Paddy Burke (Fine Gael)
Link to this: Individually | In context

I welcome the Minister of State at the Department of Finance, Deputy Mansergh.

Martin Mansergh (Tipperary South, Fianna Fail)
Link to this: Individually | In context

Since last September Ireland has been caught in and particularly badly affected by the severest global economic and financial crisis of the post-war years which has cost an estimated 59 million jobs worldwide. Domestically, it has had grave consequences for employment, living standards and the public finances, as well as for a now vulnerable banking sector which has only been sustained by radical State intervention.

The causes and responsibility for the effects felt in Ireland will be hotly debated for a long time to come. Some causes arise because this is a globalised country dependent on external trade. The country was in a rapid catch-up phase which, in certain respects, overshot. We became, if not over-ambitious, certainly over-extended and underestimated the risks. As more than 30 academicians in Britain stated in reply to a royal question, the optimism worldwide about light regulation, incentives for short-term financial profit-making and the belief this was a new financial world order, together with the feel good factor for households, businesses and government from ready credit and overflowing revenues, all contributed to the disaster. No one properly understood the effect of a series of interconnected imbalances.

For some 15 years Ireland headed the international growth tables and was one of the countries which benefited most. Many benefits will be lasting and survive the current crisis. This is not to claim that all moneys were well spent but until 2008 most of the pressures on the Government from the Opposition and the media were to spend more and tax less, rather than for greater prudence and restraint. The country has critical choices to make with respect to our economic and political future in the coming weeks. I welcome the opportunity on behalf of the Government to contribute to the statements in the Seanad on the economy. The referendum on the Lisbon treaty, the establishment of the National Asset Management Agency to address the issue of confidence in the asset quality of the banking system and the framing of the next budget are all major and immediate challenges.

It is impossible to overstate the fundamental importance to our economic recovery of resolving our banking crisis. This is the reason the Government, like governments and central banks across the globe, has provided substantial support for the financial sector and broad economy in the current crisis. In all our actions in the past year our overriding concern has been the best interests of the wider economy. Credit remains the lifeblood of any economy. It allows business to source funding for productive developments and foster creativity and innovation in order that we can become a more competitive, export oriented economy. It allows individuals to access mortgage funding and finance the purchase of consumer goods. The only way to restore the flow of credit is through a cleaned up banking system. In the past year the Government's priorities in this sector have been, first, to secure the liquidity of the banking system; second, where necessary, to maintain and rebuild the capital position of our systemically important banks and, third, to address the issue of confidence in the asset quality of the banking system through the establishment of the National Asset Management Agency, NAMA.

The National Asset Management Agency Bill is the centrepiece of the Government's plan to solve the problems that have beset our financial and credit system. The decision to establish NAMA was taken following expert advice from at home and abroad. The asset management approach has a proven track record internationally. Our proposal has received the backing of the International Monetary Fund and the European Central Bank. The proposal has credibility in the financial markets, since the cost of borrowing by the State has fallen as bond spreads above the German ten-year benchmark for Irish sovereign debt have halved from almost 3% to just 1.5%. Last week's edition of The Economist takes the view that "Ireland's toxic-asset plan makes a good fist of a bad situation" and compares the plan favourably to American and German initiatives.

The National Asset Management Agency is not a bailout for those who have operated irresponsibly. In relation to those who took out development related loans, the agency will treat them as borrowers who continue to owe the full amount of their loan. The agency has a duty to maximise taxpayer returns and the Government expects it to use the range of powers available to it. The National Asset Management Agency Bill includes a risk sharing mechanism with the banks that will protect the taxpayer from overpaying for the assets to be transferred to the agency. In due course, the House will have an opportunity to discuss the NAMA legislation much more fully. The Government is determined to re-fashion the financial and banking system and address and correct regulatory and governance shortcomings. The sole purpose is to get our banks back to what they should be doing, namely, underpinning and encouraging much needed sustainable activity.

