Martin Mansergh (Fianna Fail)

——of competitiveness is, in many instances, market forces. If alcohol prices go too high, the volume drunk will fall off. The same applies to accommodation. If the price of accommodation goes too high, it will not be filled. We have particular concerns about the sheltered sector of the economy where the forces of competition are not what they should be. The Government has done a substantial amount to try to break the rise in the cost of insurance and to start bringing it down by a number of different measures; the Minister's predecessor deserves some credit in that area.

I share the Minister's emphasis on the importance of research and development. That is very important and it is important that in our third level sector, for example, the equipment and facilities are made available in terms of our competitiveness.

My colleague, Senator White, raised the question of the research and development incentive in the recent budget. To save money, it was to be applied only to additional expenditure so as to avoid dead weight and there is some suggestion that may not be working as well as intended. We have to look at what other countries are offering in this field and match them.

The Government is making an enormous investment in improving our infrastructure. I will not go into the details of that; we have debated it on other occasions. An enormous number of facilities are coming on stream. I notice in the IMF report that the greatest emphasis is put on investment in infrastructure.

Some of us believe, in terms of housing policy, that the price of housing has not been a positive contributor to our competitiveness. There is much interesting material in the IMF report on the effectiveness or otherwise of Government measures. Obviously, the Government has been extremely effective in terms of increasing supply, perhaps a little less successful in terms of affordability.

There is one issue on which I took issue with Senator Ryan yesterday and, therefore, I must also take issue with the Minister. It is unwise of us to use language in speeches to the effect that we are the second richest nation in Europe. That is using the GDP measure, which includes billions repatriated by foreign companies. The IMF report states that in 2003 we were at 99% of the EU average in terms of GNP, which is a far more accurate measure of living standards. One can assume that by the time the EU enlarged on 1 May, we were at 100%. We do not do any service to ourselves, however, if we make boasts that are not, strictly speaking, credible. It also leads to demands to the effect that if we are the second richest nation in Europe, why have we not done X, Y and Z? The answer is that we are not the second richest country in Europe. It takes many years of accumulating high levels of income to build wealth. High income in a given year is not the same as wealth, which takes time to accumulate. While we may be rich in terms of income, countries such as Germany, Britain and France are well ahead of us in terms of accumulated assets. Economic debate should be conducted on the basis of a realistic assessment of our position. We should not preen ourselves in the belief that we are far in advance of our real position.

Senator Ryan referred to a suggestion by the leader of his party, Deputy Rabbitte, that we will need a thesis to explain the reason the rainbow coalition lost power in 1997, despite the good state of the economy. That is not the case. There is one economic and two non-economic explanations. The rainbow coalition lost the confidence of the public in its ability to manage the important issue of law and order. In addition, the public strongly believed a Fianna Fáil Administration would be able to handle the peace process more skilfully — the first ceasefire broke down during the coalition's period in office.

In terms of the economy, the recovery started in 1987. To find impartial evidence in support of that statement, one need only look at the IMF report. The term "Celtic tiger" was a phrase coined by an economic journalist in the early autumn of 1994, before the change of Government.

I freely accept the rainbow Government kept the economy moving at a good pace, although perhaps without much flair or imagination. To suggest the Celtic tiger economy was created in two and a half years by the rainbow Government only makes one smile. I noted from a radio broadcast this morning that at least one economist, Dan McLaughlin, believes the Celtic tiger economy mark II is upon us. The period of progress since 1987 accelerated from the mid-1990s onwards. While I do not wish to deprive the rainbow coalition of any share of credit it may wish to take in this regard, it is false to paint a picture of a Celtic tiger created by the coalition and subsequently messed up by Fianna Fáil and the Progressive Democrats.

Although our economic achievements are highly respected, we are all conscious that we remain vulnerable and have a major agenda to fulfil. It will be necessary to maintain sharpness and competitiveness and avoid complacency.