Michael McGrath (Cork South Central, Fianna Fail)
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I very much welcome the opportunity to contribute to the debate on Second Stage of the Finance Bill 2009, one of the most important and difficult Finance Bills any Minister for Finance has had to introduce in the House in modern times. The key tasks facing the Government in terms of the economy and the public finances are restoring stability to the public finances as a matter of priority; dealing with the serious issues affecting the banking system through the establishment of the National Asset Management Agency to rid the system of the property-related loans clogging it at present; revaluing our cost base to ensure that, when we emerge from the recession, it will be more competitive and position the country in such a way that it can benefit in a very positive way from the economic upturn when it arrives, and taking whatever steps are necessary to support enterprise and those in employment and to support every initiative that creates further employment.

The backdrop to the Finance Bill is formed by what is probably the most adverse set of global economic conditions in modern times. In this regard, one should consider the statistics on GDP contraction among some of our main trading partners in 2009. In Germany the figure is to be in excess of 5%; France, 3.3%; Italy, 4.3%; the United Kingdom, almost 4%, and the United States, 4%. World trade is expected to contract in 2009 by in excess of 13%, according to a recent OECD publication. This highlights the difficulties the economy is facing. The economic contraction is placing unprecedented pressure on Ireland's public finances. The International Monetary Fund has predicted that advanced global economies will contract by 3.75% in 2009. The performance of the Irish economy, a very small, open economy, is linked directly to the performance of global trade. One might ask why Ireland is to expect a contraction of 8% in 2009 when some of our main trading partners are to expect contractions of 3%, 4% or 5%. The fact is that global trade will decrease by an expected 13%. We have a particularly small, open economy with a very limited domestic market. We have an export-led economy and the growth we experienced in the Celtic tiger years was driven by exports and a boom in the property sector. Those exports are now under severe pressure. It is inevitable that we will be hit harder than many of our trading partners because of the small and open nature of our economy. We are expected to experience a contraction of approximately 8% this year which, by any measure, is very sharp. This and the measures the Government must introduce as a consequence will have very serious implications for every family and the public finances, as we have seen.

It is clear that the way to achieve economic recovery in Ireland is by putting the public finances back on a stable footing. The measures in the Finance Bill are fundamental to creating the necessary conditions. We must get the public finances in order and simply cannot expect to build a base for economic recovery on a deficit of €20 billion. The deficit will grow a lot more in the years ahead if the Government does not take the corrective action it is proposing in the Bill. That is why in January the Government made a very detailed submission to the European Commission setting out a programme which will take us through to 2013 to return the public finances to the requirement stipulated in the Stability and Growth Pact, namely, a 3% deficit within the next four years. This is a very difficult challenge and will require significant shifts in fiscal policy, a broadening of the tax base and cuts in expenditure. The Government has taken very serious steps towards achieving this goal. It is heartening to note some of the comments made by the European Commission that have endorsed the Government's plans and commended it on taking what are extremely unpopular, unpalatable and difficult decisions. These decisions affect everyone in the country but are essential in the long-term interests of the economy. We have no choice but to make them in the longer term.

While people are to have less money in their pockets arising from the decisions taken in the Finance Bill, it is worth noting that prices are falling. The consumer price index is expected to fall by almost 4% in 2009. The purchasing power people will have, albeit with less money in their pockets, should be maintained in real terms vis-À-vis the prices that prevailed until now and the new prices that have emerged. I very much welcome the recent announcement by Tesco to reduce the prices of grocery products significantly right across the board. This must be replicated throughout the economy in order that families who experience the pain of extra levies and taxes will still be able to afford essential goods and services such that they can continue to run their homes.

