Liam Twomey (Fine Gael)

Some of the book's findings are interesting. For example, of the €413 million that was spent on the Ringsend glass factory, almost €300 million came from Anglo Irish Bank. Last week, Davy Stockbrokers wrote down the value of that site by 60%. If similar valuations are applied across the commercial and residential property sector, we can expect significant write-offs. I was also interested to read that Mr. Seán Dunne, one of the movers and shakers who were responsible for this boom and bust, was a VIP guest of none other than Deputy Bertie Ahern when he attended Westminster and the US Congress.

A programme about the property crash, "Future Shock", was condemned by Government politicians when it was broadcast in April 2007. It was claimed that the predictions made in the programme would never transpire even though, in November 2007, builders and developers meeting in the Radisson SAS made it clear to the then Minister for Finance that the construction sector was in trouble. Afterwards, however, they each donated €5,000 to the Fianna Fáil Party. In October 2007, Deputy Bertie Ahern, who was surely being advised by the same builders and developers, accused those who talked down the economy of being prophets of doom and claimed to be confident that the economy had good times ahead. In the meantime, Irish people were taking out huge mortgages to purchase property. One must ask how much the Government knew about these matters.

What are we to do now? The Government is spending €60 billion despite earning a mere €40 billion. This situation is unlikely to change over the next few years. Even if the Government lasts a full term in office, it will need at least €50 billion to keep the public finances in order. The value of the assets owned by Irish people have decreased by between €50 billion and €100 billion. Many are now described by banks as "distressed" but we do not know the exact number of such assets. If the total value is only €50 billion we will have some hope but if it stands at €100 billion, the Government will need €50 billion to sort itself out and the taxpayer could be made liable for a further €50 billion. When the Taoiseach mentioned a figure of €15 billion to his backbenchers last night, he was way off the mark in regard to the figures which are troubling this country.

This House is being treated with contempt on this issue because the Government has retreated to Dublin Castle to discuss matters that have a major impact on Irish people. Ministers should present more accurate figures to the Houses.

The Government has focused its attack on the public sector, but no action we take in that regard is likely to resolve the mess we currently face. The debate needs to be broadened rapidly.

The aforementioned devaluation by Davy Stockbrokers of the Ringsend site will be repeated during the course of the year. Any movers and shakers who are still making money will be able to write off their losses against their tax bills, which will mean even smaller revenues for the Exchequer next year. We may find that our tax shortfall will be dramatically greater than the 2008 figures. However, Ministers are not taking account of this prospect.

The Minister of State stated that he is not making his decisions quickly because he is afraid of what may happen. However, the Government is in effect selling the family silver. It intends to protect the public finances and meet our commitments to the banking sector by giving away the gains we have made over the past decade in terms of repaying the debts we incurred. Government debt will now be ratcheted up to an unbelievable level for the next couple of years.

I do not know what interest rate the Government will borrow this €50 billion or €60 billion at but it will be significant, so this interest will have to be paid back as well as the principal. That sort of talk is sending us back to where we came from in the 1980s. That is profligate and out-of-control Government spending. When acting in such a way, the Government cannot argue it will do so in conjunction with the social partners in Dublin Castle. These sorts of discussions should be open and far more information should be given to the people of Ireland on what is being done.

It is an unbelievable position and it is only now dawning on many people because, to some degree, they were being misled for a long time. The people expect direction from the Government. In this House just before Christmas, the Minister for Finance stated that he still expected the 6% pay increase for the public service to be paid next September. In the new year he is not just talking about getting rid of the 6% pay increase but making cutbacks. The Government is not being honest with the people. If it believes there is a crisis, it should speak as if the people need to realise how serious this issue is.

The Minister of State's own speech acknowledges this to some degree but one would have to look for the information. Ministers misled the people all through 2007 and 2008 with regard to the crisis in the country. Government backbenchers are expecting the Taoiseach to make a state of the nation address to the people of Ireland but all he must do is tell the truth. They should stop talking as if there is leadership in this country and concentrate on what is going on instead. The situation is very serious, if one considers the sort of figures currently being mentioned.

