Brian Lenihan Jnr (Dublin West, Fianna Fail)

While the new economic reality has meant that significant expenditure adjustments are required, the Government remains committed to the continued upgrading of Ireland's infrastructure. To this end, the Exchequer capital allocation in 2009 published in the Revised Estimates for public services 2009 is for more than €7.3 billion. This is a substantial outlay, given the dramatic drop in Exchequer revenues and the increase in Government borrowing. The allocation amounts to 5% of gross national product, which is among the highest in the former EU 15 member states.

It is our intention to ensure that this expenditure is targeted to achieve the maximum economic return while presenting the best value for money to the Exchequer. Within this context, we are targeting investment that will support sustainable employment, have the optimal impact on employment and help Ireland to take advantage of an eventual upswing in the economy. Indeed, with this prioritisation of investment in mind, the Government has already redirected €150 million in February within the 2009 allocation to areas that are both labour intensive and of high economic value. Some €75 million of this money went to sustainable energy schemes, including €50 million for the home energy saving scheme, and €75 million went to the school building programme.

Within the 2009 capital allocation, continuing national development plan, NDP, investment can be seen across all sectors. Obviously, this will not completely arrest the contraction being experienced by the construction sector, but the investment in our capital programme will provide a certain level of ongoing activity in this sector while providing us with the infrastructure to enhance our return when the upswing comes. The Government is examining the potential for unlocking investment by pension funds and other institutional investors in the public infrastructure market. The contraction in the construction sector reflects the substantial collapse in private sector investment in construction. The challenge for the Government is to restore confidence in the public finances and thereby restore confidence in the economy. This will encourage the resumption of investment by the private sector in construction.

As a Government, we have needed to introduce a series of measures over the past year to tackle the unprecedented deterioration in the public finances. All of the measures announced since July last year, both expenditure-reducing and revenue-raising, have cumulatively delivered adjustments of approximately 5% of GDP for 2009. We did not flinch in making these difficult choices. To meet the general government deficit target of 3% by 2013, further decisions will be required in all areas of policy. In this context, the Commission on Taxation and the SGPSNEP will have a significant role to play. Their two reports will set the context for a real political debate on policy options. It will not be a comfortable debate, but it will be an inevitable one that will force every Deputy, including those in Opposition parties, to address the real world in which we must all now live. There are no soft options or safe hiding places. The time has now come to tell the people what they would do were they on this side of the House.

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