Paschal Donohoe (Fine Gael)

There is a distinct possibility there will be another two or three budgets announced by the Minister for Finance, Deputy Brian Lenihan, but we will see all of them next year. That could be the prospect faced by Senator Leyden's party. As for his claims that Fianna Fáil will be re-elected to Government in 2012, as a fellow politician, I must admire the gusto and conviction with which he can say that, but I assure him there will be some battle in the next election and whoever wins it and forms a Government will be focusing on issues relevant to today's discussion on the budget. One of the reasons the Senator's party has been so successful and in power for so long is that it has claimed the mantle of economic competence. However, it has now blown that reputation with the people. Yesterday we saw it throw away the possibility of being viewed as compassionate and caring. I refer to the cuts in social welfare and carer's allowance and its attack on those earning less than €30,000 per year in the public service. Thus, the loss yesterday of the Government's reputation for competence was accompanied by the loss of its reputation for compassion.

There are a number of points on which I will focus, including some that have not yet been mentioned by my colleagues. I emphasise a point I made this morning on the Order of Business. In the last week many have put forward different tests for the budget. We have heard of the fairness test, the jobs test and the Newry test, about which I read for the first time last Sunday. However, the most fundamental test faced by the budget was whether it would allow the country to maintain its economic independence and security. Regardless of what side of the political divide we are on - whether in government or opposition - the country, the Government and the political system must be united in ensuring that test is passed. I hear people, with whom I agree and whose point I made at the start of my contribution, talk about the attack made on their incomes. I have much sympathy with and, in many cases, support them. They talk about the changes made to their incomes. However, the most fundamental issue is whether in the next six to 12 months we will still have the ability to set that income, regardless of what those decisions will be.

For all our sakes, including those inside Leinster House and those we serve outside it, I hope the test is passed. I desperately want to see the country putting clear water between it and what is happening to countries such as Greece, Spain and Portugal. It has been a source of major distress for me in the last week, when reading about the Greek economy, to see commentator after commentator state Dubai and Greece are in trouble and that the next country to be in trouble will probably be Ireland. It is essential that the budget and the decisions made in the next three to six months steer the country away from such waters. None of us, regardless of the criticisms we level at the budget and at each other, has anything to gain from the country being in that position. We have a considerable amount to lose. I hope that in the coming weeks and as we move into the new year, we will begin to see the country and its reputation stabilise and move towards the firmer footing on which we all want it to be.

There are many aspects of the budget of which I am critical. The first is something on which Senator Ross touched - the estimates prepared for tax revenue and expenditure for next year. Based on my analysis of them - the Minister may correct me if I am wrong - my understanding is that no provision is made within these estimates for the provision of additional capital for Irish banks next year. The reason I bring up this issue is that in the December and November Exchequer returns published by the Government it was obliged to state the contribution to Irish banks from the taxpayer. It detailed the many billions of euro involved. For this reason, I would have thought it would be incumbent upon it to spell out what that contribution could be next year, or at least make a provision for it. Politically, I know why that was not done. The reason was the Government did not want to find itself in the situation where it would have to defend its action of imposing a wage cut on those with incomes below €30,000 while, at the same time, leaving aside €3 billion to €6 billion as a buffer for capital injections into the banks next year. This is a question that will have to be addressed at some point.

During the early part of the discussion that took place on the banking sector, speaker after speaker spoke about the need to recapitalise the banks via the taxpayer. As I have said before, I thought too many were in a desperate rush to do this. The money that would be put into the banks was the same money needed for schools, hospitals and the tax system, yet, time and again, we heard people demand that it be given to the banks. I thought at the time that the Government had the timing of the decision right. However, in view of the juncture at which we find ourselves, it would have been in the Government's interest and that of the country to spell out the likely decisions that would have to be made with regard to the banks next year and offer clarity regarding its effects on the nation's finances.

The second point is on the decisions were made pertaining to young men and women in the social welfare system. This is something in which I have a major interest. In Dublin, one in three men under the age of 25 years is unemployed and the number is greater in the constituency in which I live and hope to represent in the future. I have a real concern that the machinery of government and semi-state bodies will not be up to the task of supplying the quantity and quality of training and job placement programmes needed to ensure people are offered a place on a programme without a reduction in their social welfare payments. Let us consider the language we use in this regard. We call such programmes "activation programmes". About what do we think we are talking? These are people; they are not zombies who will run out to work on the application of a spark of electricity. In all cases they are already looking for work. To speak of activation programmes does not do them justice. Is the Minister of State confident there is a sufficient variety of plans, well funded and run, to ensure those who may face a cut in their social welfare payments will have the ability to move into meaningful employment that will be funded by the State? This will allow them to maintain their current level of income.

My third point, which is one colleagues have made, relates to the position of public service workers earning less than €30,000. On Friday last my party published a fully costed plan of what we would do differently on the challenges facing the country's finances. We spelt out that reluctantly a reduction in overall earnings within the public service was necessary and warranted. We did that because we should always first protect the numbers employed in public services and the quantity of services they are providing before we look at wages.

However, we spelt out clearly that we would not ask those earning less than €30,000 to take a wage cut and make a contribution. This is essential, not only on social grounds and on the grounds of protecting those who could become the most vulnerable in our society, but also for sound economic reasons. What the people who are on those income levels have, they spend. The money they have coming in to their house tends to go out in shopping in local supermarkets, etc., and the level of savings which they generate from such levels of income are fairly small in the first place. Asking these people to take the proposed wage cuts is not right, nor will it be right economically for our economy as we try to reflate it and get it going again. The reduction in consumer spending as a result of what is proposed here will have a further negative effect on the VAT receipts coming into our economy and a further negative effect on the employment being generated.

The speech of the Minister of State, Deputy Mansergh, and the contribution from the Minister for Finance made much mention of the wage levels of those in the public service at the top level, but what about those earning €300,000, €400,000 or €500,000 per year running large semi-State organisations? Will we ensure that their salaries are reviewed to reflect the state of the nation's finance and how little money we have to pay them? It is absurd that those heading up semi-State bodies charged with implementing Government policies are paid multiples of what is paid to the Ministers determining such policy in the first place. It is madness. We should be using this crisis in which our country finds itself to bring common sense back into those wage levels. It will not necessarily generate significant savings, but it is the kind of signal that is needed if we are to get the costs and competitiveness of the country back into shape.

There are significant questions the Minister must answer. It was wrong to attack people earning less than €30,000 a year and to attack many of the social welfare allowances necessary to maintain a caring society. It could have been done differently.

I will conclude with a point on a local matter relevant to the Minister of State, one of whose many responsibilities is the Office of Public Works. I congratulate him on the fantastic work that office has been doing recently, particularly in Farmleigh House in providing much needed good cheer for the people who live around it.