Kieran O'Donnell (Limerick East, Fine Gael)

This is a bookkeeping exercise. An holistic approach has not been taken. The Taoiseach had a glorious opportunity to put measures in place that would impose very little cost on the Exchequer but would give confidence to consumers. With the increases in income tax and levies, the Government will force consumers to save because they are worried about the security of their jobs and their future. Instead of having security and spending money, they will save more. The Central Bank has stated that savings have doubled and I expect that trend will continue. Effectively, instead of tax revenue being €34 billion, it will be significantly less. This is a matter of Government policy.

The Taoiseach spoke about the structural deficit. The Central Bank has said it estimates that the structural deficit accounts for 10% of the overall deficit. That has been caused by the property bubble and by a policy deficit of the Government. The Taoiseach must admit this.

Also in terms of the jobs plan, an exemption for employers' PRSI payments for two years would encourage employers to take on people. The Taoiseach spoke about energy costs and reductions. The Irish Exporters Association stated in the past week that it wanted to see a 20% reduction in energy costs. Reductions in world oil prices in the recent period have not been passed on to the end consumer. The Government has the power to change the way the sector is regulated to ensure such reductions are passed on.

The back to work allowance scheme, which encourages employers to take on the long-term unemployed, is being scrapped. While I welcome that some changes have been made to the back to enterprise allowance scheme, they have been ham-fisted. Applicants for the scheme had to be in receipt of the jobseeker's allowance for two years - that period has now been reduced to one year - but the period participants will be able to participate in the enterprise allowance scheme will be reduced from four years to two. How can one be expected to get a business up and running in two years? I worked in a practice for many years and I know that it takes a minimum of five years to get any business off the ground. With the change to this scheme, the Government is telling people they will have a two year period to do that. The Minister said that a shorter back to enterprise allowance scheme will be introduced but no details were proviced. It is critical to put in place measures to restore confidence.

I welcome that €100 million will be provided for the establishment of an enterprise stabilisation fund, but it does not go remotely far enough. It relates purely to exporters. In terms of cross-Border trade, retailers find it impossible to deal with the differential in the VAT rate. Retailers in my constituency of Limerick, marched on the streets of Limerick city because they cannot compete in terms of VAT rates. The Government did not do anything by way of introducing practical measures to restore our competitiveness, encourage employers to take people on or encourage the development of an entrepreneurial culture. The Irish are a resilient race, but they need structures and supports to be in place to enable people to become self-employed. Participants on the back to enterprise allowance scheme are already in receipt of the jobseeker's allowance, which is €204.30 per week. Why could those participants not be allowed to retain that payment in another guise by way of the back to enterprise allowance? That would enable them to contribute to the Exchequer and create employment.

This budget is bereft of ambition. It is a cowardly measure because it goes after soft targets, namely, working families, old age pensioners through the withdrawal of the Christmas bonus, and hard-pressed young people who bought houses in the period from 2000 who will now lose €900 in mortgage interest relief. I would have liked the budget to deal with our public finances but in a way that would bring about proper reform of the public sector and, as Deputy Kenny stated, reform of the HSE, FÁS and the various quangos to give people confidence. I would have liked some measure to have been introduced to restore competitiveness and ensure the creation of jobs.

I would also have liked to see a model introduced to deal with the toxic debt in the banks that did not involve the Government moving the problem from the banks to the taxpayer. That is effectively what the Government is doing. If this scheme goes ahead, I have no doubt that in years to come that it will cripple Fine Gael-led Governments, which will not be able to make current expenditure allocations because they will be crippled by debt repayments. The Taoiseach said in the House yesterday that €230 billion could be the potential figure in that respect.

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