Enda Kenny (Mayo, Fine Gael)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

notes that the Government has contributed to the current economic downturn through:

the introduction of reckless inflationary budgets, driven by electoral needs, that killed competitiveness;

implementing huge increases in day to day spending financed by unsustainable property tax revenues; and

stalling public sector reform and abandoning any credible value for money discipline;

condemns the Government for producing a package of measures which:

fails to introduce serious reform in the way the public finances are managed;

ignores the need for a credible medium-term strategy to address our declining competitiveness and provide training and upskilling support for the increasing numbers of unemployed; and

misses the opportunity to embark on a process of economic recovery through reform.

This debate is essentially about the Government's economic competence and credibility. It is about the stark realism of Ireland having been allowed to drift into a situation where we are clearly uncompetitive against international competition. That is now compounded by a real sense of loss of public confidence across the country. Hundreds of thousands of families all over Ireland are now worried about their livelihoods and jobs, their ability to service rising mortgages, the value of their homes and pensions, the cost of living and funding for key local services. They no longer believe the false statements of assurance from a leader who is discredited because of his inability to manage our economy when he was Minister for Finance. The Government is clearly discredited because of its blatant failure to manage the affairs of the nation competently. People no longer believe the Taoiseach because every action and utterance on the economy by him has further diminished his credibility as a leader and the credibility of the Government to steer Ireland away from the deep recession now staring us in the face.

People no longer have any faith in the Taoiseach because when he was Minister for Finance he used every opportunity to tell Irish families and investors, in 2005 and 2006, that house prices were based on "strong economic fundamentals". We now know that he was being told exactly the opposite by domestic and international experts. That is too late, though, for the tens of thousands of young families who have seen their entire savings wiped out by the property crash. Does the Taoiseach realise the extent of the despair felt by young people faced with negative equity in up to 100,000 cases?

People no longer have faith in the Taoiseach because, as Minister for Finance, in the space of just two years, he turned a €2 billion surplus into an €8 billion deficit, the biggest deterioration in the public finances in the history of the State. He was the Minister for Finance who ignored all the warnings about the unsustainability of tax revenues from the property boom, ramping up day-to-day spending in the run-up to the last general election at almost twice the rate of growth in the economy and leaving the public finances hopelessly unprepared for the inevitable downturn. Even when all the omens were pointing to a dangerous slowdown in the economy last autumn, he further ramped up day-to-day spending by over 9% in the last budget, which effectively destroyed the economy's ability to respond to tougher economic times.

People no longer have confidence in the Taoiseach because as Minister for Finance he spent four years expanding the number of Government agencies and quangos, fragmenting our public services, handing them over to consultants, damaging democratic accountability and massively wasting taxpayers' resources. He now realises the folly of these actions and has referred in his speech to amalgamations, reductions and quangos.

People no longer believe the Taoiseach because in April 2007, when he was Minister for Finance, he said that stamp duty reforms were unnecessary and reckless. However, he was then forced unwillingly to eat his words, not once but twice. People no longer trust him because when he was Minister for Finance he said, as recently as last April, that he was not concerned about the downturn in the construction industry. We know now that approximately 25,000 construction workers have already lost their livelihoods. In addition, FÁS told the Government that up to half of those working in the house-building industry — 75,000 workers — might well lose their jobs because of the property crash.

People no longer have faith in the Taoiseach because he was the Minister for Finance who tried to appropriate all the credit when the economy was growing at 5% on the back of cheap credit and a debt-driven housing boom. However, he now disingenuously claims that the Irish economy is simply the victim of international events outside our control, when we know the sharp reversal the economy is experiencing is unique in its suddenness and brutality.

Since last year we have witnessed the biggest fall in growth of any advanced economy, with growth falling from 5.3% last year to the latest ESRI projection of a decline to 0.4% this year. Even the USA, the source of the financial credit crunch, is only seeing growth drop by1%. We are witnessing the biggest increase in unemployment of any advanced economy, with unemployment expected to exceed 6% by the end of the year. Meanwhile, the OECD is predicting that unemployment will fall in 25 of the 27 EU countries. Our projections seem to point to 250,000 being in the dole queues by year end.

