Dan Boyle (Green Party)

That is even higher again. Very difficult decisions will have to be made. The Minister has said that his room for manoeuvre on tax rates is very small. We increased taxes in the April budget, especially through the levy system, and this has improved the effective rate of taxation paid by higher earners and the level of money paid through income tax. Our scope might not be as large this year, but I believe that on 9 December, the Minister for Finance must refer repeatedly to the report of the Commission on Taxation. We are not just talking about bringing in additional money through taxation. We must bring about tax reform. There is much fat in the current tax system in instruments such as tax reliefs, tails in tax reliefs that have already been ended, the tax residency rules and what are prosaically known as horizontal measures, where people on higher incomes from €250,000 and €500,000 have an effective tax rate of 13.6%. We have to be seen on budget day to be sharing the burden most proportionately. If there are no figures to show that the tax take among those income groups has changed radically, then we will have failed as a Government. We will set a bad precedent in our efforts to improve the economy.

We also have to address the question of public sector pay and numbers. Initially the McCarthy report was derided politically. Taken as a whole, many of its recommendations are practical and should be introduced quickly. It refers to getting rid of bodies that do not seem to have any practical purpose, amalgamating bodies that could work more effectively together, and to practices within public sector spending that could help reduce costs. Nonetheless, part of the argument on public sector reform has resulted in an unnecessary confrontational attitude to those who work in the public sector. We are fortunate with the quality of the people we have in the public sector. It happens to be a sad fact that in terms of public expenditure, most of the Government's resources goes into this area. It needs to be examined critically. While I wish those involved in the talks every success in coming up with a formula that addresses the cost of the public service, I would not be that impressed with a deal that is structured around unpaid leave alone. The overall package must include less being paid and fewer people working. Otherwise there will not be jobs in the short term. We are talking about measures that will bring about a change in people's individual circumstances and which will bring down the standard of living to what it was five or six years ago.

As the Minister rises on 9 December and we get to talk about his proposals, I hope we in this Chamber will address the reality of what is ahead of us, not only this year but in the next three to four years. I do not believe that any change of Government would result in addressing these problems differently because our room for manoeuvre is pitifully small. Given the scale of the problem we are facing, the actions necessary and the need for honesty with the people, there should be a greater degree of consistency among all politicians about the nature of that problem. If there are those who continue to say that if we tax differently, cut differently, and pretend that everyone can be kept happy in the aftermath of 9 December, then I do not think that is being honest with the people.

To be successful, the budget must do more than meet the broad economic parameters. In philosophical terms, it has to be a budget that nobody is happy with. It must be a budget of such consequence that everybody will look at it aghast and realise the nature of the problem we are facing and recognise that if we do not take actions of this type, we are not going to recover in time and to the extent we can given the potential we have shown in recent years.

Today's debate is important in setting out the decisions we need to take, but I would also like to hear the extent to which politicians collectively are prepared to address the people about the nature of the problems we face and how we can deal with them in the immediate future.