Brian Cowen (Laois-Offaly, Fianna Fail)

For the purpose of accuracy, Deputy Gilmore's first reference to the €2.5 billion to €3 billion shortfall was related to the Exchequer returns, which were to be officially announced within 15 minutes. Obviously, I provided that information to the Deputy. The shortfall was estimated by the Department of Finance regarding revenues at that point. That is what the Exchequer returns are about and I gave the Deputy this information, which was in line with the information subsequently provided by the Department of Finance.

The second point relates to expenditure pressures which were arising as a result of increased unemployment and so on. The Department estimated this to be between €1 billion and €1.5 billion. That would bring the discrepancy to between €4 billion and €4.5 billion, and this relates to the Department's estimate at the end of February of the deficit on the tax side and what was emerging on the expenditure side.

It is a matter for the political judgment of the Government to decide what further necessary steps we will take beyond those points. We wish to ensure we deal with the matter for the remainder of 2009 in a way which would be seen to be credible by international markets based on the emerging figures. One of the difficulties that Deputy Gilmore and others have, no more than ourselves, is the fact that the deterioration we have seen in the last quarter of 2008 and the beginning of 2009 is a moving target in terms of the problems of addressing accurately what the ultimate position will be in the contraction of the economy during the course of this year. It was said at budget time it would be in the region of 2%, it was said in January it would be approximately 4% and the indications are now that it could be 6% or 6.5%.

This shows the fragility of the economy and the need for the Government during the course of the coming period leading up to the budget to decide the balance and the correct approach, both in terms of imposition of further taxation to meet the revenue shortfall and in addressing the expenditure overruns as they are emerging, such that we have a budgetary position which is more in line with our publicly stated position to the European Commission. I believe that not only is it necessary to indicate this for the course of the year, but it is also necessary to try to put it into a multi-annual framework, such that we can show the country and the international community our intentions in addition to what will be required this year. We do so in order that we can be as open and as frank about these issues with the people. This is the approach of Government and the process has begun.

Political decisions will be required before any final decisions are taken and this will require a good deal of political discussion within Cabinet during the course of the coming weeks. In the meantime I suggest that if Deputy Gilmore so wishes, his finance spokesperson should consult with the Minister for Finance to see in what way he can further assist in respect of any additional queries he has with regard to the broad framework I have outlined.

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