Ulick Burke (Galway East, Fine Gael)
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I wish to share time with Deputies Perry and Creed.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Is that agreed? Agreed.

Ulick Burke (Galway East, Fine Gael)
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Week after week over recent months we have had announcements of job losses throughout the country. In all cases, the agencies charged with responsibility for job creation and the support of industries have come to the help and assistance as far as possible to support those companies which indicated they were about to leave in part or were closing altogether. It is necessary for all of these agencies to indicate their responsibilities.

On the Order of Business I asked the Tánaiste to indicate whether the remit of Enterprise Ireland had changed dramatically in the recent past. I have always believed that its responsibility was to support and help Irish indigenous industries. However, I must state my disbelief at what happened recently under the auspices of Enterprise Ireland. A letter I received from the CEO of Enterprise Ireland states:

Thank you for your letter of 28 January. In response to the downturn in the construction sector, Enterprise Ireland put in place a number of initiatives, including a Leadership 4 Growth programme for CEOs of the construction companies and a number of trade-related activities in support of new businesses development in that sector. A number of companies in that sector are also actively seeking access to the new areas of technology, new products and processes. As part of that response, Enterprise Ireland organised a visit to the International Builders Show in Las Vegas.

I want the Tánaiste and Minister for Enterprise, Trade and Employment, who has direct responsibility for this matter, to indicate clearly why there was a junket to Las Vegas parallel to that which occurred under the auspices of FÁS. How could Enterprise Ireland, which only has responsibility for indigenous industries, take the CEOs, as they are termed, of the building and construction industry to Las Vegas? How in God's earthly world could this be a response to Irish needs in these times? Bearing in mind that we talk about development, the Taoiseach announced at Christmas how Ireland could develop a smart economy. What I have described is, in anybody's book, too smart a development.

When I contacted Enterprise Ireland following the closure of Cigna in Loughrea, County Galway, I was told it had no money whatsoever except €5,000 that was to be granted to a company for consultancy work. While Enterprise Ireland was telling me it could not support an industry in Loughrea, it was in Las Vegas on a junket. Will the Minister for Enterprise, Trade and Employment indicate clearly the responsibility of Enterprise Ireland for the development of Irish industry?

Michael Creed (Cork North West, Fine Gael)
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I thank my colleagues for sharing their time with me.

The backdrop to the country's financial difficulties was outlined graphically by the Taoiseach in the Dáil yesterday. He indicated approximately 36,000 private sector employees lost their jobs in January. That is an indicator of the human misery associated with the downturn in the economy. Ipso facto, the undeniable truth that almost dare not speak its name is that not a single public sector employee has lost his job in the same period. I am not comfortable with framing the debate on this issue as a conflict between the public and private sectors but that is an undeniable fact. Many of the 36,000 who lost their jobs would willingly have taken wage reductions or opted for four-day weeks, as many of their colleagues have done. They would have done everything possible to cling on to employment.

Collectively, we all need to forge national consensus on how to proceed. I very much regret that the Taoiseach, in outlining the proposals, missed the opportunity to show that this House is prepared to lead by example. I have difficulty with how his proposals are skewed to the disadvantage of lower-paid public servants. Over the years, particularly in recent years because of economic affluence, there has been an explosion in the number of Oireachtas committees, Chairmen, convenors and Ministers of State. We should only have one Minister of State for every Department, totalling 15, and only one committee pertaining to each Department, also totalling 15. Bearing in mind the issue of sitting Members drawing ministerial pensions, we should show we are prepared to take the pain ourselves. By doing so, we would go some way towards forging the required national consensus.

These are unprecedented economic times. It is simply not sustainable that the country would continue to borrow €55 million per day. This is merely the start of it, and it is a poor start given that we have not managed to forge the required national consensus, as is evident in the newspapers. While nobody accepts pain willingly, a greater effort could have been made by the Taoiseach over recent months, during which his Government prevaricated, to forge the consensus necessary to see us through the crisis. The cuts of €2 billion, which will have an adverse impact on many, are only the beginning in that we face cuts of €4 billion next year and the year thereafter. The Taoiseach missed an opportunity in that regard. We in the House should be prepared to lead in respect of the cuts in the areas I have outlined.

John Perry (Sligo-North Leitrim, Fine Gael)
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There is an old adage that cash is king, and this is never more true than when there is no cash. The message is so critical that it is worth repeating. Just in case there are any slow learners, I reiterate that cash is king. Our Government does not have any cash to pay its way and we are borrowing approximately €55 million per day to pay our daily bills. Quite simply, we are living beyond our means and this must stop.

The country faces two major problems — the massive hole in the Exchequer finances and the growing national economic crisis, which is such that thousands of people are losing their jobs every month. The banking crisis is really a sideshow to the decline in the well-being of the national economy. How we solve these crises will depend on the problems we define. The Exchequer deficit is so vast and deteriorating so rapidly that there is a need for immediate action. The timescale in which to identify and address all the economic issues is too long to permit any delay in tackling the immediate financial crisis.

Two days ago, the Government introduced a series of measures to tackle the financial crisis. There has been much negative commentary on the absence of decisive leadership over recent months. With regard to what one should do in a crisis, an old Australian saying suggests that if one is up to one's ass in a swamp with crocodiles, it is time to take big steps. Instead of taking big steps, the Government went for long, leisurely walks with the social partners. The measures announced yesterday could have been announced at any time in the past two months. I broadly support these measures in so far as they will work. Good disaster management requires that the current crisis should not be allowed to overwhelm in-depth analysis of any key factors that led to it. A fundamental review and public acknowledgement of the origin of the crisis are critical to development of the right solution, and particularly to the development of public confidence and trust in the solution given that harsh changes are essential.

The Government has failed to carry out any fundamental review of the origins of the crisis and the reasons are obvious. The Government is responsible for approximately 80% of the current difficulties and international factors account for the rest. It must accept responsibility publicly; otherwise, public trust and confidence will continue to drain away. Having failed to carry out any fundamental review of the origins of the current crisis, it has failed to identify any new or creative ideas on how to proceed as a country. The recent Framework for a Pact for Stabilisation, Social Solidarity and Economic Renewal is nothing more than a winning entry at a feis for economic clichés. The Government is bringing forward a series of short-term tactical micro-steps to address individual elements of the immediate crisis. These steps are founded on the idea that, if taken, we will return to where we were on the wealth and economic growth path.

Some fundamental questions need to be asked. Do we really want to be one of the wealthiest countries in the world? Do we really want to return to a level of economic growth that pushes our infrastructure and social fabric to their limits? Do we really want to be absentee landlords to the world in our race for wealth? Did a degree of crassness creep into our society? We should aim to be one of the best countries in the world. The most fundamental requirement at present is to protect existing manufacturing jobs. We have an open, exporting economy and only the manufacturing sector can provide enough quality jobs to result in full employment in the medium term. To maintain a strong, viable manufacturing sector, we must declare manufacturing to be the foundation of the national economy and benchmark manufacturing costs, including labour costs, against those of the main European manufacturing countries. We cannot rely on tax breaks that can be wiped out in the stroke of a pen. All sectors in our economy must be benchmarked against the manufacturing sector. If we take these steps we can really hope to weather the storm and come out stronger when it passes.

Michael Kennedy (Dublin North, Fianna Fail)
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I certainly welcome the opportunity to speak on this very important topic. Last week, when I had a few brief moments to talk about it, I mentioned two issues, the first of which was the negativity that emanates from this Chamber. As a nation we do not benefit when the Opposition, day in, day out, talks down the country and talks about the negative aspects. We are in a most serious worldwide crisis. No country is free of problems. We see what is happening in America, Britain and across Europe. As a Parliament, we should recognise publicly that we have major problems. Borrowing €55 million a day is not sustainable. In our private lives none of us would expect that we could spend more money than we earn.

It is time the Labour Party stated publicly that we have major problems and that we must do something about it. The media today have put it bluntly to the Labour Party that it must offer solutions. It is easy to criticise. I accept it is the Opposition's role to offer criticism but it must offer solutions also. I was brought up in a business environment where from a young age I was told bluntly that if I disagreed with a business proposal I had to put forward a credible alternative. I accept we have problems but the Opposition must offer solutions. At a time of national crisis the Members of Parliament should endeavour to work together to come up with solutions rather than the crossfire we hear day in, day out. All Members have been contacted by people who have lost their job, are about to lose their job or have a family member who has lost a job. The public expect us to show solidarity with their plight. They do not like to see media stories about Opposition party leaders criticising the Taoiseach. People expect us to come up with solutions.

Yesterday, Moody's put Ireland in a negative category. Fortunately, we still retain our AAA status. If people abroad detect negativity from parliamentarians they will ask questions about Ireland Inc. If we borrow €55 million a day it behoves us as a Parliament to ensure that the people from whom we seek the money will give us the best possible interest rate. It is critical that we do not get further into debt and that we can borrow at the best available terms. Bickering in this Chamber does not help the situation.

Deputy Rabbitte is a man for whom I have great respect. I suggest the Labour Party changes tack in the national interest. Let us fight each other on minor issues but let us collectively put our shoulder to the wheel on the economy so that we can get from where we are today to where we need to go tomorrow and in the future. The public and the 330,000 people who are on the dole might appreciate that more. Let us get over apportioning blame to various parties and groups. The public do not want to hear about blame, they want us to take action.

We must get our public finances in order. Everybody in the Chamber privately accepts that we must reduce public spending by €2 billion this year, €4 billion in the following two years, €3 billion in the fourth year and €3.5 billion in the fifth year. People in this Chamber should be big enough to say that is what we must do and come up with ways of doing it. The Government made its decision yesterday. The Opposition should recognise that was a courageous and correct move or it should put forward an alternative. It is not good enough to say the cuts are being made in the wrong sector. Neither is it good enough to say people in certain salary categories should be excluded unless an alternative is put forward.

No Member will hear a person say he or she is affected more than another person. The people who work in this House are affected, the same as we, the politicians, are — some more so than others. Perhaps the measures require a little tweaking here and there. I am sure that can be achieved when the Bill comes before the Dáil in the coming weeks. The broad principle of everybody putting their shoulder to the wheel and taking some of the pain is reasonable.

The stabilisation of our banking system is the second issue on which the Government has been concentrating. Each one of us in the Chamber is critical of what happened in Anglo Irish Bank and the actions of certain directors. However, as politicians, we should accept we need a banking system, as our economy cannot function without it. We cannot let any bank fail. I do not wish to harp on about the past, I look forward to the future. I hope that when the Government introduces the recapitalisation plan for AIB and Bank of Ireland, the Labour Party will accept the reality that we must do that in the national interest, whether we like it or not.

I agree with what the Taoiseach said yesterday, that the salaries of banking executives need to be reduced substantially. It is gratifying that President Obama followed the Taoiseach's lead yesterday. The American Government is putting $800 billion into the system. It is good that the American Government can print money to put into business or bail out banks. We do not have that luxury in Ireland as we cannot print our own money. The British Government has taken the position also that it can print off hundreds of millions of sterling and that will resolve the issue but I am not convinced.

We must get our finances in order and stabilise the banking system. We must get back to being cost-effective and competitive in business. We became a high wage economy in the Celtic tiger years. I regret to say that we ensured certain businesses would go to the Far East and eastern Europe where the wages are one third of ours. It does not come easy to say it but that is the reality. In the current recession we can introduce cost-effectiveness to business and then when the good times come we will be in a position to move forward again.

I welcome the €150 million investment by the Government in home insulation schemes and the school building programme. We need to get small businesses working so they can retain jobs. If every small business in the country created only one extra job we would have more than 100,000 extra jobs. We must ensure small businesses survive. The Government is committed to ensure that small businesses will be facilitated through the measures it will introduce in the coming weeks.

