John Paul Phelan (Fine Gael)

I spoke on the finance Bill during the boom when I was the Fine Gael spokesperson on finance in the Seanad. It was a difficult position to be in when there was plenty of money in the economy and the public were happy with the economic progress of the nation. It is amazing how quickly things change. The way our economic prospects deteriorated so much so quickly is the most startling thing that has happened in the last few years. What happened in the previous ten or 12 years and the contents of previous finance Bills led in no small way to this situation. The failure to plan for the future, particularly for a period when taxes from construction would decline, led us to this position.

Senator Hanafin mentioned the return to growth. He is right that economic commentators think there will be growth in the third or fourth quarters of the year. They have also clearly indicated that this will not have any impact on the economy and society in terms of decreased unemployment or increased Exchequer revenues. They do agree, however, that there will be limited economic growth at the end of the year. I hope that will be the case but we must wait and see if it materialises.

Senator Twomey specifically mentioned Westport House. I concur and ask the Minister of State if it is possible to accede to the Senator's request that Westport House be given a derogation from some of the measures included in the Bill, particularly that relating to the 80% windfall tax that could potentially be levied on those who operate the premises. I hope the Government will accede to this request because there is a small number of similar properties around the country and this is a major attraction in the Westport area.

We have had two of the worst years for employment. In the last 24 months 250,000 extra people have signed the live register, of whom over 90% are under 35 years of age. That is a shocking indictment of Government policy and a social disaster. These are the people who bought houses for €400,000 because they wanted to get on the property ladder, who were told by the Government that they would be foolish if they did not do so and that property would rise in price indefinitely. They have been hit hardest by our economic collapse. They have difficulty in making their mortgage repayments, while many others have already left the country, those lucky enough to get a passport. It is not only a personal disaster for the people concerned, their families and their communities but also an economic disaster for the country. We have invested a lot of money in educating these young people and we will lose vital skills if they emigrate. The central objective for the Government must be job retention and creation.

The reality is that the Finance Bill 2010 does sweet damn all to protect or create jobs. If we are to climb out of our economic hole, we have to get people back to work so that they can contribute to the Exchequer through their taxes. This Bill does little to enhance their prospects for future employment. It contains several positive measures, such as the extension of mortgage interest relief for the hard-pressed mortgage holders I referred to earlier and other minor changes in the tax code for research and development, but it lacks a strategy for addressing our major economic challenge of unemployment. For that reason, I cannot accept it.

We must encourage people to spend money. There is still money in Ireland but people are afraid to spend it because they lack confidence in the future. Money is to an economy what blood is to a human being and it needs to circulate if jobs are to be created. This Bill and the previous measures introduced by the Government, including NAMA, have done very little to circulate money through the economy.

Previous speakers, including Senator Coghlan, spoke about NAMA and I continue to have serious reservations about the significant financial drain it represents. I remain miffed by the Taoiseach's claim on the Order of Business in the Dáil some weeks ago that NAMA would get money flowing, even though the Minister for Finance has repeatedly stated that NAMA was never intended to achieve such an objective. Were we not told at the outset that NAMA would be instrumental in circulating money once again?

A recent survey conducted by the county and city enterprise boards reveals that 96% of small and medium enterprises in Ireland are concerned about the difficulties in getting access to credit. This is crippling the economy. If we are serious about job creation and protection, we should acknowledge that small and medium enterprises will do most of the hiring in the short term but that they face immediate problems in getting their hands on the money they desperately need. I recently learned about a Kilkenny businessman who runs a profitable operation for which he has borrowed €1.75 million from one of the State's leading banks. He was hauled before his bank manager for his annual review and told that he would have to sell 20% of his assets immediately or else the bank would put his entire business up for sale within 12 months. It simply wanted to remove his debt from its books, even though he never missed a repayment to a bank which is being recapitalised with our money. It is disgraceful that a successful business which is employing people in County Kilkenny is being put through such difficulties. I could offer many more examples involving similar businesses. More than anything else, we need to get money circulating through the economy but nothing in this Bill will help that to happen.

The enterprise spirit for which Irish people are famous continues to exist but the challenges in accessing credit and keeping costs down are crippling businesses and preventing good ideas from being implemented. The Government has a role to play in that regard but it has not yet faced up to the issues of upward only rent reviews, boardroom pay in the banks and salaries for the top people in the public service who have escaped relatively unscathed compared with lower paid public servants. Although the cost of electricity in this country has decreased in recent times, it spiralled out of control over the past eight years. Our electricity costs were at the European average at the turn of the millennium but they had increased to 1.5 times the average seven years later. The Government appointed a regulator who, in his wisdom, decided that the best way to serve the economy would be to drive the cost of electricity production through the roof. Small businesses have been particularly affected by these increases.

We need to give the people confidence and the Government has a major responsibility in this regard. A constant emphasis in this and last years' budgets was on the need for people to take pain. Workers in the public and private sectors have taken pain in bucket loads but they must also be given hope for the future. The players in the Kilkenny hurling team will burst themselves over the winter months because they believe they have a chance of winning the all-Ireland. We must give hope to the ordinary, decent worker or unemployed person that there is light at the end of the tunnel.

It is interesting to note that half of the €4 billion in cuts announced in the last budget will go on interest payments, while the remainder will be spent on the 75,000 people who are projected to lose their jobs this year. In effect, the Government's cuts have already been wiped out and it is running to stand still. That does not augur well for next year's budget.

Fine Gael is often criticised for failing to make its views known in advance of budget announcements. This time, however, we proposed an extensive alternative budget prior to the publication by the Minister for Finance of his own proposals. We emphasised the need to avoid hammering lower paid public servants who earn €25,000 or less per annum. These people should not be made to suffer to the same extent as those who are on higher incomes. Having introduced a cut across the board, the Government changed course several weeks later to protect the incomes of higher paid public servants, even while those on the lowest grades were forced to bear the full brunt of the budget measures. That was an unjustifiable decision. People need a sense of solidarity.

An earlier contributor spoke about the partnership process, of which I have been critical in the past because by the final years of the Celtic tiger it had become a vehicle for Fianna Fáil to give money to its friends. However, we have never needed social partnership more than we do today. This Government has dropped the ball because, for the first time in 25 years, there is no immediate prospect of harmony in that particularly important area. I urge the Government to do all in its power to ensure social partnership is brought back on track in the future, but it must be a sustainable social partnership.

In the run-up to the budget, Fine Gael raised the need to cut employers' PRSI to protect existing jobs and to allow for the prospect of taking on people in the future. This was ignored by the Government. We produced an extensive policy called NewERA on how it might be possible, through a small stimulus package, to create jobs in the economy. The Government has done nothing in this regard. Perhaps the new Minister for Enterprise, Trade and Innovation might have some new ideas in this regard. Certainly the former Minister did not.

I refer to such issues as the airport travel tax. The Government is still digging its heels in. It seems blatantly obvious that its actions are an attempt to thumb its nose at Mr. O'Leary and Ryanair but it is costing jobs and bringing in very little revenue to the Exchequer. This is an area of tourism in which the country has always excelled but we are driving people away. It makes no sense. The Government should get rid of the airport tax and such measures should have been included in this legislation.

I refer to the failure of Government in this Bill or anywhere else to tackle the tough parts of the McCarthy report, including such things as cutting quangos, which he recommended. The Government took the easy measures such as cutting welfare and so on which affected the lowest income earners in the economy, but it has not tackled the difficult problems, which is why I have a difficulty with the Finance Bill.