Dáil debates

Thursday, 5 February 2009

Stabilisation of the Public Finances: Motion (Resumed)

 

11:00 am

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)

There is an old adage that cash is king, and this is never more true than when there is no cash. The message is so critical that it is worth repeating. Just in case there are any slow learners, I reiterate that cash is king. Our Government does not have any cash to pay its way and we are borrowing approximately €55 million per day to pay our daily bills. Quite simply, we are living beyond our means and this must stop.

The country faces two major problems — the massive hole in the Exchequer finances and the growing national economic crisis, which is such that thousands of people are losing their jobs every month. The banking crisis is really a sideshow to the decline in the well-being of the national economy. How we solve these crises will depend on the problems we define. The Exchequer deficit is so vast and deteriorating so rapidly that there is a need for immediate action. The timescale in which to identify and address all the economic issues is too long to permit any delay in tackling the immediate financial crisis.

Two days ago, the Government introduced a series of measures to tackle the financial crisis. There has been much negative commentary on the absence of decisive leadership over recent months. With regard to what one should do in a crisis, an old Australian saying suggests that if one is up to one's ass in a swamp with crocodiles, it is time to take big steps. Instead of taking big steps, the Government went for long, leisurely walks with the social partners. The measures announced yesterday could have been announced at any time in the past two months. I broadly support these measures in so far as they will work. Good disaster management requires that the current crisis should not be allowed to overwhelm in-depth analysis of any key factors that led to it. A fundamental review and public acknowledgement of the origin of the crisis are critical to development of the right solution, and particularly to the development of public confidence and trust in the solution given that harsh changes are essential.

The Government has failed to carry out any fundamental review of the origins of the crisis and the reasons are obvious. The Government is responsible for approximately 80% of the current difficulties and international factors account for the rest. It must accept responsibility publicly; otherwise, public trust and confidence will continue to drain away. Having failed to carry out any fundamental review of the origins of the current crisis, it has failed to identify any new or creative ideas on how to proceed as a country. The recent Framework for a Pact for Stabilisation, Social Solidarity and Economic Renewal is nothing more than a winning entry at a feis for economic clichés. The Government is bringing forward a series of short-term tactical micro-steps to address individual elements of the immediate crisis. These steps are founded on the idea that, if taken, we will return to where we were on the wealth and economic growth path.

Some fundamental questions need to be asked. Do we really want to be one of the wealthiest countries in the world? Do we really want to return to a level of economic growth that pushes our infrastructure and social fabric to their limits? Do we really want to be absentee landlords to the world in our race for wealth? Did a degree of crassness creep into our society? We should aim to be one of the best countries in the world. The most fundamental requirement at present is to protect existing manufacturing jobs. We have an open, exporting economy and only the manufacturing sector can provide enough quality jobs to result in full employment in the medium term. To maintain a strong, viable manufacturing sector, we must declare manufacturing to be the foundation of the national economy and benchmark manufacturing costs, including labour costs, against those of the main European manufacturing countries. We cannot rely on tax breaks that can be wiped out in the stroke of a pen. All sectors in our economy must be benchmarked against the manufacturing sector. If we take these steps we can really hope to weather the storm and come out stronger when it passes.

Comments

No comments

Log in or join to post a public comment.