John Gerard Hanafin (Fianna Fail)

I wish to share time with Senator Larry Butler, with the permission of the House.

The debate on the benefits of the Finance Bill 2010 has been well answered at an international level. It is very easy to make a decision when there is no choice. The Government took long hours, days, weeks and months, to ensure the tough decisions were fair. It is no surprise that the effective cut in pay of 7% for public officials by means of the pension levy, provoked a reaction in Ireland much different than it might have done in France or Greece where there would have been stronger reactions. This is because social partnership was in place for a lengthy period. This social partnership has served us well. We are now at a critical juncture. I hope that social partnership will hold steady. I am very conscious that people may feel aggrieved. However, as to alternatives, we must consider where Greece finds itself. There were similarities between Greece, Spain and Ireland. The similarities ended when we took decisive action. At the moment, it is a question of whether it will be the EU or the IMF or a combination of both, that will step in to assist Greece.

In such a situation, it is a government's responsibility and duty to ensure the national finances are in order. This is what the Government has undertaken in the Finance Bill. It is possible we will have similar difficulties in 2010 until the second half of the year when growth will begin to be evident. We have to believe that growth will begin. My hope is that all the partners in the current talks will agree that the benchmarking process which took place in the good times could not be solely an upward process. It was never possible to have a situation where the benefits in the general economy would be shared by all of us in the public service but when the bad times came that we would stand alone in a golden circle and retain all our benefits. This was never feasible.

Given that the good times will follow, there should be an understanding that when the economy turns around, the public service will have the appreciation of the State once again and its significant contribution will be recognised.

We are not out of the woods yet. The figures for the final quarter of 2009 are available today. I note that unemployment had increased to 13.1% of the workforce at the end of 2009. This is a worry as people may now be more than one year unemployed. However, at the beginning of this year there have been very positive signs. Even today IBM announced the creation of 200 jobs in Dublin in its Smarter Cities Technology Centre, while yesterday we heard 150 jobs were to be created by eBay. Therefore, there are positive signs which would not be there were it not for this Bill to put our finances in order. It has become clear to international markets that we are committed and will take the necessary action to shore up the public finances. It may be that people, because of uncertainty in the world economy in the last 18 months, are saving significant amounts. Bank deposits have increased significantly. Where people were previously saving 2.5% of their income, they are now saving 12.5%. This means we will see a situation where the Government will be able to suggest a composite payment of their income and the money that was being saved will go to ensuring the public finances are in order.

Similarly, job creation has become the major issue in 2010. Last year the Government ensured State's finances were in order by rescuing the banks, the very method of doing business. We took the necessary steps that were subsequently internationally acclaimed to ensure deposits in the banks were guaranteed. Initially many European states indicated this was inappropriate but each followed our decisive action one by one and it proved to be correct. We also had to ensure we took lending that had gone sour off the banks' balance sheets and establish NAMA. That was appropriate in the light of experience in Japan where banks did not lend for 15 years.

With the Finance Bill we ensured the public finances were put in order. This has set the groundwork for us to concentrate on job creation. I trust this will be the year, following a difficult but successful 2009, in which we will see significant numbers of jobs created. We have experience in this area from the 1980s and should move capital allowances that were available in the property sector towards job creation in order that we can again engender a culture in which this will be a competitive economy, as it was in 2004, and use our position as the third most open economy in the world. Only Singapore and Hong Kong are more open. We are in a position, therefore, to make a significant difference after the budget for 2010 ensures the public finances will be in a healthy state.