Enda Kenny (Mayo, Fine Gael)
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I wish to register a protest. There was an opportunity for the Government to have made these announcements in the House, but we did not receive the statement until well after 3.30 p.m. despite the commitments given by the Taoiseach. A number of the measures announced by the Government today have been promoted by the Fine Gael Party for quite some time. I support the measures that have been mentioned, in particular, in respect of the huge expenditure on public relations and consultants within Departments, the element of ministerial and higher civil servants' pay, and the attempt to halt the shambles that has become evident in respect of the decentralisation programme. These matters have been referred to by Fine Gael for a number of years.

This three and a half page document appears to have been cobbled together in an ill thought out fashion since the half-yearly figures were produced by the Department of Finance last week. This is not about a fiscal crisis for the country; it is the consequence of economic mismanagement by a Government which has proven itself to be probably the worst Administration of the past 50 years. This document contains no vision, economic stimulation or anti-inflationary measures. It seems to me that the document is ill-thought out and has been cobbled together haphazardly.

Can the Taoiseach provide a breakdown of how the €440 million in savings will be apportioned between the broad categories referred to? As regards all Departments, State agencies and local authorities where a 3% payroll cut is to become effective by the end of next year, can the Taoiseach give a guarantee that no front line services will be affected outside the Department of Health and Children and the Department of Education and Science? Many of those Departments and local authorities provide front line services such as social welfare benefits, waste collection and waste management.

Brian Cowen (Laois-Offaly, Fianna Fail)
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First, I thank the Leader of the Opposition for indicating some measure of support for some of the initiatives the Government is taking in light of the changed economic circumstances in which we find ourselves. The Government certainly does not have ill-thought out policies. We are trying to ensure that we can work together within the social partnership process to meet the challenge we face. The Minister for Finance has outlined in broad terms the areas where his Department is satisfied that savings of up to €440 million can be achieved in the context of trying to work within agreed spending limits for 2008, with longer-term effects in 2009 of over €1 billion. This is the initial response by the Government to the Exchequer mid-year returns, which were published last week. I said in the House then that the appropriate way to proceed was for the Government to take decisions at Cabinet this morning on foot of what emerged and to have a full debate this week in the House on all the economic issues. Ministers will come into the House and deal with the matters as they affect their own particular Departments.

Enda Kenny (Mayo, Fine Gael)
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The Taoiseach has not given me a broad breakdown of the €440 million. Is he taking personal responsibility for this? Who will be responsible for a failure to meet the 3% reduction in the public payroll that he mentioned? The second page of the document states that the parameters of the exception for the health and education sector are to be agreed by the Departments concerned with the Department of Finance. We were told in March this year that every Department had carried out a detailed report on its fiscal position. Why is this document full of vague generalities? The statement on the second page means that there is no agreement between the Departments and that the Taoiseach has been unable to get one.

Of the €19 billion spent on the public payroll, €14 billion refers to health and education. That means that the Government will get €150 million from the 3% reduction outside health and education. Where is the remainder to come from? Is it a fact of life that the Government will not now reach the 0.54% of GNP target for overseas development aid? Is there not a robbery of the overseas aid development budget in this document? Can the Taoiseach give a guarantee that the Government will meet the figures set out for overseas development aid in last year's budget?

The Taoiseach stated that further expenditure on the acquisition of accommodation for decentralisation will await detailed consideration of the reports from the decentralisation implementation group. Does that mean that this is effectively dead unless a contract has been signed for land acquisition?

Brian Cowen (Laois-Offaly, Fianna Fail)
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Regarding the requirement to reduce the payroll bill by 3% by the end of 2009, we are looking at appropriate measures identified by local management in the light of local circumstances across Departments, State agencies and local authorities. The measures to be taken will include the control of premium pay, the management of vacancies, the organisation of work processes and the levels at which work is carried out, as well as the control of numbers through recruitment and other measures.

The contribution from the health and education sectors should be an agreed process with the Department of Finance, being mindful of the need to protect front line staff to the greatest possible extent, including teachers, special needs assistants, nurses and so on.

Brian Hayes (Dublin South West, Fine Gael)
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So it is not guaranteed.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The 3% in respect of all other Departments, State agencies and local authorities should yield €250 million by the end of 2009.

We made a commitment of 0.54% of GNP for 2008 and we intend to honour that. Reports are due from the decentralisation implementation group and no further decisions to acquire property should take place until this report is properly considered by the Government.