It is important to say the economic cycle will take its course and the wheel will turn once again. The economy must be ready and well positioned to capitalise on the upturn when it arrives. It is important that we do not allow a spiral of negativity to take a stranglehold on the economy. I was heartened to hear on 9 April an interview on "Morning Ireland" with Mr. Peter Sutherland who I am sure everyone in the House will agree knows a thing or two about economics. The transcript of the interview is worth reading by all. Mr. Sutherland highlighted a number of strengths of the economy. He essentially said we needed to be more positive and focus on our strengths and make the decisions required to work our way through the crisis. He stated, for example, that if 100 was to be taken as the average GDP per capita in the European Union, the average for Ireland, following an expected decline of 8% in 2009, would be approximately 135. The averages for the United Kingdom and Germany would be between 114 and 117, while that for Japan would be 107. He said that, in 2009, Ireland's exports were expected to decrease by approximately 5.9%. Other countries with which we trade significantly are to experience greater decreases. The exports of Germany, for example, are to decrease by 16.5%, while those of Italy are expected to decrease by 15.9% and the United Kingdom by just under 10%. These are important comparisons that we need to bear in mind. While it is true Ireland is in a very grave position, so too are all of our main trading partners throughout the world. Many are suffering to an even greater extent in terms of their exports. The necessary recovery from the recession will be export-led. Mr. Sutherland also states we must stop talking ourselves down excessively, while recognising the pain of the remedies everybody is facing which will bring a great deal of negative comment. We need to bear in mind what he said because he has had tremendous economic experience in very large companies throughout the world.

Many have money to spend and invest but are not doing so because of the negativity and lack of confidence in the economy and the constant downplaying of our strengths and highlighting of our weaknesses. Tax increases are unavoidable and must play a role in helping the country work its way out of the recession by putting the public finances back in order. To suggest to the people that there is another way out of the recession and that there is a way of making the €20 billion deficit disappear in 2009 would be to mislead them. There is no easy or cost-free option that will result in the regrowth of the economy. It will not do so as long as the public finances are in decline. We must arrest that decline and put the public finances on the path to recovery.

I listened with interest in recent weeks to some of the comments of Deputy Bruton following the budget. He stated people on the average industrial wage would be paying tax at a rate of 51%. Yes, it is true they will be paying tax at 51% on a small part of their income, if one adds up income tax, levies, PRSI and so forth, but the real measure of the amount of tax a person pays is the total of all of the elements expressed as a percentage of his or her total income. This gives the effective tax rate.

I will give a few examples if the Acting Chairman will allow me. Under the measures in the supplementary budget, a person on €40,000, which is just over the average industrial wage, will have an effective rate of tax of 22.1%. In 1997, when Fianna Fáil came into power, that person was paying 40.6% tax. Thus, the rate of tax he or she is paying on that income has effectively halved in that time. Deputy Burton stated on the Order of Business that we have taxation levels akin to those of the 1980s.

Joan Burton (Dublin West, Labour)
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Absolutely.

Michael McGrath (Cork South Central, Fianna Fail)
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That is simply untrue.

Joan Burton (Dublin West, Labour)
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That was the Minister's answer. He gave a formal answer yesterday from the platform of the Dáil.

Noel O'Flynn (Cork North Central, Fianna Fail)
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Allow the Deputy to continue without interruption.

Michael McGrath (Cork South Central, Fianna Fail)
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Do I have the floor?

Joan Burton (Dublin West, Labour)
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I can show his reply to the Deputy.

Dick Roche (Wicklow, Fianna Fail)
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Deputy Burton was never very good at maths.

Joan Burton (Dublin West, Labour)
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I am better than Deputy Roche. I can add and subtract, thank God.

Noel O'Flynn (Cork North Central, Fianna Fail)
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Allow Deputy McGrath to continue without interruption.

Michael McGrath (Cork South Central, Fianna Fail)
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I will give examples. Deputy Richard Bruton said a person on the average industrial wage was paying tax of 51%. Yes, he or she is, on a tiny proportion of his or her income. A person on €40,000 is paying an effective rate of tax of 22.1% following the supplementary budget. The equivalent in 1997 was more than 40%. We have brought taxation levels back to those which pertained between 2005 and 2006. In 2005 this person was paying 24%; in 2006 he or she was paying 21.9%. Thus, we are now back to 2005-06 levels.

Let us take another example of a married couple with two children and one income of €60,000. In 1997 they had an effective rate of tax of 36%. Under the supplementary budget measures, their effective tax rate is 24%.

Joan Burton (Dublin West, Labour)
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In his answer yesterday the Minister stated it was 35%. The Minister was speaking about the effective tax rate.

