Enda Kenny (Mayo, Fine Gael)

We are told by the Taoiseach that the measures will save €440 million this year and will then save €1 billion in 2009, even though these measures include the deferral of one-off capital projects and a delay until next year of implementation of the fair deal on nursing homes charges. Taking €85 million from the health budget is simply disgraceful. The sop of a €12 million increase in subventions is simply a salving of the Minister's conscience, while the further €13 million announced for 200 beds was already announced last January.

The gateway innovation programme of €40 million is gone. How can there be balanced regional economic development when some of these very good ideas are now being put on the long finger? The €75 million earmarked for decentralisation is also gone. This has been a complete shambles. Everybody supports a well planned, well managed decentralisation programme, but what has happened to Departments and State agencies has been a farce. The Taoiseach knows well that many of these State agencies will never move, and he should face that reality. The decision to cut the €75 million needs to be highlighted a lot more.

If the incoherence and bungling of the numbers by the two most senior members of the Government was not bad enough for the country's confidence, even more worrying is the absence of a clearly thought-out plan. Such a plan would set out the anti-inflation measures of this programme and the stimulus for the economy. Despite the Government's attempts to conceal the breakdown, it has now emerged that the biggest cut announced is in health spending for the old and the vulnerable, those who need the most assistance.

We respect the fact that the Government has adopted a number of the proposals put forward by Fine Gael. However, the ministerial pay award has only been deferred, not dropped. Action is proposed on agencies and quangos, but the Government has not explained what that means. Some of the other proposals are so vague as to be meaningless. There was no breakdown of where the €1 billion in savings in 2009 will come from, and one has to suspect that a large portion of it will come from cutbacks in the vital capital projects needed to get this economy back on track. If so, this is exactly the wrong response from Government. There is no detail on what cutbacks are going to be enforced in the health and education sectors. Despite the fact that we were told these sectors were to be exempted, we need to see the colour of the Minister's eyes when talking about front line services. There is no responsibility assigned to individual Ministers to ensure that savings are achieved from efficiencies will take effect. These savings should be in back office bureaucracy, rather than front line services.

There is evidence of county council managers across the country not signing contracts for major water and sewerage schemes, because they have no money to meet their contributions. The response of the Minister for the Environment, Heritage and Local Government has been to appoint more inspectors for the polluter pays principle. I guarantee that the fines paid over a few years would pay for the implementation of these schemes. The Government has left local authorities high and dry with no income stream and they now face a very difficult situation.

This does not represent a credible medium-term strategy to address the serious economic challenges that we now face. Besides lacking a credible strategy to reform our public finances, the Government has remained entirely silent on how it might help to tackle the deep-seated problem of lost competitiveness that is threatening many jobs across the country. A young man spoke to me the other day about his proposal to set up a restaurant and how he was billed for almost €200,000 by a local authority betterment levy. People cannot do this and hundreds of businesses are in a critical state.

There are no anti-inflationary measures in the statement. Fine Gael has proposed a freezing of State charges and a cut in the 13.5% rate of VAT, funded by a carbon windfall tax on power generators.

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