Liam Twomey (Fine Gael)

Over the past two days this budget has been debated extensively in the Lower House so much of what we say today will be repetition to some degree for the Minister. Ministers should be described as super, but rather than in the traditional sense of the word it is in the sense it is used with supermodels. We have supermodels in the Cabinet rather than on the catwalk. It is not the way the Minister, Deputy Dermot Ahern, would flutter his eyelashes, or even the Minister of State present, and it is not how another Minister, Deputy Micheál Martin, pouts when he is accused of mugging the elderly, but what makes our Ministers supermodels — L'Oréal supermodels — is the way they collectively say "because I'm worth it." Ministers are supermodels with attitude who have trampled on the vulnerable in this budget. They have pushed the poor not into consistent or even relative poverty but into everlasting poverty. Ministers want everybody else to pay for the worst excesses of the past ten years.

There was an expectation in this budget that our "L'Oréal — because I'm worth it" Ministers would be the first to make the significant sacrifices, but that has not come to pass. They have maintained their State cars and there is no change whatever to ministerial Mercs and Garda drivers, with everything remaining the same. Our public representatives have no problems when they retire from politics as they pay themselves in excess of €100,000 in pensions per year, which is unacceptable. I would have expected that in these more difficult and frugal times, for the majority in this country, the Ministers in charge would have been prepared to make a greater sacrifice.

Most Ministers have an entourage of between ten and 20 civil servants doing constituency work for them and there has been no change in those personnel whatever. Ministers have made no changes and their only sacrifice is 10% of their very generous salary; that is enough of a sacrifice for our celebrity supermodels in government. The Fianna Fáil backbenchers must feel like the ugly Betties of the fictional model agency that is Fianna Fáil because they are taking all the political pain for their Ministers. When the relevant Finance Bill comes back to the House, the Ministers should look at themselves and the very generous bonus payments, allowances and grants being paid.

The Minister for Finance admitted that those earning more than €20,000 will be back at 2007 tax levels, those earning over €50,000 will be back at 2005 tax levels and those earning over €100,000 will be back at the 2001 tax levels. Our race to the past will raise €1.8 billion in taxes this year, but the trouble is it seems to be a long race. In 2010, the Government will seek an additional €1.75 billion and an extra €1.5 billion in 2011. What year will the people's tax rates be equivalent to when all that is finished?

There is no guarantee that the process will stop at these figures. The Minister admitted that he got his predictions wrong for the tax income by €5 billion. He made that prediction in January and we are now in April so the finances are deteriorating faster than anybody could have possibly expected. Tax revenue was €47 billion in 2007 and €40 billion in 2008 and it is expected to drop to €34 billion in 2009. That is today's prediction but only a few months ago the prediction was €37.5 billion.

What happens if the revenue drops to €30 billion before the end of the year and what changes will come in December's budget? Will the Minister of State fill us in on that? What will happen if the improvements expected do not materialise in 2011 and we get into a more prolonged recession in the country than we expected? What are the Government's plans in this respect?

We should look at the cause of our problems. Benchmarking was once described as an ATM machine for the public and Civil Service and it is the root cause of the misery inflicted on public servants. In the days of the benchmarking I and benchmarking II process, former Taoiseach Deputy Bertie Ahern and the current Taoiseach, Deputy Brian Cowen, told us everything was flying. There was a collective exuberance in the nation and the same people in the public and Civil Service bought their homes when they were expensive, took out car loans and maxed out credit cards because Fianna Fáil told them it was safe to do so. We knew it was wrong then and it is definitely wrong now.

Public servants are not the only ones who have seen their dreams shattered not just for themselves but for their children as well. The scourge of unemployment is back walking the land we live in. The fact that no Minister would even bother resigning or saying sorry to the people is a sign of their collective arrogance. It is really annoying for the people now that the Government has washed its hands of responsibility.

No matter how bad things get, there will always be vultures and laughing hyenas to feed off the carcase of what was the Celtic tiger. As everyone is aware, during the past five to ten years developers viewed themselves as "big fellows" and clever bankers were of the opinion that they deserved nothing less than bonuses of €1 million each. These people are now destined to off-load their toxic debts not only onto us but also onto our children.