Michael McGrath (Cork South Central, Fianna Fail)
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Deputy Burton had her opportunity.

Joan Burton (Dublin West, Labour)
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I can get the Minister's answer for the Deputy.

Noel O'Flynn (Cork North Central, Fianna Fail)
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I ask Deputy Burton to obey the Chair and let Deputy McGrath continue.

Joan Burton (Dublin West, Labour)
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I can get the Deputy's ministerial colleague's answer.

Michael McGrath (Cork South Central, Fianna Fail)
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These are the official statistics published with the budget.

Noel O'Flynn (Cork North Central, Fianna Fail)
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Just a moment, Deputy McGrath. I ask Deputy Burton to let the Deputy finish. If she wishes to correct anything or make any statement she can do it in her own time.

Joan Burton (Dublin West, Labour)
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Deputy McGrath is directing incorrect comments to me.

Noel O'Flynn (Cork North Central, Fianna Fail)
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Deputy Burton, will you obey-----

Joan Burton (Dublin West, Labour)
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Instead of speaking-----

Pat Breen (Clare, Fine Gael)
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She is only trying to correct the Deputy.

Michael McGrath (Cork South Central, Fianna Fail)
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Deputy Burton said we were back at the tax levels of the 1980s. We are not.

Joan Burton (Dublin West, Labour)
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On a point of order, a Chathaoirligh, I respect what you are saying, but the Deputy, rather than addressing his remarks to you, is directly addressing me, and I am responding where he is wrong.

Michael McGrath (Cork South Central, Fianna Fail)
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I directed my remarks through the Chair.

Joan Burton (Dublin West, Labour)
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He is wrong in what he is saying.

Michael McGrath (Cork South Central, Fianna Fail)
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I am not wrong. I have the facts here.

Joan Burton (Dublin West, Labour)
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Such tax levels have not been seen since 1989 and the early 1990s-----

Michael McGrath (Cork South Central, Fianna Fail)
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The Deputy is wrong.

Joan Burton (Dublin West, Labour)
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-----when compared with this budget.

Michael McGrath (Cork South Central, Fianna Fail)
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A Chathaoirligh, who has the floor?

Noel O'Flynn (Cork North Central, Fianna Fail)
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We are still on a point of order.

Joan Burton (Dublin West, Labour)
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He directed his response to me and therefore I felt obliged to correct the Deputy. However, I agree with you, a Chathaoirligh, that he should address his remarks to you and to the House.

Noel O'Flynn (Cork North Central, Fianna Fail)
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Deputy McGrath is addressing all of his remarks through the Chair.

Michael McGrath (Cork South Central, Fianna Fail)
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All of my remarks.

Noel O'Flynn (Cork North Central, Fianna Fail)
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If Deputy Burton wishes to correct him she can do so at the end-----

Joan Burton (Dublin West, Labour)
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I ask the Acting Chairman to ask the Deputy to speak through the Chair.

Michael McGrath (Cork South Central, Fianna Fail)
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All of my remarks are being directed through the Chair.

Noel O'Flynn (Cork North Central, Fianna Fail)
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I ask Deputy Burton not to interrupt.

Joan Burton (Dublin West, Labour)
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You are chairing, a Chathaoirligh.

Noel O'Flynn (Cork North Central, Fianna Fail)
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Yes. I am chairing the House and if the Deputy does not interrupt I will be able to do so.

Michael McGrath (Cork South Central, Fianna Fail)
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The valuable time I have has been wasted by interruptions.

Noel O'Flynn (Cork North Central, Fianna Fail)
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I ask the Deputy to continue. We will give him an extra minute.

Michael McGrath (Cork South Central, Fianna Fail)
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If I may continue, I will give some further examples.

A married couple with two children and one income of €60,000 had an effective rate of tax of 36% in 1997, but following the supplementary budget it is 24%. Again, this couple is going back to levels of taxation that pertained in 2004-05. In a final example, a married couple earning €100,000 in two incomes, with two children, had an effective rate of tax of 42.6% in 1997, but under the measures in the supplementary budget they now have an effective tax rate of 27.9%.

