Alex White (Labour)

I do not accept it is dishonest to say we can make the kind of adjustment that undoubtedly is required without affecting social welfare. I do not accept that, so I must be blunt about it. In circumstances where the Government has engaged in an adjustment in this budget of the order of €6 billion, we know the proportion that is attributable to social welfare payments, including the reduction in payments to people of working age and in payments of child benefit, amounts to about €500 million. I do not accept the proposition of Senator Boyle and others that it is not possible for the Government to avoid affecting the least well-off in our society and to avoid reducing welfare payments by 4% and still bring in a credible budget. I think he is wrong with that proposition, but he is right to say we will have an opportunity to debate these issues in the course of the general election, which cannot come soon enough. I would not mind asking Senator Boyle when he thinks that will come. We have heard all manner of rumours about extensions and target dates moving as well as proposals for referenda being held on the same day as a general election and so on. What is going on? Perhaps the leader of the Green Party will clarify that when he gets an opportunity.

I would like to begin my contribution by quoting the Minister of State towards the end of his speech, which I thought was quite striking. He said: "This is not just a budget to increase taxes and reduce expenditure; in our current economic circumstances we have to do far more than this." He went on to say: "It is also, crucially, a wide-ranging plan which points the way to securing stability in the public finances and the economy which will be followed by sustainable economic and employment growth in the years ahead and which will also be underpinned by reforms in key areas that will boost the performance of the private and public sectors." With all due respect, he could have fooled me. He could have fooled anyone who heard the speech because this is entirely a measure that increases taxes and reduces expenditure. Can someone point to a plan in here? Where is it? It is not in the speech. It is not in the bigger document. It is not there. It does not exist. There is no point in the Minister of State trying to persuade us it is there when it is not. We had a look and we cannot find it.

It comes down to what Senator Boyle said in his contribution when he used the word "wish". In fairness to him, he said in good faith that he wishes that there would be growth and that the Irish economy's fortunes would improve under whichever Government is in charge of it. It is fair enough that he should wish those things, and I share his good wishes that things would improve. More is expected of politicians, however, than the expression of wishes. Senator Boyle is right when he says we are not beyond salvation. I do not believe anything in human affairs is beyond salvation. It is not beyond our ingenuity as a people to turn this appalling situation around. I share the optimism, but that is not to say it is not a very difficult task. It is not beyond the bounds of possibility that we can regain control of our affairs, develop and improve our country and the wealth of our people if we take the right decisions. Wishing it to happen will not make it happen. There is no point in just talking about wishing.

The first difficulty we in the Labour Party have with this budget is that it is only six weeks since the Department of Finance stated the correct order of adjustment in the 2011 budget was €4.5 billion. That is a very short time since the Department took this view. Its officials were exercising a judgment. Everyone knows that if we take money out of the economy in this radical way, we will cause a deflationary impact. The Government does not talk about that. Its members accept it is true if this is put to them, but they tend not to want to remind us of that. Whether it was €6 billion, €4.5 billion, €3 billion or €1 billion, we know it would have that impact. People might ask why we are going for €4.5 billion or €6 billion. They want to know where we get the figures. These numbers can go over people's heads sometimes.

We have to exercise a judgment. We have to point out that this will have a negative impact. How can we minimise that impact? How can we control the possibility of growth in the economy and not rely on international improvements? What steps can we take to ensure we open up and free up the possibility for growth in our economy? It seems an adjustment in €6 billion in such a brutal way can only have the effect of very severely deflating, if not clobbering, the economy and any prospects it has for growth next year. There is no point in Ministers or their colleagues in this House criticising the Labour Party and saying a figure of €4.5 billion does not have credibility when this was the Department's own figure only six weeks ago.

We are seeking to exercise a judgment on what the correct figure ought to be. Why did it get to €6 billion from €4.5 billion? How did it happen? It is clear what happened and it has been admitted what happened. The members of the Government saw the chaos on the markets and the extraordinary difficulty we had in borrowing at any kind of a sustainable level and they decided they would throw them the figure of €6 billion in the hope that this would be good for the optics, that this would persuade people they were serious in Dublin, that they were really taking this on board, that they were going to tear the backside out of their economy and that they really meant business. They were not talking about €4.5 billion but about €6 billion. It was all about optics and how it would look. How does it look to people who are facing a reduction in welfare payments? How does it feel to them? What are the optics of the situation for the people who must sustain the effect of this much larger adjustment?

The Minister of State in the House, Deputy Brady, will understand the effects of what is happening. We all see the effects of it in the daily lives of people in our constituencies. We cannot turn our backs on that. There is much lip service paid to fairness in this budget, but it is no more than lip service. It is not a fair budget. No budget can be fair. There is a notion that to be fair, we must take something from everyone. There are many people in society who cannot afford to have anything taken from them. Let us be blunt about that. It is an academic argument to demonstrate by taking some from here and more from there and so on, but there are some people who cannot manage if anything at all is taken from them, given what they have had to sustain over the past two years. That is the basis on which we should be debating this.

I agree with Senator Ross that the budget is the result of a negotiating rout. Instead of sitting down, as they do in other countries, to negotiate a memorandum of understanding, the Minister of State claims we prepared one and that the IMF and European Central Bank looked at it and stated they would have everything in it. Pull the other one. Does anyone believe there was no close collaboration between the Government and the external parties to the memorandum of understanding prior to its being agreed? No one buys this. This is part of the narrative that stretches back to the start of the crisis, where people are told things by Ministers and, like in Alice in Wonderland, words mean what the Minister says they mean. People can read and understand what is going on. They do not buy the notion that the budget is anything other than the result of the Government being in an incredibly weak position by virtue of the catastrophic failure of its banking policy.

How many times in this Chamber have we heard the Government and its supporters say the reason we had to pump money into the banks and establish NAMA and introduce all of the other measures introduced was so that the banking system would function again and lend in the economy? They have not said this for weeks now because they would not have been able to say it while keeping a straight face. It has not happened and there is no sign that it will. Where is the credit from the banking system, the life blood of business? It is not forthcoming. Even according the Government's own test of the success of its banking policy, the availability of credit, it has failed. To call it mistaken does not even begin to describe the disaster of the Government's banking policy, which is recognised internationally. It is an disaster to pin the fortunes of the taxpayer to the banking system as it collapses.

The budget comes at the end of an extraordinary period. It is a bookend in historical terms. Senator MacSharry can read bullet points of good things that have happened within the last ten years all he wants - good things did happen; infrastructure has been improved - but if they had not happened, it would have been absolutely extraordinary. Why would it be a surprise if we could point to something like the roads system or the provision of special needs assistants? If they were not in place, it would be worse than an0 abject failure. Of course, there have been infrastructural gains; the problem is that the Government failed throughout this period to provide sustainable funding for infrastructure and public services more generally. It ignored that key responsibility, not just to find money to pay this year's bills but also to look to the future of our children and put in place a sustainable basis for funding the public services we want.

That idea was totally set to one side by Fianna Fáil. Its view of the economy and future looked to the fortunes of the party rather than the country. That is why we have reached this stage. No amount of pleading on the part of the Government, particularly Fianna Fáil, that no one saw this coming and that the Opposition had demanded improved services, as if that was not our responsibility, will lessen the impact of that fact. The Government is a gate keeper and iresponsible for the public finances. What it has done in the budget will not give anyone confidence that it has taken a serious approach to securing the future of the country or the economy.