Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Ba mhaith liom mo chuid ama a roinnt leis na Teachtaí Upton agus Broughan.

John O'Donoghue (Kerry South, Ceann Comhairle)
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An bhfuil sé sin aontaithe? Aontaithe.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Tá sé tábhachtach gur féidir leis an méid is mó Teachtaí agus is féidir, labhairt ar an ábhar rí-thábhachtach seo — geilleagar agus todhchaí na tíre seo. Inné, d'ímpigh mo chomhghleacaí, an Teachta Morgan, ar an Rialtas an méid atá le déanamh acu go gearr-théarmach chun an gheilleagair a shocrú, a leagan amach go mion agus go díreach. Níl na mionphointí mínithe dúinn go fóill. Cad atá molta ag an Rialtas go meán-téarmach i dtaca le plean tárrthála chun iomaíochta an gheilleagair a choinneáil? Cad iad na céimithe a thógfar láithreach chun oibrithe na tíre seo a athoiliúint — scileanna breise a thabhairt dóibh — os rud é nach bhfuil postanna ann dóibh go léir? Tá mé chun na héilimh sin a chruthú athuair inniu. Tá súil agam go mbeidh Airí in ann an méid atá romhainn, maidir leis an ngeillagar, a leagan amach go mion agus go díreach.

The cutbacks announced by the Minister for Finance and the Taoiseach on Tuesday were scant in detail and economically and fiscally short-sighted and they do not address the fundamental contractions in the economy due to inept policy decisions by successive Fianna Fáil-led Governments. Refusing to link investment in public services with GDP, as is the practice in other European economies, has led to the State's substantial deficiencies in public infrastructure, namely, school buildings, hospitals, social housing and public transport.

During the past two days, Minister after Minister traipsed through the House and minimised the current economic challenges while, in the same breath, defending their low-brow policy making of the past ten years that has led to this situation. Suddenly, the A, B, C of sound fiscal management ignored to date is the order of the day. Value for money in public expenditure should always have been a fundamental element of the State's budget management, but clearly it was not.

The Taoiseach stated that we are in the same boat as the rest of Europe, but we are not. Our economic decline is far more acute because Fianna Fáil and its Government partners believed it made sense to draw the State's income primarily from consumption and property. They have left the Exchequer in the unenviable position of being precariously over-dependent on revenue from both sectors. For this reason, the State is experiencing an acute decline in public finances.

In addition to being unable to manage incoming money, the Government has been equally inept in managing the money going out. Tuesday's measures testify to the wastage and inefficiencies that have been normal practice to date. Only now when our back is against the wall does the Government propose to deal with tribunal costs, project cost overruns and the absence of fixed pricing. One need not be an economist to know that value for money must always be central when public money is being spent.

Despite all the obvious failures in managing the public purse, the Government appears intent on continuing its record of bad practice. Assertions that the most vulnerable will not bear the brunt of the proposed cuts are not credible because experience tells us otherwise. For example, the Minister of State, Deputy Peter Power, has defended the clawing back of €45 million allocated to overseas development aid, justifying the decision by stating we have reached our overseas aid target for 2008. This is an appalling tack to take, considering the global food crisis, which is hitting the developing world the hardest. If there is extra in the overseas aid kitty, it should go to whom it was intended. It is also worth reminding the Government that the UN target of 0.7% of GDP to be allocated to overseas aid by 2012 is a revised target because Ireland changed it a number of years ago. If we have reached this year's target of 0.54% and if there is extra money, let us give it to those for whom it was intended and perhaps we will achieve the target of 0.7% this time.

In May of this year, preceding a meeting of EU development Ministers, NGOs from all 27 member states launched a report entitled No time to waste: European governments behind schedule on aid quality and quantity. If other European governments are behind, those of us in front have a responsibility to lead by example. The Irish Association of Non-Governmental Development Organisations, Dóchas, stated at the time of the launch:

In 2005, European governments promised with great fanfare to increase overseas aid. The targets they set themselves are being missed, and the need to step up international aid is becoming more and more urgent.

Dóchas is correct in its assertion. According to the UN Food and Agriculture Organisation, global prices of staple foods have risen by more than 40% or more in some cases in the past year, causing shortages of food, food hoarding and, in some instances, rioting for food in developing countries. Rice prices alone have risen by 76% between December 2007 and April of this year. While the global poorest of the poor have to fight for their food, the Government is withholding overseas aid budget allocations because it has reached an interim target figure. Shame on the Government.

With regard to how Government cuts will affect public services in this State, scant detail has been given with respect to how the Government will achieve €440 million in savings. How exactly will the 3% cut in payroll costs be achieved in the various Departments? What impacts will this have on service delivery? Asserting that frontline services will not be affected by cutbacks is simply not credible in the absence of detailed data.

How, for example, will the 3% cut affect the numbers of gardaí on the street and the provision of support services to tackle drug addiction? Only this week figures were released which show a record number of heroin addicts seeking treatment. Despite that, in the Dublin mid-Leinster area the HSE has already enforced a 1% cut in funding for addiction services. Will the 3% cut be on top of that? The 1% cut is affecting delivery of services already under strain.

How many gardaí will be taken off the streets or away from Garda operations that are tackling serious drug and gun crime? We need the data to evaluate what the Minister has put in front of us. Will Garda overtime be further cut? If so, this is a major decision that will have serious consequences, given that many of the major Garda operations against gun and drug crime in this city, such as Operation Anvil, are dependent upon Garda overtime.

Cutbacks in key economic and social infrastructure projects will result in the period of recession we are now experiencing being prolonged. Infrastructure has a critical economic and productivity value and must be protected and in turn delivered. The social cost of not doing so is immeasurable. Regeneration plans for the worst off areas in Dublin city are already falling apart with the announcement this week that the Bernard McNamara consortium is pulling out of four key projects. The publishing of the master plan for regeneration projects in Limerick has been delayed, which does not bode well for delivery of the projects. My Limerick party colleague, Mr. Maurice Quinlivan, is meeting the Limerick regeneration boards today to seek a commitment on the delivery of those projects on budget and on time.

Mary Upton (Dublin South Central, Labour)
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There has been much discussion about protecting the weakest and most vulnerable in society. Minister after Minister has come into the House to give assurances that they will be protected. I need to know how this protection will be ensured given the likelihood of significant cuts. Not alone will they be unprotected, they are already suffering. There is a need for home help but not alone is the huge demand for home help not being met, in the case of existing services the hours are being cut back. I have been contacted by a large number of concerned constituents about this in recent weeks. I have noticed a subtle shift of emphasis in regard to the granting of medical cards, again in regard to the people most in need of them. If the people we describe as most in need are not being protected now, how will they be protected when the cuts kick in? We were told that money for health and education would effectively be ring-fenced. However, already in the health area people are clearly not being protected. I worry about the day when the cuts kick in. We now know that in the case of health, money has not been ring-fenced.

During Private Members' business on the past two evenings we debated at length the pulling out of the Bernard McNamara consortium from public private partnerships. One of those directly affects St. Michael's Estate in my constituency. For ten years this area has been waiting for that development to go ahead. It has been brought forward and moved back and there have been various shifts in regard to it. Now, we know for sure that the developer is gone and these people are left in limbo. What is the plan in regard to them? We debated this and the blame is being sprinkled all over the place, but ultimately it comes back to the Government. Again, we are moving into lean economic times and cuts. When times were good we could not deliver on the critical housing needs of this very vulnerable sector. What hope do we have now that the money is no longer available? I would like a commitment, not platitudes. Over the past two evenings we heard nothing but platitudes from every Government speaker and promises were made to take effective action. Let us hear what that action will be and how it will be delivered.

There is an ever-growing number of schools in my constituency that are in need of serious refurbishment or new buildings. Some of those needs date back ten years. Inchicore national school, Scoil Mhuire Óg in Crumlin, Loreto secondary school and, most recently, Our Lady's in Templeogue have been in touch with me and my constituency colleagues. All of them are on a waiting list and all have received a "cut and paste" answer from the Minister to the effect that he will be in touch. That is all they are being told. We are told there will be no cuts in education. Can we be assured of the capital programme that is so urgently needed for those schools and for the parents and pupils who have waited patiently?

We are told there is no need to panic. In regard to the threat of job losses, if one receives the number of requests I have received from people looking for advice on financial management and being sent on to MABS, one might start thinking that perhaps there is reason to panic, to be concerned about what people will do when they are unemployed

Last week I obtained from my colleague, Deputy Shortall, the figures relating to the numbers on the live register for last year and this year. In two of the social welfare offices that service my constituency there was an increase of 35% and 27%, respectively, for those two years. The total number on the live register from the two offices was an extra 1,682 compared to the same time last year. This information relates to a part of the city that was neglected and was just beginning to improve. If we are to have chronic unemployment, what chance is there for those people? What is the Government doing to ensure those people have a future to look forward to?

I want to refer to the cuts in arts, sport and tourism. The savings here come to a proposed €6 million. The capital programme for the National Sports Campus Development Authority is being deferred. What will happen to the contracts that were signed in April with the design team and the project management team?

Tommy Broughan (Dublin North East, Labour)
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I am pleased to have an opportunity to speak on this important motion. I am also pleased to see the Minister of State at the Department of Finance, Deputy Mansergh, who should be retitled the "Minister for Cutbacks", in the Chamber. I understand he will have a central role in the paring back of many projects throughout the public service.

If we are serious about cutting out flab and waste, the first action the Government should take is to reconsider the position of the 20 Ministers of State. There is no case to be made for the continuation of six or seven of those offices, along with their associated entourage of officials. The three Ministers of State currently in the Chamber, Deputies Mansergh, Hoctor and Curran, have useful roles, but the offices of ten to 13 of their colleagues are a perfect representation of the type of waste and flab the Government has overseen. If the Minister for Finance, Deputy Brian Lenihan, and the "Minister for Cutbacks", Deputy Mansergh, are serious about reform, they should give serious consideration to abolishing these offices of State, which would yield a saving of at least €6 million or €7 million.

The more we have learned in recent days about the Government's new economic measures, the clearer it has become that there will be a vicious assault on current spending and that major capital projects are under serious threat. We have been assured by a succession of Ministers that the focus of all savings will be a reduction in wasteful spending. However, it is becoming clear that essential services, including in health and education, are being assailed on all sides by the Government. Astonishingly, given the great pressures on the health service, €135 million is being cut from the health budget, with more than €100 million of that coming from the further deferral of the already much delayed fair deal scheme.

Many citizens are already experiencing the harsh effects of current Government policies, such as the recruitment freeze in the public sector, and of Government mismanagement of resources in the health and education sectors. In the third level sector, where investment for the future is vital, the Government is shamefully withdrawing resources. Some years ago, the former Minister for Finance, Mr. Charlie McCreevy, told us of his intention to write a book setting out his achievements as represented by his successive budgets of the late 1990s and the early part of this century. The most recent chapters of such a book would read as a horror story for the citizens of this State as the consequences of the budgets introduced by the Taoiseach in his previous capacity as Minister for Finance become apparent.

We have learned belatedly that at least €22 million will be slashed from the budget of the Department of Transport. The Minister, Deputy Dempsey, must explain whether these savings will be taken from road safety initiatives such as the promised investment in speed cameras and enhanced testing for drink and drug driving. Many Deputies attended a meeting in Kildare Street yesterday with all the Transport 21 agencies to hear about their plans for the future. There should be no delay in the delivery of critical capital projects such as metro north, the Dublin rail interconnector, the western rail corridor, the maintenance and expansion of the Bus Éireann and Dublin Bus fleets and the construction of Luas systems in Cork, Limerick and Galway. Many stakeholders fear these initiatives are under serious threat.

It is of great concern that the Taoiseach declined in recent days to offer a commitment to the House that the metro north project will be not delayed or abandoned as a consequence of the recession which he engineered. There has been no announcement in this regard but there is an ongoing suspicion that, with a nod and a wink, metro north, the western rail corridor and other major transport projects will be severely curtailed. The early planning stages for the interconnector, metro north and other projects must take place in the next year or two. However, they could easily be delayed by the Government through the tendering and other processes.

I acknowledge there are grave external factors relating to the "Cowen recession", as I have called it for some months. I accept, for example, that the sub-prime crisis in the United States has had a grave effect on international liquidity. I recognise too that we are at an epoch-changing watershed in regard to the price of oil. We in this House and many others commentators, with the exception of Mr. Paul Tansey of The Irish Times, have not given enough attention to the role of the euro in the current difficulties. The European harmonised index of consumer prices points to the striking fact that 80% of our loss of competitiveness arises from our membership of the eurozone.

It is incumbent on this House to ensure there is no slashing of the funding for key transport infrastructural developments. Most important, the impact of this "Cowen recession" must not be imposed on those least able to bear it, particularly in the areas of health and education.

Noel O'Flynn (Cork North Central, Fianna Fail)
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I remind Members that under Standing Orders, Members must refer to Ministers or officeholders by their correct title and not by any other title or name.

Martin Mansergh (Tipperary South, Fianna Fail)
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I propose to share time with Deputies Áine Brady and Curran.

Noel O'Flynn (Cork North Central, Fianna Fail)
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Is that agreed? Agreed.

Martin Mansergh (Tipperary South, Fianna Fail)
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The last 21 years have been a remarkable period of economic and social progress which has been sustained for longer than anyone dared to hope. In his previous capacity as Minister for Finance for the past four years, the Taoiseach shares the credit for this with his colleagues, predecessors, the social partners and the Irish people as a whole.

Employment now stands at 2.1 million compared with a figure of 1.1 million 20 years ago. Net general Government debt has decreased in that period from some 122% to 12% of GDP. Living standards, quality of infrastructure and social provision have all greatly improved. However, we have not abolished the economic cycle. Like Ireland, many countries are experiencing economic turbulence. The challenge is to adjust our sails in time so that we can protect and consolidate our gains and be ready for when conditions improve.

The Office of Public Works, which is attached to the Department of Finance, is making capital savings of €75 million, or 11%, from a total gross budget of €680 million. Some €35 million of this will come under the heading of purchase of sites and buildings. This saving has been identified from within the €82.5 million allocation for that purpose. Some €25 million will be saved from the allocation for capital projects. In the normal course of such a large building programme, some projects will be delayed because of the planning and tendering process. Recent examples include the headquarters building for the Department of Community, Rural and Gaeltacht Affairs at Knock and the Leinster House refurbishment project. In addition, a saving of €15 million will be achieved under the flood relief works programme. My officials are examining appropriate measures to meet the Government's targets of achieving savings on payroll of 3% by the end of 2009. I have also asked them to examine other areas of expenditure such as consultancies, advertisement and public relations to identify opportunities for savings this and next year.

Yesterday's announcement by the Minister for Finance that there will be a pause in the acquisition of accommodation for decentralisation is a prudent step which provides the Government with the opportunity to consider in detail two forthcoming reports on the implementation of the programme. The Government recently agreed to an examination by the decentralisation implementation group, DIG, of the feasibility of phased moves by the State agencies. This report is being finalised and is expected to be available shortly. The Government also asked the implementation group of Secretaries General to examine the governmental and cross-departmental issues arising from the need to provide facilities for Ministers, Ministers of State and officials while in Dublin on business. This report is being finalised and is also expected to be available shortly. It is likely that further implementation of the programme will be done over a more extended timeframe. The precise implications will be clearer when the reports to which I referred are to hand.

Commitments already entered into in regard to the provision of permanent accommodation under the decentralisation programme will be fully honoured. Where the building of property has commenced or where contracts to build are in place, work on such properties will be advanced and the programme of decentralisation in regard to those properties will continue. Commitments already entered into in terms of the provision of advance or temporary accommodation will also be fully honoured. The decentralisation implementation group has a sanctioning process in place to consider the case for the provision of advance parties and will continue to assess each proposal on its merits.

It is not widely understood that there has been a positive net financial return from decentralisation and other related property transactions. Capital expenditure to date by the OPW in the purchase of sites and procurement of buildings is in the order of €215 million. Against this, in recent years, the OPW has realised in the order of €575 million for the Exchequer. Sales of surplus property on the market amounted to the sum of €375 million. The OPW has also entered into several joint venture deals with owners of adjoining properties to unlock the value of the combined properties concerned in time for the next commercial property upswing. The net present value of these deals so far totals a minimum of €125 million, which is far in excess of the value of the properties had they been sold outright. Similarly, the value of property transferred to the affordable housing initiative was in the region of €75 million. The OPW has always sought to capitalise, where it can, on the rising property values of the last few years and we will continue to maximise the State's interest in obtaining excellent value for taxpayers' money.

The Minister for Finance has asked me to establish a joint public procurement operation between the Office of Public Works and the Department of Finance. I will be progressing this as a matter of urgency. We will be bringing together officials from both organisations to drive a programme of reform and to produce a business plan to meet the Government's targets in the areas of procurement. My intention is to bring this innovative plan with specific concrete proposals for savings to Government in the autumn.

The Minister for Finance has asked that I target a minimum saving of €50 million for 2009. In this regard, I will be looking critically at public expenditure on procurement across a wide range of sectors. The range of categories is quite large involving €15 billion to €17 billion per annum including some €8 billion to €10 billion per annum on goods and services. This will present a serious challenge to all concerned in this process. Current levels of expenditure present us with serious opportunities to effect substantial savings in procurement through applying more efficient techniques, through a process of aggregation and a more effective approach to procurement methodologies.

All areas will be critically analysed to ascertain where savings can be achieved, mindful of the need to maintain a high level of service across the sectors involved. I will ask the group to develop proposals in the areas of IT, hardware and software, fleet purchase and fleet management, energy, fuels, stationery, consultancies, uniforms and furniture.

My review group will actively consider and bring forward proposals for the improvement of the public sector approach to specialist and general procurement. There must be a strong qualified cadre of staff dealing with this function, with detailed market knowledge and with the ability to employ hard-nosed techniques and approaches in this competitive market. I have no doubt that at least €50 million of savings will be identified by the autumn. The group will also progress the development of a business plan to reform public procurement and to assist other Departments and public service bodies in delivering further savings over the longer term.

Following a comprehensive review of progress to date on the various work elements provided for flood relief, I now anticipate that the actual expenditure for the year will be €35 million, or a saving of €15 million. This reduction in the predicted outturn generally reflects small delays in the progress of projects rather than the postponement or abandonment of any scheme. These delays arise for a variety of reasons including the complexity of some projects, more time required for the assessment of tenders than anticipated and compliance with approval procedures.

