Liam Twomey (Fine Gael)

These are the reasons we are where we are. The budget breaks down into cuts valued at €4 billion and taxes valued at €2 billion. Some €1.8 billion of the cuts will be made in the capital budget. This is a significant portion of the overall adjustments. As we pointed out, there is no clear policy on restoring jobs in the economy. The €1.8 billion would have been spent on building school extensions, refurbishing hospitals, local authorities fixing roads and so on. As such, it would have provided jobs in the public and private sectors. This significant cut will have an impact on jobs in both sectors and could lead to further problems next year unless a clear policy, one that is not just about tinkering around the edges, is put in place to reinvigorate job creation. The Government needs to examine this issue ahead of next year, otherwise we will not be able to get ourselves out of this trouble.

A further €2 billion in cuts will either come from public sector pay and pensions or social welfare. We have agreed with the Government on some of the cuts in the social welfare budget that affect people trying to get back to work. We want to make going to work a desirable option, but there is a sense that working is not the desirable option. Being on social welfare is offering people a cushion in these straitened times. We must change people's focus by taking them off social welfare and putting them into work. We support this policy, but a greater focus must be placed on producing jobs for those who will see their social welfare benefits reduced.

The naked political decision to leave the old age pension alone has been pointed out, as has the decision to cut the pension entitlements of blind people, widows, widowers and those with disabilities. It sounds strange that one would want to hurt a 62 year old blind woman, a 59 year old disabled person or someone who was widowed at an early age. It does not stack up. Consistency throughout the budget is required and the Government must examine whether other options are available to it instead of targeting a group of vulnerable people, including those with disabilities, who cannot stand up for themselves in the same organised and coherent way in which the elderly approached the Government. That said, the latter group's approach is good, in that it shows how people power can work.

Public sector pay and pensions constitute a significant issue. The amount of money involved is considerable. Fine Gael has discussed slimming down the public sector and increasing efficiencies. These measures will be vital in controlling the Government deficit of €18 billion. What will happen to public sector pay and pensions if efficiencies and redundancies are not delivered and radical changes are not made? The Croke Park agreement was approved last March, yet there is significant concern to the effect it is not working as it should be. The International Monetary Fund, IMF, has put a gun to the Government's head by stating it will move by next September. It is a question of being honest with the large number of people working in the public and civil services and with public sector pensions. What will occur in three or four years if the situation does not work out? The only option will be forced redundancies or considerable cuts to pay and pensions. The unions are also responsible. There is still a certain mindset within the public sector unions, emanating from the partnership arrangements that were in place for years, to the effect that somehow all that needs to be done is to fill up the ATM machine, but that day is long gone. There is an enormous push on us to reduce the Government deficit, although the problem was not of our making. I believe the Government is not showing leadership but rather misleading public sector workers, and those relying on public sector pensions. It is playing a game with them, indicating in effect that the Croke Park agreement is the one. Both the Minister of State and I know, however, that this is like a train coming down the tracks and something must be done about it now. Otherwise, it will just crash straight into the buffers.

The IMF will enforce stringent cuts to the pay and pensions of public sector workers in the event. I have nothing against public sector workers. I am a public sector worker, as is my wife and other members of my family. If they ask me, I cannot mislead them and say that somehow things will not change if we do not deal with our problems, if we do not achieve growth in the economy over the next couple of years or if more people lose their jobs. If the banking crisis deteriorates, we have to pay for it and we must make allowances for that eventuality now. I do not believe that type of honesty is entering the debate.

On the €2 billion on taxes, one sees that across the board the majority of people will take a hit in take-home income next year of somewhere between 4% and 5%. It will be somewhat more for some and less for others. One of the topics raised earlier in the week was the fact that the bankers were still paying themselves bonuses. Everyone else is taking a 5% pay cut, in effect, to pay out another €25 billion to the banks, and they are awarding themselves bonuses.

There is also the issue about Ministers giving themselves a clap on the back because their pay has been brought into line with that of President Obama of the United States. There is an argument that Ministers are still grossly overpaid and perhaps need to look again at their severance arrangements. There are issues to be addressed when one sees that people on €12,000 will have their pay reduced to something marginally above what an old age pensioner receives. There are issues about the increasing cost of mortgages next year. The only areas reflecting inflation in the economy at present are mortgages and utilities such as gas and electricity. The taxes imposed in this budget affect families who must pay mortgages and meet high ESB and gas bills.

The Government's promise to get rid of property reliefs by 2015 does not really count for much because most of these reliefs would have been for a five or seven-year duration, which means they would have been taken out in 2007 around the time the crisis in the property sector began, so they will have run out. The Minister of State has not indicated whether the €660 million, which seems to be the price the State will get for the sale of Bord Gáis, is part of the €6 billion as well or whether the whole amount is €6.6 billion?

On the issue of the cap of €250,000 on public sector pay, were many people taken on in recent months in excess of that figure? I would like an answer to that when the Minister of State responds because people on the minimum wage face twice as many cuts in terms of adjustments to pay and tax as those who face adjustments being made to social welfare. That does not send out the right signals when the Government is supposed to be trying to get people back to work.

I would also like the Minister of State to bear in mind the consequences of the figures for families and individuals. A family on €40,000 a year, for instance, with three children, will face a cut in take home pay of €1,000. That is not €1,000 off the €40,000 but rather off the net pay, having paid all the cuts up to this point before the latest changes came into play. That will fundamentally distort the picture in terms of whether such a family might be better off on social welfare. The Minister of State needs to look at all these figures.