Liam Twomey (Fine Gael)

The Minister made an interesting speech today when one considers the speech made by the Minister for Finance, Deputy Brian Lenihan, 11 months ago. I sat in the Dáil and listened to him make his Budget Statement last December in which he said we had turned the corner, although we appear to have run straight into a big cement truck. Today's speech is a completely different outlook from what was outlined last December and there is a need to explain to the people of Ireland what has gone wrong.

The tax take predicted last December is more or less as expected. Projected growth rates for the next couple of years are lower, although not massively so, while the global outlook has probably improved. That is evident from our export figures which have increased by 9%. Therefore, what has gone so dramatically wrong in this country in the last 11 months? One of the main problems was the Minister's mismanagement of the banking crisis. Two years ago, the Minister for Finance told this House that he envisaged the bank guarantee would not cost the taxpayer anything. Instead, it has cost us €50 billion in two years. Two thirds of the tax take of each of the last two years has, essentially, been spent on bailing out the banks, even though the Minister thought two years ago it would not cost us anything. As we progressed through 2009 and 2010 the Minister either did not know or was unable to ascertain how much the banking crisis would cost. That has led to a shocking loss of confidence in this Government, both at home and abroad.

The other accusation that can be made is that the Government is drip-feeding bad news to try to lessen its impact. However, it is only compounding the problem. People are constantly getting mixed messages that somehow we are turning corners and seeing green shoots and then that things are absolutely terrible. Did the Government suffer from some form of wishful thinking that our problems would go away or has there been a deliberate cover-up of the facts over the last number of months?

What has brought us to this point where there appears to be a greater sense of realism on the part of the Government compared with some of the words spoken at the beginning of the year? What has shattered the illusion that the Government was in control of the situation was, I believe, a front page article in The Irish Times by the European Commissioner, Olli Rehn, which appeared either at the end of September or the beginning of October. The Government is now doing everything he advocated in that article. He said the adjustments might need to be higher and that a four-year plan was required. The Government is now doing that. I believe this was a game-changing event.

There is a strong necessity for the Minister to start answering questions clearly and concisely. There has been much talk in the Seanad over the last couple of days about the €80 billion or €90 billion of savings in Irish banks which people are refusing to spend. Why would anybody who has money in the bank spend it now, when they do not know what will happen? They do not know whether there will be pay cuts, tax increases, if there is more bad news coming down the tracks or whether we will have problems with international investors. The reason they will not spend their money is their lack of confidence in the Government's ability to run this country. People do not know what is happening.

I have listened to commentators discussing whether we should stretch this process out over four or six years. It does not matter. The only thing that matters is what we do this year and next year. The Government will go to the international investors in March - I believe it is covered for January and February - to borrow money again for the Irish economy. Another €20 billion must be borrowed next year. If it borrows at the interest rates announced today, it will drag the country back even further. We need that money to pay our civil servants, pensioners and social welfare recipients. There is a need for the Minister to give answers to the House now. We cannot wait for weeks as it only adds to the fear and lack of confidence in the economy. He must outline where the cuts will occur and make it quite clear what impact cuts or tax increases will have on growth. We must have an honest debate and the Minister must explain to the Irish people what will happen.

We also must know about the status of the Croke Park agreement. Let us be honest, the implementation of that agreement so far is an abysmal disaster. It is not having any impact whatsoever in controlling the public finances. Some Departments are basically doing nothing while some are making an effort but, overall, the agreement is not having the impact we expected. If that is the case, the Minister should say as much and not waffle by saying this, that or the other might happen. The problem is that there are many people like the Government who do not wish to see the reality and face up to how bloody awful things are at present. Until we explain where the country is and where it could go quite quickly, there will be less inclination to make these changes. The history over the last number of years is of the two benchmarking processes and the former Taoiseach, Deputy Bertie Ahern's, legacy of everybody protecting their own patch and not expecting to take a hit in terms of accountability, reform or changing work practices. We must break that mindset down, and quickly, before the economy goes completely pear shaped. I do not get that sense of urgency or hear that type of straight talking from the Minister for Finance or the Taoiseach, and they are the people who matter now. They must point this out.

There is also a need for the Minister to explain the role of the European Union. I have met people who believe it is positive. Indeed, they would nearly prefer if the EU took over completely because they do not believe the Government has the ability, whether that is because the Government deliberately misleads them or is clearly incompetent at doing the job. There is no doubt that the EU has a greater role and the Minister must explain to people what that role is and why it is so concerned and involved in what is happening in this country.

The Minister must also explain a number of other issues that are also having a huge impact on the economy and its ability to recover. There is the issue of the National Asset Management Agency, NAMA, and how it is progressing. NAMA is seen by many commentators as distorting the market. Since it controls such a huge part of our economy, what it does or could potentially do in the next months and years will have an impact on property prices.

There is a need for clarity, otherwise the Minister will continue with his policy of death by a thousand cuts in the context of the construction sector and property prices and the ability of that sector of our economy to recover.

Clarity is also needed on what is happening with Allied Irish Banks. When the Minister announced that €50 billion would be the cost of bailing out the banks, he tried to make it seem that the bailout was complete. Given all the other concerns raised in the meantime, such as the state of our public finances, we have forgotten about the banks. NAMA has raised the threshold at which it will accept loans from banks to €20 million from €5 million. The agency's officials, therefore, realise that many small problems are still floating around in the banking sector and they do not have the ability to deal with them at this time. However, this may indicate the banks have still to deal with a significant number of bad loans. There is a feeling that Bank of Ireland may be able to deal with this problem but it is possible AIB will need further bailouts. We have heard nothing about this or whether the Minister is happy the issue has been addressed. Last December he was happy that the banking crisis had been dealt with but then it cost another €30 billion this year. The equivalent of the entire tax take for 2010 will be spent on the bailout of the banks.

Recently I watched the movie, "Rogue Trader", and it occurred to me that the Minister for Finance is the best rogue trader in the country. He completely miscalculated the bank bailout and he has spent €30 billion in one year on it. He took gambles, the outcomes of which he does not know, and he clearly did not understand them. They are costing us a bloody fortune. The Minister still has a little credibility with the public, unlike his Government, but it is fading quickly. He needs to be more honest about what is going on, tell us what we need to know and give us clear answers on the economy.

Government Members constantly remark that when Opposition Members make their contributions, they must be measured because everybody is listening to what the Opposition is saying. International investors could not give a damn what we are saying. They want action and clarity. They want to know what the Government will do in the upcoming budget and in next year's budget and they want to be sure the Government has the bottle to follow through on what it says it will do. In addition, they want to be sure the figures the Government gives them are real. It is our job in opposition constantly to hold the Government parties to account. The attempt by the Minister for the Environment, Heritage and Local Government to seek a consensus whereby we would all pretend we were working together was half baked. Such a consensus would spook international investors rather than give them confidence. We all understand our responsibilities and nothing we say is intended to undermine the country. However, the Government needs to give up on its wishful thinking, stop deluding itself that it knows what is going on, start working hard to solve the problems we face, tell the people what will happen and, more important, tell them why it must happen. The only way we can give hope to the people is if we are honest, however painful it may be.