M J Nolan (Carlow-Kilkenny, Fianna Fail)

I wish to share time with Deputy Fahey.

I am pleased to speak in this budget debate. It is an opportunity for us all to have our say on what is going on in our economy and our country. Recent days have been overshadowed by the issue of medical cards for the over 70s. The matter has been resolved and some clarity has come into the debate. I was concerned from the outset that the news was that all over 70s would lose their medical cards, which clearly was not the case. I am glad the Ministers and the Taoiseach have amended that and brought forward a scheme that is more acceptable to the over 70s.

When speaking to over 70s in my clinics, on the telephone and in e-mails, the majority of them were of the view that all those over 70 years would lose their medical cards. There was much confusion which, to a large extent, was fuelled by vested interests who wanted to ensure there was uproar among a certain section of the community in regard to a budget proposal, and they succeeded in that. That debate has taken place and we now have clarity. I am glad 95% of over 70s will receive medical cards. Those who do not receive them will, by and large, be more than capable of paying for general practitioner visits.

We should now focus our attention on the scale of the economic challenge facing us and which is only becoming clear. I encourage the Government to outline at every possible opportunity the serious financial and economic situation in which this country finds itself. We are not unique in this regard. There is a serious global downturn of which we are part. We are fortunate in so far as we are part of the European monetary union and, to a large extent, some of the impact of that downturn is being felt by fellow members of the EMU. We have been cushioned somewhat by that.

If the economic downturn stops next year or, indeed, the year after, we will be very fortunate. Some commentators have said this economic downturn could go on for four years. It will result in serious difficulties for every sector of Irish society.

For the past two years, we have seen the impact that has had on our construction industry with the serious slowdown in that area. Apart from all those directly involved, there has been a knock-on effect. We have seen job losses in the legal area and among the professions such as architects, engineers, quantity surveyors and estate agents. My local newspapers have seen a huge shortfall in advertising revenue. We have been told this will continue until the number of housing units and apartments currently surplus to requirement — we have been told there are roughly 42,000 — are washed through the system. We will then see the construction industry start again. That is causing problems in the employment sector. Many brickies, electricians and painters are looking for jobs. For the past 15 years, it was difficult to get some of those tradesmen to do work. Now there is pressure on them and prices are being cut.

We have seen non-nationals, in particular from Poland and some of the new accession states to the European Union, return home. In a way, that is good because it lessens the impact of this slowdown on the Irish workforce.

However, in dealing with that, there is one aspect on which I urge caution and which has been brought to my attention over the past few weeks. People from other EU member states who come here to work are entitled to child benefit. However, I understand there are instances where they have not notified the authorities of the fact that they have returned to their home country and they are still drawing social welfare benefits from this State. The Minister for Social and Family Affairs and her officials will have to be mindful of this abuse of the system and put in place some scheme whereby they are notified by the home country of the return of individuals. When people return home, the country in which they have previously worked should be notified of that fact. Any social welfare payments should cease and revert to the host country. I was recently made aware of a case where individuals claiming what was disability benefit have returned to their home country but continue to send certification to the Department to claim this benefit. We must look at these issues.

I would like to see some changes in the planning process. I can only speak for my constituency but I know of a number of individuals who seem to make a career out of objecting to planning applications and are available to negotiate a solution to the problem with the applicant. That is grossly unfair and uncalled for. Now that we are in a slowdown, perhaps it is an issue which the Minister for the Environment, Heritage and Local Government might consider.

I refer to redundancies and job losses. Perhaps it is time for the question of the public sector versus the private sector to be examined. The private sector is the production sector which generates the revenue for the Government to function and which is being most severely hit. The Government is putting in place a redundancy programme for sections of the HSE. Perhaps this redundancy programme should be extended to other areas of the public sector where over-manning is evident. It would be easy enough for Ministers and their officials to identify over-manning.

Most of the functions of the health service have been given to the HSE but there are still more than 500 employees in the Department of Health and Children in Hawkins House. I am not picking on the Department of Health and Children; I am sure there are other examples of that in the public service which could be examined.

Previously, I spoke about and commended the Government on acting so swiftly, effectively and efficiently when the banking sector was under serious threat. The Government action then has been recognised and acclaimed internationally. At a time when the banks are being hammered by many commentators, it is important to acknowledge the role a strong banking and financial sector has in a strong economy. If we lose the support of our financial sector, we will not attract inward investment. We have been singularly successful in attracting that investment over the past 20 or 30 years and must continue to do so. In order to do that, we need a strong, robust and healthy financial sector. I urge the Government to keep this in mind.

Now there is a slowdown in the economy, it is time to look again at the service sector for job creation. Tourism has been the poor relation, with regard to commitments from Government, over the past number of years because of the strength of other sectors of our economy, but it is an area that should be given more support. This need not be financial support. We must remember that sectors such as tourism could generate wealth and these should be given more consideration while we go through this difficult period.

We must maintain our competitive position in the global marketplace. It will be necessary to become more competitive to attract jobs from overseas. This is particularly apparent when we hear the statements of the campaigning candidates in the US presidential election. They are clearly under pressure from domestic voters in terms of jobs America is haemorrhaging overseas. This is an area the candidates have highlighted and we must be mindful of it because of the significant number of individuals employed by overseas companies here.

We must retain our low personal taxation rates. I am pleased the Minister did not take the easy option and increase PAYE tax rates in the recent budget. If we do not have a competitive personal tax rate, we will lose jobs overseas. Our corporation tax rate has been part of the reason companies have located here. While we saw a small increase of 0.5% in VAT rates, we can live with that.

We have a well educated young workforce, but we need to continue to invest in education. Everybody on this side of the House will come under pressure from schools which have seen their budgets cut, which will manifest itself in the loss of teaching jobs. However, we must keep our eye on that area to ensure we do not lose what has been one of our greatest advantages for the promotion of jobs. I think in particular of our third level institutes and our good university structure. These institutes have been told by the Minister for Finance that savings must be identified in the sector and they must get their houses in order.

We have a very good third level institute of technology structure also. I understand there are proposals with the Department and the Minister with regard to regularising, bringing together and making savings in that sector. One of the suggestions mooted is amalgamation. I suggest the directors of those institutes should get together and come up with positive and meaningful proposals that would not cost the State anything more than the current budgets. If they did this, we might see changes made that would increase their standing and the quality of the programmes and courses they offer.

As a result of what we have seen over the past week, it is time for us to change our focus. We must focus on the challenges that face us as a country, a nation and a people and the challenges that face our particular economy. As we face even more difficult times next year, we must position ourselves to deal with those challenges.

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