Martin Ferris (Kerry North, Sinn Fein)
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I wish to share time with Deputy Rabbitte.

Brendan Howlin (Wexford, Labour)
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Is that agreed? Agreed.

Martin Ferris (Kerry North, Sinn Fein)
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Like everyone else in this House, I am shocked by the latest unemployment figures. All of us know from our own constituencies that the position had significantly worsened over the past month or so. That was indicated by the 70% increase in unemployment in Kerry between December 2007 and December 2008, and the statistics, when broken down locally, will show yet another steep increase. As I have said previously, this will further worsen all the problems associated with large scale unemployment. We have witnessed the return of emigration, which will have an extremely negative impact on the fabric of local communities and exacerbate the problems associated with rural decline and isolation.

For those who remain there are the daily struggles of attempting to cope with making ends meet on social welfare payments. That will contribute to a marked increase in poverty with all the consequences that will have on the State in terms of increased demands on the health service and other public provisions. As others have said, the impact of unemployment levels on State expenditure will mean a significant additional demand on public provisions to the extent that they will probably negate any of the savings claimed to have been made by the measures announced in the House on Tuesday.

It should also be borne in mind that while there is a temptation on the part of the Government to make even further short-term savings by, for example, shedding jobs in Dublin Bus and Bus Éireann, the cost of supporting the workers made redundant will vastly outweigh any savings made through cutting down on the relatively minor losses made by the public transport providers who are obliged to provide services, for example, to the more remote rural parts of the country, which are unlikely to make a profit. However, that is why services such as transport and others were taken into public ownership in the first place. Private enterprise was either unwilling or unable to run them efficiently to provide an adequate service or to make a profit from doing so.

That is worth bearing in mind at a time many people are seeking to blame the public sector for all the ills in this country. Many of those leading that call did very well out of the Celtic tiger. Unfortunately, for whatever reason, little of the driving force within the economy was led by indigenous enterprise, other than the construction sector. We remained, and continue to remain, overwhelmingly dependent on inward foreign investment in what there is of a manufacturing base and in key areas such as information technology.

Many people were happy to invest in the services sector in which wages have remained low, even with the introduction of the minimum wage, and working conditions and workers' rights have been undermined, yet those who made large profits in this sector, who were happy to charge consumers more than they would have had to pay in other countries, are the first to demand that those who gained least over the period of economic prosperity should pay for it. The same applies to those who were happy to push the price of housing and rents well above any other increases in the cost of living and certainly above any increases in wages.

That is why there is understandable resentment and anger among people who have lost their jobs and people within the public service who are being asked to take a substantial pay cut, not to mention the perception that this Government has bailed out the banks and left those responsible walk away from the mess they created. Some of those involved were shown to have engaged in practices, which, at the very least, were underhand and unethical, and which, it would appear, were designed to allow them and their friends to continue to gamble on the property and other markets. Not many gamblers have their tab picked up by the State.

The Taoiseach yesterday, in defending the pay cuts imposed on public servants, said he would like bank executives take a 25% pay cut. Surely, where the State has, in effect, guaranteed the banks' losses and nationalised the debt they built up through their irresponsibility, the Taoiseach can do more than suggest what those banks, which are effectively owned by the State, should do. He is not suggesting that nurses and teachers and postal workers should take a pay cut or there should be no increases in pay for any workers or that there will be job losses in places like Dublin Bus and Bus Éireann. He is imposing these measures and, in the process, ignoring the structures of social partnership, which he and IBEC were happy to use when it suited them to effectively dampen the wage increases in both the public and private sectors during the boom. Now that the same people have contributed to the current mess, the unions and those they represent are simply ignored and told what to do. The contrast between that and the manner in which the property speculators and the gambling bankers were saved could not be any starker.

There is a great deal of discussion currently about responsibility and everyone taking their share of the burden. That is all very well but if that is to be seen to be more than empty rhetoric, then it must be seen to be put into effect. However, where people can contrast the treatment of the bankers with that of public sector workers, they will fail to be convinced. Many people this week are asking themselves why they should take the hit when others are being allowed to walk away. The bankers and developers and cowardly political practices are responsible for the mess we are in. The bankers, through irresponsible lending to facilitate developers to increase the cost of land way beyond its value, have contributed to many young people who bought homes facing negative equity.

Pat Rabbitte (Dublin South West, Labour)
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Deputy Kennedy asked the Labour Party to acknowledge that we have a major problem. I have no difficulty at all acknowledging as much and the Labour Party has drawn attention to the fact that we have a major problem going back many months while the Government was in denial. Apart from drawing attention to the fact the Government has taken on board ideas advanced by Deputy Gilmore, for example, in his speech to our party conference last November such as the insulation of homes and the refurbishment and rebuilding of schools, the Labour Party over a number of years — it is on the record of the House — pleaded with the then Taoiseach, Deputy Bertie Ahern, to intervene in the cost of building land and advocated many of the proposals in the Kenny report. At the same time I argued that case with him, my colleague, Deputy Burton, highlighted the extension and continuation of tax incentives to maintain the property bubble while the economy was in boom, but we were ignored. It is that ignoring of the obvious in terms of economics that has worsened the crisis we face. The property bubble, facilitated and encouraged by Fianna Fáil, in particular, has led to the worsening and deepening of the crisis we are in.

When I am challenged by Deputy Kennedy to say the Labour Party acknowledges we have a problem, I most emphatically do, and if the views of the party had been followed, we would not be in quite the degree of mess we are in. I accept the Deputy's bona fides, although I have some difficulty with anybody who sees politics through a prism or believes that President Obama last night followed the lead of the Taoiseach in the matter of bankers' pay.

Charlie O'Connor (Dublin South West, Fianna Fail)
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It is a good line.

Pat Rabbitte (Dublin South West, Labour)
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We all occasionally surrender to self-delusion. When Deputy Kennedy criticises the Opposition for drawing attention to the mistakes that were made, especially by Deputy Bertie Ahern's second Government, in the management of the economy, I must point out to him that he was never in the House to watch Fianna Fáil in opposition. I have witnessed this and, by God, if the Deputy thinks the Opposition is irresponsible now, he ought to have been here to watch Fianna Fáil in full flight in opposition.

I accept that getting control of the direction of the public finances must be part of the solution to the crisis into which we have been plunged. It must be seen as a part of the solution because the package before us is neither fair or balanced. It is punitive on people on low pay. A conflict has been set up between private sector and public sector workers but many people forget, for example, that a clerical officer in the Houses of the Oireachtas or elsewhere starts on a salary of €23,221, a staff nurse at €30,339, and a special needs assistant at €23,232. These people are now liable to the full belt of this levy. When the Taoiseach says he wants to go the route of social partnership, I draw his attention to what the agreed framework document spells out several times. I will quote one paragraph.

The Government and social partners are fully committed to an approach in which all sectors of society contribute in accordance with their ability to do so, and conversely the most vulnerable, low paid, unemployed and social welfare recipients are insulated against the worst effects of recession.

That is not what we have. We have a package that punishes the low paid and rather than a Government boasting about the number of people who do not pay tax, it ought to be highlighting the number of people who are on very low pay.

The package before us is riddled with internal inconsistencies. When tax is applied to the proposed pension levy — it is an income levy and not a pension levy — people on lower pay end up paying more in the pension levy than people on higher pay because the lower rate of tax applies in one case and the higher rate of tax in the other cases.

As outlined in the framework document the Taoiseach has argued for a system of social partnership that would spread the burden in a social solidarity pact. Instead of that the inverse has happened. He has come into the House with a package of proposals that is purely a tax on income. It is an income levy not a pension levy. It imposes disproportionately on people from €15,000 a year. At €30,000 a year — can anybody in this House imagine living on €30,000 a year — the levy will be €1,750. On €50,000 it will be €3,750. Is that fair in the circumstances in which we find ourselves?

It is ridiculous when we organise the business of this House that on an issue of such importance, when we are staring economic crisis in the face, Members of this House who want to contribute to this debate and deal with the issues raised by the Government have five minutes to make a contribution. We need to distinguish between the debates that matter in the House and the ones that are less important. We need to give the Members of the House the opportunity to contribute in a thoughtful, considered and coherent way to offering solutions to address the crisis we now face. The way this debate is structured does not offer that opportunity.

Frank Fahey (Galway West, Fianna Fail)
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I believe that five minutes is plenty. I want to make two proposals to the Taoiseach and Minister for Finance. In this time of unprecedented financial and fiscal challenge, which is affecting every economy in the western world, we need to act in solidarity as a nation. As part of the public reform process the Taoiseach should establish a new Department of public service innovation. The biggest challenge facing the country is the objective of delivering services efficiently and cost-effectively.

I have been fortunate to have served in seven different Departments. The public servants who work there are excellent people who work hard. However, the structures and system in which they operate make things almost impossible. The best civil servants should be drawn from across the spectrum to staff this new Department. People from the private sector who are expert in change management should be introduced in exchange for public servants going out. There should be a radical and fundamental reform of the public service from the top down and more importantly from the bottom up, including the local authorities, HSE and other agencies delivering services. Quangos need to be eliminated. This recession offers an ideal opportunity to undertake innovative work in public service reform. It is the civil and public servants who should lead that. There are no better people to do so.

My second proposal is that the Minister for Finance should invite representatives from Labour and Fine Gael to the Department of Finance and open up the books to let them see the precise situation. This will let them have the opportunity——

Bernard Durkan (Kildare North, Fine Gael)
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The Government should have done that five years ago.

Frank Fahey (Galway West, Fianna Fail)
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I know Opposition Members do not like this because it would call their bluff.

Bernard Durkan (Kildare North, Fine Gael)
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We could have told the Government where it was going wrong.

Brendan Howlin (Wexford, Labour)
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Allow Deputy Fahey to make his contribution.

Bernard Durkan (Kildare North, Fine Gael)
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However, the Government did not want to.

Frank Fahey (Galway West, Fianna Fail)
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We should let the Opposition see the books.

Bernard Durkan (Kildare North, Fine Gael)
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Who destroyed the books? Who destroyed the economy?

Brendan Howlin (Wexford, Labour)
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Allow Deputy Fahey to make his contribution.

Frank Fahey (Galway West, Fianna Fail)
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It is very important that we have solidarity and responsible Government and Opposition.

Bernard Durkan (Kildare North, Fine Gael)
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It is time we had responsible and accountable Government.

Frank Fahey (Galway West, Fianna Fail)
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While Fine Gael has made some attempt to give us alternatives, as I said in my speech on 30 October, I am particularly saddened by the attitude of the Labour Party.

Bernard Durkan (Kildare North, Fine Gael)
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I bet the Deputy is.

Frank Fahey (Galway West, Fianna Fail)
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I said then that Deputy Gilmore and Labour are trying to be all things to all men.

Bernard Durkan (Kildare North, Fine Gael)
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That is what Fianna Fáil Members have been doing all their lives.

Frank Fahey (Galway West, Fianna Fail)
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It does not work.

Bernard Durkan (Kildare North, Fine Gael)
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It did not stop Fianna Fáil Members.

Frank Fahey (Galway West, Fianna Fail)
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It does not work in this climate. As a student in UCG in the 1970s I voted for Deputy Rabbitte as president of the students' union and I also voted for Deputy Gilmore in that role. Deputy Rabbitte will recall that at that time, at the archway in UCG, we solved the problems of the university, of Galway, of Ireland and of the world. I remember Deputy Rabbitte being particularly innovative and people like Mick Lally always having great wisdom. Our lecturer, Deputy Michael D. Higgins, came along from time to time to make sure we were realistic. Deputy Gilmore's performance in this Dáil has reminded me of his very good performance as president of the UCG students' union. He has not changed very much. Being the leader of an Opposition party, being the one who has recently told us——

Bernard Durkan (Kildare North, Fine Gael)
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The Members opposite have not changed very much either.

