Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I am not casting any doubt on the submissions that are being made. However, there is an ongoing process at the end of which a Department or a section of the Department gets a particular amount which may be higher and lower. So a negotiation is going on. The break-even point with Revenue is if the extra resources enable it to collect more than the cost of the additional resources. That seems to be where the sum is and where the breakpoint is. We are at the early stages of a process which will culminate with the full budget on both the expenditure and tax sides.

The Deputy asked me where I expect the growth in the economy. The economy is growing and a number of sectors are growing very strongly. As I pointed out in last year's budget, as well as complying with the conditions of the bailout programme and the memorandum of understanding, we are also running a kind of parallel programme where we are building on the strong sectors of the economy and repairing the weak sections of the economy. Ideally growth should come throughout the economy. The strong areas at the moment are self-evident. Inward investment is very strong. IDA Ireland had a record year last year and is heading for a record year again this year in terms of the value of inward investment. Despite the bad summer, farming and the agrifood industry is doing very well. One of the new features covered is the demand from places like China for baby food sourced in Ireland. Some big orders are coming through to the main co-operatives and dairy companies. Everybody knows there is great potential in the Irish farming industry, particularly in the dairy industry, when quotas are eliminated under the CAP in 2015 at which point the Irish farming community will no longer be inhibited by caps on volume and will be able to produce.

The financial services sector is also quite strong and there is more activity and growth there. In general terms goods and services on the export side are strong. The domestic economy is what is weak. I would hope we will see growth in that area when confidence rebuilds. We have very high savings ratios of 14% at present. That is historically high and quite high by international comparisons. If that were reduced to 10%, which would still be high, that four-percentage point drop would switch to expenditure, which would add 1% per annum to GDP growth. So there is a potential for growth in the domestic economy, but it was related to confidence. It is also related to what the Deputy also commented on and what one of the regulators of the banks said yesterday about clearing personal debt. The two big drags on the economy are national debt and personal debt. If we could get solutions for both national debt and personal debt, we could take the fetters off the economy and it would drive forward.

The Deputy spoke about mortgage arrears and I would share his disappointment that the plans outlined by the Government were slow to be implemented by the banks. However, they are at it now under the monitoring of the Central Bank. Several interventions have been pilot tested in the past quarter and are ready to go. I hope they go with them quickly because it would help on the personal indebtedness side. The policy is that it must proceed on a case-by-case basis. In parallel with that the Insolvency Bill is working its way through the Houses of the Oireachtas - it is on Committee Stage now. That will also make a major contribution.

The banks were tardy in two ways. First, they did not pay rigorous attention to arrears and was potential to collect more in arrears if they had applied themselves to it - there was a certain amount of drift. Second, they did not make case-by-case arrangements with people who are in great difficulty and whose ability to repay mortgages is impaired. That was what was being said yesterday by both the regulator from the bank and the Secretary General of my Department, and it is a view I share.