The Governor of the Central Bank made a very significant statement today at the ESRI conference. He said it is necessary to rebalance public spending and taxation by restoring the shares of taxation and spending in GNP to the levels which prevailed in the years running up to the turn of the millennium when the economy was growing along a sustainable path. The ESRI quarterly economic commentary gave very clear guidance with regard to the balance between taxation and spending savings in the upcoming budget. It stated: "There are strong arguments for postponing any significant further tax increases until the worst of the recession is over". Despite this, it clearly points out the growing gap between the Government's budgetary strategy and the advice given by Deputy Richard Bruton over the years in terms of getting the balance right between taxation increases and spending savings.

The most worrying event over the weekend was the approach taken by the Minister for Transport, Deputy Dempsey and the Minister for Communications, Energy and Natural Resources, Deputy Ryan who took on the burdens of the nation and who told us they had agreed a survival programme for Government as distinct from a survival programme for the country. The shambles of the deal that was done last weekend is shown clearly in the fact that we still do not know how much it is going to cost or, if listening to the Minister for Education and Science, Deputy Batt O'Keeffe, whether there is a deal done at all. He is clearly of the view that in respect of third level fees that what was agreed at the weekend is only a temporary little arrangement.

What is the cost of the deal agreed on Saturday between the Green Party and the Government? What taxes will be increased or what services will be cut in order to meet it? I am sure in the 70 hours of discussion chaired by the Minister, Deputy Dempsey, these matters were discussed in some detail. What services will be cut to pay for it?

Anyone with a cursory understanding of the current financial situation in the country will understand we have to operate within the budgetary and financial parameters set out by the Minister for Finance in respect of the budgets he has outlined to date and this will continue to be the case. The Deputy refers to what the Governor of the Central Bank had to say today. We must listen to the advice of the governor and take it into account. He made the point he believes a credible convergence path is being embarked upon by Government to deal with the question of closing, over time, the deficit borrowing requirement which has opened up. This has been reconfirmed in the newly agreed programme for Government.

In answer to the Deputy's questions, the priorities and initiatives that will be proceeded with and pursued by the Government, following the recent discussions we have had with our partners in Government, will operate under the same financial parameters which the Minister for Finance has already set out.

The Minister has changed his tune since April of this year when he set out his budgetary parameters. For three days before the weekend we witnessed all the intrigue, hype and tension of the negotiations with allegations and rumours about this, that and the other. Eventually, Ministers Dempsey and Ryan approached the podium to explain to a nation pent up with excitement or terror what this agreement was all about. It is a pity we do not have a cost on this document and I will explain why. On 30 September this year, the Minister, Deputy Gormley, who went on the ferry to Holyhead, stated at a press conference, "You cannot have a document which is not costed. It has to be costed and it will be". The Taoiseach has signed off on a deal, he has them in the lair now for the period ahead.

From our perspective we have carried out a preliminary calculation of the tax implications of this new deal. Based on those estimates, the ordinary family will have to foot an increased tax hike of €2.5 billion. Where will the money come from to pay for the announcements in this new deal? Fine Gael has repeatedly pointed out that no country has ever taxed its way back to prosperity. All the pronouncements that the Minister for Finance has been making since April now seem to be thrown out the window simply to keep the Government on board. What is the calculation of the cost here? Is it €2.5 billion on the tax side? Will the Taoiseach outline who will pay for the 500 extra teachers over three years referred to? Are they to be appointed to the detriment of the appointment of nurses, gardaí and other front line public services that our people so desperately need?

Deputy Kenny is being disingenuous as usual. The fact is the tax initiatives contained in the programme are about rebalancing our tax system to keep taxes on labour as low as possible. They require a good deal of preparatory work and will be implemented over the lifetime of the Government. Some initiatives will be undertaken in that timeline too. It is important to point out the removal of the PRSI ceiling as proposed in the programme does not constitute a new tax. It is proposed to change the existing tax which would be redistributive in effect. The revised programme states the change would be introduced in parallel with the reduction of the temporary income levy. Basically, we are setting out the objectives and direction of tax policy. I would take with a pinch of salt any preliminary costings of the Fine Gael Party.