Seán Ardagh (Dublin South Central, Fianna Fail)

As a result of the budget, Finance Bill and the work the Minister has done in the past year we are going in the right direction in that regard. We have a very challenging economic situation at the moment. This budget will be a significant step in restoring stability to the public finances. The Minister for Finance was very brave and courageous in taking the steps he took in 2009. He initially took €5 billion out of the system principally through the pensions levy and a reduction in capital expenditure and then in the budget he made further adjustments of €4 billion. While such adjustments are difficult for some people, they have been generally accepted. There is no doubt the people recognise the Minister's courage, and as a result his profile and that of the Government have improved. As can be seen from the recent opinion polls, the people believe and have faith in what he did in the budget and as expressed in the Finance Bill before us.

We are in a very difficult borrowing situation, which is disimproving dramatically. Gross national product was €154 billion in 2008. The projection for the end of 2012 is €126 billion. The wealth of each individual in the country has reduced. Our standard of living has reduced. When we entered the EEC, the big talking point was that our income was at 60% of the Community's average. That increased to approximately 120%. We are now coming back to 90% to 95% of the EU average. That appears to be the stable sustainable position over the short to medium term.

Regarding the debt, there is a reason for expenditure having been cut and the adjustments having to be made. The country is spending far more than it is taking in. In 2009 the current expenditure was €45 billion and the total current revenue was €33 billion. That was an €12 billion balance. There was also a capital expenditure of nearly €14 billion. We are €26 billion in the hole since last year. That needs to be clawed back. Some of it is what one calls a structural deficit which exists because we - all the people of Ireland - allowed the economy to reach a stage where we were spending so much money because we had a lot of income coming in. Then suddenly our income reduced drastically. However, it is not as easy to reduce the expenditure. There is a structural deficit that needs to be dealt with in coming years. I understand the intention is that it be dealt with by 2014.

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