Brian Cowen (Laois-Offaly, Fianna Fail)

It is also important and appropriate that the Government can show to this House and Irish people that it is listening to all points of view and considering all policy options.

Some have expressed the view that we can reduce the severity of the fiscal consolidation by extending the 2014 deadline. While the Government understands this view, it is simply not grounded in the reality of the political and economic situation in which we find ourselves. It also disregards the implications of the consequent rise in debt service costs for the economy.

There is a lively debate about the scale and pace of changes to public spending amid fears that austerity could create a deflationary spiral. Reducing public spending on the scale envisaged will temporarily dampen economic growth but we must recognise that even with the proposed adjustment of €15 billion, we still intend to borrow tens of billions of euro between now and 2014. We simply cannot afford to increase borrowing further. If we tried to do so, we would run a very real risk of not being able to borrow.

There are, however, many good ideas to which the Government has been carefully listening and about which it has been actively thinking. While respecting the absolute need to meet the deficit target, we are considering new initiatives to promote employment in various sectors of the economy. We are looking at how we can reduce the abnormally high savings ratio and release some of those resources into the economy. We are examining the entire asset base of the State to make sure it is being used to maximum effect to drive investment and to help our competitiveness. Moreover, the Government is acutely aware of the role of small business in providing employment and the need to make sure we support our indigenous companies by helping to reduce their costs and administrative burden. We are evaluating our capital investment plans to make sure we make the right investments for the future as well as helping employment in the short term. Consequently, all our decisions on taxation, spending and growth will be made with an open mind. There are many choices still to be made.

In bringing forward the four-year plan, the Government will set out its ambitions for the future of the country and our society. In doing this, we will be part of the broader Europe 2020 strategy for jobs and growth to ensure that our economy and society develop to meet the ambitions and aspirations of our people. We will outline an approach to budgetary policy which is not just about balancing the books in line with our commitments but about trying to transform and restructure our economy and ultimately to improve our society. In addition, the Government will set out a new vision for social partnership as a process that can mobilise commitment and energy to support economic recovery and a fair and decent society. Our social dialogue will thereby return to its roots as an important part of the process of building up the real economic and social strengths of our economy and society.

This is a moment with very few parallels in recent economic history. It is a moment when the Government will act clearly and resolutely in the national interest.

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