John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Sherlock has ten minutes remaining in his slot.

Seán Sherlock (Cork East, Labour)
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The financial crisis is due to both external and internal factors, external in that the beliefs we held regarding the behaviour of banks and financial markets as actors in a real economic setting have been challenged like never before. It must be said that somewhere in the recesses of our minds there was a nebulous idea that the global financial economic structure was based on a false premise but we never realised just how much the Irish banking sector was tied to that false premise. We are now left with a new rhetoric from the centre left and centre right about the role of the State. The question for all of us is how to construct a new narrative for the position we are in and a solution for the next generation.

This country was over-reliant on tax receipts from stamp duty. That issue will be analysed until kingdom come and there is nothing that I can bring to that analysis that is new. The question now is how we get ourselves out of this morass and restore our economic well-being, and what we can do to ensure a sustainable economic and social model into the future.

The restoration of the economy must be based on strong Government intervention and co-decision making with our European Union partners. The Stability and Growth Pact has vanished and the question remains as to what will replace it. This country is nowhere near a fiscal stimulus plan and all talk of change, President Obama style, is futile. What we need now is a new definition of the role of markets and the role of the State regarding market behaviour.

I am encouraged by the fact that the European Commission published proposals last week that would set up a pan-European regulatory body with strong powers to intervene in national regulation. Unfortunately, that is a necessary consequence of Ireland's soft attitude in regulating the behaviour of financial institutions. We await the political outcome of such proposals and I hope the Government will support that initiative. It is necessary if it is to send a message to global markets that Ireland is getting its house in order. If the Government is to restore public finances it must also restore confidence. The restoration of confidence will ensure that investors will once again begin to look at Ireland.

Given that we are an open economy, it is vital that our membership of the European Union is seen in a positive light. I am encouraged by the fact that the EU monetary affairs Commissioner has stated publicly that any country in crisis will receive financial assistance in advance of the International Monetary Fund knocking on our door. We must be encouraged by those signals. In terms of the motion before us, we must acknowledge that any Government strategy has to incorporate our European Union partners. Without them, we are doomed.

In putting forward these ideas I am conscious that a new language must emerge, which is one of social solidarity. This Government has sought to pitch sectional interests against each other. We need a new language that does not put the private sector against the public sector or the urbanite against the rural dweller. Any interventions made by Government must be based on equity and on the basis that each bears the pain in accordance with their ability to pay.

We all have ideas. Our membership of this House is based on the notion that we put forward ideas to get elected here. I suggest we examine the notion of social capital. Amidst this economic storm there are practical solutions that would put thousands to work if the Government thought more laterally about its policy interventions.

Many communities are in need of serious investment in terms of public works that could be carried out at an extra marginal cost but that would yield a massive return in terms of adding to the quality of this country's citizens' lives. We need a proactive Government intervention at the most basic and community level to ensure our communities can survive.

In that light and in light of the fact that in the past six months my colleagues within the Labour Party have put forward some concrete proposals, we wish to work in a positive sense to try to do what we can to get this country up and running again. Today I spoke with my colleague, Deputy Róisín Shortall, who put forward proposals on the inclusion of certain persons within the tax net. In the past two weeks or so, we have heard many social commentators speak about the fact that 38% of the population is currently outside the tax net. If we are talking about a mini-budget in the coming months and if we are talking about changing the tax code or increasing personal taxation, we must take cognisance of the fact that there are large numbers within that 38% bracket who are pensioners and low paid. If the Government proposes to bring more people into the tax net, it must be on the basis of equity and not on the basis of making sure that those people on marginal or lower incomes are not taxed unfairly.

Darragh O'Brien (Dublin North, Fianna Fail)
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I would like to share time with Deputies Nolan, Cuffe, Byrne, McGrath and Calleary

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

Darragh O'Brien (Dublin North, Fianna Fail)
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I am genuinely glad Deputy Sherlock asked the House to be constructive and I welcome that. However, I would further welcome if his party took the opportunity to do that in the coming weeks and I hope we can take constructive decisions in this House for the good of the country.

I am pleased to be given the opportunity to speak in support of the Government's counter-motion. I commend the Minister for Finance and his Department for the tireless work they undertook in recent months in these very difficult economic times. The Government has been consistent and decisive in taking measures to protect this country's economy. Since the effects of the global economic crisis were beginning to be felt last year, it has taken decisive action. We needed to cut Government spending and last July measures to save 3% were announced, acted upon quickly and achieved in 2008.

