The Green Party Ministers are again absent this morning. I raised the issue of economic performance with the Taoiseach a month ago. On that occasion, the response was the situation was being monitored and that there would be no changing course. Yesterday's figures clearly demonstrate that there is a problem. This is disturbing news that needs to be looked at seriously by the Government.

Figures show that taxes are down by 8% on the same period in 2007 and that spending is up by 14% over the same period. On closer examination, which is even more serious and of greater concern, one can see that this is clearly no longer confined to the construction sector. VAT receipts are down, as are capital gains tax and corporation tax profits. This has now leaked out into the broader economy.

If this is not corrected or confidence in the economy is not restored by mid-year, there will be a knee-jerk reaction from Government. Does the Taoiseach recognise that the economy is not on the trajectory as proposed and outlined by the Minister for Finance two months ago? What is now happening amounts to the worst deterioration of the economy in the history of the State.

The €5 billion deficit——

Deputy Kenny, without interruption.

This is a serious matter.

Deputy Kenny should check with his friends in IBEC.

Deputy Kenny, without interruption.

If Deputy Brady will be defending the €300 million cutbacks proposed in the HSE later this year, we will see how confident the Government will be. I am asking the Taoiseach, as head of Government, whether he recognises that there is a problem in respect of the trajectory outlined for the economy by the Minister for Finance two months ago. Does he recognise that the economic ship is off course and that this is a matter of concern to all sectors of Irish society? In recognising that, what is the conclusion of the monitoring of this situation by the Cabinet? What action will the Government take to restore confidence to our economy and what corrective direction will the Taoiseach take?

His eye is off the ball.

The end of February Exchequer returns were published yesterday, as Deputy Kenny noted, and the overall position is that the Exchequer deficit is €125 million at the end of February. The forecast for the Exchequer deficit for the year is €4.866 billion and a general Government deficit of 0.9% of GDP is forecast. The general debt level is projected to be around 26%. Trying to place it in anything other than its historically good context is wrong.

Taxes to the end of February were €516 million, which is 6.4% below expectations. Income tax, excise duties, stamp duty, capital acquisitions tax and customs are very close to target. Capital gains tax, VAT and corporation tax are significantly below profile. I am always slow to make any great judgment on two months' figures. February is an important month for capital gains tax. Looking at those figures, it would seem that capital gains tax figure is substantially down. There is no argument about that. That is based on the last quarter of 2007 so this means there was not a great deal of land purchase or closing of deals in construction in that period. That obviously pulls down that tax.

On the other side of it, house building is down from a historic high of 88,000 in 2006. The figure this year is projected to be 55,000. The rule of thumb is that every 10,000 houses not built pulls 1% off the growth or about 0.5% off the tax base. Most of this in the analysis of two months, which I would be loath to read as a year, is based on capital gains tax on one side, with construction and developers' deals not going through in the last quarter, which substantially pulls down the revenue base, and on the other side, the fact that we are down so many thousand houses on the construction side. It again shows, as I have said here for years, the importance of the construction industry's knock-on effect on the economy. The fact that developers, builders and others have a significant knock-on effect on the economy has always been a positive factor even though I have always had to argue in this House against there being something negative about that position.

Deputy Kenny does not need me to go through it at great length. We are now the sixth strongest country in the world in services exports, which are extremely high. If one looks at the position in manufacturing, exports, financial services and the services industry, which is extraordinarily strong, and what has gone on for the past few months, one can see that developments in the stock market, the credit crunch, the US economy and sterling-dollar movements have been substantially negative. However, we are still not that far off our targets. As I said at budget time, it is a year where there will be some increase in unemployment mainly in the construction sector. We will still create a significant number of jobs if, as is projected, we build 55,000 units and this is broadly in line with the consensus among economic commentators. As the year progresses and as we get the wash-out of houses that have already been constructed in 2007, we will see this improve as the year goes on. It is a year for tight and close management of the economy and for watching expenditure. The Government is wholly conscious of this and will continue to monitor the situation very closely, in particular, looking closely at the first quarter returns in a month's time.

Will the rent for the tent be down?

