Joan Burton (Dublin West, Labour)

One might say I am a glutton for punishment after too many late nights in this august Chamber. What lessons has the peace process for us as we attempt to deal with our economic woes? Two features stand out for me. Nothing is agreed until everything is agreed and we all jump together. Both are of vital importance now. The main gripe people had earlier this year was the sheer unfairness of the cuts and the belief that some sections of society were exempt.

The Taoiseach tells us, "We are all in this together". It is far from clear that "we" really means what is says on the tin, namely, that everyone has to make a contribution and be seen to do so in a balanced way. Justice has to be done and has to be seen to be done. The Labour Party accepts a deficit reduction target of €4 billion as long as the actual measures do not cause even further contraction in the economy. I say this to the Minister as the author of the half point increase in VAT that sent people in their tens of thousands across the Border.

Leaving party politics aside, there is both an ethical and economic dimension to this. On the ethical side, it is about fairness. On the economic side, it is a question of minimising the deflationary impact of the budget. I am deeply worried about the deflationary impact of the Minister's proposals. It seems the principal target of the cuts will be the low paid, social welfare and health. The impact of cuts on the spending power of the least well off will be far more deflationary than, for instance, effecting €1bilion in savings through closing property tax shelters and other tax loopholes principally availed of by the super-rich. It is a truth universally acknowledged that somebody who is rich and who gives up a little share will continue to spend whereas if the income of a poor person is cut, this will have a much greater deflationary effect. We want to cut the deficit percentage. Spending cuts are part of the mix but cannot be the sole component of the budget day package.

The Minister never tires of repeating his "Apocalypse Now" scenario, although he never acknowledges his own and his party's complicity in creating this situation. How often we hear the refrain, "We are where we are". No, we are where the Minister, his leader and his party have brought us. Those who feathered their nests as a result of this Government's actions and policies cannot be allowed to withdraw to the sidelines while everyone else picks up the pieces.

The Minister for Education, Deputy Batt O'Keefe has boasted that in 2007 Ireland had 33,000 millionaires. Now those millions are well and truly hidden from public gaze and we are repeatedly told that the poor souls have taken such a hit that they cannot cough up anything extra. How different it is elsewhere. I read that in Germany there are moves afoot among the wealthiest to put together a national recovery fund, rather like ICTU has suggested, with as much as €100 billion to assist that country's efforts. Now that is wartime psychology, with everyone pulling together to protect the country they love. In the USA, billionaires campaign for additional taxation on wealth to demonstrate social solidarity during the emergency. Have I heard a single squeak from our home grown millionaires to echo that call? All I hear are special pleas to the effect that no pot of gold exists. Ansbacher Man has gone into retirement but his sons and daughters have inherited the same mindset. When things get tough, the tough pack up and run. Deputy Bertie Ahern let the cat out of the bag recently as he feted his good friend Mr. FitzPatrick of Anglo Irish Bank fame. He said, "I'm sure Seanie has a bit stashed away". I am sure he has, and so have many like him.

We have the Revenue accounts which tell us, in a study published in the summer, that the effective rate of taxation for many in the top echelon, people with incomes of €2 million annually, was between 9% and 20%, after the measures the Labour Party had advocated were finally introduced. Millionaires they might have been, even billionaires, but Fianna Fáil in Government faithfully served their interests and tweaked the tax code in a thousand ways to accommodate them and release them from the obligation to contribute their fair share.

Are they still free of that obligation in the Minister's mindset, or do these people have to jump together with the rest of us? I can say without equivocation that my party will face the obligation to meet the deficit target. In our last spell in Government we produced, with Deputy Ruairí Quinn as Minister for Finance, the first balanced budget in a generation, so we have form on this and we have total commitment to financial stability. We will agree nothing, however, until everything is agreed and that "everything" has to be a balanced mix that can command the confidence of the whole of society.

Do not ask me whether I agree with this cut or that. I agree to nothing unless it is part of a fair mix. I will agree to a great deal, if it is. If the Minister bites the bullet, or the garlic, on fair taxes at the top, I will bite some others.

The Minister has spoken of wartime. Can there be tax exiles in a wartime economy? If one lives and does business here, then one should pay one's share, no ifs, no buts, no special pleas. Our tax system is enormously unbalanced and part of the challenge of restoring us to a stable, fair and prosperous society involves rebalancing it. All should read Dr Peter Bacon's account this week of the hotel sector and the destruction of so many viable and important family hotels and chains because of irresponsible tax breaks which, in his words, have made a whole sector insolvent. If we are to jump together then tax reform and tax justice is a core part of the equation. I am not a supporter of high marginal rates and never have been. The high marginal rates of yesteryear are a nightmare scenario. Low tax rates, however, must run in tandem with the principle that everyone pays his or her share. There are people in this country who talk of low taxes when they really mean, "No taxes", for themselves and their clients. That has to end now.

The McCarthy report was published on 16 July. In each chapter there are suggestions about agencies, administrative cuts and savings which individually are of no great consequence but collectively add up to a great deal.

Some were so obvious that I am amazed there were no announcements to implement them on 17 July. Why this procrastination? Did Ministers get cold feet about their own sections? Did the Minister for Community, Rural and Gaeltacht Affairs, Deputy Éamon Ó Cuív, refuse point blank to walk the plank as suggested? How could the Minister have sanctioned a large advertisement in this weekend's newspapers for a new Secretary General of a Department that may be abolished? Does joined-up government exist at all? While there are big spending Departments, there also are ten other Departments in which efficiencies could deliver a good slice of savings that could amount to as much as €500 million in total.

Curiously, the Minister has balked at publishing the report on higher pay grades in the public sector. Some of these salary levels have grown excessively in recent years and are no longer justified. If the private sector wishes to take some of those concerned and to pay them more, let it do so. This is the reason the Labour Party advocates a cap that would apply to the Taoiseach, the President, Ministers and senior grades in the public service generally. The combined savings would be worth the effort in itself. No less important is the signal it would send that the Government means business. Percentage cuts of 10% here or 5% there are not the way to go at the top whereas a cap is a serious indicator of intention. One should see where one gets with this suggestion as a start and could work down the scale thereafter. It is impossible to ask for cuts in pay generally unless it is accepted that those at the top must show serious intent in reducing salary levels that have been allowed to drift up through the tyranny of percentage increases that gave most to those already at the highest levels.

Scientists use an especially strong conditional expression called IFF, meaning "if and only if". The Labour Party is willing to support the €4 billion budget target on four conditions: first, if, and only if, the burden of sacrifices is shared and seen to be shared by measures that require a major contribution from those who own the lion's share of our nation's wealth; second, if, and only if, salary reductions oblige those on the highest incomes to sacrifice most and those on the lowest are protected; third, if, and only if, the spending cuts are spread across the board in each Department and are focused on the elimination of duplication and other sources of waste and inefficiency; and fourth, if, and only if, there is compelling evidence of deep cuts in the cost of maintaining this bloated Government with all the perks and luxuries accumulated for far too long.

Three weeks remain before budget day. In those three weeks, Ministers have an opportunity to build a sense of national unity that would help us to deal with the crisis. At present, only some are in the firing line to make sacrifices while others, who can easily afford to take a hit, are assured that their pot of gold is safe. This is no way to build a national spirit. The young people who now constitute 20% of those on the unemployment register are being offered €204 per week, which may be reduced, to go on the dole instead of the Ministers opposite using their imagination to release that creativity, education and fantastic skill about which the managing director of Microsoft spoke so eloquently in Dublin at the weekend. He spoke of the need for optimism with a small "o". To get people on-side and to release their creative energies, the Minister must build a consensus around fairness and justice.

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