining table now will return only on their own terms because beggar-my-neighbour economics will get one good headlines in the short term but it will store up trouble in the medium term and will undermine confidence in our capacity, as a country, to manage our way through this crisis.\n\nThere is a broader agenda here and it is a low pay one. People on low pay in the public sector have taken a severe hit. Young unemployed people have had their benefits cut in half. The next target will be the national minimum wage. These moves are intended to drive down wages at the lower end of the labour market. Rather than train people and support them in finding new skills, Fianna Fáil is creating a new cohort of working poor. A young graduate will jump at a job that pays the minimum wage and a person on €40,000 could find himself or herself replaced by two people with master's degrees who will cost their employer less.\n\nFianna Fáil had the opportunity of national unity and it blew it. The Labour Party set out how this budget could have been balanced and fair. Instead of cutting child benefit to save €123 million, Fianna Fáil could have made modest changes to capital taxes. Instead of cutting welfare payments to people of working age, Fianna Fáil could have abolished all of the property schemes. Instead of cutting maternity benefit for new mothers to save €11 million, Fianna Fáil could have abolished any one of several minor reliefs.\n\nInstead, Fianna Fáil reverted to the beggar-my-neighbour strategy. The idea that if one isolates one or two groups in society, if one targets them and blackguards them, if one denigrates them day after day, then one can load the problem onto them and others can avoid carrying their share of the load. For the past 12 months, therefore, there has been an unparalleled campaign of abuse and denigration targeted at nurses, teachers, council workers and ambulance drivers. For more than a year, it has been as though it was these people - servants of the people - who caused the economic crisis. It was not Fianna Fáil or the property developers that this budget did not touch. It was certainly not the bankers.\n\nThere is a certain irony in the measures announced to cut the long-term costs of public pensions when we consider that the pension fund has already been handed over to the banks. The rich and privileged of Irish society have circled the wagons and Fianna Fáil has ridden to the rescue. They got NAMA and in return the voices of privilege have been out in force. These are the stockbroker economists who do not mention the bank that owns them or the bonds they trade and the tax consultants who do not mention their rich clients. In the run up to this budget we have had a queue of such people at the national microphone - bankers' lackeys, most of them telling us that \"you cannot tax the rich -sure they do not have a bob - and it is all the fault of the teacher, the garda, the council road sweeper\".\n\nThe alternative was to bring forward a budget that contained a fair balance between expenditure cuts and revenue-enhancing measures. It would be a budget based on the principle that those who have the most must contribute the most. The Government refused to do that. It constantly tells us that it is basing the budget strategy on international evidence to the effect that successful fiscal adjustments are expenditure-based.\n\nWe can consider the international evidence to which Fianna Fáil is wedded. I tend to agree with Dr. Garret FitzGerald, who has said that the conclusions to which the Government is wedded are generalisations that do not apply to Ireland's case. A paper published by the European Commission last year tends to agree. It indicates that the Government's line is the conventional wisdom but it also states: \"More recent studies, focusing on country cases, provide evidence that both expenditure and revenue-based consolidation can be successful.\" In other words, international evidence is fine if it is leavened with a dose of reality and some basic common sense.\n\nSuch common sense was set out by Jens Henriksonn, a key figure in solving Sweden's budget crisis in the 1990s. In an essay for the Bruegal Institute he writes: \"If a consolidation package consists of both tax increases and expenditure cuts the distributional effect can be fair.\" Fairness is not a luxury or an optional extra; it is the glue that keeps a society together in a crisis. This budget is manifestly unfair as it targets the poor, public servants and children. It lets the bankers, the property speculators and the Fianna Fáil backers off the hook.\n\nThis is a financial emergency yet even during the Emergency of the Second World War it was possible to introduce child benefit to promote social solidarity. Child benefit is the only payment through which the State recognises the cost of bringing up children in our society. It is a payment that does not produce poverty traps because it is paid irrespective of a person's employment status. It is the closest this country has ever come to treating all the children of the nation equally.\n\nThe biggest gap in this budget is an absence of a coherent jobs strategy. Time and again I have made the point that the banking, budgetary and jobs crises are interlinked. We must deal with them all in a coherent manner. Fianna Fáil has been so fixated with the banks and the budget that it has utterly neglected the jobs crisis. The measures introduced yesterday are nothing more than a laughable fig leaf. They are a series of ad hoc concessions to the pleading of special interests. There is no strategy here to promote the knowledge economy or even the smart economy, only the smart alec economy.\n\nIt is necessary to make a major budgetary adjustment to deal with the Fianna Fáil deficit. We will never get out of this crisis until we start to create more jobs. We cannot cut our way out of a deficit and we must grow the revenue line as well. We must lower the cost of this Government's failures - the cost of unemployment.\n\nThe cost-benefit analysis here is easy as every person off the dole is one fewer person being supported by social welfare and one more person paying into the Exchequer. In our pre-budget statement, Labour identified adjustments totalling €5.8 billion, which would allow for the €4 billion adjustment in the budget deficit while at the same time creating a jobs fund of at least €1.15 billion. Labour's jobs fund would be a key component in a broader strategy to deal with the jobs crisis. Labour's objective is to retool the Irish economy, wean it off its dependence on property and return to export-led growth.\n\nThis country can be a leader in the global knowledge economy if we take the necessary steps now to support that change. There are four actions we must take immediately to make this change a reality. First, we must create a structure of enterprise supports that are both wide and deep. As the world economy begins to recover, new opportunities will open up for Irish business. There is a new and deep pool of entrepreneurial talent in Ireland that we have to support, whether it is a new start-up, an expansion programme or a university research spin-off. We must strengthen the framework of supports available to Irish companies.\n\nSecond, we have to do the same for people. It is simply economically and socially unsupportable to have more than 400,000 people on the live register, with more to come next year. We must find the means and resources to give these people opportunities to train, learn and gain work experience. The sums of money involved are not great and Labour has shown how it can be done.\n\nThird, we need a strategy for investment in infrastructure and companies. We need a new national development plan to match more limited resources to strategic priorities. The Government says it has done a review but we need more than that. We need a new, costed, rigorously-evaluated plan. We need to ensure that we are meeting the needs of the knowledge economy. Labour has proposed the establishment of a State investment bank to assist in the financing of public investment and we have to ensure there is adequate growth capital for firms with ideas that need financial support to grow.