Ned O'Keeffe (Cork East, Fianna Fail)

I do not feed any meat or bonemeal now. The Central Bank claims that it has used stress testing. When I was stress tested recently, I was found to be a perfect candidate. The Central Bank lost control of the banking system. Many foreign banks have entered the island and some people were unhappy with the performance of Irish banks, but competition and a liberal approach to lending have left us in this serious crisis. Many banks will be short of capital. Day after day, I meet people who require further capital and must borrow if their businesses are to be successful, but the capital is not present. Liquidity in the banking system is an issue that is causing a crisis for the Government, which cannot do anything in this regard.

A number of corrective actions can be taken in one respect. We must not hide from the fact that there is a world recession, particularly in the West. We must consider increasing taxation, borrowing and cutbacks. There are many regulatory systems — the HSE, the Competition Authority and other agencies — with no role to play in this matter. Until recently, we relied on civil servants and Ministers to regulate and run the economy. The cost factor of the public service is an issue. I do not know the exact figure of how many people are employed therein, but I believe it is significant. The Central Bank has played a questionable role.

We have lost out in terms of capital tax. For example, honest, ordinary farmers sold development land on the outskirts of villages and towns for €1 million, developers built walls and sold the same land for €5 million. I know of more than one example in my constituency in which development land originally sold for €1 million subsequently changed hands for €40 million. This situation obtained across the country. The developers paid the same capital gains tax rate as the farmers who received €1 million. This situation is not good enough. We must place a capital gains tax on developments if we are to reduce the economic crisis.

Government policy did not bring the crisis about, given that Fianna Fáil has run the country successfully and ably for decades. One can see where the country has come from. With Deputy Brian Lenihan as the Minister for Finance and given his ability and his success at the Departments of Justice, Equality and Law Reform, Health and Children and elsewhere, the economy will be put right. A stitch in time saves nine and he will place that stitch in the right place. We will be successful again.

The increasing unemployment rate is just one of the issues that must be addressed. We have lost our manufacturing industry. We must return to reality and examine what has occurred in the various economic sectors. In the past five to ten years, many factories closed because the chief executives of companies who saw the development and construction of houses and apartments as being more lucrative were given large cheques. The salaries of politicians and Ministers have been criticised, but they receive approximately 10% of that received by chief executives. We are moving towards asking for pay freezes and pay controls. How could one expect an ordinary industrial worker to agree to a 2% or 3% reduction when there are people in the private sector who are, via different mechanisms, earning millions of euro, particularly in terms of development?

Share options can make millionaires of a few people. While I am an investor, I believe in equity. Without a proper taxation system, there is no equity, making the poor poorer and the rich richer. Fianna Fáil has never been about that. From Eamon de Valera in the 1930s onwards, it has driven the economy. This side of the House must return to such a policy and I am confident that the Minister for Finance will do so. We must also consider the capital taxation structure, but we have missed the boat. We would have significant funds in the Exchequer had we got the structure right. I have provided examples of land being sold in my constituency.

Unemployment is a hardship on the people. A figure of approximately 200,000 has been cited. We have heard about auctioneers, builders, architects and solicitors letting people go because they cannot face the challenging times. Due to high costs, Hibernian Insurance's parent company, Aviva, will relocate it to India. However, we did not hear anything when other companies, of which there were many, relocated their administrative staff to India. We must put our house in order and get the cost base right. If we do not do so, the job of the Minister of State with responsibility for labour affairs, Deputy Kelleher, will become untenable. What is wrong in the economy is our cost base. It must be corrected. The people at the top — those I have identified — have a major role to play in this regard because their large salaries and share options are causing jealousy among lower paid people.

We have a job to do and I am confident in the Administration. We have kept our borrowings as low as possible and within the framework of EU regulations. The national development plan has been successful in respect of infrastructure. When I drive from my constituency to Dublin, I can be proud, as can the Minister of State, Deputy Kelleher. We will open another section of that road from Mitchelstown to Cashel on 27 July. This will be a significant step forward in the infrastructure.

Our cost base is wrong and more people will be going to India if this is not corrected.

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