Peter Kelly (Longford-Westmeath, Fianna Fail)

We find ourselves in difficult and uncertain times, unprecedented in my lifetime. Turmoil in the financial markets and steep increases in commodity prices have placed enormous pressures on economies throughout the world. The budget sets out a plan to deal with these unfavourable circumstances. The aim is to restore order and stability in the public finances and to increase productivity and competitiveness.

The budget seeks to secure the significant gains we have made in the past 15 years. These include the increase in the numbers at work to 2 million, major improvements in living standards, a more generous welfare system and the largest public investment programme in the history of the State. All these advances were made in better economic times. However, the context has changed dramatically and with great rapidity. It is incredible to consider how quickly our circumstances have changed in the recent past.

As a small open economy, we are vulnerable to economic shocks beyond our shores. There has been a sharp rise in unemployment and a steep decline in revenue, with businesses experiencing the types of economic difficulties not seen for more than two decades, although we are now in a better position to address those difficulties. We must not forget that even in this global downturn, Ireland continues to attract a disproportionate amount of all foreign direct investment into the European Union. We continue to welcome announcements of new investments in cutting edge companies and new high value jobs for graduates.

The Government is determined to retain and enhance Ireland's reputation as a pro-enterprise economy and an attractive location for foreign direct investment. The most important action we can take in this regard is to stabilise our public finances. Fiscal responsibility has ensured a modest national debt burden, a strengthened ability to deal with the financial and economic crisis now affecting the world economy and a credible tax regime which incentivises work and investment. We must take the right decisions now to place us on a path to budgetary stability in the interests of everybody who lives and works in the State.

The budget provides a social welfare package of €515 million, with spending in this area increasing by 8.4% to €19.6 billion. Education will see an increase of 2.8% to €8.7 billion, while health spending will rise by 2.1% to €15.8 billion. The budget acknowledges the importance of protecting young home owners. Mortgage interest relief increases to 25% for first-time buyers in the first and second years of their mortgage. Most auctioneers have welcomed this initiative and expressed confidence that it will be of benefit to those seeking to purchase their first home. First-time buyers in the third, fourth and fifth years of their mortgages will see an increase in mortgage interest relief to 22.5%. Those in years six and seven will continue to receive relief at 20%, while those after year seven will continue to receive relief at 15%. The existing local mortgage scheme will increase the maximum loan available to borrowers from local authorities. In addition, a single Government equity initiative will be introduced to assist those seeking affordable housing and to simplify the delivery of affordable homes.

The budget provides for €56 million worth of improvements in support of families and children. The qualified child rate is to increase by €2 to €26 per week. All family income supplement, FIS, thresholds are to increase by €10 per week per child. The income threshold for the back to school clothing and footwear scheme will also increase to allow more families to qualify.

The budget recognises the importance of keeping people in work. Capital expenditure of €309 million, representing an increase of €15.4 million over the 2008 forecast outturn, is made available to continue the implementation of the strategy for science, technology and innovation, SSTI, as part of the Government's commitment to promoting a competitive, knowledge-based economy. This provision will continue to support the work of Enterprise Ireland in driving innovation and research and development in companies, and will maintain the commitment to world class research through the capital allocation of €179 million to Science Foundation Ireland.

Support for the major enterprise development agencies will continue in 2009, with a €90 million capital expenditure allocation to IDA Ireland to attract foreign direct investment. A further €48.4 million will be allocated to Enterprise Ireland for the indigenous sector, reflecting the importance of maintaining and attracting foreign mobile investment and a strong commitment to increasing exports by indigenous companies. By moving to restore stability, the economy will be in a position to benefit from the next global upturn.

We all must pull together in these uncertain times. However, we must not forget how far we have come as a country. The past ten years have seen a major increase in the public services financed by taxation. Day-to-day expenditure has risen by 200% between 1998 and 2008. Spending on health has risen by 293%. Provision for education has increased by 174%, while the social welfare allocation has risen by 200%. Many other European Union member states are also obliged to take difficult decisions. This is a financial shock that affects everyone.

I am concerned by the recent announcement of the intended closure of four Army barracks. This came as a complete surprise to me, particularly the proposed closure of Connolly barracks in Longford town. I hope this proposal does not proceed and I will meet the Minister to make the case in this regard. A rally will take place in Longford town next Saturday at 2 p.m. after which a march will proceed from the railway bridge to the barracks. I will attend this rally to show my support for and solidarity with the people of Longford.

I wish to make absolutely clear my opposition to this proposal. I am not closing the barracks.

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