Rory O'Hanlon (Cavan-Monaghan, Fianna Fail)

Deputy Crawford remembers it like I do: tax rates of 65% with 8% pay-related social insurance, unemployment at 18%, bank interest rates of 20% and the highest level of industrial disputes per thousand workers in the EU. All that changed, but at that time and in those circumstances very tough decisions had to be made and implemented by Government. One lesson that can be learned from 1987 is that Fine Gael, led by former Deputy Alan Dukes, adopted the Tallaght strategy and supported the changes and difficult decisions that had to be implemented, as did the social partners. The Irish people accepted them and we brought about an unprecedented level of prosperity in the country.

While we do not want to return to the 1987 situation and we do not like to see a slowdown in the economy, in particular to see people lose their jobs, there are totally different circumstances today. We are still one of the most prosperous countries on this earth and are well placed to deal with the temporary difficulties facing us. I will enumerate some of the economic and social factors in our favour. We have a young, dynamic and adaptable workforce with 2.1 million people in employment. The size of the workforce puts us in a much better position to support our far more extensive social programmes. We have flexible markets, including the labour market. These markets are characterised by a light regulatory burden. Greater flexibility in the labour market has been the key to the creation of 700,000 jobs over the past decade. We have a pro-enterprise environment in which the burden of taxation on both capital and labour is low. This has facilitated greater entrepreneurial success and the significant growth in small and medium sized enterprises that are key to greater balance in regional economic development. General Government debt is forecast to be approximately 26% of GDP at the end of 2008, one of the lowest ratios in the euro area. This low level of general debt gives us the possibility to borrow modestly to invest ambitiously in key infrastructure.

One of the issues that must be addressed by Government, all the Members of this House and everybody working in the public service is that we should seek to effect the required savings through efficiency rather than a reduction in the level of service. For example, this year the health service is receiving €16.1 billion. When I was Minister for Health in 1987 I received a budget of £1,100 million, approximately the same in euro as the five big Dublin hospitals receive today for one year. That is an indication of the progress that has been made in the level of funding available to support our health service. With a budget of €16 billion and more than 100,000 people working in the service, everybody should look to see how they can effect efficiencies. For example, they could eradicate duplication. Given the multidisciplinary nature of the health service, there is a question of better communication to ensure patients will not wait longer and will not be kept in hospital any longer than necessary. If we all look to see how savings can be effected through efficiencies we will minimise any fall-out from the measures that have to be taken.

I support the motion. I am satisfied that the economy is better placed to emerge from the current difficulties than it ever was in the past. We are still one of the most prosperous countries in the world and it is important that we do not talk ourselves into any more difficulty than we are experiencing. I believe it will be short term as a result of the measures the Government is taking.

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