Contractors are already on site constructing flood relief schemes in Clonmel, Ennis and Mallow. Subject to the completion of tender and approval procedures, works will commence in Carlow, Fermoy and Waterford later this year. The single most significant saving of €4.5 million to €5 million arises from the fact that a project, which OPW was investigating with Ordnance Survey Ireland, to develop a digital terrain map of large areas of the country, is not now considered viable.

No one should be in any doubt about the value of the arts as an integral part of the economy and society, not an optional or expendable extra. Funding to the Arts Council has increased by over 70% and now stands at €82 million over the past six years, while spending on the whole range of arts and culture, including film, national cultural institutions and the capital arts infrastructure, amounts to over €220 million.

Substantial employment, community participation and a strong tourism and educational dimension are involved. All this should be borne in mind when assessing the support that this Government continues to give to the sector in more challenging times. Overall, the bottom line is to keep moving forward where we can while limiting any avoidable damage. Our resilience is undoubtedly being tested but I have no doubt that we will pass the test.

Some comments were made by Deputy Broughan on the number of Ministers of State. I am sure he was in the House when the numbers were expanded at the request of the Labour Party which also, for the first time, employed a full complement of programme managers and advisers. I always find such comments to be more credible if they are a pledge by the party concerned about what it will do on the subject when it next finds itself in Government.

Áine Brady (Kildare North, Fianna Fail)
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Tá an-áthas orm an deis seo a ghlacadh labhairt faoi chursaí eacnamaíochta na tíre faoi láthair. Tá an díospóireacht seo an-tábhachtach don sochaí go ginearálta.

This debate is taking place against the backdrop of an increasingly difficult domestic and international economic environment. While we face short-term problems which require action, the future for the economy remains positive. While global economic conditions are very different to what they were last year, it is important that as a country we take pride in the significant achievements of the past, while setting objectives to secure future economic growth.

The National Economic and Social Council has described Ireland's economy in the early 21st century as one that is "in transition to a new phase in its development". While any such transition would be a challenge, a number of factors have combined this year to make the management of this transition all the more challenging. The normalisation of new house building, which was signalled for some time, is welcome but the scale and speed of this adjustment is a matter of concern. The rise in global commodity prices, especially oil and food, is causing major concern. The euro has appreciated against the dollar and sterling, which impairs our ability to compete in these markets. We are not alone, however, as other European countries and the United States are experiencing similar challenges. We must now take corrective steps and I welcome the Government's action this week to restore confidence in the public finances.

It is important that we do not talk down the economy. It is clear that the national development plan is tackling infrastructural deficits with significant investment in the road and rail network. Resources are also being provided with the upskilling, training and education our workforce needs. The NDP is also supporting the enterprise and innovation sectors. In my own constituency, NUI Maynooth has focused on innovation as it charts a new course for the college. Its work in setting up the Innovation Value Institute ensures that it will become a relevant knowledge provider to local industries. NUI Maynooth now has increased links with many multinationals and was recently appointed an education partner to Intel. Nurturing relationships between knowledge providers and industries will assist with overall competitiveness and ensure that we maintain and attract industries to Ireland. Colleges are now working hand-in-glove with industry to ensure that the research they are pursuing is relevant. They are being supported, in part, by the Government-funded Science Foundation Ireland.

The recent success of Abbott's plant in Clonmel, which last week won approval from the US Food and Drug Administration to sell its stent in the US market, has almost gone unnoticed. However, the continued success in attracting such businesses to Ireland is down to a number of positive factors, including our track record in regulatory compliance, a talented labour supply and a prudent corporate tax policy.

We now apply the lowest tax wedge on workers' incomes in the OECD. In addition, a competitive corporation tax rate coupled with a young, educated and committed workforce, has led investors to locate here. Companies such as Intel, HP and Wyeth in my own constituency are a testament to this successful policy mix at play, which is delivering both for enterprises and the country at large.

I make these points in order to establish a balance in this debate. The economy is facing challenges, but it is not closing down. We need to take corrective action for long-term gain. We also need to develop policies which will have the potential to stimulate the economy. Continued investment in infrastructure will help to keep people at work and improve competitiveness. With this in mind, I feel strongly that the Government should continue a PPP-type programme to build schools where required. Now might be the time for the Government to obtain best value from the private sector, given the spare capacity that exists in the construction industry.

In my own constituency, we are in need of further investment in school buildings. Some of the required buildings could be bundled together for such a PPP programme, making it attractive for the private sector but, more importantly, good value for taxpayers.

I welcome the commitment by the Taoiseach and the Minister for Social and Family Affairs, Deputy Mary Hanafin, to ensure that the less well-off are not negatively affected by the proposed corrective measures. Carers, older people and the disabled will be the focus of concern for all Members of this House, so the Government's commitment in this area is welcome.

The policies being adopted will ensure that we are well equipped to overcome these problems. We are investing in human capital and infrastructure to secure future growth, as well as pursuing policies that protect the weaker in society.

I commend the Government motion to the House.

John Curran (Dublin Mid West, Fianna Fail)
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I welcome the opportunity to contribute briefly to this debate today. I listened to the contributions of some of the previous speakers on the opposite side, in which they apportion blame to the Government for the economic situation the country faces. Many of them have commented that we have simply squandered the boom. Where have they been for the past decade or more? Ireland has transformed radically in that period.

Between 1997 and 2007 we halved the national debt. Back then, €1 in every €6 was used to service the national debt, whereas now it is nearly €1 in €30. When Luas was first mooted, it was considered pie in the sky. Today it is probably the best transport system in Dublin, with other areas looking for exactly the same. Deputy Upton spoke about the lack of development of certain projects in her area. We all recognise that there are problems, but we should acknowledge the progress, be it on schools or rail stations that have been built in my area or upgraded major roads, such as the N7, the N4 and the M50. The surplus generated over the last decade has been spent on those projects so it has not been squandered. We have also increased the number of gardaí and teachers and introduced SNAs, which did not exist a decade ago. It is unfair to say that the boom was squandered. We invested in it wisely.

The economy faces challenging times, but it is worth noting that the economy today is much better prepared than in the 1980s. There are more than 2 million people working in this country. Regrettably, unemployment is rising, but the figures compare favourably with the European average. We should not talk ourselves into a recession. The real challenge over the next two years is about how we manage the situation so that we can take advantage of global changes. Oil prices, sub-prime mortgages and so on have had a negative effect, but not just on the Irish economy.

The Government recently spelled out its changes in spending. The Minister for Community, Rural and Gaeltacht Affairs said yesterday that all savings relate to administrative pay, as well as to agencies under the remit of his Department. He also stated that there will be no change in the amount of money available for the various programmes. The section of the Department under my control, namely, community and voluntary groups and drugs task forces, deals with the small groups that benefit directly from that funding. It is important that they are aware that the commitment given earlier in the year remains. As there is an onus on the Department to get the best value for money, those agencies that receive money must ensure that they are playing their part too. The programmes that fall under my remit will remain unchanged. The Minister and I, with senior staff of the Department, are going through everything line by line to ensure that the savings required will be achieved through the administrative side, not through programmes.

I commend the Government motion to the House.

Leo Varadkar (Dublin West, Fine Gael)
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I would like to share time with Deputy Reilly.

I thank the Leas-Cheann Comhairle for allowing me the opportunity to speak on this motion. There has been a debate as to whether this has been an international downturn or a domestic downturn. The reality is that there are elements of both. There is an international credit crunch under way and we are suffering the effects of rising commodity prices. However, there are significant domestic factors, but Ministers have not admitted that to any great extent. The housing bubble has not burst in other countries to the extent that it has happened in Ireland, with the possible exception of Spain. Rather than dealing with the housing bubble by responding to artificially low ECB rates, by discouraging the level of credit, the Government, particularly the Taoiseach, made it worse. No measures were taken to deal with the fact that we had artificially low interest rates. People were given 42% incentives to invest in property, in spite of the recommendation of the Bacon report that they be removed. The banks were allowed to offer huge amounts of inappropriate credit to people like me, for example, and those people are now lumbered with a 100% mortgage. No action was taken on stamp duty.

The public finances were appallingly mismanaged, even as recently as in the last budget. At a time when everyone understood that the economy was slowing and when growth was predicted at 4-5%, even though it now looks like there will be no growth, the then Minister for Finance decided to increase public spending by 10%. Anybody can understand that this is no way to run an economy. This happened consistently during the Taoiseach's time, and that of his predecessor, in the Department of Finance.

We have also seen an appalling loss of competitiveness as Ireland has fallen from being the fourth most competitive country in the world in 1997 to 22nd place under this Government. That is due to inflation, unjustified pay increases, an absence of public sector reform and an increased cost of doing business. The cost of doing business has spiralled, through regulation, Government charges, local authority charges and a refusal to bring real competition into the electricity market, among others. This country is now in a much worse position than most other European countries. For ten or 15 years, Ireland was fortunate to out-perform the world, through a combination of good policy measures and good luck.

The reverse is now happening and we are doing much worse than almost any other country in the OECD. Growth in GDP has decreased by 5% on last year, something which has not happened in other countries. Unemployment is rising ten times faster in Ireland than it is in the UK, yet the OECD estimates that unemployment will fall in 25 of its 30 countries. No country has seen such a rapid turn-around in the public finances as Ireland as we are now going to be at a deficit of 3% of GDP. Our deficit is about six times the OECD average.

The time has come to challenge the narrative of the past ten years. We have heard a little bit of that narrative from the Minister of State, Deputy Curran. It may be an over-statement to say that the past ten years were squandered. Some good things were done, but it was certainly a lost opportunity. Consider what was done in similar boom periods in other countries, such as the post-war boom during the Adenauer years in Germany, the Atlee and Churchill years in Britain or the Eisenhower period in the US. They used that incredible boom period to build a modern society. They built a public sector that works and an economy that functions and they delivered high class infrastructure and public services. That was not done in the past ten years here.

In spite of a 50% increase in spending during the period in which Charlie McCreevy was Minister for Finance, we saw nothing like a 50% improvement in public services. There was a 300% increase in spending in health, yet there was nothing similar in terms of service improvement. Nobody can tell me that the health service is three times better than it was ten years ago.

Some Members on this side of the House have been accused of talking the economy down, but one cannot talk the economy down. It is bad policy that does that, not words. However, if anyone has been talking the economy down, it is the Minister for Finance. In the greater scheme of things, nobody really cares what I or Deputy Reilly thinks about the economy, but they care about what the Minister for Finance thinks. The Minister stood up at an international conference in front of developers and investors from all over Europe, complained about the fact that he had the misfortune to be Minister for Finance and then told those potential investors that our economy had come to a shuddering halt. When I hear Members opposite bleating about economists, journalists and Opposition politicians talking the economy down, I wonder how they can possibly have confidence in their Minister for Finance, especially when he says such things publicly and when he clearly does not want the job he has been given.

In the past ten years, the Government should have prepared us for the inevitable downturn that was going to come at some stage. Unlike any other country, Ireland had the opportunity to prepare for the downturn and generate large enough budget surpluses to now be in a position to reduce taxes, increase spending and invest in infrastructure rather than cut spending and increase taxes, but that was not done. The fundamental duty of the Government over the past several years was to prepare for the inevitable downturn, lay the foundations for future growth and ensure we had enough resources to weather the storm. The opposite course was taken which is the real disgrace of the Members opposite, with the possible exception of the Green Party which only came on board recently.

The Government has announced plans to reduce spending by €500 million this year and by €1 billion in 2009. When examined more closely, the savings do not seem credible. There are some real cuts such as the €50 million in overseas development aid, affecting the poorest people in the world, and €100 million in the nursing home scheme, affecting the elderly.

The rest of the cuts seem cosmetic. There are no details as to which quangos will be abolished or merged. This morning on the Order of Business, the Tánaiste and Minister for Enterprise, Trade and Employment confirmed the Government does not intend to withdraw any of the five Bills which will establish new quangos. Some cutbacks are proposed in departmental advertising and consultancy contracts, which are welcome, but it exposes the reality of the appalling and reckless overspend on advertising and public relations, particularly by the Green Party Ministers. All over Dublin, billboards tell me not to water my lawn. It might be appropriate to withdraw this campaign. I cannot sit in my garden, anyway, because there has been so much rain lately. To spend large amounts of Government money in the wettest summers in ten years telling us not to water our lawns is a kick in the face to taxpayers.

It is proposed to reduce the public sector payroll by 3%. This makes no sense to me. The Government will go ahead with a 2.5% increase in public pay in September and obviously another pay increase next year, maybe 4%. This will be an overall 6.5% increase in public pay. How does one turn a 6.5% plus into a 3% minus unless 10% of public sector staff are dismissed? I do not think the Government will want to do that either. The Government seems to be operating on a wing and a prayer. It is doing the bare minimum to keep the budget within the Maastricht criteria and hoping something will come up next year. It will not happen. The Government is not really tackling the crisis.

The Tánaiste and Minister for Enterprise, Trade and Employment has decided to cut €20 million from apprenticeships and the Skillnets programme in FÁS. Many savings — even up to €100 million — could be made with FÁS but not with the apprenticeships. That is one of the few things that FÁS does that is worth holding on to. During the debate on financial peculiarities at FÁS, I released an extract from an internal audit report which I got from a freedom of information request. This included comments about the matter in which advertising was placed by FÁS while its advertising agency was bypassed. Last week on "Morning Ireland", I drew attention to the fact that a €100,000 contract was given to one local newspaper, which was referred to in the internal audit report. Lest there be any confusion, I believe any impropriety or irregularities in this regard are on the part of FÁS and not on the part of outside advertising agencies or the local newspaper group concerned. I would like to correct the suggestion that there is any effect in terms of the tickets that may have been exchanged in return for this particular contract. I want to state once again categorically that to the best of my knowledge this Garda investigation is into FÁS and contractors and not the local newspaper group or any of the advertising agencies. I look forward to the outcome of that Garda report and hope it produces some good results.

I agree with the Labour Party Members that this is the Taoiseach's recession. It was created by Fianna Fáil and is its legacy. For the first time, it is being asked to clean up its own mess. The recession cannot be explained away exclusively by international factors. No other country is experiencing the job losses, the price increases, the exports loss or housing market collapse we are. International factors have exposed how badly the economy has been run in the past five years. This week's savings plan is an ill-conceived and half-hearted attempt by Fianna Fáil to clear up its own mess. We are entering a tough period. If the right decisions are made now, we have the prospect of a reasonable recovery in three years time. If those decisions are not made, we are facing into a long-term downturn and economic decline. My great fear is that is exactly where we are heading.

James Reilly (Dublin North, Fine Gael)
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I really wanted to address myself to the Minister for Health and Children who is not present although she will be later. It would have been nice to hear the detail of her plans before I stood to speak. In 2006, the Minister for Health and Children announced the fair deal scheme to address the inequities in funding of long-term residential care for our elderly citizens. In December 2007, the Minister said she intended to introduce the legislation and have it passed by the Houses of the Oireachtas before the Christmas recess. Plans have been put in place to have nursing homes inspected by HIQA to ensure they meet the required minimum standards. I presume budgets have been provided to HIQA for these plans.

In 2007, a sum of €110 million was earmarked for the commencement of the fair deal scheme. The undue delay and blame game or referring to legal complications does not give our elderly citizens much comfort or confidence that the Government will introduce this scheme. Is this the first time that the Department of Health and Children has dealt with patients who have diminished mental capacity? This is an obvious provision that would be in any legislation dealing with elderly sick patients.

The fair deal was promised for January 2008 but has now been scrapped by the Government. We will no doubt be told it will be introduced in 2009. However, with the Minister's current record and the Government's actions I have little faith the scheme will be introduced as promised.

There is now to be a cutback of €85 million from the money ring-fenced for long-term care of the elderly. On closer analysis, this is really €98 million taken from the elderly because the €13 million allocated for contract beds had already been announced last January and is separate to the €110 million.

The first to feel the pinch are the most vulnerable, the elderly in our society who find the Minister picking their pockets yet again. Many of them are still waiting for the return of the money taken from them and their families illegally by the Government. These families have had false hopes raised by the Minister since December 2006 when first promised the fair deal legislation. It is always the most vulnerable who are first to be hit as they have the least voice and are the last to be heard by the Government.

Moneys allocated in the past two years to mental health and palliative care were shifted into other areas. Last year, the Minister promised cutbacks would not affect patients in autumn. They have been felt with operations cancelled, outpatient waiting times lengthening, accident and emergency waiting times lengthening, home-care packages for disabled children removed and home help from the elderly removed. The elderly have been led a merry dance for the past 18 months to find nothing at the end of the road.

I have a constituent whose mother sold her house for a considerable sum of money and has spent €300,000 in nursing home fees. The money is now gone and he has no idea how his mother will be cared for. These are the real hardships which the Minister fails to see as she makes announcement after announcement but axes service after service.

Many of these cuts are unnecessary due to the waste that occurs through the mismanagement of our health service under the HSE created by the Minister. We have in recent times heard of redundancies, an action that should have taken before the HSE was formed. This would have been normal planning in the merging of any two companies, let alone 11. A management structure was put in place before a chief executive was appointed instead of allowing him to appoint his own. Failure to bite the bullet on redundancies early on has resulted in large numbers of patients choking on that said same bullet and dying because of it.

It was announced recently that some of the structures of the HSE will be dissolved. While I welcome this, the HSE has been examining this option for the past 18 months but no details have emerged. I would welcome more regional and local devolution of power across the pillars and more co-operation between the hospitals and the community. This would get rid of the nonsense of a patient being left in a hospital bed at a cost of €3,500 per week because the primary, community and continuing care services will not take the patient on its budget and would only cost €1,200 a week.

Through the lack of proper illness packages for people with diabetes, complications set in costing the State hundreds of millions per annum. Through lack of detection further hundreds of millions are lost as complications develop in 50% of people by the time they are diagnosed. Millions could be saved. I ask the Minister to put in place chronic care packages for patients with diabetes and to talk to the insurance companies also. In 2001 €350 million was spent on diabetes care; the figure now could be as high as €1 billion.

