Arthur Morgan (Louth, Sinn Fein)
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The front-line casualties in the economic crisis we are debating today are the thousands of workers who are losing their jobs every month, and hundreds of viable small to medium sized businesses which are going under because of the credit crunch.

In the past four weeks Dell has announced 1,900 job losses with a further related 4,000 jobs to go; Kostal has let 300 people go; 400 workers have been made redundant in Dundalk and last Monday it was announced that 750 workers in Ulster Bank will join the growing queues at our social welfare offices. While this is happening the Government is doing nothing. Everyone, including the dogs on street, can see that the Government has not done a single thing for Irish workers since this crisis started six months ago. The Government has also ignored small and medium sized businesses. The only noticeable measure the Government has taken has been to bail out its greedy property developing friends through the banking sector. I cannot think of one other move apart from that.

Thanks to this inertia, almost 300,000 people are on jobseeker's benefit and the Minister for Social Welfare, Deputy Mary Hanafin, admits that staff in welfare offices are "working flat out" to process welfare applications. While our dreadful economic circumstances are as clear as daylight, the Government's plan of action is as clear as mud. Over the past four months we have seen one woolly document after another proposing, and leading to, nothing. The Government has done a U-turn on almost every decision it has made and the poor Minister for Finance, Deputy Brian Lenihan and the so-called "excellent people" at the Department of Finance have got nearly every estimate they have made completely wrong.

We had been led to believe that the stimulus package produced last December would provide us with a clear path out of this mess. Instead we got a flimsy discussion document long on waffle and short on ideas. Despite the criticisms from all quarters, the latest framework document headings which were presented by the Department of Finance in the negotiations with the social partners have been described as "vague". According to reports this document did not even mention public sector pay cuts although the Minister for Justice, Equality and Law Reform stated last Monday that nothing could be ruled out.

The confusion that the Taoiseach and the Minister for Finance have created through their mixed signals and dithering has reinforced the public perception that the Government does not know what it is doing. If it does know it is deliberately creating confusion so that it can implement the most severe cutbacks imaginable while the confusion still reigns. Amidst all this uncertainty we are now one of the last countries in the western world to implement a recovery plan.

There has been much talk over the last few weeks of "zombie banks" but the leadership comes from a zombie Government that has helped create our zombie banks. The Minister for Finance unbelievably claimed last week on BBC's "Newsnight" programme that our economy is vibrant. If the Minister bothered to listen to the 5,000 Irish workers who are losing their jobs every week, he would hear a different story. It is this type of nonsense from the Government and senior officials in the banking sector that makes it far more difficult to get to grips with our dire circumstances.

The banking crisis is central to the Government's failures to do anything right at the moment. Despite the Government's claims, this banking crisis was very much of its own making. In the last four months, we have seen the disaster go from bad to worse and we still have no evidence that the Government has finally got on top of it. At this stage, I dread to switch on the news on Sunday nights in case I hear the Government's latest bird-brained idea, probably cooked up by its friends in the banking and property sectors.

The Government's guarantee scheme was described by the Minister for Finance last September as "the cheapest bailout in the world". The taxpayer is now set to take on a €73 billion loan book on top of the Government's €440 billion guarantee scheme and its €10 billion botched recapitalisation. The aim of the latest nationalisation scheme was to get a corrupt, debt-riddled bank and its cash-strapped builders off the hook. At the press conference about the Government's botched recapitalisation scheme, the Minister stated that "nationalisation would be affirming that we have no confidence in the bank as a bank to survive". He then went on to state that under State ownership, it will be "business as usual" for Anglo Irish Bank. The last thing we need is "business as usual" at Anglo Irish Bank. The latest news on the Anglo Irish Bank saga is that the bank will be transformed into some kind of skip for bad debts, which would enable other banks to get off scot free. Why should the taxpayer have to pay for the mess that the banking institutions created themselves, with the help of the Government?

While Irish workers are being asked to bail out the banks, the likes of Seán FitzPatrick and Roddy Molloy are riding off into the sunset with golden handshakes worth hundreds of thousands of euro and pensions worth more than €100,000 per annum. Does the Minister find that acceptable? These people are walking away without being sacked. They resign in advance and walk off with these golden handshakes and huge pensions, at a time when many workers across the private sector are threatened with losing their pensions. The workers at Waterford Wedgwood face the prospect of seeing their pension schemes wiped out, yet these characters are walking off with their huge pensions while the Government does absolutely nothing about it. The public cannot understand that. As a Member of the House, I cannot understand how that is happening and how the Government is presiding over such a catastrophe. I really believe it warrants an explanation.

When will we finally see legislation to outlaw the behaviour of the likes of Seán FitzPatrick? When will there be wholesale changes in our regulators to ensure that it does not keep on happening? While the Government gives golden handshakes to the likes of Roddy Molloy and others, it has shifted responsibility onto public service workers for the mess that it has created. Having listened to senior Government members, IBEC officials and even Fine Gael, one would swear the deficit in public finances is solely down to our public service. Over the past number of months, the attacks on the public sector from these parties have intensified and the public sector has been wrongly described as "inefficient" and "bloated", while public spending is characterised as "unsustainable". There are some inefficiencies in the public sector, but these can be dealt with and managed quickly.

As an economist stated in yesterday's edition of The Irish Times, the crisis in public finance was not created by the public sector, but rather by the property market. Successive Fianna Fáil led Governments, because of their cosy relationship with developers, made this country dependent on property taxes and encouraged a property bubble that continued to swell out of all proportions. With the bursting of the property bubble, which is what bubbles usually do, our revenue plummeted. The Taoiseach encouraged this bubble and it is he and the Minister for Finance who continue to prioritise those dodgy developers over our workers, our SMEs and our economy.

Why should the low paid workers in any sector take the hit for that level of incompetence and the incompetence of those around the Government? If there are savings to be made, why do we not start with the Government's friends who can afford it most? Everyone can see that the CEOs of State bodies from FÁS to Coillte are grossly overpaid, and if anyone must take the hit we must start with these people.

We all accept that there are efficiencies which can be delivered by the public sector but this does not mean taking an axe to it. With all the talk of efficiency and adopting a business model, nobody from IBEC to the Fianna Fáil Party has ever once looked at the horrendous waste of State resources as a result of outsourcing to private companies. We have all seen the bills for so-called consultants. I accept that is improving, but it is very late. In the health system, hundreds of millions of euro have been thrown away on subsidising for-profit health care companies which is only draining our public hospitals of resources. Despite all the claims of efficiency by the Minister for Health and Children, the reality is that private health care is inefficient. It is a complete waste of taxpayers' money and an inferior service to the public system. Numerous reports in the United States have proven that for-profit health care companies, of which the Minister and the Taoiseach are so fond, do not provide the same level of care as public hospitals.

Hundreds of millions of euro in tax is foregone by the State in exemptions for investors through the promotion of private hospitals. This is most evident in the co-location strategy that the Government has continued to pursue, despite the objections of those working in our health system. Why can the Government slap an income levy on people barely over the minimum wage and continue to shelter investors from being taxed on their rental income through private hospital adventures? These are not ordinary people, but extremely wealthy individuals who continue to avoid paying taxes despite our plummeting public finances.

How can the Government find the billions to bail out banks and property developers, when there is not a brass farthing for our schools or the elderly? There is not enough funding to hire midwives to allow them do their work properly. The midwife ratio should be one to every 25 births, but in the maternity unit of Our Lady of Lourdes Hospital in Drogheda, the ratio is currently one midwife to every 48 births. That means that the midwives are doing double the work they should be doing, and double the amount of work that is deemed safe, yet this has prevailed for several years. However, people still tell us that the public service is inefficient. It is surely these areas that need to be examined, rather than undermining our front line services and our low-paid workers.

Sinn Féin made a number of proposals in our pre-budget submission to find the resources to deal with the deficit. The Government did not do enough on a standard rate of tax relief, it failed to lift the PRSI ceiling sufficiently and again did nothing to address the litany of tax exemptions that allow investors to evade paying tax. These are the measures that had to be taken; not some sordid and mean-spirited attack on low-paid workers. Had these measures been acted upon we would be well on the way to meeting the €2 billion target set by the Government.

If the Government wants to get spending under control, it will have to change its "private good, public bad" mindset and put an end to this wasteful outsourcing of our public services. For example, this will mean an end to subsidising the private practice of consultants in public hospitals. The State will have to take control of some useful resources, such as the Corrib gas pipeline. I suggest that it should renationalise our telecommunications network. A major public State bank needs to be established to address these problems. This would involve the nationalisation of a major banking institution to offer credit to small and medium sized enterprises, restructure mortgages to stop families from losing their homes and restore confidence among the Irish people, workers and businesses who have the skills and knowledge to get us out of the current economic turmoil. If we are to encourage economic renewal and secure our public finances, the public will have to come first and property developers will have to follow behind, for a change.

In the statement he made in the House earlier this afternoon, the Taoiseach argued that as the situation deteriorated, the Government introduced an early budget to make some difficult expenditure and taxation adjustments and give clear signal of its determination to respond to the various economic pressures the country was under. Perhaps some of the more interesting aspects of the Taoiseach's statement need to be examined in closer detail. It is worth remembering that the Government was on holidays for most of the early part of this crisis last summer. It did not bother to come back. The Spanish Government came back to try to do something about the crisis, at least. In the absence of a prepared plan, the Government's reaction to the pressure of the public, which had started to appreciate the gravity of the situation, was to introduce a rushed budget in October rather than December. Some people thought it was a good sign that the Government was about to take action, but that was not the case. It decided to take medical cards from older people. Its decision to slash the education budget affected teachers and students. It imposed a 1% income levy on people on the minimum wage. Those three disastrous decisions were reversed, thankfully, following public protests. That was welcome, even if the Government had been forced to back down.

If the Government had accepted the pre-budget submissions of organisations like the Conference of Religious in Ireland and my party, Sinn Féin, we would have made significantly more progress by now. The Taoiseach told us earlier today that the Government had clearly set out the measures it intended to take to support a return to sustainable growth and encourage job creation over the medium term. His contribution set out some vague aspirations, rather than any detailed or specific actions. I would have welcomed some detail. If we had got it, perhaps we could have supported it. We did not get that information, however, which is unfortunate.

In the comments I have made so far, I have dealt primarily with Fianna Fáil's contribution to this crisis. The presence of the Minister of State, Deputy Sargent, reminds me to speak about the role of the Green Party in government. To be frank, I have not heard any solutions from the Green Party. It has not made any proposals on how to make our way out of the economic mess that has been created by 11 years of virtually the same Government. We may have got a hint of what the Green Party is doing when the leader of that party spoke in Drogheda, which is in my constituency, last Saturday. His contribution to solving the economic crisis was to say that he intended to examine the expenses and allowances of Deputies. The Ceann Comhairle will be more aware than most that Members on every side of this House have been in favour of the reform of the expenses and allowances processes for some time. I do not know why the leader of the Green Party was wagging his finger in Drogheda last Saturday, especially as the Houses of the Oireachtas Commission had announced significant changes to the system of Deputies' expenses and allowances on the previous Tuesday. He was well out of touch. If that is the best advice he can give as we try to get out of the economic crisis we face, that sums up the impact of the Green Party in government. It is extremely disappointing and unfortunate.

I hope somebody in the Green Party can remind that party's leadership that policy positions need to be drawn up to deal with this ongoing crisis. Perhaps some of the proposals that have been made by Members on this side of the House can be examined to see it they merit consideration. The Green Party needs to develop some policies if it is to deal with this problem. To completely ignore the biggest economic crisis the State has faced since its foundation is less than worthy of any political party. I will conclude on a constructive note by assuring the Government that if it produces a decent plan, we will support as many elements of it as we can. No plan has been introduced to date. It is about time for a proper plan to be developed and proper structures to be put in place to deal with the economic crisis. We have seen no such plan to date.

Noel Dempsey (Meath West, Fianna Fail)
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I will start on the note on which Deputy Morgan finished. If we need Sinn Féin to come up with bright suggestions to resolve the current economic crisis, we will be waiting for a long time. Contrary to the protestations we heard this morning, this important debate gives Members on all sides of the House an opportunity to state clearly where they stand in the current economic crisis.

Arthur Morgan (Louth, Sinn Fein)
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This is not a debate — it is a set of statements.

Noel Dempsey (Meath West, Fianna Fail)
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It is important that Deputies have an opportunity to offer suggestions and solutions. Deputy Morgan has recognised that this is a serious national crisis. There is nothing to prevent Members of the House from making constructive suggestions and addressing the various issues that have been clearly set out for their information. The only conclusion I can draw from the resistance of Opposition Deputies who have protested that they cannot make suggestions during this debate, because they do not know what the circumstances are, is that their paucity of ideas will be exposed over the next two days. This debate will expose that despite all the verbiage we have heard from the Opposition since last September, it does not have any real solutions. At the end of the debate, it will be interesting to analyse how many good, concrete suggestions will have been made by the Opposition.

I have already listened to some parts of the debate since it started earlier this afternoon. Having been a Member of this House for over 20 years, I have listened to frequent taunts from the Fine Gael benches, in particular, about the negative approach that was taken by Fianna Fáil when it was in opposition in the 1980s.

Kieran O'Donnell (Limerick East, Fine Gael)
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It is still negative in government.

Noel Dempsey (Meath West, Fianna Fail)
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I am often reminded of how great Fine Gael was when its former leader, Alan Dukes, initiated the Tallaght strategy in the national interest in the late 1980s. Over the last six months, during a more serious situation than that of the mid-1980s, Fine Gael has been far more negative than Fianna Fáil ever was in this House. I continue to have the highest admiration for Alan Dukes. It is clear that the attitude he took in the 1980s was not typical of Fine Gael, however. He is always cited by Fine Gael as a model politician who put the national interest first. I have often acknowledged in this House, and in person to Mr. Dukes, that he took the correct course of action. While his stance was a positive one, it is clear that it was an aberration from the norm in Fine Gael. His call to patriotic duty, if I can use that phrase, was warmly received in Fianna Fáil at that time. Unfortunately, most of Fine Gael remained true to its negative instincts and got rid of Mr. Dukes at the first available opportunity. Not much has changed in the Fine Gael Party in the intervening 20 years except perhaps that it is impossible to find even one person like Alan Dukes on the party benches.

