Seán Sherlock (Cork East, Labour)

The financial crisis is due to both external and internal factors, external in that the beliefs we held regarding the behaviour of banks and financial markets as actors in a real economic setting have been challenged like never before. It must be said that somewhere in the recesses of our minds there was a nebulous idea that the global financial economic structure was based on a false premise but we never realised just how much the Irish banking sector was tied to that false premise. We are now left with a new rhetoric from the centre left and centre right about the role of the State. The question for all of us is how to construct a new narrative for the position we are in and a solution for the next generation.

This country was over-reliant on tax receipts from stamp duty. That issue will be analysed until kingdom come and there is nothing that I can bring to that analysis that is new. The question now is how we get ourselves out of this morass and restore our economic well-being, and what we can do to ensure a sustainable economic and social model into the future.

The restoration of the economy must be based on strong Government intervention and co-decision making with our European Union partners. The Stability and Growth Pact has vanished and the question remains as to what will replace it. This country is nowhere near a fiscal stimulus plan and all talk of change, President Obama style, is futile. What we need now is a new definition of the role of markets and the role of the State regarding market behaviour.

I am encouraged by the fact that the European Commission published proposals last week that would set up a pan-European regulatory body with strong powers to intervene in national regulation. Unfortunately, that is a necessary consequence of Ireland's soft attitude in regulating the behaviour of financial institutions. We await the political outcome of such proposals and I hope the Government will support that initiative. It is necessary if it is to send a message to global markets that Ireland is getting its house in order. If the Government is to restore public finances it must also restore confidence. The restoration of confidence will ensure that investors will once again begin to look at Ireland.

Given that we are an open economy, it is vital that our membership of the European Union is seen in a positive light. I am encouraged by the fact that the EU monetary affairs Commissioner has stated publicly that any country in crisis will receive financial assistance in advance of the International Monetary Fund knocking on our door. We must be encouraged by those signals. In terms of the motion before us, we must acknowledge that any Government strategy has to incorporate our European Union partners. Without them, we are doomed.

In putting forward these ideas I am conscious that a new language must emerge, which is one of social solidarity. This Government has sought to pitch sectional interests against each other. We need a new language that does not put the private sector against the public sector or the urbanite against the rural dweller. Any interventions made by Government must be based on equity and on the basis that each bears the pain in accordance with their ability to pay.

We all have ideas. Our membership of this House is based on the notion that we put forward ideas to get elected here. I suggest we examine the notion of social capital. Amidst this economic storm there are practical solutions that would put thousands to work if the Government thought more laterally about its policy interventions.

Many communities are in need of serious investment in terms of public works that could be carried out at an extra marginal cost but that would yield a massive return in terms of adding to the quality of this country's citizens' lives. We need a proactive Government intervention at the most basic and community level to ensure our communities can survive.

In that light and in light of the fact that in the past six months my colleagues within the Labour Party have put forward some concrete proposals, we wish to work in a positive sense to try to do what we can to get this country up and running again. Today I spoke with my colleague, Deputy Róisín Shortall, who put forward proposals on the inclusion of certain persons within the tax net. In the past two weeks or so, we have heard many social commentators speak about the fact that 38% of the population is currently outside the tax net. If we are talking about a mini-budget in the coming months and if we are talking about changing the tax code or increasing personal taxation, we must take cognisance of the fact that there are large numbers within that 38% bracket who are pensioners and low paid. If the Government proposes to bring more people into the tax net, it must be on the basis of equity and not on the basis of making sure that those people on marginal or lower incomes are not taxed unfairly.

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