Eugene Regan (Fine Gael)

I wish to address the talks between the Government and the social partners. These talks began as discussions on expenditure cuts and pay. Issues of taxation were left to the Commission on Taxation, which would report later in the year. The Minister for Finance had indicated there was no scope for further increases in taxation in 2009. In a concession in those talks, the emphasis has shifted and the Government has conceded that taxation issues will be part of whatever agreement is arrived at. There are intimations of increases in the different levels of taxation.

It seems that increased taxes are the easy option, which avoids the real decisions that need to be made on the curtailment of public expenditure. There is a serious risk that under this Government we will return to a high taxation economy, when we know a low taxation regime contributed to the growth we have enjoyed over the past ten years.

This exemplifies how the social partnership process is providing a straitjacket for Government decision making. Although the social partnership process has been very beneficial in its initial phases, it has provided political cover for the worst ten years of economic management of this economy, which has contributed to the problems we have today. In particular, IBEC bears much responsibility for indulging in and providing in that period the political cover for the waste introduced, either through benchmarking, decentralisation or not calling a halt and raising concerns about the way the housing market was managed.

This is a fundamental problem, which we can see from the Draft Framework for a Pact for Stabilisation, Social Solidarity and Economic Renewal. The document is so all-embracing, inclusive and wordy as to be meaningless. The recommendations include building on strengths in the agriculture, fisheries and food sector, supporting the manufacturing sector, encouraging entrepreneurship and business start-ups. What is new? Resolutions of the United Nations are more specific and meaningful than this type of document. I am concerned that even if we reach agreement, it will not be what the Government initially set out to achieve, namely, cutbacks in public expenditure. I ask the Leader to comment on the implications for the tax regime in 2009 with regard to these discussions.