The sharp decline in economic activity has led to a chasm of €20 billion opening up in the public finances. The April supplementary budget projected tax revenues in 2009 between the 2003 and 2004 levels. Fortunately, Ireland's public finances entered the current economic difficulties from a relatively strong position. We ran general government surpluses in ten out of 11 years and reduced our general government debt ratio to one of the lowest in the European Union, at approximately 25% of GDP in 2007 or even less if calculated net. However, continued borrowing on the current scale is simply impossible.

April's supplementary budget was the latest in a series of measures commencing in July 2008 designed to stabilise and then bring sustainability to the public finances. These measures which amount to almost 5% of GDP in 2009 are spread between both expenditure and taxation and include the introduction of an average 7.5% pension related pay deduction for public servants. A pay round due under the social partnership Towards 2016 transitional pay agreement was postponed, estimated in 2010 to achieve up to €1 billion in savings on the pay bill.

The April supplementary budget set out a multi-annual consolidation plan for the public finances to bring the general government deficit to 3% of GDP by the end of 2013. This plan has been welcomed by the European Commission but requires difficult decisions. In addition to adjustments made in 2009, the supplementary budget set out targets for adjustments to taxation and current expenditure in 2010 and 2011. While the specifics are still being formulated, the overall policy areas for examination have been announced. As part of this process, the Government established the special group on public service numbers and expenditure programmes to examine critically every area of Government expenditure to identify potential savings. The group's report was published in July and will be taken into account by the Government in making future spending decisions.

The Government also established the Commission on Taxation as an independent group, charged with providing an assessment of how the tax system can be reformed. The report of the commission, published earlier this month, will contribute to the medium to longer-term framework within which tax policy will be set over the next decade.

The Minister for Finance has stated that the balance of the corrective action in the 2010 budget will have to come from the expenditure side. We cannot tax our way out of this recession. Resolute action will restore confidence to the wider economy and help Ireland towards recovery.

Next week, the Irish electorate will vote on the referendum on the Lisbon treaty in light of the guarantees obtained to meet previous concerns. Ireland's economic and political future requires full participation at the heart of Europe. We cannot allow ourselves to be consigned to the margins, in the shadow of the UK. We should reaffirm our pro-European policy that underpins our real independence and that has served us well since the 1960s. We fight our battles from within. EU membership with access to an integrated market of 500 million people has brought immense economic and political benefits. A positive vote will be a critical step towards restoring our economic fortunes. In the recent difficulties in the banking sector, membership of the European Union and of the eurozone in particular has been vital - the real difference between Iceland and Ireland. The European Central Bank has been highly supportive of this country. We need to take this into account when voting on 2 October.

We also need to identify new opportunities and be ready to take advantage of these when international economic recovery resumes. The lesson from previous downturns is that while the immediate concern is to address short-term issues, countries also need to reorient their economies towards taking advantage of emerging growth opportunities. In this regard, the Global Irish Economic Forum, which took place at Farmleigh last weekend, was attended by members of the international Irish family and friends of this country from across the globe. Distinguished participants from a variety of fields shared their insights on the economic and related challenges confronting us. A number of innovative, constructive ideas came from the forum and provide the basis for follow-up action.

The publication last year by the Taoiseach of Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewal sets out our agenda of reorientating and reprioritising the business of Government to achieve the goal of building a more competitive economy which will help underpin our future. The Government is pursuing policies to facilitate the development of a smart, green economy with high productivity across all sectors, both private and public. The Government remains committed to implementing measures that continue to support the smart economy through investment and incentives to increase research and development expenditure to reach a target of 2.5% of gross national product by 2013. Ireland has already trebled economy-wide research and development expenditure over the past decade to around €2.5 billion.

From a medium and longer-term perspective our future pattern of growth will, by necessity, be predicated on a more sustainable, export-led economic model. This will require continued focus on improving our competitiveness. Our economy remains flexible and resilient and this will facilitate an adjustment to reflect the prevailing environment. There is evidence of wage flexibility in both the public and private sectors, a significant achievement, which many countries would wish to emulate. Adjustments in work practices have taken place and other labour market costs are being addressed to safeguard as much employment as possible. Our labour force continues to be highly skilled and flexible. We have made significant investment in education at all levels to ensure we have the skills demanded by our increasingly knowledge intensive economy.

