Deputy Gilmore should be allowed to put his question to the Taoiseach.

If Deputy Cowen could do his job as Taoiseach and provide leadership for the country in as good a way as he attacks the Opposition, we would all be better off.

Hear, hear.

The same applies to Deputy Gilmore.

People are aware that we face a number of major problems. The figures published yesterday indicate that the abyss over which we are teetering is even deeper than previously thought. People expect the Government to show leadership. In recent months, however, those opposite have been behaving like bewildered bystanders instead of displaying the courage, conviction, imagination, innovation and leadership expected from the Government.

The worst aspect of the current recession is that people increasingly believe that not only do we face serious economic problems but also that the Government is not up to the job of dealing with such problems.

Hear, hear.

The Government sent out mixed messages in recent months. We were informed that the Taoiseach would give a state of the nation address but this never happened.

Who said such an address would be given?

The Minister for Finance then introduced a budget, the figures relating to which were wrong. Last week we were informed that an announcement would be made in respect of an economic strategy but the Taoiseach has now stated that such a strategy is already in place. The only difficulty in that regard is that the rest of us do not know the nature of that strategy.

We were informed yesterday that the Government's revenue from tax will be €2 billion less than it calculated only seven weeks ago in the budget. The Minister for Finance indicated on radio this morning that there will not be a mini-budget and that taxes will not be increased. I presume, therefore, that the shortfall in the tax take will be balanced by the introduction of cuts in expenditure. In the budget, the Government set down its intention to save €2 billion and we are aware of the consequences to which this will give rise for pensioners, the unemployed, class sizes etc. Obviously, it is now contemplating making savings of a further €2 billion. The only problem is that the Minister for Finance has now indicated his intention to wait until the figures for December emerge in order that the Government will be in a better position to judge what it is going to do at the end of the year. It is a case of live horse and you will get grass.

When will the Taoiseach publish a strategy — written in plain language and easily understandable — that will outline the direction in which the economy is going and the leadership the Government intends to provide in respect of this matter? He might also indicate what are the November unemployment figures, which are due to be published in 15 minutes.

I am not seeking to attack the Opposition. I am defending myself from attacks by the Opposition, which I am entitled to do. Those opposite are entitled to attack me and I am entitled to defend myself and the position of the Government in respect of its policies. That is fair enough. Let us keep it simple.

We have a strategy in place. In order to ensure that spending would remain within the parameters set down, we introduced changes in July. This happened when the figures for June indicated that spending estimates would be off by €3 billion. The changes to which I refer will have the effect of ensuring that expenditure for this year will be brought in on line with the parameters set down. We made a decision with regard to what we would spend this year and adhered to it. However, the Opposition opposed that decision and the changes to which I refer.

The second step in our strategy was to bring the budget forward to October. The purpose behind this was to being to the attention of the public the fact that our situation was deteriorating sharply. In his Budget Statement the Minister indicated our estimates for taxes and spending for 2009 but also stated that we would continue to respond as the situation developed. That is what we will do.

The position internationally is deteriorating. Ireland is a casualty in this regard as a result of the open nature of its economy. We are responding to these changing circumstances. As already stated, our first action is to control spending for this year and next year. There will be a significant decrease in the rate of increase in expenditure next year. We have introduced cuts in respect of all Departments with the exception of the Departments of Health and Children, Education and Science and Social and Family Affairs. Despite the fact that they claim they want order brought to the public finances, those in Opposition opposed all of the economies and cutbacks we have made or introduced.

We are also determined to boost the economy. I have already explained that because we have a national development plan and are implementing it, the boost to which I refer is being taken for granted. In previous years we could pay for the capital investment programme relating to the national development plan from our surplus reserves. However, we are now in a position where we will be obliged to borrow in order to fund that programme. I have no difficulty borrowing for capital purposes. This is the correct thing to do in current circumstances in order that we can make the economy more competitive and when the upturn comes, we will be in a position to return to a period of growth as soon as possible. Strategically, this is the right thing to do.

The simplest way to remain within our budgets and avoid all the difficult decisions that must be made in respect of current spending would be to suspend the capital investment programme and then I would have no difficulty showing Deputies that the budget is well within the Stability and Growth Pact guidelines. We are not prepared to suspend the capital investment programme because it is vital that it should remain in place. Deputy Kenny suggested that we have cut it out of sight. That is not the case. It has only been cut by approximately 10%.

