Kieran O'Donnell (Limerick East, Fine Gael)

The main reason the Government gave no details in its planned cutbacks yesterday was it knew they would affect front-line services. From the Taoiseach's speech, I have calculated that 40% of the cutbacks will affect these services. The Government tried to produce a three-card trick yesterday, hoping people would not believe there would be cuts to front-line services.

Various savings have been outlined such as €10 million from the public payroll, €85 million from the fair deal package, €35 million from a slower roll-out of new developments in health services, €2.5 million from the Reach programme and €45 million from the overseas development aid budget. The latter is a sleight of hand. As the economy is not performing as well as forecasted, GDP growth rate is being reduced which allows the Government to rejig the overseas development aid figures. It defies logic for the Government to cut €10 million from FÁS apprenticeship funding when people are being laid off. It has used the crude instrument of cutting 3% of the public payroll with no assurance it will affect front-line services.

The figures do not add up to €440 million either. Apart from the clever use of language, there is a shortfall of €14.5 million. Will the Taoiseach explain where this saving will be made? Either the Government is rudderless and unaware or it is misleading the people. I do not know which is worse. The Government's role is to provide confidence and direct policy.

Typically, the Government blames the international downturn for the state of the economy. It did not blame international factors when the Celtic tiger was roaring. The Government cannot have it both ways. The role of the Taoiseach and the Minister for Finance is to give confidence to the economy, which they are not doing.

The Government claims the downturn is not unique to Ireland. It is unique to Ireland. Recent Irish GDP and unemployment figures are ahead of EU averages, bar those of Spain. The Irish GDP growth rate has fallen six times faster than the EU average. Unemployment is rising at a faster rate than the EU average.

I take exception to the Government's claims that this side of the House is talking down the economy. The Opposition has come forward with constructive polices to deal with wastage and encourage growth. As Deputy Kenny stated, the Government has not taken any steps to stimulate the housing sector. Fine Gael has proposed straightforward measures, such as reducing the VAT rate from 13.5% to 12.5%, to give some impetus to the construction sector. The Government's plans do not refer to a freeze in Government charges. Over the next 18 months, more stealth taxes will creep in.

Until 2000 Irish export growth rates were good. When the construction industry took off, the exports market collapsed to the point that in 2003 it saw negative growth. As the construction industry was tax rich, it suited the Government, for electoral reasons, to go after it. It allowed the economy to become uncompetitive with rising inflation rates. The Government's stealth taxes contributed to more than 50% of the increase in inflation between 2000 and 2006. While there were some international factors involved in the downturn, it was predominantly caused by the Government's policies.

These planned cutbacks are incompetent, the figures do not add up and they directly hit front-line services. The Government, yesterday, thought it would get away with it. It also produced the plans on the last sitting week when no parliamentary questions can be tabled on them.

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