Derek McDowell (Labour)

I did not have the same problem with Senator Ross. I managed to get through his contribution without agreeing with any of it. If the opposite was the case, I would be worried.

I am not sure that Senator Minihan's comments sit comfortably with Government policy. He said we should not be deflected from prudent borrowing simply to stay within the stability pact. He also suggested that we should operate a counter-cyclical economic policy in this State, an idea the Minister for Finance does not support. It is worth dwelling on this point. The current Government's policy has been dictated by political, not economic, considerations. The spending splurge before May 2002 was intended to smooth the way through the general election, and it did, and the current belt tightening is to facilitate a similar splurge before the next general election. We will see if it works.

The primary function of these splurges was political but the Minister tells us that we should spend when we have the money and withhold when we do not. That makes no sense, it is unwise to prime the pump when it is working and a bad idea to cut off the flow of money that will be needed to prime it when things have slowed dramatically. We are not in recession by any stretch of the imagination, where I would take the Keynesian approach and argue that money should be spent to stimulate the economy, but I disagree with the Minister's pro-cyclical approach.