I stated that it is being cut by €1 billion. I did not say that it is being cut out of sight.

It was originally a programme worth €9 billion, based on 4% growth. We will now have a programme worth €8.2 billion based on a contraction in the economy. We could not show a greater commitment to the capital investment programme in current circumstances. The amount to be spent on it would only be increased by €800 million if the economy was growing by a far greater rate. This is a strong commitment by the Government.

Before we made our decisions, there were calls that we should prioritise our spending. The National Development Plan 2006-2013, which is predicated on annual growth in the economy of 4%, will not be implemented within that timeframe. However, we should continue with its implementation, even if over a longer timeframe, because it is the right thing to do for this country.

Hear, hear.

We need to build up the capacity of the country and to do so as quickly as we can and as public finances allow.

Also in regard to the strategy, we have brought forward incentives in the Finance Bill. The Minister for Finance outlined these incentives on Second Stage and in amendments tabled for Committee Stage. These are significant incentives which will allow multinationals to increase investment in research and development and assist those starting a business.

Young people are not interested in starting a business.

The Finance Bill will help to secure and advance our enterprise economy while maintaining and enhancing pro-employment business tax reliefs which will support jobs.

I recognise that in a recession we will not be casualty free. There are people who are losing their jobs and the prospect of more people losing their jobs is great. We must, to the greatest extent we can, bring about a competitive position for our economy in the context of the resources available to us. This means we must continue with a public investment programme of the size of which I have spoken, namely, up to 5.5% of GNP in a recession — far in excess of what was contemplated by previous Administrations during boom times — as a percentage of what we are producing. The difficulty that will arise in this regard — we must be clear about this — is that we will need to make further economies on the current side. There is no way around that.

The Government already did that.

More hardship.

We have to make that decision strategically, and we are doing it.

On the banking situation, which is fundamental as a strategy in terms of bringing about the prospect of economic recovery, we are continuing our engagement with the banks. We swiftly introduced a banking guarantee which meant we did not have the calamitous situation of a collapse in our banking system. We continue to strive to ensure we have an appropriate banking system and we are determined, if there is State investment in the sector, that the taxpayer will get a good deal and liquidity will flow to business. We are asking the private sector to make its contribution in this respect also.

It was suggested some weeks ago that we should go on behalf of the taxpayer and borrow in full for such a recapitalisation, not as a last resort but as a first option. We must take into account the demands on current and future taxpayers in terms of borrowing. It is only fair to say, as I have indicated already, that the Government and I are in the process of bringing forward further ideas, strategies, options and initiatives that will accentuate the positive in respect of our economy.

What are they?

It has been suggested that everything that has happened during the past ten years was illusionary.

That has been proven.

That was a fine speech.

It is called leadership.

It is waffle.

It is, however, riddled with inconsistencies and contradictions. The Taoiseach says the Government has a strategy. This strategy has never been outlined. We are asked to believe there is a strategy.

What we can deduce from the Taoiseach's rhetoric this morning is that the Government is going to rely on the capital programme, and that is great. However, the problem is that the Taoiseach in that same reply is telling us that the national development plan will not be achieved within the period set down.

The Taoiseach has also told us the Government has contracted out its responsibilities to an bord slash which he has asked to reduce and cut back on the capital programme.

That is correct. It is in its terms of reference.

The Government is not up to the job.

Is the Taoiseach saying that an bord slash is not being given a responsibility or may not come back with a recommendation to cut capital programmes? There is no point in the Taoiseach coming into the House and saying the Government's strategy is that it is going to continue with the capital programme while at the same time a particular group is being told to come back with recommendations to assist in reducing the capital programme.

The Minister for Finance did that.

No.

Yes, the Minister did.

The Taoiseach stated that economies must be achieved.

They could be spread over 20 years.

We can all add; this is not complicated. There is less tax revenue coming in to the State. We heard the figures in this regard yesterday. The Minister for Finance says there will be no new budget and no additional taxes. There will, therefore, be what the Taoiseach calls "economies" or "adjustments", which basically amount to cuts in expenditure. I want to know how this will be achieved. Will the Taoiseach and Minister for Finance come before the House at some stage and tell us what is the plan in this regard or will they allow the next couple of weeks to run ahead and then, during the Christmas and New Year period, allow individual Ministers and the Minister for Finance to do this by way of departmental decision without any presentation in this House of what is being done?