At Cappagh Hospital operations have been cancelled one day a week for the months of July and August. This will result in longer waiting times, people going to the NTPF and having their hips and knees replaced at three times the cost to the taxpayer — more waste. The length and breadth of the country hospital wings are idle, as in Mullingar. In the Taoiseach's backyard there is a new €80 million hospital in Tullamore which was idle up to one week before he became Taoiseach when some patients were placed in it to take the bare look from his backyard. There is a countless number of wards to which this applies, including in Cavan, Clonmel and Sligo. In UCH, Galway and Ballinasloe €4.6 million has been spent on intensive care beds, but there is no money to staff them. The waste is incredible. An excellent surgeon is standing idle at Monaghan General Hospital, with anaesthetists at the ready and a state-of-the-art theatre, built only five years ago. However, he cannot operate because every patient must travel to Cavan. The nonsense is just astounding.

With regard to the cancer strategy, in Cork it is proposed to transfer 300 breast cancer cases per year from the South Infirmary Victoria Hospital to CUH which already has an 80% occupancy rate and lengthening accident and emergency waiting times. We do not have the money to indulge in this shifting of deck chairs on the Titanic. The service provided in the South Infirmary Victoria Hospital is excellent. At over 300, the hospital carries out more operations than any other centre in the country and this year the figure is heading towards 400. Why are we messing about?

Where is there more waste than in the Mercy Hospital, Cork, in which I stood only last week, with state-of-the-art ventilators and incubators which are unable to be used? People are probably dying because of this. They could be used to improve patient care; we have the facilities but will not staff them. It is outrageous.

The primary care strategy is continually being talked up but, ultimately, it is not delivering any real change in patient care, except in a small number of instances. A sum of €1.2 million per team was promised, but they will only receive €200,000. Some 13 staff per team were promised, but they will only receive three. In effect, nothing is happening. No improvement is being seen.

I said the Minister had allocated funding for palliative care, people with disabilities and mental health services but all of those funds were used for alternative purposes. Clearly, this is a Government which has no idea of what a promise means, or how to keep it. It lacks vision or a real reforming agenda and the country now finds itself in a recession. In the boom years money was wasted. There were no real reforms and nowhere is this more evident and the pain felt more than in the health service. Now, because of the approach taken by the Government, the first to be hit will be the old and those with a mental and chronic illness.

This is the Taoiseach's recession. I do not have time to go through all the promises made in the programme for Government, including the task force on obesity. During the boom the vulnerable and the weak were left behind and nowhere is this more evident than at St. Ita's Hospital, Portrane. As regards the co-located hospital planned for the Beaumont Hospital site, a new unit was put out to tender in 2005 but has now been thrown at the back of the queue. The Minister can pursue her ideology of private co-located hospitals, but in 2008 we have 23 men and 23 women in an open ward, with two feet between the beds, one block of three toilets and one shower unit and bathroom. Now that we have hit bad times they are grabbed and placed at the front to take the hit first. It is a disgrace.

Make no mistake, this is the Taoiseach's recession. It is the legacy of four years of appalling management on his part. As my colleague said, it cannot be explained by international factors. No other country is experiencing such a level of job losses, price increases, loss of exports and a house market collapse. International factors have exposed how poorly the economy has been run in the past four to five years. This week we have seen an ill thought out, half-hearted attempt by Fianna Fáil to clear up its own mess but, as usual, it is the old and the weakest, the least influential, who will not be heard by the Taoiseach because he does not listen to those who do not have a voice.

Eamon Ryan (Dublin South, Green Party)
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I am sharing time with the Minister for Education and Science, Deputy Batt O'Keeffe.

I very much welcome this debate, as it is an opportunity for us, the political leadership of the country, on all sides, to explain to the people what is happening, how we can get out of it and the solutions we can provide. Let us be absolutely honest and clear that we are facing into a real economic storm. We face difficult times, the likes of which we have not seen in at least two decades. We must be honest in defining exactly from where it has come and how we can work our way through it, to provide a course for the people that will give them confidence as we face into difficult economic times.

The difficulties in the economy are categorised by two fundamentally different problems. These are the credit crunch and the lending difficulties we are seeing, as well as higher energy prices — a real crisis. These are the two key driving factors. We should accept that it is both an international and a domestic phenomenon. There are features which are at play internationally, as well as here in Ireland. We should be honest about this.

Let us define the problem first.

Leo Varadkar (Dublin West, Fine Gael)
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The Minister should tell that to his Cabinet colleagues. Let him make this speech at the Cabinet.

Eamon Ryan (Dublin South, Green Party)
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To take a broader perspective, what has occurred in the past decade is that there have been massive efficiencies in China and India which started to produce our goods for us at a fraction of the cost. This brought down inflation across the developed western world which, in turn, allowed central banks to lower interest rates, not just here but also in America, Britain and elsewhere. This led to easy lending — indeed bad lending — coupled with speculative greed and property crises in——

Leo Varadkar (Dublin West, Fine Gael)
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Talk about what we can do.

Brian Hayes (Dublin South West, Fine Gael)
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We know all that.

Eamon Ryan (Dublin South, Green Party)
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——Florida, England, Spain and Ireland. That was a fundamental flaw in the international system. Let us be honest, we were all caught up in the property crisis; we opened our newspapers to see nothing but property advertisements.

Leo Varadkar (Dublin West, Fine Gael)
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The Minister can speak for himself.

Eamon Ryan (Dublin South, Green Party)
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One could not turn on the television without seeing a programme on how to buy an apartment in the eastern bloc. That is the reality. It was also tempting to provide housing. Every local authority was counselled to rezone as much land as possible and to build as many houses as it could. "Lend as much as we can" was the philosophy of the banks and on all sides of the House no one shouted "Stop".

Simon Coveney (Cork South Central, Fine Gael)
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If the Minister looks at the Dáil record, he will see that we have been shouting "Stop" for three years. He should be honest about that.

Eamon Ryan (Dublin South, Green Party)
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In the energy sector there is a similar international crisis which has been a long time coming. We received warnings in the 1970s and 1980s, but did not heed them. China and India required steel, oil and other energy resources. Eventually the demand for basic commodities started to push inflation upwards which, in turn, triggered the financial crisis and there was no longer any cheap and easy money available. It was an international phenomenon and it was the same here at home. Let us be honest with each other. We bought bigger cars because of the status they gave, built bigger houses with any number of bedrooms and bathrooms, regardless of how they were to be heated. We flew to New York and, effectively, turned Madison Avenue into Grafton Street.

Brian Hayes (Dublin South West, Fine Gael)
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The Minister should speak for himself.

Eamon Ryan (Dublin South, Green Party)
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We revelled in it. It was on the basis of cheap energy resources which are no longer available as we face a peak in global oil production. Those structural problems define the storm we are facing. This helps us to acknowledge and be aware of the reality in order that we can plot a course and start to deliver solutions.

Let me outline a number of principles about the solutions we will deliver for the people. First, we must recognise that, as a small island nation with an open economy, the solution will require us to be enterprising. We will have to trade our way out of the problem. Government solutions will not carry the economy into a new era. It will have to be done on the back of inventive creative enterprise. For that reason we will have to be international in our outlook. It requires us to be active in international co-operation with our European partners and other countries in order that we will be well placed to allow our companies to trade in global markets. That is a crucial principle.

We will also have to have consensus on the path we take. I am old enough to remember the last difficult period in the early 1980s. Let us be honest and admit we spent seven years bickering about the solution that we all needed at that time——

Brian Hayes (Dublin South West, Fine Gael)
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It was called the Tallaght strategy.

Eamon Ryan (Dublin South, Green Party)
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——namely, one of financial responsibility. It took us seven years until the late 1980s before we reached a consensus here and then we were much more able to deliver the solution that allowed the Irish economy to develop. We need the same consensus today. It worked back in the late 1980s and in the 1950s when we were faced with a similar crisis. Consensus reached then about the opening up of our economy to international trade helped us to deliver the solution. Let us try to seek agreement on the solution we will provide and not just bicker about what happened during the past ten years.

Leo Varadkar (Dublin West, Fine Gael)
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Is the Minister proposing a national coalition?

Eamon Ryan (Dublin South, Green Party)
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I attended a meeting yesterday of a leaders' forum on climate change at which all the main sections of our society, the trade unions, the religious groups, environmental groups, business leaders——

Simon Coveney (Cork South Central, Fine Gael)
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Opposition parties?

Eamon Ryan (Dublin South, Green Party)
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Yes, the Deputy's colleague, Deputy Seán Barrett, represented them at it. A crucial message was conveyed by Oisin Coughlan of Friends of the Earth when he put forward the proposition that we will only be able to tackle the climate change issue when there is consensus among all the social partners on it. He is absolutely right.

Leo Varadkar (Dublin West, Fine Gael)
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Will the Minister invite us to join the Cabinet committee?

Eamon Ryan (Dublin South, Green Party)
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It is crucial to have such approach, if we are to meet the climate change targets——

Leo Varadkar (Dublin West, Fine Gael)
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The Minister is preaching.

Eamon Ryan (Dublin South, Green Party)
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——which will offer us a solution on the energy side and on the enterprise side on a way ahead.

Leo Varadkar (Dublin West, Fine Gael)
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The Minister is giving a sermon.

Eamon Ryan (Dublin South, Green Party)
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Crucially, we need to recognise that sustainability is social sustainability and not only environmental and economic sustainability. We will achieve consensus best when we bring all our society along with us and when we set our planning on the basis that it is not only pro-enterprise but includes the weakest in every section of our society on this new path that we have to take.

I am confident that we have the right policies within our grasp, policies which are agreed on all sides of this House. I do not hear Members opposite arguing against me when I say that developments of renewables and energy efficiency are the best way for us to tackle the energy storm we are entering into. Nor do I hear anyone on the opposite side of the House disagree with the hypothesis that a new digital services economy and our expertise in ICT can give us the facility to develop our economic opportunities. I do not believe there is any disagreement on that fundamental point. The key job in my Department is to organise a fossil fuel retreat and the advance of a new digital economy.

I want to give the Irish people a certain confidence that the policies are within our grasp. One can read reports in the newspapers about the Gate 3 process on the development of wind energy; some 3,000 MW of electricity will be generated on top of the 1,500 MW that will be generated as we proceed with the Gate 2 process. This process will generate large volumes of power and the fuel price will be zero and will remain zero regardless of what happens on internal markets.

Simon Coveney (Cork South Central, Fine Gael)
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How will that be generated, given that no offshore wind projects will be delivered now?

Eamon Ryan (Dublin South, Green Party)
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That is a development that is occurring and one we can progress in these difficult times in terms of energy resources. We will face difficulties because in the short run electricity and energy prices will be high because of those international fuel issues.

We must be linked internationally and on this island to ensure an effective response and build good transmission connections to have an effective electricity market that will result in a decrease in prices. We are progressing with the east-west interconnector, which will provide international connectivity that will yield solutions.

We can lift our construction industry by giving supports to people to retrofit their houses, which were built during the past ten to 30 years with poor insulation, to increase their energy efficiency in this new world.

We have everything going for us to deliver ICT as our main fundamental driver of a new economy. We have 200 of the world's leading ICT companies here, 600 of our own software companies and 400 companies involved in the digital leader services areas. We have the right policies in place for the development of broadband, the education system and in Science Foundation Ireland to steer that economic development in a way that will help us.

I visited one of those international companies in the health care sector — Vistacom, in Limerick — and met its management team of 15 people. They might as well have been wearing Munster jerseys such was the pride they had in the efficiencies they were delivering each year to make sure their company was one of the main suppliers in the world of a very specialised product. I walked away from them with a clear sense that the drive they are under every year to achieve 10% efficiency gains should be and could be mirrored by what we do in the public sector to ensure we play our part. We need to be similarly efficient in how we provide services.

The measures announced by the Minister for Finance can be turned to good effect by delivering the public services we want efficiently and effectively, as the private sector is doing. Our Civil Service can rise to that challenge. We are all wearing green jerseys in this difficult period. Such consensus and co-operation in the public service and in the private sector will see us progress in the period ahead.

Batt O'Keeffe (Cork North West, Fianna Fail)
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The Government has clearly signalled its commitment to education by providing more than €690 million more for education in this year's Estimates, with a total allocation of more than €9.3 billion for the education sector. This considerable investment has been used to continue to implement improvements at all levels of our education system from primary right through to postgraduate level. Increased numbers are participating in all levels of our education system, including further and higher education. We are investing in developing and reforming our higher education system and investing significantly in research. We have targeted provision of resources for children from disadvantaged areas, special education and the language requirements of newcomer children.

The additional allocation in 2008 has enabled us to provide for more than 2,000 extra primary teachers since last summer. Capital investment continues with almost €600 million being spent on school building projects this year alone. Following the Government's deliberations, my Department is aiming to make savings of €6.6 million this year through efficiency measures across the sector to contribute to the Government's overall adjustment measures. To put this in context, the €6.6 million represents only 0.7% of the overall allocation of €9.3 billion this year.

With changing economic circumstances, this Government must carefully manage the public finances to ensure that as a country we work through the current difficulties and challenges in a manner that ensures past improvements in services can be consolidated and improved upon into the future.

We must take action now to ensure that when there is a cyclical upturn and a recovery in economy growth we are positioned to capitalise on that. The Minister for Finance has made it clear that we must now act to make sure that the financial situation facing us in 2009 is not even more difficult. He has made it abundantly clear that we are not taking what might appear to be the easy option advocated by some, that we go down the futile and damaging road of trying to deal with the downturn by further large-scale borrowing.

I know that the measures being implemented by the Government will help us to ensure that into the future our education system can continue to be improved and play the vital role it has played in the lives of individuals and in the economic and social life of the country.

The overall level of administrative costs in the Irish education system is quite lean, relative to international comparisons. Nonetheless, we must still ensure that efficiencies are achieved by targeting payroll, advertising, consultancy and PR and other costs and by seeking out any other general administrative efficiencies we can make. This is the challenge for my Department, for all its agencies and for the institutions in the higher education sector. The measures being adopted now are that vital first step. By taking them now we are applying immediate corrective action that will produce further savings on a full year basis in 2009.

I would like to give some details of the expenditure savings and other measures on foot of the decisions taken in order to deal with the expenditure pressures. In line with the Government's decision, payroll costs in the education sector will have to be reduced. This means restrictions on recruitment will have to commence immediately commensurate with ensuring a reduction of 3% on payroll costs in 2009. This measure will apply to my Department and to all agencies and bodies across the sector, including the higher education institutions. However, the Government has decided that an across the board adjustment of 3% would not apply to front-line staff in primary and post-primary schools and this includes schools in the VEC sector. This aspect of the Government's decision exemplifies the prudent and careful approach we are taking in applying restrictions.

The increase in teacher numbers in recent years reflects the particular pressures applying to schools as they respond to demographic pressure and accommodating children with special needs. This requires us to distinguish the position of schools from the rest of the education sector. However, we need to ensure resources for schools are efficiently targeted in accordance with the criteria for their allocation. The overall number of teachers and special needs assistants in schools will be agreed by my Department and the Department of Finance. All schools, including those in the VEC sector, will open next September with their teacher allocation that has already been approved. Deputy Hayes should take note of that.

In line with the Government decision that administrative efficiencies must be achieved across the public sector, the education sector must achieve reductions in spending on consultancy services, advertising and PR this year, by at least 50% in 2009. My Department will inform all its agencies and bodies of budgetary adjustments that will be necessary immediately and the measures that must be taken to ensure they achieve the payroll reduction of 3% in 2009.

In the higher education sector the detailed apportionment of the savings between institutions, core funding and funding for the strategic innovation fund and research programmes will be communicated to the institutions by the HEA following consultation with my Department. All the relevant budgets for 2009 will be framed and allocations will be determined on a basis that takes full account of the required 3% reduction. Over and above the specific measures decided by the Government, I must ensure I deal with any emerging pressures. I will need to exercise tight budgetary control until year end and deal with pressures as they emerge by taking any other measures needed to underpin the Government's overall fiscal requirements, particularly with a view to preparing the budget for 2009 in the context of the new realities we face.

This Government has prioritised, and will continue to prioritise, education. I repeat the reductions to be achieved represent 0.07% of my Department's overall allocation. I emphasise there is no reduction in capital investment.

Brian Hayes (Dublin South West, Fine Gael)
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Not yet.

Batt O'Keeffe (Cork North West, Fianna Fail)
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All schools will reopen in September with no reduction in the teacher allocation already approved for the new academic year. We will continue to sustain and develop educational opportunities at all levels so education can continue to play its central role in the development of each individual and Ireland's economic and social well-being.

Simon Coveney (Cork South Central, Fine Gael)
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What is, perhaps, as worrying in this debate as the economic figures themselves, is that there is no recognition whatsoever from Government that its mishandling of our economy has contributed to this fiscal crisis. Not for the first time, the Government is in denial, blaming everything and everyone but itself for the state of the public finances. It is the fault of international factors beyond its control and if it had not been for all those doom merchants talking down the economy, things would not be half as bad. Unfortunately, the Government has waited, blind to and refusing to accept the reality of deep problems developing in the economy, and doing little or nothing to remedy the situation until now, when we have been confronted with the shocking and undeniable facts that surround the collapse in our financial revenue streams.

However in typical Fianna Fáil self-righteous fashion, when we in the Opposition call it as it is and point the finger squarely and directly at the primary cause of this boom to bust fiasco, we are accused of playing politics. The problem with that defence is that we were also accused of playing politics when, after each of the last three budgets, Deputy Bruton warned of Ireland's waning competitiveness, over-reliance on tax revenue from unsustainable growth in a booming property market and increases in current expenditure that were more than two and half times our economic growth rates. Deputy Bruton also warned of the Government spending a fortune on setting up more than 250 extra quangos to do the job that many Government Departments could and should have been doing and creating a bigger and bigger public service wage bill without any regard to efficiency gains or ensuring value for money.

Our Taoiseach, while Minister for Finance, kept increasing current expenditure as if the boom would last forever. Now we are all suffering the consequences of having to slam on the brakes, as the Government flounders to find a way to make the savings needed to merely limit the damage in terms of how much this country will have to borrow this year to pay the bills. Nobody on this side of the House is claiming that international factors do not contribute to the challenges the Government faces. However, the failure to prepare for an economic shock and the inevitable slowdown, during a decade of unprecedented wealth creation, will be a lasting criticism and indictment of this Government.

Other countries are affected by the same international conditions as Ireland but are not suffering to anything like the same extent that we are, despite what Ministers repeatedly say. Unemployment fell in 24 of the 27 EU member states in the last year. No other country in the OECD is threatened by negative growth. So let us nail this lie that Ireland is helpless in the eye of an international storm of economic problems.

Eamon Ryan (Dublin South, Green Party)
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It is time for solutions.

