John Paul Phelan (Fine Gael)

I welcome the Minister of State, Deputy Mansergh, back to the House. I am pleased Senators have been given an opportunity to debate this issue before the mini-budget is introduced on 7 April.

I will not disagree with much of what was said by several speakers on the Government side. Senator O'Malley expressed confidence that the Government would take the tough decisions required. When the budget was brought forward to October last year, the Government informed us it would take the necessary tough decisions. For about two months it introduced a budget virtually every week and further announcements on public expenditure and the pension levy have followed since the turn of the year. We find ourselves at this juncture because the Government has not taken hard decisions, although there now appears to be a greater realisation in government that difficult decisions must be taken. My party will support decisions which are beneficial and necessary to protect the economy.

Senator O'Malley is correct that the Government spent money when it had it. It refused to accept that a rainy day might come. The Celtic tiger had two phases, a sustainable phase which was largely based on foreign direct investment and job creation in industry and an unsustainable phase which was based on construction. During the previous Seanad the Minister of State, Deputy Mansergh, and I were, respectively, the Government and Fine Gael Party spokespersons on finance. For those five years I consistently argued that we could not depend on construction to provide such a large proportion of tax revenue and economic growth. My argument was either ignored or laughed at by the Government, but the chickens have come home to roost.

I am particularly upset for people of my generation in my part of the world, and Senator Walsh is from my part of the world, because the Celtic tiger did not roar as strongly in the south east, Wexford and Kilkenny-Carlow area as it did in others parts of the country. Thousands of young people became involved in the construction sector and the harsh reality is that this sector is decimated. The other harsh reality is that there is no prospect that it will be lifted up to the position it was in previously in the coming years.

The Government has a number of tasks in the budget, the most important of which is job protection but there is also an important task in terms of the thousands of people in construction who have lost their jobs. Many of them have left the country already and the rest are thinking about leaving. It is important that those people would have the prospect of a job in the not too distant future. Whatever happens in the budget must be targeted towards that.

Senator Bradford mentioned a number of sectors. I mentioned construction and the need to retrain and redeploy people, whether it is in terms of the insulation scheme we have heard mentioned and other possible uses of the skills we built up in that sector. While admittedly it was part of our downfall economically that we were very dependent on construction, we have expertise in that area that we should not allow to leave the country. Something must be done with regard to the future of those people.

Senator Bradford's comments about the motor industry were correct. He proposed an innovative idea about the export of second-hand cars. There has been decimation in that sector since the turn of the year and the Government should consider some job protection measures in that aspect of our economy.

The Senator mentioned agriculture also. Many of the people I referred to previously who got involved in construction came from an agricultural background, at least those in my part of the world, yet at a time when workers in construction were losing their jobs the Government made announcements in its budget last October with regard to abolishing the early retirement scheme and the installation aid scheme, which were necessary attractions to try to get young people involved in agriculture. The reality in rural Ireland, and the Minister of State represents a largely rural constituency, is that the safest bet for job retention and creation is to support the agricultural community. The measures taken by the Government so far have failed in that regard.

I add my voice to others who spoke about the nature of the Irish economy. Ours is a small, open economy but we hear a great deal of waffle from people about plans with a view to protectionism and how we must look inward in terms of our economic future. The reality is that, by and large, we are an exporting nation. We are one of the biggest exporters of software in the world. In terms of food production we are one of the biggest exporters per capita in the world and therefore any future economic uplift here cannot be on the back of protectionist policies of any kind. We must ensure that we remain open for business and attractive to our comrades in the European Union and to other investors across the world.

I agree with Senator Bradford and others who spoke about the possibility of a PRSI holiday for small businesses. Many small businesses across the country are under pressure because they are not getting credit from the credit institutions. Anything the Government can do in the budget to alleviate some of the costs incurred by those small businesses and protect the jobs they provide should be given serious consideration and implemented.

Fine Gael announced a number of proposals this week with regard to energy and job creation in the green job area. I welcome those announcements which were made with an aim to the budget on 7 April. The Government might be in a position to accept some of the proposals contained therein.

I concur with Senator Bradford's views on the family income supplement. It is restricted to those people who are employed but there are a number of people who are self-employed. Many of them were small builders or involved in other aspects of construction. The Government should consider the possibility of allowing them some access to that scheme or a revamped version thereof.

Members of the Oireachtas met yesterday with representatives of the Carers Association in a location across the road from here. It is an organisation that is particularly close to my heart. The Government made pronouncements and gave indications that there will be significant cutbacks in terms of the half rate carer's allowance, and the carer's strategy has been shelved. For the sake of an extra €20 per week on top of what they would earn from jobseeker's allowance or unemployment benefit, those people provide a crucial service. Cutting the carer's allowance is a false economy because the money saved in the short term will be lost in multiples because the people they are caring for will have to seek residential care, if they are not cared for in their homes by these people. I urge the Government to do what it can to protect carers when it comes to the mini-budget.

In the midst of everything that is going on it is crucial that the budget, when it is announced, is seen to be fair. Many of the announcements made up to now were not seen to be fair. The cutbacks in special needs education and in the provision of medical cards to those over 70 were seen to be targeted at particularly weak sectors of society.

I have said previously that the Oireachtas must lead by example. Fine Gael has produced proposals on significantly reforming the way these Houses spend the money allocated to them in terms of the number of Ministers of State, the number of staff in their offices, the number of committees, and the extra payments given to Members for performing their functions within those committees. It is not a huge amount of money in the overall scheme of things but it sends a message to people and if we are expecting solidarity from public or private sector workers, these Houses must show leadership.

I welcome the announcement. I spoke on the Order of Business on Tuesday about what was then the impending strike next Monday. I am glad that will not go ahead but we should not fool ourselves either. A total of 64% of members of the IMPACT union voted to go on strike. In terms of the gloss being put on that by some Government speakers to the effect that there is a realisation among some members of the public sector union that striking was the wrong approach to take, the figures tell a different story. The vote result was very close and if it had gone the other way we might be facing the prospect of a strike on Monday.

The key to ensuring we do not have a huge level of unrest and action in terms of strikes in the coming months is that the budget must be seen to be fair across the board. Hand in hand with that we must offer people hope for the future. I am struck by the negative comments I continuously hear from the Taoiseach in particular. I took the unusual step of listening to his address to the Fianna Fáil Ard-Fheis this year at which he spoke about how the Irish people would survive this crisis. Whatever happens the Irish people will survive it. We have survived many things in the past. When Brian Cody and the boys in the Kilkenny hurling team or Declan Kidney and the Irish rugby team are pushing themselves hard in December, January and February they make themselves physically sick because they believe they will achieve something at the end of the year and that there will be light at the end of the tunnel. In the same way we must offer people across the board that hope for the future in that if we take the tough decisions now which must be taken, the future will be better. That must run through everything that is announced by the Minister for Finance on budget day on 7 April.

I concur with previous speakers who expressed opinion on taxation increases. It is unavoidable that there will be some increases. The tax base must be broadened but wholesale increases in personal taxation are not the way to go if we are to learn from the lessons of the past. I hope that lesson will be learned when the budget is announced on 7 April.