The national debt could return to 100% of GDP before 2011 if we do not get to grips with what is going on, which would be a terrible failure by the Government. We are returning to being the basket case of Europe. This comes from not only fawning over the movers and shakers that were spoken about but a lack of realism in dealing with the problems when they arose.

Over the weekend I read about the Swedish crisis in the early 1990s which the Minister, Deputy Brian Lenihan, has touched on in his speeches. Some economists have argued that a devaluation of the Swedish currency was effective in getting the country out of its problems. We cannot devalue the euro. The cutbacks being spoken about may bring in €2 billion, which is pretty miserable considering the Government will be liable for at least €20 billion extra in Government spending and we do not know how much the bank bail outs will cost the taxpayer.

Is there a solution being discussed at a broader level that could be debated in this country? Has the Government gone to Europe to consider some way of discussing what was done in Sweden, if devaluing the currency and making radical changes is the only way to solve the mess we are in? As a small open economy we have a very strong currency, yet we are trying to export into a market with a very weak currency. We do not have a hope in hell of sustaining this in the long term and something will go seriously wrong.

Nothing is coming from the Government to suggest it has any plan. I am not talking about pulling out of the euro, and the Minister of State would not even mention this in his response. Surely there must be some way of the European Union looking at introducing a regional package for those three or four countries like Ireland at the periphery of the currency which seem to be seriously distressed. There should be a way to deal with the strong currency and how it is affecting our economy.

It is amazing that in 18 months we have doubled our national debt and unemployment levels in this country. One economist, Mr. Jim Power, predicted that unemployment could reach 420,000 by the end of this year but most people feel it will easily reach 400,000. Some think we could easily reach 450,000. Fine Gael will table a motion on this issue tomorrow in this House and I am sure Senator John Paul Phelan will have more to say on the matter.

We must begin hearing solutions from the Government on how it will deal with the significant number of people who will be unemployed by this time next year. If 450,000 people are unemployed, it will have an incredible effect on Government finances. We must also have a frank discussion with Ministers in both Houses on the advantages of pay cuts for the Irish economy over an increase in the higher rate of tax. Some, including those in the unions, feel that increasing the higher rate of tax might be more equitable rather than just singling out public and civil servants for a significant reduction in their pay packets. That may not take into account the overall gross income coming into each person's household.

People's salaries cannot be considered in a vacuum, as they may well be paying for very expensive mortgages, child care costs or loans taken for other reasons. In some cases, both people in a partnership may be working, with one in the public service and another in the private sector. Perhaps both may be in the public sector. All these factors must be taken into account before there can be a blanket decrease in public sector incomes. We have a good idea of what can happen when we do not give pay increases or if taxes are increased. There should be more input from the Government on why it is taking a particular line in the discussions so far.

When making cuts, one factor that must be considered is the effect on services to people provided by Government. We are already getting correspondence from the Minister for Education and Science and the Minister for Health and Children telling us that because of difficult financial circumstances, special supports for children with disabilities and intellectual needs and elderly people that have been expected over the last number of years will end. There is a need to clarify what will be taken from people.

Access to home help for elderly people in our communities is already coming under severe pressure and this will only get worse over time. Local authorities have clearly lost out with regard to development levies and income from Government. They are responsible for grants to elderly people to refurbish houses by putting in showers, stair lifts or extensions which make it easier for them to stay at home if they have some mobility problems or other disabilities. That keeps such people out of nursing homes, which are far more expensive. We will see a significant reduction in those grants, and county councils and local authorities will run out of money much sooner than expected. We must hear from the Government about what action it intends to take in this regard.

Unfortunately there is much we can talk about but I do not have the time. There is talk of reducing salaries paid to Members of the Oireachtas. I have previously indicated to the Minister, Deputy Brian Lenihan, that he is cushioned from many of the effects that other people in the country will suffer. He has a ministerial driver so he does not have to worry about benefit-in-kind or the cost of petrol. He has a significant salary and would get an allowance for living arrangements if he lived outside Dublin. If members of the Government do not want to see themselves as different from the rest of the country and the hardship the people will have to endure over the next number of years, these perks should also be taken into account.