The Government has introduced a number of measures to support the competitively exposed sectors. An enterprise stabilisation fund has been established. This fund has a total budget allocation of €100 million over two years to provide targeted support to indigenous companies to assist them in the current exceptional business environment. A temporary employment subsidy scheme has also been set up by the Department of Enterprise, Trade and Employment. This is a €250 million scheme which will protect up to 27,400 vulnerable jobs in the productive sector. The scheme will provide a subsidy of €9,100 per employee over 15 months to qualifying exporting enterprises.

We are facing tough challenges and to succeed we must continue to pursue appropriate policies to position the economy to benefit from the global recovery when it eventually emerges. The Government is acutely aware that businesses, families and almost everyone in our society is affected by the deterioration in economic conditions. We are attempting to ensure the burden of adjustment is spread evenly and fairly. The economic, budgetary and banking sector issues we confront as a country are very important to resolve. They will benefit from the debate and scrutiny they receive here in the Seanad and elsewhere.

Liam Twomey (Fine Gael)
Link to this: Individually | In context

I welcome the Minister of State to the House. In his reply, perhaps he can indicate where Government policy is going. The overall economy is seriously distressed but the Government portion of the economy is completely in tatters. As regards the overall economy, there is an 8% reduction in GNP. In discussing the economy we should use GNP rather than GDP, much of which is just repatriated profits from multinationals. The situation facing the Irish workforce is incredibly serious. We talk about 440,000 or 450,000 people being on the live register at the moment. In addition, we are talking about an unemployment rate of 11.8%. In reality, however, 440,000 people represent 20% of the workforce. So 20% of the workforce is on short-term work to the degree that they need unemployment assistance of some sort. That 20% must survive on what is roughly the equivalent of the unemployment allowance. Approximately 100,000 people must live on disability benefits or allowances of some sort, which means that 25% of the workforce is surviving on very little at the moment. There is little scope for taxing those one in four people in the workforce, which is a serious situation when one reflects on where we were just a few years ago.

These figures are now showing up in the social welfare budget. People wonder why the Government has not made many reductions in the €56 billion it spends annually. The problem arises from the rapidly increasing number of people who are on short-term work or are fully unemployed which is having seriously detrimental effects not just on the Government's finances but also on the lives of those concerned and their families.

We were told that two reports would form the basis of Government policy for the next couple of years: an bord snip nua and the Commission on Taxation. We would like to see some uniformity of opinion from Cabinet members on this matter. Either an bord snip nua and the Commission on Taxation form part of Government policy or they do not. The Taoiseach does not seem to think the Commission on Taxation is part of Government policy while a number of other Ministers do not seem to think that an bord snip nua is part of Government policy. These mixed messages have a negative effect. When the Opposition criticises the Government we are told that it has an effect on what investors think. Nothing will have a greater effect on investors, however, than watching the Government in total disarray sending out mixed policy messages. They clearly do not support either report, yet we are told there are two ways out of this problem: more taxes or expenditure savings, which are cutbacks.

The Minister of State said we cannot tax ourselves out of recession, although this may or may not be Government policy. We are not really supporting tax increases at this moment in time, which means we have to make more cuts. The scale of the cuts needed to bring our economy back to a manageable level is of the magnitude of somewhere between €5 billion and €6 billion. That is the sort of figure involved, so I would appreciate it if the Minister of State could outline how that scale of cuts can be implemented.

We can see from the Comptroller and Auditor General's report the waste of money that occurred over the years and the cavalier attitude to millions of taxpayers' money, often at the behest of Ministers. They clearly did not know what they were doing in their portfolios except that they were happy to waste money. The Minister for Health and Children announced yesterday that she will make a 10% cut to the health budget, but who will pay for that? Will it be through reduced pay scales for those working in the health services? I presume that if it affects people in the health services, it will affect all civil and public servants. Will it be applied to health service staff or patient services? The Government will have to stop talking in general terms and address the issues. A 10% reduction in the health budget is substantial and will seriously affect patients or health workers. The Government needs to be honest in the messages it sends.

