Brian Cowen (Laois-Offaly, Fianna Fail)

I am not seeking to attack the Opposition. I am defending myself from attacks by the Opposition, which I am entitled to do. Those opposite are entitled to attack me and I am entitled to defend myself and the position of the Government in respect of its policies. That is fair enough. Let us keep it simple.

We have a strategy in place. In order to ensure that spending would remain within the parameters set down, we introduced changes in July. This happened when the figures for June indicated that spending estimates would be off by €3 billion. The changes to which I refer will have the effect of ensuring that expenditure for this year will be brought in on line with the parameters set down. We made a decision with regard to what we would spend this year and adhered to it. However, the Opposition opposed that decision and the changes to which I refer.

The second step in our strategy was to bring the budget forward to October. The purpose behind this was to being to the attention of the public the fact that our situation was deteriorating sharply. In his Budget Statement the Minister indicated our estimates for taxes and spending for 2009 but also stated that we would continue to respond as the situation developed. That is what we will do.

The position internationally is deteriorating. Ireland is a casualty in this regard as a result of the open nature of its economy. We are responding to these changing circumstances. As already stated, our first action is to control spending for this year and next year. There will be a significant decrease in the rate of increase in expenditure next year. We have introduced cuts in respect of all Departments with the exception of the Departments of Health and Children, Education and Science and Social and Family Affairs. Despite the fact that they claim they want order brought to the public finances, those in Opposition opposed all of the economies and cutbacks we have made or introduced.

We are also determined to boost the economy. I have already explained that because we have a national development plan and are implementing it, the boost to which I refer is being taken for granted. In previous years we could pay for the capital investment programme relating to the national development plan from our surplus reserves. However, we are now in a position where we will be obliged to borrow in order to fund that programme. I have no difficulty borrowing for capital purposes. This is the correct thing to do in current circumstances in order that we can make the economy more competitive and when the upturn comes, we will be in a position to return to a period of growth as soon as possible. Strategically, this is the right thing to do.

The simplest way to remain within our budgets and avoid all the difficult decisions that must be made in respect of current spending would be to suspend the capital investment programme and then I would have no difficulty showing Deputies that the budget is well within the Stability and Growth Pact guidelines. We are not prepared to suspend the capital investment programme because it is vital that it should remain in place. Deputy Kenny suggested that we have cut it out of sight. That is not the case. It has only been cut by approximately 10%.

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