David Cullinane (Sinn Fein)

I support what Senator Reilly has said.

The logic of the Government's approach is that it wants to lift the domestic economy and sort out our economic problems. There are a number of strands to that and one of those is the move to reduce the deficit. My party, obviously, disagrees with the Minister and the Government's approach to reducing the deficit. We would not have taken the kind of decisions which the Minister took in his budget on reducing the deficit by going after low to middle-income families and those on welfare in terms of their secondary benefits. That being said, I think we all accept that we must reduce the deficit because we are spending far more than we are taking in. It has to be done.

The real solution, as we all should accept and agree, is that we must grow the domestic economy. One of the big problems in the past was that the economy was over dependent on construction and consumption and when the bubble burst, the public finances collapsed as a consequence. We should now be aware of the dangers of putting all our eggs in one basket. That is why, when we look at the Irish economy at present, there are certain areas which are doing well - agriculture being one, and exports. We all accept these areas are doing well. We all support that, and it is good, but we cannot solely depend on those areas because we are now seeing austerity measures being put in place across Europe. The fiscal compact treaty will copperfasten that. There are a number of countries in bailout programmes which will make it more difficult for the retail sector across Europe because we are taking money out of people's pockets, footfall is down and people simply do not have the discretionary income to spend.

There is not a Senator or public representative who does not understand the considerable burden on small to medium-sized retailers who face rising costs of fuel and rates. I have spoken to many of them over the course of the past number of years. Many of them - I am sure the Minister himself has met some - are working for less than the minimum wage. The reason they are still working, and keeping their doors open, the lights on and people in jobs, is because they are self-employed and if they close their doors, there is no safety net or benefits for them. If their partner is working, of course, they are means-tested and there is no financial support.

Then this Government came into power. It spoke about creating jobs, stimulating the domestic economy and doing all sorts. In its first year in office, in its first budget, the Minister increased VAT by 2% and put a bigger burden on the retail sector in this country. In fact, by doing so in such a regressive way, he has hampered the ability of many retailers to lift their game and get out of their dire situation.

If one goes into any small town - the Leas-Chathaoirleach comes from a small town in west Cork - or village, or even into a city, such as my city of Waterford, and walks down any of the main streets, one will see "For Sale" signs and "To Let" signs where businesses have closed because people do not have money to spend. The Government's solution was not to put more money in their pockets to ensure that they can spend but to take more money from them by introducing stealth charges. It then increased VAT by 2%.