Arthur Morgan (Louth, Sinn Fein)

The Government should have removed the PRSI ceiling, thereby eliminating the need to bring those on the minimum wage into the tax net. It should have introduced a 48% tax rate for those earning more than €100,000 a year, ensured that all discretionary tax reliefs are claimed at the standard rate, done more with regard to capital gains tax and capped pension fund contributions. Such measures would have ensured fairness and helped the public finances. Some 372,800 people in this State are unemployed. The retraining measures that have been announced today would not help all of those who lost their jobs in January and February, never mind the hundreds of thousands of other people who are unemployed at present.

The Government is taking €200 million from the environment budget, principally in respect of social housing and water infrastructure. It is cutting €54 million from the school building programme at a time when it should be doing the opposite. It should frontload such projects. Educational centres need to be built if we are to have the workforce that will be needed in the knowledge economy of the future. Some €13 million is being taken from sustainable energy and energy research programmes. A further €300 million is being cut from the public transport fund. This has been a slash and burn budget, by any measure.

If the Government is serious about addressing the unemployment crisis and improving competitiveness, it should do the opposite of what it has announced today. The Minister for Finance, Deputy Brian Lenihan, referred to the smart economy and the need for competitiveness, but this budget will make it harder for businesses to engage in research and development and innovation, which are supposed to be key elements of the Government's strategy. The Government has walked away from enterprise. It has given the banks a "get out of jail" clause, after years of reckless property lending, and saddled the taxpayer with a €90 billion debt. It has again nationalised debt but privatised profit. Those watching and listening to this debate are desperate for real political leadership and a positive change in direction.

Sinn Féin has set out proposals aimed at saving and creating jobs and progressive tax and spending measures. There is a fairer and better way, but the Government has decided not to take it. Instead, it is pursuing a policy of regressive taxation, unfair spending cuts and countless job losses. The Minister's attempt to cite the rejection of the Lisbon treaty as one of the causes of our economic difficulties was deceitful. The seeds of economic decline were sown by the Minister's colleagues long before the electorate rightly rejected what was a bad deal for Ireland.

People have waited in fear and hope of what this day might mean for them. Workers in companies like Waterford Crystal, Dell and SR Technics have lost their jobs. Small businesses across the land have been forced to let thousands of workers go. Such people have waited to see whether this budget would do anything for them. They hoped it would contain a stimulus package for the economy, involving the creation of new jobs that would allow them to apply their many skills. They will be disappointed with this budget, particularly its lack of support for job protection and creation measures. Those working in companies that are in receivership and industries that are under threat have waited to see whether measures would be introduced to save their jobs, keep them in employment and protect them from the lengthening dole queues. They will be disappointed when they learn that regressive flat taxes, such as the income levy, have been increased. Families have been struggling to cope since the last emergency budget, which involved the introduction of levies on wages. In that budget, children were targeted through education cuts and elderly people were targeted through medical card withdrawals. As families have waited, they have worried about what the Government will hit them with next. They have wondered how much more they will be expected to sacrifice to clean up a mess that was not of their making. They will be disappointed when they learn about spending cuts and flat tax increases. All of these groups, and many more, have waited impatiently.

At the start of last year, it was apparent to everyone that the economy was facing serious contraction. While the Government was late in coming to the table, it saw fit to implement some budgetary measures in the form of savings last May. By the time of the Budget Statement in early October 2008, the Government had walked us into a recession. I accept that there were significant international events in the global economy, including the fall of iconic institutions like Bear Stearns and Lehman Brothers. It was revealed that certain people at the head of Ireland's financial institutions, including the Brothers Grimm, Mr. Fingleton and Mr. Fitzpatrick, had behaved in a scandalous manner that, some would argue, put this country's economic survival at risk. The criminal behaviour of those charged with managing our financial institutions, which almost brought the country to its knees, required the taxpayer to provide an underwriting of €440 billion.