Brendan Howlin (Wexford, Labour)
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Allow the Deputy to conclude. He has only one minute.

Olivia Mitchell (Dublin South, Fine Gael)
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The Deputy had five minutes to speak on the economy and all he talked about was Deputy Gilmore.

Frank Fahey (Galway West, Fianna Fail)
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Deputy Gilmore recently told us he wants a general election and wants to become Taoiseach. It is now imperative for Deputy Gilmore to take up my challenge this morning and examine the finances of the State. He should then come up with an alternative. If he wants to make a positive contribution to the challenge we now face he must come up with an alternative.

Bernard Durkan (Kildare North, Fine Gael)
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He should go back seven years and find out when the rot started.

Brendan Howlin (Wexford, Labour)
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Deputy Durkan, please.

Bernard Durkan (Kildare North, Fine Gael)
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I apologise a Leas-Cheann Comhairle. This rubbish drives me up the wall.

Frank Fahey (Galway West, Fianna Fail)
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The populist babble and the shock horror tactics we have heard from Deputy Gilmore in recent times was good in the 1970s when he was president of the students' union in UCG but is not good enough now. Therefore I respectfully suggest that the two proposals I have made should be taken on board by the Taoiseach and the Minister for Finance as a way forward out of our present difficulties.

Bernard Durkan (Kildare North, Fine Gael)
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Particularly in respect of seven years ago. There were two general elections in which Fianna Fáil codded the people and caused them pain.

Charlie O'Connor (Dublin South West, Fianna Fail)
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I welcome the opportunity to make a brief contribution to this debate. I disagree with Deputy Fahey in that I could do with more than five minutes to speak. However, I will do my best. I am glad my colleague, Deputy Rabbitte is present because it reminds me that I am sure both of us would prefer to be in Tallaght, where a jobs fair is opening in the library.

Bernard Durkan (Kildare North, Fine Gael)
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I knew the Deputy would mention it.

Charlie O'Connor (Dublin South West, Fianna Fail)
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The opening of the fine new civic centre is due to take place at noon.

Bernard Durkan (Kildare North, Fine Gael)
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All is well in Tallaght.

Charlie O'Connor (Dublin South West, Fianna Fail)
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I do not know whether Deputy Rabbitte will be released to attend. If he is, he might give my apologies because I am not being let out.

I am trying to be positive about today because life goes on. It has been a very gloomy week in the Dáil as I said last night. At the same time we need to be upbeat about some aspects and we need to keep going about our business. If it is difficult being a Fianna Fáil Deputy in Dublin South-West at the moment, as far as I am concerned I still need to do my job and that is what I will do.

In that context I was reading The Echo with my breakfast this morning, as I do. It reminded me that I attended the opening of a new restaurant, Kennedy's restaurant in High Street. For some strange reason three restaurants have opened in High Street in Tallaght since Christmas, two Chinese restaurants and now Kennedy's.

I do not deny that things are difficult but if that is not good news, I do not know what is. It is important to state this even from the Government benches. In my political and community life, I have always tried to be positive about my constituency and the need for job creation. Tallaght is the third largest population centre in the country and the wider Dublin South-West region needs investment and jobs. Over the past couple of weeks, one has been afraid to say anything in this House unless it is about the need for jobs in Limerick — which is fair enough. I note there was a lot of talk at the weekend about the need for employment in Donegal which is also fair enough. Every Deputy in this House will speak with passion about his or her own constituency but I am not afraid to talk passionately about Dublin South-West and it is important to continue to do so.

A number of colleagues have referred to the excellent work of the Oireachtas Library research service, and I know others have suggested that it should be abolished, but last week the research service published a number of constituency profiles and I read those relating to Wexford — where I have family connections. Of particular interest was the profile on Dublin South-West.

I wish to highlight both the mixed messages and also the positive messages which are recorded in respect of my constituency:

This profile is based on the Census of Population 2006...The profile reveals that Dublin South-West has a number of notable differences when compared to the State as a whole. These include: The average age of the population in Dublin South-West is below the national average and the share of the population aged 65 years and older is well below the national average.

My constituency has a very young population. The profile further states:

People in Dublin South-West are slightly more likely to have left education earlier and with fewer qualifications than people nationally.

This is an aspect which should be of concern. The profile further states:

People in Dublin South-West are more likely to be at work than the national average. They are much less likely to have retired.

This is a very interesting fact which may come as a surprise to many. The profile further states:

The share of the Dublin South-West workforce in professional occupations is well below average and Dublin South-West people are more likely to work in clerical and transport occupations.

Households in Dublin South-West are more likely to have access to a computer and broadband Internet access than households nationally.

I acknowledge the many calls I and many other colleagues are receiving. Overnight, I have received calls from workers in Tallaght who work for the county council, the hospital or various agencies. I am listening to what they are saying and I will certainly represent their views.

Olivia Mitchell (Dublin South, Fine Gael)
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I wish to share time with Deputies Durkan and Catherine Byrne.

Brendan Howlin (Wexford, Labour)
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Agreed.

Olivia Mitchell (Dublin South, Fine Gael)
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Fine Gael has been critical of the Government for not taking action and for delaying action on bringing spending under control so we welcome the fact that action has finally been taken. However, we have serious concerns about the action and the extent of it. We were told the pensions levy would account for almost three quarters of the total take but in my view it is taking a disproportionate amount from the lower paid. I contend that the contributions to pensions, including Members' pensions, still make for great value and even allowing for the increase these are pensions that could not be bought on the open market. Nevertheless, it is unfair on young people on very modest incomes. Such people may have made financial commitments and have bought houses and have planned their expenditure for a mortgage, perhaps borrowing funds to decorate the house or for school fees. People have made commitments and to now make changes of the order of this magnitude is grossly unfair, particularly for young people starting out. People need certainty and there is no certainty. They do not expect such change to come from the Government, for the Government to pull the rug from under their feet.

I am also concerned at the magnitude of the pension take as a percentage of earnings. It is very difficult to ask people to do their patriotic duty and pay this levy when the money is going into the black hole of completely unreformed Government spending. How can I go out and say to a young teacher or a young nurse who has just qualified and who has taken on a mortgage for an apartment bought at the height of the market, that his or her money, their contribution of €4,000 or €6,000 in the pension levy, is going to be used to store e-voting machines or to buy a box in Thomond Park for some quango or to perpetuate some quango whose purpose has long since been forgotten? It is indefensible to take people's money and to continue to spend it in the same old wasteful way, with no attempt to restructure the way spending decisions are made or to tackle and root out spending programmes that have long outlived their usefulness.

FÁS is one organisation that certainly needs to be reformed. The Taoiseach has stated that there could be 400,000 unemployed by the end of the year. What is happening in FÁS? It has a budget of €1 billion. Back in the 1980s FÁS provided literacy courses and community employment schemes for the unemployed and these were satisfactory for that time. However, the people losing their jobs now are already highly educated. How is FÁS planning to deal with such people who are now unemployed? Who will retrain the architects, the bankers, the Dell workers and the quantity surveyors, who are being thrown onto the job market daily and in huge numbers? I have no confidence that the Government has done anything to gear up FÁS or whether it even realises there is a problem. Deputy Fahey identified the problem and his solution was to set up another quango. Are they for real on the other side of the House?

For weeks the Government has been telling the House that the Government would reduce the expenditure bill by €2 billion this year and by €4 billion next year. Does the Government think it will be easier next year to cut back spending?

Bernard Durkan (Kildare North, Fine Gael)
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That will be the day.

Olivia Mitchell (Dublin South, Fine Gael)
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Surely the Government cannot think it will be easier. Does it not realise that the longer it is postponed, the greater the cost of borrowing? It now emerges that even the €2 billion is not being saved. The Government may not have taken into account the deflationary effect but it certainly did not take into account the fact of the tax relief which is not a full tax relief. It is stated in today's newspapers that the take will only be €0.75 billion. The Government huffed and puffed and brought forth a mouse in the end, as Deputy Kenny said, and it will be back to us within a couple of months looking for more money.

Brendan Howlin (Wexford, Labour)
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Deputy Durkan has a mere three minutes.

Bernard Durkan (Kildare North, Fine Gael)
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Certainly I cannot do the kind of damage in three minutes that the Government has managed to do in the past six of seven years. I was amazed to hear a Government backbencher suggesting that the Opposition should be invited in to see the books which are in a complete mess and the country is broke. The country is now bankrupt and the Government is looking for suggestions from the Opposition. It did not invite anyone over, even though the Opposition advised it five, six and seven years ago. The Opposition was told it was stupid, that those of us on these benches were prophets of doom and did not know what we were talking about; now it knows as well.

Deputy Mitchell made the point that there is not a hope on earth of taking €4 billion out of this economy next year or any other year from here on in and ensure the country is still surviving. Even the people over there must know this by now. No regard has been taken of the fact that a significant number of families bought houses at exorbitant prices, took out huge mortgages in the past six or seven years and pay child minding fees in order that both parents can go to work to pay for the mortgage. There is not a hope on earth that they will survive in the climate that will be created. Deputy Rabbitte and others have referred to the so-called pensions levy. This is not a pensions levy as it has nothing to do with pensions; it is a complete retrenchment, a hitting back at the unfortunate public. It is a penalty which the public will have to pay for through the nose and it is a swingeing attack on people who are totally innocent, who did not contribute to this situation but who unfortunately followed Government policy to such an extent that now they are paying the price. It is an appalling situation and I do not know that the people fully realise the magnitude of the likely impact on them.

The notion is that this proposal will stabilise the economy but it will have the opposite effect. It will break the backs of the people, the economy and, more worryingly, it will do nothing for the competitiveness of this economy which is the area in which we have lost out most seriously.

Catherine Byrne (Dublin South Central, Fine Gael)
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It is easy to blame someone else for one's mistakes but we should remember that less than two years ago we were one of the wealthiest countries in the world. What went wrong? How could a small country like ours fall so hard so fast in such a short time?

I listened yesterday to the debate and it struck me that everybody now appears to be singing off the same hymn sheet. We are in a crisis but the crisis was not made by the men and women who have lost their jobs in recent months or the less well off. It was made by this Government.

There are two reasons this small country of ours is in crisis, the first of which is greed. I am taken aback by the Minister of State's laughter. I heard in disbelief yesterday about the amount of money paid to bankers and top executives — money people in communities would never see in their lifetime. That money was paid out with no reason or accountability.

Some Deputies in the debate last night said how sorry they were about the thousands of jobs that have been lost. Saying sorry is not good enough, particularly for the family living beside me with two young children. The mother has lost her job. The father has been put on a three day week and they are left with a mortgage of €530,000.

This Government spent and spent without thinking of the rainy day. Money has been poured into projects where bricks and mortar were more important than human life or communities, and developers became rich. The Government spent as if there was no tomorrow but tomorrow has come. Most housewives know that they can only spend what is in their purse and when that is gone they have nothing else and they are in trouble.

Deputy Kennedy said earlier that the Opposition should come up with ideas. The Opposition has been coming up with ideas for the past few months. Deputies Bruton, Coveney and many other members of Fine Gael have brought various motions to the floor of this Chamber and all of them were rejected, even the one last night. It is about time the Government listened to the Opposition if it wants to know how we can get out of this crisis.