We are witnessing the biggest deterioration in the public finances of any advanced economy, with Ireland now facing the ignominious prospect of being the only country this year to breach the 3% borrowing limit set by the EU's growth and stability pact. If the rest of the world economy is catching a cold, we are surely suffering from pneumonia. People no longer trust the Taoiseach when he says that we are witnessing a temporary adjustment to the housing sector and the public finances, and that the fundamentals of the Irish economy are still strong, when they know that the Central Bank is telling us that our cost competitiveness has declined by 35% since 2001. The Department of the Taoiseach is telling us that our export market share has been in sharp decline since 2003. I am not sure whether the Taoiseach and his Ministers meet business people, including exporters, these days, but these are tough times for Irish business. Enterprises are becoming uncompetitive because it is too costly to do business in this country for a variety of reasons. The CSO is telling us that we are the most expensive country in Europe to live in and Forfás says we are the most oil-dependent country in Europe. The National Competitiveness Council states that we are bottom of the international rankings for transport, energy and telecoms infrastructure. That is blatantly obvious when one travels throughout the provinces and speaks to people who are trying to do business in the face of international competition from countries whose infrastructural facilities are so much greater.

Business investment is collapsing and has dried up. Yesterday, one manager in charge of six banks said there had not been a single query for a mortgage in five weeks. Meanwhile, other mortgages that were approved under tightened conditions have not been taken up. Consumer confidence is at a record low. I predict that by this time next year several hundred retail businesses will have gone to the wall. They cannot sustain a situation involving such a loss of consumer confidence across every sector of society.

People no longer have faith in the Government because, to this day, not a single Minister will accept responsibility for the current position. There has been no acknowledgement of the huge mistakes that were made. This is not just about an adjustment to the housing market and the public finances; it is a crisis of confidence in the credibility of the Taoiseach, who is central to having brought about this recession, and in the Government's record of mismanagement of the nation's affairs.

The Taoiseach has squandered the fruits of the Celtic tiger. We are in this position because of a long-standing Government culture of cynical, soft-option politics and a refusal to face hard decisions and implement real reforms. Neither the Taoiseach nor those around him has done anything to change that culture during their long ministerial careers. We have seen a failure, without accountability, to deliver all the promised transformation programmes in health, e-Government, climate change, the spatial strategy and Dublin transport. No target or objective has been achieved. Many have been abandoned and many have become noble aspirations. There has been a catalogue of waste and mismanagement without any accountability, including benchmarking without reforms. It is now five years since we pointed out in Killarney that if the Government was going to pay out €1 billion per annum under benchmarking, then the very least it could do was to determine and agree the increased efficiencies that were going to come throughout the public service as a consequence. The Government missed a glorious opportunity for real reform of the public service at the start of the benchmarking process.

The Government also created 250 new quangos and a completely fragmented public service. How many consultants' reports, paid for by the taxpayer, are lying on the shelves of Departments gathering dust? There were 120 such reports in the Department of Health and Children alone. The HSE is a bureaucratic nightmare. The Minister for Health and Children said when this was set up that it was a once in a generation move to bring about efficiency, professionalism and a world class service for patients. Now we are seeing a return to regional devolution of responsibility and some form of accountability.

The wasteful spending by FÁS was uncovered recently in a document obtained under the Freedom of Information Act by Deputy Varadkar. The PPARS system wasted €200 million, while the e-voting system wasted €60 million. There are overruns in so many of the major infrastructure projects throughout the country, and this is the hallmark of failure for the Government. It is fine to have the money during the good times and to set out projects, but there has been no ability to manage and deliver them in the way the public would expect.

This is the most wasteful Government of the past 50 years — we have never had so much economic strength but never seen such a waste of obscene amounts of public money. There has been an unwillingness to challenge antiquated practices that have held back the public sector as the driver of economic and social transformation that it so needs to be. I agreed with the Taoiseach's comment on the public service. Its officials have always been among the brightest and the best in Irish life, but they have been bypassed by the Government for one consultancy report after another. I guarantee that there will now be a break in the link with the public sector, due to the 3% reduction in the payroll, as the Taoiseach has not spelled out where it is going to happen.

There has also been cynical management of the public finances for electoral purposes, at the expense of longer-run economic stability and competitiveness. The Taoiseach's predecessor put it very well when he said we get in here and our ethic is to stay in here. The ethics of the Fianna Fáil Party in Government has been to bring about a situation where its members assume that they have a right to be in power in perpetuity, to stay in Government at all costs, and to ratchet up public spending before elections.

This recession is not just about bad luck. It is about bad management. It is the legacy of a decade of Government mismanagement, waste and missed opportunity. It is the legacy of a flawed Government culture of tolerance of low standards and soft option politics. Yesterday's announcements by the Taoiseach and the Minister for Finance will do nothing to restore confidence in the Government's economic competence. The response ranked as one of the weakest and most uncertain performances from any Taoiseach and Minister for Finance in recent years. Deputy Bruton remarked that the two men appeared dazed or confused.

See this speech in context