I notice of late that Deputy Kenny is trying to portray himself as being more positive, offering all types of solutions to the current crisis. Clearly, he is getting the message from the public that it recognises the extent of the national crisis and that it wants positive solutions rather than the usual political point-scoring we have seen in recent years. However, all the solutions I have seen thus far from Deputy Kenny are either populist or totally ignore the size and extent of the problems we face. Yesterday, for example, he stood in the Chamber in his positive mode to propose a reduction in the VAT rate. He did not specify what that reduction should be but we may assume, given that he was referring to cross-Border shopping and the threat it poses to retail jobs, that he proposes to reduce it temporarily to the current United Kingdom rate. He may have used the word "concede" in this regard.

The issue of cross-Border shopping and the associated loss of retail jobs in the State is serious. However, the result of a reduction in VAT to the United Kingdom rate would be an increase in the revenue shortfall of €2 billion to €5 billion. If Deputy Kenny intended instead to propose that VAT be restored to the pre-budget rate, which was half a percentage point lower, the gap would be €2.5 billion. What type of solution is presented by either of these proposals? Deputies Kenny and Bruton and their Fine Gael colleagues criticised the Government at budget time for aiming at a budget deficit of 6.5%, arguing that it should instead be set at 5.5%. This would require at least an additional €1 billion of spending cuts at a time when Fine Gael opposed every single measure we proposed to cut expenditure. What type of solution is that?

We have listened for the last six or eight months to various Fine Gael spokespersons attacking the public sector, insisting that it is too large and that this and the previous Government were guilty of giving public service staff more money than they deserve. We have heard much talk from Fine Gael about reducing the number of public sector staff and reducing the pay bill. We were lectured consistently and insistently about fiscal rectitude until, lo and behold, decisions have to be made by the Government in regard to the public sector. Suddenly, Fine Gael discovers the public sector is not so bad after all and that its staff are not, after all, overpaid, with the possible exception of some of those fellows earning more than €100,000.

These are just some examples of the types of flip-flop policies pursued by Fine Gael. Instead of taking the realities of the current situation fully into account and putting forward balanced policy proposals, it will instead follow any populist notion. These examples underline how bereft that party is of authentic ideas and of the courage to make the necessary decisions we all face in the national interest in the coming weeks and months.

The proposals from the Labour Party are not much better. I have seen only two concrete proposals. The first is that we should have an election. If that is the best Deputy Gilmore can do after ten years in opposition, that is precisely where he should stay. Does he not remember the early 1980s when there were three general elections in 18 months, with the result that economic recovery was postponed for a decade? The other issue on which the Labour Party has focused is its suggestion that we should increase our borrowing. I will return to that point presently. We have heard the Labour Party make all types of sounds in the current difficult times but it is producing little by way of positive ideas or solutions. It opposed Government moves to protect the savings of thousands of workers and their families through the bank guarantee scheme. It opposed moves to provide capital for businesses so they could continue to employ people.

The Labour Party keeps talking about the necessity of getting the finances right to ensure the economy recovers, yet it has proposed to borrow more and more money. How is that for consistent economic logic? Its approach to current economic difficulties is dramatically different from that of its erstwhile partners in Fine Gael. The Labour Party proposes more borrowing and more spending while Fine Gael accuses the Government of spending and borrowing too much. Fine Gael is — or was until recently — advocating massive cuts in public expenditure and in the public sector. The Labour Party is diametrically opposed to those policies.

In these circumstances, a general election campaign and its aftermath would serve no useful purpose other than to return us to the conditions of the early 1980s. It would lead to increased uncertainty and delay the necessary programme of recovery already begun by the Government and outlined today and previously. Recent opinion polls may have gone to Deputy Gilmore's head because it seems he now wants to be Taoiseach. The one telling figure in all those polls is that 67% of the electorate are of the view that an election would serve no useful purpose.

Kieran O'Donnell (Limerick East, Fine Gael)
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I hope the Minister, Deputy Dempsey, will remain in the House to allow Members to respond to the points he raised. He has discussed everything other than Government policy. He did not mention the framework or any other of Fianna Fáil's proposals.

The Taoiseach's speech this morning was perhaps the most negative I have ever heard.

Noel Dempsey (Meath West, Fianna Fail)
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Deputy O'Donnell obviously does not read any Fine Gael scripts.

Kieran O'Donnell (Limerick East, Fine Gael)
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I listened quietly to the points made by the Minister and I ask that he do the same for me. The Taoiseach stated that there will be an additional 100,000 persons unemployed this year. What type of message does this send out to the public? It is indicative of failure and shows that the Government has no plans in place to deal with rising unemployment. The Government should be bringing forward policies to provide jobs. Instead, I am gravely concerned that it is using the framework for working with the social partners as a political shield rather than as a mechanism for bringing forward policies. The Government has yet to state what will form part of this framework. I see the Minister is leaving the Chamber.

Noel Dempsey (Meath West, Fianna Fail)
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Yes, I apologise.

Kieran O'Donnell (Limerick East, Fine Gael)
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This shows the contempt of the Government for the points made by the Opposition.

Trevor Sargent (Dublin North, Green Party)
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I will convey the Deputy's points to the Minister.

Kieran O'Donnell (Limerick East, Fine Gael)
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I thank the Minister of State.

This is a serious debate but it makes little sense to have it at this point. Instead, it should take place after the framework document is issued. The Minister, Deputy Dempsey, was in the Chamber for ten minutes and never mentioned in his contribution what the Government intends to do. He did not refer to any of the policies it intends to bring forward. Nor was there any mention of the difficulties people are experiencing in terms of losing jobs and being unable to meet mortgage repayments. There was no reference to the pressures being experienced by the owners of small businesses to continue to pay the wages of their staff. He spoke about good old fashioned bully-boy political tripe that serves no purpose for the people of Ireland in the context of the position in which they now find themselves. Furthermore, he has left the Chamber.

I thought this debate was about engaging in discourse on dealing with the economy as we now find it. Why are we in this mess? I will not attribute to the Government the problems prevailing in the international economy, but I will deal objectively with the Government pushing the growth of the construction sector. In 2001, growth in Irish exports was of the order of double digits. We are a small open economy. In 2003, our trade in exports was in a negative position, while the growth in the housing construction was going out of control. The Government took the easy option. What is worse, it did not even have the confidence to assert how vulnerable we were in having everything reliant on the construction sector as we moved forward.

When moneys were flowing in, the Government was like a depot waiting for the cash to come in and then spending it, but it was spending money on services that were not sustainable into the future. It misled the people and provided services that were not sustainable. We now find ourselves in a position where the Government will have to borrow €18 billion this year. It can be compared to a business, it has an overdraft and the surcharges are beginning to hit in that we are paying nearly double the rate paid by Germany to borrow money abroad. The question is how long will we be even able to borrow money.

The Minister, Deputy Dempsey, spoke of issues that are of no relevance to the position in which we as a country find ourselves. I will call on the Government after next Tuesday, when the framework document has been agreed by the social partners, to allow us to debate it, go through it and deal with the issues that have been raised.

Positive measures are needed. Deputy Kenny brought forward one of the most practical measures needed this morning. He asked the Taoiseach to require the Department of Finance, together with the governor of the Central Bank and the Financial Regulator, to give a breakdown of all loans taken out by small businesses and all mortgages taken out by home owners who are experiencing difficulty making repayments to facilitate a valid discussion on how much it would cost to deal with the debts of these people. However, €7.5 billion of the National Pensions Reserve Fund or nearly half of it will be put into banks, one of them being Anglo Irish Bank, which effectively is a zombie bank. This is taxpayers' money. We do not even know how much it will cost us. Why has the PricewaterhouseCoopers report on the banks not been published? What we need are the facts.

In my previous career I practised as an accountant for many years. If a person in financial difficulty came to see me, I would ask him or her to fully outline their financial position to enable me to address the difficulties presented. The Government is not doing that. It is in denial. Clearly, it does not know what it is doing and it does not understand that people are worried about their security of their jobs. We are grossly uncompetitive. We have lost 33% in terms of national price competitiveness in the past eight years. The Government has no structure in place to address this.

A number of points are worth taking on board. A radical strategy needs to be put in place to ensure that the jobs of these 100,000 people in question are retained. If people have jobs, they can afford to pay their mortgages. Furthermore, they will not pose a charge on the State in terms of social welfare benefits. Neither will they have to worry about their children's education. If these people lose their jobs, they will lose dignity and hope. I did not see the word "hope" in the Taoiseach's speech, all we heard was negativity. He used the words "unexpectedly rapid collapse of the activity in the construction sector". The dogs on the street knew that the construction sector was in trouble. The Taoiseach used the word "unexpected" and he expects the people to take the Government seriously. The Government lacks credibility on an enormous scale as to exactly what it will do to address this matter.

We need to come up with a policy to protect the mortgages of home owners. People are worried about losing their homes. When the recapitalisation scheme is going through for the other banks, we need to demand that they provide measures to protect homes and that they provide funding to small businesses. Small businesses are not getting access to funding. If we recapitalise the banks for no reason other than to allow them to write off their bad debts, that will not be good enough.

People who are following this debate will note that Seán FitzPatrick had a loan of €87 million from the bank. In the 2007 accounts he was recorded as a non-executive director. He was not even working for the bank at that time and he received €413,000, nearly half a million euro, in director's fees. How can the Government expect people to take what it is putting forward as credible when it appears, on the surface, to be bailing out the banks, not looking after small business and mortgage holders and not protecting jobs?

Our challenge and that of the Government is to keep people in jobs. We must examine radical measures, be it through the social welfare system or otherwise, to enable employers to keep people in jobs. We must return to being competitive. We have a glorious opportunity during the next few years to restore our competitiveness. I did not see a reference to that in the Taoiseach's speech today.

I take grave offence at the Minister, Deputy Dempsey, insulting the House by not dealing with the issues in this debate. We are the fastest declining country in Europe. The position now is not like that in the 1980s when the debt was Government debt, now it is not only Government debt but private debt. The Government pushed our debt from the State sector to the private sector and now people are losing their homes and their jobs. In response to addressing these issues, we got a performance from the Minister, Deputy Dempsey, that put Ballymagash in the shade. That is not good enough. When the framework document has been dealt with by with the social partners, I want the Government to allow us to debate it, to restore dignity to the House and for it to act as a government rather than behaving in an insulting way towards this House and, by implication, towards the Irish people.

We are in this mess for two reasons. First, it is due to the Government's over-reliance on the construction sector. We were not able to withstand the external shocks in terms of the slowdown in the international economy and ours is now the fastest declining country in Europe. Second, the Government has not brought forward any measures in terms of job creation, job retention, mortgage protection or in terms of moneys flowing to the banks. Addressing this problem is not rocket science. It is about knowing about how business operates, dealing with the situation and ensuring that the Government does not use the social partners as nothing more than a political shield.

Trevor Sargent (Dublin North, Green Party)
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Cuirim fáilte roimh an deis labhartha ag an díospóireacht thábhachtach seo. Mar a dúirt an Taoiseach níos luaithe, "global output is expected to decline . . . and . . . global export volume to be down for the first time since 1982". In the midst of that global picture, a point I, as Minister of State with responsibility for food and horticulture, probably do not need to make is that we all need to eat. Eating well keeps us well and health is wealth. There are different ways of measuring wealth. We are focused on the financial problems today, but there are also issues that affect us all in different ways in terms of our quality of life.

The agri-food sector continues to be of great importance to Ireland. It is our most fundamental indigenous industry, accounting for 10% of total Irish exports and nearly one third of net foreign earnings of our primary and manufacturing industries. Its resilience, capability and ability to adapt to changing circumstances have contributed to increasing the value of exports by €1.5 billion to more than €8 billion since 2002. The industry is important in every county and accounts for more than 8% of employment.

The resilience of everyone whose business is food is now to be tested as never before. The competition between large retailers brings to mind the old proverb "when elephants fight, grass gets trampled". In Ireland's case, it is the farmers who are feeling the pressure and as a result our means to feed ourselves as a country is unfortunately being undermined.

As people will know, I, like many Members, enjoy growing some of my own food in my garden, but the skill needed to produce a high quality consistent, low cost crop to order on a massive scale of tens or hundreds of acres is an enormous achievement requiring skills that all too often are taken for granted. It is sobering, therefore, but important to state that the excellent growers of the fruit and vegetables we all need every day must have our support. I am talking about the farmers who are still growing. I can document others, from County Cork to County Donegal to Dublin, and in between, who are no longer growing. In many cases they have left their land uncultivated which is a tragedy not only for them and their families, but for all of us, in terms of food security. My priority is to get those farmers back into production as well as to give hope and confidence to farmers who are still producing.

The development strategies implemented for the agrifood sector and the investment in marketing, food safety and traceability have given rise not only to an overall increase in exports, but also to the development of new consumer foods, dairy ingredients and beef markets in the EU. The sector has a solid future based on its land resources, further moves to higher value products, more efficient processing and application of the results of high quality investment in food research and market and consumer insights.

On the world trading front, we are determined to continue to press for strategies that will allow Ireland retain its agricultural production base to meet the future demand for food. The weakening of sterling against the euro is impacting on the agrifood industry's competitiveness in respect of its most important export destination. The UK accounts for almost two fifths of Irish agrifood and drink exports and remains our biggest market despite diversification to other EU markets and beyond.

The national development plan provides €289 million to support investment by the food industry in capital infrastructure as well as in marketing. In the past two years, €130 million has been announced in awards for capital investment projects, including €16 million announced as recently as December for projects that will support continued investment in the food sector, add value and improve competitiveness. Each business must be run in an efficient way, must watch its costs and must make a profit. It must have a strategy with regard to deciding its place in the market and differentiating itself from other similar businesses. Reviewing one's business energy costs and, where possible, employing renewable energy sources can lead to greater profit while at the same time preparing for a post-fossil fuel future and combating climate change.