\n\nFourth, we need sectoral strategies to deliver jobs. Not everyone can or will be employed in a software firm or a high-tech start-up. We must ensure that job opportunities are opened up across a range of skills and across the regions. I welcome the initiatives on tourism, and I will keep an open mind on what is being proposed for the food sector.\n\nWe need strategies that will build comparative advantage on the back of our natural strengths in sectors such as clean technology, food and the creative industries. The native creativity and genius of the Irish people is not just a cultural asset, it is an economic asset. In the UK, creative industries employ as many people as financial services.\n\nAbove all, we must rebuild confidence in this economy. The Minister has spoken much about confidence, and well he might because he destroyed it along with the other three horsemen of economic collapse, Professor Ahern, Commissioner McCreevy and the Taoiseach, Deputy Brian Cowen. The collapse in confidence in the Irish economy is both domestic and international. Following the disastrous handling of the banking crisis, Irish Government debt now costs 140 basis points more than the equivalent debt in Germany and at home, the savings ratio has rocketed.\n\nThe ERSI estimates that the savings ratio, which in 2007 was 2.3%, will exceed 11% in 2009 and 2010. That is the equivalent of taking some €9 billion out of the economy. If we are to restore confidence, we must do more than just attack the poor. We must reassure families that their home will be safe, there must be greater protection for homeowners, real action to clear out the banks and a firm determination to ensure a flow of credit to business.\n\nThe real confidence building measure that the country needs is the one the Taoiseach will not grant us - a change of Government. This Government is broken beyond repair. It is led by a Taoiseach who has been fatally undermined by his Minister for Finance. In the Taoiseach's contribution he spoke of a €3 billion adjustment next year but the Minister for Finance spoke of a €2 billion adjustment in his budget speech. The Taoiseach then has the audacity to suggest there are differences in approach between Fine Gael and Labour when the present Government does not appear to even be on song in what the target is for 2011.\n\nThis Government will limp on and will inflict more and more damage as it does so. The Irish economy and the Irish people need a fresh start and a new direction. They need a Government that will put jobs and people at the heart of economic policy, and which will make the hard decisions on spending but make the right decisions on jobs. Fianna Fáil cannot do that as it does not have the moral authority, the imagination or the wit. This budget is a disgrace and so is this Government.\n\nNothing sums up this budget more than the tawdry proposal to take money from the blind. There are Government Deputies who will return home this weekend after voting for the social welfare Bill and tell their constituents that they did not have any choice in doing so because they were under the Whip. Six Deputies are not under a whip and they have an individual choice to make. Deputy Healy-Rae has a choice to make tomorrow. Does he support taking money from widows? Deputy Lowry has to decide whether he supports taking money from the blind. Deputy Grealish has to decide whether he supports taking money from carers. Deputy McDaid has to decide whether he supports taking money from people with disabilities. Deputies Devins and Scanlan have to decide whether they support taking €1 billion from the health service and if they do, will the people of Sligo ever see the cancer and other services that are being lost in their local hospital?","The Labour Party's alternative budget was based on fairness and solidarity, it was practical and it was active. In meeting all those criteria, what was being proposed could have achieved enormous, widespread public acceptance. That would be different from what we heard yesterday, which was about politics. The Government was well served by those commentators who, for the past few weeks, followed the Mrs. Thatcher recipe, TINA, \"There is no alternative\", and therefore, we got a shabby discourse, a limited analysis and a suggestion of inevitability that was to be visited upon us. Very little was left to expectation. There is an alternative to TINA, which might be uncomfortable to mention for some Members. It is TARA, \"There are radical alternatives\".\n\nHowever, the discourse was incapable of a radical alternative. For example, former Taoiseach, Deputy Bertie Ahern, frequently spoke about his task force on citizenship. This was an opportunity for citizenship. One could in the midst of, and emerging from, a recession define \"citizenship\" in terms of a floor below which people should not be allowed to fall but that did not happen. The Government could have examined issues of redistribution. Instead of any concept of redistribution and a political economy that would include macroeconomics, which were beyond fiscal adjustment, we got a tawdry notion that certain steps were the only steps and these had to be taken and we got a disgraceful suggestion that, somehow or other, the entire population had created the problem. In more recent weeks, one could not speak at all about how we came to be here. It was as if the position we are in was not the position to which we had been delivered by Fianna Fáil Ministers, those in charge of regulation who failed us and wrecked public trust and those who damaged Ireland's reputation abroad and for which ordinary taxpayers now have to pay more taxes to service interest rates that are above the norm. These are truths and to seek to avoid them was quite scandalous.\n\nThe Taoiseach stated that he has been in the House since 1984 but I have been here since 1981. Since then I have spoken about the consequences of inventing the depeopled economy. This refers to the economy as a system where the people do not matter, the blind do not matter, the disabled do not matter or the graduates without jobs do not matter. Suddenly it is all the young people's fault and they are failures before they emigrate but it is not a failure of the economy. That limited thinking is not practical, moral or of any value in getting out us of where we are.\n\nOn 26 March 2009, a long time after I entered the House, I asked the Minister for Finance in Parliamentary Question No. 89 what proposals he had for gathering income from wealth. He replied: \"I have been informed that no general research has been carried out over the past ten years by either the Department of Finance or the Revenue Commissioners regarding the extent and breakdown of wealth as opposed to income\". That was always the case. Opposition to a wealth tax in the old days was not to the yield but to what it would reveal.\n\nYesterday, it was suggested in regard to the tax breaks, for example, that somehow or other, we have just come to our present position like it was an attack of the 'flu. In 2004 annual tax reliefs cost us €8.4 billion, which equated to 22% of total taxation. That is the year my colleague, Deputy Burton, Labour Party spokesperson on finance, raised the issue of 48 people having a tax rate of less than 5%. The Minister announced yesterday that he has made significant progress because the effective tax rate of those who are at the top of the heap will move 20.45% to 30% but there has been no clawback from those who accumulated and transferred wealth during the McCreevy years. In addition, of those who availed of such tax breaks in recent years, 66% were on incomes of more than €200,000 and 77% were on more than €100,000. Tax breaks were then provided for car parks, spas, health clinics and so on. Those who had money were forking it in to avail of these different tax breaks. In one year, €8.5 billion was invested in property abroad. Are any of these people paying for this so-called adjustment, which is, in fact, a gross management of the economy? Are any of them facing such an adjustment in the name of citizenship, to use the former Taoiseach's phrase, in order that, for example, those who were quickest and deepest into the trough might pay a fair share in getting us into a new concept?