Micheál Martin (Cork South Central, Fianna Fail)

I welcome this opportunity to make my contribution to the budget debate along with my colleague, the Minister, Deputy Ryan. The key imperative facing the country is to chart a credible pathway over the coming years towards economic recovery and towards emerging from what is an unprecedented economic crisis. We have not seen the likes of this globally or in Ireland since the great crash of the late 1920s. It has taken a collective effort by the nations of the world to prevent the collapse of the global economy. There is significant interdependence in the world economy today that perhaps did not exist in earlier decades. It is important that this European and global context is not lost sight of in terms of where Ireland now finds itself. Since we joined the monetary union and since the phenomenon of globalisation, the world is a much smaller place; it is far more interconnected and the impacts of decisions we take here and elsewhere can influence Ireland and Europe. This is particularly true with regard to banking. We cannot act unilaterally with regard to banking as some people have suggested or superficially put forward as panaceas for the banking crisis. We cannot act unilaterally in this regard. That is very clear.

Some people sneered at the Minister for Finance for suggesting there was a turning point, but if one looks at the sheer decline in 2009 and the contraction in GNP and GDP terms and then looks at 2010 when that situation flattened and there was 0.3% growth in GDP, it is clear that there has been a substantial stabilisation of the economy. If one adds to this the modern dimension of our economy, namely, the industrial and export sectors, the economy showed significant resilience in the eye of the storm during the crisis itself when we witnessed a decline of 4% in exports in 2009 when other countries witnessed export declines of up to 16%. This year our exports have shown significant growth as they have increased by 7% in real terms in the first half of this year. This is a significant indicator of activity, productivity and regained competitiveness in this sector of the economy which, everyone agrees, is the engine of growth for the future and the way towards economic recovery. Manufacturing output was up 12% in the third quarter, export orders remained strong in October and the live register figures are down for the third month in row. Another key factor in terms of the public finances is that the underlying budget deficit stabilised at approximately 11.6% prior to the budget. This is important, because many people have suggested that the €14 billion correction that has occurred since 2008 has not worked or that it was unnecessary. If we had not made that correction, we would not have up to a €20 billion deficit but would be in a completely unsustainable position in terms of the public finances. That would threaten the very fabric of our social security and welfare systems and our health and education services. The answer does not lie in the wholesale reversal of the programme of getting our public finances in order. As our colleagues across Europe have said, we need deeper and more rapid action on a number of fronts.

The Labour Party has suggested that we could, for example, have worked on a €4.5 billion cutback this year. That argument is disingenuous because nobody has mentioned the growing nature of debt servicing costs. The longer we postpone the change, the more costs we build up down the line and that is the major problem with the Labour Party's €4.5 billion approach or with the idea that we can continue to delay corrective action. Both the Labour Party and Fine Gael have questioned the growth rates that underpin the budget and the four year plan. I suggest it is no longer enough for the Opposition parties just to question the growth figures. The plan the Fine Gael Party put forward accepts the Government growth figure and it forms the basis of the Fine Gael projections for the next four years. The figure also forms the basis of the Labour Party budget. The Commission has a different growth perspective.

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