Brian Cowen (Laois-Offaly, Fianna Fail)

The analysis we received from NESC earlier this month follows its analysis provided in January which fed into the February framework. It also provided further analysis in March. The Government recognises that there are many facets to this problem. The analysis also makes the fundamental point that this matter is not alone the responsibility of Government but of all economic and social actors in society who must come together to find a nationally supported way forward. We have been seeking to achieve this through the framework process agreed in February, an obvious imposition of which was the pension levy for which there was not agreement. However, that necessary and urgent decision had to be taken and was confirmed, in terms of its impact, in respect of the reputation of our country in regard to bond issues and so on.

I do not accept that the critique is fundamentally against the Government. The analysis points out that there is a need for all aspects of the crisis to be addressed. Getting agreement in this regard is always a problem. There has been much analysis. In June, we introduced measures through which we are seeking to assist on the skills and training front, including the stabilisation scheme and the employment subsidy scheme. Also, the number of available places for training and upskilling has doubled since 2008, up from 66,000 to 130,000.

There has been a response from Government in all areas. On the financial front, the issue to be debated in this House in the coming weeks is part of that response. We believe the National Asset Management Agency legislation is the means by which we can do this. Again, the response by markets to its publication and progress has been positive. The final issue is the budget and how that will be addressed. While there are many views in this House in regard to what should be the scale of adjustments the Government is of the view that if we are to effect a quick recovery we must avoid prolonging the crisis in our public finances, with all of the attendant difficulties that brings with it. While we have a high deficit and a relatively low debt, although rising quickly, we may quickly end up in a situation whereby we could move from debt interest at 4% to 11.5% to 20% by 2013, which would be a huge drain on the capacity of this country to deliver services given the great shortfall in our tax revenue position during the past two fiscal years.

I can understand why people might put forward a proposition that there is perhaps a different way of approaching this. However, I am of the view that we need to take decisions which lessen the prospect of that increase of debt interest as a percentage of what we are collecting in terms of revenue as this could impact in an adverse way our ability to fund services. That, in many respects, is the dilemma and difficulty we face. By the same token we must look at what it is we need to do, taking everything into account, including what is being said by the EU and European Central Bank, which has been helpful throughout the current crisis. From our own point of view, we must avoid a situation where we deflect more of a reducing resource towards interest on debt rather than addressing the debt issue itself, which means making a significant adjustment in the first couple of years.

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