\n\nI am sick and tired of people being described as \"economists\" on television and radio in a public service broadcasting system that does not offer economic alternatives but rather goes along with the drift of the inevitable. What kind of analysis is made by those who are involved in this? When it all quietens down, the suggestion that one should say to the most vulnerable and broken, the widows and children and so on that they must pay for all this because it has to be is bad thinking. I mentioned economics. It is fascinating when someone from the right wing school, the paradigm that has failed us, comes on television and the subtitle used in the interview is \"economist\", whereas when someone with the same qualifications offering an equal agenda comes on, the name of a trade union is used as the subtitle. It is as if we have a high priesthood of failure. The same people who could not analyse the property bubble or speak about the Government's dependency on one source of revenue are precisely the people who now say the poorest of the poor must be among those who are pushed to the front to pay for our adjustment.\n\nWhat a tragedy it is that this recession is not being used to build citizenship and to foster an active politics that would put all the mechanisms for job creation and task forces into the green economy and the creative economy; that instead of cutting carer's allowance would recognise carers at work; that would do a deal with the public service unions and the private sector to share work, create new employment and discuss the working day; and that would have a decent society instead of a society that is deep into a drink problem. One could do all those things for citizenship but the high priesthood of the commentariat, no more than the Minister for Finance, do not have the moral courage, the ability or the commitment to speak about a genuine alternative, the Labour Party's alternative, which was fair, effective, active and in solidarity and it could have offered hope.","I have been in the House for quite some time and I have listened to various speeches on various occasions in good times and in bad. One word was missing from yesterday's speech by the Minister for Finance and this morning's speech by the Taoiseach. It is a simple Anglo-Saxon word and it is the word \"sorry\". Not once has Fianna Fáil said to itself, to the nation or to the Members of this House, \"Sorry, we screwed up\". They do not do apologies in Fianna Fáil but if they did it would be a start. Yes, we have screwed up. Yes, this country has screwed up and some people are more responsible for it than others. The start of a recovery that would embrace the principles of citizenship, to which my friend and colleague, Deputy Michael D. Higgins referred and which was once a mantra for the former Taoiseach, would be fixed\n\nWe will get out of this crisis. We will not get out of it the way the Labour Party wants to get out of it. We will not get out of it as quickly as Fianna Fáil thinks we will get out of it. We will carry for the rest of their lives people who will be the walking wounded because of the damage done to them. I am thinking in particular of the type of person referred to by Deputy Eamon Gilmore, such as a person who, because of a broken home, is looking for a second chance at education in a Youthreach programme. That will now be denied. All of the research shows that such a person will cost the Government, me and the taxpayer far more money when he or she ends up in prison than the miserable amount of saving that cutting the Youthreach programme will achieve. This is not even to count in the cost of the damage to such people, their partners and perhaps to their children.\n\nInternational surveys show that equal societies are fairer societies. International surveys also show that equal societies are healthier societies and are more competitive. Consider the competitive economies in Finland and Scandinavia. Yes, they are high-tax economies and that is their choice. However, they are also much fairer societies and are more deeply competitive than ours.\n\nI want to say to Fianna Fáil that the exercise in censorship being undertaken in this debate is without precedent. When will we be able to go through the Book of Estimates and ask Ministers what it means? What exactly is the impact of this? Why has the Minister for Education and Science, Deputy Batt O'Keeffe, decided to leave the primary and secondary sectors relatively untouched but to impose a 4% cut on the third level sector? We hear speeches about the smart economy, the knowledge economy, investing in third level education and trying to get a cohort of those coming out of secondary schools into third level. In most cases, this is appealing to a generation whose parents never went to third level and who are frightened of it because they do not know it, never experienced it and are scared of taking on debt and borrowing to put their children into that world of experience which they never had. However, we are imposing a 4% cut on third level education. It seems quite arbitrary but I have had only a chance to glimpse at one section. I suspect my colleagues could only do the same for the sections for which they have responsibility.\n\nI welcomed one aspect of the speech made by the Minister yesterday. At last the Government will deal with the tax exiles. The phrase \"tax exiles\" does them an honour they do not deserve. They are not exiles, they are tax fugitives. I find it hard to reconcile what the Minister, Deputy Brian Lenihan, stated yesterday with what I saw in the newspapers some weeks ago about the President of this Republic attending a function hosted by a tax fugitive. What type of message on citizenship did that send out? We all could provide charities of our choice if we had designer taxes. That is outrageous. \n\nAbsolutely. They are not tax exiles, they are tax fugitives.\n\nWhen we see the legislation, and I note the presence in the Chamber of a senior official of the Department of Finance, I will invite the Department to consider the following because it will be very interesting to see how the detail of that provision is written. It will be hard to impose and assess. I suggest the simple additional requirement to the legislation that any tax fugitives who wish to renew their passports, which are EU passports and are of great benefit, would have to do what a taxi driver seeking a licence has to do, namely, provide a tax clearance certificate. It is very simple and is used all the time by the Department of Finance for contractors trying to get jobs of one type or another.\n\nI would like to discuss many other matters but time prevents me from doing so. The House will have to find a way of scrutinising in detail the impact of the damage that this budget will do to so many sectors of our economy. How that is to be done I do not know. Today's business was ordered in such a way that after the leaders of the various parties have spoken the debate will end and will not be resumed. That is an insult to every Deputy elected to the House and who has something to say from their experience and constituency. We will have to find time to bring Ministers before committees to explain how precisely matters will impact on the delivery of services.\n\nThere are alternatives put forward by this side of the House. To the Fianna Fáil and Green Party Members present I state that I know they will not hold an election soon but they could start by saying they are sorry that they screwed up, that they will try to fix it as best they can and that they will take advice when they like it from this side of the House. They receive constructive advice from this side of the House that never in its congenital life did Fianna Fáil offer when it was on this side of the House. The Taoiseach spoke about how he came to the House in 1984. I remember 1984 and I remember the man who sat where the leader of the Fine Gael Party now sits, one Deputy Haughey. All we got was abuse and fantasy from a power-hungry party whose only objective was to get to the other side of the House and use the position of power. We now know that was Mr. Haughey's motivation as it is in the public domain. The House has been blessed with the constructive contributions of this side of the House to the Fianna Fáil Party and the Government. I am sorry they have not had the courage, generosity or decency to acknowledge them and implement some of them.","I welcome the opportunity of contributing to this debate on the budget as leader of the Green Party and as Minister for the Environment, Heritage and Local Government. As leader of the Green Party I want to take this opportunity to set out my party's position on budget 2010. There is no doubt that this budget is very tough but the Green Party worked hard with our partners in Government to ensure it was fair. I believe that taken in the round people will find that it is fair under the circumstances.