Joe McHugh (Donegal North East, Fine Gael)
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Question 221: To ask the Minister for Finance his views on the Keynesian 1936 precept that expectation of change affects consumer behaviour more than the change itself; to acknowledge in this context the affect of the 2009 McCarthy report on consumer spending in 2009; to acknowledge in this same context the affect on current consumer behaviour of the Government's declared intention, Minister for Finance, 30 September 2010, to make a minimum €3 billion savings in budget 2011; if he will allay consumer fears and allow consumer spending to resume by immediately outlining the specific cuts that will be introduced or if he will allow consumer spending to suffer until the introduction of budget 2011; and if he will make a statement on the matter. [35901/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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My view is that creating certainty is of utmost importance; if consumers are clear as to their future income prospects then the need for precautionary saving will be reduced. As it stands there is no doubt that the savings rate is relatively high, thus displaying an element of caution by some in society.

As has been previously stated, this Government remains fully committed to bringing the deficit below 3% of GDP by end-2014, and in so doing sustainability will be achieved. As part of this process a four-year plan is being prepared and will be published in the first half of November. This plan will set out the revised annual headline targets and the necessary annual adjustment, and in this regard help create greater levels of certainty for all.

The Government has reacted in a timely fashion to the deterioration in the public finances and the worsening global economic environment. Since July 2008, five sets of consolidation measures have been implemented. This approach is designed to ensure that the public finances remain on a sustainable path and, as a result, consumers have greater certainty regarding future income prospects. This timely and decisive approach has contributed to improving consumer confidence. The Report of the Special Group on Public Service Numbers and Expenditure Programmes remains a key point of reference for the Government in considering its overall approach to consolidation.