Róisín Shortall (Dublin North West, Labour)

The two-day Dáil sitting this week has been devoted exclusively to these statements on the macro-economic and fiscal outlook. I must ask why this is happening. We have been provided with none of the critical budgetary data and the Government has not provided any indication of the approach it intends to take to the budget, so why is it happening? The only explanation that makes any sense is that it is part of the cynical political game the Government is playing to try to suck in all political parties and to somehow spread the blame for the catastrophic mess it has created. It desperately tries to choreograph the scenario which implicates all political parties in some kind of phoney consensus to hatch a secret plan to somehow sort out the budget problems, not just for this year but for the next four years. The Labour Party is having none of that.

Fianna Fáil created this problem through its reckless mismanagement of the economy over the past decade. It has wrecked people's lives and burdened the Irish people with massive debts which will be with us for at least a generation. The Labour Party will not bail out the Government. It is time for the Government to do the decent thing and to get out and give others a chance to put things right. The people who caused this recession are incapable of bringing about a recovery. The Government does not have the authority or the ability to pass a budget this year, let alone to produce a four-year plan. The members of the Government have no mandate for a four-year plan. They will not be in government to implement such a plan and they should do the patriotic thing now and go to the country. For everyone's sake, they should allow a new Government with a fresh mandate to bring about recovery.

The prevailing feeling among the public now is fear - fear for their jobs, their homes, the welfare of their families and about what the Government will do to them in the budget in December. That fear is a self-fulfilling prophecy as it stops people from living any kind of normal life, stops them spending and destroys consumer confidence. Of course, the mishandling of the economy and the ruinous bank bailout have destroyed confidence in the money markets also. We are asked to participate in this debate yet there has been a marked information deficit when it comes to the Government providing accurate data. It seeks the Opposition's support yet it refuses to provide the basic economic information to accurately assess the current situation.

It was interesting to listen to the Minister, Deputy Ryan, earlier. He had a wholly different rationale for the kind of figures that are being tossed about at present. It is the first time we have heard that type of rationale or explanation as to why the deficit has suddenly jumped from €7.5 billion to €15 billion. Is that rationale shared by anybody else at the Cabinet table because today is the first time we have heard it?

There is no indication that the Government will consider an open budgetary process as suggested by Deputy Rabbitte. It seems intent on refusing to discuss the situation in an honest and open manner. When one considers the contribution made by the Minister, Deputy Brian Lenihan, yesterday, he seemed far more interested in knocking any proposals coming from either the Labour Party or anybody else on the Opposition benches than in listening in any kind of constructive manner to the proposals and suggestions being made. This would seem to be what the game is about as far as the Government is concerned - it is about sucking in the Opposition parties and then knocking them. All of the Government's forecasts to date have turned out to be very wide of the mark. There is no reason whatsoever to think it is any more competent or honest about it now.

Another point concerns the approach due to be taken in the budget. I always worry when I hear Ministers say their priority is to protect the vulnerable because I know from bitter experience they will actually do the opposite. The coded language which they regularly use, such as "We are all in this together" or "Everyone must share the burden", inevitably means that those on low and modest incomes will take the brunt of the cuts. Fianna Fáil has always looked after the privileged and protected the golden circle. It does this in good times and it will undoubtedly do it in bad times too.

In approaching this budget, not only is there a major hole in the public finances due to the mismanagement of the economy over the past decade but there is a major millstone around our necks with a €1.5 billion interest bill to be met as a result of the bank guarantee every year for up to 15 years. We know that bridging that gap will be crippling but front-loading the adjustment to the extent suggested by some Government spokespersons is simply not sustainable. The argument is that we must convince the markets we are serious when we go back to borrowing in January. However, it can hardly be seen as serious or credible to seek cuts that are so severe they are utterly deflationary and destroy all prospect of growth. What if front-loading does not work? Will the Minister, Deputy Brian Lenihan, be coming back and talking about a €30 billion adjustment next year? He has been wrong so often before. What if he is completely wrong on this occasion too?

The truth is that the ratings agencies and the bond markets expect to see a viable plan which is capable of leading this country to recovery. Critical to this is that growth is achieved. They need to see that our economy is viable and what they need to see most in order to create confidence is that there is a competent political leadership in the country. The Labour Party believes that an even mix of spending cuts and taxation measures is required in order to balance the key objectives of achieving growth, protecting employment and reducing the deficit. It concerns me greatly to hear the Ministers talk about cutting welfare rates and taxing the working poor. Not only would it be completely unjust to target those on the lowest levels of income, it would make no economic sense whatsoever. People on low incomes have no choice but to spend their money because they cannot afford to save. Cutting their incomes means depressing consumer spending even further and we simply cannot afford that.

It is very telling that the Government has not ruled out cutting the State pension yet it shows no appetite at all for tackling the obscenely generous pension tax breaks for the wealthy.

How can the Government defend circumstances in which the best off in society can put away pension funds of €5.4 million and, on retirement, take out €1.3 million in a lump sum and pay no tax whatsoever thereon. That this was ever allowed to happen is a scandal. That the Government allows it to continue in the current economic circumstances is completely indefensible, yet neither the Minister for Finance nor his colleagues has ever mentioned this sweetheart arrangement for the wealthy.

The Government spends approximately €3 billion on pension tax reliefs, the vast bulk of which apply to the top 20% of earners. This seems to be a very well-kept secret. Strangely, the Revenue Commissioners do not even collect data on it. Incredibly, the Department of Finance denies any knowledge at all of the costs involved. I have been looking for some of the costs for the past three years. The Department does not collect data. In the most recent reply I received last week to a parliamentary question on this subject, I was told, incredibly, that the Department is to approach the pensions industry to see whether it can put a rough figure on the cost to the State of these generous tax reliefs.

There is a wide range of other tax breaks, all designed to assist the wealthy in avoiding their responsibility to pay tax. There are 126,000 people in Ireland earning salaries in excess of €100,000. Why do we hear nothing from any of the Ministers on the need to implement a fair taxation system such that we can target the serious wealth that still exists in this country in order to achieve fairness in the approach to bridging the budget gap? Unfortunately, we only hear about tackling people on low incomes and hitting them yet again. We know what the Government is and that it has always been a supporter of the wealthiest. It has no moral authority to introduce a budget this year or in any of the coming years. The only solution is for it to do the decent thing, go to the country and allow the public to decide.

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