\n\nNobody comes into public life to cut the pay of public sector workers. Nobody comes into public life to reduce welfare payments. However, given the scale of the public pay and welfare spending, there was no other option. This is about our future prosperity and independence. My colleagues in the Green Party are in politics to tell people the truth. We believe that is far more important than chasing short-term popularity. The truth is that there is no easy option to fix our current crisis.\n\nIn this budget we have succeeded in protecting pensioners and education services, including reversing cuts from last year as well as providing a stimulus for jobs in the green economy. I have stated on many occasions in the House that we must take on board the harsh lessons of the 1980s, for which the people paid so dearly. It is incumbent on us to learn from what occurred at that time. We must take swift, harsh measures to ensure this recession does not continue for the next decade or more.\n\nI am proud that the tax increases introduced in recent budgets have been extremely progressive in effect. A single person earning €25,000 now pays €500 more in tax and levies than in 2008. However, the additional taxes and levies imposed on those earning €250,000 amount to almost €17,000 or 33 times the contribution of a person on €25,000. I am encouraged by that.\n\nThe budget increases the minimum effective rate of tax paid by the rich to 30%, in addition to PRSI, the health levy and the income levy. This will be the minimum paid by high earners, regardless of any reliefs claimed. We have dealt with some of the tax shelters and we must continue our work in this regard. The budget also tackles the issue of tax exiles or, as Deputy Quinn referred to them, tax fugitives. I agree with that description. We will introduce measures 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, regardless of where they are tax resident, an Irish domicile levy of €200,000 per annum.\n\nThe introduction of the carbon levy is a very important step forward for this country in the context of tackling climate change. In the week before Government leaders from across the globe gather in Copenhagen, Ireland is sending out a clear message that it can and will play its part in the battle against climate change. Placing a price on carbon will encourage people to make the switch, be it to lower emission vehicles or improving the energy efficiency of their homes, in order to avoid additional costs. By placing a price on carbon we will also be raising revenue. The latter will be channelled into making our economy and society more energy efficient. Furthermore, by placing a price on carbon we will be encouraging a more competitive economy, reducing our reliance on imported fuels and retaining more money in that economy.\n\nNext year the Government will invest €130 million in insulation for more than 100,000 homes across the country. Some €76 million of this will be ring-fenced for low income families. Fuel allowances for those on social welfare will be increased next autumn by 11% in order to ensure that the levy does not impact upon them. This money will also enable the Government to cut other taxes and promote the economy. Without this extra money we would not be able to provide a PRSI exemption for employers who take people off of the dole queues or to reduce the VAT rate. That is completely in line with recommendations from independent expert groups such as the ESRI and Comhar, the Sustainable Development Council.\n\nThis budget is also about offering hope. Over 15,000 jobs have already been created in the green economy since the Green Party entered Government. The budget shows that the stimulus is in the green economy. We will provide the jobs of the future as we fight climate change. In that context, there will be 3,000 jobs per annum for two years in water metering, 5,000 jobs will be sustained and created in the water services investment programme and 6,000 jobs will be sustained and created in home insulation.\n\n%%%\n\nI have acknowledged that this is a tough budget but I insist that, under the circumstances, it is fair. My colleagues in the Green Party and my colleagues in the Department of the Environment, Heritage and Local Government, are determined that we will face the upcoming challenges and we will not try to under state them. We will continue to work for a better and more prosperous, more sustainable Ireland. The harsh actions in this budget will bear fruit. It will bring a signal of hope to our young people that they have a future in Ireland. It will send our EU counterparts and international investors a strong signal that we are open for business. We have important work to do and we will get on with it.","I have a sense that the nation is battered and bruised but not beaten. If there was one line in yesterday's speech that gave people hope and lifted their spirits, it was that the worst is over, if I am quoting the Minister correctly. We need a sense of where we are going and of hope. The debate can change. There was a strong sense of the country being terrified until yesterday and I would hate to see us slip into thinking that economic stabilisation has occurred and that it is the end in itself. That is not the goal. The Government must provide financial stability but it is not the end or the purpose. We must do more than that. There must be a sense of vision of what the stability serves and how we work from that. That is important in the debate that continues next week and into the new year on where the country is going. We are at a moment of profound change in the history of the nation, the world and the nature of the globalised market system that has been consistent for the past 30 years. It has changed utterly in the past year. We must develop a different sense of where the nation is going in respect of this new and evolving world. I will set out my thoughts on how the budget fits into where we are going. What we might call the new republic that we must create must have a number of characteristics. It has to be enterprising. We must take on some of the thinking that has been around for the past 30 years. I am old enough to remember the Telesis report which stated that we should start to rely on our natural resources, not on foreign direct investment. The Culliton report in the 1990s and the enterprise strategy group five or six years ago repeated that advice. We are at a moment when we must start to do that. We continue to be a good centre for international companies but we have evolved and grown sufficiently, and have enough skills to start to be enterprising in our own right, and to trade internationally on the back of those skills.\n\nI understand the Sinn Féin Members' fears about emigration. I fully agree with them but we should have the confidence now, when it is difficult to emigrate, to stay and develop businesses here, rather than look for alternatives. That has to be our goal and our overriding ambition. We will keep our people at home and create the work opportunities here rather than seeing emigration as an alternative. That is not the vision or plan of this Government. We need to be enterprising.\n\nLast week at a meeting I heard Enterprise Ireland say that in the past year it has had 70 high potential start-up companies on its books. If half a dozen of those go from high potential to reality, which I believe they will, those companies will create the jobs. It is happening. Irishmen and women are being enterprising and creative and we have set the conditions for that by setting up research grants and research and development tax systems to help those companies succeed. We must be enterprising. This Government has put the mechanisms in place to make that happen.