Marc MacSharry (Fianna Fail)

I move amendment No. 1:

To delete all words after "That" and substitute the following:—

Seanad Éireann:

noting that:

in its response to the worst economic crisis since the foundation of the State, the Government has over the last 18 months identified the right priorities and taken the right actions to stabilise the public finances and restore our competitiveness so that we can benefit from the emerging recovery in the global economy;

the actions taken by the Government to manage our way through this crisis have been bold, decisive, innovative and effective;

the Government's concern in all of its actions has been to protect jobs, to provide a functioning banking system and to return this economy to the path of sustainable growth while, at the same time, seeking to do so in a manner that is fair and that protects the most vulnerable;

welcomes

the fact that, because of these decisive actions, the Government is now in a position to stabilise the deficit;

the approval by international bodies such as the European Central Bank, the European Commission, the IMF and the OECD as well as by the international media and the international markets of the measures taken over the past eighteen months, and by the Government in Budget 2010;

the provision of nearly €136 million in 2010 for an additional 26,000 training and job support placements bringing to 180,000 the total number of places available to the unemployed;

the wide range of measures taken in Budget 2010 to stimulate the economy and sustain employment through the reduction of VAT and Excise; VRT relief; establishing a review of the credit system; providing €171 million to help the forestry and agriculture sectors; allocating €130 million for energy efficiency measures and boosting the promotion of tourism;

the fairness demonstrated by the Government:

in protecting older people by maintaining the state pension at its current historically high level;

in ensuring that reductions in social welfare rates were less than the fall in prices over the past year;

that welfare-dependent families will be fully compensated for the reductions in Child Benefit;

the Government's commitment to protect those in mortgage arrears and to extend mortgage interest relief;

and commends

the Government's strategy which is forecasted to return this country to modest economic growth during 2010, with positive annual growth being achieved for 2011 and beyond; and

the Government's commitment to develop the long-term capacity of the economy through public investment spending of 5 per cent of GNP in 2010 — one of the highest in the EU — and €5.5 billion each year for the years 2011 to 2016.

I join others in welcoming the Minister of State, Deputy Calleary. I take the opportunity to wish him the best of success. I was not in his class, but we had the opportunity to work together in the Chambers of Commerce movement for approximately five years. Therefore, I know him very well and his capabilities. The Legislature is lucky to have the benefit of his expertise, youth, determination and focus. I extend my very best wishes to him.

I thank Fine Gael for using its Private Members' time to speak on issues relating to the economy, as there is no issue more important. As is often the case with Senator Twomey, we must always look to what happened in the past. It is reminiscent of a Christmas pantomime; we have had so many debates on the economy in recent weeks and it is a case of, "Oh yes, you did; Oh no, you didn't" in terms of who blew the benefits of the boom.

I will outline my position on what happened. The volume of exports declined throughout the 1990s. They was replacement by an unsustainable transaction based tax which was fuelled by stamp duty which, in turn, was fuelled by a national and international financial regulatory regime which we now know got us into serious trouble. With the benefit of hindsight, one could say certain things could have been done differently. As for the one or two economists who have said they called it how it was or how it panned out, a stopped clock is right twice a day. All of the party manifestos will show all parties were looking for increases in expenditure in all ministerial Votes, whether it be in public sector pay, on capital projects etc. We were all looking for more.

Circumstances, however, have changed and it is incumbent on all of us to change our minds, focus and policies. That is what the Government has set out to do. The OECD, the IMF, countless economists and media publications and people involved in the financial sector have all acknowledged that the Government is following the correct policy and has the correct focus. The first thing we should try to do, in the context of our competitiveness, is get our cost base right. In the budget last week there were many serious and painful measures which all households in the country will have to contemplate. Pain will have to be endured by people who, arguably, are not best placed to take the pain the budget insists must be endured. No one would set out by design to cut levels of social welfare or public sector pay or take €1 billion from the capital budget. The reality is, however, that these measures are necessary, although considered draconian by some, as we must get our cost base right. I regret that a changed economic environment in Ireland and internationally, as other speakers said, demands that such serious measures be taken.

Since the announcement of the budget last week, those of us on the Government side have been getting e-mails from public servants, people on social welfare and genuine cases who will suffer a little as a result of the budget. I regret this, but it is necessary and further steps will have to be taken. There will be another budget next year and the year after that and they will take steps which will be unpalatable, as happened in the budgets of 1987, 1988 and 1989.

The days of large allocations to the sports capital programme are over for now. There is no room to play politics or policies exclusively focused on vote getting and self-promotion. It is about providing the right economic policies for the day. Given the change in circumstances, different policies will be required as we look to the future. I am confident the Government has taken a serious approach. In the budget, with the other measures taken in the supplementary budget announced in April and the budget announced in the previous October, substantial correct actions have been taken.

I refer to retailers. I come from a Border county where we have had a very serious problem in terms of leakage to the North. Almost €500 million in revenue has been lost. In response to this, we saw a reduction of 0.5% in the rate of VAT which we hope will help. There has also been a reduction in excise duties. I welcome these measures. In Sligo a group called the Fair Dealers, as I mentioned on the Order of Business a week or so ago, has come together and reduced prices and offered certain incentives to shoppers in order to counter the effects of cross-Border shopping. SIPTU, even on the back of the difficulties it faces with its members as a result of last week's budget, has come together with this group and called on all its members in the north west to shop locally to support employment in this jurisdiction, rather than enhance the prospects of Her Majesty's Government. It has shown remarkable leadership. I call on the trade union leadership, at least in the six Border counties, but perhaps also throughout the country, to show such patriotism. I know it is a difficult time. Notwithstanding its intention to hold strikes in the coming months in protest against the budgetary measures that had to be taken, that is the leadership the country requires from all sectors of society, not only from these Houses and the trade unions.

In terms of small and medium-sized enterprises, in the budget the Minister indicated a credit review system. We are all aware of many small businesses which are struggling to ensure they have access to necessary capital to maintain and create employment and to ensure they can continue to go about their daily business and try to make a profit. This will ensure they can continue going about their daily commerce, creating employment to try to make profit. I welcome the Minister's intention to establish the credit review system

With local authority charges a significant cost for the business community, I ask the many county managers around the country, as they focus on budget meetings over the next period of weeks, to look for a reduction in commercial rates where possible. There has been a reduction in the cost of living over the past year of approximately 6% and businesses are finding it extremely difficult. I ask that this measure be implemented. I welcome the efficiency review of local authorities, to be completed in mid 2010, which was also mentioned by the Minister.

With regard to the social welfare cuts, of course we regret that these necessary reductions have had to be made. It is important to remember that since 1997, unemployment benefit has gone up 120%. Child benefit has gone up by 330%. It is painful to cut this but I repeat that nobody would set out by design to cut the rates. It has become necessary to do so. Senator Donohoe mentioned that we all agree a €4 billion reduction must be achieved but it is how it is to be done that divides us. It is important we have difference in politics as it is otherwise just public administration.

I will finish on the issue of mortgages, although there is much I would like to have said otherwise. As Members know, I am involved with a group seeking the prevention of family home repossessions, which continues to lobby for legislation to effectively prohibit the granting of a court order for the repossession of a primary family residence. Will the Minister of State raise the issue with both the Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, and the Minister for Finance, Deputy Brian Lenihan?

The Irish Banking Federation protocol with MABS is admirable and seems to be working so far but we must have a foundation which protects families in legislation. Organisations providing sub-prime mortgages, such as Stepstone and Start Mortgages, are not covered in that regard. The Minister of State might raise the matter.