Brendan Howlin (Wexford, Labour)
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The Minister should allow Deputy Coveney to speak without interruption.

Simon Coveney (Cork South Central, Fine Gael)
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The Minister should listen; I am about to outline some. The time to reform, whether in the public service or even in the way Government itself functions, is in times of plenty when we can afford to do it. The time to invest in long-term programmes that drive Irish competitiveness is when capital is available to the State. The time when political leadership is needed to challenge a culture of waste and promote a new ethos of efficiency is when money is freely available to be abused. Unfortunately, the Government has shown leadership in none of these areas but has contributed to embedding a culture of waste in the provision of public services. The philosophy has always been, "why take hard decisions when we can throw money at the problem?" The money has run out, yet we still face the necessity of bringing about that public sector reform that Fine Gael has proposed for years. We now have to do it against a backdrop of growing unemployment, increasing social discontent and a rapidly shrinking public purse.

Despite this reality, even when the Government is on the rack, it still has the neck to come up with a motion like the one we will be voting on later today, "commending" itself "for the substantial investment made in consolidating and enhancing Ireland's economic competitiveness". Enhancing Irish economic competitiveness — is the Government deluding itself? Since 2001, we have fallen 11 places in the World Economic Forum standings, down to 22nd, and in terms of overall physical infrastructure we now rank 55th. In the Institute for Management Development, IMD competitiveness rankings Ireland has dropped seven places since 2001. Similarly, Ireland's competitiveness ranking in the EU has plummeted from top spot to mediocrity in the middle of the table. Instead of enhancing competitiveness, we have reduced Ireland's attractiveness as a place to come and do business versus competitor destinations. What is so frightening is that even when presented with the facts, independently verified, the Government is still in denial, congratulating itself in this motion on what it has done for Irish competitiveness. It has no credibility on this issue.

Deputy Cowen's tenure as Taoiseach will be judged by how he handles the economic and political challenges that face him, which he created for himself. His response has not been inspiring. The Government's remedy, announced this week, includes little more than vague proposals for cutbacks in payroll expenditure within Departments, an abandonment of the Government's decentralisation fiasco, a rationalisation of quangos, a reduction in the development aid budget, which is a cheap shot if ever I saw one, and a proposal to reduce staff in the health services.

More importantly, despite the vague cutback plans, where is the economic stimulation or revival package that is needed? Where is the signal from the Taoiseach that he understands how to stimulate growth and drive Ireland back up the competitiveness league table again?

The 50,000 people who have lost their jobs in the past year do not want social welfare payments. They want their jobs back, or at least the assurance that they will be able to find employment in the near future.

The Taoiseach said his announcement this week does not represent the Government's full response to the challenges we face, that it was merely an immediate response to Exchequer results. When will we see the Government's plans to get Ireland back on track? The country needs leadership right now from the Government but what we have instead is Ministers limping over the line, looking forward to the summer recess.

There are few areas, in terms of infrastructural development, where the Government's record is worse than in the rollout of high-speed broadband provision. With the exception of investing in metropolitan area networks, the Government has shown no vision or urgency in creating what can be described as a "fibre nation"——

Eamon Ryan (Dublin South, Green Party)
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We have the third fastest growth in the OECD.

Simon Coveney (Cork South Central, Fine Gael)
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That is because people are desperate to grab on to whatever is there, provided by the private sector.

Eamon Ryan (Dublin South, Green Party)
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We have the fastest mobile growth.

Simon Coveney (Cork South Central, Fine Gael)
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There has been no initiative from the Minister. All we have from the Government is forums and consultation, while other countries are driving ahead, developing next-generation broadband.

Eamon Ryan (Dublin South, Green Party)
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I announced our strategy last week.

Brian Hayes (Dublin South West, Fine Gael)
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Hark at Archbishop Ryan.

Joe Costello (Dublin Central, Labour)
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Deputies, please.

Simon Coveney (Cork South Central, Fine Gael)
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The Minister has been in office for a year now. We are still only at the consultation phase in terms of next-generation broadband, which the Minister announced last week, 12 months into his tenure. There was a briefing on the Minister's desk the day he started which indicated that next-generation broadband should be a priority but he waited a full year to start his consultation process.

Brian Hayes (Dublin South West, Fine Gael)
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I am delighted to contribute to this debate. I am also delighted that Archbishop Ryan has stayed in the pews to listen to us mere mortals, having delivered his sermon on the mount earlier. The Government needs to show more humility than it has to date in this debate.

The very first thing we need is some straight talking, rather than sermonising or fascinating lectures from mushrooms and the like. We need to cut out the spin machine so regularly deployed by this Government. Above all else this Administration, if it is to be taken seriously again by the Irish people, needs to show some humility instead of the arrogant swagger and cockiness that are such hallmarks of Fianna Fáil's years in office.

We are in an era of cutbacks; so let us call it as it is. I note the Minister is shaking his head again. His Government announced cutbacks today and yesterday and the Minister will not even be honest with the people. I believe, taking from the sermon from Archbishop Ryan, that we need a new honesty in this debate. We need to be straight with each other so let us call it as it is and stop the baloney in which the Minister and his Administration are involved.

Eamon Ryan (Dublin South, Green Party)
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That does not mean we do nothing but talk our country down.

Brian Hayes (Dublin South West, Fine Gael)
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On Tuesday of this week there were no cutbacks planned for education. I note the Minister is leaving — we should all be on bended knee. Yesterday payroll cutbacks in the VEC and higher education sectors were announced. We did not hear this on Tuesday, as the spinning machine went out of control and we were led to believe that no axe would fall in the Department of Education and Science. If this is a new era, it was a bad start from a Minister for Education and Science who has been, quite frankly, all over the place on the issue in the last few days. He comes to the House today and announces there will be clear restrictions on recruitment. In response to his suggestion that there will be no loss of front-line staff, I have a straight question — does that also apply to part-time staff? Does his commitment to the House today that there will be no loss of teachers in front-line positions also apply to part-time staff? He and I both know part-time staff make up a very substantial cohort of teachers within the profession.

What is far more concerning is that the Minister went on to say he has still to involve himself in serious discussions with the Minister for Finance about next year.

Batt O'Keeffe (Cork North West, Fianna Fail)
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We always do it that way.

Brian Hayes (Dublin South West, Fine Gael)
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The reality is that cutbacks are here, in education, under this Minister, and worse——

Batt O'Keeffe (Cork North West, Fianna Fail)
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The Deputy has never been in Government. One agrees these things with the Department of Finance every year.

Brian Hayes (Dublin South West, Fine Gael)
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We had better get ready for next year because we are going to see a loss of teachers in our primary and post-primary sectors, despite the bleatings and commitments of the Minister.

Batt O'Keeffe (Cork North West, Fianna Fail)
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Not at all.

Brian Hayes (Dublin South West, Fine Gael)
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It is tomfoolery which allows small-minded Ministers to make announcements on school projects days before an election, in the full knowledge that no works will ever take place. The Irish people are sick of Fianna Fáil buying elections with money that they know they do not have.

Why does the Minister for Education and Science continue to pretend that all of the 56 education promises set out in the programme for Government can now be achieved?

Batt O'Keeffe (Cork North West, Fianna Fail)
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Why can the Opposition spokesman not avert to the fact that I told him that I would make announcements in September?

Brian Hayes (Dublin South West, Fine Gael)
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I did not interrupt the Minister, please. A total of 56 commitments in the area of education were made in the programme for Government. If this is a new era of honesty, as the Archbishop claimed earlier, why will the Minister not tell us which of the 56 priorities will be shelved? At the moment, the programme is a wish list and does not have any semblance of reality. The Minister is trying to fool teachers, school managers and those interested in education into thinking that he can now achieve all of those promises. What we want from this Government is an honest appraisal of what can be done at this stage.

Batt O'Keeffe (Cork North West, Fianna Fail)
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That is what the Deputy is getting.

Brian Hayes (Dublin South West, Fine Gael)
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If the Minister takes up the challenge in terms of delivering an honest assessment of what we can do, I will join him in that. One of the first things I want the Minister to do is——

Batt O'Keeffe (Cork North West, Fianna Fail)
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That is exactly what I did.

Brian Hayes (Dublin South West, Fine Gael)
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When the Minister said he was introducing the payroll cost reduction across the VEC and higher education sectors, why did he not say in the same breath that he was prepared to amalgamate or abolish some of the agencies under the aegis of his Department? I have already outlined three agencies in the area of special needs which could be amalgamated into one, thus reducing costs and providing more money for front-line staff. If the Minister takes up my challenge and joins me in that task, I will support him. What I will not support, however, is——

Batt O'Keeffe (Cork North West, Fianna Fail)
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I invite Deputy Hayes to join me.

Brian Hayes (Dublin South West, Fine Gael)
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——a reduction in front-line staff, in services to our children and in the opportunities this State owes to them. After almost 11 years in office, the Government has wasted the opportunity that the Celtic tiger economy presented for education. Approximately one in four primary school classes now have 30 children or more, which means that 104,000 children are in oversized classes. No progress will be made on this in the coming years. Promises made in 2002 and 2007 about reducing class size have been set aside in a most cynical fashion.

As the Minister has admitted, over 900 schools depend upon prefabricated and temporary accommodation and approximately €35 million is wasted every year on the rental of such accommodation. That is another black mark against this Government and the Minister in failing to provide decent accommodation for our children. A total of 25% of all schools in the country have building projects before the Department. However, as the Minister informed the Dáil yesterday and today, there is not a chance in hell of those projects being advanced because we will see a major drying up of capital resources next year and beyond. This means that some of the worst examples in terms of accommodation will be left hanging on a list with nowhere to go.

I am most disappointed that Archbishop Ryan did not stay in the Chamber to hear about the commitment that was given under the national development plan that €252 million would be spent on improving technology in our schools. Not one brass farthing has been spent in the past four years and we are at rock bottom of the EU league table when it comes to spending on technology. When will we get this money? When will the Minister for Education and Science produce his report on information and communications technology, about which he gave me a commitment two weeks ago? When will the report be produced and when will the money follow from it?

Batt O'Keeffe (Cork North West, Fianna Fail)
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Today.

Brian Hayes (Dublin South West, Fine Gael)
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Will the sum be €252 million?

Batt O'Keeffe (Cork North West, Fianna Fail)
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We will have a look at that too.

Brian Hayes (Dublin South West, Fine Gael)
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I suspect we will have a look at that all right. The Minister knows that the commitments in the national development plan are not worth the paper they are written on.

Batt O'Keeffe (Cork North West, Fianna Fail)
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The Deputy will know that they were all predicated on a growth rate of 4.5%.

Brian Hayes (Dublin South West, Fine Gael)
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Schools are now facing spiralling costs for fuel, water and waste collection and the Minister has said he will do something about that in the near future, which I welcome. However, now is the time that schools are finding it very difficult to survive. An average debt of €23,000 applies in many schools. The real scandal is that ten years after this Government assumed office, it takes on average 26 months for a child to get speech and language services in west Dublin where I live. I suspect it is no different in other parts of the country. Is this not a disgraceful statement of where this country is in terms of our commitment to its most vulnerable children? We cannot even provide the most basic occupational services to those children today.

The Minister has had a bad week. His spin machine went out of control and his 3% cuts will make a big difference in the post-primary and higher education sectors. I know that next year will be more difficult. The Minister has a job to do to defend his Department and ensure he gets the maximum return from his discussions with the Department of Finance. The Minister has shown he is not up to the task in terms of the outrageous cutback he announced yesterday.

David Stanton (Cork East, Fine Gael)
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I will make a few points in the short time available to me. The Minister of Communications, Marine and Natural Resources was right in saying we are facing into a storm. In a way, we are facing into what could be described as the perfect storm. Inflation is at 5%, the highest it has been for quite some time. Unemployment is rising rapidly. According to a report today, electricity costs are due to rise by 20% in October. We are in a housing crash, interest rates are rising and the Dáil is going on holidays. The Government is out the gap. The Minister of Communications, Marine and Natural Resources spoke about consensus. Each Minister should come before the relevant Dáil committee to report in detail what they intend to do regarding their spending cuts.

The Government presented Members of this House with a three-page document. This is what we have received as Members and the Minister talks about consensus. The document talks about how measures relating to the Department of Arts, Sport and Tourism will be spread across various bodies. This is the information the Minister has given, or is perhaps only able to give. That is all we have. It is stated that the Department of Finance will deliver the REACH programme at lower cost and that there will be additional control measures in respect of the Department of Social and Family Affairs. There is no detail. As a Member of this House, I expected a full report from every Minister at this stage detailing exactly what they are going to do. This House and the people deserve no less but it is not there which makes me very worried.

Ministers should go before every Dáil committee between now and the end of July and report in detail on their plans. Otherwise, we have something to be really worried about. I noticed that one of the first things axed by the Department of Social and Family Affairs is the personal advocacy service. Again, it is very worrying that people with disabilities will suffer. We have already noticed a major slowdown in the release of funding this year to service providers. These are people and organisations which raise almost 50% of their funding themselves and are not getting the money from Government or are getting it at a very slow pace.

Part of the reason we face this problem is because of the Government's refusal to engage in significant reform of how we carry out our business in this House. This encompasses reform of both the Dáil and committees so that all of these issues can be debated and thrashed out. The Government has refused to do that and treats the Opposition and all the Members here with disdain and arrogance all of the time. The Government must clean up its own mess. I do not know how will it do this without all of its consultants and PR machinery behind it but we will watch and see.

Noel Dempsey (Meath West, Fianna Fail)
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I understand I may be sharing my time with Deputy O'Rourke with the agreement of the House.

Joe Costello (Dublin Central, Labour)
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I have nothing about it here

Noel Dempsey (Meath West, Fianna Fail)
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It may happen.

Joe Costello (Dublin Central, Labour)
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Is that agreed? Agreed.

Noel Dempsey (Meath West, Fianna Fail)
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I entered this House in 1987. At that stage, the economy was in tatters. Tens of thousands of young people were emigrating, unemployment was 17% or 18%, inflation was through the roof and there appeared to be a very bleak future. The Acting Chairman will remember how the phrase "Will the last person leaving the island switch off the light?" was coined. A Fianna Fáil Government assumed power in 1987 and took very decisive action to reverse those trends and to lay the foundations for future prosperity.

As a young backbencher, I learned a few good lessons from that. The change and turnaround in the next 20 years was done on the basis of social partnership with unions, farmers, employers and Government. I must acknowledge that at that time, it was done with the assistance and support of the then Leader of the Opposition, Alan Dukes, as part of his famous Tallaght strategy which cost him his place as leader of Fine Gael some time after that.

The other lessons I learned from that experience was that decisive action in the national interest should always take precedence over short-term political popularity and that people will support action, no matter how difficult it is, if they perceive it to be necessary and proportionate. While the economic challenge about which we are talking today is not as serious for our economy as the one we faced in the late 1980s because of the progress we have made, we have difficulties which we must and will tackle.

On Tuesday, this Government made the necessary tough choices. We took these tough decisions now to avoid even tougher times later. The budget shortfall, which is driven largely by the change in the economy, the rise in unemployment because of difficulties in the construction sector, oil prices and the international banking crisis, dictates that we must focus even more of our resources on the productive areas of the economy and ensure we protect the most vulnerable in society.

With the decisions we have taken, I believe we have done that. I have no doubt some of the decisions we must take will be unpopular. We knew that when we made them. Governments do not have the luxury of just making popular decisions. They must make hard decisions that affect people at times. Despite what the media and commentators might say, politics is hugely relevant to the people and decisions we make here on all sides of the House have an affect on the public. However, we believe that these decisions will yield the greatest benefit while we navigate the current economic turbulence we are experiencing.

I will outline the changes to my Estimates as part of the Government effort to consolidate the budget for 2008. Savings of €20 million in capital funding will be made in the Department of Transport this year. Savings of €133,000 in the administrative budget of the Department will be made this year. Further savings of €156,000 will be made through efficiencies in the agencies funded by the Department. Savings of €1.9 million will be made in the Department in the area of consultancy-payroll costs, advertising and PR. A saving of 2% will be made in 2009 in the area of procurement. In common with other Departments, a saving of 3% will be made in 2009 in the area of payroll costs.

David Stanton (Cork East, Fine Gael)
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How much is that?

Noel Dempsey (Meath West, Fianna Fail)
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The Government remains committed to the national development plan, including Transport 21.

David Stanton (Cork East, Fine Gael)
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On a point of order, will the Minister give way for a question?

Noel Dempsey (Meath West, Fianna Fail)
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The NDP is the basis——

Joe Costello (Dublin Central, Labour)
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Will the Minister take a question from the Deputy?

Noel Dempsey (Meath West, Fianna Fail)
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I have limited time which I am sharing.

David Stanton (Cork East, Fine Gael)
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I do not know what the Minister is afraid of.

Joe Costello (Dublin Central, Labour)
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The Minister may continue.

Noel Dempsey (Meath West, Fianna Fail)
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If the Deputy wants to do his sums, he has plenty of time to work it out during what they call the holidays. The NDP is the basis for continued investment in our economic infrastructure in the years ahead. Investment in key transport infrastructure remains a priority. Now more than ever, we must ensure we achieve value for money across all areas on public activity, including expenditure in transport projects.

Out of a gross spending budget of over €3.8 billion for my Department in 2008, I can manage the €20 million saving in capital funding this year without impacting on the delivery of our infrastructure projects. The bulk of the saving of €20 million is in the non-core capital budget. As much as €13 million will arise in the capital expenditure grant scheme for regional airports. There has been a slow drawdown of these grants by the airports due, I understand, to factors such as planning delays and the necessity for the airports to come up with their share of the capital project costs. So far this year, the drawdown is €2.5 million of the €24 million allocation, a spend which is considerably less than anticipated. Spending on property acquisition for metro north has also been slower than anticipated and I envisage the bulk of the balance of savings on capital, €7 million, will come from there, in addition to lower costs.

Tommy Broughan (Dublin North East, Labour)
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That is terrible. It is shocking.

Noel Dempsey (Meath West, Fianna Fail)
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Before the Deputy says anything else, I wish to make a point that I may not get another opportunity to make. It is not political and I will write to him if he wants me to. We are in the middle of a procurement process for metro north. Bidders have submitted bids and must finalise bids before the end of the year. Casting doubts on the future of metro north in this House could give rise to difficulties with the tender process. I ask the Deputy to accept my assurance that the tender process will go ahead, as will the project if it is in the budgetary limits we set. I know Deputy Broughan is trying to ensure it goes ahead but raising doubts about it in the House does not help the tender process.