Joan Burton (Dublin West, Labour)
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That is totally wrong.

Michael McGrath (Cork South Central, Fianna Fail)
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These effective tax rates are equivalent to those of 2005-06. It is important to put that on the record. These are the facts as published in the supplementary budget.

Joan Burton (Dublin West, Labour)
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They are incorrect figures.

Michael McGrath (Cork South Central, Fianna Fail)
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When I am on doorsteps people often ask me why middle income families are being hit. This is a difficulty for any government. The majority of people are within that category and if we want to make a serious effort to restore stability to the public finances we cannot, unfortunately, ignore the large swathe of the population that occupies the middle-income bracket. Yes, they are being asked to make a significant contribution to bringing stability to the public finances, as is everyone who is living in this country and working within our economy.

I welcome the Minister's decision not to back-tax redundancy payments from the first four months of the year at the higher income levy rate, which would have been unfair. I raised this issue personally with the Minister and at parliamentary party meetings, and I am pleased he has taken this on board and has agreed not to backdate the higher income levy for redundancy payments.

There will be some issues with the administration of the income levy and the composite rate that has now been set. If we take, for example, a person who is generally a PAYE worker but receives a bonus in the first few months of the year, will he or she be required at the end of the year to file a tax return? If he or she does not do so, will the Revenue Commissioners take action? Could he or she potentially have an outstanding tax liability? Some powers are being devolved to the Revenue Commissioners to deal with that issue and I have full confidence in them to do so. It is important they are given that opportunity.

The Minister has also announced the termination of some property-related accelerated capital allowance tax relief schemes, particularly in the area of nursing homes, which will save approximately €60 million in a full year. I welcome the transitional arrangements that have been set out in the Bill, because there are some important projects in the pipeline and they should be given the opportunity to be completed. They were planned on the basis of reliefs and allowances that currently exist and I welcome the fact that these are being phased out rather than terminated suddenly.

The Minister has engaged with the motor industry and he announced on budget day a shift in VAT policy whereby the industry would be allowed to move to the margin scheme. However, some further engagement has taken place since then and that change will not now be implemented. However, the Minister indicated in his Second Stage speech that he would continue to engage with the industry, particularly with regard to the overhang of second hand vehicles which are clogging up forecourts at the moment. If the Minister can find a fair mechanism for assisting the industry to get out of this crisis it will be welcome. Every TD with dealerships in his or her constituency will be aware of job losses and the 60% to 70% drop in sales that they have experienced. Other sectors are also facing such difficulties, but there are particular issues in the motor industry. I ask the Minister to re-examine the area and identify policy instruments that could help the industry to work its way through these difficulties.

Do I have much time left, a Chathaoirligh?

Noel O'Flynn (Cork North Central, Fianna Fail)
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The Deputy has two minutes, but if he is not finished I will allow him another minute.

Michael McGrath (Cork South Central, Fianna Fail)
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That is fine.

Much has been said about what happened in the good times when Exchequer surpluses were being returned every year. It is important to put on the record all the good things the Government did at that time, including the significant reduction in the national debt to among the lowest in the EU, which has given us the capacity to borrow at a time when we need to if we are to work our way through the current financial difficulties. We dramatically reduced the burden of direct taxation - the higher rate of income tax went from 48% to 41% and the lower rate went from 27% to 20%. This is forgotten. If we consider the effective rates of tax that I mentioned earlier, we are taking people back to 2004-06 levels. This is based on the statistics published by the Department of Finance.

We established the National Pensions Reserve Fund and invested significantly in it. We dramatically expanded the numbers in front line services, including teachers, gardaí and nurses, and we invested massively in the infrastructure of the country. Clearly, the money was spent in important areas, and we have benefited from that. However, we are now in a different situation. The significant issues in the banking system must be resolved as a matter of urgency and supports must be given to assist companies in maintaining employment, attracting new people and supporting new employment. This is essential. One of the key areas in which we must emerge from the recession in a better position is our cost base and competitiveness. The economic cycle will move on, but if we are not in a position to avail of the upturn when it arises we will not have availed of the opportunity afforded by this recession to reposition our economy, to become leaner and more competitive and to move into the industries that will characterise and dominate this century.

