Brian Cowen (Laois-Offaly, Fianna Fail)

It is true that some of the economic scenarios referred to earlier in the year have come to pass. We have had an international credit squeeze. We have seen unemployment rise, although there are 200,000 people unemployed today in a workforce of 2.2 million. The last time we had that figure, there were only 1.25 million people working. Unemployment has risen to over 5.5% as a result of recent developments, which means there are challenges to the economy. We intend managing the economy from a position of relative strength to ensure that we get through this period without doing any permanent damage.

If we talk down the economy to a greater extent than the actual level of difficulty, that will lead to an erosion of confidence. I was disappointed to hear an Opposition spokesperson talking about the dark days of the 1980s. We borrowed £6 for every £1 we earned back in the 1980s, while more than 30,000 people emigrated. At that time, 16% of the adult population had no job. Inflation was at 21% and interest rates were over 20%, while the national debt was 125% of GNP. Personal taxes were 40% at the standard rate and 65% at the higher rate. Therefore, the suggestion that we are returning to the dark days of the 1980s on the basis of the difficulties we now face is, quite frankly, not a correct analysis.

By the same token, I am not suggesting that there are not considerable challenges facing the economy. However, if the Deputy wants to talk about an erosion of confidence, then that sort of analysis would be best left aside as it does not reflect the situation we are facing at the moment. We need to maintain our strength through this current situation. There has been a reduction of €1.16 billion in the first five months of this year, as compared to the €1.5 billion referred to by the Deputy. This is a development we shall have to address in terms of maintaining our budgetary discipline this year and planning our budgetary stance for 2009 and the year after. The budgetary stance for this year provided us with a stimulatory impact on the economy of something in the region of 1.4%. That is necessary in view of what has happened internationally, where many of the scenarios forecasted have come to pass. There is no question of suspending our management of the economy on the basis of when the Dáil rises, whenever that might be. We are talking about maintaining a responsible budgetary position, working in a disciplined fashion, setting out the situation for 2009 and the year after, which will prioritise our capital programme to get the greatest possible rate of return, putting in place the building blocks for the continued growth of the economy towards the better times ahead, and trying to consolidate the gains we have made through a disciplined approach. That, however, has not been the analysis heard from the other side of the House in this regard.

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