Richard Bruton (Dublin North Central, Fine Gael)

I moved this motion in the names of the members of the Fine Gael Parliamentary Party. It does not need telling either to the Acting Chairman or to the rest of the House that we are in deep crisis. The time for denial of the extent of the crisis is past. The pretence that Government has a strategy adequate to address that crisis is also totally inadequate. We are now in a serious situation in which not only is the credibility of Ireland's public finances at stake, but the credibility of the banking system and our ability to get it going again is intimately tied up with the state of the public finances. It will be impossible to rebuild public confidence in our banks — for which the State has offered a guarantee, recapitalisation, and the development of a new insurance-based model to deal with risky management — unless there is belief, internationally and domestically, that this Government has a coherent strategy to tackle the public finances.

We learned in January the parlous state of the public finances in a brief document presented by the Department of Finance. It acknowledges that over the next five years we must correct a problem to the extent of €16.5 billion. Since that document was produced, the scale of the problem has got worse. All the Government has done to date is to introduce one set of measures, primarily focused on a public service pension levy, which will generate €2 billion. If the Government believes that is a credible five-year fiscal strategy, we are in a very serious position. It does not constitute a credible fiscal strategy. We will only have a credible strategy under a number of conditions. The first is that it must be comprehensive. People must know what is expected of them and what will be expected of others. It must be sufficiently specific for people to know, for example, the balance between spending and tax revenue and that people know the types of tax to be applied. People must know that the Government will move beyond simple rules of thumb to try to find savings in public spending, to forensically examine public spending and to change the way we spend money so we get value for money. Another requirement — let us be blunt about it — is to front-load the decisions to restore international confidence that we are capable of managing our own affairs.

The Government was in denial for a great deal of last year. It has come to the pace of the game far too slowly and has arrived out of breath and inadequately prepared. It must recognise that many of the problems we now face are not ones that came miraculously from abroad but were created over years by a style of government that met difficult problems by buying people off, that ducked tough decisions about reform, that did not apply proper scrutiny or standards in regulation, and that allowed a cosy circle to develop whose members had too much access, so that when things went wrong they were not held accountable. We are now living with the reality of that style of government. Until the Government recognises that to change the way Ireland develops it must change all the things that led to this, we will not see the sort of reform that is required and we will not see international confidence rebuilt.

To pretend the banking system is simply an independent problem, divorced from the public finances, is a mistake. The credibility of the Government's guarantee is linked to people's belief that it can honour that guarantee, and that in turn is linked to their perception of whether the Government is in control of public finances — whether it has a strategy that is credible, well constructed, sound and able to meet the challenges. Unfortunately, the Government has failed on all these counts. That is the broader context in which I move this motion. Yes, we must tidy up our banking system and have an entirely fresh start, but we must also address our serious wider economic problems to restore credibility.

I listened to the Taoiseach today and I found his remarks deeply dispiriting. He could not resist denigrating the efforts of other parties to offer constructive solutions. He dwelt in half-truths, trying to run down what other people had suggested. Parties such as mine have consistently pointed out the necessity of a different way. We have done that for years. As recently as last October we said the budget was wrongly constructed and we could not afford the pay increases to which the Government was committing. We were scoffed at, and the Government has not moved beyond that. The Taoiseach seemed to welcome a degree of consensus, but the only consensus acceptable to him would be the Opposition's signing up to Government proposals——

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