Brian Lenihan Jnr (Dublin West, Fianna Fail)

-----for any such common arrangement. It has often been advocated by other member states.

I thank the Deputies for their contributions to the debate over the past few days. They have touched on many issues. The main points that need to be made can be summarised briefly.

Over the past two years, the Government has not hesitated to take big decisions to stabilise the banks and the public finances. Despite the fact that we are achieving stability in the financial sector and that Exchequer revenues are also stabilising, it is imperative that the Government demonstrate again that it has the ability to act decisively by making further adjustments. There have been unfavourable developments, referred to in my replies, that have affected the overall economic outlook and market sentiment. We cannot put off decisions to address the €19 billion gap in the public finances. The longer we wait to do this, the higher the proportion of our taxes that will have to be devoted to servicing our debt. Such a delay would be predicated on the unlikely assumption that markets would allow it without at least increasing the interest rates on Irish debt. It is neither credible nor sensible to delay making the adjustments to meet the deficit target of 3% of GDP by 2014.

Making these adjustments will be difficult, but in doing so the Government will be mindful of the economic impact of whatever it will do and will, therefore, seek to minimise any harm it might cause to the economy. At all stages, we must protect the vulnerable in so far as we can but we must not allow any section of the community believe it cannot make any contribution. Everyone must make a contribution and those who have most must contribute most, but everybody will have to contribute something. As a result of the briefing that the Opposition parties have been given by my Department and from the speeches of the Taoiseach over the course of this debate, the Opposition should now have a clear picture of the issues facing us in dealing with the public finances.

It is clear that the adjustments that will have to be made will be painful for living standards but it is essential that we all keep a sense of perspective on this matter. Over the past decade or so, living standards for all, including for those dependent on social welfare payments, have increased considerably. Over the past five years, even the lowest rate of welfare payment rose by some 45%, several multiples of the increase in prices over this period. On the labour market side, while there have been serious job losses in construction, employment in other sectors has held up well, such that we have close to 1.9 million at work earning wages that had also increased above the cost of living. Following the adjustments that have to be made, we will still hold on to most of the substantial gains in living standards that we achieved in recent years.

The four-year plan will not confine itself to adjustments to the public finances. They, on their own, cannot deliver economic growth. A key part of the plan will focus on structural reform, both to increase employment and economic output and income. We must change the way in which the economy works, both in the public and private sectors. The public service has a critical role to play in our economic recovery and in underpinning growth over the longer term. Public service numbers have to fall. The costs of public services have to be reduced and the way in which these services are delivered has to be reformed and transformed. This is why the Croke Park agreement is important as a framework under which these changes can be delivered. In making these points, I do not imply any general criticism of the public service and must say that many of the criticisms miss the mark, often by a wide margin.

In the private sector, we must make proposals to reduce costs further and continue to improve competitiveness. These proposals will be a critical part of the plan if we are to base our economic future on export-led growth. Already, our exports have recovered strongly in response to the recovery in wage and cost competitiveness. We must also support our indigenous companies, especially small businesses, by helping them to reduce their costs and administrative burdens. For all sectors we have to do more than just improve cost competitiveness. We must ensure the workers available to fill future jobs will be suitably qualified and trained. We must take action to ensure that all businesses - whether selling to the export or domestic market - operate in a wider economic environment where all sectors operate efficiently and none acts as an expensive or inefficient drag on another.

In the weeks ahead, the Government will agree a framework and plan for the next four years which will be critical for our economic recovery. Acting on this plan will involve difficult decisions because they will cause pain for many, but we have no choice but to make them. If we make the adjustments now, we will ensure a better hereafter for our economy and our children. If we act resolutely, the reward for all of us will be the securing of a strengthened economy and renewed society for us and the next generation.

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