Fiona O'Malley (Progressive Democrats)

I welcome the opportunity to discuss briefly issues relating to the budget. I welcome the Minister of State. It is nice to see him here.

Even though it is not an issue for the budget, Senators Bradford and Hanafin highlighted the question of Ireland's competitiveness. While we have held our own on the competitiveness index published this week, our position now at 22nd compared with our position in 2000, when we were fourth, is of concern. We need to keep an eye on the issue.

The greatest threat to our competitiveness is the possibility of tax harmonisation. While it is not a direct issue for the budget, as Senator Donohoe pointed out we live in a global economy and we cannot ignore the threat from certain European Union countries and other countries where the cost of wages is so much lower. I am concerned at the threat of a drive for tax harmonisation by many member states. I know the Minister for Finance is gallantly trying to hold it back. However, I fear he represents only one of two or three countries. As one of the smaller countries we are up against it. Our low taxation regime has been a key driver of the economy. We need to be very careful to ensure we maintain that competitive edge in future. We are on the periphery of Europe. Everything is far more expensive. We are an island nation. We need to have something to attract investment into the country and the low taxation regime has formed part of our attractiveness. That low-taxation regime is under threat. When the budget has been dealt with, I hope we will get the opportunity to discuss tax harmonisation, which I believe is happening under the radar. People need to be considerably more au fait with it because it poses a serious threat.

In his speech, the Minister said the economy is reaching a turning point, which presents a challenge. As was said previously, this will be the first time in recent years when a Minister for Finance is faced with more challenging circumstances and it is not the bounty we have become used to. A favourite phrase of the Minister's is "to suppress expectations". He will need to do so in the budget. Previous speakers have alluded to the need to make investments in infrastructure. A report published yesterday indicated that the level of infrastructure represents a threat. While I appreciate that the Minister of State, Deputy Sargent, might not be a great fan of our improved road network, I pay tribute to those responsible for it. It is phenomenal. I travelled throughout the country during the summer and it is great that people and goods can be moved swiftly and easily, although I look forward to the day I will no longer have to pass through Moate on the Dublin to Galway road, as that is the only bottleneck left. However, a motorway will soon be finished between both cities, which is only right. I agree the rail network should be developed.

I refer to the new process outlined by the Minister which will give us the opportunity to have an input. In suppressing expectations, he is trying to keep various Ministers and Departments on the existing level of service train. One of the hallmarks of the previous two Governments was the recognition of the need for reform and an attempt was made to do that. Today is a sad day for the health services because of the debacle over light bulbs. This highlights how bad people's resistance to change can get with operations cancelled over who will screw in light bulbs. It is outrageous but this presents the Minister with a challenge.

Existing levels of service in a newly reformed context should surely be about better levels of service which should be achieved at a rate of between 5% and 10% through reform and benchmarking. This must happen and the Government cannot run the economy in isolation in this regard. It must have the co-operation of workers and that is why we all need to pull together to get the best out of our economy so that we can keep pace with the changing competitive environment.

I would like more detail on the new value for money framework. I hope it is transparent so that the added value generated through the existing level of service or new service can be clearly identified. I hope the annual output statements, which are welcome, will be meaningful. As Senator Donohoe stated, it is important that such statements are examined and the budget does not happen in isolation so that we can ascertain the outcomes, what was achieved and where the Government was right and wrong.

What will be the context for such statements? Will Ministers lay them before the Houses of the Oireachtas or will such statements simply list achievements so that Departments can cover themselves? I hope it will be an engaging process and we can identify clearly where added value was achieved.

In these changed circumstances, Members and the public need to see reform and better value for our services. Elements of public spending have run out of control and been treated as a gravy train, which can no longer be sustained. We need to realise this is a changed time and salaries in the public sector, in particular, must be realigned with those in the private sector. It will be a challenging period but given the Minister's prudence, for which he is well known, and the value for money framework, benefits will be provided.

My pet project is the science bus in DCU, which will be of interest to the Minister of State. Schoolchildren in his constituency will be interested in it because it is part of the knowledge economy and science and innovation. Modest investments in this area will reap significant rewards. Investment in education in the 1960s reaped rewards and big brave steps in this regard are needed. I hope I have the Minister of State's support.