Richard Bruton (Dublin North Central, Fine Gael)

People see in this budget and the history of the past several months that the banks bailed out developers before being themselves bailed out by the Government. Today, the taxpayer is being asked to bail out the Government once again. Who is going to bail out the taxpayer given that today's budget will add almost €2 billion to the tax bill that has to be paid by every family, on top of the €2 billion and the huge increases in charges introduced last October? The net effect for many families is an additional burden of €2,500 as a result of this budget and its immediate predecessor. Even those on very modest incomes will face huge increases in their tax bills.

The Minister repeated the claim that we have been hit by a tsunami of pressure from overseas. I do not think even a handful of Fianna Fáil Members believe this Government pursued sound and sustainable strategies which were swept aside by some unfortunate event that transpired overseas. Even the Government admits that the bulk of the black hole in our public finances is due to mismanagement by Ministers. The structural deficit about which it speaks was created over the past seven years by the previous Ministers for Finance who occupied the seat opposite. We are now paying for that tragedy. A huge structural deficit of €13.8 billion has been totted up through mismanagement by Fianna Fáil Ministers for Finance. That is the problem which we face today.

This is not merely the result of difficulties overseas. I recognise that we have been buffeted by unprecedented challenges but those in Government who disregarded their responsibilities and who spent like there was no tomorrow left ordinary people exposed to the risks of a downturn. They lived on easy street, with money for everything. The cosy consensus surrounding them allowed no questioning of value for money or what we could afford and no questions were raised about the quangos piled one on top of the other with little accountability. The largesse of Government was widely distributed but now we see that it will be paid for by ordinary families, by pensioners who were expecting the Christmas bonus and by young unemployed people who will be told they can only get €100 per week. Those people will carry the brunt of the Government's mistakes. During those good times, problems were bought off rather than confronted. There was no willingness to introduce reform but the money merely papered over the cracks. Our Ministers became the highest paid in the world, as if they were managing a successful economy. The reality that we now face is very different.

I ask Members to observe how other countries are coping with these difficulties. No other country in the world is responding to this international crisis by seeking €4 billion in additional taxes in the space of six months or refusing to offer genuine stimulus and support for their small businesses. We stand alone in thinking that cutting spending and raising taxes are the solution to the problems we face. It is only the solution because the Government has eroded all the options available to other countries.

It is deeply depressing that, even at a time of huge crisis, the one issue pushed aside is any effort to introduce reform. Report after report is published by group after group. A group is studying taxation but its influence has not been reflected in this budget. Similarly, the group investigating public spending has had no influence on public service reform in this budget. If in a crisis a Minister fails to focus on the need for genuine reform, we are lost. That is the trouble with the way in which this budget was put together.

I am most worried about something that has been slipped in without much debate, namely, the Government's decision on banking. This is a massive gamble. We are told the Government will ask the taxpayer to shoulder €90 billion in toxic loans. Conservatively, that represents an additional 50% on a debt burden which the Minister has admitted is heading towards 70%. We will be back to the old days of a public debt of 120% if that materialises.

What has been set out in the document before us in regard to protecting the taxpayer who will have to shoulder these toxic loans? We have no information on the price which will have to be paid. These are assets which the market refuses to touch yet we are expecting the taxpayer to purchase them. No indication is given on whether taxpayers will recover their money if this plan becomes a disastrous mess. We are vaguely told that the Minister might consider introducing a bank levy. Where is the contractual agreement that banks shall make up any losses that accrue on these portfolios? We need to be given firm commitments rather than vague talk that the money will be recovered over time.

Why are bondholders, who walked into the risks with their eyes open and whose assets are valued in the markets at one tenth of their face value, not making a contribution to addressing the banking problems? These risk takers helped to pump up the property bubble with which we are now trying to cope. According to the Minister's proposals, however, they will walk away without compromising their position. I cannot understand that. It is not the right way to proceed. We are mistaken to follow this strategy because if it goes wrong, it could dwarf everything else that has hit us in recent times. Did the Government put forward a convincing case for what it is doing? Can we have faith in the oversight that it says will protect the taxpayer, knowing our experience over the past several years of oversight by regulators and the Central Bank? Have we any basis for an act of faith when many of the people now managing the banks brought us to this deep crisis? Serious concerns arise about the undertakings the Minister has made in an aside to the budget. These are more than an aside, however, because they are of massive proportion.

