John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I congratulate my former colleague from Seanad Éireann, the Minister of State at the Department of Health, Deputy Alex White, on his recent appointment. I have not spoken in the House since the announcement was made and wish the Minister of State the best of luck. I know he will bring great rigour to his important function in government. During this time in the Seanad, he was involved in many discussions on economic matters, especially during the time of the bank guarantee and the arrival of the troika on our shores.

He understands these matters and I am glad he is here to listen to the debate.

I want to make a number of points in the limited time available to me. I begin by emphasising that, despite some of the media commentary and the analysis by many people who are termed as experts, significant progress has been made in certain sectors of the economy even in the 18 months since the change of Government. One of the strongest statistics is on the area of employment in the private sector which indicates that slightly under 17,000 additional people are working in the private sector in the 18 months since the change of Government, which is a significant figure. Obviously, it is one we would like to see grow substantially in the coming months but it is something that is often forgotten in the general discussion that has taken place on economic matters in recent months in particular.

There have been also significant indicators that those outside of our shores believe the Government has got to grips with the country's economic difficulties. The most obvious indicator of that is that nine year bond yields are at a figure now which is approximately one third of where they were 18 months ago. That is a significant external indication that those people who consider lending to and investing in Ireland may have a more positive view of our outlook than we have and certainly than we often hear represented in the analysis of some experts in this country.

Other significant improvements have been made by the Government. I get somewhat disheartened when I hear members of the Fianna Fáil Party in particular go to great pains to state that since they went into opposition the Government would not be able to renegotiate certain aspects of the memorandum of understanding with the troika. Significant progress has been made in that area, not least the decision to reverse the cut in the minimum wage, which was one of those tokenistic gestures in which the previous Government engaged. Between 2% and 3% of the population are employed on the minimum wage but they were singled out for sacrifice by the previous Government. I am glad that through the efforts of the two Ministers working in the finance area, and the Taoiseach and the Tánaiste, that change was made. I am also glad the Government achieved a significant reduction in the cost of our borrowing over what was agreed by the previous Government. There was a saving in the region of €10 billion with regard to the changes achieved in the interest rates for the funding of which we are having to avail, which is a significant reduction and significant for the taxpayer.

On the matter of banking debt, we were all pleased with the announcement last June from the Heads of Government meeting that a special case was being made for Ireland regarding our banking debt. There was some disappointment, to put it mildly, on all sides, not least on the Government back benches and myself personally, as a result of the actions in particular of the finance Ministers of Finland, the Netherlands and Germany who had a private meeting at which they appeared to renegue on that commitment. There was also some confusion following the Council meeting last week as a result of what some people claim were difficulties with translation. I am not sure what happened but I am glad the Taoiseach and the German Chancellor clarified the position over the weekend that Ireland's situation is being viewed as a different case and that negotiations continue in that regard to ensure the two aspects of our banking debt, namely, the promissory notes and the recapitalised investment into the other banking institutions, are being renegotiated continuously. I wish the Minister and the officials in the Department success in those negotiations because it is imperative not just for the economic recovery of the country but for the self-belief and motivation of the general population that this yoke of debt that was placed upon ordinary taxpayers by the previous Government in its ludicrous decision to nationalise Anglo Irish Bank, and therefore nationalise its debt, and negotiate an arrangement which had fairly punitive interest rates is lifted as it has had a significantly demoralising effect on people. I do not underestimate the job of the Minister and his officials in renegotiating what was agreed by the previous Government but it is important that it is successful, and the announcement following the discussion between the Taoiseach and the Chancellor on Sunday was positive in that regard.

Significant progress has been also made on our level of exports and balance of payments. In the early days of the Celtic tiger up to 2002 we prided ourselves on our very good figures in that regard but post-2002 our economy was based on a property bubble. The previous Government became subsumed hook, line and sinker in the belief that that property bubble would continue and that its success would roll on indefinitely into the future. It built up public expenditure on the back of taxes that were unsustainable. What we have seen in recent years is a reduction in very important public services simply because the tax revenues from that property source have collapsed. That has resulted in much pain caused to ordinary families across the country, something that we all must acknowledge. It was through the unsustainable head-long promotion of property that those revenues were built and many people at the time, contrary to some of the coverage since, raised the issue with regard to our property market and the sustainability of tax revenues from that source. I recall raising it in the Seanad about seven or eight years ago when Charlie McCreevy was the Minister for Finance and I was the Fine Gael spokesperson for finance but there was a general attitude, best given by Mr. Ahern when he was Taoiseach which was dismissive, to say the least, of people who questioned whether those sources of funding could continue into the future.

I emphasise an issue I raised last year. I am aware there are ongoing discussions within the Minister's Department with a view to introducing minimum pricing for alcohol. I want a much more effective method of gathering revenue, although whether it would be effective from a health angle is open to question. Under our licensing laws more than 50% of alcohol is sold in the off-licence trade, yet people who have a licensed premises are charged a licence fee based on their turnover. However, the large multiples which sell millions of euro worth of alcohol - most of the alcohol that causes the binge drinking problems about which we are all rightly concerned - pay a flat rate fee of €500 for a beer licence, €500 for a wine licence and €500 for a spirits licence. I am not saying the rates should be equalised between the on and off-licence trade but a licensing system based on turnover for the off-licence trade, in particular the large multiples, would generate revenue as well as increase the price of leading alcohol products which are on the shelves of our multiples.

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