Alan Shatter (Dublin South, Fine Gael)

What is taking place in the House this week is very important. It has illustrated in a very stark way the extent to which the Government is out of touch. It is extraordinary after a recess of three months that we return to the House in the midst of the greatest economic crisis since the 1930s to discover a Government that gives priority on the agenda of this House to two issues. They are a double taxation agreement between the Isle of Man, Macedonia, Vietnam and this State, a matter of no great urgency, and legislation on the constituency boundaries with the intent that Members ignore the economic crisis and engage in political naval gazing. We have an arrogant, self-centred, incompetent Government, bereft of any notion of the impact of what is happening on people outside this House and incapable of understanding democratic accountability. On occasion, it calls for a bipartisan approach. How can one have bipartisanship on economic issues, in circumstances where the Government cannot agree to set aside reasonable time for debate on the economy? The truth is that if there was no Fine Gael motion in Private Members' time on the economy, after a three month recess the economic crisis with which we are confronted would not have been discussed at all. The Government's call for bipartisanship is nothing more than political grandstanding and old style cute hoor Fianna Fáil politics. Its concept of bipartisanship is that the Opposition should endorse without criticism whatever unilateral decisions the Government makes. This is not about the public good or democratic principle, this is a call for loyalty and obedience to the Fianna Fáil Party in government and the Green Party-Progressive Democrats slipstream in its wake. There is a whiff of cordite implicit in the call because it involves a threat, namely: "If you do not support what we say we will accuse you of being responsible for what we have done." This is the Sopranos approach to politics.

There are people outside this House who have not experienced recession during their adult lives while there are others who lived through the recession created by the unprecedented irresponsible level of public expenditure by a Fianna Fáil government in the second half of the 1970s. There are people outside this House today who are hurting as they face unprecedented job losses, while those in jobs lack security. Multinational companies have established here but it is uncertain whether they will go or stay. Hundreds, if not thousands of homeowners are experiencing negative equity. There are more foreclosures than we have known in three decades, with at least one house per week being repossessed through the courts, and it is inevitable that there will be further foreclosures in the coming months.

The scale of claims for unemployment benefit are so high that the Department of Social and Family Affairs which administers the scheme cannot cope with the pressures. A lack of liquidity in markets places at risk viable successful businesses that need to access funds within a reasonable time but cannot do so. A stock market collapse impacts not only on the super rich but on the small investor. It has decimated pension funds and has created a real problem for large firms and some State bodies with defined benefit schemes. These will only have the capacity to pay pensions if the stock markets and the value of pension funds recover. There are such funds today worth 20% less than they were worth this time last year.

On their own all these issues demanded that the Government should order time to debate the economy. Within a few days of this Dáil reconvening we have had, in addition, the social partnership agreement. Serious questions arise about that agreement. Can we afford a 5.5% increase in public sector pay in the final ten months of this 21-month agreement? Can private industry and the retail sector now afford a 3.5% increase in wages? Should wages across the public and private sectors, except for those on low pay, not have been frozen for a period of 12 or 18 months? The social partners might then have reconvened after the fog had lifted and there was a clear perspective of where the economy was heading. Should job security not have been a priority instead of wage increases? All these issues demanded that the Government order time for debate.

My colleague, Deputy Varadkar, eloquently illustrated that the difficulties we confront are not of a global nature alone but are domestically created. The four budgets which the Taoiseach, Deputy Brian Cowen, presented as Minister for Finance and the huge unsustainable increase in current expenditure authorised under his stewardship will in years to come be seen as an ill-advised unmitigated disaster. The disaster is compounded by the bizarre paralysis and indecision that descended on the Government during the four months since Deputy Cowen assumed the office of Taoiseach. Under the stewardship of Deputy Cowen, as Minister for Finance and as Taoiseach, the Government has clung to bad policies the way Mr. Magoo might cling to a lamp post, not to see clearly but to keep himself on his feet as he blindly staggers into an open manhole.

The baton of financial incompetence is now held by the Minister for Finance, Deputy Brian Lenihan. The Taoiseach and the Government fail to recognise and acknowledge that decisions they have taken have dramatically contributed to this State's economic downturn. If they cling to the delusion that global factors are the only reason for our difficulties, we are in even greater trouble. The foolish and ill-advised speech of the Minister for Finance, Deputy Brian Lenihan, last night gives no cause for confidence. It clearly illustrates, however, the Government's unsuitability for office. The Minister said the rapid deterioration in our economy and the speed with which international factors have impacted on us have taken everybody by surprise. The credit crunch has existed for over a year. The crisis arising from sub-prime borrowing in the United States has been whistling through the banking sector for approximately 15 months. The collapse of property markets in the United States, whose property bubble was a mirror image of ours, commenced two years ago. The strengthening of the euro against the dollar started four years ago. The fact that it continued so was inevitable in the context of the insane economic policies of the Bush Administration and the dramatic growth in US budget deficits.

The Government, however, ignored all the signs and ploughed on regardless, with unprecedented levels of spending, a total failure to reform the public sector and massive wastage of public funds, ably and annually illustrated by the Comptroller and Auditor General. It retained a commitment and dedication to pork barrel politics. A particular example of this is the politically inspired, ill thought out decentralisation programme whose principal objective was to move State agencies and Departments from Dublin to ministerial constituencies in the hope of shoring up and increasing ministerial votes.

The biggest scandal of all is the Government's failure to act to deal with the housing bubble. Instead of popping it at an early stage the Government allowed the bubble to attain its full spherical shimmer. This was not negligence but reckless governmental policy and fraudulent political trading. The Government's vested interest in allowing the bubble to grow was evidenced by Ministers accusing anyone who spoke about the property bubble of national treachery. The property bubble was allowed to grow because it increased house prices and the Government had its snout in the trough of stamp duty. This situation facilitated the Government in making easy decisions to spend whatever money came to hand, whenever it suited, without having to display any level of political responsibility.

Last night the Minister for Finance, Deputy Brian Lenihan, spoke of a sharp correction in the housing market and corresponding processes of adjustment. The reality is the Government should have called in the banks four years ago and stopped them providing 100% loans or repayment terms of 40 years. It should have brought spiralling land prices under control because it had a duty in that regard. The Central Bank, as a regulatory authority, also had that duty. The Government and the Central Bank abdicated that responsibility because of the benefits gained from stamp duty expenditure.

Last night the Minister spoke of those who criticise Government policy as undermining confidence in the economy. It is the Government's incompetence, paralysis and ineptitude that are doing this damage. The last refuge of a political scoundrel, bereft of ideas, is to label his critics and political opponents as unpatriotic. Last night the Minister attempted to wrap the green flag around himself and accuse critics of political treachery. The truth is the Government wanted no debate on the economy because it has no economic policy. The party that proclaimed to the electorate that it had a safe pair of economic hands is now, like the emperor of fable, exposed and seen to have no clothing. For the past four months it has played a game of economic roulette, hoping that one last spin of the political wheel would extricate it from its plight and remove this country from the malaise created by Government policy. The tragedy is that each day the Government dithers, hundreds of jobs are lost and the perils which confront us continue to grow.

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