Marc MacSharry (Fianna Fail)

The vast majority would do so. Many people have lost their jobs in recent times and we must bear in mind the prospect highlighted by Senator Quinn when contemplating the difficulties we will be obliged to face with the budget for this and succeeding years. Two to three budgets will be required in order to rectify the situation. While it is estimated that adjustments of €4 billion will be required in each of the next three budgets, I hope current income and revenue levels will hold in order that we will not be obliged to make even greater cuts.

As the pre-budget outlook states, "Evidence from international organisations, such as the IMF, EU Commission and the OECD, suggests that consolidation driven by cuts in expenditure is more successful in reducing deficits than consolidation based on tax increases". However, a broadening of the tax base will be necessary because we have a high level of services and, compared to other nations, a low level of taxation. The latter must change. For credibility purposes, and acknowledging the great efforts and progress made in Government Buildings in the partnership negotiations, it would be just to have a higher tax rate for earnings over a certain amount, whether that is €100,000 or €150,000. I have no doubt about that.

If we went through the 226 individuals in the Oireachtas we would not get consensus on the various bodies or services to be cut as envisaged in the McCarthy report. The Tánaiste mentioned that some of its suggestions appeared ridiculous and I concur with that. However, many of these measures will have to be introduced. I hope we can get on with it, that they are as fair as possible and that over the next two years we achieve very substantial savings.

In 1977, a disservice was done to the country by the abolition of domestic rates. While it was introduced by a former member of the Fianna Fáil parliamentary party, Mr. Martin O'Donoghue, with the benefit of hindsight it was a mistake, not that one could envisage the reintroduction of a domestic rate as it would be political suicide for anybody to advocate it, but we need to focus on local government funding. If a charge similar to a domestic rate, a property tax or that which is in Newry in Northern Ireland was introduced it would mean that Sligo Borough Council instead of having to beg centralised funding for a project would generate funds of its own of between €30 million and €50 million. With that type of income the relatively small urban area of Sligo Borough Council would be able to undertake its own capital projects for bridges or roads and there is merit in this. While I do not believe it will feature in this budget, we must consider it. I do not mean introducing it through broad brush strokes across the board but through a community or property tax which would be just, with an appropriate waiver scheme whereby those most vulnerable and less well-off would not have to pay.

In recent years there have been huge increases in the level of social welfare payments, with pensions increasing from €113 to €230. I do not advocate any cut in the old age pension and I hope other measures can be found. Equally, I do not advocate a cut in jobseeker allowance payments for those who are long-term unemployed. As somebody who is employed I would happily be prepared to pay more to ensure those people can maintain the levels they are at. Having said that, and as a recipient with two children of child benefit, we should examine taxing or means testing child benefit. There is scope for doing so, particularly if one considers that people earning hundreds of thousands of euro per year can perhaps survive quite easily without these payments. That is an area where savings could be made.

I want to mention a very good suggestion for a social welfare chip and pin system, which I have forwarded to the Minister for Social and Family Affairs, Deputy Mary Hanafin, and the Minister for Finance, Deputy Brian Lenihan. I do not have time to discuss it in detail. It was envisaged by Phelim O'Neill, a solicitor and businessperson from the west of Ireland. It is a very detailed proposal on how substantial savings could be made through a chip and pin system. People already have a social welfare card and they would receive their benefits through credits on that card which could be used in the State. There are vast benefits to this and merit in considering it. I hope the Ministers have the opportunity to do so in a meaningful way.

On previous occasions, I discussed an entrepreneurship education strategy for Ireland. With regard to public pensions, I hope the social partners and those negotiating in Government Buildings make the further progress they need throughout this evening to ensure the strike on Thursday can be averted. If we are to tackle this crisis it is vital that we move forward together as a nation rather than stacked against one another as programmes such as "The Frontline" would like, with the public sector set against the private sector, to which I am fundamentally opposed. The successes of the 1990s were achieved in partnership and if we are to get out of the difficulties we are in it is vital that we do so now.

In the north west in particular, and in the six Border counties, the State is haemorrhaging financial revenue, which is going across the Border. This needs to be examined urgently and I go so far as to suggest a special VAT rate for businesses selling in those six counties. At least it would ensure that the revenue stays in the country. A vast amount of money is leaving the country. I do not blame families for seeking better value for money; I fully understand they need to do so in these difficult days. We must help them and the quickest way to do so would be to introduce such a VAT rate in the Border counties as a temporary measure for four or six months. We would see an increase in revenue for the State. Her Majesty would do little to support employment in this jurisdiction and we should do more to prevent facilitating revenue going to Her Majesty's Government at present.

The Government has taken many steps over the past year and the Minister of State, Deputy Mansergh, mentioned several of them. These include the establishment of NAMA, labour market activation measures, the back to education allowance, the work placement scheme, the employment subsidy scheme - I do not agree it should be limited to certain sectors because if somebody is prepared or can save a job through the employment subsidy scheme he or she should be able to do so - and other measures introduced in the supplementary budget in April. Many unpalatable and difficult decisions had to be taken. Nobody sets out to introduce such measures or wishes to do so. However, they are necessary.

I pay tribute to the Minister of State, Deputy Mansergh, for his work and to the Minister, Deputy Brian Lenihan, who has displayed an unbelievable and unprecedented level of competence in coming to terms with a brief that at no time in the history of the world was as complex as it is, with financial services, the banks and the world crisis in which we find ourselves. That was acknowledged by the IMF, the ECB, the OECD, former Taoiseach, Garrett FitzGerald, former leader of Fine Gael, Alan Dukes and other commentators.