Eugene Regan (Fine Gael)

The background to the budget and the Finance Bill consists of three problems, namely, our place in Europe in view of the Lisbon treaty referendum, the banking crisis, and the setting of a base for economic recovery. What we have from the Government in these areas is a framework with no specific decisions made. That is the problem we have here. The Government has failed to act. It continues to procrastinate and put off the decisions on which there is a broad consensus in the country. In his statement, the Minister said the priority is:

. . . the restoration of credibility and sustainability to the public finances. Accordingly, the budget sets out a medium-term strategy to ensure this.

However, it does no such thing. It does not even set out a strategy on how to balance the books between now and the end of 2009, which is what a budget is supposed to do. In fact, on the Minister's own admission, the budget is out of date. We know this from the November Exchequer returns. The Minister has not dealt with this. The latest is that we will have some announcement in January. The problem we have, to the disappointment of many people, is that there is no strategy or plan by this Government in which one can have any confidence.

We had a situation where the State intervened, particularly, we understood, because of the perilous state of Anglo Irish Bank. We now know more about that bank than we did yesterday regarding the loans made available to directors and especially the loans to Seán FitzPatrick. The Financial Regulator says these loans are under investigation by him but the board of Anglo Irish Bank denies any rule was breached. I question how long the Financial Regulator knew about the situation and how long the Minister knew about it. Did the Minister, Deputy Brian Lenihan, know this when he provided the State bank guarantee?

I draw the attention of the Minister of State to a number of measures that apply in this situation. One is the market abuse regulation where it is a requirement to disclose any price-sensitive information, and we know how price-sensitive is the information about these loans. The second is the Stock Exchange and accounting standards, where related party transactions are supposed to be fully disclosed. It is only when such disclosures are made that one can have a true and fair view of financial accounts. A State guarantee has been put in place for these banks and the Minister must be upfront on what he is doing with regard to the recapitalisation and the appropriateness of the directors of particular banks remaining in office in circumstances where these types of activities have gone on.

With regard to the Finance Bill proper, we do not have a normal budget situation where a Minister will set out how he intends to balance the books, how he intends to control expenditure and deal with the revenue and bridge the gap in borrowing. We know the figures are out of date yet the Minister has given us no indication today of how he intends correcting that situation. The latest ESRI report clearly shows just how out of touch he is.

The budget is characterised by the 0.5% increase in VAT which shows just how out of touch the Minister is with the real state of the economy. To have an increase in VAT when our nearest neighbour has reduced its VAT rate and the resulting disparity with Northern Ireland is a clear indication the Minister does not understand the fundamentals.