Dáil debates

Wednesday, 25 March 2009

Pre-Budget Statements (Resumed)

 

6:00 pm

Photo of Michael AhernMichael Ahern (Cork East, Fianna Fail)

I wish to share time with Deputy Thomas Byrne.

The challenge facing the Government is to achieve the correct balance between cutting spending, raising taxes and borrowing in the context of the four cornerstones of the recovery strategy — getting the public finances in order; sorting out the banking sector by returning credibility to the system; protecting and creating jobs through enterprise support; and looking after those who have lost their jobs through retraining and other innovative schemes.

It must be recognised that Ireland and other states are facing the worst global crisis since the 1920s. As a consequence, we can only influence the elements under our control. Since the middle of last year, we have been looking at a target that is moving daily. I can understand why people urge the Government to do something every day because of the torrent of bad news coming down the tracks but any Government cannot react to each new piece of datum in isolation. We will examine all that has happened in recent months and bring forward a comprehensive budget to deal with all the calamities.

Caution is necessary in considering the capital expenditure programme. A balance must be achieved between taking money out of the economy, protecting jobs and investing to increase our capacity to compete while, on the other hand, deferring projects that are unnecessary now and releasing money to address more immediate concerns. While the temptation might be to cancel projects wholesale, that must be measured by the Government against the overall affect of the such cancellations on the economy. We must protect as many jobs as we can and restore competitiveness in the way we conduct business by supporting viable but vulnerable enterprises.

Firmness is needed to correct the finances as the full picture emerges. This will send a clear signal to the markets and our international partners that the Government is taking the necessary steps and will continue to do so until the position stabilises. We must robustly attack the structural gap in the public finances because there is no other way to ensure our economic recovery except through broadening the tax base by increasing tax rates and reducing public expenditure. Everyone will need to play his or her part in the country's battle for economic stability in a fair way based on ability to pay. Those who can bear it best must bear it most. The tax system needs to be adjusted in changed times and must be adapted to fit our new circumstances. Through a combination of higher taxes and increased cuts in spending, balance will be restored to the public finances by 2013. We must and we will do our utmost to protect the more vulnerable in society. We will continue to invest in those who are out of work in order that they can return to employment as soon as possible.

I welcome the deferral of the national strike which was due to take place next Monday. This bodes extremely well for the future. It is welcome that people are coming to their senses with the proposed resumption of discussions between the social partners. At this time it is necessary for everybody to come together, put their shoulder to the wheel and move in the same direction. Everybody is coming to that view inside and outside the House.

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