Despite the tougher economic circumstances, the Government is committed to continuing its support for the development of the horticulture sector. Under the scheme for the development of commercial horticulture, which provides national funding under the national development plan, grants of almost €6 million were paid out to 137 producers in 2008. This year, we hope to continue this funding for development, if at a more modest level than last year. The scheme for 2009 was launched in December and the closing date for the applications was 16 January. These applications are currently being evaluated.

In addition, the EU producer organisation scheme can provide an important mechanism for growers to achieve greater bargaining power in the marketplace by becoming part of a larger supply base. The need for strong and effective producer organisations is clearly demonstrated by the current problems in renewal of contracts with the multiples. This year, the scheme has more flexible terms and I hope this will attract more growers to join producer organisations. Since 2000, some 20 such organisations have benefited from funding, amounting to over €29 million. In many cases, this is European funding. Although this funding is available, it requires administrative overheads in order to satisfy the funding criteria.

The essential point is that farmers need to be inspired again, by the can-do attitude that epitomised such persons as Michael Davitt, Horace Plunkett and Bulmer Hobson. Obviously times and technology have moved on but when one reads their work, as I do, having an interest in history, it is inspiring. They were active during a time of crisis and it was their can-do attitude that, in many cases, laid the legacy for the successes we look back on and hope to emulate.

By co-operating and organising together, the whole community must play a role, along with Government, in ensuring food security and developing viable food and farming enterprises. I shall mention a small example but it is important to give examples of hope and progress. Another farmers' market will take place in my constituency on Saturday week. I know it will give a certain amount of hope and confidence to producers and consumers alike. It shows there are alternatives to the traditional multiple retail route which, unfortunately, is not serving farmers well at present. This can be judged by the number who have had to call it a day because they cannot make ends meet given the low prices they received for their produce. We need more producer organisations and community-supported agriculture, more co-operatives and value-added enterprises that can find a place in the market which will give farmers the return they need.

I refer to the role another important growth area is playing in the agriculture sector, internationally as well as in Ireland, namely, the organic sector. In recent years, well-paid off-farm work has been available to many farmers. It may not be so readily available at present or for some time to come. Farmers will, therefore, be looking for ways to make their farming activity more profitable. I urge them to look at the opportunities that exist in the organic sector, even in these difficult times. I say this because it concerns employment. "Organic Works", a study being carried out in the UK by the Soil Association and the University of Essex, is about providing more jobs in farming and through local food supply. It mentions, for example, that in the UK organic farming provides 32% more jobs per farm on a per acre or per hectare basis than the equivalent non-organic farms. There are similar figures in this country but we must correlate them. It is heartening also to see that organic farming in the UK is attracting younger people into farming and more new entrants to agriculture. Overall, it has a €2.1 billion market in the UK. The UK customer sees Ireland as a local production base. This means, again, that there is enormous potential for Irish producers to feed into that market as well as into our own.

Bord Bia research, which is my source here, shows that, for many consumers, organic food items are no longer seen as luxury items, to be cut out of the shopping list when money is tighter. I see no reason to believe that the organic sector will not continue to grow, even if at a reduced level. It is still growing faster than other sectors and that must be pointed out. Sales of organic produce rose by 82% in the two-year period to July 2008 and now stand at €104 million. In 2006, the percentage retail spend on organic food was small, perhaps, at 0.9% of total food sales but, at that level of growth, anybody who is serious about getting into a market that is growing should look at that situation.

In spite of the economic downturn there is still determination in my Department to ensure that growth areas are supported so that they, in turn, can provide jobs and confidence and the economic spin-offs in communities, particularly those in rural Ireland which has taken a hit in the current climate and requires to be supported. We are doing this in the Department of Agriculture, Fisheries and Food.

Simon Coveney (Cork South Central, Fine Gael)
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I wish to set the tone for what I have to say by quoting The Irish Times of 28 January 1982, exactly 27 years ago. Under the heading "The Price of Power", the editor wrote:

Let no-one underestimate how vital the quality of leadership is to the country in this hour of present danger. Life cannot continue in the spendthrift fashion of recent years. Unless the community is prepared to accept voluntarily, a cut in its standard of living, that cut will be imposed with considerably more vigour from without. A flourishing democracy requires that those who populate it take responsibility — individually and collectively — for decisions taken in its name. That major mistakes were made in the recent past is undeniable; that the community can now shrug off the responsibility for them by refusing to pay up is impossible; the slate cannot be wiped clean at a stroke. Will the country rise to such leadership?"

How true that is 27 years later, as we re-live the same kind of challenges we faced then.

As we assess the challenges of 2009 and beyond, we need to be honest with people as to just how dire the current fiscal crisis is. Ireland as a State, as it currently lives and functions, is broken and is on the dark road to bankruptcy if we do not change direction quickly. In crude terms, we are currently spending so much more than the country can afford that we are forced to borrow €55 million a day to simply stay afloat. We have a broken banking system, blocking access to essential credit. We have an uncompetitive cost environment for business growth, difficult international trading conditions and exchange rates that are working against us. We have a collapse in consumer confidence, enormous personal debt levels and rapidly rising unemployment. Most depressingly, to date, we have political leaders who are seemingly so paralysed by the enormity of the decisions they face, they are unwilling or unable to give the direction needed to steer our country through the storm.

We have seen 15 years of economic growth, job creation and massive increases in public expenditure. With that came the confidence to borrow, invest, spend and fuel a growing economy. That period of prosperity began by developing an economy that was primarily based on export growth. We were competitive and flexible enough to attract significant investment from abroad and also be supportive of domestic business growth. However, as time passed, we began to take our prosperity for granted. We became sloppy, allowed cost competitiveness to dive and began to overpay ourselves. Overconfidence led to over-borrowing to purchase property and material goods, cheered on by irresponsible banking and Government policy.

We know now that we became overly reliant on a construction boom for employment and tax revenue, and as competitiveness fell in terms of export-based business, property took over as the new wealth generator. Those who predicted a crash landing and fired the first warning shots were dismissed as cranks and nay-sayers, but they have been shown to be right.

People are no longer interested in the blame game, nor am I. What people want now is a way forward and leaders they can believe in to take us forward. Most people are realistic enough to know there can be no recovery without some pain and sacrifice. If they do not know that, then we as public representatives have a responsibility to explain why collective sacrifice is now necessary. Simply punishing those who caused the mess may be satisfying and should happen, but it will not solve our country's crises to put bankers in the dock.

Everybody has a role to play but the Government must ensure that those who are most capable of bearing the load are asked to shoulder the most in order that the State can protect jobs and, above all else, protect the most vulnerable. It will take brave, honest and politically controversial decisions to limit the pain of recession and bring us back on course for recovery. The Government's approach, namely, to achieve a consensus with social partners, is the preferable route but may well produce the wrong results. My fear is that achieving consensus among social partners is the most important priority for the Taoiseach, above what actually needs to be done.

Achieving €2 billion in cuts in the most politically palatable way is not enough. The search for consensus can stifle the ability to make the necessary hard decisions. Those like David Begg and Jack O'Connor are good people who do a good job for the people they represent, but they are paid to represent their members and get the best deal possible for them in terms of pay and working conditions. They are not paid to govern the country. The Taoiseach, Deputy Brian Cowen, must do that, and must be answerable to this House for it.

The questions that need honest answers, not politically cute or consensus-based solutions, are straightforward, namely, what are the problems with Ireland right now and what specifically do we need to do to fix them in as fair a way as possible? I am afraid the answers are not as easy as the questions. We have a fiscal crisis to mend, competitiveness to restore, a broken banking system with a credit problem that needs to be fixed and we must try to rebuild confidence in a young nation.

Let me deal head-on with the most controversial of current political questions. The country can no longer afford our public sector wage bill. Some €20 billion per year is not affordable and there is simply no getting away from that fact. We either have to cut jobs or cut pay. There is no ducking this issue, despite the understandable anger of many good public servants, who did not cause this crisis.

The market is already forcing salary reductions and has forced 120,000 redundancies in the private sector in the past 12 months, so the Government needs to do what is necessary in the public sector. We need reform on a wide scale, but in the short term we simply cannot keep borrowing to pay increasing salaries. Wage increases are typically linked to increases in the cost of living but we expect deflation in the cost of living in Ireland this year of approximately 3%, so this is a good figure to use as a starting point. Fine Gael has made it clear that we would only accept public sector wage reductions in the context of higher earners being the first to shoulder the burden. Given what Fine Gael has proposed in terms of a public sector pay freeze for this year and next year is clear on the record, I do not need to repeat it.

In terms of competitiveness, this crisis offers an opportunity for reform. My colleague, Deputy Richard Bruton, has for four years been talking about the need for honest reform within the public sector which would reward people who do a good job and introduce a proper benchmarking model whereby pay is linked with performance and there is flexibility so public servants who are not needed in one sector can move to other sectors where they are needed. I am not one of those who believes there are too many staff in the public sector in Ireland but I recognise we have too much middle management in the HSE and not enough people working in schools. Let us remedy this.

My responsibility is with regard to energy and I will conclude by focusing on this area. The regulatory model in Ireland is no longer suited to the current recessionary situation in which the country finds itself. The way in which pricing is regulated for electricity and gas is essentially based on the need to encourage competition and new entrants into the Irish market and, therefore, prices are deliberately kept artificially high by the regulator. That is no way to prioritise regulation in time of recession.

The Commission for Energy Regulation should be brought into the Taoiseach's office and told that the basis for price regulation needs to change for the next two to three years to try to provide energy as cheaply as possible to businesses and households. While there is a climate change and green agenda which is affected by this, we need to take brave decisions to allow people to survive recession and come out the other side. The cost of energy is a key ingredient in trying to improve competitiveness and the cost of doing business in Ireland.

We can make one of two choices. The Government can either decide to take the politically safe route of trying to limit the damage, although in doing so it will risk a long recession and possible national bankruptcy, or it can take tough decisions now and front-load pain to try to reduce the length of time Ireland is in recession and get us out the other side as quickly as possible.

John Gormley (Dublin South East, Green Party)
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We are now at a critical point in our country's history. We are caught up in a global maelstrom that has felled some of the most powerful economic and financial entities of this age. Ireland is being subjected to the same negative forces as most other developed countries in the world — falling property prices, falling tax revenues, falling consumer confidence and a collapse in confidence in the banking sector. However, as one of the most open economies on this planet, we are experiencing those forces much more acutely than many others.

Much has been made in and outside this House of the recent international coverage given to Ireland. Some, indeed, have used this commentary as a political stick. We should remember that there has been a strong element of schadenfreude in some of that commentary, especially in Britain, which has been tinged in places by an element of colonial condescension. It has not been written with balance, but with malice in mind.

Olivia Mitchell (Dublin South, Fine Gael)
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Everyone else is to blame.

John Gormley (Dublin South East, Green Party)
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Ireland faces a challenge equal to the greatest the country has faced since its foundation some 90 years ago. We must face it together and we must work together in the spirit of partnership that has worked so well for us previously in difficult times. We must face it collectively and that is why the Government is working towards an agreement with the social partners on tackling the public finances. The Taoiseach and the Government are prepared to allow the necessary time for an agreement to be reached, an agreement that will be in the interests of all. This is what good government and leadership is about.

The Green Party in government is playing an essential role in the sizable challenge facing Ireland at present. We have a perspective on sustainable, economic and social development, which has come of age. It is a perspective that is absolutely essential if we are to enjoy a solid economic recovery.

The green economy has been identified by leaders throughout the world, from US President Barack Obama to Prime Minister Gordon Brown, as an essential element to economic recovery. In Ireland, it is a policy the Green Party has been advocating for 20 years. More important, it is a policy we have been implementing in the past 20 months in government. This policy has already generated and sustained thousands of jobs, and will create thousands more, in every part of the country. Our vision for a green economy sees the protection and enhancement of our environment as an economic opportunity, not an economic cost.

Working towards a green economy will improve Ireland's competitiveness. The green economic outlook puts long-term gain for society ahead of short-term profit for the individual. However, it rewards and incentivises those who embrace sustainable business models.

My colleague in the Department of Communications, Energy and Natural Resources, Deputy Eamon Ryan, has undertaken a fundamental reform of energy policy, which will wean us off our oil dependency in the coming decades. He has set new prices for renewable energy, prompting a multi-billion euro investment by the ESB. This year he will also roll out an ambitious insulation scheme for homes throughout the country. Our Government colleagues are also working for the green economy. The Minister for Transport, Deputy Noel Dempsey, has increased investment in public transport infrastructure by more than 60%, to €1.3 billion since the Green Party entered Government.

I am hard at work in the Department of the Environment, Heritage and Local Government for the green economy. In 2009, at a time of cutbacks, there has been a 19% increase in water services investment to €560 million. By the end of the year, some 150 separate water projects will be under way in towns and villages throughout the State. This will secure more than 4,500 badly-needed construction jobs. We we will not slow down this investment until we have a world-class water infrastructure that protects the health of our people and our environment. These facilities will provide the essential infrastructure needed to enhance the competitiveness of the country, to enable us to attract and grow enterprises and industries.

In the waste sector, I have invested more than €27 million in the most advanced recycling plant in Europe, which opened this month in Dublin. The plant ensures a free green bin collection system for every house in the Dublin area. It has created 85 jobs. Today, I signalled my intention to introduce new rules for the segregation of biodegradable waste in restaurants and commercial premises later this year. This will ensure lower waste costs for those organisations, and it will also create and sustain an entire new composting industry, generating hundreds of jobs in the coming years.

The Department and the Minister for State with responsibility for housing, Deputy Michael Finneran, have been playing a crucial role in the housing sector. In the 2009 budget, more than €1.3 billion is being provided for the main local authority and voluntary programmes, including €190 million to support ambitious programmes of regeneration of social housing in extremely disadvantaged areas. These projects, which include the Ballymun and Limerick regeneration programmes, support the development of strong, economically viable sustainable communities by addressing underlying issues of poverty, deprivation, anti-social behaviour, social and economic need.

