Michael Noonan (Limerick East, Fine Gael)

I will be brief. We need to resolve the fiscal crisis by taking action in the banking sector. We cannot afford the kind of stimulus plan that is being implemented in other countries. We do not have the resources to do what is being done in the United States, for example. We need to invest in certain sectors to stimulate them and increase confidence. In my home city, for example, the Government is regenerating the bad areas. Four major housing estates are already half-knocked down. If the construction phase of the redevelopment were to be commenced, some 1,500 people who have been made redundant could immediately go back to work.

I have already spoken about the lack of 09-registered cars on the roads. It is time to introduce a new scrappage scheme. The big advantage of such a scheme is that it would cost nothing. It is clear, taking into account the current rates of VRT and VAT, that the average tax take on each car must be approximately 48%. I suggest that between €2,500 and €3,000 should be made available as part of a scrappage scheme, as the Government would subsequently get almost €15,000 on every €30,000 car that is sold. A scrappage scheme would be a self-financing mechanism. I accept that this measure would encourage imports, but I suggest that in light of the way cars are being sold at the moment, we could afford to tolerate a small level of importation of cars. This scheme is necessary to try to keep people in garages working and to get cars sold again. People want to change their cars, but they are afraid to spend the money they have. A scrappage scheme might encourage them to start spending.

I propose that a similar scheme could be introduced to assist businessmen who are prepared to export some of this country's over-supply of cars. It is not that long ago since boatloads of cars were coming into this country from Japan. I understand that India, where people drive on the left hand side of the road, is in a position to take cars from Ireland and the UK for the use of its emerging middle class. I estimate that 400 million Indian people might soon be in the market to purchase second-hand cars. It is possible that an export market from Ireland to India could be developed. Our forecourts, which are full of cars that cannot be sold, need to be cleared out. If one tries to trade in one's car while buying a 09-registered car, half of all garages will not quote one a price. They will sell one a car on a cash basis but they will not do a trade-in. The pressure on the domestic motor trade has to be relieved. The lack of confidence in the marketplace is clogging everything up.

I ask the Government to consider providing a couple of million euro to promote home holidays. Too many hotels were built all over the country. Holiday homes are lying idle and hotels are empty at a time when people are wondering what they will do for the summer. If home holidays were promoted — perhaps hotel packages could be offered to Irish families — things might start working along the west coast. If we create a bit of activity, we will help to restore confidence. Much of what is happening in the county at the moment is self-inflicted. In the absence of consumer confidence, people will continue to save rather than start spending, which will leave us in desperate shape. We cannot afford a big stimulus package. It is possible to use small amounts of money as seed capital to get activity going in different sectors.

FÁS is not the answer for those out of work. It would be a good idea for the Minister of State to remove every barrier in the social welfare code and in employment law that prevents unemployed people from going for education and training. People who want to improve their skills should be encouraged to do so. I have seen various estimates of the amount of money each unemployed person costs the State. I have seen Government figures suggesting that the cost is €20,000. I have seen other Government figures suggesting that it is closer to €15,000. Regardless of the exact figure, it seems to me that unemployed people who improve their skills in regional technical colleges, while receiving social welfare payments, will be in a much better position to help themselves, their families and their country in the future than people who are signing on the dole and drawing welfare but not upskilling in any way.

The Government needs to put in place a four-year plan to solve this country's fiscal problem. It needs to be a plan to which everyone can stick. Initiatives need to be taken to restore a real banking industry here and to make credit lines and working capital available to small businesses. If such initiatives help to restore consumer confidence, people will begin to spend again. If a seed capital mechanism is used to kick-start activity in certain sectors, people will begin to spend again. One would still have job losses in manufacturing industry, but the Minister of State will be aware that located down along the main streets of every provincial town in Ireland are takeaways, small restaurants, coffee shops, bookies' offices, pubs, auctioneers' offices and building societies. They employ a great many people who are losing their jobs at present. It is happening every week and it is not even reported in the newspapers. Every Friday four and five people are let go, and in some towns the figure amounts to a couple of hundred in the week.

There is a way to stop this and it is the Government's responsibility to do so, but my main concern is about the Government. I exempt the Minister of State, Deputy McGuinness from this, because I know from our days on the Committee of Public Accounts that he is far-seeing, listens to ideas and is innovative. However, there are Cabinet Ministers who are like rabbits caught in the headlights of a car, paralysed in inactivity. They have a fatalistic approach to the country which amounts to, "We'll all be rooned," said Hanrahan, "Before the year is out.", but what can we do about it?

There are things that can be done. It is predicated on getting the fiscal package right and getting the banks working properly. If the Government gets that much right, and it takes the innovative steps I and others suggest, it could stop this and we might get people back to work again. At present, we are going down hill so fast it is scary.

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