John Moloney (Laois-Offaly, Fianna Fail)
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I have the same level of interest in helping secure the future of this country as any Member of the House, including Opposition Members, but I do not play the political tactic of apportioning blame. It is important to remember that we are not just governed by our own political thinking or economic strategy. Outside forces are having an effect also, and I do not say that in the context of trying to spread the blame among outside forces.

I welcome this debate. In recent months one would have got the impression that ours was the only economy in the world suffering a recession. When I hear commentators make the political complaint that the Government is not giving leadership I wonder if those same commentators ever look at our own political apparatus and ignore what is happening worldwide. I refer to the major economic difficulties in the powerhouse of Europe, Germany, and the similar difficulties being experienced in France, the United States of America and the rest of Europe.

I am not one for Opposition bashing but for members of the Opposition to comment on the public record that this country is bankrupt represents a bankruptcy of ideas among Opposition members. This Government is in a process of trying to assure international bankers, investors and the International Monetary Fund that we are in control of our economy. My response to the comment that this Government failed to give leadership is that if leadership is about offering a soundbite, a smile for a camera or a quick solution without any strategic planning it is about short-term politics. It is certainly not strategic and is the opposite of what the Taoiseach has shown in the past few months.

It is a pity the talks with the social partners, condemned by the Opposition, did not succeed, although I understand the reason. On the one hand we are accused by Fine Gael of wasting time and Labour accuses us of not spending enough time talking to the social partners. The process this Government engaged upon involving all the partners was the proper political and, more importantly, economic strategy.

Having gone through that process the Government is now forced, as it were, to bring in serious economic strategies that will affect many people. I regret that people in the public sector believe they are being singled out but many of the concerns of the private sector have not been reflected in this House. The difficulty of having to deal with a loss of income or a reduction in income pales into insignificance when I hear of people who have lost jobs in the private sector. In that context, when we take into account the budgetary strategy and realise the shortfall in tax revenue, it behoves Members to realise the Government must take the action it is now taking.

I find it difficult when people dismiss Government speakers with a wave of their hand and say they are putting together their summation of the economy, and then rush to judgment by suggesting money has been wasted in recent years. I have yet to hear an Opposition spokesperson outline where the money has been wasted, with the exception of the storage of the electronic voting machines.

Olivia Mitchell (Dublin South, Fine Gael)
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The Minister of State wants us to tell them everything.

John Moloney (Laois-Offaly, Fianna Fail)
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I would like to hear more than a quip from Deputy Mitchell from the opposite side of the House. I would like to hear a strategic plan from her party as to how we can do that. Rushing into the House with Private Members' motions——

Olivia Mitchell (Dublin South, Fine Gael)
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It is pathetic to hear Minister after Minister coming into this House and telling us it is our responsibility.

John Moloney (Laois-Offaly, Fianna Fail)
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It is not their responsibility but it is the Deputy's responsibility to be responsible. Shouting across the Chamber that this country is bankrupt is not giving the required leadership that behoves all the Members of this House.

Olivia Mitchell (Dublin South, Fine Gael)
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I certainly never said that.

John Moloney (Laois-Offaly, Fianna Fail)
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If I could continue without being interrupted, there has been major investment in housing in the past 15 years. People talk about high mortgages, and I accept that, but I recall the days when there were very long housing lists. I can now speak of funding for public housing, voluntary housing and social housing. There has been major investment in our roads infrastructure in the past 15 years. I want to record also the huge increase in investment in our health services.

Many strategies were brought before this House in the past few years and the position now, and it is not by our own creation, is that we are facing a worldwide economic recession affecting every economic powerhouse in Europe and the United States. One would think from listening to the Members in this House that that economic recession was brought about by this Government and that it affected Wall Street, the City of London, Paris and elsewhere. This is a world recession and this Government is dealing with it in the way it is expected to do so, not with the support of many on the opposite side of the House.

Nevertheless, Government's responsibility is to govern and to give leadership and I am pleased to say this Government has outlined its programme, not just for this year but for the next four years. The difficulty for governments is that they must take unpopular decisions but they have done that. At the same time we cannot have an unpopular strategy of rushing into this House and picking and choosing where the least difficulties could occur when reducing expenditure. Consistent within the Government's programme in the past few months is the need to secure support across the social partners. That did not work out and we have now reached the point where the Government must effect those savings.

We must take into account the domestic pressures not just on the Irish economy but also by way of the contraction of enterprise worldwide. I reject the accusation that we depended far too much on the construction industry. This country has benefited from private enterprise involved in risk taking. We have a standard of housing we never had previously and if people believe we should have invested in some other quarter and not recognised the huge demand pre-1980s for modern facilities and housing, I would point to what has been achieved in those areas.

In framing this position the Government recently published the revised forecast for the period 2008-13. It showed that without corrective action, the general Government deficit for each of the years to 2013 would have been approximately between 11% and 12% of gross domestic product. The Government is prioritising the elimination of the current budget deficit by 2013 and bringing the general Government deficit below 3% of gross domestic product. Doing this in a shorter period would be so great a shock to the economy as to be counterproductive. Following the end of the partnership talks in Government Buildings, the Government has clearly shown leadership in dealing with the public finances. It has not introduced a quick fix but is strategically managing them. The cuts being proposed for the next four years will return us to a position in which we can generate our own wealth.

The issue of the national debt is also a factor in driving the Government's policy. The Exchequer funding requirement for 2009 is €23 billion, comprising a budget deficit of €18 billion and the re-financing of a maturing bond of €5 billion in April. The Government has already secured €6 billion of this year's requirement though the issuance of a five year bond in January.

The House should not be at cross purposes in dealing with the economy. I believe in the call made on budget day by the Minister for Finance, Deputy Brian Lenihan, that we should be patriotic in how we deal with the public finances and the economic problems affecting not just this country but the world. I appeal to Members not to make speeches for the sake of being critical of the Government but to bear in mind we are in this together. This is not a self-created difficulty caused by any one party in the House but reflects the worldwide economic downturn.

The Taoiseach has the ability and the stamina to show us the way forward and bring the economy with him. I appreciate the approach to tackling the problem has been honest rather than through soundbites, photo shoots or spin. The people have been given a clear direction as to how to deal with the economic downturn.

Arthur Morgan (Louth, Sinn Fein)
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I wish to share time with Deputy D'Arcy.

Brendan Howlin (Wexford, Labour)
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Is that agreed? Agreed.

Arthur Morgan (Louth, Sinn Fein)
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Yesterday I was taken by the Minister for Finance's claim that he will continue to target expenditure and tax measures on those most able to bear the cost. Who is most able to bear the cost? According to the Minister, it is those earning €15,000 per annum. That wage is significantly below the minium wage. How, under any criteria, could that category of earner be described as those best able to bear the burden? It is the most ridiculous assertion I have ever heard and I would like the Minister to explain it.

This week I spent some time with 480 workers at Waterford Crystal, many of whom have been made redundant. They will be part of the 37,000 made redundant since Christmas. The Government talks about the knowledge economy and innovation but where is the job retention strategy? In the case of Waterford Crystal, hundreds of workers have proved over many decades that they have a world class product and brand. While we are talking about all that is good in Ireland, insufficient moves are being made by the Government to save their jobs. Job retention is at least as important as job creation.

Yesterday, for the first time in months, the Minister for Finance spoke about job creation but where is the Government's strategy? Will the Minister tell us of one single idea for job creation the Government produced in the past 12 months?

Brendan Howlin (Wexford, Labour)
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I apologise for interrupting but Deputy Shane McEntee has requested to speak in this slot too. Would Deputy Morgan mind sharing some time with him?

Arthur Morgan (Louth, Sinn Fein)
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No, I am interested to hear other Members' ideas too.

Job creation is as fundamental a part of tackling the economic problems as dealing with the banking sector and the public finances. Yet, we have not heard one new idea on job creation from the Government or even seen the allocation of one extra euro into job creation strategies, helping enterprises to create new jobs and entrepreneurs start new businesses. This is most unfortunate. A one-stop-shop needs to be established among all the job creation and training agencies to facilitate entrepreneurs coming forward with excellent ideas for employment and business.

Michael D'Arcy (Wexford, Fine Gael)
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Following this week's events, it is important we praise the many excellent teachers, gardaí, nurses, doctors and other workers in the public sector. The pension levy is not a levy but a tax on those in the public sector. It is similar to the 1% earnings levy introduced in the budget. Again, the pension levy has unfairly targeted the wrong people, that is the younger members of the Civil Service and the public service who bought houses at expensive rates and have a higher level of personal indebtedness as a result. The Government has got it wrong again. Fianna Fáil and the Greens are unbelievably out of touch.

Public sector managers, such as superintendents in the Garda and directors of services in the local authorities, should be allowed to manage properly. They are being prevented from doing so because of the "use it or lose it" philosophy in the public sector. By this I mean when an annual budget allocation is not drawn down fully, the following year the benefit of the same amount is not given. It is a ridiculous situation in which public service managers find themselves. They should be allowed to make cuts in areas in which they know there is waste with a guarantee of their subsequent budget allocations not being reduced.

Cutting public sector pay by 7% does not provide the opportunity to cut out bad practices in the public sector. Local authorities must now apply for discharge licences from the Environmental Protection Agency. It is a case of one State agency applying to another for a licence. Wexford County Council has estimated these licences will cost it €1 million. Multiply that by the number of local authorities in the State and one sees a large amount of waste. There are many other examples of waste that need to be cut out.

Shane McEntee (Meath East, Fine Gael)
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The 329,000 people who are unemployed are not being treated properly. They must wait in queues every day to get some information on their benefits and weeks to get a few euro to pay their bills and feed their families. The Government did nothing in its announcement on Tuesday to address this situation. It must establish units — be it in a hotel or other location — in every town, such as Trim, Navan and Kells, to give people access to information on unemployment benefits. We were promised extra staff would be put in place to deal with the increase in benefit applications. These people must be looked after because they are the most important people in our community at this stage. They must not go to England, Australia or America. The Minister must put money in place for these people, who are made up from my family, the Minister's family and everybody's family. People should get up off their butts and help.

I do not know who was advising the other day but anybody in business knows that if one part of a business is thriving, one does not take the two feet from under it. That is what we did the other day when we depressed the matter further. The Government forced families on middle incomes to make the decision of whether they are better on the dole or working. A man on €60,000 a year with four or five kids, with one or two going to college, is losing €5,000 a year or €100 a week. He would be better off on the dole.

What was done in Germany after the First World War? They did not go into depression but rather found work for their people. They did the very same after the Second World War, finding work for the people and giving them an incentive to get up in the morning and rebuild. We could rebuild this country as we have only half done it. Our roads are a mess and we could be using our railways much more.

The buck has been passed to the public sector in trying to get us out with this €2 billion but that is not worth tuppence. It will not be nearly enough to bail us out. The banks are currently controlling us and they are calling for property taxes. Yet they are doing nothing for the people who left this country and will crucify the people who bought property here. Where is the penalty for the people who got €10 million or €15 million to build luxury homes and golf courses abroad? Fianna Fáil has let down every working class person in this country and what it did the other day was the end for the rebuilding of this country. The Government should get out, give people work and look after the people who are unemployed until they get work.

Brendan Howlin (Wexford, Labour)
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There is eight minutes left before the Minister will be called. Deputies Edward O'Keeffe and Gogarty may take four minutes each.

Ned O'Keeffe (Cork East, Fianna Fail)
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I understood I had five minutes. I am delighted to support the Government proposal because no alternative has been put forward. We are being watched and measured by international financiers as Ireland is in the borrowing cage once more. We are borrowing substantial money across the world and if we do not have our house in order, as well as a disciplined and protected economy, we will pay substantial interest rates that will add to our national problems. I fully support the measures by the Government and if there is a alternative, I would like to hear the Opposition put it forward.