If this is a year for tight and close monitoring of the economy why, just last month, did the Taoiseach say there would be no change of course? If we are actually spending 50% more than the economy is generating, this is a situation that cannot continue. The unemployment figure is rising and redundancies are up by 20% in the first two months of this year. The cost of living is increasing for everybody and this is obvious to anyone buying food and paying for energy. People are being squeezed to an unprecedented degree. This is no longer just a construction sector problem. The Government will not be able to trade its way out of this because we have lost export share for each of the past five years.

The Taoiseach still has not told the House that he recognises the problem. Unfortunately it is the case now that when members of the Opposition speak about a matter of national importance or the national economy, they will be accused by some people sitting behind the Taoiseach of being guilty of either personal or national sabotage.

In the context of the economy over which the Taoiseach and his first mate preside with sloppy and wasteful management of public taxes, does he recognise we have a problem? Does he recognise that if this continues, by mid-year the usual response of his Government will be a knee-jerk reaction? It is reported that future further cutbacks of €300 million in the HSE will apply across every sector with the bureaucracy being the one area protected while front line staff will again be hit, be they home helps, nurses or specialist teachers. This is what happens in mid-year when the Taoiseach recognises we are on a wrong course and that corrective action should be taken and confidence restored. This is the Taoiseach's duty and also that of his first mate.

I refer to this leaking of confidence from the economy. Given that the European Commission just last month published a report which spoke clearly of the deterioration of the public finances in Ireland and given the figures that emerged yesterday, how many more reputable bodies will have to produce reports or make economic commentaries before this Government actually recognises that there is a problem, that we are not on the course plotted by the Taoiseach and the Minister for Finance two months ago and that this is now a situation where confidence is leaking away and where corrective action should be taken immediately? I ask the Taoiseach to say what this corrective action will be and how he intends to restore confidence so that this situation can be corrected.

I wish to confirm that the budget day forecasts, both economic and fiscal, have not been changed. The Tánaiste at budget time noted the internal and external risks to economic forecasts. Some of those identified risks are now emerging. I do not think the House can ignore the fact of what is happening internationally. We must at least look at what has happened in the stock markets since the beginning of the year and what is continuing to happen in the sub-prime rate, in the credit crunch and what has happened in the US economy and the movements in sterling. Nevertheless, our economy has remained extremely strong in the services sector, the agricultural sector, manufacturing exports and financial services. We have been closely examining our figures every week, particularly the full monthly figures. These show where most of the slowdown is occurring. I do not need to go through the figures. If the figures for house construction show 80,000, 78,000, 82,000 and 88,000 houses were being built for a few consecutive years and then there is a reduction to 50,000 houses and every 10,000 of those are providing a growth rate of 1% and probably somewhere in the order of taxes to the amount of €0.5 billion, one can clearly see the figure. While there has been unemployment in the construction sector in 2007, it should be noted that the rate of redundancies was very small at only 15%, 4,000 redundancies, out of the total for the year.

As I said previously, the Government's response as on budget day will continue to be as in other countries — the input of a large fiscal impetus into the economy under the national development plan. Rather than increasing the capital programme for this year we have given an injection of an enormous amount of resources into the national development plan which will drive both construction and services and development in infrastructural projects throughout the State. If this were not in place, if the Government had not opted to take that position, both the employment and taxes positions would be far worse this year.

Without going through all the economic forecasts, when one studies the economic forecasts from the various stockbroker houses and others, they all indicate that all of the underlying measures are strong and that all of the policies which we are pursuing should not be altered and changed. The Government is not going to alter them. This year was always going to be a difficult year. It will require close management. I am not in any way denying that the revenues in the areas I have specified are down and we must manage this with care during the year 2008.

Before I call on Deputy Gilmore I do not need to remind Deputy Kenny that he cannot refer to the Tánaiste as the first mate. Iarraim ar ceannaire Pháirtí an Lucht Oibre, an Teachta Gilmore.

The first mate then.

The wrong horse, Best Mate.

The Labour Party horse will be called Best Mate.

He can certainly have a second mate anyway.

I apologise for referring in derogatory terms to the Tánaiste.

I appreciate that.

He certainly cannot be called the first mate after his less than full support last week.

A prime mate.