Pat Breen (Clare, Fine Gael)
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I welcome the opportunity to speak on this Bill. The Minister for Finance claims it is designed to protect jobs and build confidence but this is not the case, it is more of the same of what we have got from the Government over the last two budgets. It squeezes every last penny from lower and middle income families and does little to stimulate the economy or restore confidence.

Deputy Michael McGrath mentioned the Fianna Fáil Parliamentary Party meetings and the work Fianna Fáil backbenchers have done to secure U-turns from the Minister on some aspects of the budget. I welcome some of those, particularly the U-turn on the income levy.

My constituency colleague, Deputy Dooley, was very concerned about the Fine Gael candidate in Dublin South, George Lee. He should be more concerned about the Government's failure to deal with this crisis instead of grumbling about the selection of Mr. Lee as a candidate in the forthcoming by-election. Mr. Lee wants a new direction for Ireland and the people of the State will soon have an opportunity to pass judgment on the Government's record. From what I hear on the doorsteps, the people are waiting in the long grass for the opportunity.

The Minister has included a welcome amendment to the Bill to extend the deadline for applications for the mid-Shannon corridor tourism investment scheme. This scheme has the potential to bring significant employment along the Shannon basin, particularly in east County Clare. Tourism is vital to the area and will continue to be important because it has so much to offer. There is huge scope for further development. I welcome the Minister taking on board my concerns for this scheme because projects could have been put in jeopardy had the deadline not been extended. The success and benefits of the scheme, however, can only be assured if these projects secure credit, something which is proving difficult in the current environment.

I do not understand why the Minister is persisting with the air travel tax when the aviation sector is in free-fall. The introduction of any tax on air travel at this time is counter productive. Yesterday Dublin Airport Authority announced 400 jobs will be lost at Dublin, Cork and Shannon Airports. Questions must be answered about the mismanagement of the authority and the Minister for Transport must explain the situation in the House.

This is a huge blow to the aviation sector, coming so soon after the major restructuring in Shannon, which led to the loss of 200 jobs. It is hard to see where further cuts can be made when staff have already made huge sacrifices. Ryanair has already curtailed services at Shannon Airport, reducing the number of aircraft from six to four. This morning Aer Lingus announced that it is going to reduce the number of aircraft based at Belfast International Airport. We told the Minister for Transport this would happen a year ago when Aer Lingus opened a new base for aircraft at the expense of the Shannon-Heathrow route. It was the first Aer Lingus base outside Ireland and it was the beginning of the end.

Having said that, we must protect Aer Lingus. It is a valuable airline and we do not want it to disappear. It is vital for the country to have an airline, particularly on trans-Atlantic routes that could otherwise be cut. Aer Lingus states there is poor consumer demand but I fear there will be further cut-backs in services at all our airports and as airlines struggle to retain passengers at this difficult time.

The introduction of tax relief to support research and development, including intellectual property, as a means of supporting the smart economy, is welcome. The aim is to make Ireland the innovation capital of Europe and the Bill could allow US multinationals that establish Irish subsidiary companies to acquire intra-group intangible assets.

There is an important research and development facility in my area, the Intel plant in Shannon. Recently Intel announced an investment of €50 million in the research and development facility, creating 134 extra jobs over the next four years. I was at the opening with the Tánaiste, Deputy Coughlan, and we were given a tour of the facility, which was very impressive. It is a state of the art operation and over 75% of the employees have higher level qualifications in science, engineering and technology. We must continue to invest in third level institutions. The future is bright for science graduates and the Government must make the necessary resources available to the colleges so we can continue to produce such graduates.

Three weeks ago I visited Israel with my party leader, Deputy Enda Kenny. We met the manager of Intel there, which employs 6.500 in Israel, similar to the numbers in Leixlip and Shannon. The company is looking at employment costs - it has opened a new plant in India, where it can employ ten engineers for the same cost as one engineer in Ireland. That demonstrates the competition we face. The good thing about Intel, however, is that many of the Irish workers travel to the plant in Jerusalem for specialised training and any initiative like this would help attract foreign direct investment in this high end of the market and is welcome.