\n\nI agree with my colleagues in the Labour Party that we have to be equal and with Ruairí Quinn when he says a more equal society is more competitive, successful and cohesive one. A rational analysis of the past two years would show how this Government has amended the tax system to tax those at the high end of the scale and to cut out the reliefs that were part of the property bubble problem. It has happened. We will push it to the nth degree that does not damage our other goal of creating an enterprising society.\n\nOn a more profound note, one of the egalitarian questions raised in this budget was whether to cut services. That was a prospect to which I say no. It is better for us to manage our affairs here, taking some of the hard decisions on pay and social welfare to protect the services that are integral to an equal society. To the parent whose son or daughter is going to a special needs school this morning it was important to be able to say that those schools stay open and that in fact we have provided an additional 28 psychologists because that is important for our equal society. I am not sure that the IMF would make a similar call. We are willing to make those hard calls to ensure that those schools stay open and that where teachers are needed they are provided.\n\nYes to the carers. When it comes to health services which form a huge part of our budget we have made the hard call. It is difficult. I have received e-mails from dentists, doctors and others around the country rightly saying that we have cut their incomes in a way that is not fair. We did that on the basis that we keep our health services open so that everyone here has an equal right to the health services they are due.\n\nI can understand the anger and upset of the gardaí who have to take a cut in a difficult time. An equal society means that an older person, who might be scared at home at night because someone is acting in an anti-social way, can ring the gardaí at any hour and make sure they arrive. That is a basic essential service that we must keep as we manage our budget. This Government made a call to keep the services we built up when we were wealthy. That is behind the decisions in the renewed programme for Government and in this budget.\n\nWe need to be enterprising, equal and green. If we are creating a new and different republic it must be in tune with what is happening in this world. The defining issue is that we are living beyond the means of the planet to sustain life. We must act quickly and firmly to bring our country into tune with nature and live within its means. That will help us to be enterprising. There is a stimulus in our green economy. It is happening, it is real. We are going into tens of thousands of homes to help people lead warmer, healthier and more economically efficient lives.\n\nThere is real development occurring in a new digital economy here. My Department is committed to this by putting a new broadband infrastructure into schools, using new fibre optic networks, based on some of the technology coming out of our new enterprising companies. They will provide a hundredfold increase in energy efficiency and the power of communications. It is being built and designed here and we are investing in it in this budget. They are the three things we need to do and we tried to do in this budget, support enterprise, create a more equal society and turn ourselves green. It is a very broad perspective.\n\nWe are at the point of change. The first 30 or 40 years of this country were marked by the nation founders; I have seen nation builders, my parents and my generation, who built a very successful society on that foundation. We need a new nation now. We need leadership in the political system and across our country. That comes from a sense of purpose. That is what we need to start debating. We need to move on from this concentration on the budget as one of fear or cutbacks. They are difficult but we must come out for our people with a sense of where we want to go and what we want to do. Every section of society has a role. Those farmers dealing with the difficult floods, caused by climate change, need a sense that they have a role. They are the front line of a green economy. As they go into forestry and high value and low-emission food crops, which we do have, they can benefit from that green vision.\n\nOur party has always said that one does not measure success by economic standards alone. The parent who is juggling a job and childrearing should be at the centre of the front line services that we all talk about. We need to support and protect such parents. \n\nIt was difficult but I say to the parent that we had to do that to make sure that the teachers were available for her children. That was the decision we had to make.\n\nWe also have to work with our unions. I do not believe partnership is dead. We will work better as a nation, for the evolution that we must achieve, when we work together. We need to work with our unions and our business people to make that happen. This budget does not address one constituency over another. It gives us an economic stimulus to work towards a new society.","Deputy Gilmore stated earlier that this Government does not have the moral authority, imagination or wit to tackle the challenges that face Ireland. I disagree with him because I believe that moral authority comes from leadership and direction rather than criticism from the sidelines. It comes from implementing policies that have been talked about for years, rather than talking about what should be done, implementing policies that tackle climate change, reforming our banking system, and not only tackling the flooding that has affected so much of the country in the past few weeks but also tackling its causes, the flood defences and the proper planning policies that Fine Gael does not have the conviction to implement in local authorities around this land.\n\nThis Government has the moral authority and the well-grounded optimism rather than the cynicism of the Opposition. It has the imagination to create the new jobs in energy, agriculture, transport and construction that this green budget will incentivise. It has the imagination because it has new ideas in the form of environmental improvements and efficiencies in using money wisely. It has the imagination to fund education that came from the transformed programme for Government we agreed two months ago. Imagination will help us get through this but not if we put off making fundamental reforms and fail to tackle work practices that are past their sell-by date. The Government has the wit to get credit flowing again so businesses can create new jobs. It has the wit to propose directly elected mayors in our major cities who will drive the knowledge economy. It has the wit to provide grants that give warmer homes and save money. The Government has the moral authority, the imagination and the wit to help us get through this. I take issue with Deputy Gilmore's criticism of what we are doing, not only within the budget but in the programme for Government.\n\nRecently, I asked the Minister for Finance a parliamentary question on servicing our national debt. At a time when many commentators are saying we should not have a short, sharp shock, but should move matters out over many years, it is worth reflecting for a moment on what the cost of servicing our national debt will be unless we take decisive action. This year, we will spend €3.9 billion servicing the national debt, and this will rise to almost €6 billion next year. If we do not make the kind of adjustments that are proposed in the budget before us, this will rise to €9.1 billion by 2013. In other words, it will more than double over a four-year period.\n\nI take issue with Mr. David Begg when he says we should stretch this out for several years. The only thing that will stop us going down the route of Japan's stalled economy for ten years, or from repeating the 1980s, is taking tough steps now that will get us through to the far side of our stalled economy, that will make those new jobs happen. This will involve pain but it will be a pain that will get us through to the far side and create new jobs that will fire up our economy in the future. Those commenting on the challenges before us have to face up to this very real difficulty that lies before us today.