We are also embarking on a programme to green our existing social housing stock, to make those homes more comfortable and more economical to run. A full audit of the public housing stock will begin in 2009, to lay the foundation for a programme of retrofitting, where required, to deliver modern standards of energy efficiency. In parallel with this audit, a further €5 million, which will be increased to €30 million, is being provided to undertake several pilot retrofitting projects. The learning derived from these will play a major part in informing our approach to the wider roll-out of the programme, which will commence once the audit is completed. This programme will enhance the quality of life for thousands of low income families in the coming years. It will be an example of the green economy at work.

The green economy is also at work in private homes. The Minister, Deputy Eamon Ryan, and I have overseen the development of a new energy rating system, creating hundreds of new jobs and providing valuable information for homeowners, buyers and renters.

I have also embarked on one of the most ambitious reforms of our planning system to create a level playing field that favours sustainable development. I have published new guidelines on residential developments to ensure that when homes are built, they are alongside critical services such as public transport and schools. I have also produced new guidelines to prevent against opportunistic rezoning on flood plains.

I am drawing up major new planning legislation aimed at a fundamental overhaul of our planning system. It will reform how councillors go about rezoning in county development plans, and will make national planning guidelines mandatory for development plans. It will tackle the question of retention, streamline planning processes and will also reform our planning laws for ocean energy projects. A fair and transparent planning system is essential for a competitive economy. Developers willing to provide high quality, sustainable developments should have certainty that their plans are not undermined by cynical and opportunistic rezoning which have only profit and not people in mind.

In these times when hard choices must be made and ambitious plans are deferred or curtailed, it is opportune that we concentrate on what we can do individually and collectively to pull ourselves out of this recession and make the most of the opportunities and advantages we have at our disposal. If we are to optimise the resources available, there must be clear and co-ordinated prioritisation of investment in those locations with the potential to drive regional and national competitiveness and which have the capacity to grow. The national spatial strategy must remain the principal basis for this policy. This view is shared by the National Competitiveness Council and the National Economic Social Council, NESC.

There is robust analysis of the challenges and priorities for the gateway cities and towns and this analysis has contributed to the formulation of the national development plan. Given the significant economic and social change in the past six or seven years and the uncertain short-term and medium-term future, my Department is undertaking an update and refreshing of the national spatial strategy to assess where we are and, perhaps more crucially, to where we are heading. It is not a fundamental review or overhaul. Rather, the focus will be on how the strategy is being implemented and how it is realising the key objective to harness the development potential of all the regions. I intend to bring forward our initial analysis to Government in the coming weeks with a view to developing precise proposals on how this analysis can be used to prioritise the unlocking of these areas within what resources are available at central and local levels.

The Green Party is hard at work creating a green economy for the benefit of all people in the country and we will go further in that regard. The Green Party in government will ensure that investment will be increased, not decreased this year. The Government will also develop an ambitious green economy master-plan to attract green technology jobs and investment into Ireland, and to support green technology innovation in the economy.

Of course, the Green Party does not have a monopoly on sound economic ideas. The economic challenge we face requires the efforts of every Member of the House. Since the Dáil returned, I have seen and heard Opposition Deputies vent and emote about the current economic situation rather than offer constructive debate or criticism. However, I would rather hear ideas and solutions than the negative rhetoric of opposition. I wish to hear from Fine Gael what measures it will take to ensure its local councillors do not engage in reckless rezoning, which damages the local economy for the benefit of a small number of landowners and developers. I wish to hear realistic proposals on public spending from the main Opposition party, rather than proposals that would shave a mere €80 million off the public sector wage bill. I listened to Deputy Coveney in that regard.

Olivia Mitchell (Dublin South, Fine Gael)
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We are waiting to hear those proposals.

John Gormley (Dublin South East, Green Party)
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Deputy Coveney referred to being politically cute. That sort of response is politically cute, it is populist and it is not brave. The main Opposition party has discussed the idea of a pay freeze, but such a proposal is going nowhere when considered in the context of the €2 billion cuts which are required.

Olivia Mitchell (Dublin South, Fine Gael)
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We have not heard any proposals from the Government.

John Gormley (Dublin South East, Green Party)
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Although the Opposition has come up with proposals, they do not go far enough. We are going about our business. We are going to do it.

Olivia Mitchell (Dublin South, Fine Gael)
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When?

John Gormley (Dublin South East, Green Party)
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The Government will make the brave decisions the Opposition has not outlined. It has not come up with such proposals.

Olivia Mitchell (Dublin South, Fine Gael)
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Are the Opposition and the British media to blame for the current state of the country?

John Gormley (Dublin South East, Green Party)
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I also wish to hear how the Labour Party thinks we can incentivise the move away from fossil fuels without a carbon levy, the revenue from which could be used to lower other taxes. I also wish to hear a single proposal from the Labour Party to reduce the public sector wage bill.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Minister has exceeded his time.

John Gormley (Dublin South East, Green Party)
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Developing these proposals will require the Labour Party and Fine Gael to be honest with the electorate and workers. It will require them to acknowledge there is no painless way to secure Ireland's future in the current global economic crisis. We in the Green Party are brave and honest enough to say that. Moreover, we are confident that our role in Government will help Ireland out of this recession. We also are confident that we can deal with those in the banking sector who have brought it into disrepute. We will deal with them and will continue to ensure we have better regulation of the banking system because that is what people expect of us. Moreover, they expect all Members to work together in this House to come up with such innovative proposals.

Michael D Higgins (Galway West, Labour)
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I welcome the opportunity, even in the brief period of ten minutes, to make some comments on the economy. First, the Taoiseach, in his contribution suggested there was no merit in looking back. I profoundly disagree. He suggested there is little point in looking back at how some of this might have been anticipated or avoided. It is crucial to analyse how precisely we came to be in the position in which we now are. For example, we should analyse how it was, when it was perfectly clear that export performance was changing in early 2006, that no Government response was forthcoming.

Before he leaves the Chamber, I wish to make an immediate reply to the Minister for the Environment, Heritage and Local Government. The Labour Party has made a number of highly practical proposals in respect of job creation. Although not much time is available to me, I will give him one that is within the remit of his own Department. When 1,000 people in the local authorities were being given their cards, it was those with shovels or who were on short-term contracts who were told to go. The Minister does not appear to be terribly interested in ending the bonus system or the consultancies before letting go those who were in direct access with, and who provided a service to, the public. That was the case, for example, in County Kildare and several local authorities nationwide. It constituted an indiscriminate fall of the axe on those in short-term contracts and so forth without beginning at the top, as one might expect any socially minded person to do.

I wish to raise some questions because when responding to the economic crisis we are in, it is important to be clear as to what we are doing. There are two paths that one might take. One is a shrinking of the economy in a fairly indiscriminate manner, which would have the consequence of doing much more damage than the irresponsible inflating of the economy by excessive reliance on the building sector. The other is to restructure the economy entirely anew. If one had decent and original thinking, which I have not heard thus far from the Government side, it would concentrate on the shape of the new economy that might be created. The Labour Party will be entirely supportive of such initiatives as will be forthcoming on the Green economy.

However, other aspects of the economy are not featuring in any of the speeches from the Government side and to be practical, I will provide one example. At a time when we were describing ourselves as the wealthiest or second wealthiest country in the world, not to speak of the European Union, we had the second lowest level of social protection within the European Union. If memory serves, Portugal may have been ranked below us. One therefore could, for example, have considered employment creation in the social economy. For instance, when we emerge from the present recession, one would like the shape of the economy to be one in which the world of work has been redefined.

While jobs should be protected and new jobs created in the Green economy, there also are jobs in the social economy. For example, instead of threatening carers with the cutting of their benefit as a form of welfare, their efforts could be included as being work, and should be recognised as such, in a form of the social economy. Moreover, there has been no discussion regarding forms of work sharing in which many people would have been willing to construct social time in a manner that would be more positive in respect of its contribution to the economy.

However, what is opening up, regardless of whether people like it, is a form of the social economy that will offer one option for coming through and out of this recession, which is well on its way to becoming a depression unless we are very careful. If those who have been trapped in cyclical employment become long-term unemployed, it will be a tragedy for the people themselves, their families and their communities.

I refer to the issue upon which we will be tested. When one is invited to a form of national solidarity, or as it is more crudely put for those who like to put it in a parochial sense, to put on the green jersey, one might reasonably ask, solidarity with whom? Is this solidarity to be with the most vulnerable citizens who are threatened or is it to be with the clique and the golden circle that have destroyed the country's reputation? When all the steam is blown away, we are paying between 2.5% and 3% more in terms of interest than the German Government to fund our normal borrowing to run the State. A great contribution in this regard has been the gangster activity of celebrity capitalism. I refer to people who liked to appear on the back pages of the Sunday newspapers, while consuming as though there was no tomorrow. The only competition was the notion of continually bidding up land. There is no point in suggesting this was not important and let me dispose of such a suggestion.

I accept there is an international dimension to a global economy that is reconstructing itself. One version of that is meeting at Davos as though nothing had happened. More than 2,000 people there are wondering how the old show can be got back on the road again without many differences. I note Vincent Browne's reference in today's edition of The Irish Times to the man from the Indian company, who now happens to be in jail, but who last year received an award in London, which I believe was called the Golden Peacock Global Award for Excellence in Corporate Governance. Perhaps our Government, as it meanders through next week and the week after, might bring into existence a Golden Ram or a Golden Tiger. It could hold a competition between the regulator and Seanie for the award. However, the reason it is wrong to imagine that one can simply move on from that point is that these people have destroyed the country and have done incredible damage. This is not simply a rhetorical statement, as it is expressed in percentage points in respect of what is required for the management of the country in a fiscal sense.

This is the choice. One cannot have any solidarity with such people. Part of my party's difficulties in respect of the economic side of this matter is that we do not know the extent to which their connections and claws are in the economy.

While there was an international dimension to the present circumstances in which we find ourselves, we created our own property bubble and this is something for which the Government must take responsibility. Members should remember the advice of our Commissioner in Brussels, which was to party on. He was the most irresponsible Minister for Finance of all time in respect of taxation policy and the shift, for example, from direct taxation to indirect taxation, which affected lower socio-economic groups more than those at the very top. Members should consider the transfer pattern at the time when the economy was flying. They need not accept my word in this regard as they can examine a series of different sources. The transfers were to the top quintile. While there was a lift in some different areas in an absolute sense, proportionately, the beneficiaries were located nearer the top. If that is the case, every adjustment in respect of wages, levies, job losses and so forth should concentrate on where the benefits flowed.

However, there is no evidence of this in anything Members have heard thus far. For example, there is a huge difference between somebody who regards it as vulgar to say he or she gets a salary, and others. If one is in the banking circles to which I have pointed, they regard it as compensation. One must get compensation of €3 million per annum to get out of bed and go off gambling in the bank. Regarding these gamblers in the banks, in many cases there is no evidence of from where any of that money will be clawed back.

Another example is what is being said about those who own different forms of property. Very few people I know confined themselves to a second house when they went into that area. They were actually getting into double figures. Why is the proposal floated in the newspaper not addressing the issue of the third, fourth, fifth and on up to the tenth and even the twentieth house? It is extraordinary. It would have been obvious from the different attempts, including those of the Labour Party, to try to bring forward a version of the Kenny report on what was happening in this property bubble. One was getting a growth rate — a continued climbing — at a time when exports were stable and falling, which meant that one was effectively revaluing the property base of the economy.

There will be a demand for all of us to become involved in positive suggestions, both in terms of the role of citizens and the nature of work, but particularly on social protection, although we will all be judged by the following fundamental test — with what did we have solidarity? Was it with something entirely new, a version of the social economy about which we can have a real political division, involving, on the one side, market economics unrestrained and, on the other, a social economy that expresses solidarity with citizens and is biased in favour of those most vulnerable and in the lower socio-economic groups? Frankly, the latter offers the best prospect for a sustainable economy for future generations. A more equal society offers the best prospect for economic growth, as the Scandinavian economies have shown. That is where we need to be, not protecting people who have been little less than traitors to the Irish people.

John Gormley (Dublin South East, Green Party)
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Hear, hear.

Michael Kitt (Galway East, Fianna Fail)
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With the permission of the House, I will share time with Deputy John McGuinness.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Is that agreed? Agreed.

Michael Kitt (Galway East, Fianna Fail)
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I welcome the opportunity to contribute to this debate on the economy. This is a challenging time with difficult national and international economic circumstances and priority must be given to ensuring economic and environmental sustainability.

I very much welcome what the Taoiseach said about stability in the economy and continuing the capital programme, which is important regarding those projects we all want to see come to fruition and also in terms of employment. The Taoiseach has stated that there is a five-year timeframe for this recovery programme.

The Department of the Environment, Heritage and Local Government is concentrating on expenditure on social housing and protecting the most vulnerable, while also investing in environmental protection in terms of water, waste management and local services. As my colleague, the Minister, Deputy Gormley, has contributed already to the debate on those issues, I will use my time to focus on the areas in which I have responsibility, namely, the rural water programme and local services.

At a time of national and economic recovery the funding provisions for the continuance of the rural water programme and maintaining the development of our fire and library services reflects continued Government support for these important programmes and the contribution they can make to economic stability. An integral part of the investment programme for water services in 2009 is the continued improvement and development of the rural water programme. The record allocation for 2009 will further advance our commitment to make good quality drinking water available to all rural water consumers, in full compliance with national and EU drinking water standards.

The main focus of my Department's rural water programme in recent years has been on solving water quality problems experienced by group water schemes that depend on private sources such as rivers, lakes and boreholes, and are without proper water treatment and disinfection. Some 728 such schemes serving over 88,000 domestic connections have been identified as falling within the remit of the drinking water regulations on the basis that they serve 50 or more persons.