That is why I welcome the Shannon Development proposal to develop the Shannon estuary. In February I highlighted the potential of the mid-west region for renewable energy resources and I urge the Minister to support the initiatives to help the region become a centre of excellence. The Shannon Development proposal points to the fact that there are 100 companies employing 7,100 in the Shannon free zone, generating €3.5 billion in sales, 94% of which are destined for export markets. It also highlighted the high profile job losses at Molex, Element Six and Avocent. There is huge potential in this area and I urge the Government to support these initiatives because there are enormous possibilities for job creation in the area.

The Spirit of Ireland is another programme that could help economic revival in the midwest, particularly in County Clare. We must make more use of wave and wind energy in the Shannon estuary and, if captured, it could make a major contribution to meet our national electricity demand, making us less dependent on fossil fuels. The Minister for Finance met the consortium, as did Deputies Coveney and Hogan. The project is massive in scale and it has the potential to create thousands of jobs. I ask the Minister to take a serious look at the project and to ensure every support and encouragement is given to it.

Jobs are the main issue, as we are hearing on the doorsteps every day. It is vital that we support job creation initiatives if we are to fight back. The Government has no job strategy and the budget had nothing to offer. People are losing their jobs every day, they know there is a major crisis but they need hope. It was Private James Frazer in "Dad's Army" who coined the phrase, "we are doomed".

Dick Roche (Wicklow, Fianna Fail)
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We thought it was George Lee.

Pat Breen (Clare, Fine Gael)
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We will be doomed if the Government remains in office any longer. The Minister, Deputy Roche, might fit one of the characters portrayed in "Dad's Army", but that is another matter.

We must be optimistic about the future of this country. My party is confident that we have a plan to ensure a brighter future for this and the next generation.

Dan Neville (Limerick West, Fine Gael)
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I welcome the opportunity to speak on this Bill. I would like to deal with the issue of the resources allocated to mental heath and suicide prevention services. It is appropriate to speak on this issue in light of the Monageer report published yesterday.

I will refer briefly to it because I strongly believe if intervention has taken place in the case of that family, that tragedy could have been avoided. I will outline briefly why I believe that. The man in this case was highly suicidal. No suicide assessment of his condition was done but it should have been done. Suicide is a complex issue. A headline carried in one of today's newspapers states that it was that man's level of debt that caused him to take his life. That is a simplistic and dangerous comment. There is never a simple explanation for suicide.

That man had shown warning signs of suicidal tendencies. If his condition had been assessed, I am certain intervention would have occurred. Such intervention would include psychiatric intervention, which would have ensured that he, and therefore his family, would have survived. The person who picked up on his suicidal condition was the funeral undertaker. She became extremely concerned about his condition. The concern may not have been overtly expressed that he was in danger of taking his life but she knew there was a danger in this respect.

I will outline some of the suicidal warning signs I have identified in regard to this man's experience. He was a young man with a young family making detailed funeral arrangements. That may not indicate suicidal tendencies but combined with the fact that his brother hanged himself a month prior to that, the risk of suicide within his family increased. His father died 12 months before that, another factor that could increase the risk of suicide in his family. They were a very socially isolated family, which is also an issue around suicide. He suffered a disability and was unemployed; there is a higher incidence rate of suicide among the unemployed. He suffered from a psychological and emotional disability and had a physical disability in regard to his sight. He also had financial problems. Having regard to that combination of facts, if a risk assessment of his suicidal ideation has been made, immediate intervention should have taken place. Social services knew the history of and the difficulties faced by this family. Combined with all the issues I mentioned, that person was highly suicidal.

No psychiatric intervention was made because no intervention was made during that weekend. If that man had been psychiatrically assessed and psychiatric intervention was made, I believe his life, and therefore the lives of his wife and two children, would have been saved. I take strong exception to somebody saying that intervention would probably not have saved his life.