\n\nThroughout so many sectors of the budget, we see incentives that have a Green footprint which are helping us to get through this. I repeat the point made by the Minister, Deputy Eamon Ryan, that we are protecting education against what could have been draconian cuts. It is crucial that we invest in young people and give them the kind of teaching and assistance in their formative years that gives them possibilities and opportunities later on. The vast bulk of our teachers are doing trojan work in providing a decent future for our young people. It is right that we protect education and continue to upgrade our school programme to provide new schools and for refurbishment of existing schools so that our children, one of our most vulnerable resources, are protected, encouraged and nurtured. This is a crucial part of getting us through the challenge that is with us at present.\n\nWe have to face up to the banking crisis, the jobs crisis and the fiscal crisis, as Deputy Gilmore pointed out. The policies within this budget will get us through to the far side, although it will not be easy. There is no magical new dawn that will come in a week, a month or a couple of months. However, we need to get our finances in order and stop borrowing enormous amounts of money so that money can be better spent on policing our streets, educating our children and allowing businesses to employ more people again through the changes we are making to PRSI. The real jobs that will come through this next period will mostly come from the private sector and from the export-led economy. They will come from small and medium size businesses that are beginning, even in difficult times, to employ more people and find their way through. The kind of work our city and county enterprise boards is engaged in and the kind of training policies we have put in place through this budget are part of the ingredients that will get us through this.\n\nAs an example of the kind of initiatives that will help us, I noted recently that over the Christmas recess work will be done in Leinster House to replace gas boilers with biomass boilers. This is a good symbol of the kind of changes needed in the economy. Instead of burning Russian gas, we will use Irish wood to contribute to the heat and, hopefully, light that comes through this Chamber. It is a good example of creating jobs in Ireland, reducing carbon emissions and contributing to the kind of initiatives that are required over the next ten days in Copenhagen as world leaders gather to tackle climate change. It is grounded in reality, in employment, not in the kind of heckling and positioning that came from the Fine Gael and Labour Party benches last night when we debated carbon tax. This is transformational; it is real; it is creating jobs and it will get us through the tough times.\n\nThe budget is part of a coherent approach to tackling the huge challenges confronting Ireland at present. It is a time of enormous debate, coupled with the existential crisis we face with recent reports on child abuse. If we can make the reforms in society that can make us proud again in the social sphere and the economic sphere, we can get through this. This is the first step in creating a new Ireland that will create employment, see us through and make us proud again.","Last night, the gulf between Government Deputies and those who elected them grew wider than ever before. The people looked on with horror as the members of Fianna Fáil and the Green Party applauded a savage budget that attacks the poor, the low-paid and the medium income earners. It was a budget cobbled together by economic illiterates. \n\nThe Minister, Deputy Lenihan's, speech must rank as one of the greatest examples of self-delusion we have ever had to listen to. Either that or he is deeply cynical. Certainly, he is trying to delude the Irish people. He told us we are \"on the road to economic recovery\". Who does he think he is kidding? Like a First World War general, the Minister told us the worst is over and that this is \"the last big push\". I was expecting him to say it will all be over by Christmas. If it is the last big push, we know who he's sending over the top - the low paid workers and their families, the social welfare recipients, the carers and the young unemployed.\n\nThe Fianna Fáil backbenchers last week staged a mock revolt over the talks with the public service unions. However, there will be no revolt when they troop through the lobbies tomorrow to support cuts to the welfare payments of the most vulnerable sections of our society. The Fianna Fáil backbenchers must surely be the greatest shower of hypocrites that ever sat on those benches. Their only hope now is to try to hang together and pray they are not plunged into an early general election, when many of them may hang separately.\n\nThe sheep will be driven willingly through the voting lobbies tomorrow. Then, at the weekend, they will go home and bleat to their constituents that they had no choice, that there was no other way, that the public purse was empty and that we all have to bear the pain. Shame on them all; shame on their followers in the Green Party. Shame on them for what they are doing to those who depend on social welfare. They have cut a swathe through social welfare benefit schemes and assistance schemes. Jobseekers allowance, farm assist, pre-retirement, supplementary welfare allowance - all cut. Widows and widowers pensions cut. Deserted wife's benefit cut. One parent family payment cut. Disablement pension and invalidity pension cut, as well as the disability allowance and blind pension.\n\nQuite disgracefully and inexcusably this budget cuts both carer's benefit and carer's allowance. They are taking €8.20 and €8.50 respectively per week out of the pockets of people who are caring for elderly and/or disabled relatives in their homes. People on disability allowance will lose €8.30 per week. These are the facts.\n\nThe person on carer's allowance will be out of pocket by €34 per month or €408 per annum. The Carers Association has quite rightly pointed out that carers are the only social welfare recipients who have to work for their payment by providing full time care in the home to elderly, sick and disabled people.\n\nIt has been estimated that 161,000 family carers provide more than 3.7 million hours of unpaid care each week, contributing more than €2.5 billion to the Irish economy each year. The 40,883 family carers providing full-time care - more than the 39,000 nurses employed by the HSE - contribute €1.6 billion to the economy. This cut is the thanks that carers get. The Minister Deputy Lenihan claims the overriding objective of the budget has been to \"strive for fairness\". Fairness how are you?\n\nWhere is the fairness in the savage cuts to social welfare support for young unemployed people? This budget cuts jobseekers allowance for 20 and 21 year old new applicants from €204 to €100 per week and to €150 per week for those between 22 and 24. This is a further attack on young people who are facing the ordeal of the dole queue. It follows the April budget's slashing of jobseekers allowance for 18 and 19 year old people.\n\nWho are these young people? These are the children who did their junior certificate between 2001 and 2007 at the height of the Celtic tiger and their leaving certificate between 2006 and 2009 as it was coming to an end. They were told they were being educated in a knowledge economy and that if they worked for the best academic results they would reap rich rewards in a State with full employment. Now, however, thanks to the disastrous policies and gross mismanagement of Fianna Fáil-led governments, they are being thrown on the unemployment scrap-heap.