Larry Butler (Independent)

We had truly bad figures this morning from the banking sector. We expected some of the figures to be bad but perhaps not as bad as they were. We seem to be getting to the bottom line in terms of the total cost of the banking collapse.

The banking fraternity came to the Oireachtas a short time ago to tell us they did not want our money, that it was perfectly able to fund itself. Today is a long way from that but at least we have the figures and the marketplace is responding favourably to an honest approach by the Minister for Finance who has done an excellent job when one considers the work he has had to grapple with in recent years. He has the confidence of the entire European community.

The plan we had for the next two to three years will have to be changed. We must devise a longer-term budget. We will have to ask the ECB to extend our term to meet the budget targets that are required by 2013 as I do not believe they can be achieved. We could damage the economy enormously if we do not seek an extension of time in that regard.

We are expecting the economy to grow by 1.5% to 2% in the next six to 12 months. It is vital that we do not stem that growth by taking severe and very painful cuts that we will have to take in the budget. I hate to say it but we may need to increase taxation. That is unfortunate but looking at today's figures I do not see any other way to ensure we can balance the budget, even if we extend the term by another three years.

The only way we can keep the economy working, plan economic growth and deal with our payments which will increase substantially is to plan things in an orderly way. I believe the Minister will do that and that the budget will clearly set out how we are going to do that. It is important to bear in mind that the economy has been stabilised even though it was in an unprecedented downturn. The Government response was swift to meet the deficit of payments. We had to deal with that. When we consider the figures that were revealed this morning with what we saved in the past three budgets, those measures pale into insignificance compared with what we must do in the next six or seven years.

Economic growth must be encouraged in various parts of the economy. The retrofit scheme which was introduced two years ago has been an enormous success. A total of 9,000 new jobs were created in the sector. The retrofit programme not only provides warmer homes but also ensures energy, the majority of which is imported at a cost of €6 billion every year, is consumed more economically. We should consider expanding the retrofit programme. A ten-year programme is in place. The Minister has an opportunity to double the workforce in that area by doubling the budget for the scheme and including double glazing. The installation of double glazing is not allowed under the current retrofit scheme and this is one area in which we can increase the number of jobs created. Every one of the 9,000 jobs created would save the Exchequer in the region of €38,000, thereby reducing the real cost of creating jobs in the retrofit sector using some of those unemployed in the construction sector. It would also save us money in the long term and mean at least ten multinational companies coming to Ireland, which we would encourage as it would produce large tax revenue. We can increase the number of jobs created in this sector.

The retail sector is another to which Senator Quinn referred. There is a real opportunity in that sector which has been growing in the past 12 months. It is important to encourage such growth.

It will be difficult to grow the economy and we will have to make sure not to damage it as we progress. If more money is to be taken out of people's pockets, the retail sector and the various other sectors in which people normally spend money will suffer. It is important, if we have to provide for extra taxation, that it is kept to the minimum. People will have to roll up their sleeves and all parties will have to come together because whoever is in government after the budget will be committed to the task in the next six or seven budgets — that is a given. It is important that, therefore, when the next budget is constructed, guidelines are given for the next six to seven years. That is why it is important we secure agreement with the ECB on how it should be structured. I am sure the Minister for Finance will deal with that issue.

I welcome the announcement made by the Tánaiste, Deputy Coughlan. I note that two years ago huge revenue was to be generated by bringing in students to learn English. We have the finest teachers and the finest colleges in Europe, perhaps the world, and can offer students the finest accommodation. It offers a great opportunity when one sees what other English speaking countries have done in this regard. In the region of £7 billion to £8 billion a year is being earned in Britain. In many ways we have a better education system. We are earning €700 million to €800 million a year, not a small sum, but it could be doubled in the next two years. This would help to create jobs in teaching and also give us extra revenue to restore our balance of payments. As Senator Burke noted, it is important that we seize opportunities in these fields.

The Croke Park agreement forms a very important part of the budgetary structure. It is important that the trade unions and those involved in the public service sit down together to decide exactly where the savings will be made. We must end up with a sustainable public service. If there is flexibility within it for change, we will have achieved a substantial part of what will form the next budget.

On energy matters, the current situation regarding the ESB must change. We must examine all of the public utilities because, unless we do so, we will find it difficult to compete in terms of energy costs. There are a number of ways to achieve this. The power of wind on the west coast has only barely been tapped and we have not really extended turbo power capacity. The Spirit of Ireland group has identified four new stations at a cost of approximately €21 million. That represents the way forward. We can export energy supplies provided we develop the sector in a proper way. The grid must be improved, as it is not sustainable to keep it in its current condition. It is time to consider how we might find the ESB a new job, perhaps managing the grid instead of the electricity system, and a more competitive way to feed into the production of energy.