Paschal Donohoe (Fine Gael)

I want to talk about the way in which Senator Hanafin evaluated this budget in terms of fairness, and I will consider a number of examples to help us understand how fair it really is. Before I do so, however, I want to consider some of the commentary that has taken place about the budget. I was struck by an image I saw on my way to the House this morning. It was a picture on the front of a newspaper of the Minister for Finance dressed up as a German general, and the message was that Ireland had been given orders from abroad to blitz various parts of our society. That is a myth we must destroy in the House. Such images and language do our country no good and have the potential to cause great harm. There is no doubt our country was targeted to deliver a deficit reduction of €6 billion in the budget. Even if we were not dependent on the IMF and the ECB for outside help, those cuts would have been required. The deficit reduction program that has been undertaken by the Government, the objectives of which Fine Gael supports in the context of this budget, is necessary for our country to regain its full independence and to ensure it can stand on its own two feet. Regardless of the relationship we have with the outside world and how it has changed, we would need to do that anyway. A myth is being peddled by certain people with vested interests within and outside our country that there are other options open to Ireland, that we could go it alone or consider measures such as defaulting on our sovereign debt, but any of those measures would be catastrophic to the interests of our country. As I said before, Ireland should not be involved in any experiment that no country in the developed world has managed to pull off.

One of the great engines of economic prosperity our country has enjoyed has been our positive engagement with the outside world. Let us stop blaming the outside world for the difficulties in which we find ourselves. Much of that difficulty was inflicted on our country by Fianna Fáil, a party in a Government we elected ourselves. That was the cause of our difficulties. It was not a foreign or alien agency that caused this fate to befall our people and our country, it was choices that were made at home. For our country, and people who are writing about our country, to indulge in a fantasy that seeks to put the blame on others is the worst possible kind of escapism. It is dangerous and it could be fatal. We need to be honest and accept that the cause of this was decisions that were made at home, decisions made politically by Fianna Fáil which will pay the price. That said, decisions made at home are capable of restoring our country to the path it should be on. Let us not blame people who were not involved or who, if they did play a role, played a far smaller role than domestic forces - faces we knew and people who were elected.

Senator Hanafin said in his contribution that the budget sent out a message of hope and fairness. I want to consider three examples and ask where is the hope and fairness of which he speaks. The first is the reduction in the salaries of Cabinet Ministers and the Taoiseach. The story that has been put out is that our political leaders and the elite are taking pain to reflect what the rest of the country is going through. The fact is that before those changes were implemented and before the minimum wage was cut, the Taoiseach was earning 13 times the minimum wage but after these changes are implemented he will be earning 14 times the minimum wage. These are the figures. The minimum wage will be cut at a faster rate than the salary of anyone holding senior public office in this country. This is exactly the type of relationship and unfairness that makes the people we represent believe other forces are at play beyond the need to be fair and to ensure everyone shares the burden equally. A great deal more could have been done to ensure the budget was fair and that the people at the top, especially those at the top of the public service and the political classes, made a fairer contribution.

Our party has outlined what we believe these proposals should involve, including a smaller Dáil and the future of the Seanad. Our leader has made clear that upon the formal announcement of a general election, we will have more to say about the salaries people are paid in these Houses and the way we conduct our business. Let us consider those who teach in the classroom, run schools or hold senior roles in hospitals. These are the type of front-line workers that my colleague, Senator Jerry Buttimer, talks about regularly with such passion. We must reach a point such that no one in these Houses is earning much more than anyone performing such roles. Only then will we restore fairness and the principle of ensuring everyone makes a contribution to the path out of this disaster. Only then will the people who wish to be led have faith in those who aspire to lead them.

Another example of where fairness appears to be lacking is the relationship between those on the minimum wage and those on social welfare. Our country learned a crucial lesson during the 1980s, especially the middle of the 1980s, about the need to ensure the right incentives are in place for someone who wishes to work and that it is worth his or her while to work. Both of these boxes must be ticked. Many people are keen to work but we must ensure it is worth their while to work. If a person enters the workplace and finds he or she is worse off as a result, the people who suffer are his or her children and those workers trying to pay household bills and mortgages.

Let us consider someone on the minimum wage who will now be in the net for the universal social contribution. Such a person will be €879 per year worse off as a result of the implementation of this budget. This is twice the adjustment or change that someone on social welfare must face or deal with. This will mean the incentive for people at the lower end of the income scale in the services industries and what is left of the construction industries to work beyond the need to maintain their dignity and self-esteem, which is their primary motivation, will be reduced further. We must find a way to ensure this is re-balanced and the incentive to work is maintained where the social welfare system meets the tax code. I am concerned this area has been dealt damage as a consequence of the changes made yesterday.

I will finish on a broader point with regard to the apparatus of the State. We are all aligned to the view that we should take the most from those who need it least. The classic example often proposed relates to child benefit. Why do people on high incomes need child benefit? I have some sympathy for the point of view but this is the choice we must consider making. It stuns me that whenever this issue is explored, we are informed we do not have the administrative ability to distinguish between people on different levels of income and tailor child benefit or the welfare payment such people receive to reflect the difference. How have we reached the point that our systems are unable to tailor fully the level of welfare benefit a person has to that person's need. Had more progress been made in this area there would not have been the need for the instruments under discussion today to be as blunt as they are.