James Bannon (Longford-Westmeath, Fine Gael)
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That is a U-turn.

Eamon Gilmore (Dún Laoghaire, Labour)
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I watched the Taoiseach and the Minister for Finance deliver their press conference on the Internet. I saw them answer the questions posed by journalists and I looked through their statement. Whatever this is, it is not a plan for the economy. It is a back of the envelope book-keeping exercise. It contains a few prudent measures, some of which had been sought for some time from this side of the House. Examples include dropping the ministerial pay increase and measures relating to decentralisation, something about which I questioned the Taoiseach only a couple of weeks ago.

Most of the statement appears to be full of headline grabbers that appear to be designed more to restore political confidence in the Government than to restore confidence in the economy. The astonishing thing about it is that it says little or nothing to the 54,000 people who have lost their jobs over the past year. We are talking about an additional 2,668 people in Waterford, 3,389 in Cork and 1,250 in Blanchardstown. Forty three of the labour exchanges in this country have seen an increase in unemployment of more than 50% in the past 12 months. Most of that increase comes from job losses in the private sector, while there are hundreds of thousands of people who are worried about their jobs this evening. There is nothing in this plan that puts those people back to work or makes them secure in their employment. In fact, the only thing the Government provides is a plan to continue paying them the dole, rather than a plan to get them back to work.

What is the Government's plan to restore confidence in the economy and to get the private sector growing again? There is a proposal to reduce the payroll bill by 3% across every Department, State agency and local authority, with the exception of health and education. How much of the €1 billion the Government plans to save next year will be achieved by that 3% cut? How much of that 3% cut will be achieved by a reduction in the number of public servants who are working in those Departments? What assessment was done by the Government of the impact of such cuts on the public services for which those Departments are responsible?

Can we take it that today's announcement is the totality of the measures that will be announced by individual Departments, State agencies and local authorities? For example, will the 3% pay cut in the payroll in local authorities be made up by those authorities introducing additional charges or increasing existing charges?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The exercise in which we are engaged today was not about providing an economic plan for the country. We are trying to ensure today that we react responsibly and sensibly to the changed situation that arose as a result of the Exchequer returns last week. Based on the most up to date information available to the Department of Finance, it is clear that tax revenues will be down €3 billion. That being the case, we must make sure that we do whatever we can to ensure that we work within the spending limits we set ourselves. We must use this as the first phase in an exercise in devising a budgetary strategy for 2009 and beyond. I believe it is timely and appropriate to come forward with this set of measures within a week of the publication of the Exchequer returns. On the question of this not being directed to people at work, quite the contrary is true. The most important way for us to maintain levels of employment and return to potential growth rates in the economy as soon as possible is to have a sustainable public finance position. The public finance position has deteriorated this year. We are not alone in respect of that public finance deterioration. Deputies can look at any other country they wish where similar issues arise. It is precisely because we have in mind those who have lost their jobs or those who are at risk of losing their jobs that we are taking the corrective action as quickly as was possible. This is our assessment based on the information available at the moment.

Deputy Gilmore asked about the rest of the year beyond what we have done here. This is what we believe is the minimum required. The Government has also undertaken to continue to monitor on a monthly basis the ability of Departments to provide the savings that have been agreed this morning. He asked about what a 3% pay bill reduction by 2009 would provide. I would estimate from memory that it would be approximately €250 million. That is not important. What we are doing there is not applying a blunt uniform inflexible embargo instrument, but are providing the necessary manoeuvrability at local level for local management in the light of local circumstances to identify appropriate measures, which would include in some cases non-recruitment of non-frontline staff or non-essential staff, based on the present situation, or considering the question of premium pay, management of vacancies, the organisation of work processes etc.

We are seeking to ensure we devise a framework which is clear about the outcome we need to obtain, but is prepared to work with those with this difficult task ahead of them in a way that gives them the best possible means of achieving it according as they would determine given their knowledge of the local circumstances and for the purposes of avoiding a greater disruption of services than would otherwise be the case had the more blunt mechanism been utilised. That is the thinking behind what we have proposed today. It is not regarded as a panacea or the ultimate answer to all the challenges that face us. As I have said to colleagues — and they have agreed — we have further challenges in the context of the Estimates campaign in preparation for 2009. We need to be as imaginative and as determined regarding that wider exercise as, I am glad to say, the Government has proven itself to be this morning regarding this particular exercise.

