John Paul Phelan (Fine Gael)

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following

condemns the Government for creating an uncompetitive economy which has fallen from 5th in the world in 2000 to 29th this year in the Global Competitiveness Report; and

condemns the Government for failing to tackle high costs in areas such as energy and waste and for failing to open up to competition sheltered high cost areas such as the legal and transport sectors.

I welcome the Minister of State, Deputy Conor Lenihan. It would be churlish of me not to acknowledge the improvement in exports and the balance of trade in the past 12 months. The purpose of the amendment is to place recent improvements in exports in the context of the larger economy.

I concur with Senator Mooney that it is important to have debates on good news items and we had several such debates with the Minister of State, Deputy Kelleher, before Christmas. However, it is also important to be realistic. Figures for the rest of the economy are, to say the least, depressing, specifically those which show a disimprovement in competitiveness in recent years.

I note with interest Senator Carty's comments on the car scrappage scheme. While I support the scheme, given that Ireland does not manufacture cars, the more vehicles bought here, the greater will be the disimprovement in the balance of trade. Any increase in car sales may be good for Swedish, German and French companies, but it does not have much impact on the economy, other than on those employed to sell cars.

During the debates on employment before Christmas I recalled a discussion with the Minister for Finance, the other Deputy Lenihan, in which he had referred to a decrease of 30,000 in the number unemployed. When I challenged the Minister on this figure, he responded with a wry smile, the reason being that the decrease reflected the large number who had left the country. The single, greatest indictment of Fianna Fáil in government is that people are being forced to leave the country again for economic reasons. Politics has failed in the sense that another generation is leaving our shores not willingly but because they must do so to make a living. For this reason, Senators on the Government side should stop trotting out the figure that the number unemployed has decreased by 30,000. Reading through my list of contacts on my mobile telephone before Christmas, I was shocked by the number of those among them aged between 18 and 30 years who had left the country in the past 12 months. When one meets the parents of those who have emigrated, they are, correctly, angry and upset. They do not take comfort from the knowledge that the number on the live register has declined by 30,000 in the past 12 months.

The disimprovement in competitiveness reflects a number of developments in the economy in recent years. Senator Mooney is correct that the Celtic tiger had two distinct phases. The first lasted from 1994 to 2001-02, a period when the economy was largely export-led and a large number of foreign companies invested here and created substantial and sustainable employment. The second phase was the period following 2002 when economic growth was largely based on construction. As a result of buoyant Exchequer figures, the Government lost sight of the importance of exports to the economy.

Costs in certain areas of the economy have declined in the past two years. Pay costs, for instance, a major contributor to competitiveness, have declined in both the public and private sectors. Productivity, another important contributory to competitiveness, remains strong.

Education is another major factor in competitiveness. A recent OECD report on education showing a collapse in standards in science and mathematics was buried in other events over the Christmas period. According to the report, Ireland's position in terms of qualifications and standards of teaching in science and mathematics has plummeted in a short period. As a teacher of maths and science in a previous life, I have a particular interest in these subjects. If the smart economy and innovation are to mean anything, we must ensure educational standards improve. This will be difficult to achieve, given that resources will continue to be scarce for some years to come. That does not mean, however, that standards of teaching and learning cannot be improved. The next Minister for Education and Skills will have to tackle this issue head on.

Innovation and entrepreneurship are also important to competitiveness. Ireland has always had a significant number of entrepreneurs who have produced ideas in which they have been able to invest.

Infrastructure is another key aspect of competitiveness. I have acknowledged on a number of occasions that the lasting legacy of the Celtic tiger is our national primary road network which is second to none. Other than roads, however, our infrastructure remains sadly lacking in a number of areas. Broadband availability, for instance, is still a problem in my area, as well as others. During the previous election campaign I heard more complaints on the doorstep about broadband than about any other issue, apart from the health service. Broadband coverage has not improved significantly in counties Kilkenny, Carlow and other areas in the intervening period. It was a major mistake to privatise the network when Eircom was privatised. In so doing we gave away some of our capability to deliver a national broadband infrastructure. Significant investment is required.

Tax and regulation are also significant contributors to competitiveness. President Sarkozy and others, including some of our friends in Britain, recently attacked the Irish corporation tax rate. I share the Government's view on the importance of maintaining the current rate. My party recently introduced a Private Members' motion in the other House focusing on the need to maintain the rate at its current level.

Regulation is also a significant issue. While under-regulation of the banking sector has created major difficulties, certain economic sectors, including agriculture, are over-regulated. The Government has given a commitment to remove some of the needless regulations in this sector.

Not many people outside the House share Senator Carty's view that the Government's policies are clearly working. Nevertheless, I concur with the Senator on the potential of the agriculture sector and the increasing contribution it has made to the economy in the past 12 months. It is for this reason that I have significant problems with the Climate Change Response Bill, as currently worded. It would be a disaster if we were to jeopardise the potential of the agriculture sector. While climate change legislation is necessary and I do not deny climate change is taking place, the Bill sets unrealistically high targets.