Joe O'Toole (Independent)

I welcome this debate and I welcome the Minister of State, Deputy Noel Ahern, to the House. I thank the other Minister of State, Deputy Mansergh, for his contribution earlier. While there are many aspects to look at, we need to keep examining the broader issue. One of the difficulties is that the public looks at this purely as Ireland Inc., whereas we need to look at the nation and how every decision we make impacts on ordinary people. Some of the difficulties arising from the current economic crisis can be seen across the world.

It is worthwhile recalling what Ireland was like before social partnership agreements. Many of us are old enough to remember the oil tanker strikes and the extraordinarily bad industrial relations in the 1970s and 1980s. It is worthwhile dwelling on that for a moment and remembering the pictures of a closed down country. That has not happened in the past 25 years or so. I was involved in the benchmarking process, after which there was no strike in the public sector for four and a half years. That did not happen in any other European country.

Arising from social partnership, Ireland changed its primary and post-primary school curricula with total support from teacher unions, school management and owners, and parents. They have not found it possible to do that anywhere else in Europe. Those are two examples of how far we have come.

Could the industrial situation of 25 years ago recur? We should remind ourselves of what can happen by looking at what is currently unfolding in France. I was slightly amused yesterday to hear Senators talking about the bad message we might be giving out if we went on strike on Monday. Of course that is absolutely true, but France has had three general strikes in the past year. In France this week groups of workers are holding big business leaders to ransom to fight their particular cause. Meanwhile, the French business and industrial community has warned the Government that it will not tolerate or implement a law that seeks to limit top executives' salaries. Not that long ago we saw social unrest on the streets of Greece. That is why it is so important to put the message across. Whatever we do, we need to bring the public with us. Civic society is crucially important.

It is also important that people have some understanding of how social partnership works. I listen all the time to various political parties saying how in some way they feel uninvolved with social partnership. I am sure that is correct, but there is no mystery about what happens in social partnership. People sit around a table and are forced to listen to each other. Therefore, everyone from the trade union side must hear every argument from the business and community side, while everybody from the Government side must listen to all that comes through from the community and voluntary groups. They must all listen to each other's viewpoints as well as engaging, arguing, proposing and eventually compromising. The challenge to the Opposition is how can one possibly buy into that system. If one signs up to such a system, it is written in blood. One has to take the downsides and sell the compromises to the unwilling. The advantage, however, of social partnership to the Government and the nation is that when an agreement is reached, the partners — I did it myself for many years — will take the ups and downs and sell them. They will show leadership and put their reputations on the line by pointing out that, while a deal may not attractive in many ways, it is the best for the country and, in the long term, for their members. This is what we will be trying to achieve with the renewed partnership talks. The Taoiseach's recent letter to the social partners is crucial.

We must examine the small as well as the large issues such as competitiveness and energy costs. ICTU's ten-point plan in all today's newspapers merits much engagement and discussion according to the Government. IBEC also recognises it as a basis for discussion, as did several Members on the Government side. The plan is an appropriate basis for discussion.

For some time the trade unions saw the need for some increases in taxation for reasons of fairness and the economy. Three months ago, the Government's position was that under no circumstances would it look at a new budget or new taxation. That is why negotiations broke down with the social partners in January. The Government has recently and rightly moved on from that position.

Certain commentators on the radio this morning, in today's newspapers and in the other House yesterday said we dare not borrow. I welcome the Minister for Finance and the Taoiseach recognising State borrowing limits may have to drift up somewhat. The reason is simple. If we were to take €8 billion out of the economy, we would freeze it to death. Such a move is simply unsustainable. We must examine how we can ensure the economy and social services are maintained in the fairest possible way, sharing the pain at all levels. We must all then sell that message. As someone said, it is a bit like fertiliser; a 2:2 approach to this. We must consider a 2% increase on both tax levels and borrowing €2 billion. No matter what savings are put in place, we will not get the amounts of money we need.

The Competition Authority's role needs to be examined. On this morning's Order of Business, Senator Butler spoke about a general practitioner in his area charging €95 a visit. Any fair-minded person would consider such a charge horrendous. Why can we not insist that the cost of attending a GP should be no more than €50? The answer is the Competition Authority. We are hoist with our own petard. The Government cannot negotiate the costs of pharmaceuticals or doctor visits because the Competition Authority will claim it is interfering with the competitive process. If it means the competition legislation needs to be amended or repealed, then it should be.