At the end of 2008, improvement works had been completed on 570 of these schemes, with the result that over 73,000 households are now receiving a quality water supply. The Rural Water Programme 2009 will focus on completing this upgrading programme. The objective is to have the supplies serving 98% of households fully compliant with drinking water standards by the end of the year. As of today, works are under way on 62 of the remaining schemes with the balance of 96 expected to commence construction in 2009. The record funding for water services in this year will ensure that these schemes are brought to completion in the shortest possible time.

The rural water programme has been supported by Exchequer spending of some €698 million over the last five years. This substantial commitment, coupled with the positive co-operation and enthusiasm of everyone involved in the group water scheme sector, has guaranteed and underpinned the successful delivery of the upgrading programme. In June 2008, I announced significant increases in the subsidies payable to group water schemes towards the operational costs incurred in providing water for domestic use. The standard annual rates of subsidy were increased by over 36% and a new line of subsidy was introduced to cover the cost of paying a contractor to operate and maintain the new water treatment plants being put in place under the upgrading programme.

The Water Services Act 2007 provides for the introduction of a licensing system to regulate and develop the operations of the group water sector. My Department consulted widely with the sector when the Bill was being drafted and groups have given their full support to the licensing system.

Licensing will put the group scheme sector on a much more organised and business-like footing for the future. They will also benefit from major capital funding from my Department for new treatment infrastructure under the rural water programme from the record €560 million for water services in 2009. Along with the new subsidies to meet running costs, the long-term viability of these community endeavours has never been as secure or as well supported financially.

Fire and emergency services are operated at local level by 37 fire authorities. My Department recognises the importance of a modern and efficient fire service to the community and strongly supports the valuable work being done on the development of both the full-time and retained fire service. The significant improvements achieved in recent years in all areas of the fire service were further built on during 2008. The Department's programmes in 2008 brought about marked improvements in infrastructure and equipment, further enhanced inter-agency co-operation and promoted the all-important fire safety message.

Last year saw the continuation of significant investment, almost €24 million, under the fire service capital programme. The programme continued to support local fire authorities in the development and maintenance of a quality fire fighting service. Seven fire station projects were completed across the country and a further four fire stations commenced construction. In addition, 25 fire appliances were delivered to fire authorities and a range of emergency equipment was purchased. This sustained investment means that the fire authorities are well equipped to address the full range of risks with which they must now deal.

I am pleased the Government is to maintain the high level of support for the fire and emergency services. As in previous years, a joint fire safety promotion initiative will be undertaken in co-operation with colleagues in the Northern Ireland fire service.

I am pleased, despite the severe economic difficulties we face, that the Government's commitment to the development of the fire services, and growth of the rural water programme, will continue this year. I believe the measures the Government has taken and the difficult decisions that have been made in these most challenging of circumstances will protect the public finances while at the same time ensure that environmental and economic sustainability and protecting the most vulnerable in our society.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I agree with some of what Deputy Michael D. Higgins said about our past, from which we can learn. If we are to make the correct decisions on policy and direction for the future, then we must reflect on what happened in the past; we must understand how we got there and be careful how we move on. To that degree, we are informed by what has happened.

Regarding the protection of the 800,000 jobs the SME sector creates, we need to focus carefully on the activities of enterprise boards. I am pleased that within my Department the funding of enterprise boards has been increased by 19% and their activities now range across funding mentoring, education, etc. They are being received quite well, both by small to medium enterprises and those about to go into business. There is an increased interest among people in becoming self-employed and I encourage them to look towards the enterprise boards.

The enterprise boards come under the remit of Enterprise Ireland and it is important that we look at our exports in that context also. For those companies looking to markets abroad, from my experience, there is a huge opportunity for us, despite what is happening at home. Different markets in countries such as Japan and the BRIC countries — Brazil, Russia, India and China — are interested in what we are doing here. They look on us as being an island of innovation and creativity, one that can bring new products and services to the marketplace, has connections with information through communication technologies and not only recognises the convergence of life sciences and so on with technology, but that a new space is emerging within that market. We must commercialise the creative activities with which we are involved, get them to the marketplace and move them through companies and Enterprise Ireland to be sold abroad. Only by recognising what is needed abroad can we increase our exports.

In the context of the convergence of life sciences and, for example, functional foods, Ireland must capitalise on its recognised position as a country of good food, sound origins and so on. With companies, we must bring to the marketplace opportunities to fill orders from large foreign companies. For example, some of the large companies in Japan, which we visited recently, are interested in collaborating in respect of universities, businesses and research and development. We must exploit that interest to a greater degree.

We must also consider enterprises in terms of what they are doing, namely, cutting their cloth according to their measure. Companies and their employees are examining ways to save jobs, reduce wages and costs and work with one another co-operatively to maintain their current job levels. The Government cannot do this alone. Issues of competitiveness must be addressed by, for example, Bord Gáis, the ESB and our telecommunication providers. I do not know why the ESB or Bord Gáis would be unable to reduce its costs and bills by 20%. Given our telecommunication providers' commercial activities, there is a reasonable expectation that they will deliver price changes to the market in terms of, for instance, rolling out broadband, which will be essential if we are to deliver on economic activity targets in light of the new difficulties facing us.

Another issue for the SME sector, representatives of which I meet regularly, relates to local government charges. This may be a matter of how we fund local government, but it also relates to how the councillors of every political party represented in the House operate in the imposition of those charges.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Minister of State's time has concluded.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is high time that planning and development charges and rates be reduced significantly and for a new structure to bring about a uniform approach across the counties.

Much work can be done in our changed circumstances. There is an appetite for change, an understanding that we are in a difficult position and an acceptance that we can only get out of it by working together. I appeal to the sectors that understand their places in this market to play their roles within the changes and to deal with issues of competitiveness as quickly as possible.

Olivia Mitchell (Dublin South, Fine Gael)
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May I share time with Deputy Creed? I would appreciate it if the Ceann Comhairle would let me know when I have spoken for approximately six minutes.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Is that agreed? Agreed.

Olivia Mitchell (Dublin South, Fine Gael)
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I join with my party leader and colleagues in deploring the contempt shown to the House and parliamentary democracy by the structure of this debate and by the level of information provided to us. Such contempt is shown again and again. Last week when we nationalised the country's third largest bank in what was probably the most important and expensive decision ever made by the House, our Taoiseach told us that we did not need to know the details because he had already made his policy decision and we could pass the Bill in the space of an afternoon.

Were I to give the Taoiseach advice, I would tell him not to confuse arrogance with leadership or stubbornness with decisiveness. Leadership and decisiveness are necessary now more than ever because they are the qualities that will inspire confidence, which is key to the economy because it will make consumers spend their money again, businesses invest and create jobs and the banks start lending again. Confidence is missing from the economy, but it is not coming from the Government.

Using the social partners as the Taoiseach's personal focus group for weeks does not inspire confidence. Instead, it creates the impression that he will do anything rather than make a decision. The people we all meet when we leave the House are in absolute despair about what will occur and about their children's futures because the man who told him that he was a safe pair of hands has been sitting on his hands since being elected. When the House broke for the summer recess, it became clear to us that a major recession was on its way. The Taoiseach was in denial about it, then published a feeble early budget hardly worthy of its name and has stayed behind the game in respect of the banks. In recent weeks, he has sat on his hands in the guise of seeking a consensus.

Recently, every computation and permutation of every possible tax, levy, freeze, cut, pension reduction, job loss, redundancy, overtime payment and so on has been trotted out and run up the flagpole to see who would salute in the hope that everyone would reach a consensus and that the Taoiseach need never make a decision on his own. It must be as obvious to every Deputy as it is to every member of the public that consensus on micro-details and precise measures will never be achieved. However, there is societal consensus in a way that was never previously the case, not only on the fact that action needs to be taken, but on what that action should be. The Taoiseach referred to resolute action, in respect of which there is a consensus.

The document under discussion by the Government and the social partners is so broad and woolly that one wonders what is being discussed. The dogs in the street know that there is consensus regarding many of the matters in question. We must take action and stop allowing ourselves to be victims of events. It is recognised that this is the moment in our history at which political leadership will make the difference between the abyss on one side and taking control of our destiny and that of our children on the other. It is not the moment for a tentative and timid Taoiseach.

There is even a consensus on the broad parameters of what must be done. While no one likes to suffer, we all know that we are facing five or ten years of austerity. The sooner we hunker down, get used to that fact and start the pain, the sooner we will come out the other end. We all know that those of us with good jobs and pensions will need to pony up more than those who are weak and vulnerable. We all know that the old sacred cows, special interests, monopolies, outmoded practices and endless agencies must be tackled mercilessly because we cannot afford or justify them. We must cut out wasteful spending and pare back current spending.

However, the measures cannot only be about what we cannot do and the spending we cannot have. There must be an investment plan that gives hope for the future, a plan that shows us from where jobs will come. The Minister of State, Deputy McGuinness, referred to the types of activity we should be doing, such as restoring competitiveness, an essential matter. He discussed the potential to drop electricity and gas prices. We all know of that potential, but why have prices not been cut? Control is on that side of the House; please, let us have those cuts. Alongside price reductions, we must also prepare to produce the goods and services that the world wants to buy from a relatively high cost and well educated economy with an efficient and productive infrastructure. We must scrap the national development plan, which was built for another world, country and future, and draft one that targets investment in emerging technologies, to which the Minister of State referred. Unfortunately, the necessary investment is not being made. I am referring to investment in broadband, energy and education, which will provide jobs in the service area.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy has four minutes remaining.

Olivia Mitchell (Dublin South, Fine Gael)
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We should not reduce capital spending as the economy contracts. It would only reinforce and accelerate the downward cycle. The Taoiseach knows these facts, but he seems paralysed, hoping that the social partners will bite a bullet that he is unwilling to bite.

Confidence at home is key in encouraging consumption and investment. Even more crucial is the restoration of confidence abroad, namely, the confidence that we can tackle our problems. Currently, that confidence is tumbling and with every day that passes, it tumbles further. The cost of borrowing the €55 million, which the Taoiseach says we need every day, is soaring. Some commentators suggest we may not even be able to sell the bluechip Government bonds at any price. On behalf of the Irish people, I plead with the Taoiseach to take the resolute action of which he speaks often but never delivers.

Michael Creed (Cork North West, Fine Gael)
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The past is a different country. The present is a country which borrows €55 million to meet the daily running costs of the Irish economy, which is unsustainable.

My colleague, Deputy Mitchell, pointed out that while there is a reservoir of goodwill from all sectors of society for decisive leadership, the Taoiseach and the Government are squandering that opportunity. People are realistic in terms of the state of the economy and the measures required to be taken. While I accept we will never see the agreement in detail, there is broad agreement on what needs to be done. It is imperative we do not delay or prevaricate further. It is contemptuous of the Government to provide time for this debate when we have no idea what are its proposals in this regard, months after the extent of the problem became apparent.

I wish in the time available to deal with a number of issues. To sustain public support for the type of action necessary, it is imperative that those who contributed to bringing us to our knees are seen to pay the price. I have no confidence in respect of key officeholders such as the Financial Regulator, the Governor of the Central Bank and the Office of Corporate Enforcement. People must be brought to heel in terms of the sins they have committed. It is almost two years since the Supreme Court issued its ruling in respect of the Fyffes-DCC case, yet no action in this regard has been taken by the Office of Corporate Enforcement. Are we expected to have confidence therein in respect of breaches of company law that have become apparent in recent days?

To sustain public support for what is necessary, we need to ensure those who have contributed to the mess we are in are held to account. I believe there is a weakness emerging in terms of the Government's softness in dealing with those involved owing to its close alignment with them in the past. We need collegiality and togetherness on this issue. We have shown from these benches that we are prepared to support the Government if it takes the appropriate actions.

I believe, because I represent a constituency that has been substantially devoid of any multinational presence, that the SME sector, and in particular the agri-food sector, will contribute to the regeneration of our economy. There is much talk of research and development, which is excellent and should be encouraged. However, it is more important that we focus on bringing research to production. This is where we are stumbling all of the time. We need to focus more resources on this area.

We invest approximately €100,000 in the creation of a job in the multinational sector. We should ensure similar investment in the agri-food and seafood sectors thus encouraging them to step up to the plate. We need to get the monkey off the back of the small and medium sector which previously created thousands of jobs but are currently haemorrhaging jobs owing to the excessive burden of costs and regulation foisted upon them. We need to slash and burn red tape in that area.

Séamus Kirk (Louth, Fianna Fail)
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The Deputy's time has expired.

Michael Creed (Cork North West, Fine Gael)
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I wish to make two brief points.

Séamus Kirk (Louth, Fianna Fail)
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Make them brief.

Michael Creed (Cork North West, Fine Gael)
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It is ridiculous in the extreme that people are in danger of losing their homes, some of whom took out mortgages with subprime lenders. These people will end up on the merry-go-round of having to draw rent supplements to rent back those houses. We need to ensure we have in place statutory provisions which protect people in their family homes. This will not result in a net cost to the economy. People are in a position to pay some but not all of their mortgage. With assistance from the State — there are many creative ways the State can assist in this regard — people's homes will be secured.

Thousands of young people, seduced by the lure of easy employment in the construction sector, now in their mid to late twenties, left school with good leaving certificates but did not pursue further studies. We need to invest significantly in retraining and upskilling these people. Otherwise, they will be consigned to a lifetime of unskilled or semi-skilled labour, which is not the future. I implore my constituency colleague, the Minister for Education and Science, Deputy Batt O'Keeffe, to address this issue in terms of any blueprint on the way forward.

Willie O'Dea (Limerick East, Fianna Fail)
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The global economy is facing its most grim and uncertain outlook for a long time. As a direct result, Ireland is now confronted with a wide range of unprecedented difficulties on a budgetary and economic front.

The Irish economy has several distinctive and unique features. It is an exceptionally open economy. We do not have a sufficiently large domestic market to consume the goods and services we produce and are, therefore, heavily dependant on foreign trade. Consequently, the economic conditions of those countries to whom Ireland sells its goods and services is central to the health of the Irish economy. The United Kingdom and the United States, which represent the destination markets for approximately 80% of our exports, will remain mired in recession this year. This has consequences for the Irish economy which are all too predictable.