Eamon Gilmore (Dún Laoghaire, Labour)
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I am somewhat surprised at the figure the Taoiseach has just given us for his estimate of the amount that would be saved by a 3% payroll reduction across Departments, State agencies and local authorities. The Taoiseach has advised that would come to €250 million.

Brian Cowen (Laois-Offaly, Fianna Fail)
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That is what it would be between now and the end of 2009.

Joan Burton (Dublin West, Labour)
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For a year and a half that is crazy.

Eamon Gilmore (Dún Laoghaire, Labour)
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Is the Taoiseach referring to the period between now and the end of 2009?

Brian Cowen (Laois-Offaly, Fianna Fail)
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We are starting the process now.

Eamon Gilmore (Dún Laoghaire, Labour)
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These figures do not add up.

Brian Cowen (Laois-Offaly, Fianna Fail)
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They do add up.

Eamon Gilmore (Dún Laoghaire, Labour)
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The Taoiseach has told us the Government would save €1 billion in 2009. If the 3% payroll reduction only comes to €250 million between now and the end of 2009, where on earth is the €750 million for the remainder of 2009 and the remainder of the €190 million for 2008 to come from? That does not stack up. Even at the rate the Government is placing advertisements with television stations, newspapers etc., cutting advertisements and consultants and all the other headline grabbers in all these measures will not add up to €750 million in 2009 plus an extra €190 million in 2008. That does not stack up. If a 3% cut in payroll comes to €250 million, the rest of his figures are a fairytale.

I again ask the Taoiseach to tell us how much of the €1 billion in 2009 will be made up by the 3% cut in payroll so that we can have some assessment? Clearly the information will come out in dribs and drabs as individual Ministers make individual announcements and individual decisions are made in individual local authorities etc. In order to get a general assessment as to the impact on the overall public service of the 3% cut in payroll, I again ask the Taoiseach to give us the total figure for that in 2009 as compared with the €1 billion the Government plans to save in 2009.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am referring to official documentation. Again I can confirm that the figure is €250 if my memory recall is correct.

Eamon Gilmore (Dún Laoghaire, Labour)
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From where will the other €750 million come?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Department of Finance knows the figures in this regard and the impact of the savings.

Damien English (Meath West, Fine Gael)
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Does the Taoiseach know?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The figure I gave the House is the correct figure. The €440 million savings we are seeking to provide for the remainder of this year have a full year effect in 2009. The present effect will last for six months during the remaining half of this year and will continue into 2009. I am being very clear with the House. It is not a question of dribs and drabs. I made it clear that on receiving the mid-year returns the Government would make decisions to seek to ensure we work within the expenditure limits we had set ourselves. We agreed to have a nine hour debate in the House, which is the right place for the debate. Rather than having it come out in dribs and drabs, the Ministers will come to the House tomorrow to outline what contribution can be made by individual Departments in respect of the efficiency savings that have been mentioned totalling approximately €240 million, the 3% payroll bill reduction we are seeking by 2009, and the various administrative and other savings that are being contemplated and upon which agreement and decisions have been made. It is a very clear position by Government.

This is just a phase in a process——

Eamon Gilmore (Dún Laoghaire, Labour)
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There is more to come.

Brian Cowen (Laois-Offaly, Fianna Fail)
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——of engagement by Government across all Departments for the purpose of having a sustainable budgetary strategy going into 2009 that will address the issues we need to address. Apart from this contention that there was some effort to fritter away resources, let us remind ourselves that we have been paying to invest in a capital budget out of current budget surpluses year on year under this Administration and previous Administrations, which confirms there was not a frittering away of money. Money was being used from current budget surpluses for productive purposes to build up the capacity of the economy. The proof of that is that despite not having growth in the economy in 2008, the economy is 30% bigger than it was in 2002 precisely because during the years from 2003 to 2007 we used the current budget surpluses for the purposes, in the main, of providing a capital programme which is greatly enhanced.

Charles Flanagan (Laois-Offaly, Fine Gael)
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PPARS.

Brian Cowen (Laois-Offaly, Fianna Fail)
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We are not alone in facing into these issues. Other countries are facing the very same global economic conditions.

Brian Hayes (Dublin South West, Fine Gael)
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Where are they? Is it Botswana or Malawi?

Brian Cowen (Laois-Offaly, Fianna Fail)
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We are well placed to deal with it as I have said all along. I believe we can have a sensible debate on the options and approaches. Let it be clear that the Government is discharging its responsibility in a timely, appropriate and responsible manner and will continue to do so.

Alan Shatter (Dublin South, Fine Gael)
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The Government created this.