Paudie Coffey (Fine Gael)

I welcome the Minister of State for this important debate. I listened with interest to the previous contributors. It is essential for the country and the people that we maintain hope and optimism. However, we need to pass on that hope because people are confused, angry and hurt and need direction. That is what they are crying out for. We have just experienced the greatest deterioration in the history of the public finances over a very short period. It would be remiss of those of us in government and opposition not to consider how we have arrived at this point. We must consider the background and context and learn from our mistakes if we are to have any chance of recovery without experiencing further problems.

From the mid-1990s the economy was growing well. Export business was up, employment levels were rising and we were still competitive in the manufacturing sector. Agriculture was also doing well. These were sound foundations for strong economic growth. Unfortunately, however, as we entered the early 2000s, Government policy seemed to focus too much on property development. It is obvious that this was the case. There were tax incentives for developers and everything was being forced into the construction sector. The majority of the large rise in employment was in the construction sector. It was welcomed to a large degree, but it was unsustainable. We were building more than 90,000 houses per annum at one stage. Meanwhile, we were beginning to neglect manufacturing, especially with regard to competitiveness. We also neglected agriculture to an extent and can still see how that sector is suffering.

I do not like to see the Government in denial and not accepting any responsibility for the current economic mess. I remind it that it was quick to claim credit when the economy was doing well. Now it needs to show responsibility. If it showed such responsibility and honesty to the people at this time, it would gain more credibility and at least we could draw a line under it and move on.

Unemployment is rising rapidly. In 2001 it stood at 4%, which was to be commended. However, much of this was due to the strong construction sector. We are now at a figure of 12.5%, which is predicted to increase to 15% or more. There are major challenges. People are hurt and angry and looking for leadership. In particular, the 25 to 40 years generation are seriously exposed to financial pressure. They are the ones who have large mortgages and in negative equity. They are the ones in the family formation age group; they have young children but are losing their jobs. They make up middle Ireland - the ordinary people on whom we are hoping to rebuild the economy - and are crying out for help.

I can name multitudes of companies which are going to the wall, including marquee names such as Waterford Crystal, Bausch and Lomb, Honeywell and Teva Pharmaceuticals, which announced more than 350 job losses only two weeks ago. These are not low-end manufacturing jobs. Teva was one of the industries I hoped would see us through the recession. Highly qualified people working in the pharmaceutical industry are being laid off. There are serious concerns in this area. We must not forget the spin-off industries which serve the areas in which these companies were located. The reason for these closures, we are being told by the people running these companies, is our loss of competitiveness. The costs of energy, labour, overheads and services are too high. That is all stacked up in the recent Forfás report, Costs of Doing Business in Ireland, 2009, which repeats what the business leaders are saying.

We need to ask ourselves why this happened. Yes, international factors played a role; so too did the banking crisis. However, the failed policies of the Government were also important. I recall, as do many others, a former Taoiseach saying to those who questioned the economic policies of that Government that they should go and commit suicide. I hate to repeat it, but it is a fact. He was applauded at the ICTU national congress. Now we know the reality: when people were questioning things, they were right. I know hindsight is great, but we should take cognisance of what some people, who are academics or otherwise, are saying. If the Government will not listen to the Opposition, it should listen to the academics. The economy was overheated and we were uncompetitive.

The social partnership model brought benefits to Ireland from its inception in 1987 under the Programme for National Recovery. It is now time for new negotiations and a new programme for national recovery. I am trying to be positive when I say we need to be up-front and honest with the people. We need to engage with the trade unions and workers and business and clearly spell out the difficulties and challenges facing us. Let us put everything on the table and try to work our way out of this. The Government needs to show us a plan for recovery and a roadmap out of this economic crisis.

We are getting conflicting messages from the Government, which is causing confusion. We have the report of the Commission on Taxation and the an bord snip nua report. One will be proposing ways of raising taxes, while the other will propose cuts. The Taoiseach says one thing and the Tánaiste says the opposite; other Ministers are saying different things. This is not the way to govern a country through an economic crisis. We need to see strong leadership in government. That is what the people expect.

I compliment those who were involved in organising the think-tank in Farmleigh last weekend, to which the Diaspora came with new ideas and means of investment. Similar events should be organised at local and regional level with the universities and institutes of technology. Let us get the academics and business leaders, as well as workers, trade unions and community representatives, sitting around the table with State agencies to identify our problems and promote solutions. This may be possible through the county and city development boards, although they are too formal in their structure. They could be developed into a more informal structure to bring good ideas from the grassroots up and involve the various pillars in society. That would be a positive way of engaging with the people again.

We need to give the people hope. I was speaking with business people last week and they said they were really struggling but that if they could see hope, they would work that bit harder. That is what we need to give them.