Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank my colleagues for their very informed and constructive contributions to this very important debate. Senator Harte summed it up very well when he spoke about the economic war through which we are living. This is an economic war and is about the survival of the country. When I studied economics the people who taught me made it clear that when an economy has a debt to GDP ratio of more than 90% it is in major trouble and a country with a current budget deficit of more than 10% is also in major trouble. On the latter issue we are making steady progress, but it is still an enormous deficit that needs to be rectified over a period of years. The key task the Government faces, as Senator Harte and others mentioned, is the need to bring that deficit down to a manageable 3% by 2015. Of course that is made easier if we see economic growth re-emerge. We are seeing some tentative signs of that at the moment. Last year was positive whereas in the previous three years effectively 14% of GDP was knocked out. That was an extraordinary cliff over which the entire economy fell.

While we must do that, we must also make the correction through tax increases and reductions in expenditure. We need to get that balance right. Based on all the international evidence, if we are to correct a deficit while trying to resuscitate an economy, we need to do more on the public expenditure side than the tax side. We will not encourage entrepreneurship and investment, and get people back to work by taxing the hell out of people either on the corporate side or on the individual side. We need to get that balance right.

Of course much of the heavy lifting will need to be done by way of GDP growth. For every 1% of GDP growth, we get ¤1.6 billion into the economy through new jobs, more investment and revenue coming in. While we must continue on the taxes consolidation side and reduce expenditure in circumstances when more children are coming into our schools, there is more pressure on our hospitals and there are so many people out of work who need to be paid, that is not easy but we need to get that balance right. We need to do that in a way that is fair for everyone. I echo what the Minister for Finance said to our party and externally, that we need to do this in a fair way. Those with the broadest shoulders will need to bear the brunt of this.

We should not forget from where we have come. Since 2008 some ¤24 billion has been taken out of the Irish economy and we were told that if we did that, we would never see growth again.