Liam Twomey (Fine Gael)

Do I take it from the Minister of State's ad lib comments near the end of his contribution that it was not Lehman Brothers that got us into this mess but Government policy during the past decade? After we have had time to digest this budget and its impacts fully, it will be interesting to see whether it will contribute to getting us out of this crisis or whether it will be interpreted as a holding budget ahead of an early election, one that will not damage Government parties too much irrespective of whether the long-term crisis gets sorted. The budget focuses on cuts and taxes. The measures on jobs are not strong or clearly defined and are not underpinned by the policies that are needed to make them work during the next one or two years. For this reason, a certain amount of scorn has been poured on the budget.

The Minister of State alluded to another factor that has contributed to where we are today as opposed to where we were when making our statements on last year's budget. The dreadful mismanagement of the banking crisis has cost us additional billions of euro that we were not discussing this time last year. A hallmark of the Government's approach to the banking crisis seems to have been the country getting hit with extra billions of euro every couple of months. The underlying concern that further problems exist within the banking sector still remains. I do not want anyone to tell me that Bloomberg is looking in on proceedings in the Seanad and that our rating will drop further following my comments, but the concern about additional problems in the banks and why the Government needs an extra €25 billion is being expressed. We are not getting much information from the Minister for Finance in that regard.

Irrespective of this year's one-off measures to deal with the banking crisis, there are ongoing problems with the public finances. If additional problems exist in the banking sector, next year will also see one-off measures. Where would that leave the Government deficit next year and the year after? Some people claim the potential for economic growth is zero while others claim it will be 1.8%. This is a sizable difference in terms of sorting out the problems in the public finances.

The Minister of State was right in one respect, in that the non-government economy has reacted quickly, has restored its competitiveness and is on the verge of recovery. Exports have increased and there are other signs within the private sector that changes are coming about to make it more competitive. Unfortunately, the parts of the economy for which the Minister of State is responsible do not seem to have the same enthusiasm for or ability to change.

The budget brings with it risks. For example, the increased taxes could have a negative impact on the economy. As is usually the case with budgets, one wonders how some glaring changes were included. Perhaps the Minister will have an opportunity to consider those at a later stage.

The last time the Minister of State attended the House during a similar debate on the economy, I asked whether he had indirect concerns about our corporation tax. While there are no direct concerns, I asked him whether VAT or other taxes would be levied on the profits of some European companies. This would have an indirect impact on our revenue from corporate taxes. The Minister of State did not answer. When he is concluding this debate, perhaps he will respond.