The social welfare budget is approximately €18 billion. The cost of unemployment benefit has rocketed from €3.5 billion last year to an estimated €6 billion this year. The estimated increases in the cost of payments relating to people with a disability, the elderly and families with children who receive a benefit are not major. However, the social welfare budget is not funded entirely by taxation. Much of the funding is generated by PRSI which has two functions. The first is to cover day-to-day costs, while the second is to supplement the social insurance fund, an investment account, when PRSI revenue is in surplus. Between 2006 and 2008 this investment account contained in excess of €3 billion. At the end of July only €500 million remained; therefore, the Government had taken €2.5 billion out of the account to fund current spending. I do not know how many kitties the Government has to raid but it has raided one or two and taken substantial sums. This is in addition to the funding required for NAMA.

Will the Minister of State outline the Government's policy on the social welfare budget? The Government cannot repeat its raid on the social insurance fund in the past 12 months because that money is gone. Many businesses, particularly those run by the self-employed, will pay less in taxes at the end of next month because their trade contracted in 2008 and will contract further this year. Trade for a number of these businesses has contracted so much that Revenue will probably have to make refunds to them because they will probably have overpaid their taxes for 2008. Since it is the Minister of State's business to understand the figures, he must know how serious is this issue. He made his contribution in the same way he would have done in 2007 before we were hit with a sledge-hammer because of incompetence at national level and a crisis at international level.

The Minister of State should refer to NAMA because I am frightened by the proposal and was not filled with confidence by the Minister for Finance's comments in recent weeks. The valuation of loans at €47 billion is made up and not accurate. Approximately 30% of this money will be used to take on loans relating to land, 36% for those relating to development, while 34% is for commercial loans that are supposed to generate cash flow. The land will not generate cash unless it is rented to farmers to grow barley. The developments will not generate much cash because many of the properties are not finished and the residential property market is slow. That means commercial loans are expected to generate most of the cash flow, yet the Minister did not give a clear indication about how solid the loans were and the potential risk to the businesses involved. They may well be hit by the economic downturn in the next year or two. In other words, the income generated by NAMA could reduce significantly, while interest rates have the potential to increase.

The Government must outline the operating costs of the agency and the cost of interest payments. The banks, developers and others involved in this sector before the collapse will be paid to manage the loans and the Government needs to be honest with the people about the cost. The market potentially has not bottomed out yet and prices could drop further. The State's exposure may not be the €7 billion referred by to the Minister but a substantial portion of the €47 billion. That would have a huge impact on Exchequer finances in the future, in addition to the refinancing of the banks which the Government will have to undertake and the billions that have to be borrowed to meet current spending. How will the Minister control these unbelievable costs? Will the Minister of State be more honest about how the Government will deal with NAMA? How much is needed to recapitalise the banks? From where will the money come? Billions of euro will be necessary. While many do not understand what this is about now, they will understand the consequences in ten weeks when the budget is announced. If the Government does not get that right, we will be in the stew by the end of 2010.

Unfortunately, the economy continues to contract and nothing gives me confidence that it will improve next year. The Government is not facing up to the crisis. If the economy is to pick up, radical surgery will be required, not tinkering around the edges. Our competitiveness, cost base and so on must be restored, yet the Government has done nothing to address these issues in its recent budgets. The Minister of State should give an honest appraisal when he responds. The economic crisis is so bad that the Government parties are damned if they do and damned if they do not. That is how bad is the situation in which they have landed us. They might as well be damned for doing the right thing for the country and start making the hard decisions they have been expected to make for some time.

Marc MacSharry (Fianna Fail)
Link to this: Individually | In context

I welcome the Minister of the State. It is good that the House is back in session in order that diverse points of views can contribute to debates such as this. We will have many such debates as the budget preparations take shape in the weeks and months ahead. It is important that we have differences because otherwise we would be faced with only public administration, of which we have had enough during the years. I hope, as we all seek to do the best thing by the country, that we can be innovative and positive in our contributions as the House tries to make a contribution to the recovery of the nation.

