Seanad debates

Wednesday, 20 April 2011

Economic Situation: Statements

 

5:00 pm

Photo of Paul BradfordPaul Bradford (Fine Gael)

I welcome the Minister of State, Deputy Brian Hayes, back to this House and wish him well over the next interesting, exciting and important few years for the country.

The election at the end of February brought about a political revolution in this country and the political landscape has changed utterly. The economic landscape facing us now is similar to that which existed on the day of the general election. We have a new Government which has brought a degree of hope and confidence to the people, but the very same problems face the new Government as faced the previous one during the final few weeks of the Administration of former Taoiseach, Brian Cowen. Every action taken by the new Government over the next crucial months must be to begin the turning of the economic status of the country.

History generally repeats itself and few governments get the opportunity to chart a new direction. Therefore, every government should try to learn, in so far as it can, from the actions and mistakes of previous governments. It would be wise for the current Government to look back a few decades and reflect on the challenges which faced the coalition Government of Dr. Fitzgerald in the early to mid 1980s. I concede today's challenges are much greater, but in November 1982, Fine Gael and the Labour Party formed a new Administration which was hugely welcomed by the public at a time when the previous Administration had lapsed into not just financial difficulty but a degree of political scandal. Massive challenges faced the Garret Fitzgerald-led Government in the early part of 1983. A roadmap was set out by that Government as to what it should do. This included the curtailment of public expenditure, the changing of our tax base and a degree of political and economic reform.

However, the decisions required to be taken in the early stages of that Government were not made. They were deferred. Everybody knew what needed to be done, but everybody decided it would be done "tomorrow" and "tomorrow" never came. My message to my colleague, the Minister of State, is that once again, we know what needs to be done. We know it will be painful, but it must be done. Our new Government has huge public goodwill and it is in the interest of everybody, politician and non-politician, that it works well for the country. There is huge goodwill, but goodwill can only last so long. Therefore, the period between now and Christmas must be one in which the foundation block for the rebuilding of the nation is set in stone. The difficult decisions we know need to be taken must be taken. Tomorrow's decisions must not be left till next week, but must be taken today.

I acknowledge that the previous speaker has always spoken strongly on the issue of the Croke Park agreement. When the agreement is mentioned, it is often seen as some kind of attack on the public service. Fine Gael Members on this side of the House represent the party that founded the public service and the State and we will always defend the public service. However, we also recognise that the public service must work for the public and must pay its way. We aspire to a public service which we the taxpayer can afford to pay, and pay properly. We need a public service which works for Ireland. Therefore, it is important the Croke Park agreement is implemented in full. We must ensure over the next number of weeks that the component parts of the Croke Park agreement are up and running. There can be no delay in implementing the agreement. We have heard all the warnings from external agencies that if the agreement is not implemented and the savings are not made, we will have to have pay or job cuts. Let us work together to ensure the agreement is fully implemented, not next year, but this year.

Our economic situation is characterised by what I would call the three "Ds": the debt crisis; the deficit crisis; and the debate on default. Those of us on this side of the House will recall a most interesting presentation by the Professor Colm McCarthy to a Fine Gael parliamentary party meeting almost two years ago. It was at the onset of the banking crisis, which was very much on the political agenda. I believe the meeting took place in Galway and Professor McCarthy asked us not to ignore the fact that even if there was never a banking crisis here, we still had an enormous problem with our current budget deficit. While it might not have been - and still is not - grabbing the same headlines as the banking crisis, a country borrowing up to €400 million a week to keep ticking over is not sustainable. We obviously need to challenge the current budget deficit, which is difficult. It will be difficult to meet the 3% target and I am glad the Minister of State has again given the Government's commitment to meet it. It is easy to say we will meet it; it is more difficult to do it, but do it we must. Unfortunately across virtually every Department it will mean restraint and saving not of Government spending but of taxpayers' money. It is important that the review the Minister of State mentioned is very thorough and produces the required savings because we cannot as a country continue to live beyond our means. We lived in that sort of economic cloud cuckoo land for far too long. It and much more brought us to where we are and no further must we go, which is why the deficit issue must remain at the top of the political economic agenda alongside the banking issue.

Default is a very easy word to say and it has gained much currency - excuse the pun - in recent months. Internationally we must maintain our financial reputation because we will need to borrow the money internationally every week and month in coming years to pay our teachers and nurses to keep our schools and hospitals open. Any corporate or personal entity that needs to borrow money every week must in so far as possible repay those moneys. Obviously we hope the Government will be able to come up with more favourable arrangements on our international financial commitments, but we need to get real about suggesting that if we wave the magic wand all our problems will go away and the same people will continue to lend us money.

The national sovereign debt is of concern to us all. The debt of the banks is almost the taxpayers' debt. The level of personal indebtedness on mortgages and credit cards requires particular attention. I fully understand how difficult it is for many citizens to pay their monthly or annual financial commitments to various financial agencies for mortgages, car loans, credit union repayments, etc., and simultaneously see the Government apparently bailing out banks and paying off bondholders. The question of a type of NAMA for mortgage holders is possibly one of those simplistic slogans that does not stack up, but it is important that we work to put some structure in place to ensure people do not lose their homes and there is some degree of flexibility on debt forgiveness so that we do not end up putting people on the street, which is no solution to our mortgage and debt crisis.

I look forward to publication of the jobs initiative in the coming weeks. The solution to most of our problems would be considerably easier to bring about if we had 100,000 more people at work. In its actions across all Departments, the Government must try to ensure that job creation is at the top of our agenda. In the 1980s I remember the Talbot car factory and other such projects. We must talk about job creation that is real rather than imaginary, job creation that is sustainable rather than made up as one goes along. Throughout the country there are entrepreneurs who if given some credit and assistance can begin the process of rebuilding our country. They must be at the core of our job creation strategy. The days of large multinational factories establishing here is unlikely to be repeated and so the indigenous side of production and job creation must be to the fore. I look forward to the jobs initiative hopefully changing PRSI, introducing employers' incentives, etc. Giving people the incentive to go back to work should be at the core of the Government's thinking.

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