Tommy Broughan (Dublin North East, Labour)
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Then the Minister should not have touched it. Why did he touch it?

Noel Dempsey (Meath West, Fianna Fail)
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I did not touch it. This is money we brought forward but which we cannot spend because we have not acquired the properties. In addition, some property we intend to purchase now costs less than it did because of the downturn in property prices.

In respect of 2009 the Government has decided that payroll costs must be cut by 3% by the end of the year. The payroll savings will be achieved through a range of measures, including control of numbers recruited, tight management of overtime and other costs. This will pose challenges for the Department but I am confident we can meet them. Savings of 2% in the procurement of goods, services and capital works must also be achieved together with a saving of at least 50% in public relations, advertising and consultancy expenditure. Savings arising from the efficiency review carried out by my Department on foot of the Minister for Finance's budget day announcement will also be taken into account.

This year, my Department will make savings of €1.844 million on publicity campaigns and consultancies. Spending proposals for 2009 will need to be examined critically to comply with the Government's decision. This will be undertaken between now and budget day and my Department is already doing preparatory work so that it can make an effective input to the decision-making process.

A key objective for me is to ensure that the momentum, which has built up in the Transport 21 investment programme over the past two years, is maintained. This investment is of critical importance to sustaining our economic competitiveness. A number of projects have been completed and many more are either under construction or well advanced in planning. Excellent progress is being made on the national roads programme and I am confident that the five major inter-urban routes will be completed by the end of 2010.

New rolling stock and improved services are being introduced across the intercity rail network and the capacity of trams on the Tallaght Luas line has been increased by 40%. In addition, construction is under way on the Luas extensions to Cherrywood and the docklands and on the Cork-Midleton line, the western rail corridor and Kildare route rail projects. Important planning work on public transport projects, including two key strategic projects in Dublin, metro north and the DART interconnector, is progressing well.

A total of €2.6 billion in Exchequer capital has been allocated to Transport 21 projects and programmes in 2008. Due to the policies of successive Fianna Fáil Governments we face the current global economic downturn in a much better position than in previous unfavourable economic conditions. Stripping away the construction sector, the rest of the economy is growing at 4%. We have a young, well educated population capable of adapting to adverse conditions. Previously, our isolated economy meant we only had recourse to tax and spend in difficult times. We are now in a position where, despite the negative global economic megatrends we are exposed to, we can still make choices. The Government has consistently shown it makes the right choices. We are creating efficiencies by reducing the growth in expenditure across a series of areas to redress our budget. We are focusing on those productive areas that will yield the greatest returns to the Exchequer which in time will strengthen the Irish economy.

The Irish public consistently selects Fianna Fáil in government because the public recognises the ability of Fianna Fáil to maximise the benefits to our open and globalised economy. We had the courage and vision to chart a course that made us a leading light in the global economy in the past 20 years.

Tommy Broughan (Dublin North East, Labour)
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It led us into recession.

Noel Dempsey (Meath West, Fianna Fail)
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We opened Ireland up, educated a highly skilled workforce, attracted billions in inward investment and encouraged the entrepreneurship of Irish people to flourish. Deputy Broughan would like to hear what else I have to say on this but I will give way to my colleague, Deputy O'Rourke, and send Deputy Broughan a copy of the speech.

Mary O'Rourke (Longford-Westmeath, Fianna Fail)
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I thank the Minister for the opportunity to speak. This is a good exercise on behalf of the Government. The Opposition has been vocal in asking where the cuts will be and how many dispossessed and disadvantaged people the Government will discommode. Each Minister and Minister of State has laid out exactly where the savings will be made within each Department. That is a good exercise. When we open our newspapers, we can see where the savings are being made under each heading. This informs the House and the electorate at large on the strategy. I thank the Whips for arranging these statements in which we have set out our stall. No one can say he or she did not know. Each Minister and Minister of State has been told to come in and tell it as it is and that is the way it should be done.

Listening to Opposition Deputies today and yesterday, one would think that this downturn occurred only in Ireland, as if a big, bold witch came along and decided to single out Ireland as the place where there would be an economic downturn. Of course, it is not so. This is a global downturn, not one visited exactly on this country. I am sure many of us look at BBC or Sky News at night and see the travails of what is taking place in Britain. Seeing Gordon Brown and what is going on there, we know well that if it just afflicted us, it went quickly across the water and to many other countries of which we read.

I am amazed at the strident contributions suggesting that Fianna Fáil threw it all away for the past ten years as if we put all the taxes in big black bags and dumped them in incinerators, if one is allowed to do so. That is not so. I look at schools with extra teachers and special needs assistants, SNAs. Up to eight years ago, there was no such thing as SNAs, as the Acting Chairman will know from his education times. An SNA might as well have been a foreign body. Certainly up to eight years ago, and perhaps up to a decade ago, there was not such a person in the classrooms of Ireland. There is now and they have made a marvellous difference. Everyone wants the best for people with disabilities. There are halos not just on the Opposition side, everyone wants good for people with disabilities.

I see children who are happy with the SNA, happy going to school, knowing that their special, private, personal needs are being looked after by a well motivated person. There are training outlets open to these people, where they can be trained so that they are better professionals. That is a wonderful initiative so money spent there has not been wasted. It is money that will have a major input into the person's upbringing.

With regard to roads, next Wednesday, the Minister for Transport, Deputy Dempsey, will come to the Moate intersection and he will open the last leg of the Dublin to Athlone motorway. I will go out of my house, get into the car and 50 yards from where I live I will come to the motorway. Of course, one comes to a dead end at the M50 and this is where the difficulty lies. Massive work is being done there too.

This road is ahead of target. It is within its budget and is ahead of time. Was this wasted money? Ask anyone who travels between Athlone and Dublin. Did people think it was not a good job? Of course it is a good job, it is well merited and it is great that we have it. I hope the Athlone to Galway leg of that motorway will be completed as swiftly.

We see all the benefits which accrued in education. With regard to health, I frequently stand up and rightly give out about the vagaries of the HSE because it does not know whether it is coming or going, to whom it should report and what it should report on. That is its largest difficulty. However, my elderly neighbour tells me he visits Portiuncula Hospital on a monthly basis and Galway Regional Hospital on a three-monthly basis for various tests which he must undergo and he is treated with the utmost courtesy. He is rarely left waiting. He has a medical card and finds he gets great service.

I try to catch myself picking out the bad and tell myself to ease on because it is not all that way. Major advantages have accrued through the health service for people up and down this land. However, people do not usually talk about them because they are so happy to have gone in and out of hospital, escaped it all and be back in good health. I can also see the roads and what has been done for children with disabilities.

I wish to make a plea for funding for schools and the construction of physical buildings for schools. Yesterday, we had three deputations, one from Longford and two from Westmeath, one from a primary and two from post-primary schools. They sorely need new schools. They had reached the point of going to tender and they were told to stop. Money borrowed for infrastructural work such as schools would be money well borrowed and spent. If the school is sound, the children will be happier to attend and a better type of education will be provided.

If I were to have a plea it would be that the spending on school construction should continue in the Estimates round-up which will gather pace during the summer and the early autumn. Let this spending continue because it will be money well spent and it will lift the industry. Let no one be under any illusion that this is a soft way to go into a downturn. The Taoiseach has been emphatic in stating that if further cutbacks are needed they will be made and if there is a need for scrutiny and rescrutinising of all Government heads and subheads in the Estimates, that will be done. However, I would exempt capital spending of a beneficial nature to those living in the country.

Joan Burton (Dublin West, Labour)
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I will start with a quote from the late, great American economist, John Kenneth Galbraith, who stated that "Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable." I have a feeling this is where Fianna Fáil is at present.

As always, Shakespeare got it right, "When sorrows come, they come not single spies but in battalions". Today, as though to pile the misery on this incompetent and scared Government, the consumer price index shows that inflation is back at 5%. This follows the disastrous Exchequer returns of last week, confirming that by year end the tax returns are likely to be €3 billion short of even the revised forecast.

The Exchequer returns were preceded by the gloomy ESRI report which acknowledged what this Government has refused to admit that the economy is in severe difficulties, most of them home-grown by this Government. Governments love to blame external factors for every crisis. If things go well and oil is cheap Ministers smile and take the credit. When things go wrong and the price of commodities goes through the roof they wring their hands and state, "its not our fault".

So who killed Cock Robin and where has all the money gone?

Mary O'Rourke (Longford-Westmeath, Fianna Fail)
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"'I', said the Sparrow."

Joan Burton (Dublin West, Labour)
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Miss Marple or Hercule Poirot with his little grey cells would have little difficulty in identifying three prime suspects, the Government, the banks and the construction industry. What was the motive? Greed for money on the part of the banks and construction industry and greed for votes on the part of Fianna Fáil.

The Government, and more particularly the former Minister for Finance, now Taoiseach, Deputy Brian Cowen, boosted pre-election spending in 2006 and 2007 to the point of reckless endangerment. He was the darling of the banks and the building industry who cheered him on to blow the bubble even bigger. Cheap credit and globalisation eased the path for the banks while Deputy Brian Cowen stuffed the building industry full of juicy tax-breaks that drove land prices and construction inflation higher and higher.

When I pointed out to him that the State was losing hundreds of millions of euro every year in stamp duty evasion by the big builders while young couples paid large amounts of stamp duty on modest houses in Drumcondra and Glasnevin he refused to close the loophole, even though he acknowledged that the loophole in 2006 alone allowed the construction industry to evade €260 million in stamp duty. Now the bubble has burst and it is the ordinary Joe and Josephine who is paying for the fall-out and the bail out.

Some budgets ago, as Deputy Brian Cowen was Minister for Finance and blowing the boom, in response to his recklessly pro-cyclical budget I reminded him of John Lennon's song "Dear Prudence, won't you come out to play". Brian's flirtation with prudence, if he ever had one, was short lived. Blowing the budget won him the election. This week, however, his Government had to pay the price for its incompetence, not to mention the 54,000 people who have lost their jobs. Since 2 May, when Deputy Brian Cowen became Taoiseach, more than 25,000 people have lost their jobs and we are losing jobs at a rate of 2,000 per week.

This morning, there was an important article in The Irish Times by Dan O'Brien, a senior economist and editor at the Economist Intelligence Unit in London. People who can remember that far back will recall the Celtic tiger was confirmed when The Economist ran articles describing it as a parallel to the Asian tigers, even though people such as David McWilliams had coined and used the term previously. Therefore, this article is significant and I want to know whether what it states is true.

To quote Mr. O'Brien:

the Department of Finance now expects a general Government deficit of nearly 3 per cent of gross domestic product (GDP) this year, having enjoyed a surplus of a similar magnitude as recently as 2006. This six percentage point deterioration amounts to the most rapid two-year decline of any euro area country at any time since the single currency was launched.

This bears out the statistics quoted by Deputy Kenny yesterday from EUROSTAT. Mr. O'Brien continues to state, "Bad and all as the official figures are, they understate the gravity of the position. To achieve the new target, general Government revenues in 2008 would have to remain at last year's levels." Given a rapid and accelerating decline in tax revenues in the first half of 2008, this would require a miracle in the next six months, according to Mr. O'Brien. Without such a miracle, the deficit will be closer to 4% of GDP.

He states: "In 2009, even assuming no further reductions in revenues and a curbing of the rate of expenditure growth, the deficit is set to increase towards 6% of GDP or above?" Is this true? Does the Minister for Finance acknowledge what most of us know that the two most important pillars of the modern economy are consumer and investment spending, which accounted for three quarters of Ireland's GDP last year? According to Mr. O'Brien:

Further double-headed risk to the public finances comes from the rising cost of servicing a low-but-rising Government debt. The recent upward movement in interest rates on most Government bonds reflects rising inflation expectations.

If fears of higher global inflation come to pass, this trend will accelerate. Is this true? He further stated:

Making matters worse for Ireland has been a re-pricing of risk by those who invest in Government bonds? As recently as last year, investors considered Government debt to be as risk-free as any in the euro area. In 2008 investors have been demanding a premium to take on and hold Irish public debt [that is rated closer to that of Italy rather than Germany, as it should be].

Is this true?

Irish banks claim to be socially prudent, responsible corporate citizens, yet history tells us the opposite. Deputies from an agricultural background will recall their role in the land bubble of the late 1970s where the same bank would fund different bidders desperately in pursuit of the same land. Has pretty much the same not happened more recently in the housing market? Lending policies of banks played a large part in pushing up prices by providing additional cash by, first, extending the average length of a mortgage from 20 to 35 years, which was called product innovation, second, when even that had gone too far, moving to provide interest only loans and 100% mortgages — less scrupulous financial institutions went beyond that — and, third, bidding up land prices for developers to absurd amounts.

It is rumoured that the banks want the Central Bank, the National Treasury Management Agency and the National Pensions Reserve Fund to bail them out by buying out many of these doubtful mortgages and loans. This was referred to by Mr. Boucher of the Bank of Ireland when he appeared before the Joint Committee on Finance and the Public Service last week. He said discussions were taking place. Unable to find any more suckers willing to part with their money, the banks want the State to play the role of patsy. Will the Minister for Finance state categorically whether the Government is thinking about using the taxpayer to bail out the banks?

The Government hung tough on Waterford Glass recently, when there was a question over jobs in the Waterford area. The Taoiseach should not be coy and he should tell the House what he is thinking. Shareholders of Irish banks have received significant dividends over the years and it is time for them to put their hands in the pockets and subscribe to rights issues, as is being done in the US and the UK. Stock markets and professional investors know this must happen and they are avoiding the shares until that happens. Even the managers of the banks' own pension funds know it and they have been net sellers of bank shares for some time. This is the appropriate way for the banks to deal with their own home made crisis. Should the taxpayer be expected to bail out the speculators or people who have acted recklessly? We are all familiar with Mr. Sutherland's lectures on moral hazard. If a young couple having difficulties repaying their mortgage is bailed out, that is moral hazard but if the banking system is bailed out, that does not seem to be moral hazard. The Jesuits developed the concept of moral hazard in the Middle Ages but I do not know what is their position in this regard.

Another example of the banks continued ruthlessness in pursuit of a profit is their activities in the credit card market. In nine of the past 12 months, customers have repaid less than they spent in the previous month. Despite new spending in May 2008 being less than May 2007, repayments were only 89% of April's spending. The majority of better off people who hold credit cards have no difficulty clearing their bills but banks have focussed on those on lower incomes or students who have no income.

I refer to the discussions between the Government and the regulatory bodies. Where were the guardians of our financial system while all of this was going on? The Governor of the Central Bank and the Financial Regulator have repeated their mantras to whoever will listen that "Irish banks are fundamentally sound" — we all hope so — "there is no crisis", "Irish houses are not overpriced" and "Irish developers are not going broke", when it has become increasingly clear to the rest of us that the banks, unfortunately, have problems. There is a housing crisis because houses are massively overpriced, although they are reducing. Young people can no longer obtain mortgages even if they could afford them and the higher interest rates.

A number of Fianna Fáil's paymasters in the construction industry are in mortal financial danger. As that redoubtable Cork developer, Owen O'Callaghan, said in a recent interview about his fellow developers and the current difficulties in the construction industry, "There will be blood". Unfortunately, we are witnessing the blood of construction workers who have to take their holidays now and returning to find they have no job.

Tommy Broughan (Dublin North East, Labour)
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Hear, hear.

Joan Burton (Dublin West, Labour)
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We know what needs to be done. We have to look beyond an economy over-reliant on low value-added construction and we need to move beyond the bricks and mortar economy. It is an important component but the driving forces are indigenous investment, inward investment and high-tech, high jobs and the knowledge economy. Competitiveness must be restored while striving for social and environmental sustainability and support must be ramped up for indigenous industry. It must be ensured the fiscal and infrastructural framework is in place to support a high-tech, high valued-added economy. The foundations must be laid for a 21st century knowledge economy. I do not disagree with Deputy O'Rourke's comment that many good things happened during the Celtic tiger years but they cost too much money and they did not help the least able people in our society nor are they helping those losing their jobs now.

As I noted on the Minister for Finance's appointment, his reputation for cleverness is based on the fact that he is a Cambridge man. Cambridge men go punting in the pleasant River Cam but sometimes, instead of making progress and going forward, inexperienced punters spend their time going around in circles. The really unfortunate punters end up going backwards. The Minister is steering the economy and the ship is very unsteady. Those in charge, like the Minister, need to steer the boat to safer waters. The uncertainty, confusion and panic that we have seen in the ranks of the Government and Fianna Fáil this week will only put us all in mortal peril. People are already overboard — those who have lost their jobs, the businesses that have closed, the people sitting on negative equity in overpriced homes and whose houses risk being repossessed and the school leavers who cannot get a job. If the Government cannot face the situation, it should leave the field to those of us who will rescue the economy, restore confidence and rebuild employment. I was proud to have been in government with most of the parties in the House at different times. Those Governments created fortunate economic circumstances.

The list of cuts, half-cuts, deferrals and postponements breaches several principles despite the Taoiseach's promise and rows back on capital investment and investment in public transport and scientific knowledge. Even the FÁS apprenticeship scheme is to take a hit of €10 million. Those apprentices are at risk of losing their jobs. One month ago, FÁS was going to send them abroad to complete their training. The House has been told of a 3% reduction in salary levels across Departments, including within higher education and the knowledge economy. As someone who has served in government, I know how difficult such a cut will be.

In yesterday's discussion, the Taoiseach admitted that the famous €1.44 billion was for the rest of year and the carryover into next year. To meet the expected €3 billion slide in tax revenue, there must be further cuts, which will be set out in December's budget. Is it in the Government's principles that those who can least bear the burden should be the people least hit by the cuts? Does the Government view capital investment, investment in scientific research and education and increasing competitiveness, public transport and the knowledge economy as the way forward? Will Fianna Fáil resort to panic measures? When the two Brians first entered the House as the Taoiseach and the Minister for Finance some weeks ago, they seemed to have everything going for them. In recent days, however, they have begun to sound like the Two Ronnies — incompetent, unsure, nervous and frightened about what may occur in the economy and what the voters may do to them.

Many responsible and prudent people can be found in the construction and banking sectors. The Government must respond and reskill the construction workers who worked long and hard to make a fair amount of money in the past decade so that they can become the engineers, scientists and building and construction firm owners of the future. The bubble has burst. When people enter therapy, the first step in recovering is to accept responsibility, but I am unsure as to whether the Government has accepted responsibility.

