Dan Boyle (Green Party)

The pre-budget position is ominous and requires difficult decisions to be made not only by the Government but also by the political system. Our room for manouevre is painfully small and we are led by circumstances not entirely within our control. We may not be doing this to the same extent as other countries. However, we have some advantages such as a high level of exports. We have also managed to keep Government borrowing within European averages. Even after this year, we will rate high as a country with a high level of wealth and an average level of borrowing. We will be in a better position than most other European countries. However, we cannot continue to borrow €500 million a week. We must show due cause to those from whom we borrow that not only do we have the capacity to repay but that we will not rely on continued borrowing. The gap of over €20 billion or €22 billion must be closed. The political debate is on the question of whether it should be closed over a short or long period. The agreement we sought from the European Commission allowed us to do so until 2013 but that has been extended to 2014 because already this year we have seen a shortfall in taxes of €2 billion.

We must remove €4 billion from the budget on 9 December. The implications of this, even if it is not what other countries are doing, are severe. That is more than we have done in any budget in any given year. It involves making decisions that would seem unpalatable at all other times. Our choices are stark - we can reduce public expenditure, as the Minister for Finance has indicated. If we bring in only €32 billion and spend approximately €50 billion, we must consider our expenditure. We need to reduce capital expenditure, which is high in European terms but we need to maintain it at a level that will allow us to continue to develop infrastructure and be competitive. We need to measure our level of public expenditure against that of our competitor neighbours.

A relative of mine works as a personal assistant to the registrar of a British university. Their salary is £18,000. The equivalent salary here would be twice that amount, even in sterling terms. We have deluded ourselves in recent years. We have inflated wages and, consequently, our cost of living, beyond a level we can sustain. The effect of the budget on 9 December will be to introduce an air of realism into the economy. Unfortunately, the Minister for Finance and the Government face the challenge of sharing it out in a proportionate way. We all know the consequences of the 1927 budget in which Ernest Blythe reduced the old age pension by a shilling.