Leo Varadkar (Dublin West, Fine Gael)

I appreciate the Minister is a bit upset and highly strung - he is obviously very concerned about facing me over the next few weeks - but perhaps he would allow me to finish my contribution uninterrupted.

As I was saying, for a combination of reasons, some under our control and some not, I fear we may enter a sustained period of anaemic, jobless growth. We could have statistical growth but no job creation and no improvement in income, resulting in a period of stagnation - effectively a lost decade. In order to counter that we must have a serious jobs strategy.

As other speakers have acknowledged, we have a three-part economic crisis. We have a budget crisis, which we all know about, a banking crisis, and an economic crisis, in which our concerns are jobs and competitiveness. What we have had from the Government is a response to the fiscal crisis, although it came bit late, and the fiscal crisis was largely of the Government's creation, as the structural deficit was created by Fianna Fáil. At least in the last year or so some measures have been taken to deal with this, by reducing spending, which we largely supported, and by increasing taxation. So far, the major part of this has been tax increases rather than spending cuts. In the coming years there should be more of a focus on reducing spending, provided it is done fairly and the vulnerable are protected, and less on increasing taxation, because increasing taxes on income and on business could actually end the recovery and put us back into recession.

When it comes to the banking crisis, the Government has made a real mess. Almost €30 billion has been expended or promised already in its efforts to save the banking system, but we have little to show for it. Businesses cannot get credit - nor can consumers in many cases - and we do not have a functioning banking system. That is the worst thing about it. It is not so much what the Government has done as the fact that it has not worked.

To a certain extent we are stuck with NAMA, but there is still an opportunity to make sure it does not cost the taxpayer as much as it seems it will. One thing we can do is to dispense with the concept of long-term economic value.

Most of the loans have not yet been transferred to NAMA and only €16 billion of the €81 billion has been transferred. It is still not too late to abandon the concept of long-term economic value and to buy the loans from the banks for what they are worth. We could also increase the risk sharing element of NAMA. I recall the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, in one of his many incarnations, suggesting that up to 50% of the NAMA loans should be based on risk sharing and that they should be subordinated bonds. Only 5% of them are. Professor Patrick Honohan has already suggested that it would be reasonable for 10% of them to be risk weighted. There is still an opportunity to do that.

To move on to the more positive points, the key thing this country needs to do is to become competitive again. The Government has produced many strategies and documents in this regard, but there is still no real plan to increase competitiveness. There are three necessary elements to becoming competitive again. First, we need to reduce costs. Labour costs have reduced, but other costs have not. We also need to invest in infrastructure in a way we have not done to date. While there has been some investment, most of it has been cut back. Third, we need to improve our public service. In terms of investment in infrastructure, our main focus is our NewERA model, which essentially tries to retool the semi-State companies and to transform those which are currently a drag on growth and turn them into generators of growth and jobs. That can be done by increasing the capital spend of those semi-State companies through investing pension fund money in Ireland through the semi-State companies and other bodies, instead of in overseas investments. It can be done by privatising some State assets and by getting investment from pension funds and solvent wealth funds. That is the kind of policy measure we have come across. Having listened to Members on the Government side, I note that on receipt of even the tiniest bit of positive economic news, they are back to the hubris, pride and nonsense about not talking down the economy.

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