Liam Twomey (Fine Gael)

Fortunately, the Minister of State does not suffer from the same sense of arrogance. At the time growth in our economy was of the amount of €15 billion per annum. That growth, about which everyone was boasting, was exactly the same as the amount the ordinary man and woman in the country was borrowing at the time. Growth was exactly the same as borrowing. How did this change matters? In 2000 for every €100 of income earned by ordinary men and women, there was personal debt of €60. By 2007, for every €100 of income, such people were €140 in debt. Personal debt more than doubled within the country during that period. Worse, most of that debt was property related.

Having explained these figures, I asked the former Minister of State, Mr. Parlon, what would happen when we reached the point where we could borrow no more or if something bad happened the economy. He stated that it was a matter of buoyancy and confidence in the economy and that the people would make their own choices, a point he repeatedly made. He never once considered there was a need to express any concern with regard to this issue. Hubris was alive and kicking in the form of the former Minister of State, Mr. Parlon. It is galling for the people because Mr. Parlon has moved on to his €350,000 job with the Construction Industry Federation. He is calling for taxpayers to support his members, the very people who led us into this mess in the first place. Those who would make their own choices and who should have been on their knees blessing themselves for the great Government in place according to Mr. Parlon are now in negative equity, provided they have managed to hold on to their jobs and homes. It is a sad state of affairs in which we find ourselves.

The issue of where we go from here is equally important. If next week's budget involves taking tough decisions we must explain why. If we pay €8 billion in interest, there will be a remarkable impact on public spending. In 2007, a bad year, some 5% of tax revenue was used to pay interest. These figures are contained in the pre-budget outlook. The forecast for next year predicts 15% of tax revenue will be used to pay interest on the national debt. This is despite the acknowledgment from the Minister that we will borrow €25 billion, not only this year and next year but beyond then. We could reach a stage at which 25 cent or more of every euro in tax revenue may be used to pay interest on the national debt rather than the principal borrowed. What will happen when we try to correct our competitiveness while there is low growth and while the national debt is increasing at an incredible rate?

The Minister of State should begin the habit of using gross national product when trying to explain the seriousness of the situation. Gross domestic product takes into account the repatriated profits of multinationals. Such moneys have little or no impact on the present or future in the country. The Minister of State should use gross national product as a measure to highlight the seriousness of the situation. This would show the people that public sector spending is reaching close to 50% of gross national product every year.

If these developments come to pass in the coming years, including an explosion in the interest bill on the national debt, there will be no money for pensioners, sick children, for the development of hospitals or for public sector pensions. No one, including those in public sector, should be marked out as responsible or as having a special role to play in sorting out these problems. This is a collective problem involving all of us. We must discuss the problems in a rational matter to highlight the seriousness of the crisis. If we do not correct the public finances in the coming years, the country will be in an even greater mess than it was during the 1980s. In the 1980s the country was in debt to the extent of 150% of GNP, but most of that debt was the responsibility of the State. Now, personal debt is approximately 75% of GNP and State debt is in excess of 100% of GNP and it does not appear to be coming under control. The pain and misery will be great for everyone, not only public servants, but especially for those requiring public services. Those who require public services include children in school and hospitals and elderly people who rely on the old age pension. All of these individuals require that we make the correct decisions in protecting as many existing public services as possible and developing those that will be delivered in 2016 or 2020, which is not that far away. It is sad that we ended up in the position in which we find ourselves so quickly, particularly when we had been doing so well for so long. Even though I am not suggesting tax or other increases, I do suggest our focus should be on jobs. The only way we will extricate ourselves from the mess we are in will be by creating new jobs and protecting existing ones. We must not waste money on something that sounds good. The focus of the next two budgets must be on creating jobs and restoring competitiveness.