Marc MacSharry (Fianna Fail)

I join others in welcoming the Minister of State and am glad of the opportunity to make a few points on yesterday's budget.

No one would set out willingly to introduce a budget such as this and many of its measures are regrettable in the context of the reductions people will have to take. In the history of the State, no Administration, apart from the last two or three, it is worth noting, have invested more across all Departments and sections of society. Regrettably, as we have analysed in countless debates over the past 12 months, circumstances have changed substantially, and with that so too have policy priorities. To meet the €19 billion deficit between income and expenditure we have had to adopt a budgetary process which continues with the €6 billion adjustment that was made in yesterday's budget.

On a personal level I am surprised at how balanced it is. That is not remotely to suggest there are not many measures in it that will be very painful for people. As the Minister of State has rightly pointed out, there are measures which will reduce the standard of living for every household in the country. That is an adjustment very few have had to contemplate. People of my age, 37, and younger have never known the necessity for that type of sacrifice, but this is what is necessary. There are adjustments we can all make and challenges we can meet if we focus our minds and work together.

The cost of living in the context of consumer prices is back to about April 2007 levels. In the context of the proposed reductions in social welfare, for example, this means it will be reduced to €2.20 more than was paid in 2007. Life was not all bad in those years between 2005 and 2007 in the context of the taxation measures that have been changed and in the context of social welfare.

The Minister of State has gone through the various measures in the budget in some detail and I am not going to replicate that. I want to indicate, however, a couple of areas with which I am particularly pleased, and one is the old age pension. Obviously, from the Government's perspective it would have been much better to have been in a position where no cuts had to be made. Speaking as an individual citizen, I am quite happy to sacrifice more to give relative security to old age pensioners. I am very pleased the State pension has not had to be cut.

Another positive move has been the cut in the travel tax from €10 to €3 because this will bolster the incentivisation the airport authorities provide to carriers to encourage them to grow their numbers from those of last year. There is a vast opportunity in tourism and this initiative can enhance capability to get more people to visit Ireland and get more money into the economy from tourism. Many other countries have travel taxes and more are to introduce them next year. This will make us more competitive in that regard and give the airlines, which rightfully have been very vocal in criticising the tax, the opportunity to grow the market and contribute to economic progress.

In the context of the reworking of the business expansion scheme, the employment investment incentive is very welcome as well. It increases the maximum to €2.5 million in a given year and for the first time it is very employment focused. It will be relevant to companies' PRSI contributions, and that is very positive because it ensures the numbers of employees must increase if concerns are to maximise the benefits they may draw down from investors. The three-year corporation tax holiday people are afforded, up to a maximum of €200,000, also must be linked to PRSI contributions, and again this will be very employment focused.

I welcome the new agri-environment options scheme to be introduced in 2011. This will be open to those coming out of REPS 3, with participation levels capped at 10,000 and maximum payments at €5,000. This is a welcome boost.

The Minister of State referred to our corporation tax rate of 12.5%. It is vital that we have managed to maintain this because it will be the cornerstone of Government economic policy regardless of who is in government in the coming years. We have not been hearing much on the airwaves during recent days about the many positives mentioned by the Minister of State. I watched breakfast television this morning from which the age old concept of balance was absent. One wonders if Government representatives were invited to participate in any of these programmes.

While there has been much uncertainty and fear among the public during recent years, this budget and the four year plan announced last week provide certainty and hope for them. There has been some progress in the real economy. Unemployment numbers have fallen for three months in a row. While some people have gone abroad, not all have done so. There has been job creation. We have also seen a strong, robust performance in the export area. As such, there are positives and we must be conscious of them. We must also believe in the resilience and determination of the people who in the past were able to meet the challenges presented to them. We certainly can do so again. While this budget contains painful measures, we can deal with them and make the necessary adjustments. I accept it will be difficult for the younger generations who have known little more than increments, flexi-time, salary increases, holidays, new cars and so on which came with the Celtic tiger era, but circumstances are different and we must adapt accordingly.

In terms of rebuttal of some of the things that have been said such as, that we blew the boom and so on, it is worth reminding ourselves of some of what the Minister of State said, namely, that €6 billion was spent on our road network during recent years, 4,000 more gardaí were recruited, 1,700 new prison places were provided, 9,000 more special needs assistants were recruited and we trebled the rates of social welfare between 2000 and 2009 when the prices of goods and services increased by less than one third. We are not returning back to 2000 levels but to levels which pertained in the middle of this decade. It is possible for us to make these type of adjustments.

There are 1.86 million people in employment and we continue to have a strong education workforce. I believe the increase in registration fees by €500 is just. As I have often said to Senator Ross, what other universities like Trinity College, which is among the top 100 universities in the world, do not have fees? The answer is that there are none. I would like if in future budgets we could ensure those who can afford it pay higher fees. My parents paid significantly more in the 1980s than is paid today to ensure my brothers and sisters went to university. Perhaps there is scope in this area for whoever is in Government in the future, be it Fianna Fáil or another party.

As I said earlier, the number of people on the live register has decreased. Some 2,500 jobs have been announced by Government agencies since March this year. If one were to average this out, it amounts to almost two announcements per week. We are ranked number one in the world for jobs created by foreign direct investment. We have heard many times that eight of the top ten technological firms are based here. As I said earlier, exports have bucked the trend.

Having listened to the analysis of the Opposition parties in recent times, while they might be ready for an election one wonders whether they are ready for Government. Their alternative budgets published last week indicate they are to a large extent polar opposites. While Fine Gael agrees a €6 billion adjustment was necessary in the budget, the Labour Party disagrees and believes this figure should be €4.5 billion. On "The Week in Politics" on 5 December 2010 Deputy Gilmore stated it was the view of the Labour Party that this is a product of right wing consensus in this country and in Europe and it is not an approach it supports. Fine Gael disagrees. It plans to cut a further 30,000 public sector jobs and to dismantle the HSE and FÁS, with which the Labour Party disagrees. The Labour Party wants to introduce a new 48% tax rate; Fine Gael vehemently opposes this. Fine Gael wants to abolish the Seanad and to reduce the number of Deputies by 20; the Labour Party does not agree. Fine Gael would cut social welfare rates by €6 in 2011, rising to €14 in 2014 while the Labour Party says that all headline social welfare rates must be protected. Fine Gael wants to increase VAT rates. On the other hand, the Labour Party believes we should reduce them, which is fantasy land economics in the context of the crisis we are facing. Clearly, there is work to be done by the Opposition parties as they contemplate their readiness for Government as opposed to elections.

Senator Twomey said the Government had postponed some of its decisions owing to electoral concerns. The Government published its four year plan last week, the first instalment of which was addressed in yesterday's budget which credibly takes €6 billion from the economy and which, while painful, ensures through the introduction of other schemes that we will not be killing the patient with the medicine.

I acknowledge the budget contains difficult measures. We are a resilient nation, however, and can overcome these difficulties. The budget is the first instalment of the four year plan. As stated by the Minister for Foreign Affairs, Deputy Martin, last Sunday night on "The Week in Politics" and echoed today by the Taoiseach, we will support these policies regardless of who is in Government. We have not conceded defeat in the forthcoming general election. I have just outlined the reason it is essential people focus on the real alternative. We have seen from the plans outlined by the alternative government of Fine Gael and the Labour Party that they are polar opposites and have not put forward credible alternatives to what is proposed in the four year plan and budget announced yesterday by the Minister for Finance. As difficult as the adjustments are that will have to be made all sections of society, they are manageable and credible. I commend the budget to the House.