Michael D'Arcy (Wexford, Fine Gael)

Most likely. If this is not the case, next year's budget will have to be much harder than the current year's.

While I do not have much time, I wish to address several issues. The 1% employment levy can only be described as the most inequitable in the history of the State. We are taxing students earning a few euro to try to get through college and pensioners trying to boost existing pensions which have fallen significantly. Such people may be adding €5,000 or €10,000 to their annual income but we are taxing them at the same rate as those earning €95,000. It has never happened before that we have taken such an incredibly retrograde step.

The issue of medical cards has been dealt with so I will address the issue of business. There is nothing in the budget that could be characterised as providing anything in the way of a long-term impetus for business in this State. The Government seems to be clapping itself on the back because corporation tax remains at the current rate. However, it did not have an option to raise it. If it had done so, it would have benefited the countries throughout Europe who are currently wiping our eye, such as Switzerland, which offers zero corporation tax if one locates in certain cantons. Other countries have 3% to 5% corporation tax for one reason only, namely, they are happy to get business into their country to earn social insurance levies and income tax from the people employed.

The corporation tax rate was set by the rainbow Government of which the Leas-Cheann Comhairle and Deputy Quinn were members. From what I am told, many of the mandarins in the Department of Finance almost had nosebleeds at the idea of reducing and rationalising the rates, but Deputy Quinn did it. Another man who took bolder steps than we have seen for many years is the former Minister, Mr. McCreevy, who reduced capital gains tax from 40% to 20%. What does this Government do but reverse that trend and bring it up to 22%, a 10% increase, which is large by any standard? To advise the Government Members opposite, perhaps they should bringing back Mr. McCreevy in the way Gordon Brown brought back Peter Mandelson. Dublin South has a by-election in a few months. He could be bunged in there to see how he does and perhaps he could then be bunged back into the Department of Finance.

VAT will increase from 21% to 21.5%, which is another tax on business. Capital spending cuts are widespread. Overall, capital expenditure falls by 9% and if we assume inflation remains close to 5%, this is a very large reduction. Much of this, however, is taken up by cuts in agencies and quangos. If waste is eliminated, that is fine, but it is far more likely that front line delivery will be cut to balance budgets in these agencies.

The figures presented last year by the Taoiseach, Deputy Cowen, the then Minister for Finance, showed that our national debt ratio versus GDP stood at 25% at that time. Today, we are predicting a deficit of approximately 0.9% of GDP, which translates as €11 billion. How can the Government have got these figures so wrong? I have a major concern with regard to this year's GDP ratio, which the Department of Finance is pitching at 43%, a colossal 18% increase which almost doubles the national debt in a very short period without factoring in billions of euros that will be needed down the line to bail out the banks. We are in dire straits and in perhaps the worst economic crisis in the history of the State.

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