Bernard Durkan (Kildare North, Fine Gael) | Oireachtas source

I am running between posts. I have been looking in on these deliberations from time to time even though I have not been physically present. I want to issue my usual warning to economists and any budding economist about what happened a few years ago. Everything in the garden was supposed to be rosy and all of sudden there was a most unmerciful economic crash. Everything went through the floor. All of the wise guys from all over Europe and the rest of the world were advising about what might be done to salvage it. Everything they advised was wrong. Fortunately, nobody followed their advice. Unfortunately, before that, nobody mentioned the way things were going wrong until it had gone wrong. It was very easy to see it then.

I am concerned, and I have expressed this view previously, with regard to what looks simple in terms of general taxation, property taxes, capital gains taxes and wealth taxes, which I have also mentioned before. We need to tread very carefully because we can scare people. I know there are those who say we should not worry about scaring people because we do not need people like that. We are an open economy. Things move very fast. We can see from bigger economies than ours what can happen in a very short space of time. My strong advice based on what I have seen during my time in the House, and I am sure others have seen it too, is on the way things move when they start to slide. It is the slide that is the worrying part. We cannot avert it once it starts. It goes until it hits the bottom. Capital gains tax and capital acquisitions tax look very attractive. People complain they paid income tax on the assets beforehand. Distributing the assets among the rest of the community in theory looks well but in practice it could create problems.

I do not make the following point out of maliciousness. When things start to go wrong, nobody wants to accept responsibility. Nobody comes forward and says they advised it. In 1977, interesting things were happening in the country. Several economic theories were advanced. All of a sudden, within two and a half years, everything was gone. The International Monetary Fund was sniffing around, and there was no need for it. There were economic policies that did not stand up. What it all comes down to in the final analysis is that in the current climate, we need to have some reserve somewhere.

We need to proceed very cautiously. We wish to ensure we do not scare those who are in the business of investing or providing jobs or whatever the case may be. We need to guard it very carefully. We should never forget the fact that, right across the globe, we have competitors. Our competitors are watching what we are at all the time. They do not wait. They keep nudging along the same issues all the time until they get to a point where they can close the gap. That is why we need to be alert and ready and ensure that we have not done any damage by act, thought or speech. We have to protect ourselves because we have an open economy. When it started to slide for our next-door neighbours, who have a much bigger economy than ours, it was gone overnight, within 24 hours. Therein lies my final lesson.