There is much I could say if I had more time. Hard decisions must be taken and if we are not careful over the next five or six years, the national debt could be expanded significantly. I will not quote the figure because I do not want to frighten people.

Payments made to people both in the public and private sector in the form of bonuses and severances must be curtailed if we are to get the support of the ordinary people on the street who must accept 2%, 3% or even a zero pay increase. In the past ten years there has been privatisation, share options and bonuses that were not in the best interest of the community. I stated this last July in another speech I made and this is where we have really gone wrong. We expect working or poor people to take limited wages and salaries, and this must change. There should be discipline in the higher levels.

I am very critical of the handling of Anglo Irish Bank, which has destroyed Ireland's image in the eyes of people and our society. People have been quite critical across the world about the way it was handled. I supported the Government in voting but I have a personal view on the bank. It should have been liquidated and thrown to the wolves. Anglo Irish Bank was only an agency — it had no clearing facilities and did not want to see the likes of me or the Ceann Comhairle because it was not interested in our business. It was interested in big business speculators who have left us high and dry and destroyed our national banking system. It has destroyed two banks which have served the country since the founding of the State, Bank of Ireland and Allied Irish Banks, which was formed by a merger of the Royal Bank of Ireland, the Munster and Leinster Bank and others.

I have a strong view on the recapitalisation of the banks. This is being done to throw more money to speculators and expand the economy. I have heard from ten or 11 constituents in the past three or four months who had difficulties with banks. When I investigated and rang a bank official I was told he could not talk to me. In the past four or five weeks I have changed the system and I get a letter from them. Most of these people had difficulties in the good times so will we add to the misery with the €2 billion or €4 billion in recapitalisation? We might be better off giving it to the Department of Social and Family Affairs. One bank has said it might need all that capital. The banks should be allowed work through the system and write off the debts over the three-year period, which they have done in the past. A domestic recession was brought about by narrowing our tax base four, five or six years ago and leaving speculators get away with murder. Mr. Seán Dunne was paying €400 million for property because we had no proper capital gains tax on big developers, which we should have. It was grand for people like the Ceann Comhairle and Deputies Pat Rabbitte and Tony Killeen to have the 20% rate because they are small fry.

We expanded programmes and people went wild. Farmers down the country in villages and towns were selling land at a €1 million for a few acres. There was not even a pipe or wall on such land. Speculation drove the price to €10 million or more but only a small amount of tax would have been paid. If the State had received a substantial take from that land we would have equity across the system and no difficulties.

A great discussion is taking place in this country currently on Deputies' salaries and expenses. The commission we have set up here is a monopoly and monster which must be controlled. This House has gone out of control. The Houses of the Oireachtas Commission was introduced to euphoria because people thought it was a great idea. I was a lone voice that was laughed at when I said it was going to cost a fortune to run it. I was proven right but the Deputies' expenses will now pay for it.

St. Valentine's day is Saturday week.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I was hoping the Deputy would bring it up.

Ned O'Keeffe (Cork East, Fianna Fail)
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Hold on.

Shane McEntee (Meath East, Fine Gael)
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There will be roses.

Ned O'Keeffe (Cork East, Fianna Fail)
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Unfortunately it is not on a Dáil sitting day. Let us all put our hearts behind our country and people. There will be some pain ahead but if we all share this pain evenly, we can look forward to brighter days ahead.

Paul Gogarty (Dublin Mid West, Green Party)
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There is little good news to speak about. I welcome that my Green Party colleagues and I played a part in securing additional funding for schools, home insulation and projects that will create jobs. I am happy overseas aid was not cut by as much as it could have been and the fact that a little humanity was shown in that mathematically viable cuts — such as abolishing the social welfare and pension Christmas bonus — did not materialise in the end, thank God.

This is bad news and nobody should be happy about it. At best we should be relieved that the cuts announced in the national interest have helped stabilise what is left of our international financial standing. We might be in a position, for the time being, to continue borrowing, paying people's salaries, stimulating job recovery and allowing banks to lend to help that recovery, no matter what we think of the banks.

The majority of the cutbacks come from an increased contribution from the public sector. There has been a nasty campaign in some quarters to vilify public service workers who have provided this country with great service over the years. However, the fundamental truth is the public sector must take on the same burden as the private sector. I have spoken to many people in the private sector who have been deeply affected — I have a friend who was let go; my cousin, a barman, has had to take a 10% pay cut; and my friend's dad, who is 30 years in a company, has had to take a 15% pay cut. I have heard of 25% pay cuts. It is really bad in the private sector.

The boss of the public sector, the Government, is now indicating that those employed must take a pay cut. From speaking to constituents in the public sector, they feel the cuts are unfair. They are graded towards making the higher-paid pay more but some feel it unfair because ordinary public service workers and private workers feel that fat cats, bankers, developers and the political decision makers have not taken their fair share of the burden. If they caused the mess, why are they not paying for it?

The trouble is that those who messed up no longer have the money so we must pay for their greed and, to a lesser extent, our own greed as a nation. I hope those who caused this get their comeuppance and I hope history and the electorate will judge those who made the political decisions which caused our decline to be worse than the global norm. I will welcome the day when those who showed more favour to the political donors and vested interests than to the citizens in their care are told, in no uncertain terms, where to go. However, today is not that day. Now is not the time for apportioning blame because, like it or not, stability is required. There is a job to be done, in the national interest, for all of our citizens. We must make tough and unpopular decisions because we know that if do not do so, matters would be far worse.

It is incumbent on us, as civic leaders, to lead by example. I welcome the fact that Oireachtas Members will be cutting back on expenses. I also welcome the political forum to which the Ministers for the Environment, Heritage and Local Government and Finance, Deputies John Gormley and Brian Lenihan, referred. However, there is also a need for real movement on corporate donations. It is not good enough for politicians from all parties to accept donations from developers, bankers and trade unions. The people who need a dig-out are ordinary citizens, not those in the body politic. Let us lead by example.

Tony Killeen (Clare, Fianna Fail)
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Nuair a bhí an Teachta Rabbitte ag gearán nach raibh ach cúig nóiméad aige, cheap mise nach mbeadh nóiméad ar bith agam. Is dócha go bhfuil sé in ord mo chuid ama a roinnt leis an tAire nuair a thagann sé go dtí an Teach.

It is almost inevitable that most of the emphasis in this debate has been on the public finances and the impact thereon of the considerable drop in taxation receipts. It would be a great mistake if that were the only message to go out in respect of the state of the economy and of the position with regard to unemployment. It is extremely important to place alongside the issue of the public finances those relating to job retention and creation and competitiveness, which is something the Minister did very well.

I greatly regret that for reasons mainly beyond the control of Members of this House, as the debate has developed there has been a strong polarisation between workers in the private and public sectors. That is both hugely unhelpful and extremely damaging. The matter must be addressed immediately.

The Minister has been frequently urged to deal with the issue of taxation on income, particularly in respect of those employed in the private sector.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I apologise for interrupting, but as it is 12.30 p.m. we must take questions from Members.

Richard Bruton (Dublin North Central, Fine Gael)
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The most sobering aspect of this debate relates to the appalling figures released by the Central Statistics Office, CSO, in respect of unemployment. Proposals have not yet been put forward with regard to the immediate restoration of the flow of credit to small businesses which may, as a result of overdraft restrictions, be forced to cease their operations for want of such credit and working capital. When the Minister addressed the House in respect of banking, he indicated that the banks had made commitments to extend the level of borrowing to SMEs by 30% and 10% in different categories. That is simply not happening. What initiatives is the Government taking to restore the flow of credit?

When the Taoiseach made his announcement on Tuesday last, he did not refer to money being set aside to deal with job retention. Numerous proposals have been floated in respect of social insurance relief, schemes for export and special guarantees regarding risks taken on by businesses. What money has the Minister set aside to make provision in respect of such proposals?

Will the €2 billion reduction in borrowing to be made on foot of the measures announced on Tuesday be achieved in the current year? A gross figure of €2 billion has been provided, but there are several leakages from that. The first of these relates to the fact that the pension levy is tax allowable. The second is that once spending is removed, there will be an immediate reduction in the tax take. The third is that some of these proposals — forecast to result in savings to the tune of almost €300 million — will not come into effect this year. I calculate that the impact on borrowing of the Government's package of measures will be closer to €1 billion. Will the Minister comment on this matter?

Is the Minister open to changes in the pension levy that would provide for people at the bottom of the scale who will derive little benefit from State pensions? Would he be open to changes that would removed anomalies in the structure whereby some people on low incomes, particularly between €30,000 and €50,000, will pay higher net levies than those on higher incomes? Why have proper budgetary papers not been forthcoming from the Department of Finance? There has been no disaggregation of tax forecasts, no profile of spending or taxation for the coming months and no information regarding the impact of the Government's measures in year one, year two and year three, which is extraordinary. Why have such papers not been issued?

Will the reports from Mr. Colm McCarthy be issued prior to decisions being made? Will there be a rolling flow of decisions from the Minister throughout the year or will all the various decisions be deferred until next year's budget? The position with regard to the latter has not been made clear.

Are renegotiations other than those relating to professional fees taking place? I refer, for example, to renegotiations in respect of rents paid by the State. Have the results of the work carried out by the Minister of State at the Department of Finance, Deputy Mansergh, in respect of public procurement been factored in?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Deputy Bruton posed a vast range of questions to which I will attempt to provide answers.

It must be borne in mind that Tuesday's announcement by the Taoiseach related to a Government decision regarding financial stability in the State. This is the first decisive step towards securing our financial stability, but it builds on two earlier steps taken in October's budget and in the initial announcement last July. I appreciate that there has been much criticism of the fact that these latter steps were superseded by events because the deterioration in the public financial position was so serious. The fact remains that those earlier decisions were of great assistance.

The move in July of last year to target public expenditure and bring in the various Accounting Officers and Ministers in order that a Government decision might be made in respect of reductions began the process of financial stabilisation. That process would have been far more difficult if an initial decision of that nature had not been taken last July. It was important that this decision was taken and that a number of areas of waste and inefficiency in the public service were immediately identified. The savings envisaged in the context of that initial decision were realised last year and will continue to be realised this year. The work of the group chaired by the Minister of State, Deputy Mansergh, forms part of the process in this regard.

The budget was criticised when it was introduced. However, the Government made a number of extremely difficult decisions in respect of public expenditure which does not relate to the payroll side in the budget. Those decisions were important and essential in the context of ensuring that the various programmes delivered by the Government could be cut as much as possible and that expenditure in respect of them would be kept to the absolute minimum. As a result of these decisions, substantial savings have already been factored into the figures for public expenditure for 2009.

With the further deterioration in financial circumstances last year, the Government decided to examine and evaluate the position in January. The priority was to ensure financial stability by the taking of a decisive step in respect of payroll costs. The balance of the savings to be made as a result of the measures announced by the Government on Tuesday last relates to such costs.

The essential purpose of the most recent decision taken by the Government is to stabilise the public finances this year. This is a vital first step. As a result of the deterioration in the public finances, there has been a major escalation in our borrowing requirement for 2009. The National Treasury Management Agency, NTMA, has sufficient funds to service the needs of the State this year and there is no immediate difficulty. However, it would be unsustainable to allow the current position to obtain, year on year, after 2009. It is essential to send out a strong signal that we intend to get our borrowing under control. That is why I briefed the European Commission on the matter at a recent bilateral meeting.

Given the scale of the problem, the Government has set a five-year framework to address it. The reality, however, is that economic prophesy for 2011, 2012 and 2013 is an extraordinarily hazardous science in present circumstances. What Ireland needs to do this year is show we can get our public expenditure under control in a decisive manner and effect a major reduction in the borrowing requirement for 2010. The decision announced by the Government on Tuesday is the first step in that direction.

