Paschal Mooney (Fianna Fail)

Cuirim fáilte roimh an Aire. Her final flourish is indicative of the manner in which the Government has set out its stall. It is important that it injects confidence into the economy. I hope the measures contained in the Bill will realise the objectives she has outlined but that remains to be seen. I do not want to be churlish but perhaps it would be useful to set out the background to the legislation. The long-term unemployment figures remain stubbornly high. Growth is sluggish, although we heard a piece of good news this morning regarding the switch in GDP from negative to positive. Admittedly the change is small but these small steps are hopeful for the economy.

There is a need to reduce and, ultimately, eliminate social welfare fraud. I pay tribute to the former Ministers for Social Protection, Deputy Ó Cuív and Mary Hanafin, for the positive initiatives they took in this regard. Their efforts over the three years since this economic tsunami crashed into the economy have saved hundreds of millions of euro. I do not doubt the Minister, Deputy Burton, will follow the precedent set by her predecessors in that regard. I also welcome the effort to give legal effect in the social welfare code to civil partnership.

The main challenge facing the Government is the growing gap between income and expenditure, which will be €8 billion this year. Mr. Peter Sutherland, who is to be congratulated on the award he received from the Irish Exporters Association, has identified exports as a key area in our economic fight back but also described the budget deficit as being more important than bank debt. Given the monopoly money involved, it was inevitable that we would get hung up on the bank debt. I cannot see how we will ever repay €160 billion in debts without enormous economic growth. Given the ambitions of this Government as outlined by the Minister for Finance, it is important that Ireland returns to the bond markets at the earliest opportunity. We may hate the international investors to whom we traditionally looked to for borrowings but they will ultimately make the decision as to whether they should risk their money in particular countries. As a result of the Greek crisis, Ireland, Portugal and, increasingly, Spain and Italy are facing interest rates of 12% compared to the 6% offered under the IMF-EU deal.

The Government is aware of the need to bridge the gap between income and expenditure to ensure the economy is put back on the right track and we can go the bond markets sooner rather than later. An article in last week's The Irish Times reported that in November, when the controversy over the EU-IMF bailout was at its height, the world and its wife knew Ireland did not need to borrow because we had sufficient reserves to last until July. If the Government had decided against accepting the terms of the EU-IMF bailout, we would now be looking for a bailout because the alternative would be to pay an unsustainable 12% on the international markets. The evil day would have been delayed but that is the reality of how the Government is being funded and this is why we must bridge the gap.

This Bill contributes to that objective in respect of expenditure that is within the Minister's remit. The question arises of where the money will be found to implement the €3.5 billion in cuts expected under the 2012 budget. In recent weeks, the Taoiseach and the Tánaiste stood shoulder to shoulder in front of Government Buildings to assure the nation there will be no income tax increase or reduction in social welfare benefits. As a result of the Croke Park agreement, public servants cannot be fired or lose their jobs until 2013 at the earliest. If one adds up the bills from the social welfare budget, the income tax take and public sector pay one arrives at a figure that is 75% to 80% of public expenditure. Where will this money be found? The nation awaits with great interest the spending review that is about to commence and the publication of the Estimates for next year. I hope the Government has a good answer considering the restrictions it has imposed upon itself.

When Deputy Cowen put a similar question to the Minister in respect of her Department's budget, she was not in position to answer. I acknowledge that Ministers would be reluctant to reply to such questions at this point in the year given that the spending review is only now commencing. She has to fight her case around the Cabinet table and, knowing her social conscience and background, I do not doubt she will fight the good fight in that regard. I wish her well but I am posing the question in the context of the restrictions that the Government has imposed on itself. I would be straying into another area if I suggested other avenues for finding the money but it will almost certainly come from a reduction in public expenditure.

The key elements of the Bill have been outlined. I shall address the issues arising that I believe will generate debate in this House. I welcome the reduction in employer PRSI for the majority of workers in tourism and service industries who are paid at the lower end of the pay scale. However, it is interesting that the Minister referred specifically to the tourism sector, while at the same time, as we are all aware, there is continuing controversy surrounding the future of JLCs. The Minister's Cabinet colleague, Deputy Bruton, is bringing forward proposals which, according to the debate I have heard so far, will have a further adverse impact on lower paid workers - the very workers whose jobs the Minister herself is attempting to protect in this initiative, and hopefully to increase jobs in the sector. On the other hand another Minister is talking about dismantling procedures and while his proposals have not yet come forward, the suggestion is that they will have an adverse effect on such workers. In that regard, the Fianna Fáil position is quite well known in that the Duffy Walsh report, on which all of the Minister's deliberations so far are based, concluded that lowering the basic JLC rates is unlikely to have a substantial effect on employment. Naturally enough we believe that this House should be consulted on the Duffy Walsh report, although it looks like the proposals will be presented to the Government as a done deal by the Minister for Jobs, Enterprise and Innovation. I only raise the matter because it appears to be a contradiction. Perhaps the Minister will have a comment to make in that regard.

I do not wish to go into all of the other details in this regard other than to make one concession. The previous Government reduced the minimum wage by €1 on the basis of intensive and consistent lobbying by the sector about which we are talking. It did it by promising the then Government that by reducing the minimum wage it would generate extra employment. That was the key issue. The Government got it wrong. Evidence indicated in the subsequent months that the promises made by the industry were not going to be realised. If the previous Government had continued it would be talking now about reversing the cut. I hold my hands up and say unequivocally that the Government got it wrong. I hope what the Minister has outlined will mean not only the protection of jobs, but the generation of additional jobs. We will have an opportunity to look at the other sections of the Bill, including the controversial ones, but they were the areas I wished to deal with primarily. My colleague, Senator Power, will deal with other aspects of the Bill.

There is a local business in my home county, which is part of the service industry. It started some years ago and has proven to be quite successful. I spoke with one of the partners a few weeks ago when this initiative was being proposed. He employs approximately six people. He had estimated that he would save approximately €60,000 per year on his costs as a result. If that is true of one particular small business, if one multiplies it across the country there is real hope that this initiative will work. In the interests of the country, of lower paid workers and those out of work we will applaud it if it works.