As the global crisis worsened and when banks across Europe were falling like skittles and queues of depositors formed outside banks across Britain and the United States, this Government acted and brought in the bank guarantee scheme which guaranteed deposits in six financial institutions in Ireland. The scheme did not come free and all institutions concerned will have to pay for it over the two-year term which should net the taxpayer up to €0.5 billion. The scheme protected normal savers and, just as importantly, the 250,000 people working in the financial services industry. We were the first in Europe to act and many other countries followed.

In fairness to Fine Gael, it supported the Government initiative. What did the Labour Party do? As always it voted "No". The international crisis continues to change day by day. When other challenges were faced by Government regarding corporate governance in Anglo Irish Bank, we moved decisively but in a measured way. The State took the difficult decision to nationalise Anglo Irish Bank and that decision was taken only after detailed due diligence was carried out by two independent financial bodies.

As I said last week in another debate in this House, I want to put to bed the utter nonsense that is being peddled by certain Members of the Opposition that the Government is simply bailing out the banks. I remind them that without a stable financial system the ripple effect on the rest of the economy would result in a wave of job losses and a worsening economic situation. Without a viable and robust banking sector all other areas of the economy are under threat. The Government has not been engaged in a bail-out of the banks or bankers but in the protection of jobs and the very basis for this country to trade nationally and internally.

Fine Gael and the Labour Party wanted to shut down Anglo Irish Bank. I asked them what would have happened in the international markets if an Irish bank defaulted on its international bond commitments. The fact there now appears to be international interest in purchasing the bank further shows the correct decision was made. When it became necessary to recapitalise AIB and Bank of Ireland it was done in the interests of the country as a whole and provided a guaranteed 8% return on investment for the taxpayer. The scheme will also facilitate increased access to funds for small and medium businesses and first-time buyers.

The figures announced yesterday clearly show that the Government needs to take action once again in the interest of the State. Measures already introduced by Government, such as additional taxes and savings, have raised €5 billion towards bridging the budget deficit. It is clear, based on Exchequer returns, that further measures are needed to ensure we remain within the 9.5% of GDP as agreed with the European Commission as part of our plan for stabilisation of the public finances. It is only right and proper this is done in the interests of the country.

I know the decisions are tough and are not all welcomed by the public, but in time people will see necessary decisions have been taken to ensure our future prosperity. The Government will continue to work on areas where we can stimulate growth, protect the more than 1.8 million people at work and ensure our policies on tax and savings are fair and balanced. It will not shirk its responsibility to its citizens. People will recognise that these decisions, while difficult, have been taken for the good of the country as a whole and for future generations. This country will come through this crisis, of that I am certain. As the Taoiseach said last week, the common good must be everyone's priority.

M J Nolan (Carlow-Kilkenny, Fianna Fail)
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I welcome the opportunity to speak on this motion. As my colleagues who are speaking on this side of the House have said, it is only now the scale of the problem we are facing is beginning to hit home to those on all sides the House. Yesterday there were very sobering announcements of the falling revenue stream and, something which could have been missed, an increase in expenditure which is unfortunate at a time when our income is reducing. We must engage with all sides to find a solution to this problem. Comparisons have been made with the 1980s when we experienced similar problems. The difference is that back then we did not have the international economic downturn, which is now evident to everybody.

The Government must find efficiencies in all its spending and Departments. I am sure there are areas which can be examined and savings made. The mini budget later this month or early next month will affect the 1.8 million people still working. It is important to note that almost 2 million people are working and even though our unemployment rates are high we still have a large workforce. People who are in employment and are asked to pay even more in personal taxation and indirect taxes will look for better value for the taxes they are paying and Government spending.

It is important that best practice in doing business is put into place by the Government. I know all its decisions and actions will be taken for the right reasons. We only need to hear the news this evening of major job losses in Waterford and the blue chip accounting firm, KPMG, which announced 200 redundancies. These individuals are well qualified in their specific areas and fields. It brings home to us all the difficulties being encountered in the real world of the private sector.

The five year framework for the restoration of the public finances must be achieved. We do not have many options in that regard and we must restore the current budget position to a balanced budget by 2013. A lot of this is about confidence. This Government and country must ensure there is international confidence in the way we do our business here. We must engage with and have the confidence of our international partners and bankers, on whom we will become more and more reliant for the next two, three or four years to continue to run this economy.

