Thomas Byrne (Meath East, Fianna Fail)

This debate is being watched by members of the public who want answers. They want us to seek consensus and show generosity to the Opposition. I believe the Government has shown such generosity in listening to ideas from the Opposition and providing its spokespersons with figures and information. I note with interest the welcome statement by the Minister for Finance that the Opposition will be given access to any figures or information it requires.

The Government side does not have a monopoly on wisdom. Some of the ideas presented by the Opposition must be taken into account. A job of work remains to be done to convince people of the scale of the challenge facing us. This applies equally to parliamentarians and public representatives. Have we asked ourselves what €15 billion in savings will mean over four years? Will we all be shocked by the extent of the four-year plan that is vital for economic recovery? It is difficult to imagine €15 billion in cuts and tax increases.

The most important part of the four-year programme is economic growth. Cutting expenditure and taking a creative approach to the tax system present opportunities to secure economic growth. Without wishing to take a Thatcherite view, I believe the private sector would do better in some areas in which the State is involved. In doing so, it could contribute to economic growth and reduce costs to the State.

As the Minister for Social Protection, Deputy Éamon Ó Cuív, stated when he visited Kells in my constituency, we must protect the poor, the weak and the most vulnerable and examine in a creative manner those areas in which the private sector could do a better job than the State. We must focus specifically on areas of current expenditure in which the Government should not be involved. If the private sector could become involved in these areas, it would generate economic growth while reducing costs to taxpayers.

There is no doubt that we face massive problems in terms of our budgetary strategy for the coming years. The announcement of €15 billion in savings was shocking. I do not have any desire to make cuts for the sake of it. We must, with determination and without any doubt in our hearts, meet head on the challenge of bridging the gap of €15 billion over the next four years. To do otherwise would be to derail the hopes, dreams and aspirations of future generations.

We must treat the challenge facing us as an opportunity to get our house in order. We have to ensure we balance our books and avoid national bankruptcy. The prize at the end of the process will be to restore hope and confidence to citizens. While the task ahead is a cause of worry and concern, people should be conscious of the ultimate goal which, as the Minister stated, is the maintenance and improvement of our living standards.

Failure to reduce our deficit would undermine confidence in Ireland's ability to meet its obligations and responsibilities and delay a return to growth. It is vital that we do not delay because to do so would stall growth. On the other hand, getting our financial house in order will facilitate economic and employment growth.

We have choices to make. We can increase the tax burden on those who are working or we can cut expenditure. While neither option is palatable, the gap must be bridged. The Fianna Faíl Party, the Green Party, Independent Deputies, Fine Gael and the Labour Party have given a commitment to the European Commission and other European countries that the deficit will be reduced to 3%. This figure must remain our target and cuts in expenditure must be the main mechanism by which we achieve it, although there is scope for tax increases.

I concur with the Labour Party's proposal to introduce a higher rate of income tax of 48%. The problem, however, is that such a measure would close the gap by only 3%, leaving a balance of 97%. While the proposed initiative would grab headlines, the Government would still have 97% of the work to do to achieve the €15 billion target. Calls to tax the rich may sound great but the Labour Party's proposal would only solve 3% of the problem over four years. The party must accept that the problem is much broader than simply taxing the rich. If we had more rich people, perhaps we would not face such severe problems.

The Labour Party also points out that tax reliefs amount to €11 billion. However, tax credits or tax free allowances as they were known account for most of this figure. These reliefs are not shelters for hotels or property development but part of the tax code for ordinary people.

We should work together constructively to address the problem before us. The Government has taken a constructive approach and I welcome the fact that the Opposition is becoming more constructive by the day.

See this speech in context