Lucinda Creighton (Dublin South East, Fine Gael)

The heady days of Fianna Fáil overspending and economic mismanagement simply must end, particularly because we are facing a significant budget deficit for the first time in many years. Ireland has become uncompetitive and is very much creaking under the weight of a public sector that is spiralling out of control. I am very concerned that the Government is burying its head in the sand regarding the decrease in economic competitiveness.

Fine Gael supports competitiveness and low tax rates and, in particular, it supports incentivisation. We recognise there is now a need to set out a framework to reduce obstacles to job creation, particularly for small and medium enterprises. The Government has absolutely and abjectly failed to support indigenous industry, particularly small and medium enterprises. There is no longer a spirit of entrepreneurship in the country and business people find themselves absolutely crippled by the ever-growing costs associated with running a company or business. Small and medium enterprises have been excluded from social partnership and this is an example of the Government's attitude thereto and its failure to acknowledge the role they play in contributing to the economy.

Consider the public sector and the benchmarking process. Awarding pay increases without achieving further efficiencies and increased productivity is an absolute nonsense. Benchmarking has simply become a form of Government robbery and it is very clear that the Taoiseach in particular has decided to avoid discomfort in negotiations with trade unions by effectively raiding the budget coffers instead. This is very serious because buying time with social partners is not a solution to the problems in the public sector.

Let me draw the Minister's attention to the goals of benchmarking. Extra payments were to be triggered where there was hard evidence of recruitment difficulties and pay discrepancies in comparison with the private sector. Payments were to be conditional on the delivery of a fresh agenda of reform to deliver improved public services. Neither of these criteria was met and the reality is very different from what was envisaged. As Deputy Varadkar stated, €1.3 billion has been paid out through benchmarking and we have not seen any reforms or efficiencies of note in the public sector. An article in the Irish Examiner on 30 November refers to ISME, which I believe is a very worthy organisation although it appears to be treated with contempt by the Government. According to the article, ISME describes the benchmarking process as "divisive, expensive and a fundamental insult to those who operate in the private sector and ultimately pay for the pay hikes". The figure ISME cites in highlighting the difference between wages in the public and private sectors is staggering. It states there is a 69% difference when one takes pension entitlements and other factors into account. There is a marked difference in the pressures and efficiencies evident in both sectors and it is time that the Government addressed this.

The ESRI and the Department of Finance stated in recent years that the only two sectors in which there was a serious amount of job creation were the construction and public sectors. The wind has been taken out of the sails of the former. House sales have slowed down and building is not taking place, therefore the only growing sector is the public sector. This is not sustainable and there needs to be marked reform in this area.

Consider Ireland's commitment under the Lisbon Agenda, to which it signed up in 2000 with the other EU member states with a view to improving economic efficiencies and competitiveness. We committed to the investment of 3% of our GDP in research and development but this has not happened. The Government has made no effort to diversify and plan for the future of the economy. We are now facing difficult times and choppy waters. What is the Minister's plan to deal with the crisis we face?

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