It is also important to remember those well-qualified individuals who, through no fault of their own, have lost their jobs. Those responsible, in whatever way, for landing us in the mess must also take responsibility for that. Allied to the disappointing tax revenues we saw yesterday is the increased pressure on the expenditure side of Government spending, particularly in recent months when there has been a large increase in the numbers on the live register. It has a double impact because when people are working they are contributing to the national Exchequer but when they are not working they must be paid by it.

The Minister and Government are working hard to try to bring this to a successful conclusion. The important message to go out is that we need support from all sides, including the parties opposite. I wish the Minister and Government well.

Ciarán Cuffe (Dún Laoghaire, Green Party)
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If Kathleen Ní Houlihan took a trip to the Money Advice and Budgeting Service she would need to be prepared for some tough advice. She would be asked to control her outgoings and told to increase her income. When the MABS officials asked her about the source of her income over the past few years, they would shake their heads and take copious notes because Ireland Inc. has become too dependent on income from boom time taxation. We need to sober up and carefully examine the fiscal and taxation measures that will not only get us through good times but also through the lean years. As Kathleen returns from her trip to MABS, I can well imagine the neighbours watching out for her on the way home to see what actions she will take to get her finances in order. In the same way, EU member states will carefully examine the measures we take to ensure Ireland's finances are put back on the right track.

The way forward is simple. Ireland needs to control its income and expenditure in the same way as a household. It must ensure that a strong signal is sent to economic and political institutions elsewhere that we can get our house in order. That will involve pain, cutbacks and higher taxes but the public is looking for fairness in these measures in order that the less well-off are not penalised unduly and those who have benefitted, in some cases very dramatically, from the tiger years pay their fair share and take their part of the pain following the tough decisions that lie ahead.

The way forward has been laid down in detail. The smart economy document published by the Taoiseach before Christmas shows clearly what needs to be done for future job creation. We also need to be prudent and carefully evaluate spending decisions but we also need to show imagination and creativity. We need to look at where those new jobs will emerge. They will be different from those created previously. The various green initiatives under way within government will deliver many jobs. Organic farming and farming that results in produce being delivered directly from farm to fork will generate greater profit than selling raw produce abroad and these industries need to be developed. Ocean energy, photovoltaics and various other energy sources will create jobs and save people money. Improvements in public transport and long-term projects such as the western rail link, the metro in Dublin and additional Luas lines will help people get to where they want to go without using a car. The digital economy will bring forward thousands of jobs into the 21st century. However, we need to be prepared for these opportunities and we need to implement the smart economy document.

The Fine Gael motion brings a focus to bear on Ireland's financial issues and the Government response will be prudent and careful, as it will address the radical reform required to set Kathleen Ní Houlihan on the right path as she gets her finances in order.

Thomas Byrne (Meath East, Fianna Fail)
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Tá áthas orm labhairt ar son rún an Rialtais anocht. Bheinn sásta i ndáiríre labhairt ar son rún an fhreasúra seachas an chéad alt mar deir sé chuile rud agus atá an Rialtas ag rá le fada an lá.

Fine Gael's motion is similar to the Government's amendment, with the exception of the first paragraph, in which it asks us to cut substantially the €40 billion borrowing requirement. The problem is the Opposition parties never outline where borrowing should be cut. Whenever the Government makes hard decisions, they oppose them, even though Fine Gael is asking us to make cutbacks and raise taxes in the motion. No Opposition has ever done this before and, therefore, we should welcome that. No opposition in the history of the world has ever asked a government to raise additional tax and introduce other revenue raising measures. We should take this opportunity, which offers great hope to the country that we may can start together on the serious suggestions the Opposition parties have put forward. They are being given the opportunity to almost come into government and undergo a proper analysis and costing of their proposals. That is welcome because we need to give the people hope.

However, a serious criticism of the Fine Gael motion relates to its assertion that the Government's measures do not have international confidence. If the words of Mr. Trichet, the president of the European Central Bank, cannot be described as "international confidence", I do not know what they can be called. Mr. Trichet said he was very happy with what the Government was doing and that the Government was going down the right path. That is international confidence and we need to relay that.

The Opposition parties made proposals and offered to support additional, substantial taxes. When a budget is implemented following serious consultation with them, it is important they support it and recognise the Government is receiving support internationally because that is critical. Every time they criticise something we do because they are not prepared to support it politically, even though they recognise it is necessary, the cost of our national debt increases. I am glad the Opposition is taking this seriously. However, the Government parties have taken this issue seriously for a long time. They have not been swayed by opinion polls, although I agree with those who stated we must bring the people along with us on this because it has to be done.