The terms and conditions put in place by Fianna Fáil and the Green Party when they gave the bank guarantee were so weak that they allowed Irish Nationwide to offer Mr. Fingleton a €1 million bonus. The terms and conditions were so short-sighted that the State had to nationalise Anglo Irish Bank, which was the right idea but in the wrong bank. They were so ineffective that the State is now recapitalising the banks to the tune of €7 billion, which is the right idea but in the wrong banks. We should keep that €7 billion figure in our heads when we talk about this budget. Would we have needed income levies, excise increases and cuts in various sectors, particularly education, if that €7 billion was still on the State's balance sheet? The Minister spoke today about allocating additional funds to monitor social welfare fraud, but what about dealing with bank fraud? The "get out of jail" clause that has been given to the banks after years of reckless lending will saddle the taxpayer with a toxic debt of €90 billion. More public money will be spent on toxic debts as long as the likes of Mr. Fitzpatrick and Mr. Fingleton get off scot free.

Sinn Féin has consistently called for measures that benefit the public rather than the bankers. We need to nationalise the good parts of the banks, ensure that credit is made available to our small and medium-sized enterprises and reduce mortgage repayments for struggling families. The Government cannot maintain its policy of protecting bond holders. It cannot continue to nationalise debt while privatising profit. Its short-sighted policy was evident when, after bringing last autumn's budget forward by six weeks, the Government did not see fit to implement the sweeping measures that were needed to help the economy to enter into 2009 in a fit state.

The Government can make all the claims it wants about the global downturn having its effect on the Irish economy, but the global downturn is not responsible for the Government's failure to do enough in October, which led to savage emergency measures being taken in January to save €2 billion on the year's budget and now this emergency budget - another exercise in short-sighted accountancy.

People cannot suffer much more under this Government. We desperately need leadership and a positive change of direction. By leadership, I mean taking responsible measures that are motivated by a social conscience, that are fair and just as well as effective, and that are taken in the national interest. We need a very different approach. We need something other than Ministers preaching to us that we all caused this mess and we all must all fix it, and something other than the plethora of economists who called it wrong every step of the way and are now back on the airwaves revising their forecasts from last year and telling us, cold-heartedly, the savage steps they believe the Government must take to bridge the deficit. The Government is, of course, foolishly listening to them.

We also need something very different from that offered by Fine Gael, the party that last week managed to blow economic orthodoxy out the window by launching a jobs creation paper that called for 15,000 redundancies. We accept that the public service requires a root and branch audit to identify any inefficiencies but public servants took more than their fair share of the pain with January's pensions levy - a pay cut by any other name. The public service has become the whipping boy of right-wing economists for several years. To take an axe to 15,000 public service jobs is not the way to deal with this problem.

We have enough people losing their jobs in this country. To give people hope, we must show them we have the answers. As unemployment figures have soared – simultaneously destabilising tax receipts and increasing the social welfare budget – the human toll of the job losses has been horrific. In all of the speeches here we have been addressing statistics but these are real people. They are our neighbours, these are families in their own right.

While this country grapples with the apparent truth that this Government's jobs strategy is emigration, individual workers in factories, shops, building sites, and offices across the State are being brought in by management to be told their jobs are gone. Some are being dealt a double whammy. They are being informed that their pension funds, many of which would have been contributed to for 40 years, are also gone.

That this has been allowed to happen systematically for almost two years is shameful. It is shameful that the Government did not see the need to put job retention measures in place. It is shameful that it did not think to bring about a jobs creation strategy sooner. It is shameful that these people have been forced to watch as this Government spends billions saving the banks, but will not lift a finger to save their jobs. It is a disgrace that the people who lost their jobs over the past couple of years bore witness to the news that the head of the State jobs agency, tasked with training them to start their new lives, was allowed resign amid a myriad of financial corruption allegations. He should have been sacked. I cannot remember the last time anyone was sacked by this Government.

The cronyism and corruption that pervades this State's political elite has never been more despised or unforgivable than it is now. There is a sense of déjÀ vu about Fianna Fáil telling us to tighten our belts – we all remember former Taoiseach Charles Haughey telling us to tighten our belts while he was swilling champagne on a luxury yacht and ordering from France yet more Charvet shirts each of which cost the average industrial wage at the time.

All is not lost, however. Despite this Government's best efforts, we still have an opportunity to save people's jobs now, and to create more to replace those that are being lost. As dejected and distressed as people in this State are, they have not lost their fight. We are the same people who have battled through countless centuries of oppression and poverty. We are the same people who were able to go out into the world, help build it and send home every spare penny to help family and country.

