Brian Cowen (Laois-Offaly, Fianna Fail)

The Government is taking the action that is necessary in the short term to ensure we can return the economy to growth. How does the Deputy expect jobs to come back into the economy without growth in the economy? The Deputy has referred to the ESRI report. The ESRI accepts that the balanced corrective action we are taking is the right thing to do despite, unfortunately, its very severe short-term effects. In an economy which is contracting by 8% this year unemployment is, of course, growing. We have factored in a projected 15% or 16% unemployment rate for this year and next year. Is that complacency on my part? Of course it is not. It is a fact with which we must deal. The ESRI is saying that unless this action is taken the prospects for growth will not reappear.

If one is to create and maintain jobs, one must bring back growth into the economy. The problem for a small open economy like ours, dependent for our standard of living on global demand, is that there is a global recession. Singapore, Korea and all the famous Asian tiger economies are contracting by anything from 8% to more than 10% this year. This is no comfort to us in Ireland but it is an indication of the global nature of the crisis and of the fact that the only way we can return to growth is by being more competitive and taking down our costs.

On 1 May, gas prices will come down by 12% and electricity prices by 10%.

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