Feargal Quinn (Independent)

I welcome the Minister of State. Last night, I prepared a script which I intended to deliver today and which contained proposals which were identical to those announced by the Minister for Finance at 7.10 a.m. I will jettison my script, therefore, and deliver it during the debate that is due to take place later this evening.

We must consider the challenges we face and the direction our economy should take. Last month, I visited Vietnam for the first time. The history of that country is very interesting. The Vietnamese fought a war against the French which began in 1946 and which ended shortly after the siege of Dien Bien Phu in 1954. Following this conflict, the country was divided. The north Vietnamese then fought another war against the Americans, which finally came to an end after 20 years or so in 1975. Since then, Vietnam has been a communist state. From 1975 to 1997, this proved to be a disaster. The economy was dead and the country remained poor. As a result of their objectives, the Vietnamese did not appear able to get anything off the ground. Some 11 years ago, however, the Vietnamese recognised the benefit of maintaining their communist state and also embracing the notion of the market economy. Vietnam's economy is now booming.

The enthusiasm and entrepreneurship displayed by the people there and the way the country's gross domestic product is booming provides evidence that despite the judgment of previous Vietnamese governments and against the backdrop of all the lives lost in the two conflicts to which I refer, the market economy is working. I come from a business background and the Minister of State can understand why I might believe in the market economy. My belief in such an economy was strengthened no end by my visit to Vietnam.

We must take a positive approach to the position in which we find ourselves and rely on the market economy. I thank God the partnership deal was agreed last month. However, I read a report last week which indicated that even though there is a guarantee of a pay rise of a certain amount over a certain number of months, a large number of companies will inform their employees and the unions that they will not be able to honour that pay rise without letting staff go. People will be obliged to make a decision. If they want to receive their increases, then 10% fewer individuals will be in employment. People will be obliged to make their decision. The balance of those will be made on the basis of economics because it will be a market economy. In many cases, the unions and their members will decide they would prefer not to accept that increase if it would maintain jobs and this brings us to the one area which is so important and which was touched on by Senator Mary White, namely, competitiveness. We must maintain competitiveness if we are to keep this economy going.

Looking back at what happened in the past, I was very impressed by Frances Ruane who wrote an article a couple of weeks ago in which she talked about TK Whitaker, what happened in 1958 and what was achieved. TK Whitaker also recognised that success would not be protectionism. Let us ensure we look in a very positive light at how we succeed in this area.

There was a real crisis in 1987 and the country came together. I was delighted the then Opposition said that if it was the right thing to do, it would support it, and I heard some sounds of that today. Senator MacSharry is in the House today and his father was entrusted with responsibility of cutting the costs of running this country. That was done very quickly. I gather that at the time, the Taoiseach of the day, Charles Haughey, said to his Ministers not to bother coming back to him if they did not come back with anything less than a 10% cut in their expenses and in the costs of running their Departments. For the first time, people believed that would work. What happened in 1987 under the former Minister for Finance, Ray MacSharry, was that within a very short period, the economy began to turn because we took very tough decisions. Those sorts of decisions will have to be made once again. We will have to do something about ensuring we cut our costs.

I was delighted to read the headline words of the Taoiseach, Deputy Brian Cowen, today. He said that when the upturn comes, we must be ready. Let us take that into account. Whatever costs we cut, let us ensure that in doing so, we recognise the economy will turn reasonably soon and that we should be ready for that. However, let us ensure we do not cut costs in the very areas on which we will have to rely in the future, especially in the area of education.

I will not go in the direction in which I heard so many others go. I listened to a politician on radio the other day who had come in to solve the problems of the economy but who continued to criticise what happened in the past ten years. The person was asked over and over what he or she would do now but refused to answer the question. There are measures we can and must take.

I was very impressed by the debate between Senators John McCain and Barack Obama. Senator McCain made a mistake when he talked about Ireland having an 11% corporation tax. It was a slip-up as he should have said 12.5%. However, I was delighted he made it because I thought perhaps this is very time to consider something like that which would attract the world's attention. A few moments ago, Senator Paul Bradford talked about not increasing tax. I am talking about increasing the tax take by reducing the tax percentage. This is the very time to do something dramatic like that. We are not talking about less money but about more money for a lower percentage. Sums would have to be done but it is an area to which some consideration could be given.

This is the very time to be courageous and to have a belief in the future and to say we can do something about it. I did not know until the other day that in 1929 after the Wall Street crash, the Rockefeller family decided it was the time to build the Rockefeller Center in the centre of New York. It did so because it said it was a time to encourage and show it had a belief in the future. They are the sorts of steps we should take now.

When we come to make decisions in the next two weeks, let us ensure we make decisions which take the long term into account and not only the short term. We have the ability to borrow now and we may have to do so but we should not let it spiral as it did many years ago. I believe there is a consensus across the board and that the Opposition and Government will support the right decisions, as was done with the Tallaght strategy back in 1987. Let us ensure we take the steps which take the long term approach and that we do so from a positive point of view rather than one of doom and gloom. This is the time to look forward to the future.