Liam Twomey (Fine Gael)

I welcome the Minister of State. When we look towards the future, we should always cast an eye back on the past to understand why we ended up in this situation in the first place. Lord David Owen, a former British Foreign Secretary and is a qualified doctor, wrote a book entitled In Sickness and In Power. In it he examined how illness affected those in power. He described something that can also affect a person's behaviour. He discussed hubris or hubristic behaviour. A hubristic act is one where a powerful figure puffed by an overweening pride and self-confidence starts to treat others with contempt. Reflecting on what has happened in this country, one must ask if Fianna Fáil was engaging in hubristic behaviour and is that what led to the current financial crisis. If one considers what the then Taoiseach, Deputy Bertie Ahern, and the then Minister for Finance, Charlie McCreevy, were saying and doing, it seems that both of them engaged in a bad dose of hubristic behaviour in recent years. One must also ask if the main party in government during that period, Fianna Fáil, was engaging, collectively in hubristic behaviour.

Fianna Fáil took the credit for the success of the Celtic tiger, even though that success was by no means exclusive to Fianna Fáil. They did not share the success at the height of the Celtic tiger. Unfortunately, they started to believe in their own spin and the whole experience seems to have gone to their heads, especially in the case of the former Taoiseach, Deputy Bertie Ahern. They moved on to a stage where they felt it necessary to treat others with contempt. It is not that long ago that the former Taoiseach, Deputy Bertie Ahern, said that anyone who talked down the economy should commit suicide, nor is it that long ago that the then Minister for Finance, Charlie McCreevy, preached the teenage school of economics, namely, that when we have the money we spend it and when we do not have it, we will not spend it. That did not help and now we are in this crisis.

They developed a false confidence in their own ability and they believed they could do anything without consulting anybody. They started to make some serious mistakes and failed to learn anything from anyone. When Members on this side of the House made observations down the years, they were either dismissed or if they were taken up, no credit was given to anyone for them. That is the reason the final act of hubristic behaviour is being made in a situation called the nemesis, where we are in a mess, which the Minister of State has talked of trying to get us out of.

It is important we look back on history because it teaches us where we will go next. There has been very little done by the Government to deal with this economic crisis. The Minister of State knows that borrowing in excess of €25 billion a year is no solution to the crisis. We have to take this pain at some stage. If Government borrowing is not controlled, in a few years we could be paying an extra €8 billion to €10 billion on the interest of our national debt. The Pre-Budget Economic Outlook published in November offered some startling facts that we should examine and publicise. One section of it states:

...when economic growth resumes it will be export-led growth, which is not as tax rich as the domestic growth of the recent past. Consequently the expected pick-up in tax revenues based on existing policies will not bridge the significant gap that has emerged in the public finances.

That needs to be emphasised. The way we will get out of this mess is by producing jobs. The only place a country like Ireland can produce jobs is in export-led industries. What this document clearly points out is that even though we will have extra jobs, we will not have the massive tax revenue that was generated in the dying days of the Celtic tiger, which accrued from capital taxes. Even, if the position improves in terms of jobs in the next few years, there will not be a massive improvement in revenue. However, if we could address the increase in the numbers unemployed, which happened very quickly, almost like a tsunami, it would help to correct the deficit. It is the huge loss of jobs that is contributing to the massive extra cost to the Exchequer. If we managed to recover those 200,000 job losses, it would correct the economy in terms of the €4 billion figure. We are paying in excess of €3 billion in unemployment benefit and there are additional costs such as medical cards, grants for school books and for other items given to those individuals in receipt of social welfare benefit. Everything in the forthcoming budget must be about protecting jobs and getting people off the live register. This is a significant issue and reference has been made to unemployment of 11% in the country. However, in reality 20% of the workforce receives some form of benefit payment, that is, one in five of the workforce, a very substantial number of people. The focus must be in this area.

The next paragraph in the pre-budget outlook states that while taxation receipts have declined, total current expenditure has continued to increase, a point made by the Minister of State already. Taxation is now back at 2003 levels but Government spending is 70% above that level.

The next table in the pre-budget outlook, table 5, shows the source of the benefits during the growth of the Celtic tiger. There was an increase in the number of people working in public services such as education, the health services and the Garda Síochána among others. We do not wish to lose these gains but if we do, student-teacher ratios will increase, access to hospital care and health care in our community will disappear and there will be fewer gardaí on the streets again. There is a fine line to be walked for the Minister. However, these issues must be made clear to the unions in the discussions and it must be made clear how important it is to control expenditure. We must not lose the gains made.

At issue is a reduction in the costs of the public service and the Minister must be as open as possible, not only with public sector unions but with the people such that they can understand what is taking place. We are spending €58 billion per year. Even according to the Government forecasts, growth will not improve very dramatically in the coming years and when it does, there will be no great increase in tax revenue. The problem we face will not go away very quickly and we must acknowledge this. It is important the union leadership understands the situation, although I cannot believe that Jack O'Connor or David Begg are any less the wiser about the matters to which I have referred than the Minister or myself. They have access to the same information and they must understand the seriousness of the crisis.

There has been talk of resisting pay cuts and taxing the mythical wealthy people. It is somewhat mythical to talk of such wealthy people and even if some do exist, there is not a sufficient number to make a difference to the crisis in which we find ourselves. It is important that the union leadership face up to this and speak to their members in this way. They must not psyche up their members as if something will be different because the deficit is too great. If the union leadership continues to talk as it has done, it is no different from Deputy Bertie Ahern or Mr. Charlie McCreevy in suffering from hubris. They must know in their hearts that things have changed. We cannot afford to let public debt increase at the level it continues to increase.

I recall the pre-budget debate in the Dáil in December 2006. My counterpart at the time was the then Minister of State, Mr. Tom Parlon. His arrogance and hubris had gone out of control. He was in the position currently occupied by the Minister of State, Deputy Mansergh.