Brian Cowen (Laois-Offaly, Fianna Fail)

The task we face is made more difficult by the fact that social costs are increasing and revenues are decreasing. It is clear that if we are to bridge the gap, or reduce the deficit that has grown, expenditure savings and taxation changes will be required in the years ahead. We will need to strike a balance to protect as many jobs as possible, while putting in place the basis on which services can be provided in the future. A combination of measures will be required over the medium and long terms. The report of the Commission on Taxation, which will be published later this year, represents a timely opportunity to undertake a systemic review of all aspects of our taxation system in the context of the new challenges we face, such as the fact that we will not be returning to the large rates of economic growth we saw in the past.

Like the rest of the western and developed world, Ireland needs to adapt to the profound changes that are occurring in the context of the current financial and economic crisis and the global recession in which we are all enveloped. Choices will have to be made by the Government as we proceed. If we are to meet the clear challenge of upholding the principle of social solidarity, as I believe we should seek to do, the burden of adjustment will have to be equitably borne by everybody. That means those who have a greater capacity to carry that burden will have to do so. A political judgment will have to be made, one that is not perfect and will never meet with unanimity. Given the fluid situation we are in, the scale of the challenge is such that we cannot suggest with any certainty that any constituency or cohort of people can be immune from the impact of the adjustment that has to be made. However, we will work on the basis of trying to stabilise the public finances and provide social solidarity. We will use this opportunity to try to reform a range of areas. It is clear that the status quo does not represent a model for maintaining the level of services our people are entitled to expect, even in these difficult times.

We will bring certain proposals to the people in the aftermath of the current discussions, which I hope will prove successful. It is properly the right of this House to debate these issues on an ongoing basis. It is important — week in, week out; month, in month out; and year in, year out — to engage in an ongoing effort to ensure that the steps back we have to take now do not involve more than a temporary adjustment. When the economic recession ends and there is an upturn in the global economy, we will need to be able to play to our strengths. We will have to work on short-term initiatives while dealing with the long-term structural problems we face. Our tax base decreased by 15% in the last financial year and it may decrease further this year.

We need to be proactive in helping the newly unemployed to focus on getting back into employment as soon as possible. It is planned to increase the number of places provided each year under the jobsearch and employment support services from 78,000 to 147,000. It is also planned to increase the number of places in FÁS short training courses for the newly unemployed from 27,000 to 78,000. A further 400 subsidised jobs will be offered to redundant apprentices. FÁS has established a training fund to respond speedily to the retraining needs of low-skilled workers and redundant craft workers.

Enterprise Ireland needs to continue to assist start-up companies and identify growth areas in markets where problems are being encountered at present. Not only do we have to contend with the global downturn and the financial crisis that is enveloping the developed world, but we also have to deal with problems on the currency side, such as the depreciation of over 30% in the value of sterling compared to the euro over recent months, which is placing a great burden on our exporting community, including many companies in the indigenous sector.

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