In March of this year, Sinn Féin launched its job retention and creation strategy paper, which contained almost 80 proposals to save existing jobs and develop new ones. It is unfortunate that the Government did not at least read the document and take some of those proposals on board. Putting Irish people back to work is the essential first step to resolving this crisis.

Within our document on jobs, my party has set out a range of measures to keep people in employment. These include establishing a €300 million jobs retention fund to subsidise workers in viable SMEs which are struggling in the current crisis, the setting up of a task force to actively pre-empt job losses by going into companies where jobs are in jeopardy to troubleshoot and offer advice, ensuring small businesses can access credit by establishing a proper State bank that would have this as one of its main aims, reduce the costs of doing business by examining stealth taxes and further reducing utility bills, guaranteeing access to high-speed low-cost broadband and boosting the agri-food sector by introducing an improved country-of-origin labelling system and helping producers reach economy of scale.

Our logic in putting forward these proposals is that it is far less costly to keep people in work than it is to allow them to languish on the dole – both financially and socially. Nobody disagrees with us on this - so why are these measures not being taken? It also makes sense from an emergency public finance position. So far, the tax receipt losses have been most noticeable in the property taxes and VAT, due to the State's unbalanced reliance on these indirect taxes. As job losses have increased, we have seen income tax start to take a hit. That will only increase if something is not done now to stabilise jobs numbers.

Recognising that not every job can be saved, Sinn Féin has also produced a range of proposals to create new jobs. These include frontloading labour-intensive national development plan projects and increasing the number of school-building projects to provide both jobs and centres of learning for our much needed educated workforce of the future. The Government has done the opposite. The decision to cut capital allowance this year to save money will only damage further the potential for both employment in this State and the State's ability to turn itself around. We need more investment in infrastructure, not less.

We have also called for the creation of one-stop-shop enterprise points to be set up, for the establishment of Eolas Glas Éireann, a new green technology body, and for the creation of a sales Ireland strategy to help Irish firms access export markets outside the United States and Britain and to help Irish firms looking to set up manufacturing businesses with the potential to compete with our largest imports, including research and development funding. It is not lost on our exporters - it appears to be lost on the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, who launched the export report, Catching the Wave, last year - that currently, almost 90% of exports from this State come from foreign-owned multinationals. In addition to that startling figure, foreign-owned firms import over 86% of the materials they use, bypassing Irish firms.

These are just a couple of our 80 proposals aimed at stimulating employment. Alongside these innovative ideas, we spelt out the need to stimulate consumer spending. I spoke against the 0.5% increase in VAT in the October budget and I and all of my colleagues voted against it. I met with groups such as ISME and various chambers of commerce over the preceding months and I could see from quarterly figures that VAT returns were falling. I also met with many traders from both sides of the Border. It seemed entirely counterproductive to me, at a time when consumer spending was crying out for stimulation, that the Government would make it more expensive to shop. The Government's VAT strategy is a complete failure and one that was avoidable. We need to harmonise VAT across the whole island, not to mention work for an all-island currency. Work on this needs to begin immediately.

The total cost to implement our jobs package over a full year comes to just over €2 billion. Most of the measures are cost neutral, they just require a change in direction of Government policy. They need the Government to accept that we are not a strong performing export market, that we have a trade deficit that is strangling us, and that we are far too dependent on the multinational manufacturing sector. If we are going to attract FDI to this State, we should be targeting their headquarters, and offering their research and development sections partnerships with Irish universities. We must be more than mere outposts from which they can pull out at will and send those jobs to cut-cost economies. Some €2 billion is not much to pay if it means saving and creating jobs, and ultimately, stabilising the public finances.

That brings me to the issue of tax and expenditure. In the run up to this emergency budget, we stated the only way to secure the economic future of the State was to retain existing jobs and to create new ones, reduce the trade deficit and stabilise and better regulate the financial sector. We also said the public finances had to be stabilised so as not to further harm our borrowing capacity. We stated this could, and should, be done through fair, progressive measures that would not, as has been the traditional method of this and Fine Gael-led Governments, target those who could least afford it. We called for a line to be drawn between increasing revenue intake and not taking so much out of the economy to contract it into a depression.

