John Paul Phelan (Fine Gael)

I echo many of the sentiments expressed by my party colleagues in this debate. I welcome the Minster of State, Deputy Haughey, to the House. I have spoken on every Finance Bill since I was elected to this House six and a half years ago. I will not support this Bill. It is interesting, in the time since the announcement of the budget a number of weeks ago, that there have been a number of mini-budgets since then. The Minister has rolled back on every announcement he has made on any national controversy in the period since the budget. This does not reflect well on him and seems to indicate he accepts a number of decisions made in the budget were incorrect.

We remember when the Taoiseach changed and the new Minister came into office. There was some speculation that there would be a supplementary budget. The Minister decided not to have one and we sailed on towards the end of the year. The budget date was brought forward at that stage. The Government has been slow in taking action and there was a strong case for a supplementary budget after Deputy Lenihan became Minister for Finance. There is a strong case to be made that he must do something in the first few months of the new year. It might be politically unpalatable as the Government faces into the local and European elections but, based on the tax returns we have seen in recent weeks and the Government's budgetary outlook, significant changes will be made. Whether those are in the form of a mini-budget is unclear but action must be taken.

In responding to the Finance Bill this year, I have noticed a marked change. I remember being the Opposition finance spokesperson for a number of years in this House. I got the impression the Government was laughing at me when I proposed changes and expressed the view we were building our economy based on a property bubble that could not be sustained. There was a sense of mocking from the Government that of course this would continue into the future. Obviously it has not and this has had knock-on effects in terms of the number of people employed in the construction sector and those related to it, and in respect of tax receipts to the Exchequer. Much of the current expenditure built up over recent years was built on the back of those tax receipts. These are gone now and are not coming back.

I am sorry that Senator Hanafin has left the Chamber. He spoke about efforts in the budget to support the construction sector. We built 90,000 units per year a few years ago. The prediction is that we will build 15,000 to 20,000 next year. The construction sector has collapsed and it will never return to what it was. This was always going to happen. We could not keep building units at the rate we were doing and expect it to continue. The comment made is ridiculous and bears no resemblance to reality.

Senator Hanafin also stated we were obviously heading for a soft landing until international factors came into play. I have not heard any economic commentator indicate we were obviously heading for a soft landing. There was no such obviousness. The landing would have been different if international circumstances had not occurred at the time our construction industry began to fall. However, to state we were obviously going to have a soft landing is daft.

The Senator also praised the Minister for balancing the budget. Based on the figures we have seen since it was announced, the budget is way off balance. It bears no resemblance to a balanced budget. Interestingly and correctly, the Senator referred to this being the worst financial situation in the history of the State and praised the Minister's role. I have some sympathy for the Minister for Finance, Deputy Brian Lenihan, in his role. The worst financial situation in the history of the State must reflect in some way on his predecessor, who is now Taoiseach. He came into the position at a time of continued growth in the economy and managed to leave it in a mess. Just as the Minister for Finance, Deputy Brian Lenihan, finds himself in a difficult situation, one must acknowledge that the Taoiseach, Deputy Brian Cowen, did not cover himself in glory when he was Minister for Finance.

Senator Hanafin made another point which had nothing to do with the Finance Bill but I want to mention it because I was gob-smacked. He spoke about the founding administrations of the State and mentioned Mr. de Valera's administration, which had nothing whatsoever to do with the founding of the State. They were the people in the ditches with guns when the State was founded, trying to undermine the people who founded the State. They changed their minds subsequently and I acknowledge that.

The difficulties we find ourselves in now are similar to the difficulties we were in during the 1930s, and Senator Hanafin mentioned that. Again, Fianna Fáil was in government and made a decision to launch an economic war with our largest trading partner at the time which led to many of the difficulties in which we found ourselves during the 1930s.

We are heading towards having 10% unemployment next year and increasingly large downturns in our tax take. The budget is already outdated, as is the Finance Bill. At its current rate of increase, the national debt is on course to treble during the next three years, which is a phenomenal change in a short period of time. The Government has handled this abysmally.

I read the statement issued yesterday in Dublin Castle. It was full of nice words but it was a rehash of everything we heard before. There was hardly anything new in it. At a time when people are looking for leadership from the Government, this was an appalling missed opportunity. I regret that I cannot support the Finance Bill as it is drafted. I hope that in 2009 we will see more realism and leadership with regard to the public finances.