\n\nIn the past two years the numbers of young people unemployed under the age of 25 has soared by 173%. We have the second highest level of unemployment among 18-24 year old males in western Europe at 26.5%, more than twice the State unemployment rate of 12.5%\n\nIt is 25 years since Thatcher was on the rampage in Britain but here in the Fianna Fáil-Green budget of 2010 we find Thatcherism alive and well. The Minister tells us the purpose of his cuts to young people's dole is \"to encourage them to stay close to the labour market\". I am sorry the Green Deputies have left the House, because the Minister for the Environment, Heritage and Local Government, the leader of the party, a few moments ago told us that it would \"bring a signal of hope to our young people that they will have a future in Ireland.\" What future?\n\nThe Minister for Finance claims that the experience of the 1980s was that the welfare system \"was out of step with labour costs in the rest of the economy\" and \"trapped people in protracted joblessness\". That type of Thatcherite thinking was wrong then and it is wrong now. It translates as saying that we should not pay the jobless any more than the barest subsistence or they will not want to work.\n\nThe same mentality is displayed in the decision to slash the dole to €150 per week for anyone where \"job offers or activation measures have been refused\". What kind of job offers, what kind of activation measures? There can be many legitimate reasons a person would not take up a particular offer.\n\nThere was no real recognition in this budget of the catastrophe of unemployment. There are 423,400 people on the live register in this State, an increase of more than 146,000 in one year. There has been an increase of 63% in those applying for jobseekers allowance since December 2008 but where is the jobs strategy in this budget? There is none. There is a rag bag of mainly training measures amounting to a paltry €136 million. It is an insult.\n\nLet us be real about this. The Government does not prioritise fighting unemployment because it represents the greedy in our society. The greedy have always secretly welcomed a high rate of unemployment because it allows them to hold workers to ransom. The message is simple: accept lower wages and poorer conditions or get out, there are plenty more out there waiting in line.\n\nWhat of people who are in work? This budget attacks low and modest income families by imposing a 5% across-the-board cut in the wages of workers in the public service earning under €30,000 per year and 7.5% on earnings between €30,000 and €70,000. These public service workers, who make up the single largest bloc of public service employees, are amongst those who will be hit the hardest by this budget.\n\nThis budget crucifies those families on modest incomes. They are now bearing the brunt of pay cuts and the disgraceful cut to child benefit. A family with three children loses nearly €50 per month. Many such families have just one pay packet coming into the household and have to meet exorbitant mortgage payments out of that single income.\n\nThe cut to child benefit is an attack on children and an attack on families. Net child care costs in this State are 45% of the average wage compared to 16% -17% in EU and OECD states. Child care costs account for 30% of family income in this State as against 12.5% in EU and OECD countries. Over the past decade when people called for a real State child care strategy with proper infrastructure and places that were affordable and accessible to all who needed them, we were told that we had the most generous child benefit system and that this was how child care would be funded.\n\nOnce again it is those families bringing in wages and struggling to make ends meet who will be hit hardest. Their child benefit will be cut and if they are above the income threshold they will receive no family income supplement to compensate. It is these same families and others like them who will be hit by the increase in the threshold for the drugs payment scheme, meaning they now have to pay more every month for medicines.\n\nTo justify its cuts to pay and social welfare, the Government claims that the cost of living has gone down but this is not the case for the majority of people, especially for struggling families. This year prices went up for a range of essential items such as electricity, gas, bus fares, child care, primary education and hospital services.\n\nIn her health Estimates statement, the Minister for Health and Children claims that planned reductions in the drugs bill in 2010 will save €141 million in addition to €133 million saved this year. Such savings could and should have been made long ago and more savings can be made through reduction in price and wider use of generic drugs and the establishment of a State wholesale distributor, as Sinn Féin has long advocated. Why then does the Minister choose to target medical card holders with her prescription charge of up to €10 per month? This charge undermines the General Medical Services and the long term illness scheme. Once established it will remain in place to be increased year on year at the expense of those who rely on our public health system.\n\nThe budget has dealt a further blow to the already struggling public health system. The two-tier public private system is hugely costly in terms of inequality and the poorer health outcomes it entails and its inefficiency in using public money to subsidise the private health care industry. Privatised health care will not be affected by this budget. It will still be pampered but the public system will continue to deteriorate. The budget takes €106 million out of current expenditure in the HSE on the so-called economies and reduces capital spending by a further €37 million.\n\nThe funding for mental health is too little too late. It is typical of the mismanagement by this Government and the HSE that they have waited until the total collapse of property prices to try to sell the properties of former psychiatric institutions. We have yet to see how much this will realise and when.\n\nWith the recruitment embargo still in place, with nurses still in short supply and now going to be paid less, with trolleys and chairs still clogging our hospital corridors, with our primary care system still not properly developed and with hospital services continuing to be centralised we are in for another winter and many more winters of health care misery thanks to this Government.\n\nOne of the headings under so-called economies for the HSE is transport. In my home county people rely more than ever on HSE-provided transport since the closure of acute services in Monaghan General Hospital last July. That need will become even greater in the north east with the impending threatened closure of acute services at the Louth County Hospital in Dundalk. Yet we are told that transport is going to be cut. It is an outrage in a region which in recent weeks has seen its already totally inadequate hospital infrastructure further undermined with outbreaks of C. difficile in Our Lady of Lourdes Hospital in Drogheda and Our Lady's Hospital, Navan, resulting in the closure of scores of beds and the cancellation of operations and procedures.\n\nI have a question for the Minister for Finance and the Minister for Health and Children. Will every Deputy who votes for social welfare cuts get a 40-bed hospital facility in his or her constituency? Good luck to the people of Kenmare but let us remember the hospitals across the State that have been closed or have lost or will lose key acute services due to the compliance of the self-same Government backbenchers in pushing through the health policies of this Government to the cost of their respective electorates. Shame on every one of them.\n\nThe full extent of the health cutbacks in this budget will become clear in time and public patients will pay dearly for them.\n\nI spoke earlier of the Government's oft-repeated claim that we are a knowledge economy. The Minister, Deputy Brian Lenihan, chose not to highlight in his speech the cuts of €200 million to education in 2010. It is an outrage that 27% has been cut from the budget for building, equipping and furnishing primary schools. Children will continue to be taught in dilapidated buildings and millions will continue to be wasted in rents for so-called temporary prefabricated accommodation.