Brian Hayes (Dublin South West, Fine Gael)

This is a public debate on the issues we face. We need more of this. I want to take up one of the points raised by Senator Michael D'Arcy on the question of the national debt and speak honestly about what the national debt is. The last time I asked the Department of Finance how much we owe as a country, from recollection it is about €186 billion, and about 23% of that relates to the banks. A total of €63 billion was put into the banks. The previous Government put in €21 billion of our money from the National Pensions Reserve Fund. The other €42 billion that is outstanding concerns the ongoing recapitalisation of the banks and the promissory note. So less than a quarter of everything we owe relates to the banking problem.

Three quarters of the money we owe relates to the fundamental difference between tax and expenditure. The major part of the deficit problem is that we are spending too much and not taking in that money. To bridge that deficit requires a number of things. We must increase taxes and reduce expenditure, but for every 1% of GDP growth, there is €1.6 billion the following year. Growth of 3% would generate €4.8 billion, making up the adjustments on the tax and expenditure side. From recollection, this year 20% of all of the tax we gather goes to pay interest on the national debt. Senator D'Arcy is right. We never paid off the national debt, even in good times. In 1991 it was 39% of GDP and then stayed roughly the same, although as a percentage of the total size of the economy it was much smaller. There was an argument at the time that we should pay the national debt.