Liam Twomey (Fine Gael)

Let us suppose that when the Minister ran for re-election in 2007 I had told him my house was worth €350,000. Can he tell me now when my house will be worth that amount again? I do not believe he can.

Too much is being made of speculation about growth returning to the economy, when we will start to see green shoots and what the future will hold. Two years ago, the former Taoiseach, Deputy Bertie Ahern, said that anybody who talked down the economy or who expressed concerns about it should commit suicide. It now transpires, two years later, that what was happening in our economy was like a great pyramid scheme or Ponzi scheme, as it is called. It involved excessive borrowing and the public finances going completely out of control. All the time, the present Taoiseach, Deputy Cowen, and the former Taoiseach, Deputy Ahern, carried on as if nothing was wrong. Perhaps the Minister might respond to this question. Is there an acceptance that it was Government policy which got us into this mess? What the Government was doing for the previous five or six years has landed us in a situation in which the indebtedness of this country will exceed €100 billion. There are many questions to be answered concerning what this means to the ordinary taxpayer and the State as a whole.

Mortgage holders do not feel any relief that interest rates have come down because they have been crucified with increased taxes arising from the state of the public finances. Ordinary civil servants now pay three levies: on income, health and pension. These are the same people who took out mortgages in recent years. This Government told them to go ahead and buy their expensive houses because it saw a good future for them. Clearly that was a lie perpetrated on the people. There should be an acknowledgement by the Government that its policies have destroyed the finances of this country but no Minister has had the courage to say that those policies have got us into the mess in which we find ourselves.

Look at our economy which contracted by 9% in one year. There has been a vast increase in Government borrowings, amounting to in excess of €100 billion since the Government was re-elected. Unemployment is destined to go beyond 500,000, unprecedented in the history of this State. We continue to see increases in current day-to-day expenditure by the Government. This seems to be an acknowledgement of its failure to get spending under control even after the many budgets it was required to introduce as emergency measures.

What are the predictions for the end of the year in respect of Government income? When the budget was introduced on 7 April 2009 we were told that Government income should be approximately €34 billion, having dropped from €37 billion at the beginning of the year. There are now predictions it may be as low as €32 or €31 billion. How will this impact on what the Government will do in the budget before the end of the year? If it is the case that the losses will amount to another €3 billion in addition to what the Government already predicted for its income, namely, 10% less than expected in November, we will see the harshest budget in the history of the State. What we had in April will prove to have been only a taster of what is to come.

There is nothing in what the Minister said today, however, or in what Ministers have stated collectively, that gives any indication the Government has a plan. Since the general election, the Government has borrowed in excess of €30 billion just for day-to-day spending. With the establishment of the National Asset Management Agency, NAMA, the Government proposes the introduction of €90 billion worth of Government bonds. A sizeable percentage of those will cover what are merely junk assets, complete rubbish. I ask the Minister of State, Deputy Billy Kelleher, to respond, not necessarily about NAMA, but about how dealing with that kind of junk and putting responsibility for it back on the taxpayer will affect public finances over the coming years. We have already seen that the Government does not have control of day-to-day spending, there is contraction in the overall economy, unemployment is increasing rapidly and the Government's income dropping. None the less, the bailout for the banking sector will be substantial. How will it impact on public finances if the Government needs another €2 or €3 billion merely to service those junk bonds to be produced by the end of the year? That is not the same €2 or €3 billion needed to service the Government debt which is being produced at an incredible rate. This will impact on the ordinary man and woman because the Government is obviously adopting a policy of increasing taxes rather than controlling spending.

This month average civil or public servants have seen a reduction in take-home pay of at least 10% compared with earnings at the beginning of the year. That far outweighs any savings they might get on their mortgages or on other spending costs that have reduced. The same applies to many other people across the private sector if they have managed to hold on to their jobs. The biggest problem is that many have not managed to do so and there is still no response from Government as to how we can keep people at work or produce new jobs at a rate that will protect the solid basis of our economy. Our economic base is reasonably solid now but is not as solid as it was even 12 months ago. However, one hears nothing from the Government and there is nothing in the budget that gives any confidence the Government is taking on board the seriousness of the deterioration in the overall public finances.

What galls me, from the social point of view, is the way the Minister for Health and Children, Deputy Harney, led the Progressive Democrats culture of the past six or seven years, namely: "To hell with the public health services. We will find the new mantra in the private sector." We have here an acknowledgement by Government that this was another fools' paradise towards which it was trying to lead the people. It is now getting rid of all the beautiful tax incentives that had been given out to developers and those involved in property. These tax write-offs for the construction of private hospitals were not available to the Minister of State or me because only those who owned a substantial property could avail of them. This is now being disregarded.

As jobs are lost and incomes decrease, people close their VHI policies. For seven years the Minister for Health and Children, Deputy Harney, blew out of all proportion the need to rely on the private sector and the Fianna Fáil Party did nothing to rein her in. Throughout that period, the Government failed to reform the public health sector. As a result, wards and accident and emergency departments are being closed across the country as hospitals seek to stay within budget. They know already their finances are in dire straits and must look forward to an even busier period towards the end of the year. The continued waste of money across the public service is the reason for many of the problems in the health service. We hear many fine words about accountability, transparency and reform but no action has been taken. We will pay for this failure to act by having expensive and awful public services which should have been improved in the good times. In addition, reliance on the private sector has fallen by the wayside.

While there may be a sense that the anger of ordinary people has diminished, I believe people are still angry because their lives and dreams have been destroyed. The quality of life people experienced two years ago will not return for at least a decade. The Government should stop spreading a message that things will be great in 2011. I do not know from where it has this information.

Two years ago, public debt amounted to €100 million, while Government debt was approximately €50 billion. Currently, while the combined debt of ordinary men and women is still more than €100 billion, people have fewer means at their disposal to pay their debts. Government debt now exceeds €70 billion and the Government has given a commitment to bail out the banks by providing them with direct funding and acquiring distressed assets of some €70 billion. While I accept some of these assets will retain value, we do not know what their value is or when it will increase.

As I stated, if my house was worth €350,000 on the day the Government took office, when will it again be worth this amount? This is a matter of speculation but we must deal with the here and now. It would be wise of the Government to bear in mind the substantial debt of the nation - individuals and Government - and make some serious corrections. Otherwise, the country will not benefit when the upswing occurs in a couple of years.