Eamon Gilmore (Dún Laoghaire, Labour)

This is the same stuff we have been hearing about for almost two years.

The section on jobs is short on detail, particularly compared to the detail on cuts and tax increases. Where, for example, are the concrete numbers on training and employment programmes? The only numbers referred to are the small numbers already provided for. Where is there an investment strategy that uses what limited resources we do have? There are references to investment from the National Pensions Reserve Fund. Given the track record of the Government, it is clear that this is not serious and is not intended to happen. Instead, it is argued that the pensions reserve fund will buy Government bonds. That is code for saying we are about to liquidate what we can.

The proposals in the document are not fair and they are not balanced. Even after all the damage the Government has done, this plan provides a hard landing for PAYE workers and a soft landing for the friends of Fianna Fáil. There is no indication that those who have the most will contribute the most. There is no higher tax rate for the highest earners, no cap on high-level pensions and no cap on the highest level of public sector pay. Higher capital taxes are postponed until 2012, while PAYE taxpayers are hit immediately.

There is a cut in the minimum wage, for which no compelling logic is presented and for which there is little real demand. I can see an argument for a review of the way the joint labour committee system works and for looking, for example, at the issue of premium payments for Sunday working. However, what is the point in cutting a minimum wage that affects fewer than 50,000 people? This is being done for purely ideological reasons. If the same logic is applied to sectoral wage agreements, then what we will get is a low wage economy; but then, we have always known that the PDs in Fianna Fáil are in favour of a low wage economy.

In his article in the Financial Times, the Minister for Finance quotes Abraham Lincoln, but there is nothing of the "better angels of our nature" about this plan. While those on the minimum wage are being hit now, the high-flying tax exiles are exempt once more. In a reply to Deputy Shortall, the Minister for Finance admitted that the contributions sought from tax exiles in last year's budget will not yield a single cent before October 2011. After this budget, ordinary taxpayers and social welfare will have been hit twice but the tax exiles will continue to fly in and out of the country without the inconvenience of having to pay tax.

A number of proposals in the document, however, are in line with ideas the Labour Party has advanced. For years, Fianna Fáil have been denying that there is anything to be gained from cuts in tax expenditures. At last, the plan accepts that some €1.5 billion can be achieved from curtailing tax breaks and limiting relief for pension contributions, although again, we see no real commitment. If the Government was serious, there would be a proper minimum effect tax rate to ensure that everyone pays their fair share. There would also be a clear commitment to fairness in dealing with the pension relief issue, which has more to do with how much in total can be claimed in tax relief than the rate at which the relief is given.

It is also, unfortunately, necessary to curtail the capital programme, although it is disappointing that there is no alternative strategy set out to replace this spending from other sources, such as through a strategic investment bank, as has been proposed by the Labour Party. There are a number of innovative ideas for how this can be done, but the plan does not embrace any of them.

A further shift to environmental charges through the carbon levy is sensible, although the Government should now meet its commitment on fuel poverty.

There are also aspects of the plan that, once again, disappoint. For all the hype about the preparation of this document, and all the stories we have been told about the lengthy Cabinet meetings that went into preparing it, it contains the same old approach to public expenditure. What we are getting is butchery, not surgery. Once again, the Book of Estimates has been subjected to a crude hacking exercise rather than a truly comprehensive expenditure review.

What we need to see, and what should have happened two years ago, is a proper root and branch review of expenditure, along the lines of the Canadian model. Instead of sending in an external consultant to prepare a report, a proper expenditure review would be led by Ministers and Secretaries General. Instead of asking the question, "What can we cut?", you start with the question, "What are we trying to achieve?". You sit down and ask searching questions about what it is that Government is doing in providing the service, and how it is being provided. That is not an exercise that can be conducted from Opposition. It is an exercise that must be conducted by Government, where we look at a problem from first principles and redesign public expenditure accordingly. There is a reference in the document to such an exercise. It is called Government expenditure assessment, but it is no more than an aspiration.

Some spending cuts are particularly disappointing. The plan seeks €300 million in cuts from education but is unclear about how that will be achieved. It has been reported that this will mean a loss of 1,200 teaching posts, including language teachers for newcomer pupils and teachers for Traveller children. This is a fundamental U-turn on the so-called Green Party victory of 150 extra teachers promised in the revised programme for Government. They are now "deferred".