We have experienced unprecedented difficulty in the past year. Given the surpluses that were available, it is difficult to understand where all the money has gone. One can absolutely understand the public's palpable anger. I am angry that we are in this situation and, like everybody else, would like my pound of flesh. I am confident due process will give us the pound of flesh we seek. In the meantime, it is vital the Minister for Finance, who has provided leadership, and the Government take the appropriate decisions and correct actions to put the nation on the correct course, adjusting the sails to their optimum position in order that we can capitalise on the mild shoots of recovery internationally.

When we look to the past we can see how exports declined in the early to mid-1990s and were replaced by what we have all seen, that is, an unsustainable level of transaction-based taxes fuelled by a property boom. Circumstances are very much changed. All of us would have liked to have predicted the changes accurately at the time, but if we go back through the statements in this House and other House throughout that period we can see, as the Minister of State, Deputy Mansergh, mentioned, we all fought for lower taxation and increased expenditure.

Other issues include the fact that 2% money was available at rates of 8% growth. It is probably true to say that all aspects of society and all quarters, to some extent, jumped on the gravy train and we are paying a dear price for that. I am confident, however, that many of the innovative steps that have been taken so far will prove to be the correct ones. The Government is completely committed to stabilising and restoring our public finances. Difficult decisions have had to be taken in that regard already in terms of some €5 billion in proposed cuts. A further €4 billion will be required later this year and there is no question it will require pain and contribution from all aspects of out society, except, I hope, for one.

It is vital we do everything that is necessary to protect the most vulnerable in society and ensure those who are less well off, such as unemployed people who are currently struggling to make ends meet, are looked after at all costs, whatever pain has to be taken by those who are better placed. There is no question; many toes will be stood on between now and when budgets is revealed in the House in early December. It is important we ensure the toes that are stood on are the ones that are best placed and best able to take the pain.

I am confident that through informed debate and contributions in this and the other House the Minister, Deputy Lenihan, will take the appropriate decisions. It will be difficult. When one considers the magnitude and level of cuts and the commitment the Government has in stabilising our financial situation, it will be difficult to get a consensus on issues, but I am confident we will.

Recently published reports - Senator Twomey mentioned this - by the special group on public service numbers and expenditure programmes and the Commission on Taxation have brought forward a wide variety of suggestions. An bord snip nua, as it is more commonly referred to, suggested a stark number of very severe cuts, with some of which many of us on all sides of the House would have a difficulty. Far from a lack of unity in the Cabinet, as Senator Twomey would have us believe, there is absolute unity in focusing on doing what needs to be done. It was important that an independent grouping, headed by Mr. McCarthy, would come up with a full menu of suggested cuts for the public and Legislature to digest so that the correct decisions could then be made.

The Taoiseach on his first day in office said we should not be obliged or restricted by independent reports. I wrote it in my diary that day because I felt if anything was going wrong in Sligo or the north west as a result of an independent report, I could remind him of it. In the context of an bord snip nua I am pleased he said that. When the Tánaiste and others say there are things we have difficulty with, that did not make common sense and did not appear to be in the public interest, she was absolutely correct and I support her on that. It does not mean that difficult and unpopular decisions will have to be made. They will and will have to be made for the good of the many rather than the few. It is vital we ensure those who are less well off and are most vulnerable in society are protected at all costs.

In terms of restoring our competitiveness, our economy remains flexible and resilient. Price level and wages are beginning to fall. Obviously public sector pay is an issue that may have to be looked at. I hope if it is, it is done exclusively in partnership with public sector unions because that will have to be the case. We must take on board that, effectively, a 7.5% levy has meant a reduction in public service pay. The expenses regime in the Houses of the Oireachtas and in the public service as a whole must be dealt with in a robust fashion because it cannot be so out of tune with the private sector which has effectively corrected itself given the changed economic environment in which we find ourselves.

It is vital, as the Minister for Finance said, that we restore the banking sector. It is my categoric view that whatever price needs to be paid, it is important that developers and bankers take first place in the queue for any hit that will be taken by the risk which NAMA will give us. I will come back to this point. At a fundamental level, the banking system is at the very core of any functioning economy. We need money and credit to operate - that is a fact. The Government's approach to tackling the financial crisis has at all times been structured and considered, with it demonstrating in the form of the guarantee scheme its commitment to prevent the failure of any systemically important financial institution. It secured the liquidity of the banking system by doing that. Where necessary, the approach will maintain and rebuild their capital position. We saw what was done in terms of Anglo Irish Bank and the capital provided for the other major banks. The approach also includes the establishment of NAMA.

