Darragh O'Brien (Dublin North, Fianna Fail)

I am pleased to have an opportunity to speak in this important debate. I welcome the decision of the main Opposition parties, Fine Gael and the Labour Party, to sign up to the need to reduce the deficit to 3% of GDP by 2014. I listened with interest to Deputies argue that they do not have sufficient information to make decisions. All the information required is available and can be sought. Consensus, which I hope is attainable, is important because it would result in a reduction in the cost of borrowing for the State. While I do not expect to achieve consensus on every aspect of the forthcoming budget, a general consensus on the four-year budgetary plan to be published in mid-November would send out the correct message. In contrast, Portugal today sent out a message that it could not achieve consensus, a failure that affected the bond markets and the cost of borrowing.

In recent years, corrections amounting to €14.5 billion have been made, while a further €15 billion in adjustments is required. As Deputy Thomas Byrne and many other speakers noted, our job is to ensure that the vulnerable and those most in need are protected. This requirement must be the cornerstone of the forthcoming budget and all other budgets in the four-year plan. None of the decisions the Government makes will be easy.

The purpose of the corrections we have made and will make in the coming four years is to return the country to economic growth. While economic growth forecasts have been revised downwards, the situation has stabilised. Unemployment rates, although high, are lower than previously anticipated. Last year, for instance, the unemployment rate was forecast to reach 15% this year but currently stands at 13.5%. We must ensure the unemployed are given opportunities to return quickly to the workforce.

There are many positives. Costs have reduced and foreign direct investment in 2009 amounted to almost €20 billion or half of the total figure for the United Kingdom. Many more new investments are in the pipeline and I commend the IDA and Enterprise Ireland on the work they have done in this regard. The county enterprise boards have also provided support for the small and medium enterprise sector which employs more than 800,000 people.

We must be creative with regard to the SME sector in the budget by supporting indigenous businesses. This can be done in several ways, including through expenditure under the capital programme. In my constituency of Dublin North, I can see the benefits of the work being done to build new schools and work done by local contractors under the summer works scheme. The State is getting more for less, which must be at the centre of its efforts over the next four years. It is crucial, therefore, that we press ahead with the capital programme.

I concur with Deputy Burton on the need to cap tax relief on pension contributions. It is, however, incorrect to argue that €2.7 billion is given to wealthy people through tax relief pensions. We should also liberalise the options available to PAYE workers on retirement. At present, a PAYE worker who receives a tax free lump sum on retirement must effectively put the remainder of his or her pension into an annuity. Annuity rates have not improved and many people ask why the system cannot be liberalised to allow retiring PAYE workers to avail of other options. For example, they should be able to access the guaranteed returns available under the national solidarity bond. These are measures on which I believe broad agreement can be reached across the House and that would get more money for the State from the €80 billion that is sitting there. However, we must be creative on such matters.

One final area concerns procurement, as this State spends €15 billion per year on procuring goods and services. It would not take much to derive savings of 10% in this regard and many private sector experts believe this could be done. This also should be at the forefront of this budget, as 10% of €15 billion would yield €1.5 billion.

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