Arthur Morgan (Louth, Sinn Fein)

I thank the Labour Party for sharing time. I appreciate this and I also appreciate that Fine Gael moved this motion in its Private Members' time. It should not have been necessary, of course. The Government should have afforded at least one full day, preferably two, to debating this most important matter.

The economic challenges this State faces in the coming period are substantial but with well thought out and responsible policies they are not insurmountable. Without doubt, some of what we face today can be attributed to the international credit crunch and a global downturn. Major investment banks, such as Lehman Brothers, collapsed, sending shockwaves throughout the financial world and causive massive liquidity problems.

However, as much as we are exposed to outside factors, the Government can no longer hide from the fact that it is Government policy and mismanagement that has brought us to this point in the Irish economy. Irish banks were not exposed in any comparable way to the sub-prime catastrophe that has hit the world's financial institutions. However, because of years when domestic credit was made freely available to developers and speculators, our economy was allowed to develop on the back of an unsustainable and unstable property market.

The false bubble referred to by the previous speaker, with whose comments I agree, was not capitalised upon by Government. It was used to give absolute tax breaks to those doing very well out of the economy and was also used to bolster election chances.

The Government presided over many investment failures in respect of value for money. No major infrastructural projects came in on time. Strategic investment was not made in providing broadband nationally, in revitalising rural Ireland, in public transport or in renewable energy. The Government relied instead on property-based tax reliefs, leaving us with many hotels, car parks and shopping centres instead of social housing, buses and wind farms.

The Government also failed to invest in measures to combat poverty. As a consequence, almost 300,000 people live in consistent poverty and will remain there if this Government has its way. It continues to boast that the fundamentals of the economy are sound when it is clear that economic growth in this State was driven by unreliable domestic consumption rather than by robust export policy and sustainable industry.

Government policy produced a high-cost base for business, poor competitiveness, poor public services and huge private debt. Its strategy of high indirect taxes means that, as consumer spending falls, the Government will lose still further revenue, thereby putting even greater pressure on the economy.

Over the summer months, however, the Government all but disappeared. It took no action until it was dragged back into the House in late September. The bringing forward of the budget is simply for the optics. The Government must take charge. It is time its members accept that the buck stops with them when it comes to running the economy. The Minister for Finance, Deputy Brian Lenihan, faces into his Budget Statement 2009 with a shortfall in tax receipts projected to exceed €5 billion by the end of the year, and an Exchequer deficit which, by the end of August, had reached €8.4 billion. Nobody who has managed to make such a considerable miscalculation of the State's finances has any right to act smugly about the condition of the economy.

A Government response to the current situation that seeks to address the shortfall in public finances by resorting to cutbacks in public services is not acceptable. Our public services are already characterised by a lack of capacity and quality. Of all the countries of Europe, only Estonia and Lithuania have lower public spending than we do. There is a need to look at how and where the Government has wasted public money in recent years. Opposition parties are correct to blame Government mismanagement for our present predicament but those of us in opposition also have a responsibility to propose solutions and outline what we would do, if in power. It is not enough to say that Government must keep taxes low and must protect public services solely by seeking value for money in those services. The present motion proposes as much. That said, my party supports the motion.

Our public spending is the third lowest in Europe. Waste and duplication must be eradicated but let us not fool ourselves about the so-called black hole in public spending. It does not exist. Government spending is nowhere near the level it needs to be at in order to reverse the deficits that were allowed to build up in our social and physical infrastructure. It is irresponsible of any of us in opposition to try to sell that line to the public. Some members of the Opposition would quite happily stand over cuts in public services proposed by the Government rather than use innovative thinking to stimulate the economy and build the revenue that is needed to fund our public services appropriately. We must offer responsible solutions as to how the Government might dig itself out of this mess in the short and medium term, while protecting the most vulnerable who have so often in the past proved a target for budgetary cuts.

Sinn Féin urges the Government to use the budget for 2009 in a number of ways in order to stimulate the economy. We want job creation to be prioritised. In particular, we want an immediate re-training programme for construction workers to get them into areas such as renewable energy, retro-fitting and other industries. We want the Government to address underperforming export markets. Approximately 90% of our exports in 2006 came from foreign owned companies based here, rather than from indigenous industry. That is a shocking statistic. A well-known American economist has commented that what we had was not so much a Celtic tiger but rather an American tiger trapped in a Celtic zoo.

We want national development plan commitments in social and affordable housing and school buildings to be frontloaded. This will re-employ construction workers and will help contribute revenue as well as keep those people out of dole queues. We also want the Government to take action to reduce the cost of living pressure on low-income families and those dependent on social welfare, by establishing an anti-inflation package and awarding social welfare increases. It is also imperative that the Government brings forward a set of proposals to reduce cost pressures on small businesses. This should include the fast-tracking of company law legislation in order to reduce regulatory burdens while protecting the rights of workers.

There must be a fundamental reform of the tax system to ensure that we have both a low and a fair tax regime. In the interim, however, the Government must use the tax system to assist those on low incomes. Tax breaks and loopholes used by the super rich to avoid paying tax must be removed and those at the higher end of the scale must pay their fair share in order that sufficient revenue is generated for current and longer-term spending demands.

Over the coming two years Sinn Féin wants to see the following — national development plan investment prioritised and directed towards projects that address our infrastructual deficits; the development of a public sector reform plan, in partnership with the trade unions, that will combine increased investment in frontline services, with improved effectiveness; and the delivery of a national action plan for social inclusion to redress the inequalities in our society.

In the longer term we must turn our economy around. We need an economic model based on principles of high quality employment, environmental sustainability, tax justice and world class public services. These matters are what both Government and Opposition parties must discuss. Of course we do not have enough time to tease out these issues in the time afforded by the Fine Gael Private Members' motion. Again, I acknowledge this motion and I appreciate its introduction. Unfortunately, there are many other issues, such as the prioritisation of job creation and dealing with how we must work ourselves out of the mess the Government currently finds itself in, of its own creation. I look forward to the opportunity to have a more lengthy debate in the future.

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