It is hard to see any logic in the proposed €200 charge for students in further education. Many of these students are from families with modest incomes, for whom this charge could be a real disincentive. What is the point in imposing a €200 annual registration charge when the alternative might be paying €200 per week to the same person on the dole? It is just one of the many mean-spirited elements of this plan. The concept of universal access to third level education is further eroded, with another hike in the, so-called, registration charge and a non-specific cut in student support.

The plan also sets targets for reductions in the social protection bill, but offers little in the way of specifics. The clear implication is that there will be significant cuts in rates and that these, too, will be front-loaded.

The most striking feature of all of this is that the Government has no mandate for this plan. It is negotiating a deal behind closed doors, that will bind the next Government in a fiscal and economic straitjacket for the duration of the IMF-EU programme. A number of commentators have suggested that there may be room for manoeuvre in how the programme is implemented and that the IMF and EU will focus only on headline targets and allow the next Government to negotiate on how those targets are achieved, but there is no certainty about that. Nor do we know anything concrete about the deal that is being done on the banks. We do not know what the cost of that deal will be or whether there will be burden sharing with the bondholders. We do not even know what kind of banking sector Ireland will have next year.

I quote Professor Philip Lane in this morning's edition of The Irish Times:

The plan is silent on the impact of the banking crisis on projected growth rates. While much will turn on the resolution plans that are set to be announced in the coming days, some discussion of this key issue would have been welcome.

This is a critical point. The plan is based on the idea that there is a strong underlying growth potential in the Irish economy, largely as a result of Ireland's capacity to export. I agree with that viewpoint. Ireland does have many strengths, and we do have a capacity to recover from this crisis. However, there is a lot about the way the Irish economy will perform that we do not know. We do not know how consumers will behave in the months and years ahead, if the rapid increase in the savings ratio will unwind and how quickly consumers will regain confidence. Nor do we know what impact the impaired banking system will have on the performance of the domestic economy. That uncertainty further underlines the need for caution in the way the budget adjustment is implemented. There is a capacity for more consumer spending and more investment activity once growth resumes and confidence is restored. However, these are highly uncertain, while the impact of withdrawing €6 billion from the economy is pretty clear-cut.

Unfortunately, we do not seem to have a Government that is capable of making that case on behalf of the Irish people. Of all the many gaps in this plan, perhaps the most striking is the lack of vision. In many ways, this plan is the instrument of surrender, offered up by a Government that is a beaten docket. It offers no bridge to the future and no sense of what we can achieve, as a people, if we come together to work our way out of this mess. It offers no bridge to the future. It offers no sense of what we can achieve, as a people, if we come together to work our way out of this mess.

We are not the first country to find ourselves in this kind of economic crisis. Even if the scale of the Irish disaster is particularly bad, we can still learn from others who have been through similar experiences. The lesson we can learn is that we must keep and protect our bridge to the future. We must know what it is that will underpin our prosperity and our sense of national unity in the days ahead. We must protect and defend it, and invest in it.

Much has been said in recent days about the 12.5% rate of corporation tax and the importance of keeping it. I agree with these comments. The Labour Party was instrumental in introducing that rate. However, there is more to Irish sovereignty and more to our future than the corporation tax rate.

We must understand that social solidarity is not an economic cost, but a vital economic foundation. What we needed to see in this plan was not just a sense of an economy, but of a society that offers our children a decent future. We need a realistic strategy on jobs, not just repetition of the same old stuff. We need a strategy with a strong commitment to building on Ireland's competitive strengths and investing in our future, supplying credit to firms, and getting people off the live register and into meaningful training and work experience. We did not get that because Fianna Fáil is incapable of it. We are living in the ruins of its discredited philosophy and policies.

The four year plan is the price of political failure. It is a heavy price indeed. The Taoiseach invites us to consider what kind of country we will have in 2014. I agree with all the objectives he set out for us today as to the kind of country we desire in 2014, a country with people back at work, with businesses working again, with confidence restored in our domestic economy and in our country among those abroad, with good quality public services, and with a reformed public service and a reformed body politic. We will only achieve this when the political change the country is crying out for comes about. I hope that will happen sooner rather than later.

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