Today's budget admits that 250,000 jobs will be lost by the end of 2010. Fine Gael believed this budget would be all about employment. We accept that we have to correct our public finances during a time of crisis but the balance of the measures we would have adopted would be designed to protect employment at every opportunity. Where, however, do we see such an aim in this budget?

In the measures proposed over the five years of the Government's plan, 68% of the adjustment will come from higher taxation. That means higher taxes for businesses and people at work. The Government took the soft option because it is not willing to address the spending it pumped up over several years. Since 2005, it increased spending by 35% excluding social welfare. Where is the commitment to reducing the cost of running the Government? If we do not reduce the cost, we will have the tragedy of people paying with their jobs. We have choices. We are facing a 20% cut in our national income. People who are secure and protected in their positions can put up the barriers and refuse to make changes. Who will pay then? It will be the unemployed. What we needed to see in this budget was the Government taking a definite course, cutting the cost of running Government, and living within what can be afforded by competitive businesses and people striving to hold their jobs. That balance has not been struck, however. The Minister is insisting on correcting this predominantly by tax increases, which is not the remedy. It is not the route that will protect our job bases. We need a budget that is designed to protect our employment to the maximum possible.

Of the taxes that are to be collected in this year's budget 74% will be taxes on work, which will directly hit people who are working. If one wanted to design a budget to protect people at work, one would shift the balance the other way - a predominance of tax would come from areas that did not penalise those at work. The Minister has struck the wrong balance, however, even within his tax package, and he has relied on taxes instead of spending. It is not the correct approach. We need a Government that is willing to get out from its sheltered environment and join the battle for survival among our companies. There is a battle for survival to keep viable companies ticking over and get them through this period, but they are not able to get credit and cannot cope. A measly €50 million is in a so-called enterprise fund, as if that sum could resolve these things. Other countries are being genuinely imaginative about what needs to be done. They are bringing in well tailored packages to bring credit to viable businesses that are struggling, they are showing flexibility in the welfare system as employers struggle to cope with pressure on their workforces and they are reducing the burden of taxation by pushing out payment dates. Our Government, however, thinks it is better that struggling businesses should pay their taxes earlier than they used to. The whole emphasis in this budget has not been about protecting employment, which is the mindset that should have informed it if it was to be appropriate to the needs involved. This is too much of a bookkeeper's budget. The Minister is hauling in tax because it is easy to get, but he is not addressing underlying reforms to alleviate the struggle encountered by people in ordinary businesses who are trying to hang on to their jobs.

It is disappointing that this year we will see €600 million taken off the capital investment programme and double that next year to €1.3 billion. The following year, nearly double again, €2.4 billion, will be taken out of the investment programme. That is not laying down the foundation for employment. I would not have minded if the Government had adopted what we had recommended - a way of getting equity and borrowing into investment in public infrastructure, such as our water services, electricity grid and telecommunications network. We showed how that could be done in the coming years without costing the Exchequer one red cent, but that proposal was not adopted. I appeal to the Minister to look afresh at that solid proposal.

I welcome the fact that the Minister is willing to raise money from pension funds for PPPs. To be brutally honest, however, I thought the Minister would have a lot more work done on that proposal than he has. It merited just a throwaway sentence, saying that he is examining it and hopes something will come of it. If he has not been striving on this matter in recent weeks, what has he been doing to create incentives for investment in this country? It is the core to a strategy that will get us out of this hole, yet it is still very underdeveloped.

I worry about the share out of the burden. We believed that this budget would be about a fair share out of the burden, yet there is no capping on the huge amounts that well off people can put into their pensions. A sum of €150,000 with a huge taxpayers' subsidy of nearly 50% can be put by very wealthy people into their pension funds year after year. What is the justification for that continuing at a time when we are seeking €2,500 in extra taxes from ordinary people?

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