Seán Fleming (Laois-Offaly, Fianna Fail)

I welcome the opportunity to contribute to this debate. While macroeconomics is the issue we are discussing today we must relate matters to the experiences of people and to their own circumstances. Everyone knows the country's level of income and taxation has dropped dramatically in recent years. It is almost akin to a house where two people were working but where one has lost their job. The household must maintain a level of expenditure while as much as 40% of the household income has gone. Approximately €50 billion in taxation income is now down to €30 billion or thereabouts. This is a serious reduction. The same basic question must be addressed, whether by an individual, a household or the public at large. When people wonder what we should do with the economy, I ask how much money that we have not got should be spend next year. I am not talking about figures in billions. I simply ask how much money that we have not got should we spend next year. If the people of Ireland feel that we should borrow €1,000 for every man, woman and child in the country we would have a €5 billion deficit. If we borrow €2,000 for every man, woman and child we would have a deficit of €10 billion. A borrowing of €3,000 for every man, woman and child would make a deficit of €15 billion. This year, we have borrowed €4,000 for every man, woman and child in the country and we have a deficit of €20 billion. In this calendar year, we are borrowing €4,000 for every man, woman and child in the country so that we can spend money we do not have. Can we continue to borrow money we do not have and run up interest rates? We all know the clear answer to that question.

Some say we should continue to borrow. Some social commentators say we should not try to cut back but should continue to borrow more than 3% of GDP beyond 2014 and run up debt for a longer period of time. The Government is committed to bringing the budget deficit down to 3% of GDP by 2014. This is based on increased taxes, reduction in expenditure and growth of about 2.75%. That is not an Irish Government figure. It is what the IMF is saying will be the approximate case for Ireland. The figure is not based solely on what is happening in the Irish economy because we have considerable exports and our growth will be based on growth in other countries. We cannot export extensively to countries that are not growing.

Some say we should ignore bondholders and those people who give us loans. I have heard this suggestion from across the House. That is like saying to a couple who come into a Deputy's clinic and tell of their big mortgage and the need to borrow more that they should ignore the bank and the mortgage and that their loans will go away. Saying we should ignore bondholders is, in layman's English, saying one should ignore personal debts. One cannot do that. Especially if we have to continue to borrow, we cannot walk away from the commitments we have already incurred.

Some aspects of this debate have been unreal. We have a budget deficit of €20 billion and all the main parties have agreed that we should get our budget deficit down to 3% of GDP by 2014. GDP is of the order of €150 billion, bringing our deficit down to about €5 billion in 2014. We are starting at €20 billion and we have all agreed to get to €5 billion, yet people are saying they do not agree with the figure of €15 billion. A child of eight in second class in school could tell us that if one has to go from €20 billion, which we are at today, to €5 billion in 2014, which all the major parties have agreed, the difference is €15 billion. A number of people are now refusing to accept this €15 billion figure. The sums being done on the other side of the House suggest that we can go from €20 billion to €5 billion with an adjustment of €9.5 billion. Perhaps Opposition Deputies are using a new type of mathematics but it is not an approach the IMF will find credible.

Growth is based on our exports. Agriculture and food have done well this year and tourism and the smart economy are improving enormously. The new wind farms being developed will help our overall trade balance by allowing us to reduce our dependence on imported fossil fuels. We will also have to stimulate domestic demand, however.

If the Government does nothing else over the next 12 months, it should investigate whether the money paid on the jobseeker's allowance can be translated into supporting people in work rather than paying them to remain unemployed. Both employers and those in receipt of the jobseeker's allowance would be happier if people were in work, and all of us would benefit from such an outcome.

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