Tommy Broughan (Dublin North East, Labour)
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Hear, hear.

Mary Harney (Dublin Mid West, Progressive Democrats)
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May I share time with the Minister for Defence, Deputy O'Dea?

Joe Costello (Dublin Central, Labour)
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Is that agreed? Agreed.

Mary Harney (Dublin Mid West, Progressive Democrats)
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The debate is on the economy and it is important to emphasise that the fundamentals of our economy are sound. For many years, it has been one of the most successful economies in the world. Irish people everywhere are proud of the significant success experienced in Ireland, particularly during the past decade. Some 14 years ago, 1.1 million people were working. Today, that figure is 2.1 million. Under the rainbow Government in 1997, a single person earning £78 began to pay income tax and income tax rates were 27% and48%. There was no tax individualisation. If a woman returned to work after her children had been reared, she began to pay tax at 48%. Today, a single person can earn at least €340 tax free and the tax rates are 20% and 41%. In recent years, living standards in Ireland have improved more quickly than anywhere else in the OECD.

We are suffering due to the global setback. Ours is an open trading economy and our companies must compete in global markets, particularly those of the UK and the US. The 15%-20% difference in the values of the euro vis-À-vis the dollar and the pound sterling affects our companies in the UK, for example. They must also compete with UK companies in third markets. The difference also affects our companies exporting to the US. The cost of a barrel of oil is $145, which is likely to increase to $200. Due to the credit crunch, it has been difficult for financial institutions to get money. While money is being loaned, interest rates are considerably higher and lending periods are short.

All of these matters are international factors. The domestic factor is the construction sector, but the economy is still growing at 4% if we exclude that sector from the statistics. However, it must be included. For every 10,000 houses not built, our economic growth falls by 1%. To be fair, no one on either side of the House anticipated that the slowdown in the sector would be so rapid. During last year's election, parties opposite budgeted on the basis of a 5% growth rate, the scenario generally agreed by independent commentators and everyone responsible for economic planning on both sides of the House.

As situations change, the Government must change. It must be capable and determined to see out its responsibilities, one of which is public spending. We cannot return to an era in which we spent, borrowed and taxed to find our way out of economic deprivation. That was the story of the 1970s and the 1980s. The only Government that ever bailed out a bank was a Labour-Fine Gael Government, which bailed out AIB in the 1980s. Unfortunately, while it did so for good reasons, it did not take shares in the bank. When the bank recovered, taxpayers did not receive the benefit.

Joan Burton (Dublin West, Labour)
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Will the Government buy bank shares?

Mary Harney (Dublin Mid West, Progressive Democrats)
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No, but Deputy Burton discussed the banks for a long time. The only bank rescued was rescued by the parties opposite. Unfortunately, no shareholding was taken to benefit taxpayers after the bank's quick recovery.

As we were required to do, the Government examined public spending a few days ago. Regarding the €440 million, we set out to spend €61 billion this year governing the country and will still spend an amount of that order. In terms of national income, the country has grown from €130 billion in 2002 to €160 billion today. Many references to waste have been made. In 2002, spending on pensions amounted to €3.5 billion per year whereas the current figure is €6 billion. Is this waste? Pensioners are in receipt of an additional €2.5 billion and €800 million extra has been allocated in respect of child benefit payments to support families.

I want to deal with health issues specifically. By any standards, the health budget is enormous and spending in Ireland has grown at 4% or 5% ahead of inflation more than in any other OECD country. We spend 9% of our national income, which is more relevant than GDP in Ireland's case, on health. This is the average figure throughout the EU and the OECD. We are involved in a major programme of health service transformation.

The decisions made recently will not affect, for example, the 8,700 people with intellectual disabilities in residential care, the 4,600 people in receipt of respite services or the 24,000 people in receipt of day services. None of those things is affected by the decisions that were made the other day.

In regard to the decisions on health I want to spend some time talking about the fair deal scheme. Every working day for the past 18 months, officials in my Department and in the Office of the Attorney General have been working on this legislation. We have also availed of expertise from outside the Office of the Attorney General in regard to the legislation. The issues that arise are not constitutional but they are complex. We are dealing with people at a very sensitive time in their lives. We are dealing with money, assets and income. We often deal with people who have diminished mental capacity. We must, therefore, make sure that the legislation protects those vulnerable people legally and that the legislation we promote through this House stands up legally and protects those people. I am confident that when the Dáil resumes after the summer recess we will be able to have that legislation passed with a view to having the fair deal scheme in place from the start of next year. Of the €110 million that was assigned for the fair deal scheme, we have taken €25 million, €13 million of which is for contract beds and €12 million of which is for more subventions. It would not be responsible of me to put all that €85 million into services that we would not be able to sustain next year because we need the money for the fair deal scheme.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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The Minister could use it for subventions if she wanted to.

Mary Harney (Dublin Mid West, Progressive Democrats)
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The other decisions that were made in regard to health are around timing issues. Not one euro is being taken off the health capital budget. The national children's hospital is a priority and it will be progressed as rapidly as possible. The national rehabilitation hospital is a priority and that, too, is being progressed. Let me say in passing——

James Reilly (Dublin North, Fine Gael)
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Is the funding secured?

Mary Harney (Dublin Mid West, Progressive Democrats)
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It is good to listen occasionally. In regard to co-location, the only ideologue that opposed it was the former Deputy Joe Higgins. There was not a single other opponent. He has appealed the matter to An Bord Pleanála. We know what the former Deputy Higgins's ideology is. As Deputy Reilly knows well as a medic, half of the patients being seen in some of our Dublin hospitals for elective procedures are private patients going into public beds on a preferential basis. That is why there will be a new contract of employment for consultants which is a fundamental overhaul of the current situation where they effectively work as lone rangers in hospitals but not for hospitals. Under the new contract they will work as part of teams with a clinical director and the team will be responsible for providing cover.

In regard to some of the other moneys we are taking from the health and children Vote — reference was made to the fact that one third of the money comes from health and children, and that is the case — all the new developments are starting. There are timing issues. Professor Keane got €15 million to recruit new consultants and for other developments in the cancer control area. He is recruiting new consultants, but he does not need €15 million this year, he needs €12 million. That is proceeding. The same applies to the pneumoccoccal immunisation vaccine for a form of meningitis. Every one of the developments, including palliative care, is proceeding. None is cut back as a result of the decisions made.

On the broader reforms within the HSE, like every other organisation the HSE must operate within the budget allocated to it by the Oireachtas. The budget is not inconsiderable at more than €15 billion. The HSE must make sure it commits to the service development on which I signed off at the start of this year in relation to 2008. It has assured me it will do that. Clearly it must organise services in the most cost effective way, bearing in mind its first obligation is to patients. Earlier this week there was a controversy at Louth hospital which I will mention in passing. We paid two doctors overtime for out-of-hours services and there were 14 patients who attended out of hours. When the patients arrive the senior registrar who is also on call must attend. From here on when the patients attend the senior registrar who is on call will deal with them. I give that as an example because we spend €135 million on overtime for junior doctors. Last year 20 of them got more than €100,000 in overtime. Those kinds of decisions are sensible.

James Reilly (Dublin North, Fine Gael)
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It is mismanagement.

Mary Harney (Dublin Mid West, Progressive Democrats)
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Scheduling activity happens in hospitals every year in the summer. I am usually criticised because I am told there is 100% occupancy, which is not safe. During the summer months, during holiday periods, it makes sense for hospitals to close wards——

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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They never open again.

Mary Harney (Dublin Mid West, Progressive Democrats)
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——to move to day activity and do the kinds of things that are done in health care systems all over the world.

James Reilly (Dublin North, Fine Gael)
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We send patients to the ends of the earth and pay three times as much.

Mary Harney (Dublin Mid West, Progressive Democrats)
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There are some hospitals that do elective work on the Continent that close for the whole of August, as the Deputy probably knows.

James Reilly (Dublin North, Fine Gael)
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We do not have them here.

Mary Harney (Dublin Mid West, Progressive Democrats)
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These are the kinds of things we must do to ensure we provide services to patients in the most cost effective way, bearing in mind quality assurance and so on.

James Reilly (Dublin North, Fine Gael)
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Which the Minister has failed miserably to do to date.

Willie O'Dea (Limerick East, Fianna Fail)
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A Cheann Comhairle, for some time we have witnessed a number of negative influences on the world economy.

Bernard Allen (Cork North Central, Fine Gael)
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The Minister is inaccurate. We have wards closing in December.

Willie O'Dea (Limerick East, Fianna Fail)
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People on both sides of the House are entitled to express their opinion uninterrupted. We did not interrupt anybody on the other side of the House and the least we deserve is to be afforded the same courtesy.

James Reilly (Dublin North, Fine Gael)
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The Minister was not here.

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy's answer to everything is to shout people down.

Willie O'Dea (Limerick East, Fianna Fail)
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There is an international credit squeeze. The effects of the sub-prime crisis in the US are being felt worldwide while increasing worldwide oil and food prices are putting the brake on global growth. A small open economy, like ours, is not immune to what is happening in the rest of the world. The reality, however, is that the fundamentals of the Irish economy are strong. It is a reality that the more pessimistic economic forecasters and most Members opposite seem, amazingly, to have missed. We have more than 2 million people in work. We have a highly educated and very flexible workforce. We have a vibrant export sector. We have had a decade of unprecedented investment in infrastructure and in our productive capacity. We have a strong welfare system to support those in need and at risk. Welfare payment rates in Ireland far outmatch those in the UK. Contributory State pensions here are 94% higher than in the UK, job seeker's benefit here is 160% higher and child benefit rates are 60% higher. That is real progress.

Bernard Allen (Cork North Central, Fine Gael)
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Prices are higher also.

Willie O'Dea (Limerick East, Fianna Fail)
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Despite that, some people still persist, in the teeth of the clearest evidence to the contrary, in insisting that the boom has been squandered. As well as the huge investment in infrastructure, health and education, we have used the surpluses to build up our pension reserve fund to almost €20 billion and to dramatically reduce our national debt from 65% of GNP to about 25%. The reduction in our national debt leaves the economy in a much better position than if we had a higher level of indebtedness. It certainly leaves us in a better position than the Government under former Taoiseach, Garret FitzGerald, left us in 1987 when the national debt was 120% of GDP.

Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister should look back and see what he inherited.

Willie O'Dea (Limerick East, Fianna Fail)
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The underlying strength of the economy gives cause for considerable optimism.

Willie O'Dea (Limerick East, Fianna Fail)
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The truth hurts. Unlike any time in the past, Ireland is well positioned to deal with the consequences of an international slowdown. This means the Government is well positioned to get us through the tough times. The responsible course is to take the actions needed now. That is what we are doing. We are taking the necessary corrective actions needed to put our economy on a sustainable path for the future. When international conditions improve we will be in a position to take advantage of that improvement. At the heart of the Government's strategy are two basic principles. First, we will continue to fund current services out of the taxes received. Unlike others, we will not turn the clock back to the 1980s and fund day-to-day expenditure out of borrowing.

Bernard Allen (Cork North Central, Fine Gael)
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Or the 1970s.

Willie O'Dea (Limerick East, Fianna Fail)
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The operating cost of this State must be sustainable. This means moderating our spending and driving the value-for-money agenda harder. Second, we will continue to invest in the productive capacity of the economy. We will improve our national infrastructures even further by continuing to invest in roads, communications, education and public services.

My over-riding priority as Minister is the modernisation of the Defence Forces. We have maintained and must maintain modern Defence Forces capable of meeting the needs of Government and the public and delivering value for money. I have witnessed the tremendous work being done by members of the Permanent Defence Force at home and in various overseas missions, most recently during my visit to Chad. I know that everyone in this House will join me in thanking the members of Óglaigh na hÉireann and their families for the great sacrifices they make in the service of the State. The development and modernisation of the Defence Forces over the past decade has been a major public sector success. The Defence Forces and the Department of Defence have led the way and will continue to do so. Seeking the delivery of more productivity, value for money and excellence is now hard-wired into the ethos of the Defences Forces organisation.

The Government is fully committed to Defence and to ensuring our ability to meet our commitments at home and on the international stage. In recent years we have made considerable progress in regard to a number of matters, a few of which I want to mention. As part of our policy of securing value for money I concluded an agreement with the Irish Banking Federation in May 2005 to ensure banks pay the costs incurred by the Defence Forces in the provision of cash escorts. This agreement runs up to 2010. From 1995 to 2004 the banks paid an annual fixed contribution of €2.86 million. That was increased to €6.03 million in 2005; €6.47 million in 2006 and €7.34 million in 2007. My Department continues to examine and review its property portfolio with a view to disposing of those lands deemed surplus to military requirements.

An important policy area has been the provision of greater opportunities for enlisted personnel to advance into the officer corps. I point to recent progress in this area with the commissioning on 10 June last of 24 personnel from the enlisted ranks. I am pleased to say that a career in the Defence Forces is seen as an extremely attractive and popular option. The number of applications received far exceeds the number of positions available. In 2007, for example, there were 25 applicants for every cadet vacancy and seven applicants for every general service recruit vacancy.

Significant investment in equipment and personnel has taken place in recent years across all facets and elements of the Defence Forces. We have acquired 80 Mowag APCs since 2001 at a combined cost of some €120 million. More than €13.5 million has been invested in the provision of an integrated protection and load carrying system for individual soldiers. In addition, six utility AW 139 helicopters are being acquired from Agusta Westland at a cost of €75 million, inclusive of VAT.

We have also introduced several other important reforms. Action on equality, dignity and bullying has been implemented in a manner that will prove a useful model to other State and commercial operations. The creation of an independent Ombudsman for the Defence Forces and the comprehensive reform of military law have further advanced the equality and fairness agenda. All these important reforms and improvements leave the entire Defence Forces organisation well placed to address the adjustments and savings needed to ensure sustainable defence expenditure in the years to come.

To set the 2008 defence expenditure savings in some context, the €4.6 million saving we are making this year is just slightly more than the additional €4.48 million paid by the banks for cash escorts in 2007. We will secure the €4.6 million in savings under several headings. Approximately €2 million will come from payroll savings, a further €500,000 will come from the deferral until 2010 of the proposed Reserve Defence Force information and recruitment campaign, while the balance of approximately €2.1 million will be secured in savings in the building, refurbishment, equipment and administrative budgets. I assure the House that the savings will not impact on the ongoing operations of the Defence Forces at home or overseas.

What I certainly do not propose is to take lessons on economic responsibility from the economically illiterate.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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The Minister should look in the mirror.

Willie O'Dea (Limerick East, Fianna Fail)
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I listened to some of the earlier debate, with spokesman after spokesman, particularly those from the main Opposition party, demanding increased current expenditure on health, education and transport while, at the same time, Deputy Bruton contends we are not imposing budgetary cuts severely or quickly enough. Fine Gael must make up its mind. It cannot be at once in favour of general economy and particular expenditure. In other words, the Members opposite must stop talking out of both sides of their mouths.

Ulick Burke (Galway East, Fine Gael)
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The Minister is practising for his Sunday Independent column.

Willie O'Dea (Limerick East, Fianna Fail)
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In fairness to Deputy Deenihan, his pronouncements, while in favour of increased public expenditure, have been a model of consistency when compared with those of his Front Bench colleagues. Last April, Deputies Varadkar and Kenny launched a document committing Fine Gael to reduce massively the number of State agencies. Unfortunately, news of this important initiative seems not to have reached Deputy Shatter who almost immediately introduced a Victims' Right Bill which provides, among other things, for the establishment of yet another statutory agency.

Brian Hayes (Dublin South West, Fine Gael)
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That would be a self-financing body.

Willie O'Dea (Limerick East, Fianna Fail)
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As I said, Fine Gael cannot be simultaneously in favour of both saving and spending. I have figured out at last why Fine Gael and the Labour Party spend so much time in opposition. It is because they are congenitally predisposed to negativity. I came across a quotation which illustrates this point and which is almost 50 years old. In 1962, in reference to Fine Gael and the Labour Party, Seán Lemass said:

There seems to be an attitude of mind in those parties . . . that they have a right to attack the Government and to paddle their party canoes up any creek that appears inviting to them, but that it is ungentlemanly for us to defend ourselves against their attacks and outrageous for us to criticise them in turn. Political life and public office impose many burdens but they also confer a few pleasures. One of the pleasures is that of criticising one's critics, exposing their foolishness and demonstrating their errors. That is a pleasure of which I do not propose to deprive myself.

Nor do I propose to deprive myself of it. I do not see anyone on this side of the House depriving himself or herself of that pleasure for many years to come.

I support the motion and commit myself to managing defence expenditure in such a way as to sustain our social and economic progress into the future.

Tom Hayes (Tipperary South, Fine Gael)
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We will not have to buy the Sunday Independent this week.

Brian Hayes (Dublin South West, Fine Gael)
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The Minister has given away all his best lines.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Spontaneous applause is not encouraged.

Richard Bruton (Dublin North Central, Fine Gael)
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We can only be grateful that the Minister, Deputy O'Dea, is not in charge of the public finances. When the national development plan was introduced, the Government offered the following assurance:

A prudent budgetary policy will be implemented over the period of the plan which does not add to inflationary pressures in the economy and which leaves flexibility for budgetary manoeuvre should an economic slowdown occur. This policy will require that growth in day-to-day expenditure must be kept broadly in line with the increase in economic growth. In such circumstances, a key expenditure objective will be to achieve more with the resources already being used to realise maximum value for money.

This was the precondition for the national development plan, the bedrock upon which Fianna Fáil economic strategy was to be built.

Willie O'Dea (Limerick East, Fianna Fail)
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Deputy Bruton should be aware that I have read his election manifesto.

Richard Bruton (Dublin North Central, Fine Gael)
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In this year's budget, however, the Taoiseach, as Minister for Finance, introduced the worst example of soft option politics we have ever seen in the history of the State.

Deputies:

Hear, hear.

Richard Bruton (Dublin North Central, Fine Gael)
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Even though the property market was already collapsing and the economic storm clouds were gathering, he made provision for an additional €5 billion in current spending, more than three times what he predicted would be available from increases in tax revenues. That wildly optimistic tax forecast has proved entirely illusory. The Taoiseach budgeted that 70% of borrowing this year would be used to fill the gap between the huge current spending and the tax he hoped would come in. The tax take was not realised but spending has pushed ahead regardless.

