John Paul Phelan (Fine Gael)

I welcome the Minister of State, Deputy Calleary. Not much has been said either by Government or Opposition Senators that I disagree with and I do not have much by way of original thought because much of what I intend to say has been said already. Nevertheless, I will air my views.

Earlier, Senator Regan remarked about the need to reform the way the budget is carried out every year and I have referred to this in recent debates on this topic in the House. The days of the Minister for Finance coming in on budget day to present figures while Deputies wait around all day to vote on motions until into the early hours of the morning should be over. This difficulty we are in is, in a sense, an opportunity to reform the way we put together budgets. This has been under discussion for a long time. On budget days in the past and on other occasions, Deputy Richard Bruton has made the point that we must change the way the budget is put together and that we must hold a real discussion about it in the Oireachtas. We hold a debate in this House after the budget is announced in the other House but we have little input. Constitutionally, we are not mandated with a direct involvement in budgetary matters. However, there is very little discussion about the content of the budget, although this year we will have some discussions beforehand. From an Opposition point of view, one tries to be constructive on issues. However, if one has no direct input into what comes out on budget day then it is very difficult for the Government to expect the Opposition to be in any way supportive of what is presented.

Senator Bradford struck a chord in his contribution earlier. Politically, the people have moved past the blame game at this stage. They know where the blame lies and the Government will discover this whenever they have the courage to face the electorate. However, the people want solutions and from this perspective Fine Gael will not be found wanting in terms of putting forward ideas.

Deputy Michael Noonan has correctly pointed out several times that the Government must not only resolve the banking difficulties and improve the public finances, but provide some stimulus. Yesterday in the House we referred to between €90 billion and €95 billion in private savings in the country as well as €10 billion in the National Pension Reserve Fund. That represents a vast pot of money and the Government must be imaginative in the budget and must try to find ways of getting people to spend a fraction of that money. That would provide a significant stimulus to the economy and it would not cost the Government much money at a time when it does not have much money to invest directly in its own stimulus packages.

I agree with much of what Senator O'Malley said earlier about the need for reform of the public service, especially reform of entitlements and pensions. However, I will be somewhat political with this point. I spent five years as the Fine Gael finance spokesperson in this House. Fianna Fáil and the various parties with which it was in Government, as well as Independents, won elections by throwing money at the public sector in such areas as pensions and general public service numbers. This approach was used very politically, especially in the time of Deputy Bertie Ahern, to garner support at election time. I agree with what Senator O'Malley said about the need for reform and Deputy Richard Bruton will publish a document next week in this regard.

Reference was made to the Croke Park agreement and there is little in it with which I can disagree in terms of the objectives but we were promised those same objectives before through benchmarking and other initiatives.

For years there was a process called social partnership in this country. We have never needed social partnership more than now but we had it at the height of the Celtic tiger and it was simply money for old rope in many cases. The promises of reform of public services and the public sector which we were given did not materialise as part of that social partnership process. They were not delivered. Now we have reached the disastrous situation where they simply must be delivered. The Croke Park agreement still has the potential for significant savings in terms of the cost of running our public services. I understand from talking to people involved in the public sector and those involved in the negotiations that up to €1 billion per annum could be saved.

The Government must ensure we see not only rhetoric, but real results. I heard the leader of the implementation body on radio recently. I cannot remember his name but he was less than inspiring in his comments about the possibility of real progress being made and of delivering reform of the public service. The Government must be extra vigilant in this area.

Senator Paddy Burke referred to the difference between this recession and that of the 1980s and the level of public debt, as I have done previously. I am somewhat annoyed having listened to Labour Party remarks on this matter, its view of what constitutes being well off and who should shoulder the burden. Let us consider a couple with a joint income in excess of €100,000 who are in their 50s, who have paid the mortgage and who, perhaps, bought a house for €10,000. Such people might be well off. However, what about a couple in their 30s who have two children, who earn the same amount of €100,000 per annum and who bought a house for €500,000, which is not worth €250,000 now even if they could sell it? Are such people well off? Where does one draw the line? What is the comparison? How does one decide who will be taxed? The Labour Party has nailed its colours firmly to that particular mast. This is something which did not work in the 1980s and it will not work now. I agree with Senator O'Malley and others that the balance must be in favour of reducing expenditure rather than significantly increasing tax rates.

I call on the Minister of State to address one further point in his closing remarks. There is a wide variation between what the Government purports, a €15 billion adjustment, and what others maintain. Some economists estimate the figure could be €30 billion, based on potentially negative growth figures in the coming year or two.

I am unsure how the Government will arrive at a final figure and a final projection for growth next year. I have heard some people maintain that the adjustment could be as little as €9 billion - if one could term €9 billion as little - if one uses a different set of economic growth figures. The variation in the projections we have heard is vast. A relatively minor adjustment in the growth figures could significantly impact the overall adjustment and could produce an overall deficit figure. There is an element of guesswork in this regard.

Yesterday's announcement by the Taoiseach that the €15 billion figure is simply a forecast was interesting. Perhaps he meant to say something else, but it did not inspire confidence when he said he felt the final adjustment figure would be €15 billion. There is significant agreement across the political parties on what we must do and the difficult measures we must take. The public is willing to accept fair adjustments, but we must start at the top, including with Members of the Houses who must be seen to take their fair share in the adjustments to be made in the budget.