I make this point in the context of this Bill because the necessary resources are not available to do what I outlined should have happened in the circumstances surrounding this tragedy. I have seen this happen in similar circumstances, although perhaps not as tragic a familicide. I am aware of people who were highly suicidal, whose families had alerted the authorities of their suicidal ideation and the danger they might commit suicide, but the services were not in place, no intervention was made and they took their own lives, a tragedy with which their families have to live for the rest of their own lives.

Funding is needed for services in this area. It is highly relevant in light of what I have said that when funding of €15 million for an out-of-hours support service was mentioned yesterday, the Minister concerned immediately knocked it on the basis of financial considerations. Why does that happen in regard to issues concerning social services, suicide and psychiatric illness?

I welcome the fact that the Minister for Social and Family Affairs allocated €11 million towards addressing difficulties experienced by families due to the rise in unemployment in this recession. Such funding will assist families to deal with costs associated with a bereavement and general difficulties they experience in their new circumstances having become unemployed. I support 100% what is being done and what I am saying is no criticism of that. Why can such funding not be made in response to the publication of the report on this tragedy? It would require only an extra €4 million in addition to what the Minister, Deputy Hanafin, has done. I am regularly asked why such provision cannot be made.

Some 460 official deaths by suicide were recorded in 2007 - we do not have the figures for last year - but the incidence of suicide is under-reported. Most experts say that the incidence of suicide is nearer to 600. Last year 279 people died on our roads. Some 600 deaths by suicide occurred as against 279 deaths on our roads. Just over €3 million is allocated to the National Suicide Prevention Office to deal with suicide prevention, but this year the allocation to that office is being reduced by 12.5%. The allocations to all the voluntary organisations dealing with suicide prevention, suicide bereavement and issues in that area are being cut by 12.5% this year.

During periods of recession - we have had recessions going back to the 1890s, including during Durkheim's time, and in 1929 - there is an increase in the incidence of suicide and psychiatric illness. The Government should respond to that need. It rightly responds to the needs of those who are unemployed by allocating finances towards their unemployment benefit. The Minister has responded also to family and other crises that arise because of unemployment. Why can the Government not respond to the need for suicide prevention and help those who self-harm, attempt suicide and suffer from psychiatric conditions, especially depression? A higher level of psychiatric difficulties are experienced by people who lose their jobs, especially among young or middle aged people. I do not want to exaggerate these difficulties. There is also greater pressure on those who anticipate losing their jobs or their homes, and on those who actually lose their homes. These events exacerbate the psychological, emotional and psychiatric difficulties people experience, yet the Government responds by reducing the amount of resources allocated to provide for their needs to achieve a saving.

Some people ask me why the Government does that. It does it because it is not a political issue. I was on the doorsteps last night, as I am sure were many Members, and the people raised the issue of the health services, but did they raise the issue of psychiatric services, given that one in four people suffers a psychiatric illness at some stage in his or her life? It is not a political issue. The Government does not respond to the non-political needs of our people because there are no votes in them.

Dick Roche (Wicklow, Fianna Fail)
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The Deputy's contribution was well put together. I compliment him on it. I will make sure the Minister reads it. It was a calm and appropriate response on the day after that dreadful report was published.

Dan Neville (Limerick West, Fine Gael)
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I thank the Minister of State for those comments.

Seán Ardagh (Dublin South Central, Fianna Fail)
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I am delighted to have an opportunity to make a contribution to the debate on the Finance Bill. With regard to the current state of the economy, the Government is making strides in trying to resolve the issues to be addressed. Four cornerstones have been identified, the first being improving the fiscal position, which the Government is accomplishing well by bringing the general government deficit to a level which is manageable, even though it is still high. The next cornerstone is getting the banks to give credit and resume lending to some extent. This is very difficult but, again, is being dealt with by the Minister for Finance through the proposals for the establishment of the National Asset Management Agency which will be discussed later this evening by means of a Labour Party Private Members' motion.

With regard to training and education, the Government is making good efforts and has recently increased by 1,500 the number of PLC places allocated to the vocational education committees. The Minister of State, Deputy Haughey, is making a great effort in this regard and getting results.

