Derek McDowell (Labour)

The main focus of interest this evening is on the Progressive Democrats motion. It gives an obvious flavour of what we can expect from them in the upcoming general election. There is merit in debating the individual issues, but it also entails debating a bit of history, which I find a bit tedious. At a recent debate in Trinity College with Senator Minihan, I made the mistake of allowing him have his way with the history, so I will not do it again. I want to stitch a few obvious historical facts into the record before I get into the meat of the debate this evening.

The Progressive Democrats would have us believe that everyone else has always made a mess of the economy and that they do it brilliantly. They would also have us believe that low taxes form a significant part of the economic growth that we have had in the past ten years. The stability in the national finances came about largely because of what happened between 1987 and 1992. During the Fianna Fáil and Labour Party Government of 1992 to 1994 — when the Progressive Democrats skulked on the back benches of the Opposition due to the row between Des O'Malley and Albert Reynolds — we got into a period of jobless growth. Economic growth was really high, but we did not get the growth in employment. Between 1994 and 1997, we began the current period when we had high levels of economic growth and serious levels of employment growth as well. I have been abroad with Senator Dardis and we have been regularly asked about the cause of the Irish economic miracle. We give the stock answer about social partnership, foreign direct investment, the low rate of corporation tax, the highly educated workforce that we had in the late 1980s which was largely unemployed, as well as the investment that was made in education prior to that.

By and large, there is consensus in this House about these issues. However, in the past two or three years, the Progressive Democrats have started retrofitting low income tax into this argument. It was not there previously and it should not be there now. Low income tax rates are a result of what we could afford because of economic growth, but they did not bring about economic growth in the first place. Any sensible economic commentator looking at the facts knows that is the case. The fact is that growth had started and was well under way long before we were able to afford to reduce income tax rates. Increases in employment levels were well under way before we were able to afford the reductions in income tax rates. We are into a serious chicken and egg business and the Progressive Democrats cannot be allowed to rewrite history in the fashion they choose.

Having got that out of the way——