John Perry (Sligo-North Leitrim, Fine Gael)

The 2009 budget was conceived at a wild party held in a Fianna Fáil fuelled building boom and has been delivered prematurely in a welter of panic and confusion. As we approach the 12th successive year of Fianna Fáil-led Government, we are experiencing a game of "back to the future". However, one cannot blame somebody else.

In the cold light of a new reality, the Fianna Fáil-led Government has reached for the first available excuse by arguing that our economic problems are not its fault but a result of global economic turmoil. The worldwide downturn is not the root cause of the disastrous deterioration in Government finances, which was well in progress before the failure of Lehman Brothers in mid-September caused global credit facilities to cease functioning, thus triggering a global banking crisis. The banking crisis will add additional burdens to the Government's budget difficulties and make any recovery in Government finances even more difficult. I am concerned about the equity of banks and the survival of small companies. If the economy is to grow again, we must create jobs in small companies and businesses.

I will make one general point about the global banking crisis. The crisis arises directly from the fact that rewards in society have not been distributed fairly over many years. Serious income inequalities have arisen both in the United States and Europe and particularly in this State since the 1980s, and these widening differences favoured the financial sector. The mismanagement evident in this sector, including reckless lending practices, is a matter of grave concern.

The previous Taoiseach often spoke of his interest in Robert Putnam's ideas of social capital and his concern to ensure that we have an accumulation of social capital in Irish society. Perhaps the current Taoiseach will concern himself more with the preservation of the financial assets of citizens. In the broad sweep of history, James Burnham's forecast of the management revolution has now come to pass. While this author and socialist commentator was wrong on many issues, he was at least close to being right in this case.

In the past decade, a new financial executive management emerged and shareholders effectively lost control of their money. The executive managers of the financial institutions, in their intense greed and desire for the wealth of ordinary citizens, devoured the wealth of the owners of capital and each other. The effective power of shareholders vanished as executive management lined its own pockets.

The problems in the global economy, particularly inequalities in income, have implications for future policy making in every country. Executive management must behave in a way that promotes fairness in society as a whole so as to properly serve the longer-term interests of its shareholders.

The Taoiseach will have difficulty convincing the electorate that the economic situation facing the country is the worst in the past 100 years when he has not yet convinced his Cabinet colleagues that this is the case. Every day one sees Ministers make announcements and pronouncements on issues on television. The reason the Taoiseach and his Cabinet have difficulty facing up to the true scale of the crisis in Government finances is that the current crisis is the direct result of years of Fianna Fáil disinterest and incompetence. The Fianna Fáil Party has been in power for 12 years. In the United States, a mood for change has resulted in an historic decision. Here, too, we have a strong mood for change. The United States has experienced eight years of President Bush but Ireland has had 12 years of a Fianna Fáil-led Government which lost its way several years ago.

People are tired. The Government became ever more incompetent as each year in office elapsed. It has been in power for so long that it has become complacent, lost touch and become ineffective. This incompetence violates the expectation of citizens for good government and diminishes their esteem of all politicians. It is well documented by a range of Government projects which resulted in poor value for taxpayers' money. Each new demonstration of ineptitude shows that the problem is beyond politics and is one of plain, old-fashioned, honest incompetence. This incompetence and indifference to waste means it is time for the Government to go.

On a more specific issue, the parameters of the budget are based on the view that the decline in consumer spending will be limited to the final quarter of 2008 and that, as global confidence recovers, Irish consumers will recover their spending habits and Government revenues will recover strongly in 2009. I hope the Government is right but I do not believe it will happen. The crisis in Government finances is recognised to the extent that some crude tax increases have been introduced, and even cruder cost cutting measures, into next year's budget. The Government has tried to portray these cuts as precise surgical procedures, carefully targeted to the lowest priorities. What has actually been done is crude, ineffective clubbing rather than clean surgery. Cost cutting is a short-term tactical move and just buys some time, the panacea of a quick fix at a heavy human and social cost.

This cost cutting exercise is in fact the evidence that proves this Administration's incompetence as a Government. In the real world of business, effective managers try to reduce the cost of carrying out the activity, while keeping the activity going. This approach recognises that once an activity disappears, it is considerably more difficult to start it up again. Only as a very last resort is the business line shut down.

What Fine Gael has proposed the best policy to control and reduce the costs of carrying on the existing business of Government. Reducing the cost of the public sector wage bill is by far the best option in present circumstances. Everyone stays in work, existing services can largely be maintained, and the drop in the standard of living will be temporary. A Fine Gael-led Government following this policy can restore the trust of the people and show that the Government and its Ministers are persons of substance, in control of the country and able to bring direction, efficiency and cost effectiveness to the State's activities. In terms of specific policy areas I would like to see more attention being given to the indigenous manufacturing sector. From a small acorn the large oak grows, but there is no respect in this country for the business person who is creating a small number of jobs. There is nothing for them.

A key factor driving economic growth is the presence in Ireland of many global high technology companies. More than 80% of exports from the manufacturing and service sectors are produced by these companies. Of more importance to national economic success is the indigenous sector, both manufacturing and services. The manufacturing sector has made little progress in the past ten years with the number of jobs falling. Medium and large indigenous industry is of central importance in industrial policy because of its degree of integration into the economy. There is an urgent need to review the effectiveness of the instruments and incentives used in the development of the indigenous manufacturing sector in every village and town.

This sector must get renewed priority so that investing in productive capacity for solidly based growth becomes more rewarding than making quick profit through speculation in property. We need a significant expansion in local start-ups and in indigenous companies, with renewed attention to the issue of linkages with multinational companies located here. There is an urgent need to improve their long-term competitive advantage, not just by a short-sighted attack on labour costs but by increased research and development, an emphasis on superior design and product quality innovation and marketing.

This has been an appalling budget from an Administration nearly 12 years in Government, with all the hallmarks of massive incompetence. I thank the Ceann Comhairle for allowing me the time to make these comments.

See this speech in context