Kieran O'Donnell (Limerick East, Fine Gael)

Fine Gael brought forward this motion as a result of its concern. We brought it forward in good faith and expected the Government to respond in good faith. We sought a debate on the issue, but the Government would not provide time for it. We have spent much of the day discussing an electoral Bill that has been around for a year without discussion.

I will comment on the Government's reckless economic policies and competitiveness. The Government allowed the property boom to get out of control. When the Taoiseach, Deputy Cowen, took up the position of Minister for Finance, we saw a rapid decline in our exports and a rapid increase in construction. There was over reliance on the construction sector and, as a result, we now have negative equity. The Government has been somewhat disingenuous in this regard. It has floated the notion that it will help first-time buyers buy houses. People know houses are overpriced. The only people who will benefit from such a move are the Government and builders. Hard-pressed first-time buyers could now end up in a situation where the houses they buy will leave them in negative equity within a short period. Fine Gael feels strongly on this issue. The Government should be truthful with the electorate, but it is not.

The Government has failed to respond quickly when necessary. Last December, the situation was clear. The credit crunch was in full swing, unemployment was rising and, through successive budgets, Deputy Bruton called for proper public sector reform. The Comptroller and Auditor General's report for 2007 makes specific reference to the HSE. With regard to value for money, in the past ten years the number of people employed in the HSE has increased by 71% to 47,000. Many of those are in bureaucratic positions and are not accountable. Furthermore, the health budget has increased fivefold. The question is, do we have a better health service today? We had Private Notice Questions today on the state of the health service. We are not getting value for money.

The Comptroller and Auditor General's report made specific reference to the HSE's failure to respond swiftly. It stated that a dysfunctional consequence of delaying action was that savings must be targeted across the board at units operating within budget as well as those that are not. The Government has made a 3% cut in the HSE's payroll. We know people are being let go throughout the public sector, but that is not proper public sector reform. That is just sleight of hand.

What should have been done should have happened last December. However, the Government only decided to do something in June, when there were 50,000 extra on the live register and a €3 billion tax shortfall projected by the end of the year. All the Government did was make vague utterances on moving things around. Its three-page document did not even add up because it was €14 million short and a further 20,000 people were forced onto the live register before any action was taken.

The Government must now take control of the public finances and protect essential frontline services. The incremental system of budgeting is outdated and other models should be considered. New Zealand has a system whereby a 1% saving is sought across all government departments. Advance notice is given, which allows for proper public sector reform rather than our laissez faire attitude of overnight cuts. Departments here lack the time to adjust to cuts which affect frontline services.

The Government has failed to put in place a proper anti-inflationary policy. When we joined the eurozone, we lost control over our exchange and interest rates and the only area over which we retained control was inflation. Everyone knows that if interest rates are low, inflation should be low, but inflation was allowed to spin out of control. The European Central Bank has an inflation target of zero to 2%. The Government should have set out a target for inflation prior to the national pay talks so people could have a sense of where the country is going. We have become uncompetitive and have lost export market share over the past five years. Since 2000, our prices have risen 50 times faster than the EU average and 45% of non-mortgage inflation is Government fuelled. Health care is three times the EU average and education for hard pressed parents of children, housing, water and energy are twice the EU average.

In its ludicrous reply, the Government claims its stewardship of the economy and public finances allows Ireland to meet the current economic situation from a position of strength. Given that nothing is left in the kitty, there is no strength, unlike Spain which built up a reserve to allow its economy to be pumped. Several months ago, the Taoiseach proposed a cyclical stimulus budget which would allow him to pump the economy but he is not mentioning that now. The kitty is empty because of mismanagement on the part of the Government.

The adoption of sensible measures would have created the right economic and fiscal conditions. How can we regard the claims made by the Taoiseach in 2005 and 2006 that the fundamentals of the economy were fine and that we should continue to build? This was a foolhardy and unsustainable policy. Exports continued to fall. This is a small open economy and we need to return to basics. The Government claims that many of the factors currently impacting on the economy are external in origin. While that may be the case, it failed to exercise its control over internal factors to implement the deposit protection scheme earlier or control inflation. The hallmark of this Government is procrastination. It is either acting on the basis of arrogance or because it does not know what is going on. I am not certain which is worse but both are absolutely unacceptable.

The budget for 2009 is supposed to provide clarity and confidence but the Government is failing to provide either. The only reason the budget is being brought forward is because the preliminary income tax figures for 2008 will fall far short of projections when they are produced on 14 November. The people were mislead on the budget, which was based on a projection of 55,000 housing completions. Everyone knew at the time that the maximum figure for completions was 30,000, with a €1 billion shortfall in tax take for every 10,000 houses. I had to table a parliamentary question to find out the number of housing completions used as a basis for the budget. Budget expenditure was reliant on the construction sector.

I commend this motion to the House and hope the Minister for Finance and other Government Deputies will attend this well-informed debate on putting the economy back on the road to recovery.

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