Barry Andrews (Dún Laoghaire, Fianna Fail)

The House is debating the national development plan and the current health of the Irish economy against the background of a global economic slowdown. I had occasion to watch "Newsnight" on the BBC last night and I was struck by the similarities between the circumstances affecting the UK economy and ours. I refer to reports of construction workers losing their jobs because of a slowdown in the construction sector, the credit crunch and the lack of availability of finance. Strangely enough, the opposition there is accusing the British Government of having been the architects of the slowdown or the correction in the UK economy, or however one wishes to describe it. This would be the case in any other economy similarly affected by the global credit crunch and the global economic circumstances. One could hold up a mirror and see the same circumstances as are pertaining here. We sometimes exaggerate our successes but there is no doubt that the Opposition has completely underestimated the degree to which we exist in a global economy. We are an open economy and are more affected by global conditions than any other economy in Europe.

Nevertheless, we are in a good position to recover from the prevailing economic winds when circumstances change. This is because we have been planning long-term strategies from day one. It must be acknowledged that since 1987 we have invested heavily in education and training and more recently in the National Pensions Reserve Fund. Some people have asked what we did with all the money from the past ten great years. We brought down the national debt from 53% ten years ago to a net figure of 14% today, when the money put into the National Pensions Reserve Fund is included. Any objective analysis of the Irish economy will come to the conclusion that we are in an extremely strong position.

However, this is of little or no consequence or consolation to anybody who has lost his or her job in the past six months. It is a gross insult to the many people who were forced to emigrate in the 1980s to draw a comparison between now and then. We have moved on significantly in this economy and we are in a much stronger position under any heading. Some 2 million people are employed in the economy compared with 1.4 million ten years ago. We have the second strongest purchasing power of any European nation. We have a much lower national debt than the European average. We will create 13,000 new jobs this year. Our banking structure is much stronger than that in the UK, our biggest trading partner. People are blaming the European Central Bank and the fact that we have no control over interest rates. However, if we were in an independent monetary situation and had our own currency we would be in a considerably worse position than we are in the euro zone. Let us forget about that canard that has been circulated by many people.

There are increases in international oil and commodity prices. The easing of domestic demand and exchange rate factors should result in some moderation in the rate of inflation in the second half of this year. Inflation is forecast to average at 4.3%. I hope this will provide some comfort to those negotiating the new national partnership agreement. The Taoiseach and the Minister for Finance have consistently urged the need to continue the roll-out of the national development plan, which is vital to our sustained economic growth. The taxpayers' money is now being invested in fixed-term contracts, which is welcome as we are now in a buyer's market. We could not get contractors to work for us for anything of that sort in the past. We now have much tighter capital projects than we had in the past, which is to be welcomed.

We are making vast improvements in the transport system, which are reducing travel times throughout the State as anyone with their eyes open would accept. Even the Opposition Members, in their very brief intervals of generosity and lucidity, would concede that. We are improving competitiveness under many headings. We will need to concentrate almost exclusively on the issue of competitiveness in the next 18 months as it will put us in a position to recover more strongly. I believe we will recover and be in a position to take advantage of either lower interest rates or the euro easing against the dollar, which will also be a significant influence.

The national development plan is committed to delivering many child care places in coming years and that continues to be the case. These are real measures that provide for improvements in social inclusion. Regarding the savings announcement of yesterday, the Labour Party had described the HSE as a "bureaucratic Frankenstein" that required a reduction in staff numbers. There was not a word of welcome on any Opposition lips last week when the Minister, Deputy Harney, announced the HSE reform process and the redundancy package that was being discussed with trade unions. Instead, there was condemnation and criticism. A voluntary redundancy scheme for health service staff has been sanctioned by Government. I am confident that the Minister for Health and Children will deliver on her commitment to save €144 million within the sector. The Minister made clear this morning that the national children's hospital will proceed without delay. Regardless of the argument about its location, all patients and their parents will benefit from its construction without delay. It is about services, not about parking and all the other extraneous factors that are often brought into the discussion.

Much was said yesterday about youth justice and the question of Oberstown campus in Lusk, County Dublin. The development will increase the accommodation capacity in the detention school system from 77 to 167 places and it will be carried out on a phased basis between now and 2012, with a second phase by 2014. A notice inviting tenders from interested parties to provide a full team to design the new facilities was published in June with the closing date for receipt of tenders next month.

It is also an opportune time to discuss the question of capital efficiencies that can be achieved at community level. Those of us who have been politicians for any length of time will often arrive in a town and find a community facility on one side of the road and a national lottery funded facility on the other side of the road. There will be a community crèche down the road and empty rooms in primary and secondary schools, all of which are funded by the State. There seems to be a lack of coherence and of joined-up thinking that could lead to inter-agency savings.

We now need to focus our attention — perhaps we should have done so all along — on what savings can be achieved by asking all these community groups to begin to pool their resources. They need to agree to sharing community halls with people operating crèches, providing facilities for older people and discharging their obligations under the national recreational policy to provide youth services, whether they be youth cafés or youth clubs, or even to accommodate youth work. If all these can be achieved within the one campus a mechanism must be created whereby those types of capital applications will attract either fast-tracked funding, extra funding or ring-fenced funding, or some other mechanism to encourage people in a community setting to apply for funding in a more pooled and joined-up way. In this way we will make capital savings appropriate to the circumstances in which we now find ourselves. In any case they are the kinds of efficiencies we should be achieving.

I am confident that we will weather the current economic downturn and will be prepared to take advantage of the upswing when it arrives. The Government has taken proactive action in recent days. We have not sat back and waited for the budgetary process to roll round. The savings being sought will not come without difficult choices but that is what the people expect. In 2001 and 2002 Ireland faced similar economic troubles on that occasion induced by the slump in the ICT sector. Better than most, we quickly recovered our ground and within 12 months recorded growth rates of 7% to 8%. Owing to the swift action of the Government, I expect the economy to return to trend growth rates in the very near future.

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