I refer to the proposals in the budget and the Social Welfare Bill to provide incentives for those in the 18 and 19 year age group to return to education. Unless young people have an education, their chances of having a decent income in later life are minimised. The jobseeker's allowance is being decreased for 18 and 19 year olds from €204.30 to €100 but if a young person is in full-time second level education or returns to education after two years, the amount will increase from €100 per week to €204.30. They are also encouraged to participate in the Youthreach programme if that is an option that would suit them. They will have the general opportunity to move from PLC courses to third level education. The number of FÁS training courses has been increased dramatically. Therefore, good work is being done on the so-called cornerstone of training and education. Work is being done on job creation initiatives but there is a long way to go in tackling competitiveness and innovation. I will return to this subject if time allows.

Instead of having four cornerstones, I would like to think there is a pentagonal or five-sided structure. The fifth cornerstone as such should be the care we show to those who are suffering the most from the adverse effects of the current economic downturn. Deputy Neville referred to the effect financial troubles might have on people's ideation of suicide.

I propose that a special initiative be taken for those who are unemployed but who have mortgages. I will give as an example a couple where the main earner in the house loses his or her job. They have a mortgage of €300,000 to be repaid over 20 years, with a loan to value greater than 80%, as is generally the case. I am suggesting that in a case where such people lose their jobs and are making large mortgage repayments, they should have an automatic entitlement to reduce their payments to the value of the interest only on the basis of the ECB marginal lending facility rate of 1.75%. This is the overnight rate at which banks can borrow liquidity and it is a reasonable rate to offer to those in dire straits. For instance, if a person with a mortgage of €300,000 was paying interest at a rate of 1.75%, it would cost €5,250 per annum or €440 a month. I suggest that if this amount cannot be repaid, there should be subsidies available to meet the repayments in order that the capital amount would never increase in the case of a person who is unemployed and in a tough mortgage repayment position. The normal repayment on a 20-year mortgage with a loan to value greater than 80%, on the basis of the AIB rate available this morning, is €1,647 per month.

Joan Burton (Dublin West, Labour)
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I agree, it is impossible.

Seán Ardagh (Dublin South Central, Fianna Fail)
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Yes, it is absolutely impossible. I am suggesting a system should be put in place which would not only set the economy right, with the credit system, an increased number of training places and job creation, but would also look after those who by necessity are suffering the greatest problems as a result of the adverse effects of what is happening. When I go knocking on doors, I note that the ones who are most vulnerable are those who have lost their jobs and have large mortgages. I have huge sympathy for their predicament but sympathy is not enough; we must put a system in place. When the Land League was first established in Castlebar in 1879, it had as its aims the three Fs - fair rent, free sale and fixity of tenure. We must ensure security of tenure for those who are in danger of losing their homes. I ask the Minister to consider bringing forward an amendment to the Bill to ensure persons with a mortgage would have an entitlement to have their mortgage repayments reduced to interest-only payments at the ECB marginal lending facility rate of 1.75%.

On the question of whether the Government is making the right choices and going in the right direction, I refer Members to a very interesting article by Colm McCarthy in which he refers to our nostalgia for things as they were in 2007. It is a short, sharp article published on www.irisheconomy.ie. It reads:

In three or four years time, if we are lucky, we will have an economy which needs to look very different from 2007, the final year of the first credit-fuelled bubble in the State's history. It should look like this: (i) Government debt ratios stabilised and sovereign credit spreads back to low levels; (ii) competing banks strong enough to lend (a little); (iii) a competitive economy producing more exports, less houses, and (iv) a smaller and less leveraged balance sheet. This economy will inevitably be smaller than 07 for a while, have lower employment, a smaller construction sector, smaller aggregate bank balance sheet, bigger Exchequer debt, lower public spending, higher tax rates and possibly BOP surplusses for a few years.

Mr. McCarthy has described a scenario which we have to achieve and the sooner, the better, but it will be very difficult to do so. He further states:

All policy wheezes emanating from the commentariat over the next few months should be smell-tested for 07 Nostalgia, and rejected at the merest whiff. We have been there and it didn't work.

When discussion of the Bill resumes, I will show that Fine Fail's - rather Fine Gael's -"Enronomics" have not been smell-tested, amount to nostalgia and are not suitable for the future.