With NAMA we have found the ideal template to get credit flowing to our economy again. Those who have read the legislation in detail will have highlighted that there is no guarantee within it to say that credit will flow again. It is important, as the Minister, Deputy Lenihan, said that, given that the money involved has a rate of 1.5%, it would be in the banks' interests to lend again and put the money they will get from the ECB to work. I hope further mechanisms can be found to ensure families and viable businesses can seek and acquire the credit they need.

We should not be flathúlach about the provision of credit. It should be underwritten in a robust fashion and not just handed out. Many of us will recall throughout the boom years of the Western world the advertisements of finance companies on the television which would say all one had to do was call up and one would be sent €20,000 in the post, which was ridiculous.

It brings me on to another point about the banking sector generally. As we have seen the slight hints of international recovery, one of my worries is the international financial regulatory regime. After we have considered our own failings, there is no question that the absence of a proper international financial regulatory regime contributed in a major way to the difficulties we currently have. I would like to see a basic set of rules agreed at European level if not globally through the UN, IMF or the World Bank - I do not know the appropriate forum for it - so the focus is not on, as a banker once put it, new ways to lose money when the old ways were doing just fine. Another banking matter we need to consider is the kind of independent advice people are seeking. It is an ideological impossibility to get objective advice from anybody working in an institution with sales targets. It is simply impossible. These are some of the things I would like to see dealt with.

In terms of trying to boost our economy and being innovative about getting ourselves to work, I salute the Government and, in particular, the Minister for Foreign Affairs, Deputy Micheál Martin, on the forum that was put together last week. It was a grouping of people I would like to see kept together and expanded upon, and we should consult them continually on their views on certain issues. It would be positive. These are people who are leaders in their fields throughout the world and that they are prepared to give of their time to their nation of origin is positive.

As we prepare the budgetary process over the next few weeks, I hope the views of this House can be taken on board. Over the summer months I was involved with a group who prepared a set of proposals which I presented to the Minister, Deputy Lenihan, and which involved the prevention of the repossession of family homes. I hope the Minister of State, Deputy Mansergh, can impress upon him the need to look favourably upon the implementation of those. The proposals stated that we all acknowledge that as the eurozone recovers, interest rates will inevitably rise at a faster pace than the employment levels will recover in this country. As a result, people will find it very difficult to meet their repayments. I refer to those who were pushed to the pin of their collar in the past to get mortgages, for example. I appreciate that all the financial institutions, including those not covered by the Government's guarantee, have signed up to a protocol under the leadership and guidance of the Irish Banking Federation. I suggest we should legislate against the serving of court orders seeking the repossession of homes in the absence of a clear distinction being drawn between those who cannot pay and those who can pay but refuse to do so. I refer to what is known as wilful neglect. We took similar action in the case of private credit when we introduced the Enforcement of Court Orders (Amendment) Bill 2009 to prohibit the imprisonment of a person for the non-payment of a debt. We should offer those who cannot make repayments a variety of potential solutions, such as an increase in the term of the mortgage, all of which borrowers would have to pay for. That is just one of the suggestions I would like to make in this respect. I am pleased to have had an opportunity to make a few points on the economy. I look forward to the many debates we will have on the matter in the months to come.

Joe O'Toole (Independent)
Link to this: Individually | In context

I would like to share time with Senator Quinn.

Pat Moylan (Fianna Fail)
Link to this: Individually | In context

Is that agreed? Agreed.