\n\nEarlier this year the Government announced a €150 million programme for installing IT equipment in schools, but only those schools which have been newly developed or renovated. This cosy deal with the IT companies leaves all other schools out of the loop. The money should have been spent on providing school buildings for those who need them most, thus putting in place essential infrastructure and helping to provide employment in the construction sector.\n\nThe Government's claim to be protecting the vulnerable as well as encouraging people to educate themselves out of disadvantage is exposed as a lie when we see the cuts to student support grants, to allowances for VTOS and Youthreach, the removal of grants from recipients of Back to Education allowance, the 11% cut in alleviation of disadvantage measures to help people access third level and the 62% cut for the same purpose from the Dormant Accounts Fund. Of course teachers pay will be cut. So much for the knowledge economy that this Government likes to speak about.\n\nThis budget has been preceded by efforts throughout the past year to divide and conquer public sector and private sector workers. It has been aided, regrettably, by Fine Gael and Labour and by large sections of the media. The acceptance by the so-called main Opposition parties of a figure of €1.3 billion for the slashing of public service pay in 2010 was a major victory for the Government. Public service workers were demonised and the stage was set for the stage-managed collapse of the negotiations with the public service unions last week. The phoney revolt of the Fianna Fáil backbenchers was the trigger for the collapse and the field was clear for the Government to impose the pay cuts obtained in yesterday Budget Statement. Yes, the highest earners have been hit and rightly so, but the across-the-board 5% cut for low and modest income earners in the public service is wrong. Those earning top rates can give a great deal more.\n\nMake no mistake, any ordinary workers in the private sector who were misled enough to think that they will benefit from this cut to the incomes of ordinary workers in the public sector are in for a shock. If the Government gets away with this attack on low and modest income earners in the public sector then the private sector will be next for an even worse hit. The next target will be the minimum wage and wages and conditions across the public and private sectors.\n\nWhile ordinary workers and families have been hit hard the wealthy have been protected once again. This is a typical Fianna Fáil outlook in terms of economic need. There was no tax reform in this budget. There should have been a new third and top rate of tax at 48% for income in excess of €100,000 which would have raised €355 million. Standardising all discretionary tax relief would have raised €1.1 billion but the Government once again turned its back on that opportunity.\n\nThe Government has tried to convince us that the wealthy are now over-taxed. In 2007 the top 5% of households in the State held €320 billion in assets. That did not all vanish into thin air with the property price collapse. In 2008 1,447 people or 0.6% of all earners, took in approximately €3.459 billion between them. Most tellingly of all, more than 25% of the top 400 earners paid tax at a rate of less than 25%. The price of not introducing a wealth tax for the few is misery for many.\n\nThere were some tax changes. The carbon tax has been brought in as a revenue raising measure that once again will hit those least able to afford it, which is why Sinn Féin voted against it last night in this Chamber. We have been threatened with water charges. The Minister announced a metering system for every household in the State but he did not say how much this will cost before a cent is raised in water charges. The cost of introducing the metres will no doubt be huge and instead of wasting this money on metering and charging for a basic necessity, the Government should spend it on improving our water infrastructure and reducing the massive waste of water in existing systems.\n\nThe 21.5% VAT rate was reduced but by not nearly enough and should never have been increased in the last April's budget. The alcohol excise measures should help restore some balance in trade along the badly hit Border towns but this should be seen as a temporary expedient only. Much more needs to be done to help revive the economy of the Border region - and I mean on both sides of the Border. The only real solution will be tax and currency harmonisation on this island as a whole.\n\nThe real background to this budget, the herd of elephants, not just a single elephant, in the room, is the €54 billion of the people's money poured into NAMA to bail out banks and developers and to put future generations in debt. The Government's claim of needing to take €4 billion out of the economy to close the deficit and show fiscal prudence is a total contradiction when set against the €54 billion wasted on NAMA. Those young people not forced to emigrate by this Government will have to bear the burden of NAMA for years to come. NAMA and this budget, and further budgets ahead of us, are the legacy of the golden circle of conservative politicians, corrupt bankers and insatiable developers who have wrecked the Irish economy and it is the most vulnerable who are now once again being forced to pay.\n\nThe Minister for Finance, Deputy Brian Lenihan and the Taoiseach have tried to put a positive spin on this disgraceful budget. Unbelievably, the Minister invoked the community spirit of the people who rallied to the aid of those hit most by the recent catastrophic flooding. He has some neck, given the lack of urgency in the Government response to the flooding, the inadequate funding made available to deal with the aftermath, and above all, the fact that Government neglect left people across the country vulnerable to this flooding in the first place.\n\nAlso invoked by the Minister was the ancestry of the Kennedy family in County Wexford. This was appropriate but not in the way the Minister intended. His budget and his Government's policies are a recipe for the mass emigration of unemployed Irish youth. Last year he charged them €10 per head to leave the country when he introduced that charge for all those leaving our shores by air. This year he is making sure that Ireland is a cold house for jobless young people and that the door is wide open for them to get out.\n\nThere was and is an alternative to this disastrous budget. Sinn Féin presented that alternative in our pre-budget submission, The Road to Recovery. Central to that alternative is the provision of stimulus to the economy so that recovery can come about in the only way possible, through the provision of jobs. It is as simple as that. The provision of jobs through sustainable employment. We proposed a €3.218 billion economic stimulus package with a range of measures to get Ireland back to work. We proposed measures and savings amounting to €7.623 billion which would have protected those on low and modest incomes, social welfare recipients and public services. In contrast this anti-jobs budget will depress the Irish economy and worsen our economic woes. Our proposals are not for resting on a shelf. They are campaigning proposals and we will continue to advance them in the months ahead. We welcome the fact that people are fighting back against the disastrous policies of this Fianna Fáil and Green Party Government. People have been on the streets in the past year in unprecedented numbers in demonstrations, strikes and other forms of protest.\n\nWe need economic policies founded on fairness and with the ability to succeed in providing a decent livelihood and decent public services for all. Such policies also need to instil confidence. Sinn Féin is confident that the Irish people can emerge from this economic crisis and that we can build a fairer society and sustainable economy. Those are our goals, not only in respect of this State and this economy but for the economy of the island of Ireland as a single economic and political entity. To do that we must reject the policies on which this budget is based and get rid of the politically bankrupt Government which produced it. We demand a better, fairer way. We say to this Government, get out of office and give this country back its dignity, its right to work and its guarantee of fair opportunity for all who have been born on our shores."]