Dominic Hannigan (Labour)

Seven minutes and five minutes, respectively.

I welcome the Minister. It is a long time since we were last here and as the motion is wide-ranging, I will limit my comments to the general economy. I do not intend to speak on banking policy other than to state that my party does not think NAMA is the most efficient way of sorting out the current crisis. I also do not intend to speak about the Lisbon treaty referendum other than to state that a "Yes" vote would send a clear message to international investors that Ireland is open for business and is at the heart of Europe, and as a result, it will be a positive development if we vote for the Lisbon treaty.

I want to make general comments about economic policy and Ireland's current state. The squandering of the boom by the current Fianna Fáil Government has led to a significant loss of confidence in its ability to manage effectively its way out of the current crisis. I refer to instances such as the PPARS fiasco, the amount of money spent on voting machines and general wastage. We heard only yesterday that the Minister is still spending €120,000 on security of a field in north county Dublin. Thornton Hall, which no longer will be a prison, is just a field. We really need to concentrate on tackling waste. The people have little confidence in the ability of their Government to tackle the current economic crisis and to work back from the brink.

There has been little economic analysis in the Government's approach so far. It appears it is just an approach of cut, cut, cut, and of slash and burn, but this is not always the best option. We all are aware the country's finances are teetering on the brink and extremely precarious. Where there is wastage we need to cut it, where there are excess levels of expenditure we need to cut them and where there are inefficiencies we need to do likewise. Earlier Senator Twomey mentioned inefficiencies in the health services. We heard today that Irish general practitioners are getting five times the rate of payment for the flu vaccine that the Labour Government in the UK is giving its general practitioners.

We need to tackle inefficiencies and waste in all areas of public expenditure. When we are doing this, however, we need to ensure we do not blame the poor for the greed of the rich, that we do not price people out of the education system, that we do not restrict medical care for those who cannot afford private health care and that we do not cut off our nose to spite our face.

We need to invest in areas that offer a clear return on investment - schools, green energy schemes, projects such as public infrastructure - and we need to invest in areas where we have a unique selling point. I will highlight two potential areas where Ireland has performed well historically, namely, in attracting people to our shores both in tourism and in new industry. However, we need to have the necessary infrastructure to attract tourists. I was appalled that over the summer the Government cut back in areas of tourism investment. In my area of Meath, the Kells heritage centre is under threat. What kind of a message is that to potential tourists when the Government is closing heritage centres because of a lack of funding? We need to ensure that in areas of tourism we retain sufficient funds to operate the system. I would also ask the Government to look again at the airline tax which is discouraging people from coming to the country. Other countries, most recently the Dutch Government, have reviewed their attitude toward the airline tax and recognised that it is better to remove it.

The other area where historically we have been very good is in attracting jobs to the country. Some have asked whether our wages are competitive. I ask whether Government regulation in the area of jobs is competitive with that of other countries. For instance, do we offer sufficient research and development credits to companies which set up here? Should we review our capital gains tax exemptions and see how they compare to those of other countries? Do requirements such as withholding tax provisions and frequency of VAT payments make it more difficult for businesses to operate in this country? We need to review issues such as these to ensure Ireland is an attractive and easy place from which to operate a business.

There has been much talk about the issue of public debt. Lord Thomas Macaulay, the 19th century British historian, once stated:

At every stage in the growth of the debt it has been seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt went on growing, and still bankruptcy and ruin were as remote as ever.

He was speaking of public debt in the UK in the 19th century but he could have been speaking about the public debt in Ireland today.

We need to take a step back when it comes to the issue of the public debt ratio. I am sure no country, perhaps apart from China, is running a government surplus at present. We are running a debt of less than 50% of GDP. This will rise to approximately 70% by the end of the year, according to experts. At worst, NAMA will probably raise that to 130% or 140% of GDP, and it will probably rise again the following year and the year after that. Let us put that in context. The IMF stated in June that the debt of Japan, for example, is set to rise from its current level of 220% of GDP. In Italy, the ratio is currently well over 100%, and it is due to rise further. By 2014, the IMF stated, the debt of all of the advanced G20 countries will be by over 100% of GDP. Therefore, we need to put the matter in perspective. Senator Quinn worries about the IMF coming to Ireland's door; its officials might be busier in Rome or Tokyo before they make it to Dublin.

We need to consider carefully the issue of Government debt. The debt of the US is currently at 100% of GDP and some eminent commentators, such as Robert Reich who won the Václav Havel Prize for Economics and was a United States Secretary of State for Labor under former US President Bill Clinton, pointed out that although the debt is high in the US, it is not as high as it reached in 1945, but yet ten short years later that debt was virtually wiped out by growth in the economy, not because of government cuts. That is what the UK and the US have always done. They have grown the economy as opposed to cutting expenditure. We need to learn that lesson.

Now is the time to set the seeds for economic growth. We can do that by investing in the green area through creating new jobs in wind or wave power. We need to invest in proper schools for our children to study in, update our public transport network and road networks and tackle the appalling crisis in the water systems.

There is a herd mentality on this in Government that cuts are the only way out. This is largely unquestioned by the media. We need to be extremely clear that it is not merely a matter of cuts across the board. We need to be looking at better efficiency and cutting waste, but at the same time we must ensure we invest in key areas which can generate jobs and get us out of this economic mess.