When we engage in a debate on the proposed national asset management agency, people will come to realise the number of individuals involved in creating these toxic debts is not large. Approximately 60 to 70 people are responsible for causing the problems that gave rise to our national financial crisis. The exuberance of Deputy Bertie Ahern, the bankers and the developers has landed us in the mess in which we find ourselves.

The Minister for Finance stated the Government intends to take a hard line in respect of this matter. In what way does it propose to do so? At present, all it is doing is talking big. Most developers were quite smart with regard to how their arranged their huge loans with the banks. In the vast majority of cases, they protected themselves personally. The Government is going to take the assets referred to in the budget away from these individuals. However, the latter will still be left with substantial amounts of money. Some 20 years ago, Larry Goodman was bailed out in the aftermath of the beef tribunal and he is now one of the wealthiest men in Ireland — he is capable of purchasing private hospitals etc. We are going to repeat what happened at that time and the taxpayer will again be left to foot the bill.

Perhaps the Minister of State will indicate what the Government intends to do to make the people to whom I refer pay. My reading of the law is that nothing much can be done about these individuals. The Government is merely trying to fool or mislead the people by informing them that it will pursue the bankers and the developers. The latter are well covered, but poor taxpayers will be left to swim in a sea of toxic debt for a number of years. Taxpayers have again been hoodwinked by the Taoiseach, Deputy Cowen, his immediate predecessor, Deputy Bertie Ahern, and those who previously acted as their cheerleaders. It is these individuals who have led us into the current mess. Capitalising the banks leaves a bad taste in everyone's mouth. However, it was stupid Government policy that led us to this. The Government should acknowledge that this is the case and take the appropriate action.

Will the Minister of State comment on the development whereby the bright lights of the private sector dazzled the Minister for Health and Children, who stated that 1,000 new beds would be provided by the private sector in order to remove the pressure from the public system? I have debated this matter ad nauseam during the past four years. I informed her from the outset that it was a bad policy, but she indicated that all the experts at her disposal indicated the position was otherwise. If the Government is intent on doing away with private hospital grants, is this an acknowledgement that the scheme only ever offered poor value for money and that the policy was daft in the first instance? What action will the Government take to ensure that those beds, which as we were previously informed are necessary, will be provided by some other means? If this capital investment in the health system is not made in some other way, then patients will be denied treatment. We all know what will be the outcome of such a development, namely, a return to the position which obtained in the 1980s when it was stated that health cuts hurt the poor, the weak, the elderly and the vulnerable.

Some 70% of the population used to have private health insurance. By the end of the year or sometime next year, unemployment will stand at 15%. As a result, it will not be possible to sustain the level of private health insurance to which I refer. This means an increasing number of people will be obliged to rely on the public health system. There has been no indication with regard to how the Government proposes to deal with this eventuality. The only information that has been forthcoming was provided by Professor Drumm, who stated that €1 billion will be removed from the HSE's budget. From what I have seen to date, this will be done in the crudest possible way, namely, through cutting services. As a result, patients will be denied access to vital procedures, services etc. In the context of the long-term position, we are heading down the wrong road.

On the Order of Business, a number of Members stated the Government should take action in respect of the fixed interest rates people pay on their mortgages. Senator Hanafin and other Fianna Fáil Members quite clearly indicated they oppose such a move. Their colleagues in the Lower House are in agreement with them in this regard. If realistic action is going to be taken, the Minister of State should speak up for the people in a way that his party colleagues in this House are not doing.

When delivering his budget speech as Minister for Finance in 2006, the current Taoiseach stated that everything to do with the economy was absolutely fantastic. I do not recall the actual words he used but I am sure the Minister of State is familiar with them and they are available for everyone to read in the Official Report. What the Taoiseach stated then makes for light-hearted reading when one considers the contents of this supplementary budget.

It is stated in Budget 2009, at table 7, that net current expenditure is destined to increase in the coming years. However, we are informed that the Government is going to try to reduce capital expenditure during the same period. Does the Minister of State expect that current expenditure will increase between now and 2013, even in light of the savage tax increases being imposed on ordinary citizens? Will he indicate how such expenditure will increase? The people will be extremely interested in his comments in that regard.