On Deputy Bruton's question on small and medium size enterprises, while this is an important issue which the Government is addressing, it is not one we addressed in our decision last Tuesday because the vital decision that had to be made on Tuesday was to take decisive action to reduce the overheads of the public service. That decisive macro-economic action was needed to give Ireland credibility in the world outside and at home. I welcome the widespread welcome financial commentators have given to the announcement. It is a clear sign that everyone understands that the Government is moving in the right direction.

In regard to how we build on that in macro-economic terms, the next clear step is the work of the expenditure control group. Deputy Bruton stated the Government had outsourced decisions on expenditure control. That is far from the case. The chairman of the group is an integral part of my Department where he assists my officials and me in our work. The purpose of the expenditure control group is to strengthen the capacity of the Department of Finance in the whole business of expenditure control. The decision to invite the group to assist the Department was made so as the Estimates process for next year can begin now. This process, which, as Deputies are aware, normally beings in the middle of the year, is now beginning for next year. This will give us more time to identify the savings and adjustments which can be made as early as possible in order that current expenditure for next year is reduced to an absolute minimum.

The Deputy also asked whether it was envisaged that further savings would be made this year. If, in the course of the work of my Department and the expenditure control group, areas can be identified where immediate savings can be made, this will be done. The Government took care, in arriving at this particular decision, to ensure the sums which were indicated as savings this year were cast iron in terms of their capacity to generate savings. Clearly, if further savings emerge during the year, they will be addressed.

In stabilising the public finances it is essential that we also review our capital commitments for next year. This review process will be conducted by my officials and me in the course of the year. If capital issues arise in the course of the expenditure control group's work, they will be taken up by myself and my officials and analysed carefully. I look forward to the publication, early in the autumn, of the report of the Commission on Taxation. I hope this report will inform a public debate about how we can broaden our tax base and ensure everyone bears, in a fair manner, the adjustment which must take place. This is very important work and will be built upon in this year's budget and in terms of the taxation arrangements we put in place for 2010. There is, therefore, a determined plan of action to effect a substantial reduction in our borrowing requirement in the course of this year and leave Ireland in a much healthier position in 2010 than in 2009.

On the Deputy's specific question on credit, I explained that decisions on credit must in any event be made by the Government. As we are all aware, a worldwide credit squeeze is under way and is affecting small and medium size businesses in Ireland as much as in any other part of the world. When the capitalisation programme was announced in December the Government negotiated with the relevant financial institutions certain arrangements in regard to the advance of credit by these institutions to small and medium size businesses for agreeing mortgages and home purchase. This has not been put into operation because the capitalisation has not yet taken place. One of the reasons for this is that the markets have deteriorated since the original announcement and the banks are not in a position to raise the €1 billion they indicated they would raise by way of private investment. The banks are now engaged in intensive negotiations with the Government to finalise the capitalisation programme.

I have heard much criticism inside and outside the House about bail-outs of financial institutions. The incontestable fact is that not a solitary cent or euro of taxpayers' money has been expended to date in investment in the banking sector. The decision to nationalise Anglo Irish Bank meant that an immediate investment of €1.5 billion in that institution was averted. I am pleased to report that to date the taxpayer has not had to provide working capital for Anglo Irish Bank.

Discussions on capitalisation for Bank of Ireland and Allied Irish Banks are ongoing. I have seen criticism that these discussions have taken too much time. We have seen in other countries how capitalisation discussions have led to decisions which have had to be reversed, amended or changed with the passage of time.

For the past few weeks, I have heard a cry in the public press that some form of risk insurance should be provided for financial institutions, whereby in return for an up-front payment the Exchequer would expose itself to absorbing the losses of these institutions in future. I read this morning that the authors of the proposal, which originated in the United Kingdom, have decided not to proceed with it.

Joan Burton (Dublin West, Labour)
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That is the correct decision.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We are proceeding in the correct way in banking matters because we need to get this right. We are following the Swedish example. The first step taken in Sweden was to guarantee the institutions without qualification, which is what Ireland did on 30 September last year. The second step taken by the Swedish authorities during their crisis in the early 1990s was to examine the structure of the institutions to ascertain whether they should be nationalised, capitalised or left in private hands. While the bulk of these institutions were nationalised, the conditions in different countries vary. In the case of Ireland, we have nationalised one of the institutions and will capitalise the two principal institutions. Discussions on this matter are not yet complete. Risk is the next matter which will require to be addressed following capitalisation.

Richard Bruton (Dublin North Central, Fine Gael)
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I seek a "Yes" or "No" reply from the Minister. Will the cuts the Minister announced deliver a reduction of €2 billion in the borrowing requirement? If not, what will be the reduction? Is the Minister open to change in the pension levy given its unfair structure? Has the Government issued a directive to every State body, including commercial State bodies, that there must be no pay increases this year?

John O'Donoghue (Kerry South, Ceann Comhairle)
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I ask the Minister to be brief as we must move on.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The effect of the decision of the Government is €2 billion on an annualised basis and €3 billion next year. The net reduction in gross expenditure is €1.81 billion this year. My Department is confident that the necessary reduction of €2 billion will be secured in the borrowing requirement this year.

Richard Bruton (Dublin North Central, Fine Gael)
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The impact of the measures will be closer to €1 billion.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Our revised tax assumptions factor in the effects of this particular decision.

Richard Bruton (Dublin North Central, Fine Gael)
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Which revised tax assumptions? We have not seen them.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Stability and Growth Pact statement includes an annual tax prediction. Factored into this are the matters about the offset of taxation to which the Deputy referred. My Department has advised me it is confident the €2 billion reduction envisaged in the Stability and Growth Pact will be secured as the Government, by virtue of this decision taken several weeks into the year, has already secured €1.8 billion in savings.

Richard Bruton (Dublin North Central, Fine Gael)
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Has a directive been issued to State bodies?

John O'Donoghue (Kerry South, Ceann Comhairle)
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I must call Deputy Burton. The Minister may answer Deputy Bruton's question later.

Joan Burton (Dublin West, Labour)
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I will first ask the Minister a couple of general questions before addressing the issue of the levy. The table provided by the Department on prospective savings states that total current and capital savings under the programme will be €2 billion this year. Under the heading on the 8% reduction in professional fees, an example is given of "Medical and Legal". What does this mean? To take the case of a person who is currently charged for a private visit to a doctor, will his or her €60 fee be reduced by 8%? Will all doctors reduce fees by 8%?

Is this a direct reduction in fees paid to doctors and lawyers working for the Government on Government contracts? Will they have a reduction of 8% across the board? Does the reduction apply to those working in tribunals? I recall valiant efforts, starting with former Ministers Charlie McCreevy and Michael McDowell and others, who all said the fees of tribunal lawyers would be reduced. I think there was a promise made that they would be reduced during the 2004 local election but they were never reduced.

What legal and medical practitioner fees will be reduced? If, for example, as is suggested in one newspaper today, medical fees from the State are reduced, instead of a reduction in fees from my GP, could I face an increase because the doctors will be authorised to recover their loss of State income from private patients? It is important to clarify that matter, particularly for people in the middle income sectors who, by and large, do not have access to medical cards or free medical facilities from the State at the point of use, although they pay tax.

My second general question is on heading five of the announcement, a general administrative reduction in Government costs of €140 million. There will be all-party agreement on this question. Does the Minister have proposals included in that heading to reduce the number of Ministers of State and Oireachtas committees? Everybody in the Opposition parties would be happy to sit down and see an across the board package that would refer to Ministers of State because we believe the number could be reduced by one third or one half. The Government would work better. One would not have to try to remember the names of the five Ministers of State in the Department of Education and Science or those in the Department of Health and Children. It would make work in Government much easier.

The committees would be better if almost all of the paid positions were abolished or reduced by at least two thirds. Almost everybody, including the Minister's own backbenchers, want to make committees work better. There are too many of them; understanding what they do is very confusing and we do not even have enough rooms to service them all. There is competition in booking rooms by the gaggle of committees. We would be prepared to co-operate with such a measure and I am sure the other Opposition parties would also be happy to do so. Can the Minister make his proposals clear to us? Would he meet the Opposition to discuss them because we would be willing to discuss them with him?

The same could be said about Deputies' expenses. If there was a general discussion, the Minister would have no difficulty in reaching agreement across the House with political parties. I am offering it and trying to be positive.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am grateful for it.

Joan Burton (Dublin West, Labour)
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Let us return to what is described as a pension-related deduction. I asked the Minister for a private briefing from him or his officials on whether this would be subject to tax relief. The Taoiseach said in his statement that the gross amount was €1.4 billion. My view, which I put to the Minister privately, was that it would have to be deductible for tax purposes. The statement by the Department of Finance on its website showed that it will be subject to tax deductions.

A difficulty arises in describing the exact nature of this measure. Is in an income levy or a pension levy? We have clear anomalies in the levy. A middle-ranking public servant who earns a middle-ranking salary will, after tax, have a lesser take on the net levy than a person at the lower end of the scale of Civil Service payments. That applies to both categories, whether one is pre-1995 or post-1995.

I asked the Taoiseach yesterday if a detailed paper could be published which sets out the different categories and how they will apply.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I hesitate to interrupt Deputy Burton but I have several other queries and I will have 25 minutes.

Joan Burton (Dublin West, Labour)
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Is the levy calculated on all of a public servant's income? In other words, is it calculated on one's basic, overtime, special allowances and weekend allowances? Is it calculated on bonuses, such as the 10% paid to assistant general secretaries and above?

The issue of our troops serving in Chad was raised by my colleague, Deputy Brian O'Shea. When they are on UN service, as the Minister knows, they receive a daily allowance which is paid for by Ireland via the UN. Will it be subject to the levy? Many of the soldiers concerned are raising queries about it and we do not, as yet, have clarification. I would be grateful if the Minister could enlighten us. If he cannot give us the information now, could he set it out in some detail after the debate?

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Minister has three minutes.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Regarding medical and legal fees, it relates to Government contracts and arrangements in connection with them. It will require legislation because the State is, in effect, altering contractual or legal arrangements. It will apply to all medical and legal professionals, so in principle it will apply to persons who act at tribunals.

The question of whether private clients of a professional person who has a dual practice can be affected by this misses the point about the demonstration effect of what this announcement is about. It is about improving competitiveness in the economy and the public sector must lead the way.

If the public sector is leading the way in the market pricing of service, the private market must also respond. The relevant professionals cannot compensate themselves at the expense of the public sector by increasing the extent of their remuneration.

Joan Burton (Dublin West, Labour)
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How can they not compensate themselves? Will the Minister legislate for it?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is a matter for the private market that exists. One can go to a different doctor if necessary. It is essential that we tackle costs throughout our economy. It is the one clear economic message in this announcement. We must reduce our costs. It is not just a matter for the public sector. If necessary legislation is needed to restore competitiveness to sheltered private sectors, the necessary action must be taken as a follow-on from this announcement.

On the issue of Oireachtas committees and Ministers of State, I welcome the tone of what was said by Deputy Burton. I think she appreciates that the Houses of the Oireachtas Commission is now charged on the Central Fund. It is like the establishment of the President. It is independent of the Department of Finance. The arrangement was put in place precisely because it was alleged that the Department of Finance, as an arm of the Executive, was constantly interfering in the autonomy and independence the Oireachtas should have. I invite Opposition parties to work with the parties in Government, through the Houses of the Oireachtas Commission, to secure the necessary savings which should be secured in the expense of the Oireachtas.

