John Curran (Dublin Mid West, Fianna Fail)

We are given a chance to say a word as well.

I welcome the opportunity to contribute to this debate. The Government will bring forward a budget on Tuesday, 7 April. This is often referred to in the media as a mini-budget, which is an unfortunate title because in real terms it will be a very significant budget and will impact greatly on the future path this country will follow. It must address in different ways a number of wide-ranging issues such as the widening gap between Exchequer revenue and expenditure, the need to address the banking situation and, importantly, the area of job creation and job maintenance.

This morning at Leaders' Questions I was interested to hear Deputy Gilmore turn around to the Taoiseach and state that this was his fourth attempt to get it right. If that is the perspective from which he is coming, he is missing the whole picture. There is a global situation occurring. If one looks at the analysis by political and economic correspondents in September and October of last year, the outlook at that point in time was substantially different from the outlook today. The Government should be commended on being prepared to take the initiative and do what is necessary on an ongoing basis rather than saying that it made its decisions come what may. We are responding in a timely fashion as the information comes to the fore, but it would not be true to suggest that the position we are in was predicted by political and economic commentators who were commenting in advance of, and subsequent to, the October budget. There is a significant global situation.

Opposition Deputies mentioned the issue of property, which has been significant in Ireland. It is worth standing back and looking at the facts. There are other economies where property did not play a significant role and which did not have the problems in banking, yet they too are seeing substantial declines in their levels of activity. If one looks at those countries, the likes of Hong Kong and Singapore which saw huge growth, most of them are very similar in one aspect to Ireland in that they are open trading economies. The reality is that the countries with which we trade are all in recession and, in simple terms, are buying less. We can address some of the issues on property and banking, but one of the issues that is of fundamental difficulty to us is our productive sector. No matter how much we produce, if the countries into which we sell are buying less, that has a direct impact on us. It is expected in the current year — this would not have been said months ago — that total global trade could be down by as much as 9% and we are very vulnerable and exposed to that. That is an underlying factor.

The reason I mentioned that figure specifically is because Deputy Kenny specifically asked the Taoiseach what will be the Government deficit or what is the target. The problem is that it is very difficult to pin a target in the manner in which Deputy Kenny was doing if the global trade figure, which is outside our control, is reducing substantially, and one bases one's figures on an analysis at a given point in time. That is the prospect.

Not to focus too much on doom and gloom, the economic stimulus packages provided in the US, the UK and elsewhere will have an impact here because, obviously, they are purchasers of Irish goods. The commentary and the opinions being expressed in recent times by Jean Claude Trichet and the chairman of the Federal Reserve, Ben Bernanke, are becoming more optimistic in their outlook. They are markets to which we must look.

Clearly the Government has a position that the deficit will reduce to 3% during the five-year period to 2013, and that is very significant. The point is to try to track that along the way with international trade on which we are dependent. We have historical issues to deal with in terms of property and banking, but of fundamental importance to this country are exports, which account for so much of what we produce. We are dependent on that export market and if we forget about that, we are not addressing the real issue.

The type of stimulus package that was introduced in the US would not work here because we do not have the capacity internally to consume all we are producing. There are certain stimuli we could introduce that would have some impact but would never have the same impact as in a large economy like the US that is not exposed in the same way to international trade as Ireland. That is quite important.

I want to briefly mention the banking sector. I sat here a few weeks ago when the legislation on the recapitalisation was going through when a colleague on the opposite side of the House, for whom I have great respect and with whom I served on the Committee of Public Accounts, Deputy Noonan, referred to the share prices on the day. I note that in the intervening period the share prices of the main banks in Ireland have stabilised significantly. A solid financial banking system is not enough. It is how the system performs to help the economy that matters. Incidentally, I was glad to see as part of the package that in the case of homeowners in difficulties with loans, the first step would not be to institute default proceedings in the courts, etc.

One of my concerns is that we monitor and ensure that businesses, particularly SMEs, can access credit. Those credit figures need to be published on a regular basis because we are trying, not alone to do business but to instill confidence in the economy. The publishing of the credit available — I hope we see growth in the credit available to businesses — would be a positive step in that regard.

For a long time I have held the view, which I have discussed not with the Minister for Finance but with a number of other people, that the bad bank scenario should be advanced. Until that happens, until the distressed and doubtful loans are cleared up within the balance sheets of banks, there are concerns about how they will progress.

We often speak of toxic debts, but behind those are assets which an asset management agency or the State would acquire with the debt. Those assets are not to be viewed as having no value. They might be difficult to dispose of in the current economic climate — a couple of years ago they were incredibly valuable and the State in many cases would not have been in a position to buy them — and they will have value again. It is a question of managing those assets that are related to the debt over an extended period; that is very important.

Having been self-employed for 20 years before I came into this House — I was involved in an SME where, I suppose, we saw good and bad times — the following is one of the areas about which I would be concerned. We speak of job creation and foreign direct investment, but I am of the view, old-fashioned though it may be, that it is easier to hold on to a job than to create a new job, and we need to look at that proactively. For example, a hotel not far from me recently put 180 of its staff on a three-day week. Effectively, that means they are on social welfare for a couple of days and they are working for a couple of days. When they are on social welfare, they are not productively employed. During these difficult times, during the depth of the recession, we need to be able to divert social welfare payments and supports to people to maintain them in employment which would have the effect of increasing the productive capacity and competitiveness of that entity. That is something we need to look at in great detail.

Regrettably, we are seeing companies close and go into liquidation. As a consequence, those companies are not able to clear all their debts and other surviving companies are now carrying bad debts and may be encountering difficulties meeting their tax, such as VAT, and rates liabilities. Just as the Government asked the banks to deal sympathetically and leniently with homeowners, the Revenue Commissioners, instead of adopting the tradition of referring cases fairly promptly to the sheriff, now need to sit down with a more compassionate view towards business and look at companies in difficulty to understand whether they are in difficulty because of a hiccup or a bad debt they might have incurred, albeit they may still have a solid financial basis. If that is the case they need to put in place a programme to allow companies to trade through their present difficulties rather than initiating with the sheriff.

This will be very difficult. Our expenditure and revenue do not match by a long way, so the Government will have to increase taxes and cut expenditure. Our tax base has diminished and we need to broaden it, but whatever we do to raise taxes it must be seen to be equitable and be understood by the public. As a result of this budget everybody will have to pay something, but it is critically important that those who can afford it most pay most.

On a personal note I am very pleased to see the partnership agreements and negotiations with the Irish Congress of Trade Unions is back on track. This is a national situation of global and epidemic proportions that needs all partners working together in a cohesive way. There is no use having a budget if people will strike and we lose our productive capacity and competitiveness. In that spirit I wish all well at the social partnership talks.

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