Martin Mansergh (Fianna Fail)

I move:

That Seanad Éireann

commends the Government for its prudent handling of the public finances and reaffirms that it is a key objective of An Agreed Programme for Government to sustain a strong economy and "keep the finances of general Government close to balance or in surplus.";

acknowledges, in particular in this regard, the achievement of the Minister for Finance in maintaining a stable and disciplined budgetary policy at a time of global uncertainty, when many of our neighbours in Europe are experiencing deficits, serious economic setbacks and, in some cases, negative economic growth;

accepts that while inevitably there has been public concern given the international downturn and the consequential slowdown in the Irish economy, it has only been by acting sensibly and refusing to take the short-term option of massive borrowing, that the Government has contributed significantly to Ireland's fiscal and economic future;

recognises that our economy is now in a strong position to accelerate rapidly and that, in terms of pursuing higher growth, Ireland is starting from a good base relative to our European or OECD counterparts;

notes also, in terms of growth, employment, income per head and adherence to the Stability and Growth Pact, that Ireland compares very favourably with the rest of the EU;

welcomes especially our continued strong employment performance which is particularly impressive in a situation where, last year, labour force participation averaged over 60% of the adult population — the highest level ever recorded;

congratulates the Minister for Finance for pursuing policies that have helped ensure

the annual rate of inflation fell to 1.3% in March, the lowest for almost five years;

our GNP was 3.3% higher in 2003 compared to the previous year and accelerated to 5.5% in the last quarter;

employment grew by 1.8% last year, despite the difficult global economic environment, while unemployment was kept to a comparatively low rate of 4.7%;

and

the end April Exchequer returns indicate that we are on course to meet our public finance targets for 2004;

urges the Minister for Finance to maintain our low levels of direct taxation which, in accordance with the policies of the parties in Government, have boosted significantly both employment and revenue;

supports the Government's continued opposition to irresponsible fiscal policies predicated on unsustainable borrowing; and

encourages the Government to follow through on its policy of careful and sustained investment, in particular, in our public services and infrastructure which has already done so much to transform our economy.

It is a great pleasure to move this motion. The state of our economy is a source of justifiable pride and satisfaction, notwithstanding that there are many readily identifiable things to be done. Credit is due not just to the Government but also to the social partners who have worked closely with Government for the past 17 years. They can take equal satisfaction from this as they begin to negotiate a further spell of the current agreement.

The French newspaper, Le Figaro, carried an article last Friday reporting the views of a French economics professor on the impracticality of tax harmonisation. It contrasted the French preference for public goods, such as state electricity, railways and post offices, with countries such as Ireland where people are able to keep more of their income and enjoy high growth and full employment. The connection is not accidental. The Irish economic model is admired across the world, as we saw in the applicant states of eastern Europe on the day of enlargement. It is admired in developed countries, large and small. The Chinese Prime Minister is visiting this country at present. Even though China is the largest country in the world, the Chinese have a great interest in what Ireland is doing and, indeed, in the Shannon region in the Minister of State, Deputy de Valera's, constituency. Indeed, there is interest in Ireland's economic experience even in the White House.

The Irish economy has achieved a soft landing, which was a source of concern two or three years ago. Both GDP and GNP growth are reckoned to be in the region of 3.5% this year. The public finances are in first rate order despite attempts last year not just by the Opposition but also by some economists to suggest they were going off the rails. We were told by the Opposition that benchmarking would be the ruination of the nation but it is not even mentioned in the amendment to the motion. It seems to have gone off the radar.