In the financial aspect of our pre-budget submission last week, we set out measures that would have raised and saved €3 billion in the current year and €5 billion in a full year. These included fair measures such as standardising all discretionary tax reliefs, which would save the State approximately €1 billion a year; levying the existing and remaining property tax reliefs, which would return between €200 million and €300 million on average a year; introducing a new third rate of tax for high earners; and increasing the health levy on high earners and PRSI by 1% while abolishing the ceiling to ensure the social insurance fund can continue to meet its obligations for unemployment, maternity and pension payments. We laid out savings in the public sector, but none that would affect front line services. Our savings targeted areas such as the private health care sector, which has been financing itself on the back of the public health care budget and people's fear because public services are run so badly by this Government and the HSE.

In bringing forward proposals to bridge the gap in the current budget deficit, Sinn Féin sought to protect those on low to middle incomes and those in receipt of social welfare. We could go over old ground all night about how the Government did nothing over the past ten years to broaden the tax base or to make it more fair and progressive and how the Government oversaw the shift from an export-led economy to a bubble economy dependent on property and consumption taxes. In its simplest terms, the Government believed four walls and a roof, and the furniture bought for that house, constituted the solid foundations for an economy, which is ludicrous.

However, the fact is that we need to deal with where the country is right now. The dramatic contraction in the economy is nothing less than a national emergency. There is much we can do in the long term to fix the public finances and my party has advocated a complete overhaul of the taxation system to include a sophisticated system of multiple bands and rates for both income and business tax, an end to tax reliefs except when they are for society's benefit, an end to tax shelters and loopholes and putting a stop to wastage and duplication in public expenditure. In the immediate term, measures can be taken, and I listed some earlier. My party believes our approaches are sensible. We are not using the recession to push an agenda that will ultimately serve only the few.

For example, we are completely against selling off, for short-term gain, profitable State companies or companies that could be made to turn a profit again. This policy, articulated by some in the House, is ideologically partisan, economically naïve and, ultimately, counterproductive for the future of the State and its economy. I refer to the case of SR Technics, formerly FLS Aerospace and Team Aer Lingus, which emerged from the mechanical and engineering section of a public sector company, Aer Lingus. This is a classic example of where the privatisation agenda takes us and how it leaves workers on the dole.

We have also been adamant that those earning the minimum wage must be kept out of the tax net and that those on social welfare cannot be targeted. With the abolition of the Christmas bonus for those subsisting on social welfare, it appears that Fianna Fáil and the Green Party disagree that nobody earning €204 a week should be asked to carry the can for the mess that the Government, bankers, developers and the business elite have conspired to create. Unfortunately, the Government has chosen, once again, to take a series of measures that are neither fair nor just and that will not be effective.

The income levy is not progressive. A levy of 2% on somebody earning €15,000 a year is more disproportionate than levying 2% on someone earning €70,000 a year. The Government's line about not being able to change tax rates and bands in the middle of a tax year is dubious and does not explain why the tax system was not changed last October when the levy was introduced. It also very convenient that the Government claims it cannot tackle the multi-billion euro tax relief scheme in the middle of the tax year. There was nothing to stop it ending these unfair reliefs last October. Bringing people into the tax net is outrageous. Nobody earning €350 a week can carry the can in this budget.

The cuts to social welfare are vicious. The early child care supplement is paid in recognition of the fact that the State does not provide universal early child care, as is provided in most other progressive European states. Even if the proposed child care scheme comes on stream in January next year, how are parents supposed to pay for child care this year following this payment cut? Perhaps the Government's unemployment strategy ties in well with the slashing and eventual abolition of this payment. Means testing or taxing child benefit next year is also punitive. The Minister should target the tax rates of parents, not their children. The reduction in rent allowance is a disgrace. The housing market has changed but not to the extent that rents have collapsed. The measure to reduce jobseeker's allowance for the under 20s is an attack on young people, who are the most vulnerable in seeking a job in this economy now. It is an emigration tax, as it will force them to leave the country and travel elsewhere where the economic crisis will probably be as bad.

