Dara Calleary (Mayo, Fianna Fail)

I welcome the opportunity to speak on the budgetary situation ahead of 7 April. There are several areas in which I have an interest and I would like the Minister for Finance to address these on that day. Some involve cuts and others involve packages that might stimulate activity. Our most important need at present is to reduce costs right across the economy and to continue to do so.

Some areas are within Government control. For example, it can reduce the cost of employing people by reducing the current level of employers' PRSI. In that way we can stimulate more employment and give employers a better incentive to hire people. There is a commitment in the programme for Government to reduce by 25% the red tape burden on small business. In the current climate let us be more ambitious and aggressive and increase our ambition to make that, ultimately, a 50% reduction.

In recent years this House has put in place a number of organisations, such as the National Employment Rights Authority, NERA, and other bodies that currently inspect Irish business as if it now operated in the same way it did some years ago. It does not. The majority of small and medium enterprises are struggling to keep doors open and can do without red tape being forced down their throats at the current time. Let us call off those inspectors. I respectfully propose they might be better employed now in addressing the social welfare backlog and there might be a better transition of employees between Departments to address current demands. That is an action the Government might pursue.

Public procurement is another area within Government control. In spite of the cuts and the curtailment in capital and current expenditure, the Government is still the biggest buyer of services and goods in this economy. The rules, however, curtail the involvement of small business and crucify it, preventing it from getting access to that market. Whether one is a builder, a printer or an office supplies company, if one is small one is not wanted as far as Government procurement is concerned. To protect jobs and provide greater competition and a more local response to local situations, we must review this. I ask the Minister to do so ahead of 7 April.

The issue of stimulus is being discussed and, although we are not in a position, either as a current economy or as a style of economy, to take US-style actions, we can examine a number of issues. Again, these involve a change to the way we do things. Now is the time to change. For instance, is there a need for the State to own school buildings? That system served the country well since the foundation of the State but there is a backlog of schools to be built or refurbished. The construction industry is at a low in terms of activity but also, and more important, it is at a low in terms of pricing. The industry has a substantial landbank. Two and two equal four. If we review our rules and open up our school building programme to a buy and rent scheme, the State would not have to lay out significant expenditure up-front. Through a good rental agreement, which could be very easily negotiated at present, we can get good schools, stimulate activity and address the difficulties in building schools. We must think outside the box. Solutions that worked in this country over the past 70 years, or that may have served rather than worked, will not work in the current climate.

Concerning stimulus, we must address the concerns of the motor industry. We are not bailing out big car dealers but are bailing out the 50,000 people who depend on those dealers for their jobs, the mechanics and those just above the minimum wage. There are a number of cost neutral proposals we can implement, such as revising the VAT system.

The low direct tax model was a model of its time during a period of surpluses and economic growth. It is no longer appropriate for us. Everybody is braced, perhaps not quite ready, but expecting large increases. However, we must be careful that we do not burden with further large increases the middle sector of those who pay tax. The sector that gets paid between €50,000 and €80,000 gets very little support from the State but it pays a lot of the State's bills. Surely there is ability within the Department of Finance to devise models that would place the impact and the burden on those on higher incomes and, on this occasion, probably also on those on lower incomes.

The ongoing drive to reduce costs is paramount. The cost of food is beginning to fall as are costs of other necessary household items, and this must continue. Regarding social welfare reform, a €21 billion budget cannot be exempt from examination in the current time. However, there are ways to do this. The recent initiative on tackling cross-Border fraud shows our social welfare system has grown fat. There is a lot of room to cut back on that fat before we start tackling direct rates. For example, every case should be examined to ascertain if the need that originally applied still applies and whether the total benefit being paid to specific households from social welfare payments is disproportionately high.

I make a special plea for self-employed people who in the past five or six years employed people and paid taxes and PRSI and who now, through no fault of their own, find themselves out of business. They are not eligible for social welfare. They have paid their share to the economy and now at their time of need the economy should support them.

Concerning jobseeker's payments and benefits, currently many people are being forced onto that payment who would like to work in their communities and have the talents and skills to do so. This is the area of responsibility of the Minister of State, Deputy John Curran, and he will be well aware there are many organisations who could well do with those talents and skills. Surely we can marry the two needs in some shape or form and get those people working for the benefit of their communities and in voluntary activity, while being in receipt of a State payment. As sure as night follows day, the time will come again when we will be begging for volunteers. That will be the case when we return, as we hope, to a situation of high employment.

Another social welfare issue that must be addressed is the payment of benefits directly to bank accounts. This encourages fraud and so-called welfare tourism and should be reviewed as a matter of urgency. In reviewing it, we will support our smaller post offices and social welfare offices around the country.

We must also examine our own operations in this House as we approach 7 April. There was a campaign for many years to link our salaries with those of Principal Officers, but that would take the matter outside our control. That situation should be examined and if there is a need to suspend that link for the next number of years and to take reductions, that should be done.

The issue of Ministers of State is being considered at present as are issues of expenses and allowances, including those paid to committee chairmen, vice-chairmen and convenors. These must all be reviewed between now and 7 April. The very legitimacy of this institution and of our democracy is being scrutinised at present and we must review and protect it.

The Government must be congratulated for introducing the cap on salaries in the banking sector. It should be extended across the public sector in both semi-State and State companies, to include contracted employees, who are either independent contractors or direct employees. If a person is paid no more than €500,000 to run a bank, then they do not need to be paid any more than that to run any company, to present a radio or television show or to do any other job paid out of the public purse no matter what the shape or form of an organisation funded by the public purse.

It is essential that on 7 April we protect the vulnerable. People like those we met this morning, the carers and people providing support to those with Alzheimer's, are not able to respond in the way we can respond to this economic challenge. The Minister needs to show a path of recovery to the country and I am confident he will do so. He needs to show that there is a plan at the end of all this, that the shoots will grow again and that we will be in a position to begin to lead this country out of the current challenges. I am hopeful from his statements to date that he will do that and I hope he takes some of those ideas on board.

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