Brian Cowen (Laois-Offaly, Fianna Fail)

When they talk about the need to avoid a bubble, we all know their policies meant exactly that in the last election.

The important point is about correcting our public finances. It is also about regaining competitiveness in our economy and maintaining and creating jobs. The Government will examine all areas whether it be the tourism sector or the construction sector particularly after the serious job losses with the collapse of the domestic housing construction in the past 18 months.

Perhaps Deputy Bruton will clarify his suggestion that there should be no cuts in capital investment. He believes this must be maintained at present levels which means greater cuts would have to be found on the current expenditure side. This would have a serious impact on day-to-day service provision.

Tender prices are down by 30%. The Government is interested in maintaining the same level of output in capital but ensuring we use the more competitive tendering process now available. The depression in the market place will help get better value and outcomes. This is enabling us to get far more done with less money with the schools, roads and public transport we intend to build. It is important to point this out as there was a critique coming from the Opposition that the Government was not achieving in a range of areas.

The three big spending areas are health, education and social welfare. I agree there is need for further reform of the HSE. It must be acknowledged, however, there have been significant improvements in basic measurement of health staff performance and benchmarking it against best international practice. We are seeing real improvements in output and productivity growth as a result of having better management systems in place.

There has also been development in primary care services. I accept we have not yet reached the target of 530 primary care teams but by the end of 2011 they will be in place. It is by diverting activity from hospital services into properly resourced primary care that we will see an improvement in health service delivery. There has also been increased productivity in hospital services. With 1,000 fewer beds there have been lower waiting times for elective surgery. There has been improvement in the management of patient care in our hospital system with greater throughput and efficiencies.

It has been suggested that there is absence of vision on the part of the Government about where it wants to bring the economy. The smart economy framework sets out the platform for the areas of growth that we can identify. It is not about people in white coats in laboratories but about increasing productivity across all sectors of the economy. It is only by improved productivity that we will regain economic growth and competitiveness. By examining our labour and other rates we can see how we can get more productivity out of this economy in both the private and public sectors.

It is important that public sector reform needs is accelerated. This crisis provides us with an opportunity to do this, I hope by agreement. There are many tens of thousands in the public service who are dedicated to their jobs but who want to move away in some sectors from the crisis management mode to more redeployment, flexibility and opening up of organisational boundaries. There is an appetite for this and it can be done, particularly in the health sector.

However, it involves a rate of change from getting way from the nature of the health debates held in the House recently. There is a need to redeploy and reconfigure to move hospital services to centres of excellence. I accept parochial and local pressures have been brought to bear in this area. However, we must be prepared to recognise reform involves discipline and preparedness to move the existing configuration of services to ensure they are more cost effective.

There has been unprecedented investment in education. Even in the more difficult times of today, there is still a commitment to continue with schools refurbishment and ICT investment. It has also not just meant investment in teacher training and providing computers in classrooms but ensuring broadband infrastructure for schools and the bandwidth to enable it to be used as a real e-learning tool. The vision remains to modernise our education system at primary and post-primary level.

We need more collaborative projects in third level education. The problem which has bedevilled the health system, that institutions are stand-alone operations rather than a wider network of universities and institutes of technology, must be overcome. There are also opportunities in the internationalisation of education services with bringing more income and people to the country. It is important to recognise education as playing a role in economic policy and as an economic tool.

All of this investment and commitment in upskilling and preparing our people to adapt to new technologies to take up new opportunities can only happen if we face up to the short-term reality - we are spending far more than we are taking in. This is not a sustainable position and we must proceed with the budgetary adjustments. The Minister for Finance recognises, as does everyone who supports the Government, that it is open to Members opposite if they wish to put forward their constructive contribution to the debate. There is at least consensus in the House that this level of adjustment is necessary. All parties will have to recognise that there is no unanimity on what is fair when it comes to these cuts.

Fianna Fáil is very proud of what it has been able to achieve for those on fixed incomes during the recent period of prosperity. When inflation was approximately 12%, increases were made to the old age pension of more than 50% and the basic unemployment rate of 37%. We are conscious of the need to calibrate how we deal with that issue, knowing it cannot be avoided. The present level of investment in the social welfare area cannot be sustained in view of what taxpayers are in a position to contribute. We will approach that with the care and consideration that would be expected of parties in Government who have as much social concern in this area as any other party in this House.

The social welfare area amounts to one third of expenditure, as the Minister for Finance pointed out. The public pay and pension area must make its contribution, no matter what people think about it and we seek agreement on that issue. The programme area of expenditure also must make its contribution. These three areas must all contribute to the adjustments to be made. Despite what Deputies Burton and Bruton have said, the Government will take on that responsibility as carefully as it can. It will do so on the basis that all of us are interested in promoting Ireland's economic growth and ensuring job creation. Unless these corrective measures are taken, economic recovery will not occur quickly.

See this speech in context