We are now seeing what was never before seen in the history of the State — a surplus of €2 billion in 2006 being turned into a deficit which the ESRI predicts will be €11 billion in 2009. The Taoiseach sleepwalked into this entirely predictable crisis. At a time when every commentator was telling him that his spending programmes were unaffordable, he pushed on relentlessly. We are paying for that recklessness now. The Taoiseach has destroyed the flexibility and capacity of our economy to withstand the economic downturn which was so clearly predicted.

Willie O'Dea (Limerick East, Fianna Fail)
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If we had done as Fine Gael proposed in its election manifesto, we would be in a far worse situation.

Richard Bruton (Dublin North Central, Fine Gael)
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One need only look at the record of the Taoiseach in his former Ministry to see how this has come to pass. He emulated the Charlie McCreevy mantra of party time in the run-up to an election and hangover once it is over.

Willie O'Dea (Limerick East, Fianna Fail)
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When will the Deputies opposite get over the fact that they lost the election? It is time they accepted it.

Richard Bruton (Dublin North Central, Fine Gael)
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He did not even have the cuteness of Mr. McCreevy, failing even to introduce these new measures earlier this year when they might have been effective. Instead, we are left facing into the abyss on the economic front. Contrary to all advice, the Taoiseach introduced four inflationary budgets which pumped up the housing bubble and drove price inflation far higher than elsewhere in the eurozone, thus destroying the competitiveness of our businesses.

Willie O'Dea (Limerick East, Fianna Fail)
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Fine Gael based its election proposals on the same figures.

Richard Bruton (Dublin North Central, Fine Gael)
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We have been losing export market share for five years in a row because of the Taoiseach's stewardship of the public finances. He increased spending far in excess of the growth of the economy, ignoring the wise counsel set out in the national development plan.

Willie O'Dea (Limerick East, Fianna Fail)
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Fine Gael budgeted before the election for greater spending.

Richard Bruton (Dublin North Central, Fine Gael)
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Over the course of four budgets, he increased spending by 50%, or twice the rate of growth of the economy.

Willie O'Dea (Limerick East, Fianna Fail)
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Deputy Bruton needs to talk to the other members of the Fine Gael Front Bench.

Richard Bruton (Dublin North Central, Fine Gael)
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He funded those increases on the back of property taxes everybody knew were unsustainable. I pointed this out at each budget but he pushed ahead relentlessly.

The Taoiseach indulged the lazy habit of his ministerial colleagues of setting up unaccountable agencies to tackle every problem that came their way. Those agencies are now a millstone around the necks of taxpayers. He corroded the traditional disciplines which emphasised a frugal approach to public spending and the importance of evaluation before large projects are launched.

Willie O'Dea (Limerick East, Fianna Fail)
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Has the Deputy forgotten what happened in 1986 and 1987?

John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Bruton should be allowed to continue without interruption.

Richard Bruton (Dublin North Central, Fine Gael)
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Under the Taoiseach's stewardship of the Department Finance, not only were the public finances destroyed but the notion that Ministers would ever be responsible for any culpable mismanagement was destroyed. Individual Ministers introduced failed strategies in areas such as climate change, decentralisation, e-Government and health. What happened? Nothing because Ministers sat smugly in their seats and blamed someone else. That is the culture of Government that we have learned to expect from Fianna Fáil under the leadership of the Taoiseach, Deputy Brian Cowen, and the former Taoiseach, Deputy Bertie Ahern.

Willie O'Dea (Limerick East, Fianna Fail)
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That is why the Deputy is in opposition.

Richard Bruton (Dublin North Central, Fine Gael)
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It is just not good enough and it will not deliver to people. It is causing unemployment, which is rising to levels that have not been seen in a generation. It is causing inflation that is hurting people. Irish shoppers now pay 30% more for basics here than in the North of Ireland. Much of that has occurred because of the way the Government mismanaged its public sector responsibilities. It failed to reform, change, deliver efficiently or keep down prices in public sector bodies. We are paying the price in lost jobs and public service cutbacks. The two Brians woke up like two dazed men from a deep sleep to discover that the public finances were sinking below the Plimsoll line. They did what comes easily to them, cobbling together a few mindless measures that do nothing about the underlying economic problems.

Willie O'Dea (Limerick East, Fianna Fail)
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Soundbites.

P J Sheehan (Cork South West, Fine Gael)
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Will he take note of that for his Sunday Independent contribution?

Richard Bruton (Dublin North Central, Fine Gael)
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For 48 hours they indulged themselves and would not show anyone what was going on. They kept it to themselves. This is the new approach by the Department of Finance, a three-page document with no details of any of the so-called cuts. Where is the day when responsible Ministers for Finance attended the House to spell out what would be done in each section, as well as how and why it was being done?

Willie O'Dea (Limerick East, Fianna Fail)
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Like John Bruton, I suppose.

Richard Bruton (Dublin North Central, Fine Gael)
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These Ministers have become too smug and they do not do that.

Willie O'Dea (Limerick East, Fianna Fail)
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They are usually successful.

Richard Bruton (Dublin North Central, Fine Gael)
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What have they done? The truth is that three quarters of the so-called 2008 savings are coming from deferring capital expenditure and commitments made to the elderly and those with disabilities.

Willie O'Dea (Limerick East, Fianna Fail)
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That is not true.

Richard Bruton (Dublin North Central, Fine Gael)
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Three quarters of the money has come not from any efficiency cuts or policy changes, but simply by denying frontline services to people who are dependent upon them.

Willie O'Dea (Limerick East, Fianna Fail)
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That is not true.

Richard Bruton (Dublin North Central, Fine Gael)
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Indeed it is.

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy should withdraw that.

P J Sheehan (Cork South West, Fine Gael)
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The Minister should read it.

Dinny McGinley (Donegal South West, Fine Gael)
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Some €440 million.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Hold on a second, Deputy Bruton is in possession and he should not be interrupted.

Deputies:

The Minister should be shown the red card.

Richard Bruton (Dublin North Central, Fine Gael)
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I am struggling to be heard over the Minister but I will address my remarks through the Chair. If one looks at what purports to be a corrective economic measure, there is nothing in it that will deliver any serious change. This is not a medium-term strategy for the recovery of the economy. Three quarters of the money this year is either for capital or deferred programmes. Next year, one third of the money will again be in capital. The sum total of the Government's efficiency savings, €71 million, represents one eighth of 1% of Exchequer spending. After all the huffing and puffing, the great body of Government produced savings of one eighth of 1% from the massive spending that has been ramped up in recent years.

Willie O'Dea (Limerick East, Fianna Fail)
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Untrue.

Richard Bruton (Dublin North Central, Fine Gael)
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One eighth of 1% is the sum total of their ideas as to how the public sector can be run more efficiently. No wonder we are in a hole when that is the sum total of ministerial efforts.

Willie O'Dea (Limerick East, Fianna Fail)
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It would be worse if the Opposition got what it was looking for.

Richard Bruton (Dublin North Central, Fine Gael)
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The problem is that they will let local managers decide where the 3% cuts will be made.

Willie O'Dea (Limerick East, Fianna Fail)
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Is this official Fine Gael policy?

Richard Bruton (Dublin North Central, Fine Gael)
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What does that mean? The Ceann Comhairle knows as well as I do what that means; it means that even the most successful agencies that have been repeatedly delivering results will have to cut their payrolls. Equally, the duds — agencies that should have been closed down long ago — will be treated the same way. Where is that forensic search for value for money, rewarding success in the public service and encouraging innovation? They are seeking savings in programmes that should be closed down.

Willie O'Dea (Limerick East, Fianna Fail)
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Would the Deputy care to identify the duds?

Richard Bruton (Dublin North Central, Fine Gael)
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Those sorts of notions do not appear on the Government's radar. God forbid that they would ever close down an agency. Instead, they have to make the old suffer or defer gateway towns, which were supposed to be the core of the Government's spatial strategy. There is no coherence in the approach being adopted.

Willie O'Dea (Limerick East, Fianna Fail)
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He is the parliamentary equivalent of a barber's shop, all wind and song.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Please allow Deputy Bruton to continue without interruption. He only has ten minutes.

Richard Bruton (Dublin North Central, Fine Gael)
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Is the Ceann Comhairle adding the five minutes that the Minister, Deputy O'Dea, has already taken from my time?

Bernard Durkan (Kildare North, Fine Gael)
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Injury time.

Deputies:

Fianna Fáil would never have got into office today.

Richard Bruton (Dublin North Central, Fine Gael)
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This country needs a serious medium-term strategy to address what is happening in the real world.

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy is in a different world.

Richard Bruton (Dublin North Central, Fine Gael)
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The Minister, Deputy O'Dea, may be living in his own little world.

Willie O'Dea (Limerick East, Fianna Fail)
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They elected me here, too.

Richard Bruton (Dublin North Central, Fine Gael)
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In the real world people are losing their jobs and struggling to make ends meet. They are facing negative equity and are unable to repay their mortgages. Parents of children with disabilities are being told by agencies that there is no service for them. That is the reality we have to face. We need and deserve a serious strategy from the Government that addresses the required changes. Where, for instance, is the reform in budgetary strategy that would see an emphasis on scrutiny and an evaluation of value for money? It is not there. Where is the new approach to cut out layers of administration which have dogged the public service for years? There is no such approach. Where are the new mechanisms to reward innovation and success in the public service? There is none.

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy will see it.

Richard Bruton (Dublin North Central, Fine Gael)
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Where is the thrust among public and private agencies to compete for the delivery of public services so we will see a genuine attempt to deliver best practice? There are no such initiatives.

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy will not have to wait long.

Richard Bruton (Dublin North Central, Fine Gael)
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Where is the strategy to prioritise capital spending and recognise the problems with broadband, port infrastructure and electricity infrastructure? There is no such strategy.

Willie O'Dea (Limerick East, Fianna Fail)
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It will be in the budget.

Richard Bruton (Dublin North Central, Fine Gael)
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Instead we are seeing cutbacks in capital spending. Where is the strategy for rationalising agencies?

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy will see them.

Richard Bruton (Dublin North Central, Fine Gael)
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It is not there. It is a wing, a hope and a prayer.

Willie O'Dea (Limerick East, Fianna Fail)
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What is Fine Gael policy?

Richard Bruton (Dublin North Central, Fine Gael)
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Where is the thrust for accountability with consequences, starting with Ministers? It is not there.

Willie O'Dea (Limerick East, Fianna Fail)
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It is there.

Richard Bruton (Dublin North Central, Fine Gael)
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The Minister for Finance who created this situation has jumped away from it and is pretending that he has no responsibility.

Charles Flanagan (Laois-Offaly, Fine Gael)
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Where is the Minister?

Richard Bruton (Dublin North Central, Fine Gael)
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Instead we have seen a huge number of reviews. There will be a review of agencies, while examining this and assessing that. They are going to set up a task force on the public service. There is going to be an outgrowth of assessments, evaluations, examinations and consultants but there will be no results. The Taoiseach was managing the public service for four years and came into Government saying his priority was to reform the public service. Following debates on his inauguration, OECD reforms in the public service and the current financial collapse, how could it be that at this stage he does not have one idea about how to reform our public service? He is devoid of ideas.

Willie O'Dea (Limerick East, Fianna Fail)
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Ask Garret FitzGerald and John Bruton.

Bernard Durkan (Kildare North, Fine Gael)
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Ask the former Minister, Martin O'Donoghue.

Deputies:

A Williebuster.

P J Sheehan (Cork South West, Fine Gael)
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I am afraid the Minister will have to get his gun.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Please let Deputy Bruton make his contribution.

Richard Bruton (Dublin North Central, Fine Gael)
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What is most disturbing about this week's announcement is that the triumvirate, the three Ministers in charge of the economy, do not realise what is going on in the real world. They have now woken up to the need for Ireland to articulate a new strategy, taking it in a different direction, that will reinvent the economy. In addition, it would reform public services, tackle inflationary problems and address the decline in competitiveness with which we have struggled and which is causing business to shed labour.

Willie O'Dea (Limerick East, Fianna Fail)
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We started by putting the public finances in order. That is a precondition.

Richard Bruton (Dublin North Central, Fine Gael)
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There is no realisation of those needs. There has been no mention this week of what the Government might do to resolve the credit crunch that has people up to their necks in debt. Banks are pulling back on every front, while ordinary businesses struggle to get capital to remain in place. People who want to buy houses are unable to obtain mortgages.

Willie O'Dea (Limerick East, Fianna Fail)
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It is not just here.

Bernard Durkan (Kildare North, Fine Gael)
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It is in Limerick too.

Willie O'Dea (Limerick East, Fianna Fail)
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And in New York.

Deputies:

It is no laughing matter.

Richard Bruton (Dublin North Central, Fine Gael)
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The Government is silent on those issues, including a competitiveness action plan and an anti-inflation strategy. They have no commitment to change, including competition and deregulation, anywhere in the public sector. That is the core problem: they continue to peddle the snake oil of a programme for Government issued last year, from which €40 billion in cumulative tax expectations have been wiped out. The dreams of the programme for Government were built on that €40 billion but it has now been wiped out and there has not been a whimper from the Government. Ministers will not own up to the reality that the promises made to pupils, the sick and people struggling with crime are now baseless. We need a bit of reality. Ministers should realise that we are in a new situation. Resources will be scarce in the coming years so we must cut our cloth to what is available.

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy should tell that to his colleagues who are asking for more every day.

Richard Bruton (Dublin North Central, Fine Gael)
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We must seek far greater efficiencies within the public sector. We must start a serious review of every programme, not just those on which money has not yet been spent.

Willie O'Dea (Limerick East, Fianna Fail)
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Is that the official Fine Gael economic policy?

John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Bruton must be allowed speak without interruption.

Richard Bruton (Dublin North Central, Fine Gael)
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There must be a certain irony in Deputy O'Dea lecturing the Opposition on interruption. He has not interrupted just once; he has interrupted a million times.

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy never stops interrupting.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Just proceed.

Richard Bruton (Dublin North Central, Fine Gael)
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It has become a Fianna Fáil strategy in the media not to allow anybody speak and just to fill the gaps with waffle. With the Ceann Comhairle to protect us in this House, I would have thought we would have some sort of decorum.

Michael Ring (Mayo, Fine Gael)
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The Minister thinks he is at war.

Willie O'Dea (Limerick East, Fianna Fail)
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The Deputy might be at war with Deputy Kenny.

Richard Bruton (Dublin North Central, Fine Gael)
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I can understand why the Ceann Comhairle is happy to be out of the Cabinet, if he had to put up with that all day.

One of the things we are supposed to be debating today is the national development plan. According to Fianna Fáil, this was the centre piece their strategy.

Willie O'Dea (Limerick East, Fianna Fail)
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It still is.

Richard Bruton (Dublin North Central, Fine Gael)
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This was going to deliver the economic nirvana towards which we were heading. I am sure the Minister has the progress report for 2007 for his bed time reading, as it contains some very worthwhile things. The programme was to be delivered in full, on budget and on time. This was the great mantra that was repeated time and again on posters, on the back of buses and everywhere else. None of the five Transport 21 projects has been delivered yet. Spending is 97% off on strategic energy infrastructure. It is 50% off on broadband expansion, 50% off on waste infrastructure, 65% off on ICT in schools, 100% off on the delivery of primary health care centres, and 30% off on affordable housing. We were led to believe this was a Government that was focused on the need to modernise our schools, to have a broadband structure that would span the country and that would have the highest quality energy infrastructure. Instead, we find the Government is 60% off on all of these priorities. All this has happened before money got scarce.

The truth is sad and it is hard for the Minister to face up to it. Ministers have come into this House and have articulated strategies that have been without foundation. We had a climate strategy for eight years, but we delivered no impact on our carbon emissions. The health strategy has delivered 20% of its ambitions. We had a decentralisation strategy, which thankfully is being buried, but the Government has to wait for some outside agency to tell it that the programme has collapsed. It delivered 20% of what was promised.

At least Charlie McCreevy had the good grace to say that if Ministers promise a strategy but do not it on time, then they should be sacked. Of course, Charlie McCreevy was the one who got sacked.

Michael Ring (Mayo, Fine Gael)
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There will be no one left.

Richard Bruton (Dublin North Central, Fine Gael)
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Perhaps the consequence is the empty Chamber today, as the rest have been banished. Are we meeting our targets at the Department of Defence? The sad truth is that if the NDP was to be the centre piece of the Government's strategy, then it had to do what it said at the outset of the strategy, namely, to manage current spending within the capacity of the economy to deliver. Instead, the Government introduced huge spending programmes on the back of unsustainable property revenues. Now we are right up against EU borrowing limits at a time when Ministers should be bringing forward good projects to take up the slack in our building industry and the slack created by other industries falling by the wayside. We are not in that position. The Taoiseach and his Ministers have sabotaged the capacity of this economy to deal with the economic downturn.

The consequence of all this is clear. More people will lose their jobs than normally should be the case. More old, sick and disabled people will suffer cuts in their public services than should. The reason for that goes back to the shoddy way in which the Government has been managed for years. Ordinary people are paying the price, and not the Ministers comfortably strapped into their Mercedes. When we hit the wall, it will be those vulnerable people who once again will feel the pinch. We have already seen it this year, as older people and people with disabilities have been turned away from services. That is just the start. We will see a continuation of that trend, because this Government does not have a credible medium-term strategy that can get us out of this hole. They keep doing what they have always done, and that is just not good enough.

Darragh O'Brien (Dublin North, Fianna Fail)
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I am pleased to be given the opportunity to speak on this motion on the economy and the national development plan. It is important to put in context where Ireland is now, when compared with ten years ago. Some commentators in the Opposition would have us believe the economy has nearly collapsed overnight, and that the budget surpluses which the Government has delivered over the past few years have in some way been wasted.

Damien English (Meath West, Fine Gael)
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The tax paying workers delivered that.

Darragh O'Brien (Dublin North, Fianna Fail)
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I know and the Opposition Deputies know that nothing could be further from the truth. Their contributions to this debate have been ill-judged, badly thought out and often bordering on disingenuous.

James Reilly (Dublin North, Fine Gael)
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Is the Deputy talking about his own Government's policies?

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy, without interruption. He has only got four minutes.

Darragh O'Brien (Dublin North, Fianna Fail)
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I did not interrupt anyone and I will not be interrupted by the shadow Minister for Health and Children.

Pat Carey (Dublin North West, Fianna Fail)
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Is that the shallow Minister for Health and Children?

