Billy Kelleher (Cork North Central, Fianna Fail)

I will make my contribution and then I will listen intently to other speakers.

On competitiveness, we must readjust how we pay ourselves. If we do not, we will lose more jobs and it will further erode our competitiveness. In recent times, labour unit costs in Ireland went down by about 4% and rose in other European countries by between 2.5% and 3%. That in itself has made us more competitive, but there is a great deal more to do. The simplistic view being put forward that we can tax our way out of this difficulty, had been shown historically to be a failed policy. If we continue to burden the private sector in a difficult time - when there is huge vulnerability along with job losses steadily increasingly, up until quite recently - we will further exacerbate the problem. We must try to stabilise the public finances and do nothing that would make our private sector less competitive. At the end of the day, most job creation opportunities will arise from the small and medium-sized business sector, and will then move on to export companies.

Over many years, Enterprise Ireland and IDA Ireland have been very successful in bringing foreign direct investment to Ireland and in promoting Irish companies abroad through Enterprise Ireland's trade and technology board. We are acknowledged worldwide as being one of the most innovative people on the planet. In addition, we are willing to deal with difficult decisions when they arise. Looking back at the history of what has been done, particularly since 1987, hugely important Government decisions built a sound financial footing for the economy to evolve and become innovative with a highly motivated and flexible workforce. That has benefited us no end. Equally, our investment in education is acknowledged around the world. We have the best and brightest coming out of our colleges at the moment. However, if we put our heads in the sand and do nothing to rein in the public finance deficit, we will deny many of our finest people the right to work here and develop this country.

It is also important to get a stimulus package into the economy. It has been said that there is no such package, but Deputies opposite should examine the budget's stimulus package of well over 5% this year. There is a commitment that there will be such stimulus packages right through to 2014 and beyond. That gives us the confidence to know that school building programmes will be continued, as will the motorway programme. In addition, there will be investment in water and sewerage schemes, as well as research and development, including broadband and other key areas outlined in the Smart Economy document published last year. That document was ridiculed then, but it is now accepted here and abroad as a positive blueprint for investment in research and development, science and technology and the idea of the innovation island. That is critically important in attracting overseas companies to locate here. Likewise, when we promote Ireland abroad we can say we have a strategy for continued investment in key areas to create competitive opportunities and a dynamic to ensure that we can increase the labour market in the years ahead.

Obviously there are major pressures on families at present. No Government or employer takes lightly a decision to reduce wages or salaries, but it is very necessary. If we did not do it today, somebody could quite possibly do it for us in the very near future. That is not an idle threat. Some people may say that could never happen, but it has happened in many countries over the years. The IMF has arrived in some countries heretofore and is currently trying to address budgetary problems faced by some European states. The greatest signal we could send from this Chamber is that we are resolutely determined to deal with the difficulties in as fair and compassionate a manner as possible. It is very difficult, however. I have yet to hear from the Opposition benches a method whereby one can reduce public sector pay by more than €1.3 billion, which is being advocated by Fine Gael and which has also been acknowledged lately by the Labour Party benches. Yet when it comes to the specifics, they will continually oppose them. Nobody wants to take €1 billion out of any social welfare Vote, but it is fundamentally necessary because that is a huge annual cost to the Exchequer. We had to address that also, but when it comes to the specifics the Opposition will oppose every measure. Some of the Fine Gael proposals state that even more should be taken out of various areas and the New Era document will provide the stimulus to address all our difficulties. There are many flaws in it. However, this measure is part of an overall strategy and it is simplistic to look at it in isolation. We have reduced substantially in recent times the costs of running the State and more than €8 billion has been taken out of the economy since the slowdown. The pension levy was introduced and it in itself was a heavy burden on the public sector and Civil Service. We now have to make the decision to rein in public pay.

It has been suggested that we could tax our way out of the difficulty. The Labour Party, in particular, seems to believe there is a pot of gold elsewhere. One thing I know is that if we send out a message that we are not capable of addressing the budget deficit and that we will tax our way out of it, investment into the country will dry up in a very short time. Other people are campaigning for their countries to be seen as hot spots for foreign direct investment. The Singapores of this world are competing with Ireland on a continual basis. Now, with increased competitiveness and an adjustment in how we deliver services to people, we have a golden opportunity to send out a message that Ireland is very much open for business.

The view has been put forward, particularly by the Labour Party, that our international reputation is in turmoil. Anywhere I go internationally as Minister of State with responsibility for trade and commerce, it is acknowledged that our financial services centre is one of the finest financial services centres in the world and that the regulation of the sector is up to scratch. There have been difficulties with our internal banking system, but that should not be confused with the financial services centre. We have 26,000 people working in the financial services centre, which is of huge importance to our economy. Therefore, it is wrong for people to come in here and throw out an opinion that our international reputation is shattered. It is far from shattered, but it is certainly undermined when people cast aspersions in the Chamber without having the facts. That does a disservice to the people in the sector.

These are difficult times, but for people to try to portray those on this side of the House as people who do not understand what the public is going through is disingenuous and wrong. Fianna Fáil, in its many years in Government, has funded and expanded the number of employees in the public sector and expanded the services it provides for the people. We have been very proud of what we have achieved. It is with a very heavy heart, as the Minister for Finance said, that we must now make these decisions. We do not take these decisions lightly, but they are necessary. I hope that over the next number of months we will replace despair with hope and see opportunities creeping back into the economy. Hopefully, by the time we are discussing the budget next year, we will have reached our targets, will have growth in the economy and will have provided hope and opportunity for the people.

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