Paul Bradford (Fine Gael)

I am glad of the opportunity to say a few words on this economic debate, and I welcome the Minister of State, Deputy Dara Calleary. it is appropriate that he is here for this economic analysis because in his first and interesting portfolio in government he has certain economic responsibilities. His job was previously held by the Minister of State, Deputy Billy Kelleher. We often joked with Deputy Kelleher in the past that as Minister of State with responsibility for labour affairs, he was not unduly taxed in the sense that there were very few strikes and unemployment was not top of the political agenda. All of course has changed over the past 12 months. The latest statistics show that the number of workdays lost through strikes has, sadly, increased dramatically and there has been a dramatic increase in unemployment, which is what this debate is all about.

In theory we are commenting on the OECD and IMF reports, but we could make the same contributions without any reports because it is no longer possible to see cranes on the skyline in our cities or new cars on the roads. What we see are lengthening queues outside social welfare offices, and those few snapshots indicate the current state of the economy. I have some sympathy for the plight of the present Taoiseach, Deputy Cowen. The case for the prosecution, of course, can be made to the effect that he presided as Minister for Finance during a few crucial budgets where policy, unfortunately, was misdirected. Students of politics and history who will write the reviews, however, in 100 years, will put one person at the centre of all that is now wrong with the political economy, namely, the former Taoiseach Bertie Ahern.

Since 1997 when the Administration changed, the Governments in power have had access to unprecedented resources and had a unique opportunity to do the right thing for the country and the economy. There was the opportunity to resolve economic difficulties, create long-standing wealth and sort out infrastructural problems as regards roads and in health and education. The tragedy is that the last ten years were very much a wasted decade and the problems that existed in 1997 as regards the lack of school places and hospital beds as well as poor road, rail and transport infrastructure generally still remain, notwithstanding that billions of euro were available. Shockingly inaccurate and incorrect political and economic choices were made, and that is most disappointing of all.

Now we must ask ourselves where to go from here, and the statistics are very bleak, with unemployment heading for the 500,000 mark, enormous pressure being put on the public finances, the rate of job creation dropping alarmingly and business confidence going through the floor. General economic confidence, too, is at a low ebb. Now the Government and indeed all of us must face the enormous challenge of trying to respond and regenerate confidence.

From the political perspective, in the aftermath of the local elections, the public has already cast its judgment on the current political establishment. It is only a question of when the electorate has a chance to vote and cast out the Government. It does not really matter now what the Government does, from a political perspective, because it will be summarily dismissed in the next general election. However, it is crucial for the Government, regardless of how much time it has left, to try genuinely to do the right thing for the country and take the fundamentally difficult but necessary decisions required to turn the economy around.

Public sector reform must be very much at the heart of Government thinking in coming months. We may, perhaps, see the publication of the McCarthy report. In a sense, while this would be interesting, it will not tell us anything significant that we do not already know. We have to accept that we cannot sustain the current levels of public spending. No country, whether the Republic of Ireland or anywhere else, can continue to spend €60 billion per annum when its income is not significantly more than half of this. Tough decisions will have to be taken.

I asked earlier in the week that the Seanad might have a series of debates in the autumn where we could interact with the social partners. The point is often made here and in the other House that as a result of the social partnership model which has existed since 1987, very little economic debate has taken place within the Oireachtas and decisions are taken elsewhere. I would like to see leaders of the unions, industry and agriculture as well as the leaders of the alternative economic pillars in society presenting their cases in the Seanad and outlining their views, objectives and fears. It is necessary for us to keep putting on the record the stark statistics which face us.

Contributions have been made over the last week or ten days, particularly in relation to the electricians' dispute, reflecting both sides of the argument, sometimes with emotive language, which does not always help. However, we cannot remove ourselves from the reality of the fact that as a country and a society we are overpaying ourselves, and that cannot continue. There is need for change. It is happening already in the private sector, but there needs to be profound reform and amendment at the public sector level.

It is difficult and presents a political challenge for all of us, particularly the Government, but it is urgently required. Take the health service, for instance. Almost every other day a Senator will raise a health issue from his or her area. This shows the health service is not working and yet it is costing the taxpayer billions of euro and employing roughly 116,000. This is one area to which we shall have to give detailed political consideration.

As regards the broader public sector, at present there are dozens of social welfare offices across the country where the volume of claims is such that staff are unable to keep up to date in processing them because of inadequate numbers. In other State offices, however, there are obvious signs of surplus staff, so we need to talk about flexibility and the possibility of moving people interdepartmentally. That should be happening seamlessly and not require months of debate. The whole area of public sector flexibility and reform must be very much at the top of our agenda. The public sector plays a crucial role in the economy. Some union leaders criticise my party, in particular, from time to time for our views on public sector reform. However, Fine Gael holds the public sector in the highest regard, as the party which founded the State and put a very solid public sector in place, recognising its value and importance. We certainly want to work with it, while always recognising the urgent need for reform. The percentage of taxpayers' money that is required daily to fund our public sector is not sustainable and will have to be reduced. Therefore reform and reduction will have to be part of our political debate. I wish the Minister of State well in his very crucial portfolio, because, sadly, over the next few months, particularly during the winter months, we will inevitably see major job losses, industrial doubts and difficulties, and it must be approached in a mature fashion. If the Government can project an image of certainty, strong will and a plan for the future, there will be some degree of public acceptance. That is very important because the future of our economy is in grave doubt and we need to redress it and give people some hope and confidence.