The Government has taken tough decisions, which are absolutely necessary, because we cannot continue to borrow. No mention was made of the Government successfully selling a three-year €4 billion bond last week. We will have to pay this back, and not just our children and grandchildren, and we will have to borrow more. The interest rate on the bond is high, partially because the perception here is there is no international confidence in what we are doing when the reality is the people who matter internationally are satisfied with what we are doing, including Mr. Trichet.

The Government has made a clear commitment that the general Government deficit will not be worse than 9.5% of GDP this year. It is a shocking figure but if it was lowered any further, the cutbacks in expenditure and services would be horrendous. The Government's job is to do what it can with the money available to it. It cannot continue to provide endless services and pay endless wages if the resources are not available. The Government is doing a fabulous job of managing our resources and not overstretching us for the future.

The motion states, "unless we urgently take new measures to stop Government borrowing from spiralling out of control, other measures to support our struggling small businesses, exporters and job seekers will have little effect". While we took the public finances under control over the past six months, the Opposition parties said we were not concentrating on job creation. However, Fine Gael has acknowledged in the motion that we need to get the public finances under control before the country has any economic prospects, which the Government has said all along.

I commend the Government on the work it has done and on taking hard decisions that are not popular with us and the people. However, they have to be taken because we do not have the money and we cannot borrow any more.

James Bannon (Longford-Westmeath, Fine Gael)
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The Government squandered it.

Thomas Byrne (Meath East, Fianna Fail)
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Every interest group will be involved in lobbying. Earlier the Combat Poverty Agency appeared before the Joint Committee on Social and Family Affairs for the third time. Every agency whose budget has been cut by the Government will be supported by the Opposition when it appears before a committee. It is about time that stopped and the Opposition got real. That seems to be happening and that is positive for the country.

Michael McGrath (Cork South Central, Fianna Fail)
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I very much welcome the opportunity to support the amendment. Yesterday the Government took an important decision to provide certainty that the deficit in the public finances in 2009 will not be allowed to exceed 9.5% of GDP, as set out in the stability programme submitted to the European Commission in January. Clearly, staying within the 9.5% deficit will require enormously difficult decisions to be taken but it is not sustainable to have Exchequer deficits of between €18 billion and €20 billion, which will increase if corrective action is not taken. The national debt expanding at its current rate and the collapse in taxation receipts are unsustainable. In 2007, tax revenue was €47 billion. In 2008, it fell to €41 billion. It is estimated that tax revenues in 2009 will amount to €34 billion or €35 billion, possibly less depending on which commentator one believes.

This financial and economic crisis represents the single greatest challenge to the well-being of our Republic since its foundation, so grave and serious is the situation. However, the crisis presents an opportunity for us to show that the political system can work and has the capacity to bring the country through the turmoil that has affected almost every family we represent. The bottom line is that we have no choice but to face up to our problems. There is no bottomless pit of international debt of which this country can avail. We are competing with almost every other country in the world for a limited pool of available debt on international markets, which will judge us harshly if we fail to take control of the public finances. The markets are ruthless and we must stop believing that the world owes us something. We must resolve this situation ourselves, a process that must start in the House. If we do not resolve it, others will do it for us on terms that are far more unpalatable than those introduced by the Government in the first week of April.

The Government is prepared to make tough decisions with no regard for the consequences in terms of electoral popularity. We have been elected to govern in bad times as well as good times, and govern we will. However, not only the Government has a responsibility at this time. As Deputy Thomas Byrne stated, the Opposition has been elected by the people and must stand up to show what it is made of.

This morning during Leaders' Questions, when the Taoiseach announced that the supplementary budget would be introduced in the House during the first week of April, howls of derision came from some Members across the floor. It was suggested that introducing the budget on Wednesday, 1 April would be some type of April fool's joke. People are losing their jobs in their thousands. The least that they expect of us as their leaders is the capacity to deal with the crisis with a degree of political maturity. The Opposition can take the easy option and be all things to all people, which it has done since this crisis unfolded. The income levy was opposed, as were the public sector pension levy and the recapitalisation of the banks. The Labour Party even opposed the bank guarantee scheme that saved the banking system from collapse. The fact is that every Government initiative to get to grips with the economic and financial crisis has been opposed.

