Timmy Dooley (Clare, Fianna Fail)

I welcome the opportunity to discuss this matter and to address the motion, which is populist in nature. It is always popular to suggest that one intends to take from the rich or big business and give to the poor. This is laudable at one level and, in a sense, it is a no-brainer. Unfortunately, however, the motion misses the point and in my view what is proposed represents Robin Hood economics. The latter will not solve the weakened fiscal position which has impacted on Ireland's economy and on other economies throughout the world.

The challenges with which the economy must deal are, for the most part, outside our control. Rising oil and food prices and difficulties regarding the euro versus the dollar and sterling are creating strains and stresses within the economy. As a result, our capacity to trade is being hampered and this is having an impact. This phenomenon is not peculiar to Ireland and it has become a global issue.

Ireland has an open economy and the housing and mortgage sectors here are experiencing difficulties as a result of the issues that have arisen in the sub-prime market in the United States. The challenges faced by the housing construction sector have created a sudden slowdown in the economy. This slowdown is set against a backdrop of a prolonged period of high growth in the sector. Perhaps we got somewhat ahead of ourselves in this regard, particularly in the context of the number of units completed in the past two years. However, I have no doubt that the position will right itself quickly. The construction sector has displayed its capacity to stop building and has thereby created an opportunity for the glut in the market to be addressed. The slowdown to which I refer has had a significant and sudden impact on employment and Exchequer returns. The headlines in today's newspapers illustrate the position, particularly for anyone who was not aware of what was happening.

The medium to long-term prospects for the residential housing sector are very good, particularly in the context of the projections for the next two years. These projections are based on the fact that our economy continues to grow. The most pessimistic economists suggest that there will be a 2% growth rate in the next number of years. When one considers these forecasts in conjunction with figures which illustrate the increase in our population, it is clear that there will be a need for more sustainable levels of residential housing development. The residential housing sector has been extremely important to the economy.

The fundamentals of the economy are strong, with projected growth rates of 2%. Employment in other sectors is holding up strongly. In my opinion, the industrial and commercial sectors are performing well. The shock to the system the economy has received — this has been exacerbated as a result of our dependence in the past couple of years on the residential housing sector — is probably being felt more acutely at present.

The challenges facing the residential housing sector have been exacerbated by difficulties in the banking sector. The initial problems relating to the banking sector emanated from the sub-prime lending market in the United States and related to the capacity of banks to package sup-prime loans and sell them on——

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