Michael Noonan (Limerick East, Fine Gael)

Those who usually buy new cars can just as easily afford to do so this year as they could last year. It is a question of confidence. It is up to the Government to commence the task of restoring confidence. We have already had several budgets. I hope next month's budget will restore confidence. Confidence is seeping away because the Government is handling this crisis in an uncertain manner.

A plan is needed if we are to deal with the fiscal situation. When the Taoiseach announced earlier this week that he would implement the Brussels agreement on the debt-GDP ratio between now and 2013, he said he would ensure that Ireland adheres to its stated target, which is to limit borrowing to 9.5% of GDP, this year. I understood at that stage that a four-year plan was to be put in place, but the Taoiseach drifted away from that position when he spoke in the Dáil yesterday. It now seems that the relevant figure will drift upwards from 9.5%. I suggest that he is giving himself some elbow room, so that he will not have to hit the people so hard with tax increases or spending cuts. However, his actions are creating the impression that the Government does not know what it is doing. If the target is 9.5%, the Government should say that it will stick to 9.5%. If it intends to drift up to 9.9%, that is well and good. We know why that would be done. If the debt-GDP target were to drift from 9.5% to 10%, that would give the Government an additional €900 million to play with. When Ministers are sitting around the Cabinet table, it would be useful for them not to have to make cuts of almost €1 billion, or raise that much in taxes.

The Government's approach is creating uncertainty. The Minister for Agriculture, Fisheries and Food, Deputy Smith, said on television last Sunday night that a shortfall of up to €6 billion, rather than €4.5 billion as previously suggested, will have to be made up. Neither the Minister nor his advisers were able to explain it. We were given a confusing explanation of what is going on. I suggest that the Minister was confusing the effect of the budget over a nine-month period, which will amount to €4.5 billion, with the effect of the budget over a 12-month period, which will amount to €6 billion. When he was pressed, he could not explain it. As we try to encourage people to invest in the economy by buying houses or cars or by supporting the entertainment industry, it does not help that one member of the Cabinet, at least, does not have a clue what is going on. He proved in public that he does not know the difference between the nine-month effect of a measure and the 12-month effect of that measure. It is another example of the kind of behaviour that is sapping confidence.

The inability of the Government to deal with the banking crisis is also sapping confidence. The introduction of the guarantee scheme, the nationalisation of Anglo Irish Bank and the recapitalisation of the other banks helped to stave off a collapse. They kept the show on the road, but they have not restored confidence. Real action to sort out the banking situation has to be taken around the same time as the budget. The inability of the banks to provide working capital to businesses is costing jobs day in, day out and week in, week out. I have spoken to people from big industries and small industries. A representative of one of this country's major co-ops told me it cannot get working capital from the banks this year on a 12-month basis. The banks wanted to negotiate a flat-rate working capital arrangement in February. They will not admit that people in the milk business have to pay for an awful lot of milk in June and July, and therefore need a great deal of additional working capital in those months.

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