Jim Walsh (Fianna Fail)

Cuirim fáilte roimh an Aire Stáit go dtí an Teach. Go n-éirí go mór leis san obair thábhachtach atá le déanamh aige ar son an Rialtais agus, go mórmhór, ar son mhuintir na hÉireann. We are living in the deepest recession since the foundation of the State.

In this regard an interesting leaflet was produced by the Oireachtas Library and Research Service in recent days which showed that in the 1930s our economy fell by 5% but over the past three years GNP has fallen by 16%. This very graphically spells out the depth of the recession we are in, which is unprecedented for us. Its projections indicate that it will be 2018 before Ireland will recover to the 2007 level of GNP. This is over-optimistic; last October when the Government announced its projections I stated they would not be met and that we would be lucky to be at 1%, but we will be at less than that. Growth for this year and, I believe for next year, will be more or less flat and if we make projections which are far too optimistic the corrections and solutions we apply will be inadequate. This would have the absolute effect of countering the suggestion the Minister of State made, which I agree with, that one of the great priorities we have now is to restore confidence. The more we procrastinate on dealing with the issues and prolonging the agony, with bad news coming on a six monthly or annual basis, will mean that it could be a generation before we see the end of this.

The biggest cost of the recession, apart from over-leveraging by many people, is unemployment whereby individuals and families have had to suffer setbacks in their lifestyles and incomes which are unparalleled for them. Many of them never saw bad days or recessions in the past.

A number of issues need to be tackled and I will deal with them quickly. If we are to restore growth in the economy, one of the first issues to be dealt with is competitiveness. It is amazing that after cutbacks our salaries and wages are still probably anywhere between 25% and 40% too high compared with other European countries. A 2008 report by the University of Glasgow indicated clearly where our wages stood vis-À-vis other western European countries. This is a major issue which has not been seriously tackled. If it is not tackled and if we merely mark time for the economy to grow to where the level of wages is commensurate with the wealth being created, we will be waiting quite some time.

There is also the issue of the minimum wage which the previous Government introduced. It inspired no confidence in me to see the current Government take what is a populist stand. It shows either an unawareness of the depth of the problems we are encountering or a lack of economic analysis of what needs to be done.

The issue with regard to wages generally must be tackled from the top and very severe cuts should be made in public administrative positions, in the wages paid to people at higher levels in the public service, and in the private sector as we have seen. It is interesting that it took IMF pressure for the Government to respond to the huge cost of our legal fees, on which many in the House have commented over a period of time. Medical expenses and fees by other professionals have never been seriously tackled. It is a real failure of successive Governments and public administration as this is anti-competitive behaviour which does untold damage to the economy. It is an abuse of privilege and I have previously quoted in the House the words of Pedro Arrupe who stated, "Let there be men and women who will bend their energies not to strengthen positions of privilege, but, to the extent possible, reduce privilege in favour of the underprivileged."

The question of the economic agreements for various sectors in the economy, which were really between unions representing larger employers and the major employers themselves to protect their positions and not have smaller operations competing favourably against them, has done much damage to this economy. All these agreements, including the minimum wage, should be suspended for the next three years and reviewed prior to being reintroduced. Let the market decide where we should be. Failure to deal with the minimum wage and other such issues is leading to people remaining on the dole on social welfare wages and not taking up employment or, as is happening in many instances, retaining their social welfare payments and working in the black economy. This is an area of increasing concern. Unless it is tackled forthrightly and fairly, all we are doing, as I stated previously, is delaying dealing with it.

Our failure to tackle public sector pay and numbers is leading to increases in taxation. In opposition, Government Members strongly advocated the avoidance of increases in taxation in order not to impede or retard growth in our economy. In government, I would like to see them acting on these opinions as it needs to be done. If, as I suspect, there will be feet-dragging on the Croke Park agreement and failure to tackle the huge increase in numbers and pay, then the Government will find the problems we are encountering now will still be there at the end of its term and we will still be debating the same issues, only they will be more embedded in the economy and there will be much pain for people as a consequence.

I urge the Minister of State, those elected to the Lower House and those who will be elected to this House to support the Government in its courageous effort to make corrections on fiscal rectitude and the economy and to eradicate wasteful expenditure in the public service in the interests of the Irish people. If the Government does so, it will deserve the support of all sides of the House and of the public at large.