Joan Burton (Dublin West, Labour)
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With respect, the Ministers of State and committees, as I understand it, are a matter for the Taoiseach and Government to consider. That is the question I was asking.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I will begin with the Houses of the Oireachtas Commission because it is where the bulk of politically-related expenditure rests and it is important that is addressed. I welcome the spirit of what was said by Deputy Burton and I am sure the different parties will work together on the commission in the national interest to secure the necessary savings.

Its budget is tri-annual and it will be reviewed this year because we are coming to the end of a three-year period. The special group on expenditure control is examining it and other items in the Central Fund in that context. Regarding savings this year, I would very much welcome the proposals of Opposition parties on what savings can be procured.

The position on the expenses of Deputies and Senators is that I can, by legislation, vary them but the constitutional convention must be that I do so after hearing the views of the commission. I am an adjunct to it in that respect, and necessarily so, and cannot unilaterally impose a change in the absence of force majeure extraordinary circumstances.

Joan Burton (Dublin West, Labour)
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What about the Ministers of State and the numbers of committees?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am working through each of the issues in turn. Regarding Ministers of State, the Taoiseach made it clear in the House yesterday that everybody has to work in the current crisis, including Ministers of State. They will have to work in this crisis but he has no immediate proposals for a reduction in their numbers. The Government takes the view that Ministers of State are necessary to assist in governing the country in what is a very difficult time. As regards Dáil committees, I welcome the proposal mooted by the Deputy and will take it up with the Government.

Joan Burton (Dublin West, Labour)
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What about the pensions?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As regards the pension levy, tax relief clearly applies at the marginal rate. It is a pension levy and not a levy on any other type of income. It applies to all gross income, including the various expenses that Deputy Burton referred to, though in advance of the legislation I will not particularise it in any individual context. In principle, it applies to all gross income. As regards the bonuses to which Deputy Burton referred, the Government has decided to abolish these bonuses subject to discussions on the implementation of the decision with the relevant staff association. I will prepare a detailed paper on this matter in conjunction with the legislation, which is already being drafted in my Department.

Arthur Morgan (Louth, Sinn Fein)
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I have two brief questions. First, the Minister told us yesterday that he would continue to target expenditure and tax measures at those most able to bear the cost. People on an annual income of €15,000 are subject to this levy, although that sum is below the minimum wage. How can the Minister consider that category to be most able to bear the cost?

Second, given that the motion refers to expenditure measures, can the Minister advise us on the Government's policy strategy for job creation or retention? Does he have a plan or is it secret, too, like the rest of this economic package he claims to have? If the Minister wants advice on this, I have made several suggestions in the House on job creation and retention. Will the Minister put any funding into county enterprise boards? I would appreciate answers to those two matters. Even additional euro for enterprise and job creation would be appreciated.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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First of all, no public servant is paid less than the minimum wage, as I am sure the Deputy understands. There are public servants who work part-time, but they are not paid less than the minimum wage.

Arthur Morgan (Louth, Sinn Fein)
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Their income is €15,000.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The minimum wage is based on an hourly calculation on the assumption of full-time work. It is important to put this point on the record of the House. No public servant is paid less than the minimum wage.

Arthur Morgan (Louth, Sinn Fein)
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We are talking about a sum of €15,000.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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If a public servant is engaged in part-time employment for a part-time income, the levy may apply to that income.

Arthur Morgan (Louth, Sinn Fein)
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So the Minister's best deal is to defer the cost.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As regards the question on job creation and retention, I did not get an opportunity to reply to Deputy Bruton when he raised that point earlier. If we want to create jobs in this country the first item we must address is to give ourselves credibility in terms of our public finances. Of course the Government will make a stream of decisions on job retention and creation, and has been doing so in recent months. Before Christmas, we saw the prompt action the Taoiseach and the Minister for Agriculture, Fisheries and Food took when the bacon industry was put in jeopardy. I agree with Deputy Morgan that it is essential to do all in our power to shore up jobs in the real economy in this very difficult period.

Arthur Morgan (Louth, Sinn Fein)
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When will the Minister share that with us?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Any constructive proposals the Deputy wishes to advance in that regard will be addressed. Deputy Bruton referred, for example, to the question of export risk insurance, which can be examined. I must point out, however, that it would be extraordinarily prohibitive for the State to insure against the risk related to currency differentials in the present climate. However, constructive proposals in that regard will be looked at by the Government and brought forward on that basis.

Arthur Morgan (Louth, Sinn Fein)
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When will the Minister publish any proposals he may have for job creation and retention?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In December, the Government published a comprehensive framework on economic renewal.

Arthur Morgan (Louth, Sinn Fein)
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That is not a plan.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Particular actions will be taken on foot of that.

Damien English (Meath West, Fine Gael)
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I urge the Minister to bring forward a job protection plan. Some of the money for new job creation could be refocused to protect existing jobs. Some of the grants and supports that come through the enterprise boards are only for new jobs. Most people in work want to try to keep their jobs, so some of that finance should be rebalanced and refocused.

It is not sustainable to have 300,000 plus people on the dole. The total is heading for 400,000 fast. Labour initiatives are needed to get some of those people back to work. It could be cost neutral if some of the people concerned were to be employed in fixing council housing stock and community buildings, doing up bus stations and working in voluntary community groups. Some of those costs can be offset against capital borrowings. It would make good economic sense rather than spending €20,000 per person. It is not right or sustainable so it must be tackled. With respect, we have been offering solutions since this time last year.

Many small and medium enterprises are experts in their business fields, but they are not experts in finance, debt management or employment law. We need a scheme, similar to that in the United Kingdom, which would make professionals available to help such enterprises to compile business plans to avoid the current problems. They should be able to obtain finance for their businesses from the banks. There are plenty of retired people on big pensions who could be deployed to guide such enterprises through these difficult times, so the Minister should examine that possibility.

It is a shame that the foreign aid budget has been cut by €95 million, although I understand why the Minister had to do it. Some public service sectors are overstaffed due to cutbacks in agriculture and other areas. Could the Minister offer a voluntary scheme so that some public servants could work in developing countries for three, six, nine or 12 months? In that case, their wages would be offset against foreign aid, so it would be cost neutral and might bring in savings. In that way, some departmental employees could be working in the foreign aid sector abroad, including African countries. That would save us money as well as providing valued experience in agriculture, health and finance to developing countries. There are many ways in which money could be saved with a bit of imagination. I can assure the Minister that we have plenty of ideas.

Seán Sherlock (Cork East, Labour)
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In light of the Taoiseach's announcement on Tuesday, I wish to refer to the Financial Regulator's proposal to examine a specific code on mortgages. Can the Minister provide a clearer picture as to what that entails? The vast bulk of expenditure by those in the private and public sectors is on mortgages. When will the Government introduce some scheme to grant relief to mortgage holders who lose their jobs? While the current rate of home repossessions is quite low, it can be reasonably assumed that the rate will increase seriously in the next few years. I would like to get some response from the Minister in that regard.

The Taoiseach's statement also referred to tax credits available to companies and exemptions on capital gains tax. If the exemptions were significantly increased beyond €40,000 it would give a further incentive for people to come into that sector. The back-to-education allowance should be amended to allow people who are going to become unemployed to avail of educational training, including how to start up their own companies, without losing their entitlements. We need to be a bit more imaginative. If we are going to create tax exemptions based on production in the smart economy, one must create incentives for people to get into that sector in the first instance.

Kieran O'Donnell (Limerick East, Fine Gael)
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I do not think the Minister has fully addressed the questions about the pension levy. Does the Minister agree it is unfair that people not liable for income tax will get no tax relief when the pension levy is imposed? Does he agree it is unfair that people within the public sector on lower income levels who will probably get no use of their State contributory old age pension should be required to pay the pension levy? Will he take another look at the scheme in order to make it fairer? Looking at it objectively, the scheme appears to be unfair. Will the Minister give a breakdown of the amount produced by the levy in the various income categories, that is for those on less than €30,000, those between €30,000 and €50,000, those between €50,000 to €70,000, those on from €70,000 to €100,000, and upwards, so that we have some indication of where he is coming from with regard to the levy?

The Minister has spoken about taking €8 billion from the National Pensions Reserve Fund to put into the banks, but there has been no analysis or explanation from him as to the justification for this. We cannot get funding for the Limerick regeneration project. Will the Minister consider using money from the National Pensions Reserve Fund for that project, which would provide employment and much needed housing in the area?

This morning, Ryanair announced that 100 jobs were to go in Shannon and up to 700 jobs would be lost indirectly, because of the imposition of the punitive €10 tax on air travel, a tax that only brought in €95 million for this year.

John O'Donoghue (Kerry South, Ceann Comhairle)
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We must move on.

Kieran O'Donnell (Limerick East, Fine Gael)
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I am trying to make a positive contribution. Fine Gael made a proposal that a switch from branded to generic drugs would save €200 million. Why does the Minister not make a positive move like that and save money and jobs and remove the €10 travel levy that is crippling areas like Shannon?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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There is a large number of questions to deal with. Deputy English raised a large number of issues relating to the responsibilities of the Tánaiste and Minister for Enterprise, Trade and Employment. However, I thank him for their constructive character in the context of job protection in the current economic situation. With regard to financial arrangements, in the announcement made by the Government there has been a refocusing of the capital programme on home insulation and the building of schools.

With regard to finance for small and medium-sized businesses, the Deputy made a constructive suggestion which I will take up with the relevant Minister. I will also take up the constructive suggestion made with regard to the overseas aid budget with the relevant Minister.

Deputy Sherlock is concerned about repossessions and mortgages. I agree with him. He pointed out that, to date, the rate of repossession has been low. In the context of the recapitalisation discussions with Allied Irish Banks and Bank of Ireland, we have raised the question of limits on repossessions and those institutions have been receptive to our representations. However, the real difficulty relates to other institutions that do not subscribe to the code of practice on repossessions. The work of the regulator is targeted at those institutions and at bringing them within a compulsory scheme. In the absence of full agreement by those institutions to comply with any scheme, I will bring in legislation if necessary.

Deputy O'Donnell raised the issue of the unfairness of the levy. We have a very fair and progressive tax system here and the pension levy is consistent with that principle. Working examples relating to actual pay demonstrate that, as a rule, the total deductions as a percentage of gross pay after the pension contribution are greater for those on higher rates of pay rather than lower rates of pay.

Kieran O'Donnell (Limerick East, Fine Gael)
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That is not correct.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Some of the figures that have been put into the public domain are not accurate in that respect.

Kieran O'Donnell (Limerick East, Fine Gael)
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They are Department figures.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am glad the Deputy has given me the opportunity to comment on the National Pensions Reserve Fund. Legislation will be introduced in the House to discuss this matter. Any moneys invested by the National Treasury Management Agency or the pension fund will be invested for a full return. For example, any preferential shares——

Kieran O'Donnell (Limerick East, Fine Gael)
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We would get a return from investing in infrastructure: houses would be built.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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No, there will be a cash return. This is a financial and commercial operation, not an operation connected with public expenditure. There would be no return, in financial terms, to the investment proposed by the Deputy.

Kieran O'Donnell (Limerick East, Fine Gael)
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Will the Minister examine the idea?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I will examine it, but what the Deputy proposes would abolish the fund. I understand the Deputy's concern at the loss of jobs in Shannon and will take the issue up with the Minister.

The Deputy put a final question, but I was not able to make a note of it.

Kieran O'Donnell (Limerick East, Fine Gael)
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It concerned the €10 levy on air travel. Will the Minister revisit that issue as there is only a saving of €95 million, but approximately 800 jobs will be lost in consequence?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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With regard to that levy, higher levies apply in the Netherlands and in Great Britain, but they do not seem to have the effects the Deputy has outlined.

