Martin Mansergh (Tipperary South, Fianna Fail)

This is certainly a very important day in the history of this country and, indeed, the life of this Dáil. There is a conviction on the part of the Government that, with today's announcements, we have finally hit the bottom as far as the banking situation is concerned and that potential liabilities have been defined. Uncertainty as to the dimensions of the problem, coupled with the difficult budgetary decisions to be taken in the short to medium term, has caused many stresses in the market and challenges to our position over the past month or six weeks. It is also fair to say that today also shows us the full dimensions of the banking calamity that has hit this country.

There has been much discussion, and there will be more discussion and debate, about the causes of and responsibility for the banking crisis and what should have been done at various critical stages, up to and including today. Government clearly bears an important responsibility, but there is also - I do not mean to include literally everyone in this - a collective responsibility. Most people bought into and benefited in some way from the Celtic tiger. Politically, people are not being honest if they claim that they saw the calamity coming. It is quite true that Deputy Burton claims - I heard her do so - that she was critical of many of the property reliefs, but I would suggest that was much more motivated by equity considerations and traditional Labour thinking on what taxes wealthier people ought to pay than by the anticipated economic consequences, which Members are aware have turned into something close to catastrophe. People from the Labour Party benches often stated that Ireland was the second richest country in the developed world, which nominally was true in GDP terms but not in real terms. In addition, one of the mantras of the party's former leader was that the country was awash with money and ergo, more should be spent. However, with the benefit of hindsight it is clear that in many respects spending should have been more restrained.

Likewise, to defend Deputy Bruton, it is quite true that together with his party, he was highly critical of the benchmarking process. Although that was something that I have defended and still defend, the rates of increase for public servants, including Members, at the middle and higher levels were excessive and certainly were far in excess of those experienced at lower levels of the Civil Service. While Members may find it strange that I will cite someone who is not very popular on this side of the House, namely, Fintan O'Toole of The Irish Times, it appeared for a time as though we could have European-style social services for American levels of taxation.

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