Michael McGrath (Cork South Central, Fianna Fail)

That is fine.

Much has been said about what happened in the good times when Exchequer surpluses were being returned every year. It is important to put on the record all the good things the Government did at that time, including the significant reduction in the national debt to among the lowest in the EU, which has given us the capacity to borrow at a time when we need to if we are to work our way through the current financial difficulties. We dramatically reduced the burden of direct taxation - the higher rate of income tax went from 48% to 41% and the lower rate went from 27% to 20%. This is forgotten. If we consider the effective rates of tax that I mentioned earlier, we are taking people back to 2004-06 levels. This is based on the statistics published by the Department of Finance.

We established the National Pensions Reserve Fund and invested significantly in it. We dramatically expanded the numbers in front line services, including teachers, gardaí and nurses, and we invested massively in the infrastructure of the country. Clearly, the money was spent in important areas, and we have benefited from that. However, we are now in a different situation. The significant issues in the banking system must be resolved as a matter of urgency and supports must be given to assist companies in maintaining employment, attracting new people and supporting new employment. This is essential. One of the key areas in which we must emerge from the recession in a better position is our cost base and competitiveness. The economic cycle will move on, but if we are not in a position to avail of the upturn when it arises we will not have availed of the opportunity afforded by this recession to reposition our economy, to become leaner and more competitive and to move into the industries that will characterise and dominate this century.

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