Thomas Byrne (Meath East, Fianna Fail)

I picked up a copy of The Daily Telegraph earlier which is not something I do ordinarily, but it printed a picture of the new French Minister for Overseas Territories, Christine Kelly. Perhaps we should examine our diaspora in this context. However, I read a front page article and thought that a number of RTE's economics gurus had emigrated. The article states:

There are growing fears that the Government may be over-extending the public finances in response to the recession. Some fear the combined cost of banking bail-outs alongside economic measures could cause Britain to lose its top-level credit rating, raising the prospect of having to call on the International Monetary Fund (IMF) for help.

This articles highlights the issue raised by the Minister for Finance, the Taoiseach and all serious commentators. We are an island nation floating in the world economy and totally dependent on what happens in the global economy with limited power over our own economic sovereignty. However, we must do whatever we can to make sure the public finances are in order. Deflation is a threat to the economy but a short burst is probably needed to restore competitiveness. That means reducing wages and prices. However, too much deflation could cause a reduction in consumption, thereby reducing Exchequer tax receipts. Meanwhile, people's buying power would be vastly increased with interest rates remaining low. One must ask at what level of deflation and lower tax receipts will the Government state it will reduce expenditure on social welfare and other transfers to citizens and point out to them that they are gaining because of deflation. That is a difficult political message to sell but that case will have to be made at some point.

Inflation poses the greater risk. Many of my constituents shop in the North. While I have never criticised them, I do not agree with them in the current circumstances. The British economy is experiencing significant inflation. Prices generally have increased by 3% year on year with food prices increasing by 9%. People must realise they will not always obtain better value abroad.

I urge the Minister to continue as best he can with the capital expenditure programme. Schools building projects and the Slane bypass are important in my constituency.

The decision by the trade unions to call off the national day of action is a significant step and I urge IBEC to be more conciliatory in its public statements. Every time the organisation issues a statement it annoys the hell out of many people and that is not the point of social partnership. Its representatives need to be measured in what they say and more conciliatory towards the trade unions because some of their statements have not been conducive to the public good.

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