Martin Mansergh (Fianna Fail)

The combating of inflation was the overriding priority for him. In a very interesting article billed on the front page as "Milton versus Keynes", the Financial Times points out that economic policy is actually a synthesis between the two. A sentence of the article, written by Martin Wolf, states: "Over the past two decades, a world of flat money has supplied modest inflation and supported stable growth".

There is an ongoing debate in Europe, and Mr. de Villepin, the French Prime Minister, has quite sharply attacked the European Central Bank for placing too much emphasis on the exclusive combating of inflation at the expense of jobs and investment. We have learned the hard way that those objectives must be balanced. Our Minister for Finance, billed in the Financial Times as the most effective finance minister in the euro zone, is very conscious of his responsibilities in combating inflation, and he does not take the view that if one has it, spend it.

In a sense, the motion is a little like what Germans call a Sonntags Rede, or a Sunday address or sermon. One of the Independent Senators has many opportunities as the business editor of a Sunday newspaper to make Sunday addresses to the populace, rather than saying what he might in the privacy of this House. The Sunday Independent suggests that stamp duty should be abolished, that all taxpayers should be put on a rate of 20%, more or less in one go, and that the top rate should be cut. Is there any inflation-proofing of those policies? I think not.

In an article in the Irish Independent of Thursday, 16 November 2006, Brendan Keenan stated that if the Government were foolish enough to cut stamp duty without a countervailing tax on property itself, another bidding frenzy would be the likely result. I reject the notion that inflation is the elephant in the room. Listening to that sort of rhetoric, one would presume the inflation rate is 15%, 20% or 25%, but we have no such thing. I worked out the average rate of inflation since 1987. I accept the rainbow coalition was also in Government for two and a half years since then. The average rate is 2.9% which, by all historical standards, is a great achievement.

I refer to the Department of Finance statistics on the European comparisons. The comparison is HICP, the standardised rate of inflation. In 2004, Ireland's rate was 2.3% and the euro area average was 2.1%; Ireland's rate in 2005 was 2.2% and the euro area average was 2.2%. The Minister for Finance in his pre-budget outlook admits that the rate this year will be slightly higher, at approximately half a per cent more. The Central Bank suggests that having come in line with the euro area average in the past two years, on the figures I have quoted, Irish inflation will exceed the average this year before coming back broadly in line with the average in 2007. The notion that we are way out of line has no basis.

I will anticipate other contributions by Independent Senators. When Senator Ross is in the House he usually vigorously attacks the public sector, and social partnership and benchmarking in particular. It is healthy to note that in a National Competitiveness Council overview of Ireland's productivity performance in the period 1980 to 2005, it notes there is a good productivity performance in the public sector and international evidence suggests the Irish public sector performs well compared with public sectors in other countries. Senator O'Toole will be familiar with the productivity of teachers in respect of the resources with which they are provided. I am sure this bears any international comparison.

The reason for the Government's amendment to the motion is clear. Key objectives are to maintain employment and investment. One would form the impression from the opening speech that we were ceasing to attract foreign direct investment. In the constituency of Tipperary South, we have had four projects in as many months. I admit one of them was a domestic expansion project.