Bernard Durkan (Kildare North, Fine Gael)
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His has cast a shadow over the Minister on that side.

Darragh O'Brien (Dublin North, Fianna Fail)
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The facts are clear. There are over 2 million people at work now, which is double the amount at work 20 years ago. Many factors have contributed to this, not least an educated and hard working labour force, prudent taxation policies, including a competitive corporation tax rate, and the very good work of State agencies such as the IDA in securing foreign investment and jobs here.

Damien English (Meath West, Fine Gael)
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There were net losses last year.

Darragh O'Brien (Dublin North, Fianna Fail)
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Only this week we have heard announcements from Volkswagen and Covidian that they are to create hundreds of new jobs in Cherrywood in Dublin. Blue chip companies such as these are still investing and locating in Ireland, as it is a good place to do business and because our economy is robust. The Opposition will not talk about such announcements, as the truth does not suit their arguments.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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What about Hibernian Insurance?

Darragh O'Brien (Dublin North, Fianna Fail)
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Let us not forget that it was Fine Gael that openly and irresponsibly labelled this country "rip-off Ireland" and did its best to undermine Irish businesses in order to seek cheap publicity. Unlike Fine Gael, we have reduced our national debt from 64% of GDP to 25% in 2007.

Damien English (Meath West, Fine Gael)
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What about private debt? What about the 40 year mortgages?

Darragh O'Brien (Dublin North, Fianna Fail)
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If we take into account the National Pension Reserve Fund, we reduced that debt ratio to 12%. We established that fund and this shows forward planning for the economy as it will go a long way towards meeting our pension liabilities in 2030. In 2002 and 2003, Fine Gael called for a suspension of payments into the NTPF, which is another ill-thought out measure that has been proved to be incorrect. The SSIA scheme is another example, introduced by the former Minister for Finance, Charlie McCreevy, of whom Deputy Bruton speaks so highly.

Tom Sheahan (Kerry South, Fine Gael)
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Fianna Fáil did not think much of him.

Darragh O'Brien (Dublin North, Fianna Fail)
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It was an extremely successful——

Bernard Durkan (Kildare North, Fine Gael)
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Fianna Fáil got rid of him.

Darragh O'Brien (Dublin North, Fianna Fail)
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I did not interrupt any Opposition Deputy. If they do not want to hear the truth, that is fair enough.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Let him finish. He only has one minute.

Pádraic McCormack (Galway West, Fine Gael)
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The Deputy was not even here for Deputy Bruton's speech.

Darragh O'Brien (Dublin North, Fianna Fail)
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I was watching it on the monitor. It did not make good listening.

Brian Hayes (Dublin South West, Fine Gael)
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I would not admit that, if I was the Deputy.

Darragh O'Brien (Dublin North, Fianna Fail)
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The SSIA scheme has delivered a savings culture in this country. Deputy Bruton said at the time that this scheme, upon maturity, would lead to rampant inflation, but this is simply not true. Over 60% of SSIA holders have kept their SSIAs and maintained their savings record. Yet in 2002 and 2003, Deputy Bruton wanted to cap them and scrap them. That is another ill thought out policy that has been proven wrong.

In the statement released this week by the Government, we have given priority to the areas of health, education and social welfare.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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Health services have suffered.

Darragh O'Brien (Dublin North, Fianna Fail)
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Fianna Fáil has ensured the weakest in society have been put first. There have been massive increases in spending in health and social welfare, and rightly so.

Paul Kehoe (Wexford, Fine Gael)
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It is obvious the Deputy was not watching the monitor.

Richard Bruton (Dublin North Central, Fine Gael)
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What about the cutbacks?

James Reilly (Dublin North, Fine Gael)
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Tell that to the patients in St. Ita's.

P J Sheehan (Cork South West, Fine Gael)
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What about the fair deal?

Darragh O'Brien (Dublin North, Fianna Fail)
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Fianna Fáil makes no apologies for taking prudent steps towards ensuring the economy is in a good state to take the benefit of a global upturn in the next 18 months.

P J Sheehan (Cork South West, Fine Gael)
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He means raw deal.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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All Members realise the challenge we face and I welcome their contributions as to how we can collectively meet the new situation. It is easy to be critical when hard decisions have to be made. I am satisfied, however, that our response to the new economic circumstances is proportionate, measured decisive and credible. I believe the public recognise that and will support our approach. The savings outlined by Ministers this week will be delivered.

A set of systematic measures have been announced that will yield dividends now and in the medium term in the current account. By focusing on greater effectiveness, targeting better payroll management, seeking savings in the services we buy in and prioritising productive capital, we are putting in place a regime that will enhance the delivery of public services and the return from the investment decisions we make.

Damien English (Meath West, Fine Gael)
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Where are the new ideas?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Ireland has experienced an economic transformation since the mid-1990s that has been the envy of the rest of the world, if not the Opposition benches.

Bernard Durkan (Kildare North, Fine Gael)
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The Minister used the past tense.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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That transformation has been achieved through the hard work and enterprise of our people, guided and led by the sound economic and fiscal policies pursued by successive Governments.

The brightest beacon for the future lies with the national development plan. When the Government launched this plan, it highlighted the need to tackle the infrastructure deficits that had constrained our potential economic development. That work is well in hand. Over the remaining period of the national development plan we will continue to roll out a very substantial programme of investment in economic infrastructure. We will focus on those priorities which offer the best value for money and promise the greatest economic return. By investing in crucial infrastructure projects, we can augment our productivity, enhance our competitiveness and improve the quality of life.

Future economic infrastructure priorities in the plan include completion by 2010 of the major inter-urban routes linking Dublin with Belfast, Galway, Limerick, Cork and Waterford; significant enhancement of the Atlantic road corridor.

Deputies:

We have heard all that before.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputies, please.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It will include a major development in the public transport network in the greater Dublin area, additional commuter services elsewhere in the country, significant enhancement of Dublin Airport and its capacity; increased energy security through the North-South and east-west interconnector projects and an ongoing programme of investment in our environmental services infrastructure to facilitate commercial and residential development.

The national development plan recognises the centrality of the productive and enterprise sector in the future development of the economy. National development plan investment priorities up to 2013 in the area of enterprise innovation will include strong support for continued investment in science, technology and innovation, with a particular emphasis on ensuring research can be translated into commercial products with resultant economic benefits. It will include ongoing support for high potential start-up companies, support for productivity enhancements for indigenous companies and support for overseas firms that wish to invest and locate in Ireland — many such companies continue to make such decisions. There will also be further support for tourism development, including tourism infrastructure, such as the convention centre in Dublin, due to open in 2010——

P J Sheehan (Cork South West, Fine Gael)
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What about the Cork-Swansea ferry service?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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——whose impressive progress on the quays can be seen on a daily basis. There will be support for the ongoing development and modernisation of our agriculture and food sector.

The national development plan also highlights the importance of education and training.

Ulick Burke (Galway East, Fine Gael)
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Yet the Government is cutting back on training programmes.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I will deal with that later. People are the ultimate bedrock of national competitiveness and the national development plan will provide very substantial allocations so that our labour force has the flexibility, skills and qualifications to enable Ireland to compete in the high value-added sectors.

Taking all these together, investments in infrastructure, enterprise, innovation and human resources confirm the Government's intention and determination to make those priority investments which will secure Ireland's economic future.

John Cregan (Limerick West, Fianna Fail)
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Hear, hear.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Ireland's economic potential, as the ESRI's recent medium-term review indicated, is considerable. We must now focus and prioritise the resources provided under the national development plan to optimal effect.

Damien English (Meath West, Fine Gael)
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Where is the plan?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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All this gives the lie to the charge constantly repeated in this House by the Fine Gael Party that there is no strategy on our part to ensure a return to growth.

Bernard Allen (Cork North Central, Fine Gael)
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There is no strategy.

P J Sheehan (Cork South West, Fine Gael)
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There is not.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Sheehan, please.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The national development plan shows that the Government is determined to enhance the productive capacity and productivity of this economy and to restore and improve our international competitiveness. The national development plan provides a robust, multiannual financial investment framework to underpin this endeavour. The Government is determined to prioritise and deliver those investments under the national development plan which promises the best long-term economic return for Ireland.

The public can be reassured of the Governments determination to see us through and to take the sensible and balanced action needed to keep the fiscal position in good order. That is a very important part of the strategy for Ireland in the years ahead.

Irrespective of this or that EU rule, we cannot, for sound budgetary reasons, allow current spending to out-distance current revenue. We must deal with current spending and not borrow on the never-never. That path leads to unsustainable borrowing, less room for manoeuvre, lower growth and a heavier tax burden. Those opposite know this only too well as all those things happened during their extensive period in power in the 1980s.

Deputies:

Hear, hear.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am not prepared to bring the country back to the days of unsustainable borrowing, less room for manoeuvre, lower growth and a heavy tax burden.

P J Sheehan (Cork South West, Fine Gael)
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What about all the money that was wasted?

Bernard Durkan (Kildare North, Fine Gael)
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That is the economics of 1977.

Kieran O'Donnell (Limerick East, Fine Gael)
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We are already there.

Bernard Allen (Cork North Central, Fine Gael)
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Only if the Government is re-elected.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Unlike then, our economic future is bright.

Damien English (Meath West, Fine Gael)
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Tell us all about it.

P J Sheehan (Cork South West, Fine Gael)
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It would have been.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In the past 11 years 750,000 new jobs have been added to the economy.

Kieran O'Donnell (Limerick East, Fine Gael)
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Some 54,000 jobs alone were lost this year.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The economy has doubled in size, while exports have increased by over 100% in volume terms. Public investment has been maintained at record levels while real income levels have increased substantially.

Deputies:

Hear, hear.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Tax rates have been reduced virtually across the board while hundreds of thousands of ordinary workers have been removed from the tax net.

James Reilly (Dublin North, Fine Gael)
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That is because they are all unemployed now.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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A minimum wage has been introduced to protect the weak in our labour market and social welfare payments are now up to double those in the UK.

Tom Sheahan (Kerry South, Fine Gael)
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It is not the only thing that has doubled. The deficit has doubled too.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Unemployment has been reduced from 10% to 5% during this period.

Deputies:

Hear, hear.

Bernard Durkan (Kildare North, Fine Gael)
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The Minister is using hypnosis.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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These are all substantial improvements and our ambition is to do more in terms of the welfare of our people, as resources allow.

Pádraic McCormack (Galway West, Fine Gael)
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Is Deputy Brian Lenihan glad he is the Minister for Finance?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Our economic potential is clear and attested to by all economic commentators. The economy can grow at 4% per annum once the cyclical effect of the housing adjustment washes through.

Joan Burton (Dublin West, Labour)
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How long will that take? Four years, ten years.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Burton, please. The Minister, without interruption.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Our glass is very much more than half full economically. The Taoiseach, in his opening remarks to this debate, set out a vision for positive economic policies to deal with this downturn, measures to reduce the cost of doing business in Ireland, increase competition, help the consumer get greater value for money, improve competitiveness and maintain the focus on education and skills. These are sound measures that will pay off.

Joan Burton (Dublin West, Labour)
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That is rubbish.

Damien English (Meath West, Fine Gael)
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Where are the resources?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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During this debate the Opposition has accused the Government of causing the short-term economic problems that the country faces. Deputy Kenny suggested the problems we face are solely due to Government mismanagement, waste and missed opportunity.

Bernard Allen (Cork North Central, Fine Gael)
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It is all his fault to start with.

P J Sheehan (Cork South West, Fine Gael)
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And rightly so.

Enda Kenny (Mayo, Fine Gael)
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I am glad the Minister understood my statement.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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That is to ignore the serious implications for a small, open economy like Ireland of problems that even the world's largest economies are having difficulties in coming to terms with. Ireland is not immune to international developments. Since the late 1950s it has been clear that Irish prosperity is strongly associated with deep international links. If Fine Gael does not understand and appreciate that, it is not able to give economic direction to this country.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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It was the Government that lost the boom.

Frank Feighan (Roscommon-South Leitrim, Fine Gael)
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The Minister should look in the mirror.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Please, Deputies, do not start again.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The first thing we must reflect on is the international position. If we do not do that and draw intelligent conclusions from it, we will not give the people the right leadership. We are determined to give the people the right leadership.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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This does not come without risks, risks that were enunciated in the last budget, risks that those opposite choose to forget. They have forgotten, in particular, the significant uncertainty and volatility in world financial markets which began in August 2007 and has continued into 2008. The euro has continued to strengthen against the dollar and sterling, our two important export markets. Oil prices have continued to rise, which is obviously unhelpful to competitiveness of an island economy like Ireland's.

While these risks present significant challenges for the economy, it is, as has been widely acknowledged by economic commentators, is now in a position, as it never was before, to meet these challenges head-on. The people are confident in their own abilities. The economy and the labour force is flexible, highly skilled and innovative. There have been significant improvements in productivity and infrastructure. It is this confidence and flexibility, in conjunction with the improvements in productivity and investment, that have lessened the effects of the international problems and put the economy in an excellent position to benefit fully from the inevitable upturn in the global economy.

Deputies:

Hear, hear.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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A number of Deputies opposite have suggested that the measures the Government proposed are ill-conceived and rushed. I assure the House that we were careful in developing the measures to protect the vulnerable and the economy as far as possible.

We have been preparing the ground for some time. In his budget speech last year, the Taoiseach, then Minister for Finance, announced a wide-ranging efficiency review. That review asked Departments to examine all their administrative spending as well as the administrative spending of all bodies and agencies under their aegis with a view to identifying possible savings. Many of the proposals with regard to savings have emanated from that review. All Departments have identified a range of administrative savings that are now to be acted upon.

Throughout the year officials in my Department have been carefully and assiduously monitoring developments in the Irish economy. As evidence began to emerge of revenues being behind profile, they began work on plans to address fiscal problems. While the economic situation is changing fast, the deterioration if not its extent has been clear to my Department for some time and we have been planning accordingly. Furthermore, that work will continue over the summer. While the issues involved are complex, the targets that the Government has set are stringent and it is committed to achieving these efficiencies and the resultant savings. I believe that the savings on administrative costs can be realised across all Departments and agencies. The Government is determined to secure maximum value for money in our public services and concentrate resources on frontline service delivery.

A number of Deputies have joined the chorus of outside commentators in calling on the Government to breach the conditions of the Stability and Growth Pact. Our aim for good reasons is to adopt policies consistent with the Stability and Growth Pact. There are few Deputies in this House who do not remember the 1980s and the state of the public finances. During that period the public finances went out of control as a result of an accumulation of bad policy decisions.

Deputies:

Hear, hear.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The lessons of the past tell us that we need to guard against——

John O'Donoghue (Kerry South, Ceann Comhairle)
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Let the Minister finish, please. He has only a couple of minutes. Please allow him to finish.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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——entering into a process of ad hoc responses and persistent and increased current borrowing. I listened very carefully to what the leader of the Fine Gael Party said yesterday in the course of this debate. When one translates what he said in fiscal terms, he was opposing some of the savings, although he welcomed others, in fairness.

Enda Kenny (Mayo, Fine Gael)
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Name them. The Minister should list them.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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He also proposed other expenditures and a reduction in taxation. That is not a sustainable strategy for Ireland in the future. It would be easy to veer completely off course by resorting to such policies. If we were interested in an easy life for the present, it might be a tempting option.

Brian Hayes (Dublin South West, Fine Gael)
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Get rid of half the Ministers.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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However, the Government is determined to address the issues by taking the necessary decisions. I know for certain that no Deputy on this side of the House wants a return to the economic situation that pertained in the 1980s.

Deputies:

Hear, hear.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am sure the Deputies opposite share my view on this.

Deputies:

We want a return to reality, that is certain.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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A number of Deputies criticised the proposal to reduce the allocation for FÁS apprenticeships. However, this measure is a recognition of the reality that there will be a lower demand for apprenticeships as a result of the downturn in the new housing sector. I remind Deputies that FÁS schemes are demand-led.

Brian Hayes (Dublin South West, Fine Gael)
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Particularly for advertisers.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Employers look for apprentices. It is not some sort of social employment scheme, as has been suggested by some speakers. The numbers of apprentices are falling because demand for labour in the construction sector is falling. We all know that and have referred to it in the course of this debate.

Tom Sheahan (Kerry South, Fine Gael)
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The Celtic tiger is an intensive care unit.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Sheahan, please.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Equally, it is not surprising that the largest saving should come from the health Vote since the entire income tax yield is spent on the health allocation. The savings arise from allocations that cannot be spent this year. That is an ordinary saving for 2008.

Emmet Stagg (Kildare North, Labour)
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It is very good value for money.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The truth is health costs have not been targeted for heavier savings than others and the percentage of savings is close to the average for all other Departments combined. Likewise, the savings in overseas development assistance arise from moneys that would not have been spent on time this year. Even so, we will still exceed the 0.54% target set for 2008 in terms of GNP and we will be far ahead of what most other developed nations spend as a percentage of their national income.

In winding up this debate, I want to make clear the Government has an absolute resolve to meet the present challenges. We need a sensible stewardship of the public finances. We have taken firm decisions, some of them not without controversy. All expenditure must be subject to scrutiny for 2009.

Bernard Durkan (Kildare North, Fine Gael)
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That is a new one.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We are firm in our aim to get savings from payrolls, procurement and policy measures and are prepared to face up to the need for more action as the situation warrants.

Emmet Stagg (Kildare North, Labour)
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It is a pity the Minister did not do it in time.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Over the last 11 years, we have invested wisely in schools, roads, public transport and environmental infrastructure, giving us one of the highest rates of public investment in Europe. We have dramatically increased the State pension, child benefit and the number of gardaí, teachers, doctors and nurses serving our people. These are the choices we made with the surplus that our taxpayers earned for us and we made wise choices in increasing this social expenditure.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Our priority will be to manage the present situation sensibly. This will ensure we create the right environment to return to trend rate of economic growth, which is generally agreed by leading economic commentators to be 4%. In doing this we can sustain the real and tangible economic and social progress we have made. The measures I outlined this week will help us along that path.

Dermot Ahern (Louth, Fianna Fail)
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Hear, hear.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Before we move on to questions, the Minister for Social and Family Affairs, Deputy Mary Hanafin, wishes to make a clarification to the House in accordance with Standing Orders.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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During the course of the debate last night I indicated that the Department of Social and Family Affairs would be able to generate savings of over €3 million this year on information and technology projects. I should have indicated that the figure is €1 million, but the overall figure I provided remains the same.