Mary Harney (Dublin Mid West, Progressive Democrats)

The debate is on the economy and it is important to emphasise that the fundamentals of our economy are sound. For many years, it has been one of the most successful economies in the world. Irish people everywhere are proud of the significant success experienced in Ireland, particularly during the past decade. Some 14 years ago, 1.1 million people were working. Today, that figure is 2.1 million. Under the rainbow Government in 1997, a single person earning £78 began to pay income tax and income tax rates were 27% and48%. There was no tax individualisation. If a woman returned to work after her children had been reared, she began to pay tax at 48%. Today, a single person can earn at least €340 tax free and the tax rates are 20% and 41%. In recent years, living standards in Ireland have improved more quickly than anywhere else in the OECD.

We are suffering due to the global setback. Ours is an open trading economy and our companies must compete in global markets, particularly those of the UK and the US. The 15%-20% difference in the values of the euro vis-À-vis the dollar and the pound sterling affects our companies in the UK, for example. They must also compete with UK companies in third markets. The difference also affects our companies exporting to the US. The cost of a barrel of oil is $145, which is likely to increase to $200. Due to the credit crunch, it has been difficult for financial institutions to get money. While money is being loaned, interest rates are considerably higher and lending periods are short.

All of these matters are international factors. The domestic factor is the construction sector, but the economy is still growing at 4% if we exclude that sector from the statistics. However, it must be included. For every 10,000 houses not built, our economic growth falls by 1%. To be fair, no one on either side of the House anticipated that the slowdown in the sector would be so rapid. During last year's election, parties opposite budgeted on the basis of a 5% growth rate, the scenario generally agreed by independent commentators and everyone responsible for economic planning on both sides of the House.

As situations change, the Government must change. It must be capable and determined to see out its responsibilities, one of which is public spending. We cannot return to an era in which we spent, borrowed and taxed to find our way out of economic deprivation. That was the story of the 1970s and the 1980s. The only Government that ever bailed out a bank was a Labour-Fine Gael Government, which bailed out AIB in the 1980s. Unfortunately, while it did so for good reasons, it did not take shares in the bank. When the bank recovered, taxpayers did not receive the benefit.

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