Liam Twomey (Fine Gael)

The news being announced on the airwaves just adds to the calamitous situation we are facing for the next couple of years. I want to focus on three major issues that are important for our recovery and perhaps the Minister of State might reply to some of the issues being raised, because they are important, in addition to some of the matters we are reading about today on banking.

There are several big issues facing the Minister for Finance outside of banking and the overall economy, one of which is the status of the Croke Park agreement. It has been a number of months since its announcement and it is important that we know its status. What is happening in terms of implementation? What changes have taken place across Departments? The Minister of State might give an overview, but there is a need to provide a more detailed explanation of where we are going with the agreement which is absolutely pivotal to improving the public finances. As the Minister has put a lot of stock in it, it is important that we know exactly what is happening. Will it go the same way as benchmarking, with a few Departments making serious attempts to implement change, a few others making lacklustre attempts and the majority doing nothing at all? This requires a response from the Minister because the circumstances are much more difficult today than they were in the past.

There has been much discussion about public sector pay, whether staff are over or underpaid and who should be protected. However, if the public finances continue to deteriorate at the current rate, the ability of the Government to pay public sector pensions in five or six years' time will be under threat. This is something about which we are all concerned because such a large number are dependent on Government pensions.

Another issue facing the Minister is that of cuts to Government spending. The Government has said it is fulfilling its budgetary mandate of cutting back expenditure year on year. The trouble is that capital spending may be taking the brunt of the cuts and the Government may not be achieving the necessary cuts in current spending to get the public finances back in order. Cutting back on capital spending is damaging for our recovery. Cutting back on spending in building new schools, extensions to hospitals, roads, motorways and so on will hinder our ability to recover. The core requirement is to cut back on day-to-day spending. We must cut waste and get spending in order. There is a sense that the Government may be taking the soft option and only cutting back on capital expenditure. The Minister of State may want to reassure us that is not the case.

The Minister has mentioned that he is improving competitiveness in the economy, but we have not seen many examples of this in the part of the economy for which the Government is responsible. Charges to customers who rely on Government services are not decreasing at a rate that will help us to start economic recovery. The State's responsibility to reduce costs to businesses, consumers and its own customers is not being fulfilled. This is something on which we must focus.

That issue is related to today's announcement that AIB is essentially being nationalised. It is well known to small and medium-sized enterprises and anyone who wants to borrow money that there is, more or less, a credit lockdown. Banks are not lending. It is completely obvious that, no matter how many reports are published by the banks stating otherwise, far too many are unable to obtain loans. People are coming to us about it and we are even experiencing it ourselves with family members who own good and viable businesses but cannot obtain credit. It is not because the banks do not want to lend but because they do not have the money to do so. The Government is making all the right noises, but it is not doing enough to ensure credit is available to those who want to develop businesses and create jobs. It must face up to this problem quickly.

At the beginning of the week the Government announced an ambitious five-year plan which reminded me of the days of Joseph Stalin. The Soviet Union was good at having five-year plans also, although they did not do it much good in the end. If I remember rightly — sometimes I cannot get dates right because these things happen so often — only a few months before the last general election the same five Ministers were rolled out to launch a plan to deliver so many hundred thousand jobs in five years. It might even have been 300,000. Of course, we have now seen a reduction of 300,000 jobs. However, the point is that the same grand plan was announced before the last general election as was announced at the beginning of this week.

I must tell the Minister of State that this week's announcement was taken with a grain of salt by the general public. The public is getting a bit tired of the Government announcing big plans that come to nothing. It needs to focus on making the economy work. The problems I have mentioned are serious, but we have not even touched on the banking issues yet. The Government has been well aware of these problems since long before the bank guarantee was introduced in September 2008. They date back to the days after the last general election. We had the same issues of competitiveness, credit availability and a large Government deficit and the Government has simply failed to do anything about them.

I have been critical of the Minister for Finance but, as I stated last night, he is an excellent communicator and the general public buy into the idea that he is doing something right. For too many of us in the House, however, he is starting to be seen as a bluffer. The Government's banking policy, as we saw from the announcement this morning, has essentially fallen apart and is in tatters. There is a need to produce a radical plan that will work for the country.

An article in The Irish Times at the beginning of the week showed that, amazingly, Commissioner Rehn seemed to be dictating the policy that the Minister announced this morning. According to the article, he requested the Minister to outline his budgetary measures and reforms for the next four years. It also stated the markets needed clarity on what was to happen between 2012 and 2014. It is interesting to see what the Minister is saying this morning: that he will outline at the beginning of November what will happen in the next four budgets. The problem for the markets is that there is no guarantee that the Government will be in office for the next four years; therefore, they cannot really take these predictions into account. In some respects, it just adds to the uncertainty.

The next Government will be tied to the commitments entered into by this Government.