It is all very well for the Taoiseach to say the Government is engaging in a strategy. We do not know what that strategy is as it has never been outlined by Government. In so far as we get glimpses of it occasionally from speeches the Taoiseach makes in the House and radio interviews by the Minister for Finance, all we get are contradictions. The Taoiseach cannot one minute say we have a capital programme and then say we must cut back on it.

No bigger contradictions than across the House.

With respect to Deputy Gilmore, there are no contradictions. An bord snip referred to by Deputy Gilmore is an advisory body. We will make the decisions.

Where are the Ministers?

The Taoiseach, without interruption, please.

Do Members want to have a serious discussion or not? On the question relating to public service numbers and expenditure programmes, the Minister for Finance has appointed a public official in his office and four others to go through every item of expenditure relating to public spending on the current side. Members should read what the man has to say. The group's remit is to examine items of expenditure on the current side. It will come back with ideas and initiatives in that respect and the Government will make the decisions.

That is the strategy.

We do not contract out Government responsibility——

The Government does so in respect of the Health Service Executive.

And the National Roads Authority when it suits.

——as we do in social partnership. Whenever we hear good ideas around the table, we will take them. We will even take them from the Opposition if we can get them. The Government's plan is simple. I have outlined it. Through our budgetary strategy we need to provide stability in the public finance position. We have not yet achieved this because we have a deteriorating economic situation.

That the Government created.

We have seen, through the balanced approach taken, the virulent opposition from all sides in respect of every aspect of what the Government must do to bring about that stability, which is a prerequisite for any prospect of recovery. Without it, recovery will be prolonged. If we want quick recovery, we must accept that budgetary stability is an absolute prerequisite. On whether it is comprehensive, "No" is the answer. We have never suggested that budgetary stability on its own is a comprehensive response. As I indicated, we are maintaining, at a time of recession, our capital investment programme to the tune of €8.2 billion in respect of direct Exchequer spend. An additional PPP provision of €800 million will bring us to a spend of €9 billion next year. That is an important contribution by the Government in terms of maintaining economic activity in productive purposes at a time when private sector activity has receded considerably. They are the facts.

On what else the Government can do, we are working to ensure we provide a credit initiative in the banking system.

That is a drastic strategy.

We are trying to ensure that recapitalisation, if it is to take place, is done in a balanced way which does not require Joe taxpayer to put it up as the first request, which was the view of the Opposition.

Hear, hear.

The Government never even heard of Allied Irish Bank.

The Labour Party opposed the bank guarantee scheme. One can only imagine the precarious banking system of which we would be speaking if we did not have that scheme. The plan for economic renewal will be on the basis of social partnership. We will work with the social partners, those who employ and represent workers in this country and with the voluntary pillar and will devise our own approach in that regard over a credible timeframe. That is what I believe in. The Fine Gael Party does not believe in it and the Labour Party does believe in it. I do know if the former Democratic Left Party believed in it, but the Labour Party believes in it.

That is rubbish. The Taoiseach should withdraw that remark.

I will not withdraw it because that is the approach of Fine Gael.

I must contend that the so-called arch strategists of the Opposition, who told me in August——

The Taoiseach's own crowd do not believe it. He should look behind him.

——-I am expected to accept a strategy on pay policy——

Please allow the Taoiseach to conclude.

I am expected to accept a strategy on pay policy which even the Labour Party said last week was confusing. Even the Labour Party, following its big day in Wexford, said there was confusion.

Shout everybody down, Taoiseach.

It is Members opposite who are shouting.

The Taoiseach should take a look at those behind him.

Members opposite cannot take it. They can give it but they cannot take it.

The bottom line is, I am not taking it from them.

Shout them all down.

The bottom line is — I can produce the statements — that Deputy Bruton in August criticised the fact that we did not conclude the negotiations, in September congratulated me on bringing them to a conclusion and now says I should not have an agreement in place. Members opposite are now suggesting we should cut pay by 10%.

The time allowed for Leaders' Questions has concluded.