Ten years ago I spoke in this House about energy costs when Irish electricity charges were the cheapest in Europe. In a bid to move 11% of market share from the ESB, energy costs were allowed to increase to make it more attractive for the private sector to enter the market and make a profit. In that time, we have gone from the cheapest electricity in Europe to the second most expensive. That is unsustainable.

Our energy independence is crucial. The Kinsale gasfield will run out in the next two years. Ireland cannot maintain any level of energy independence without the Corrib gasfield coming on stream. I am no advocate or supporter of Shell. I have spent much of my life arguing with it, criticising it or opposing its activities. However, in our democratic structure certain obstacles, checks and balances, health and safety requirements and environmental conditions have been put in place for Shell. If it has passed every one of these checks, whether I like it or not, then the gasfield should come on stream. If it does not, we will suffer. Political leadership is needed to bring this about instead of politicians shying away from it. The gas needs to be brought ashore in the safest and most environmentally friendly way because our economy needs it.

Social partnership was never developed for the good times. It was developed in 1987 to get us out of the worst recessionary hole we were in prior to this one. A point made by Senator Hanafin on this morning's Order of Business is worth recalling. In 1987, we had a debt-GNP ratio of close to 140%, an 18% unemployment rate, 1 million working as opposed to 1.9 million currently, and interest rates in the high teens. We have a better infrastructure now and are in a better position to crawl our way out of the current recessionary hole. I have every confidence that if we can get civic society behind us through social partnership and the political classes to come together with common objectives, we will be able to deal with this recession. The people will recognise that level of leadership. It takes courage to sell the bad message but it can be done.

Yesterday the Minister for Finance said the people with most should pay most. I have heard many people remark on the fact that 20% of the people pay 80% of all taxes. Of course, the next bit to that statement which is never said is that 10% of the people own 95% of the wealth. The ordinary person in the pub would then ask why that 10% should not pay 95% of taxes. In future, any time someone reiterates the first statement, it must be balanced with the second.

I am not all about screwing people into the ground. Earlier this morning, I made the point we must take responsibility for regulation as we have regularly been dishonest about it. Not only has it failed us, the legislation which established it was inadequate and did not give enough powers. In 2003, no Member could understand why we were separating the Financial Regulator from the Central Bank. No clear case was made for it. We are now moving back into a more conjoined approach which I welcome.

We never gave the Financial Regulator the power to ban financial products such as 110% mortgages. Of course, we were quick enough to blame the regulator for not doing anything about these products when they came unstuck. We also need to examine how regulation has affected energy and telecommunications prices. If we do not get them right now, we will pay a price later.

We are dealing with a people as well as an economy. It is not just Ireland Inc. but also the Irish nation. The Irish nation is not the creature of Ireland Inc.; it is the other way around. We must ensure that Ireland Inc. looks after its people well.

In that regard, I refer to the points in the ICTU ten point document for a better way forward. One is the issue of employment. I am concerned about a number of issues relating to employment. The Government has cut back on road building and everybody knows the reason for that. It is cost saving. However, it is also a loss of jobs. Road building creates jobs. Somebody suggested this morning that €2 billion will be taken out of the school building capital programme. That is appalling. School building provides real jobs around the country for small contractors. That is surely counter-productive.

I do not pretend I am exactly right on this issue, but I believe I know as much about it as any economist. Of the best economists, even the economists who are currently celebrated for getting their forecasts right, none has been right about the past year. I have all their forecasts for last year and the year before in my office, and none of them got it right. One economist is celebrated for forecasting that the downturn in the economy would be much worse than any previous downturns. He forecast that but he did not do so until April last year, barely 11 months ago. Furthermore, if one reads his prognosis at the time he correctly forecast that we were going into a bad recession, the last three paragraphs of the article predict it will get even worse because, this economist said, under no circumstances would there be any reduction in interest rates for the foreseeable future.

We should challenge those economists. When they predict something, we should ask them why. It is not, and never has been, a science. It is always seat-of-the-pants stuff, reading from the back and not working into the future. We know as much as they do. I appeal to the Government to ensure that every decision it makes is rooted in people as well as the economy. It should not be rooted in one as opposed to the other but in both together. Social justice is as important as economic principles.