Unlike our EU trading partners, we conduct an unusually large amount of our business with the United Kingdom and the United States, both of which trade in a currency different to ours. This explains why the dramatic falls in the value of the dollar and sterling against the euro have had disastrous consequences for Ireland's competitiveness. A number of studies, the most recent by the National Economic and Social Council, have concluded that currency changes between the euro on one hand and sterling and the dollar on the other are the direct cause of 70% of Ireland's falling competitiveness.

Countries have reacted differently to the economic typhoon sweeping the world. Some have concentrated exclusively on fixing their public finances while others have thrown caution to the wind and indulged in an orgy of borrowing and spending to stimulate their moribund economies. Ireland has adopted two approaches, namely, we are spending massively in an effort to stimulate our economy and invest for the future. This year, we will borrow more than 5% of our GDP to invest in capital projects, which is enormous when compared with what other countries are doing in this regard. It is proportionately the largest capital programme in the European Union. If the Government were not borrowing this money the Exchequer figures would look much better and would move much closer to the Maastricht guidelines of 3% of GDP.

The Government has recently taken steps to refine this massive spending so as to reorientate it towards more labour-intensive activities. In addition, we have invested enormously in education, retraining, upskilling and so on, as suggested here earlier. Our capital spending is focused on specific projects. Unlike other countries, we have not tried to revive our economy by an unfocused stimulus such as a general tax cut. From our point of view this makes perfect sense. Our economy is fundamentally different from that of the United Kingdom and the United States. It is reasonable to expect that in the US higher spending and lower taxes will benefit the domestic economy but the calculation is totally different here. We tried this fiscal stimulus approach previously. It constituted the Government's response to the oil shock of the late 1970s. The increased spending power given to the Irish consumer at that time was largely dissipated on increased imports, leaving us in an even worse position. There is absolutely no evidence to suggest that the same would not happen if this strategy were repeated today. In other words, that cure, instead of ameliorating the disease, would make it infinitely worse.

In the United Kingdom, where obviously the risk of such an outcome is much less, most of the respected economic commentary suggests that the significant risk that Prime Minster Gordon Brown is taking with the country's finances will inevitably end in disaster.

The second part of our strategy is to take firm control of our burgeoning budget deficit. This year, in the absence of action by the Government, it is estimated we would have to borrow €55 million per day.

The process of bringing this expenditure back in line with revenue will be long, painful and inevitably will involve a reduction in living standards. However, it is not a sideshow or an afterthought; it is vital to restore confidence in our economy. In a small open economy such as ours, confidence, credibility and sustainability are vital factors in both boosting domestic confidence and attracting foreign investment. The imperative now is to rebuild confidence in the economy both at home and abroad. The only way to do that is to be seen to be making a determined effort to put our public finances back in order by bringing expenditure in line with revenue. This applies especially to current public expenditure. Borrowing to run this country from day to day is not sustainable and it means that the interest to be paid will consume more and more taxation that could have been spent on paying for services.

The approach taken in the late 1980s focused on restoring stability to the public finances, increasing business and consumer confidence and restoring economic growth. It more than outweighed any direct impact on the economy from spending cuts. There is no reason to believe that this cannot and will not happen again. The very fact of stability being restored to the public finances increases business and consumer confidence and thus helps to restore economic growth.

Normally cutting expenditure slows growth because it takes money out of the economy. In the late 1980s, however, the opposite happened. While we are now in a very difficult international economic climate, the Government has taken, continues to take and will in the future take difficult decisions which will help lay the foundation for our future growth. We must not lose sight of the fact that we have strengths. We have a very low level of public debt compared to most of our trading partners. Our level of employment is at its highest in Ireland's history at some 2 million, 1 million more than in the late 1980s. Ireland is still a high income country by international standards. We have spent massively on infrastructural projects together with science, technology and education.

The difficulties we confront are great, but they can be overcome by taking the decisive action now to place this country in the position where it can avail of the inevitable improvement that will occur in the international economic environment.

Billy Timmins (Wicklow, Fine Gael)
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One of the new catchphrases is "consensus". It strikes me as somewhat strange because it is the first time I have heard it in here in 11 years. There was no consensus when decentralisation was announced. No one looked for consensus when they were trying to build the "Bertie bowl", so it is strange that the Government is looking for it now. Fine Gael has always been constructive in putting forward proposals, but none of them has been taken on board. It is strange that the Government now wants consensus, but we welcome it.

Another word much in use is "global". There are three issues, namely, the public finances, the banks and our economy. Deputy Quinn is in the House and he must be shell-shocked at the way the public finances have deteriorated since he left the Department of Finance several years ago. We have no one to blame but ourselves. We could claim that, due to the global economic crisis, there would be deterioration over a period in the public finances, but the dramatic fall has come about because of our policies. They are linked to the difficulties of the banking sector which also arose from our policies, with complete concentration on the construction industry and no regulation in the banking system. We cannot blame Lehmann's or anyone else. We cannot blame the oil crisis. This was our own creation.

My good friend, former Deputy Charlie McCreevy, was the Minister for Finance for a while, and then we had the current Taoiseach, Deputy Brian Cowen. Regarding the export economy, competitiveness slid down the scale. It is not as if this issue fell out of the sky, six or nine months ago. In budget speech after budget speech, Deputy Richard Bruton outlined the catastrophe we were headed for, but no one believed him. It was a case of "eat drink and be merry, for tomorrow we die".

The accusation has been made that we never come up with ideas, so I want to throw out a few issues. In my special area of interest, foreign affairs, the largest part of the budget is for Irish Aid. There is a great desire to achieve the budget target, which was meant to be 0.7% of GNP by 2015. This was very worthwhile funding, but, as the economy contracts, the amount of funding for Irish Aid will also contract. It happened in the last year, where funding was reduced by €40 million or €50 million. We have to explore every avenue to determine how we may assist the economy and yet keep the Irish Aid budget in place. I ask the Minister for Foreign Affairs, and the Minister of State with specific responsibility for overseas aid, Deputy Peter Power, to examine the concept of people employed in this country who have certain skills that might be beneficial to programme or Third World countries. Perhaps, instead of paying them unemployment benefit at home, they could be paid the same amount or an increase, based on the average industrial wage, if they wish to go and work abroad. They might be able to link in with the aid agencies or programme countries and use their skills abroad. That would assist Ireland while greatly helping the individual concerned and ultimately lead to a regeneration of our economy by using this funding in a more fruitful manner. I would like this examined.

From some private conversations I have had with aid agencies, however, it seems they might be reluctant to go down that road. They tend to be opposed to the whole concept of tied aid. Nonetheless, this is something that should be examined and the Minister should explore its possibilities.

As regards the private sector paying for the public sector, Fine Gael is often accused of putting the boot into the latter, which is not true. However, we must remember that, ultimately, the private sector actually pays for the public sector. We need a vibrant public sector and we cannot have an economy without it. It must be acknowledged that some reform has taken place, for example, in the Department of Defence. Great reforms have taken place within the Defence Forces over the past seven or eight years, which is very welcome. The Revenue Commissioners have been reformed and do an excellent job. They bring in much more money than they used to. I do not know what they were doing in previous generations, but they are now more active and very efficient. However, there are many other areas of the public sector that could improve and that is what we want. We want value for money and an efficient public sector, where people are paid a fair wage for carrying out fruitful work for the benefit of the economy.

Much legislation has been passed in this House which impacts on the efficiency of the economy. A time of crisis affords us the opportunity to look at this area, for example, regarding the services industry and the hotel and restaurant trade. The National Employment Rights Authority, NERA, is quite rightly implementing the legislation, but anomalies are sweeping this country like a black plague because of our laws. I know the Minister of State, Deputy Kelleher, is seeking to address the matter of agreements which were introduced several decades ago, long before the minimum wage agreement was introduced, that are actually hindering businesses. I am aware of some businesses where employers and employees on both sides of the industrial divide had to sign a document to the effect that they were happy with the status quo to protect jobs, keep costs down and maintain employment. However, this is not allowed by regulation. NERA stepped in and said it could not be done.

Regarding the funding of local government, while the number of businesses has increased, we must look at a fair and reasonable mechanism. It is unsatisfactory that a small sector of society, whether businesses or people building houses, with the development levy, are paying for benefits we all enjoy. Taxation will only survive if it is equitable over time. While we talk of public service cutbacks in this downturn, services and professions must also cut back. I know an individual who paid something in the region of €148 for a blood test in a well-established medical centre in this city. Within the last few days, however, he had to pay €192 for the same service.

The builder, baker, candlestick maker, solicitor, architect or whoever must look into his or her heart and take a cut. I would urge consumers to put it to them. It did not take long for inflation and costs to creep up. The same urgency is not being seen towards the lowering of costs, however. Consumers should put the case to their friendly doctor, or whoever.

An unemployed person may have a desire to make a contribution to society instead of lining up to get his or her money. It is humiliating for them. I am lucky enough never to have stood on a dole queue and hopefully I never will, but the day may come. I would love the opportunity to be a classroom assistant, assist the local authority or work in a local hospital for the same wage rather than be at home and queue up once a week.

We must be innovative and examine such ideas. It is not a right-wing economic theory. It is a socially minded policy that would keep people's integrity, keep their hopes up and allow them to make a contribution. We must examine that. It is an enhancement of the FÁS schemes. Our education system is crumbling due to the difficulties teachers have, particularly at primary school where children are creating difficulties. They are crying out for classroom assistants, not necessarily resource teachers or additional expertise. This is a way we could work on it.

Some 70,000 houses lie idle. I ask the Government to examine the concept of reducing VAT on them for a two year period. The VAT on 70,000 houses would bring in approximately €2.5 billion. If we reduced it from 13.5% to 10% the yield would still be over €2 billion if they were all sold. It might give that stimulus. We need to examine these possibilities.

I do not know much about nuclear power but it is a poor country that cannot explore the issue. We should examine energy. We need to cut the number of committees by half and examine our practices. Anything we apply to ourselves we should be willing to apply to the public sector. I am not into this populist self-sacrifice.

The public is sick of bad news. Today I saw the front of a newspaper that said Sebastian Barry's book was "flawed", despite the fact that he won an award. We need to be positive. Let us forget about moaning on chat shows. Let us send out positive information.

Martin Cullen (Waterford, Fianna Fail)
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Hear, hear.

Billy Timmins (Wicklow, Fine Gael)
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Some of those chat show hosts could brighten up the day of many of their callers or listeners by taking a 10% or 20% cut in their incomes, particularly those on big contracts that may be paid for by the licence fee. I am not trying to be populist but I get weary of somebody who works 30 to 40 hours a month lecturing me and others. I am a little sick of it. We politicians should stand up for ourselves. We have to examine our practices. I do not know how many days the Dáil sits per year, 80 or 90, but I could tell Joe Duffy or Pat Kenny they work perhaps six or ten hours per week for 30 weeks per year. Most politicians work morning, noon and night. We may not be as productive as we think we are, and we must examine that. Let us stop the moaning.

Martin Cullen (Waterford, Fianna Fail)
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Hear, hear.

Billy Timmins (Wicklow, Fine Gael)
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Let everybody take the cut and put our shoulders to the wheel. We will be over on that side of the House very shortly, and if the current Government does not do it, we will.

Martin Cullen (Waterford, Fianna Fail)
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I wish to share time with the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív.

Séamus Kirk (Louth, Fianna Fail)
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Is that agreed? Agreed.

Martin Cullen (Waterford, Fianna Fail)
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Ireland finds itself in the most challenging global economic conditions we have seen for a long time, however economies have always been subject to cycles. It is vital that as we manage the immediate challenges we face, we position ourselves so we come out ahead in the inevitable upturn. The framework for sustainable economic renewal outlines an agenda for reform and investment that will allow the country to emerge in a position to prosper when conditions improve. We can turn this time of difficulty into an opportunity as we did in 1958 and 1987.

The Government's framework document, Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewal, builds on the national development plan, and, more recently, the National Economic and Social Council's report, The Irish Economy in the Early 21st century. The NESC highlighted the long-term potential of services supported by a strong culture of innovation. I was pleased to see the NESC report recognised the success of Irish tourism as a national champion among indigenous exporters of services due to successful marketing of holidays, conferences and other products to overseas visitors in a highly competitive international marketplace. The NESC also recognised the innovation achieved in tourism. The framework for sustainable economic renewal sets out how Ireland can become the innovation and commercialisation hub of Europe. The framework highlights how the smart economy rests on four pillars: developing human capital, building physical capital, securing social capital and protecting environmental capital.

Tourism can sustainably exploit our environment while adding to our human capital. Arts and culture provide intellectual capital for the smart economy. Sports and culture provide essential social and physical capital. Arts, sport and tourism sector are critical to achieving the smart economy across the framework. In securing the enterprise economy, prioritising investment in arts, sport and tourism infrastructure can help maintain activity and employment in the construction sector. Tourism maximises the return from high-end international financial services through business tourism and conferences. In building the ideas economy, tourism has proved its ability to respond to a highly competitive international market.

The framework report highlights actions in tourism, including investment in marketing as well as tourism product and the scope for eco-tourism. The tourism renewal group, which I established in December, is examining tourism policy and programmes and will develop a framework for action in the first half of 2009 to maintain the long-term sustainable growth of Irish tourism. Fáilte Ireland is enhancing the skills of tourism workers and working with tourism enterprises to enhance their operational capabilities and business skills. Tourism Ireland is pursuing new and developing markets and is establishing a hub in the United Arab Emirates to drive the development of key markets such as India and China.

When there is a risk that ill-informed comment could have a negative effect on our international image, the work of Tourism Ireland in promoting a positive image of Ireland abroad is vital for tourism and our enterprise sector. The ideas economy is also about arts and culture. There is scope to leverage our cultural capital making better links between the cultural industries and the wider economy and strengthening business capacity in the culture sector. Cultural tourism has the capacity to highlight the attractiveness of the Irish social and cultural environment for knowledge workers and innovators.