Like everyone, I recognise the fact that there are people on all sides of the House who have expertise and experience that can help us at this time. I welcome the approach taken by the Minister for Finance in bringing in the Opposition spokespersons. This crisis is beyond party politics. If we do not demonstrate that we have the courage, ability and intelligence to deal with it, confidence in the entire political system will be demolished.

We will need to show leadership in the way in which the Houses do business. The number of Oireachtas committees, the system of Members' expenses and the number of Ministers of State must be examined. We cannot with any credibility tell people outside the Houses that they must accept pain while we fail to reform the political process designed to serve them.

Dara Calleary (Mayo, Fianna Fail)
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I welcome the chance to speak on this motion and the changed context signalled in the past 48 hours, namely, the involvement of Opposition spokespersons in discussions this morning with the Department of Finance at the Minister's invitation. I encourage him to extend that invitation beyond the House to those involved in social partnership — it may be the way to return them to the table — and to the commentators who seem to have all of the answers, but who dismiss the work done by all sides of the House in our efforts to respond to the crisis.

I echo Deputy Michael McGrath's remarks on the challenges presenting to the Republic. Every Deputy must be conscious of those who sat in the House before us during much tougher economic and social times. We owe it to those people who gave us the right to be present today to fight for the country in the days and weeks ahead.

The Government's decision on the mini-budget yesterday, irrespective of the day on which it is to be delivered, I hope, will bring certainty to the economy and people's lives, those who wish to plan their incomings and outgoings for the rest of the year. If there are to be increased taxes or more levies, we must know to allow us to plan. It will also bring certainty to business in terms of its expenditure and taxation plans, as confidence and certainty have been lacking in the business market. In designing the revised budget in the coming four weeks, I encourage the Minister to consider a number of proposals, to use the Department to cost them and to decide that an initial cost might lead to the stimulation of economic activity, which is being sought.

Taking the example of VAT, some people have not taken any hint recently. While some still have money to spend, they are unwilling to spend it due to a lack of confidence. Some imaginative work on VAT and other issues could be the key to unlocking that expenditure, which would protect jobs in our retail and hospitality sectors.

I ask the Minister to consider the various stimulus packages being offered by the motor industry, which should be acted on before 1 April to try to stimulate some activity therein. I also ask him to examine the various community and State initiatives that we could unlock by involving the elements of the private sector that still have access to credit or may access it via the banks' recapitalisation in the coming weeks. This type of initiative would promote growth and economic activity.

There is no doubt that the decisions to be taken on 1 April will be tough. No one likes to increase taxes or to cut expenditure. However, both are necessary if we are to sustain our economy and return to circumstances in which we can improve investment in services. Ahead of the budget, every Deputy should take the opportunity to recast the country by presenting proposals and thoughts to the Minister and the Opposition spokespersons.

I echo Deputy Darragh O'Brien's remarks on Government strategy, which has been pilloried by many. The Anglo Irish Bank case is a good example. Many suggested that the bank should have been liquidated and that we should have moved on, but international investors' interest in it in recent days shows that the strategy was right. The bank guarantee strategy was perfectly right, particularly given the current pressure on the banks. The recapitalisation strategy is the proper way to go, given the guarantees on mortgages and small business lending achieved by it.

Last week's comments by the president of the European Central Bank, Mr. Jean-Claude Trichet, were significant, but might have been lost in the gathering economic doom. It is important that they be communicated to the world's markets. There is a perception that we are weaker than he portrayed us to be. These challenging times have shown the value of our membership of the euro zone and the EU. Later this year when we have the opportunity to debate our EU membership, we should not be behind the door in shouting about the fact that, without our full-blooded and vigorous participation at the heart of Europe, our situation would have been much more dangerous.

The next couple of weeks will give everyone a chance to put his or her cards on the table and to let his or her vision of where the country will be in the next 18 months to two years be known. This should be done in a non-partisan manner, but there will inevitably be partisanship. Using the facilities offered by the Department and the expertise available to every side of the House, we should be in a position to devise a budget in April. While it will be tough, it will finally put us on the road to some sort of hope and recovery. As a House, we should take the chance with both hands.

Billy Timmins (Wicklow, Fine Gael)
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May I share time with Deputies O'Mahony, Neville, Perry and Bannon?

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

Billy Timmins (Wicklow, Fine Gael)
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It is important to point out that the Government is moving to take difficult decisions.