Joe O'Toole (Independent)

In fairness to the Senator, there is a reference to the Consolidation of Taxes Bill in the Appropriation Bill. It is a fair question to ask of Fine Gael and the Labour Party. I support the carbon tax, as it is essential. The approach the Government has taken is progressive. There are aspects of it over which I am not exactly exultant. However, it was necessary. I would have thought all the parties represented on the Oireachtas Joint Committee on Climate Change would share that view.

I welcome the Minister of State, Deputy Mansergh. I am aware the Minister for Finance is indisposed and I wish him well and a speedy return to full health. I have no doubt there is a huge level of responsibility on the Minister of State.

What frightened me after the budget was that when a question was put to the Taoiseach about the optimistic view of the Government on the economy, he more or less said it was as it was given to him by the Minister for Finance, which was fair enough. A day later the Minister for Finance was asked the same question on "Today with Pat Kenny" and he said it was as his officials advised him. Is somebody passing the buck all the way down?

While most people focus on section A of the Budget Statement, I tend to take much more interest in section C. I thought the figures in it were extraordinary. I use my words wisely; I am not saying they were right or wrong. I recall that the prognosis from the Department of Finance was that the debt-GNP ratio will tip barely above 80% and will then begin to drop. That is certainly much better than we have been hearing. More important, I recall that the highest point the budget deficit will reach will not be the 14%, 15% or 16% put about in international media and in the Irish media until last week but approximately 11.7%. The difference between our budget deficit being 11.7% rather than up around 15% means that we are mainstream. The only other two countries up around the 15% mark are the UK and Greece. As far as I know, Germany is close to double digits. I believe it is 9%, 10% or marginally more than that. It is important to recognise that.

The other issue in section C of the Budget Statement related to growth. I noticed that on this occasion, the Department of Finance chose to illustrate it in a diagrammatical format. It also illustrated the indications, prognosis and forecasts of other groups. I recall that the diagram showed the forecast of growth for this year, next year and the year after from the Central Bank of Ireland, the EU, the Department of Finance and the ESRI. The most significant thing was that the most pessimistic outlook in the diagram came from the Department of Finance, which is always criticised for being overly optimistic. In fairness to the Department, it is an interesting point which has not been made. In that diagram, there was a consolidated or an agreed line. If it pans out in that way, it shows something very close to a symmetrical recession - in other words, this economy will come out of recession very rapidly, although not as quickly as it went into it.

I am sure the Minister of State will correct me if I am wrong but I believe it has been acknowledged that while the European economy will increase by approximately 1.5% this year - we will be in negative territory this year - it will only increase by less than 2% next year. This is a European prognosis. The Irish economy might increase by more than that. The Department of Finance and the Minister's forecast is that we will be in negative territory for the next four to six months but by mid-year, they expect GNP to begin to grow. I do not want to get stuck into figures but I would like to hear the basis for all of that. I do not expect a half an hour speech but would like to hear an instinctive response from the Minister of State.

I strongly supported the Government on the issue of the credit guarantee, the NAMA project and the special purpose vehicle which took the operational aspects of NAMA away from mainstream NAMA, and I saw nothing wrong with that. What I liked about those three things was that they were progressive, creative and imaginative. As I said at the time, it was not that I believed the Fine Gael proposal had no chance of working. I am a great believer in the view that there is more than one right way to deal with a problem but I believed the Government proposal was more complete, it was in power and the correct thing to do was to support it.

Since then, there has been a total lack of creativity. One issue raised in the House all the time is protection or support for people with mortgage difficulties, and Senator MacSharry has raised it time and again. The Government talks a great deal about that. The other issue is the lack of credit about which the Government talks a great deal as well. People have been misled on that second issue.

The Government will not force the banks to give out credit. It goes against banking policy. It will happen eventually but only organically. This is not a new problem. After the depression in the 1930s, the United States set up a new bank, the Export-Import Bank, to do precisely what we have been talking about, namely, making credit available to support exporting, manufacturing, and so on. The Export-Import Bank, or exim bank as it is called, in the United States produces various financial debt and bond instruments which allow various guarantees. For instance, Boeing is in financial trouble. It has just produced a new airliner and has advanced orders for 800 but, in many cases, its solid good customers do not have the money to buy them. Foreign banks can get money through bonding from the Export-Import Bank, bonding which is either guaranteed by the state or, in this case, by Boeing. It is just a new debt instrument. It is no different from the bonds our Government sells on the European market, except it is done in a different way and in the private sector. It also allows private sector money to be invested in creating credit.

This is important because, according to Senator Doherty, there is a statement on the finfacts.ie website to the effect that €50 billion Irish money has been invested in America in the past six months, although I have not seen the figures. That means there is money here which could be invested in safe debt instruments and bonds instruments which would support exporting. Not only would it support companies exporting but it would support companies which must buy raw material provided that raw material is used to produce stuff which is solely for export. We need a bit more creativity from the Department in dealing with these issues.

I hope the forecast and prognosis in the Budget Statement are correct because it would mean a very optimistic future. I wish the Minister of State well and I support the Bill.