The Minister of State indicated that people on the minimum wage will only be obliged to pay €7 per week as a result of the changes proposed. If a person has one child under the age of five, he or she will automatically lose almost €20 per week before he or she pays any form of increased tax etc. The Minister of State has not taken into account the effect this budget will have on young families. What will be the position of such a family which bought a house seven years ago and which now finds itself in a position of negative equity? One or other of the parents might have had a second job in order that the family could afford to pay the mortgage. However, that job has probably now disappeared and his or her primary employment may also have gone by the wayside. In addition, under the budget the family in question has lost its mortgage interest relief and its overall income may be relatively low. If they have children under five and a half years of age, they will lose the €1,000 per year early childhood supplement. The Government has not yet indicated what will be the position regarding child benefit. We know that it will be means tested, but will the gross amount provided be reduced by the end of the year? I am of the view that we are being softened up in respect of something that is going to be put forward in December.

The Minister of State indicated that "Approximately 70,000 children will be eligible to qualify for the new preschool year under the new preschool early childhood and education scheme". In the Lower House last evening, the Minister of State at the Department of Health and Children, Deputy Barry Andrews, criticised Deputy Enright in respect of a press release she issued. The Minister of State attempted to weaken the effect of Deputy Enright's statement by saying the Government would be able to achieve its goal in this regard because a certain number of parents will send their children to private preschools, others will not take up the scheme and others still are already eligible. This scheme is another figment of the Government's imagination. The Government merely ratcheted up the figures to make matters look good. Some €450 million will be removed but €150 million will not be put back in. The Government is again using gross figures in order to soften the impact of what it is doing. It should endeavour to be as straight as possible with regard to the figures it uses in its budget documentation.

Enterprise Ireland is to receive €100 million to allocate in respect of small and medium businesses. I did not know that Enterprise Ireland was a bank. Perhaps this is a new development. I am aware, however, that unlike their larger counterparts a number of small banks in Ireland have not been destroyed by exposure to toxic loans. Why has the Government not approached one of the smaller banks or building societies which possess the expertise relevant to evaluating loans and which can identify what are good and bad criteria in the context of carrying out such evaluations? Why was the €100 million to which I refer not allocated to these institutions? Enterprise Ireland is not the appropriate body. It might be able to evaluate the scientific merit of certain projects or their research and development potential but it has never been an organisation that would have the expertise to understand banks' loan issue criteria. That should be examined because if one of the smaller banks was approached, it might also be able to do something for mortgage holders and first-time buyers. Some of these smaller banks have a network across the country and they have the expertise and one of them could be used to play a role in sorting out the crisis.

The two main banks are about to receive €3.5 billion each from the State. They have a huge mortgage assets book and people are making repayments — for the bigger bank it is at least €2.5 billion per year, a percentage of which is profit. Does the Minister know how many loans that bank has approved since the beginning of the year on the potential €6 billion it has received both from the Government and existing mortgage holders? It is a small sum because the bank is holding on to that money to improve its capital position. Giving the main banks €500 million and telling them to give it to small businesses and first-time buyers is misleading and will not work. The Government should look at one of the smaller banks that is solvent.

The problem is not the mortgage holders, they are paying their loans back, the problem lies with the toxic debts of the 60 individuals who have banjaxed our national finances. The three main banks, Anglo Irish Bank, AIB Bank and Bank of Ireland, are holding those toxic debts, while the smaller banks are not in that position. The Government must talk to them and use their expertise when using taxpayers' money to get the country back on its feet.

The national asset management agency is an expensive option, costing €80 billion, with no guarantee it will work. I would like to know how this figure increased from the €40 billion mentioned by the Governor of the Central Bank to the Oireachtas committee to the €80 billion outlined by the Minister for Finance. God help us when the banks get the chance to ratchet the figure up even further. We must be very careful here.

The Minister of State must consider whether the Irish economy has a bad does of the flu, as Mr. Peter Sutherland said on "Morning Ireland" this morning, and that we are not in intensive care. We do not, however, have the full prognosis. We need to know if there is an opportunity for the resuscitation of hope in the Irish economy. There are good pointers for the resuscitation of hope: energy costs are falling, with interest rates and other costs. There is a sense we have finally grasped the need for competitiveness and are lowering costs across the economy. I do not believe the leaders of some of the public sector unions are giving good leadership to their members. There is a need for people to be more honest if we are to continue with the resuscitation of hope in the economy. Barack Obama wrote about the audacity of hope but we must try to have the resuscitation of hope so we can get things going in this country again.