Tourism will benefit from and contribute to enhancing the environment and securing energy supplies, and not only from eco-tourism. Enterprise is already being assisted by Fáilte Ireland as well as through tax incentives in reducing their energy and utility costs while environmental measures can also protect our core attractions of landscape and natural heritage. Investing in critical infrastructure will boost the already significant economic impact of tourism by making access easier, protecting our environment and investing in key elements of tourism and sports infrastructure.

In that context let us recall the economic impact of tourism. It delivers an estimated €4.7 billion including carrier receipts and service exports, sustains close to 300,000 jobs in approximately 17,000 firms and is estimated to generate almost €3 billion for the Exchequer. While indications that visitor numbers in 2008 will show a fall in the record set in 2007, they compare well with previous years. Irish tourism is holding its own against international competitors and can continue to do so with all of us working together: industry, tourism agencies and Government. This framework sets out a positive vision for a future Ireland in which the natural skills and aptitudes of our people to innovate, create and welcome others can deliver a secure, sustainable and prosperous future.

Éamon Ó Cuív (Galway West, Fianna Fail)
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It gives me great pleasure to speak in this debate. We must recognise the great challenges our society faces. As somebody who worked in developing industry and enterprise during the 1980s, it is important that we do not dismiss the opportunities there. From my experience I believe sometimes when the challenge is greatest it drives one to look at opportunities one might have overlooked in the past. We have to encourage people to look around them for new opportunities coming our way. In every cycle as the world develops there are types of industry that wither while new developments come forward. Some 40 or 50 years ago nobody thought financial services, which are causing many problems, or computers and IT would become the major world industry and that we would have a total demise of traditional industries such as clothing and footwear etc. We must look for the next phase.

Often life takes unusual directions. Looking around, particularly in rural Ireland, in most communities we have great untapped resources. I hope we would encourage our educated and erudite population to avail of those opportunities. Deputy Quinn would share my interest in developing a world-class rural recreation product. There is no reason our landscape and countryside could not become a European Mecca for people to come and enjoy.

We have made slow but steady progress with the various partners in dealing with many of the issues that have bedevilled development there. Access is not the only problem. We have never invested as other economies have in providing a full, comprehensive set of services for those who want to enjoy our countryside. There are many thousands of possible jobs there. Anybody with experience of visiting continental Europe knows that the backup services there far exceed anything that we provide. We have not realised the full potential of our marine leisure facilities. We have one of the most interesting coastlines in the world but it has not been developed.

Our greatest resource lies with those who have a good education and have worked in multinational industries, but have reached a point where they want to become entrepreneurs. They have technical knowledge on a par with anybody else in the world. We must unlock the potential of the indigenous resources of our people and look in new directions. The development of alternative energy using wind and wood involves significant technology. We need to combine the basic raw energy with development in the technology sector to tap these renewable sources. We need combinations of experts in many directions. Clean water technologies also offer potential to create employment and export knowledge to other economies because we could become leaders in this area. There are many things we can do. In this challenging time, when people are going through a transition, we must encourage them not to think that everything is over, but to see that often such situations are only a new beginning.

As the Minister responsible for rural development, I am delighted that this time coincides with the beginning of the new Leader round. This is by far the biggest rural development programme ever undertaken here. We have €500 million of European and State money to invest in rural Ireland. That should generate an investment of €1.5 billion in the economy. I hope the money will be spent in a creative way to develop all the resources that we have not yet developed.

It has become common in our society to play the blame game and to expect somebody else to solve every problem. Governments must lead, and we will do so and take hard decisions. We can only solve the problems, however, if the people are motivated and encouraged to become part of the solution. The next phase of our development will come from within ourselves.

There has been much ill-informed comment about our public service. As I said the day after the budget was presented, most public servants do a good job and most are needed. The idea that we could get rid of half the public service does not match my experience. There is no question that there are places where we must re-allocate staff. There is a small minority in the public service not playing their part but for everyone who is underperforming in the public service, there is at least one who is going beyond the call of duty and giving tremendous service to the State. We face challenges. The cost of the public service bill is an issue but to try to link that to public service performance or to downgrade the public service and its contribution to the State is wrong and unfair. The State has been well served by its public service. I have no doubt that it will work with us, recognising the problems and that we do not have the money we had last year, or in previous years, to solve problems. The commentary I hear all the time that seems to imply that most of our public servants are not doing a good job does not do any service to our country and the dedicated people who work in the public service.

Séamus Kirk (Louth, Fianna Fail)
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I call Deputy Ruairí Quinn who is sharing time with Deputy Joe Costello. The Deputies have seven minutes and three minutes respectively.

Ruairi Quinn (Dublin South East, Labour)
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This debate is taking place in a vacuum. The Government has put no proposals on the table. Is it any wonder that the country is frightened? The people are scared. They know that things are bad and believe they will get worse and they have been concerned since last July.

Last July, the Sunday Independent invited me to put into an article comments that I had made on the radio. I published the following on 13 July 2008:

The economic and financial crisis facing Ireland is much greater than the Government will admit. The Taoiseach Brian Cowen was Minister for Finance when the storm clouds began to gather. But he ignored the warning signals and the advice from independent commentators.

Decisive action is required immediately — above and beyond the timid measures which were put through the Dáil on Thursday. Honest leadership is now needed. This government has been basking in the sunshine of the economic success which it inherited 11 years ago. I am not sure it has the experience or management skills to get us out of the crisis.

But here is what has to be done. The Government needs to drastically cut current expenditure so as to bring it into line with the tax revenues which our declining economy is generating.

That will ensure that we will operate within the budgetary rules of the eurozone currency.

But it must also generate confidence and hope that our economy starts to grow again. This means substantial investment in our productive infrastructure.

The Government went on holiday for the whole of August. Its members played golf up and down the west coast, and were on beaches and elsewhere while other governments were dealing with the problem. They returned in September and realised that the country was in panic.

It introduced a stunt budget that backfired desperately on it. The Book of Estimates was rushed, inadequate, badly worked out and is out of date. The revenue figures it calculated for the budget for 2009 were ahead of the October and November figures that would have been available had the budget been presented in the first week in December. By Christmas, the end of year revenue figures marked the worst fiscal record in the history of this State.

The Government is in denial and we are wandering around frightened. That fear is compounded by the inaction this month. Today is 28 January. The Taoiseach said he wanted a month to sort things out. The discussions continuing with the social partners and the parade of people in and out of Government Buildings is compounding the fear because the Government seems incapable of acting. Today we should not be debating the fantasy programme launched in Dublin Castle on the day the Dáil adjourned before Christmas but the outcome of discussions with the social partners about what we, not the social partners, must decide. We are not having that debate.

We are running out of time. Every week the Government delays decisive action, the lack of confidence in its and the economy's ability to generate the measures necessary to correct our problems costs us money. When we joined the euro the cost of borrowing money was the same as that for the German Republic. That has spread by 2.5% for the same currency, borrowing in the same currency. That shows how little confidence the rest of the world has in this Government's ability to do the business.

I listened to the Taoiseach's contribution at the outset of this debate. He said: "The challenge is severe but the Government has a clear strategy which we will continue to implement." That is fantasy, lies or delusion, or perhaps all three because there is no clear strategy and it is not implementing anything. The Taoiseach went on to refer to the unexpectedly rapid collapse of activity in the construction sector in Ireland. That was not unexpected, as it has been predicted for the last four or five years. Some of the commentators were saying that it would be a hard landing, and that it would have severe effects. This is a Taoiseach who is in denial. He then had the arrogance to state that there is little point at looking back at how some of this might have been anticipated or avoided. Who is in charge here? Who has been responsible for the last 11 years? Who rejected the valid, well-intended and constructive criticisms that came from this side of the House? Who asked the then Minister for Finance, Deputy Cowen, to wake up and smell the coffee? Who accused the Labour Party of talking down the economy?

We are dealing with a group of people who do not know how to solve our problems. Why should we trust the recovery of the economy with the people who got us into this mess? The Minister for Community, Rural, and Gaeltacht Affairs spoke about developing the resources of our rural economy to enhance access so that we could have rural tourism. He stated that legislation to bring that about is not necessary, yet we have the worst access of any European country to the uplands of this island, while the farming associations are blocking attempts to have reasonable access to them. The Minister, a pleasant and gentle man, is in denial. We have a fantasy Cabinet that thinks it is governing, when it is steering the ship of State to the rocks of destruction.

It is not about all shoulders to the wheel, because the people driving the car do not know how to steer it. We need a change of Government at the top, but we also need hope and creative thinking. In an article I wrote for the Sunday Independent on 11 January, based on an interview I gave immediately after Christmas, I stated the following:

But we also need new thinking and innovative ways of delivering public services. For example, why can't the surplus staff in the public service help out in the Department of Social and Family Affairs, so that the recently unemployed workers will not have to wait up to 12 weeks to get their Job Seekers Benefit, for which they have paid with their PRSI contributions?

Instead of introducing expensive redundancy packages for surplus managers in our health service, why can't they be transferred to our 800 post-primary schools to help with the administration and finance of those large organisations, so that qualified teachers and educational staff can stay in the classrooms and deal with the concerns of students?

I rest my case on that point and I know that Deputy Costello will continue in this vein. We have a Government that is in denial and that is incapable of generating the successful solutions that we need for the economy.

Joe Costello (Dublin Central, Labour)
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Thomas Payne, the great 18th century philosopher who contributed to the French and the American revolutions, once said, "Never let a serious crisis go to waste". That phrase was repeated last week by Mr. Rahm Emanuel, chief of staff to newly elected President Obama, in responding to the US and global financial recession. The US is clearly on the ball. There can be no situation so desperate and dismal that does not provide a host of opportunities and challenges.

A new ethics and equity must be established at the heart of the financial sector. The old boys' network with its nexus of banking, the regulatory authority and the Central Bank is fatal and must be ended immediately. Self-enrichment of directors through internal sweetheart loans and inappropriate remuneration packages must be discontinued immediately. A new independent regulatory system must be established to prevent the excesses of private greed which have caused the crisis. Above all, the State must retain its involvement in the banking sector after the crisis is over in the interests of protecting the people's money and the country's economy.

The days of light or self-regulation in the financial sector are well and truly over. The golden circle of overpaid, underperforming irresponsible financiers and bankers, creating a cosy self-perpetuating cartel which has controlled the economies of the world in the interests of profit and self-aggrandisement, must never be allowed to control the commanding heights of our economies again. The people have too much to lose. Millions of jobs are at stake, careers and lives have been destroyed and families beggared. The public sector must never allow itself to become so enthralled by the private sector again. National governments representing the public good must insist on a new banking system. It should be a mixed banking system consisting of part public ownership, part co-operative and part private. Each member state of the EU should have a designated financial institution, preferably a State controlled or co-operative bank, to draw down funds from the EU banking system.

In the case of Ireland, the newly-nationalised Anglo Irish Bank should be the vehicle for drawing from the €30 billion fund that was made available in October 2008 by the European Investment Bank to provide loans for small and medium-sized enterprises. These enterprises are the life blood of every economy. The existing private banks are not drawing down the EIB money and they are not lending it to those enterprises. The small and medium enterprises are thus starved of cash flow and their ability to operate effectively is greatly damaged, causing further small scale job losses across the length and breadth of Ireland. The Government is doing nothing about this.

Millions of people are losing their jobs in this unprecedented crisis. Every effort must be made to minimise the effect of those job losses. The key Government response must be to make every effort to ensure that those unemployed workers do not sink into long-term unemployment. Retraining, re-skilling, back to education, mechanisms to complete apprenticeships, community-based work programmes, a stimulus package to create employment in necessary projects such as school building, installation of homes and social housing are all essential Government actions. New technologies, particularly in the area of sustainable and environmentally-friendly energy creation and use should be targeted and resourced.

The financial institutions should not be allowed to foreclose on homeowners. There should be a moratorium placed on mortgage repayments for a number of years so that those who become unemployed do not lose their homes as well as their jobs. The State banking guarantees and re-capitalisation of the major banks should provide sufficient leverage for the Government to insist on such a moratorium.

Micheál Martin (Cork South Central, Fianna Fail)
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I wish to share my time with the Minister of State at the Department of Education and Science, Deputy Seán Haughey.

Séamus Kirk (Louth, Fianna Fail)
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Is that agreed? Agreed.

Micheál Martin (Cork South Central, Fianna Fail)
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Since credit markets around the world seized up last August, we have seen unprecedented turmoil in financial markets, rising unemployment and increased economic uncertainty. In Europe, in the Americas, in Asia, economic growth has stalled or is in decline. Referring to lay-offs by multinational firms around the world, a British newspaper yesterday carried the headline "More woe as 72,500 jobs axed in one day". In the United States, 2.5 million jobs were lost in 2008. Of these, over half a million were lost in December alone. In Singapore, the Government has cut its original growth forecast for 2009 to between -5% and -2%. Japan's trade surplus plunged by 50% in 2008 as the yen rose in value and demand in international markets weakened.

As growth has stalled around the world, unemployment rates have gone up and Government finances have deteriorated. These are common stories and have their origin in common difficulties. Most of our major trading partners are in a recession. Global trade flows are slowing. The decline in value of other currencies, especially of sterling, has created significant difficulties. These external realities cannot be ignored. The problem is global and the solution must also be found in a global context. The European Union will be fundamental to defining a global response to the crisis. The meeting of the G20 Group in London in April will have an important role to play in looking at a co-ordinated international response.

We would do ourselves a disservice if we do not recognise the strengths as well as the difficulties in our current situation. We have a low level of public debt. Our debt to GDP ratio stands at 41%. We have 2 million people at work, which is over 600,000 more than a decade ago. Our productivity levels are relatively high. We have a strong entrepreneurial culture and Government policies that support this. Membership of the EU provides access to an internal market of almost 500 million people, while membership of the euro ensures a stable currency. We remain a high income country by international standards with strong underlying growth potential.