Kieran O'Donnell (Limerick East, Fine Gael)
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There has been a 10% reduction in flights in Britain because of the levy.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Shannon-London connectivity has now been reopened.

Seán Sherlock (Cork East, Labour)
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I asked about tax exemptions, but got no reply.

John O'Donoghue (Kerry South, Ceann Comhairle)
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We can deal with that later. We have approximately four minutes left and several people want to contribute. I must call on the Minister to reply at 1.20 p.m. Therefore, in accordance with an Order of the Dáil and with the Minister's indulgence, I will call as many Members as I can in the time available.

Seán Barrett (Dún Laoghaire, Fine Gael)
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Surely, if the levy is a pension levy, it can only be levied on pensionable income. What are the Ministers' views in that regard? On the recapitalisation of the banks, has the Minister examined the difficulties faced by the banks given that much of their lending is a result of borrowings by the banks? Therefore any moneys going into recapitalisation may, because the banks must keep borrowing, be used by the banks themselves to pay back what they have borrowed from other banks. What are the Minister's views on that issue?

When we have investment opportunities, for example in offshore renewable energy, we should be able to prioritise legislation to ensure these projects are up and running as quickly as possible.

Pat Rabbitte (Dublin South West, Labour)
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Is the total contribution towards the resolution of the public finances reduced to approximately €900 million rather than the €1.4 billion claimed for the pension levy? Is the Minister confident that between now and the publication of the Bill he can iron out the many irrational inconsistencies in the scheme? Does he accept the claim from this side of the House about the unfairness of its application to the lower paid? Does he acknowledge that some modestly higher-paid civil servants will pay less proportionately towards the pension levy than low-paid civil servants, because of the application of the tax system?

Is the Minister considering any extra credit facilities, outside of the banking system, for small businesses that are deeply in trouble? Does the Minister accept, contrary to the public view, that there are 255,000 public servants earning less than €60,000 and that 45,000 are earning more than €60,000 and that the levy is skewed to take disproportionately from the lower paid?

The issue of industrial civil servants has not been raised. Industrial civil servants pay full PRSI, contribute towards the old age contributory pension scheme — there is a double disregard for that — arising from which they get a very modest pension. Will those thousands of industrial civil servants, mostly on low pay, have the pension levy applied to them on their gross income? Would that not be entirely unfair?

Various claims have been made about why the social partnership talks broke down. Is it not a fact that in the framework document the Government committed to all sectors and interests in society making their contribution, but it has produced a pension levy scheme that addresses only one aspect of this? Issues were raised, such as the difficulties with regard to pensions in the private sector, homes protection, corporate governance, executive pay etc., but as far as the social partners were concerned there was no move on any of these issues but only on the question of the pension levy. Is that not a very long way from any kind of social solidarity contract?

Michael D Higgins (Galway West, Labour)
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Why did the Minister make no reference in his speech to curtailing the interest paid on mortgages to landlords which would have had a yield of more than €500 million? Why did he not make reference to bespoke pension schemes for directors?

Why did the Minister make so little reference to liquidity issues? Taking his point on the Swedish reference, including the wide guarantee restructuring, he did not mention the most important aspect, namely, the quick identification of the state of the assets which was made available to the Swedish public. It is the biggest stumbling block for the public in terms of what is to happen in the banking sector.

On a positive note, the Minister made reference to an bord snip nua. What about identifying a "bord snap" to examine all of the obstacles placed in the way by the Department of Social and Family Affairs, the Revenue Commissioners and the Department of Education and Science? Delays with regard to availing of any of the back to education or back to work special allowances are longer than 12 months. It is scandalous that one must wait so long before one qualifies for any of these measures. Every day, the Minister's letters are written to Deputies stating that even demanding a utility bill of a particular type can delay a person by months. Self-employed people must wait for the Revenue Commissioners before they can register for social welfare. The Minister has not commented on any of these matters.

Pádraic McCormack (Galway West, Fine Gael)
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Will extraordinary bonuses continue to be paid to banking officials, local authority executives and HSE staff? Some of these bonuses are greater than the wages or salaries of the people from whom the Minister is about to take a 9% deduction.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I apologise to Deputies McGinley, Burke and Ardagh.

Pádraic McCormack (Galway West, Fine Gael)
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I did not delay the House.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I am aware of that.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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A large number of constructive questions were asked and I appreciate the tone of the House at this time. I am not in a position to deal with all of the questions because so many were asked.

To answer Deputy Barrett, we decided to use gross income as the basis of this measure and I will take his point about lending money to facilitate alternative energies. It is an important issue and I am aware the National Treasury Management Agency has been involved in this matter with regard to the interconnector.

Deputy Rabbitte returned to the subject of the total contribution coming from one sector and the fact that the nature of the progression was unfair. Across the Civil Service at all grades and on all pay scales from clerical officer to principal officer, the total deductions are higher as a percentage of gross pay as pay increases. However, we will have an opportunity in the context of the Bill to develop these matters at greater length.

Pat Rabbitte (Dublin South West, Labour)
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Is there any truth in the e-mail we all received today about the Minister contemplating a pay increase for principal officers?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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No, I am afraid not.

Pat Rabbitte (Dublin South West, Labour)
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There is no truth in it.

Joan Burton (Dublin West, Labour)
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Good.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have not been apprised of it.

Joan Burton (Dublin West, Labour)
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If the Minister has not been apprised of it will he ask his advisers about it?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As I understand the position it is not being paid.

Emmet Stagg (Kildare North, Labour)
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The media might take note of this.

Pat Rabbitte (Dublin South West, Labour)
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Is there one due?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am not in a position to advise the House at this moment.

Pat Rabbitte (Dublin South West, Labour)
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It seems there is.

Pádraic McCormack (Galway West, Fine Gael)
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Maybe a few bonuses will be thrown in.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As I understand it, no such payment is being made or envisaged. I will have to check out the position in some detail. I did not see the e-mail and if Deputy Rabbitte put me in possession of the e-mail I would be in a better position to comment on it. It has not been suggested to me over recent weeks that any pay rises are impending.

Pat Rabbitte (Dublin South West, Labour)
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The Minister's answer is that he will not apply one.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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With regard to the banks, Deputy Michael D. Higgins referred to the Swedish example. I agree that the identification of the assets which are at risk is crucial to the determination and resolution of their problems. We have made progress on this through the work of the PricewaterhouseCoopers assessment of the exposures of the banks. We built on this with auctioneering advice. In the context of any capitalisation the due diligence exercise will yield further information to enable us to do a far more precise identification of risk before we formulate policy on it. I would be reluctant to commit the taxpayer on any issue connected with risk without a full and definitive assessment of the risk in the institutions themselves and we must await this assessment. In general terms I agree with the sequencing outlined by Deputy Higgins that the assessment of risk is vital in finally addressing the problems posed within the banking sector.

Deputies will note that when the State made the offer to Anglo Irish Bank we followed up with a due diligence and this due diligence influenced me and the Government in arriving at the determination that it should be nationalised. I do not anticipate, on any of the information I have to hand, that a due diligence will require the nationalisation of the two major banks. However, it will establish with far greater precision the precise nature of the exposures they have. This will allow the State to formulate a far more exact policy with regard to risk identification.

Michael D Higgins (Galway West, Labour)
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When?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Discussions with the Bank of Ireland and Allied Irish Banks are coming towards a conclusion and I anticipate decisions by the Government in this regard in a matter of days rather than weeks.

Pat Rabbitte (Dublin South West, Labour)
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What about the industrial civil servants?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I will examine this position. Particular cases will be brought up by Deputies and I am not in a position to provide a definitive answer today. I will examine the issue.

Pádraic McCormack (Galway West, Fine Gael)
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What about bonuses?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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With regard to the Civil Service, I made clear that bonuses have been abolished and I will be in contact with the other bodies on this matter.

Pat Rabbitte (Dublin South West, Labour)
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What about credit lines?

Pádraic McCormack (Galway West, Fine Gael)
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Members of the HSE are receiving bonuses and the amount is €80,000 in one case.

Pat Rabbitte (Dublin South West, Labour)
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Are credit facilities outside of the traditional banking system being contemplated?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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There are no proposals before the Government on this at present. However, I am prepared to examine it as we move forward. I should close the debate at this stage because I am within my time.

Paul Kehoe (Wexford, Fine Gael)
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There are three minutes left.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Ceann Comhairle can correct me if I am not in order but I have allowed questions——

Damien English (Meath West, Fine Gael)
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The Minister is wonderful.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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——and I am entitled to reply to the debate.

John O'Donoghue (Kerry South, Ceann Comhairle)
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That is right. The Minister is entitled to reply to the debate and close when he wishes.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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How long do I have to reply to the debate?

John O'Donoghue (Kerry South, Ceann Comhairle)
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Until 1.30 p.m.

Paul Kehoe (Wexford, Fine Gael)
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Three minutes remain.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I will use those three minutes to reply to the debate and state that the discussions which took place were constructive and productive.

In his line of questioning, Deputy Rabbitte mentioned a number of issues which were raised during the discussions and which the Government is open to discussing with the social partners in the context of the management of the very severe economic and financial crisis facing us. This particular element of the proposal was brought forward because the Government recognised the immediacy and urgency of the position with regard to the correction of the public finances.

The correction of the public finances on its own will not renew our economy. However, it is an essential prerequisite to the renewal of the economy that we bring our public finances into order. This is why the Government found it essential to make a decision last Tuesday and implement it. I accept that it will not be easy to implement this decision. Many are affected by it. Public servants in this country have always served the State to the best of their abilities and have done tremendous work. We appeal to them to come with us on this journey. It is a difficult journey——

Pádraic McCormack (Galway West, Fine Gael)
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See fair play——

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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——but it is one in which the public service can play a signal part in giving example to the rest of the community that in addressing our cost competitiveness, in being flexible in our work patterns in giving more for less pay and in working for this country and this nation we can address the very serious economic and financial circumstances which face us.

Those serious financial and economic circumstances are mirrored in every country in the world at present. There is nothing unique about the position in which Ireland finds itself. The problems we have in the housing sector are mirrored in Great Britain, Spain and the United States. I accept they are not mirrored in all countries. We are extremely fortunate in this period of profound economic and financial turmoil that we find ourselves, as a result of wise decisions by successive Governments, in the eurozone——

Pádraic McCormack (Galway West, Fine Gael)
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Fianna Fáil has been in the Government——

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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——with the protection——

Pádraic McCormack (Galway West, Fine Gael)
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"Successive Governments" means Fianna Fáil.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I said "successive Governments" of all colours.

Pádraic McCormack (Galway West, Fine Gael)
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It has been successive Governments made up of Fianna Fáil for the past 11 years. That is what destroyed the country.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Deputy McCormack's party was in office. I am sure Deputy Burton and Deputy Bruton will remind Deputy McCormack that he was in office for a number of years during which time the Government took good steps with regard to our participation in the eurozone.

Paul Kehoe (Wexford, Fine Gael)
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From 1994 to 1997.

Pádraic McCormack (Galway West, Fine Gael)
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We left the country in a good state and Fianna Fáil has destroyed it in the past 11 years.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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This has given us a solid stability in the current climate. It is important that all citizens and Deputies are aware that we have a basic financial stability in this country. We have very difficult decisions to take——

Paul Kehoe (Wexford, Fine Gael)
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The Minister is listening too much to his civil servants.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We as a Government will take those decisions.

Kieran O'Donnell (Limerick East, Fine Gael)
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That is Cowen speak.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Opposition is here to hold us to account and I have no doubt the Deputy will do so.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Amendment No. 1 in the name of Deputy Burton and others and amendment No. 3 in the name of Deputy Morgan and others fall.