Paul Bradford (Fine Gael)

I am glad to speak in this important debate and glad that the Seanad is discussing the enormous and grave financial crisis facing the country. At a time when politics and the Seanad receive negative publicity, this House should engage in robust debate on matters pertaining to the economy, analysing why and how we are in our present difficulties and suggesting how we can advance. I hope this is only the first of many regular debates on economic issues.

Approximately 15,000 students turned up to protest outside the House yesterday about various matters, particularly the possible introduction of new fees for education. I noted with a wry smile one group calling itself Free Education for Everybody, FEE. That terminology represents the philosophy that has this country in its present state. Cloud cuckoo land is the only place where free anything for anybody would exist. Everything has a price that the taxpayer must pay. The sad and brutal reality of our economic plight is that we have lived significantly beyond our means for many years. "Race to the bottom" is the phrase tripping off many lips. For the past five to ten years, however, there has been a grotesque rush to the top in which everybody wanted to maximise profits, wages, expenditure, borrowings and purchases, buying a second house, a second apartment, a foreign home and so on. If one did not enter that league of decency, one was deemed to be a second-class citizen. All has suddenly changed and a cold new dawn of reality surrounds us. We must live within the rules of our new financial dispensation. While the crisis has major international elements, it also has major national elements because many decisions taken by Governments of the past ten or 12 years proved ill-founded. We have debated the onus placed on the property sector to bring in taxes and fuel the economy. All the international agencies warned us that we were too dependent on property but the Government did not heed this advice. We must try to work our way out of the resulting difficulty.

The battle against inflation did not get the attention it deserved in the past five or six years when most people had a large disposable income and rarely sought value for money. In the new economic circumstances we must try to tackle the cost of living because most people will be significantly worse off. Hundreds of thousands will be unemployed. We must attend to energy pricing, home heating oil prices, telephone charges, value added tax, VAT rates, transport and fuel. The income of most families will move down a peg and we must try to ease their burden a little by tackling the costs. That is worthy of another debate.

I have been annoyed recently also by the phrase "we did not cause the problem and therefore we should not be part of the solution" coming from all sides of the House and society. Virtually everybody has been part of the problem because most of us earned too much, spent too much and saved too little. I appreciate that some people are more responsible than others but trying to wash our hands of the problem is the economics and politics of cloud cuckoo land. We are all part of the solution. While some practices within the banking industry have been despicable, grossly irresponsible and damaging, and must be addressed, we need a solid banking system. It is imperative that we get our banking house in order and recognise that while the national debt is a serious problem, personal debt is at a record high too. We have all contributed to some degree to the problem and must contribute to a solution.

The Government's solution is only the beginning. We can debate it at length but decisions were urgently required. The Minister of State is aware of the Fine Gael proposals. The taxpayers' money must be spent wisely and carefully to get maximum value. Public sector pay must be controlled as much as possible because the taxpayer pays the bill. It is not some invisible cheque written by Government. The numbers speak for themselves. Ironically, while public services in the area of health and education have reduced and their quality has disimproved, the number of providers of those services appears to have increased. We must examine the numbers working in the public service and consider how to streamline the services and reduce the number of staff, apart from those in the frontline. The man and woman who pay tax cannot continue to fund the present level of public expenditure. The reduction will be painful, difficult and must be approached in a fair and balanced way.

The Government offered one analysis and Fine Gael offered a different one but the Government proposals are being enacted. In the past 48 hours many public servants have expressed grave disquiet about the income levy. It can be argued that it is an unfair and disproportionate levy across the board but it is Government policy and we must consider how to make the unfair measures more fair. We are now facing the gravest economic and social crisis in the history of the State. The Minister of State was a Government adviser in the 1980s when we thought that the era was the worst time for us since the Emergency. This is truly the greatest challenge we have faced.

At a time when projections show that 400,000 people will be out of work, those of us who have a guaranteed job must recognise that the first priority must be for those who have no such guarantee. All policy decisions must be taken in such a fashion to protect taxpayers, provide value for money and make cuts and sacrifices in a fair and equitable fashion. Otherwise, the country literally will go down the tubes. If we believe we are unique in the world and that a situation that occurred in Iceland or South America could not happen here, then we are not dealing with reality. I hope all of us in this House will play a part in having real economic debate so that realistic political choices can be put forward over the course of the next few crucial weeks and months.