Those on the right argue that, in a public finance crisis, the last place a government should look to raise money is the tax system. They argue cuts are the only way to solve an economic crisis. It is easy for these Washington School students to advocate spending cuts, which invariably comprise cuts to services on which the better off never have to rely. If one is rich enough, one does not need a public health service or education system nor does one need social welfare payments. What differentiates Sinn Féin from those on the right is that we believe all these important services such as health, education and social welfare are rights. That is what one pays one's taxes for. One does not pay them so the top rank of civil servants can earn upwards of €150,000 per year. One does not pay them so the heads of State bodies can take first class trips to Florida and stay in five star hotels. One pays them for the Government to give them back to their developer friends through billions of euro in tax reliefs.

Sinn Féin's priority at this time is to get Ireland back to work and to build the knowledge-based economy that we so often talk about. The conscious decision by Fianna Fáil and the Green Party to make cuts to education spending and to increase class sizes is detrimental to both of these crucial goals. Deputy Paul Gogarty talks a good talk when it comes to these education cuts. I call on him to show his hand now. Will he stand over this targeting of the most vulnerable in our society or will he actually stand up for what he says he believes in and walk away from this Government?

Likewise, cuts to health have been affecting the delivery of health and personal social services since the autumn of 2007. The "national emergency" the Minister for Health and Children declared in 2006 because of the numbers of patients waiting for many hours, and in some cases, days, on trolleys and chairs in accident and emergency units has been forgotten not because the situation is better but because the so-called emergency is now the norm, despite the Minister's much vaunted but ineffective plan of action. While she ploughs on with her precious and ideologically driven co-location of private for-profit hospitals, the provision of life saving units are being denied. It appears an issue has to be aired on the Joe Duffy show for a week before it is sorted by the HSE. How Deputy Harney can hold her head up is a mystery to me and how Government backbenchers can stand behind her is something they will have to explain to the electorate at the next election.

The recession is being used as an excuse to make cuts to the public health service but no real action is being taken to tackle the waste in the health service such as the use of brand drugs instead of generic drugs, the co-location plan and the subsidising of the private sector through the private beds in public hospitals. The list goes on. Everyone else is expected to take a pay cut but the consultants' contract is untouchable. In the meantime, we face the non-renewal of contracts for up to 1,400 so-called temporary workers in the health services. Under the guise of reorganisation, the Minister and the HSE are slashing services in our small hospitals across the State, worsening the overcrowding in large hospitals such as Our Lady of Lourdes in Drogheda, the Mid-Western Regional Hospital in Limerick and the big Dublin hospitals.

Health and education are just two areas where the cuts have hit the most vulnerable the hardest but there are many more. A government that can bail out the banks to the tune of €7 billion, but cannot protect its most vulnerable in their time of need is not a government that anyone in their right mind would want to be in power.

Today's budget will not restore our international reputation. Our reputation internationally has been damaged by this Government's failure to manage the economy and regulate the financial sector, and by its over-reliance on construction and shambolic handling of the public finances. The Minister for Finance, Deputy Brian Lenihan, spoke today as if his party had not been in government for more than a decade, as if he and his colleagues were not responsible for the crisis which the country faces.

The Government has made several attempts to fix the State's finances. Each time it has fallen short and this was its last attempt. This budget is not even a first tiny step in the right direction. I doubt anyone is convinced that Fine Gael could do a better job. If the past is anything to go by, not to mention its policy documents of the past few weeks, Fine Gael's solution will be as punitive as it is negative, cuts and privatisation will not sort out this economy. Fine Gael believes it will be elected to govern next time around because of Fianna Fáil. I believe, however, that people are starting to look for something different. The old two-party system is teetering on the edge of history and an alternative is starting to emerge. My party leader made a call at our Ard Fheis to the parties of the left to form an alliance of the left. I ask my colleagues on this side of the House to consider this again. No party that claims to be of the left should prop up a right wing government. I call on the Labour Party today to go back to its roots and to abandon its policy of abolishing tax reliefs for trade union membership. If ever there was a time when people need to be members of unions, it is now.

People want change. They want a new model of development for the economy, not one that relies on the boom and bust method, which economists can sit back and comment on, but with which real people must live. Nobody in the two main parties believes in shared pain for everyone. They will protect the well off and target the less well off, as has been seen here today.

We can go forward in this State, we can turn this economy around but we cannot do it by clinging to the politics of the past. It is time for real change. This budget has been far more depressing than even I had expected with cuts in education and all public services at a time when injecting funds into labour intensive projects was needed to stimulate the economy rather than this slash and burn approach.

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