Billy Kelleher (Cork North Central, Fianna Fail)

I am quite sure that would not be different in this House.

Reference has been made to the difficulties faced by this country. Everybody accepts that the challenges are enormous. The purpose of the budget last week was to stabilise the public finances, to reduce the budget deficit by €4 billion and to send out a strong message that Ireland is capable of dealing with its own difficulties. Most people say we are just sending out signals to the money markets and the bond markets, but it is critical that we have an international reputation and that we can back this up with the policies brought forward by the Government. We will be borrowing about €20 billion next year to run the country, provide public services and pay public servants. If we had to borrow with a damaged reputation, it would cost much more to insure that debt and we might get to a stage where we could not borrow any more. That is a critical situation for any country.

Senators referred to Iceland, the default on sovereign debt by Dubai and the difficulties being experienced by Greece. We could not allow Ireland's international reputation to be damaged any further. If we had a damaged reputation and were not seen to be capable of getting our own house in order and dealing with the huge challenges we face, foreign direct investment would not come to these shores. A huge number of jobs have been created in recent years by IDA-backed companies and other companies that have come here. We only have to go down to the IFSC to witness the contribution it makes to the economy, with 26,000 people employed. If our reputation was damaged, the international markets would take a very different attitude, as would international investors. Some people are dismissing the bond markets and money markets, but these are critical because they are where the Government gets its money for borrowing.

We have no difficulty in debating the budget. There were difficult choices to be made. These had to be made to reduce the budget deficit by €4 billion. The decision to reduce the pay of public servants puts a huge burden on families in the public sector. This Government fully acknowledges that and is aware they are under pressure. However, if we are to find savings, this was a critical area of addressing the deficit.

It is important to recognise the increases in social welfare year after year before this budget, which were far ahead of the consumer price index inflationary measurement. That was acknowledged for many years. I can remember the Opposition parties bringing forward a budget with social welfare increases of €1.50 per week, even though they were governing during the good times. I do not want to go back over the history, but I wanted to put our actions in the context of the social welfare increases right across the board. We tried to poverty proof people on low pay through family income supplement, through child benefit and early childhood supplement.