We need to remind ourselves that much of the spadework for this country's recent development was carried out in difficult economic times. We need to bear in mind that a world in recession is not a world without opportunities. This crisis has had a global impact. Its pace and characteristics have reflected the local circumstances of each country. While Ireland is geographically an island, economically it is part of an integrated global economy. Our economic growth over the past two decades has resulted from our increasing willingness to engage with the global economy. Much can and will be done at national level to address the challenges posed by the international economic environment, the imbalances in the domestic economy and the loss in competitiveness.

Faced with unprecedented developments in the public finances, the Government took steps in mid-2008 to address the emerging budgetary pressures. The date of the 2009 Budget Statement was brought forward. More recently, a group was established to examine ways of further curtailing public expenditure and public service numbers. The social partners have been seeking to develop a consensus on the way forward. The Government will restore balance to the public finances by, inter alia, reducing and prioritising current expenditure and adjusting taxation levels to reflect the changed realities. Immediate action is required. The Government has given a commitment to make expenditure savings of up to €2 billion, or 1% of GDP, in 2009. Its work with the social partners in that regard is ongoing.

Since this crisis emerged, the Government has acted decisively to safeguard the Irish banking system. In September 2008, it guaranteed retail, wholesale and dated-term debt and secured borrowings and the inter-bank deposits of domestic credit institutions. In October of that year, the guarantee scheme was made available to certain banking subsidiaries in Ireland. In December, the Government decided to recapitalise certain credit institutions. In January of this year, the Government took steps to take Anglo Irish Bank into public ownership. We have demonstrated we will do what is needed to ensure the fundamental stability of the Irish financial system.

The Government is committed to maintaining and prioritising the public capital programme. Approximately 5% of national income is being invested in capital projects. This is one of the most effective ways of stimulating the economy. In light of our infrastructural deficit, this investment will generate significant returns in terms of enhanced infrastructural capacity and future improvements in living standards. The Government is keen to emphasise capital works that are labour-intensive. Along with addressing the deterioration in the public finances and seeking to improve the competitiveness of the economy, the Government is focused on developing the medium and long-term potential of this country. While the external environment is difficult, we are looking at those areas in which our actions have put us in a position to seize the opportunities that exist and prepare for the recovery that will come in international markets.

On 18 December last, the Government launched its economic renewal framework, which outlines the priorities and actions that are required. A central part of the framework is its emphasis on building on the previously high levels of investment in education and the knowledge economy. It contains important initiatives to foster innovation and develop the research and development capacity of companies operating here. The key elements of this plan include strong supports for start-up companies, which will provide the employment of the future, enhanced research and development tax arrangements, details of infrastructural projects and the basis of the development of a green economy. This country's research and development capacity has been transformed over the last ten years. That will help us to develop and sustain new employment in the future. Our continued engagement at the heart of the European Union will be an essential aspect of this country's economic recovery and further development. We have the ability to work together and with others on the road to sustainable economic renewal.

Seán Haughey (Dublin North Central, Fianna Fail)
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In December 2008, the Government launched its strategy for the renewal of the economy. The strategy commits the Government to stabilising the public finances and restoring competitiveness. It also repositions the Irish economy in the medium to long term. The strategy involves investing heavily in research and development and implementing a new green deal. The economic renewal framework is a comprehensive plan that involves repositioning Ireland to avail of the new opportunities that will arise when the economic recovery comes. The aim of the framework is the development of a smart economy that combines the most favourable elements of the enterprise economy and the innovation or ideas economy. Such an economy will promote a better quality environment, improve energy security and promote social cohesion. The priority of the framework is to ensure that Ireland functions as an innovation and commercialisation hub in Europe.

As Minister of State at the Department of Education and Science, I have responsibility for lifelong learning. As Minister of State at the Department of Enterprise, Trade and Employment, I am responsible for co-ordinating the education and training policies of the two Departments. The interdepartmental committee that is responsible for the preparation of an implementation plan for the national skills strategy is of critical significance under the framework. The Government aims to improve co-ordination between the various Departments and agencies that are responsible for matters like access to jobsearch, training and education and community and employment programmes. It will provide a range of opportunities for upskilling and re-skilling. A number of lifelong learning initiatives will be supported. Under the strategic innovation fund, priority will be given to flexible learning initiatives that can be targeted at upskilling people in the workforce. The Cabinet committee on economic renewal will ensure that all Departments are giving this agenda their top priority.

This year, we celebrate the 50th anniversary of the appointment of Seán Lemass as Taoiseach for the first time. In difficult economic times, Mr. Lemass steered a new course through uncharted economic waters. He abandoned the old protectionist policies and replaced them with the first programme for economic expansion, which heralded tax breaks and grants for foreign firms wishing to invest in Ireland. This is an opportune time for a similar change of course. If we are to reposition the economy for the economic upturn, we should market Ireland as the island of new innovation. The economic renewal framework will help to reorient and reprioritise all Government activities, with the goal of building a smart economy. Issues like training, education and upskilling will form an important aspect of this process. I look forward to improvements in these areas.

Just as Seán Lemass championed Ireland's first application to become a member of the EEC, this Government recognises that Ireland's future lies at the centre of Europe. The ratification of the Lisbon treaty will be an important part of the success of the Government framework plan. Any uncertainty about Ireland's future position in the EU is a serious threat to all aspects of our economic performance, particularly direct foreign investment. This economic crisis can be seen as a threat or as an opportunity. I see it as an opportunity. I believe we have the skill and determination to ensure the successful implementation of the plan I have mentioned. We are well placed to reach new horizons. The tide always comes in and lifts all boats. Only those boats that are seaworthy, or focused on innovation in this case, will reach new shores.

The Taoiseach said at the launch of the Government plan last December that a national effort is required. For that reason, the social partners are an integral part of the decision-making process, as they were in 1987 when the necessary decisions were taken in the best interests of the future of the country. I am confident that they will not be found wanting on this occasion. For 20 years, social partnership has proved that it can be a workable and beneficial process. A little give and take on the part of all participants in this process can help to make the dream of an innovation island a reality.

We should not overlook the fact that this recession is a truly global one. Most of the world's advanced countries are in recession, or are close to recession. It has previously been pointed out that the countries that respond most favourably following an economic downturn are usually those that have restructured and transformed their economies to the meet new challenges of the next wave of economic growth. The framework plan that was launched in December, along with the new economic growth measures aimed at stabilising the public finances that will be announced next week, represents the basis of our economic renewal.

Charles Flanagan (Laois-Offaly, Fine Gael)
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This debate is crucial in the context of democracy in this country. Unfortunately, this opportunity is being squandered. Rather than providing decisive leadership, the Government is giving headless chickens a run for their money. The Government's focus is on blaming the Opposition and the media, rather than taking action. Sitting back and letting nature take its course may have worked when EU money and the global credit surge combined to create the Celtic tiger, but it is not an option on this occasion.

Fine Gael has offered solutions, including an alternative budget, to maintain, stabilise and improve the economic situation. The damage that has been done to Ireland's reputation by the incompetence with which the Government has dealt with the banking crisis cannot be underestimated. I have described the behaviour of senior management in the banks as "financial treason". Bank officials and the Financial Regulator have considered themselves — and still consider themselves — so utterly immune from accountability that they have come to the Parliament of this Republic and told bare-faced lies to Oireachtas committees. Some time later, these same officials arrived at Government Buildings demanding a bail-out, which is exactly what they received. They were given a blank cheque and not even a slap on the wrist from a compliant Government.

In the boom days the banks were tripping over themselves to hand cash over to developers. In these days of bust, the Government is tripping over itself to hand over our money to the banks, money the State can ill afford to part with. It was inevitable that Anglo Irish Bank would have to be nationalised, not least because of the scandalous behaviour engaged in by its senior management for years. Now that nationalisation has taken place, what lessons have been learned? Do we even know the full story in respect of the liabilities and bad debts of that institution or is that too to be swept under the carpet? I cannot imagine any other situations where the owners of an institution — in this case, Irish taxpayers — would be denied basic information about their property.

I have several questions which I hope the Minister for Finance will respond to at the close of this debate. How will the new chief executive officer of Anglo Irish Bank be appointed? What has been done to provide competent, accountable leadership at the helm of that bank now that it is the property of the Irish taxpayer? Will it be an insider appointment or will applicants be subjected to interview and the appointment subjected to Dáil scrutiny? Have the salaries of top bankers in Anglo Irish Bank been examined? Have new salary scales been set? Have the ridiculous criteria for bonuses been appraised? I suggest a maximum salary for any banker of €200,000.

Will the Government clarify what connection, if any, exists between Anglo Irish Bank and interests in the Channel Islands? Has the bank been writing new business since it was taken over by the taxpayer? Has it been signing new contracts with new liabilities? Fine Gael is of the view that Anglo Irish Bank must be wound down in an orderly way over a period of five years. We were proved right in our assertions about the banks to date but the Government prefers to close the stable door after the horse has bolted rather than deal with the realities of the situation.

The reaction of the Government to the chief executive officer's disgraceful behaviour and recent resignation is telling in regard to Fianna Fáil's attitude to the banking crisis. There seems to be a belief that no wrongdoing took place despite staggering evidence to the contrary. The Minister for Finance said he was "disappointed", while the chief executive officer of the Financial Regulator remarked that no law was broken. Legislation does not cover every aspect of modern life but we all know the difference between right and wrong.

I draw the attention of both the Minister for Finance and the Financial Regulator to the Companies Acts 1990 which lays down clear procedures in respect of loans. These procedures should be pursued in respect of possible breach in this instance. From a criminal justice perspective, certain provisions of the Act are particularly relevant. Section 30 deals with the penalisation of dealing by directors of a company in options to buy or sell certain shares in, or debentures of, the company or associated companies. Section 31 establishes a prohibition of loans to directors and connected persons. Section 41 states that substantial contracts with directors and others must be disclosed in accounts, while section 42 establishes the particulars required to be included in accounts.

Section 46 establishes the duty of auditors of a company in breach of sections 41 or 43 of the Act. Section 53 defines the obligation of the director or secretary to notify interests in shares or debentures of a company. Section 197 establishes clear penalties for false statement to auditors. Section 202 establishes an obligation on companies to keep proper books of account. Sections 203 and 204 detail the liability of officers of a company to penalty where proper books of account are not kept.

Section 242 relates to the furnishing of false information. Subsection (1) states:

A person who, in purported compliance with any provision of the Companies Acts, answers a question, provides an explanation, makes a statement or produces, lodges or delivers any return, report, certificate, balance sheet or other document false in a material particular, knowing it to be false, or recklessly answers a question, provides an explanation, makes a statement or produces, lodges or delivers any such document false in a material particular shall be guilty of an offence.

The law is not just for the little people. It applies to us all. The Director of Public Prosecutions should be asked to examine the behaviour of bank officials in the context of the Companies Act 1990. Will the Minister inform the House whether or not the Director of Corporate Enforcement is taking or has taken action in regard to the banks?

Tom Wolfe's famous novel, The Bonfire of the Vanities, springs to mind when we recall bankers flashing their credit cards in the best restaurants in the best cities. This practice cannot continue in a bank that is the property of the taxpayer. Have we halted the sponsorship by Anglo Irish Bank of the top races at Cheltenham and other places? What is being done about the junkets of golf trips to the United States and the corporate boxes in luxury surroundings at sporting events?

The golden circle that characterises Ireland under Fianna Fáil has shown itself to be toxic. A cursory glance at the number of pies in which Mr. Seán FitzPatrick had his fingers shows that cover-ups and business based on winks and nods were bound to occur. While chief executive officer of Anglo Irish Bank, Mr. FitzPatrick was also chairman of Smurfit Kappa. Mr. Gary McGann, the chief executive officer of Smurfit Kappa, was on the board of Anglo Irish Bank and chairman of its internal audit committee. This man is also chairman of the Dublin Airport Authority.

Does the Government consider these arrangements appropriate in the circumstances? Apparently it does given that last week it appointed Mr. Maurice Keane to the board of Anglo Irish Bank. This person was a member of the board of DCC which voted confidence in Mr. Jim Flavin after the High Court had adverted to serious ethical questions in the Fyffes case. Similarly, the recent statement of Mr. Brian Goggin of Bank of Ireland that he is to retire next June is bizarre. This announcement is akin to the Captain of the Titanic, on viewing the fatal iceberg, announcing his intention to step down when the ship reaches port. The arrogance of the banks was exemplified more recently by Mr. Eugene Sheehy's statement that he would rather die than accept Government equity.

The greed and incompetence of bankers combined with the greed and incompetence of successive Fianna Fáil Governments have combined to bring this country to its knees economically. We are an international laughing stock, referred to in The New York Times as "the financial Wild West", and hapless Ministers failing to take control of the situation has done nothing to dispel that view. The consequences of this international perception are evident. Our credit rating has been downgraded and we are now paying 2% more on Government borrowing than the German Government. Some €50 billion has been wiped off the share value of Irish financial institutions in just 18 months.

Today, we again witness Fianna Fáil's dirty linen being aired in public. For 11 years, that party has treated the public purse as its private piggy bank. It has stuffed boards with its supporters, put the interests of its friends ahead of the good of the nation and allowed its donors to get away with the most reckless behaviour. The catastrophic mess we are confronting today offers the chance to call a halt to the clientelism, cartelism, back-scratching and political ineptitude that have characterised Fianna Fáil's governance for the last 11 years.

The economics of the Galway tent must be removed once and for all. The people who plunged us into this crisis are not capable of leading us out of it. That has been made manifestly clear by the pathetic flailing in which the Government has been engaged since last October. There must be a clean-out at the top of the financial institutions and a clean-out at the top of the Government. It is time to say goodbye to incompetent bankers and incompetent Ministers. These people should examine their consciences and, for once in their lives, put the national good ahead of their own greed and arrogance.

It is appropriate, on the 200th anniversary of his birth, to recall Charles Darwin's statement that, "It is not the strongest of the species that survives nor the most intelligent but the one that most responds to change". This is an apt quotation for the situation we find ourselves in, led there by the headless chickens who have overseen the governance of this State in the last six months. The required change is not possible under the current Government. People are angry and that anger is justified. The time has come for change and change in the banks and in Government must come about if we are to retrieve from this current situation.