Timmy Dooley (Clare, Fianna Fail)

I welcome the opportunity to discuss this important matter. We debate on a daily basis the economic crisis in which the country finds itself. This is very much to the fore in national issues and in the international circumstances that have brought about the economic crisis.

To an extent, during the various debates on individual topics, we can lose sight of the real issues. We focus a good deal on the banks, the bonds and the various bondholders and on whether there will be senior or subordinated debt, interest rates, coupon values, non-recourse loans etc., while losing sight of the impact the current crisis will have on the lives of individuals and families. Most Members of the House hold clinics on a weekly basis and meet the people on the street. The overriding aspect of all this for me, and I believe for most Members, is the level of unemployment and the scourge that is associated with being out of work.

People can countenance a reduction in pay. We have all had to do it, and rightly so. People can countenance trying to reorientate the architecture of their household budgets, difficult as that might be, but it is being done, in some cases more successfully than others. Some clearly are under considerable strains because of their stage in life relative to the living costs with which they have to deal. There is real pressure on people in that regard, but the overwhelming scourge I see concerns people who are used to a reasonable level of income, with the associated costs, and who now find themselves on the basic level of social welfare, just able to remain outside the poverty trap. At the same time they have the burden of the significant debts associated with house purchase, education, car loans and private indebtedness.

We talk on all sides of the House about job creation and stimulating the economy. Some have various plans, but I do not want to get into this tonight or to be political. However, some of the statements are incoherent and I do not believe anybody has a monopoly of wisdom in this regard. There is a view to the effect that it is not the role of the Government per se to create employment, but rather to have a framework and conditions within which employment is created. I believe the Government is trying to create the appropriate framework, as I am sure its successor will also try to do. Difficult political decisions have to be taken and I do not believe there is anybody on this side of the House who would want to reduce the minimum wage, unless it was being prescribed as an obvious way to deal with the crisis.

I take on board what the previous speaker has said. Deputy Connaughton is a very shrewd politician and a man who has worked extremely well having been successfully elected on many occasions. He is a man I respect. He made a telling point in talking about Fianna Fáil's cute approach and the way we did business in the past. The simple fact is, however, that it is neither politics as usual nor the politics of the past. We are faced with a crisis we never had before. Sadly, we have to countenance methodologies and solutions to problems we did not want, but they are being put forward as necessary for regaining our competitiveness and the creation of jobs in certain sectors. If sectors in the economy are saying a reduction in the minimum wage will allow them to create more employment, then I do not believe any of us has a choice other than to try it out.

Of course, there are issues regarding the so-called average family living on 40 hours a week on the minimum wage. Deputy Connaughton has outlined the impact this would have on such a family. It is worth noting, however, that the family income supplement scheme is in place to protect those poverty traps, and it is a very useful mechanism for addressing such issues. People on the minimum wage are in second jobs in some cases, some of them as casual labourers, others just entering the workforce for the first time. For that reason it may not have the same impact on the family structure. I would argue, however, that the costs associated with remaining outside the poverty trap are addressed through the provision of the family income supplement scheme, which exists to protect the vulnerable family unit.

The overriding concern, however, is to get our competitiveness right. It is not just a question of the minimum wage. There are other escalatory clauses in place through joint labour agreements, EROs, etc. that have to be addressed but nobody wants to do it. However, we have addressed this in terms of public sector pay which was clearly set out as being problematic. We now have the Croke Park agreement which offers some protection for a period of time and, hopefully, that can be maintained. It is a question of recalibrating the cost structures within the economy. I would like to believe this could be done through reducing the cost of electricity, fuel, etc., but labour is a very significant component, and regardless of the electoral consequences, if we are not prepared to do what is right, we are casting a shadow over the lives of the population for years to come.

See this speech in context