Joe O'Toole (Independent)
Link to this: Individually | In context

I welcome the Minister of State, Deputy Mansergh. I am glad we are having a general debate in advance of our consideration of the important Bill that will establish NAMA. My tendency is to support NAMA, although I would like certain changes to be made to the legislation. I certainly believe this can work. A great deal of the nonsense surrounding it needs to be cleared up. It is not unreasonable for the Minister for Finance to work on the basis of an expectation that property will rise in value by 10% over the next ten years. Any ordinary person would go along with that. It should be explained to some members of the Minister's party that selling bonds in Europe is not like selling cars. They are like loans in the sense that they have to be repaid at the end of a certain period of time. I assure the Minister of State that there is a complete misunderstanding of that point among certain people in his party. I have spoken to some Members of the Lower House who do not seem to understand what bonds are.

I would like to mention another crucial point that is not fully understood. I refer to the tier 1 requirements of the banks. Many people have asked why the banks are not releasing credit. As Senator MacSharry said, it is not a question of turning it on like a tap. People believe credit should be made available as long as it is a good or appropriate risk, but that is not happening. A banking agreement that was reached two or three years ago increased the tier 1 capital requirement to approximately 7% or 7.5%. Since then, however, the market has determined that the requirement should be closer to 10%. The banks are putting every bit of profit they can make into their reserves, in effect as part of their effort to build up to the 10% level. We should be straight and honest with people by telling them that until the banks reach the 10% level, everything we put into them will go into a black hole and will not come out again. Therefore, Fine Gael is quite correct to make the point that the money we are providing could be simply locked up. There needs to be an understanding that things might not change until we get over that level. I would like the Minister of State to respond to that suggestion.

It is fair to say that much of what is going on at the moment is hard to take. Many of those who are complaining about the decrease in the price of houses were celebrating not that long ago when prices increased by between 10% and 20% over a couple of years. There is a huge element of hypocrisy out there. I agree with Fine Gael that we should not forget some of the economic decisions which were taken over the past ten years. I was glad to hear the Taoiseach acknowledge that too. Similarly, it is important to acknowledge that everybody can make mistakes. When people in leadership positions admit they are working on that basis, it gives people a sense of confidence. We have learned other things as well. We have learned that we were being screwed into the ground left, right and centre. I refer not only to the price of houses but also to the price of cars and eating out, etc. When one considers the manner in which prices have dropped over the past year, one has to ask who was driving the high costs of previous years. We need to examine that aspect of the matter.

It is important to clarify where NAMA is coming from. As almost all Senators have said, it is a source of anger among the public. If one can get people to listen for long enough, one can explain the importance of NAMA to them. They might agree or disagree with it, but they can accept that it might work even if they conclude that it will not. However, they cannot accept the one-sided nature of the NAMA proposal which does not contain anything to meet the needs of ordinary people. As I said on the Order of Business this morning, it is a vicious circle. I may be at risk of boring my colleagues. The banks gave huge sums of money to developers and speculators who caused the price of land to increase beyond a reasonable level by bidding more than it was worth. When they built houses on those lands, they had to drive the prices up to ensure they got their money back. The same banks that were giving money to the speculators were also giving mortgages to people to buy the houses the speculators had developed.

Now that the banks have gone bust, we have to support our banking system in some way. The banks are turning their backs on the people whom they got into this mess in the first place. The banks are closing in on them, but they cannot be allowed to take their property from them. It is not as if we have not seen similar problems in the past. The Minister of State, Deputy Mansergh, will agree that the same thing happened in the 1970s, when the banks shoved money at farmers to build milking parlours. They offered other moneys in similar circumstances in the intervening period. It is irresponsible, unjust and inequitable that working people who did everything right - they saved, skimped and put everything together to get themselves a home - now find themselves in negative equity. I am not too pushed about negative equity for its own sake but I am pushed about people who are not able to meet their repayments.

I spoke this morning to a man in the Swords area who has been in the taxi business for approximately 30 years. He said he does not owe anyone anything because he has always repaid his loans. He was off the road recently because he had to go into hospital for a short period of time. When he went into his building society to ask for a two-month holiday from his repayments, he could not believe how well he was treated. The officials in the building society agreed to give him two months of respite, which made a huge difference because his wife had lost her job a couple of months earlier. He then contacted his bank to discuss the repayments on his car, which is the basis of his business. He explained that he had to go to hospital for a couple of weeks and would be recuperating for a further couple of weeks. When he asked the officials in the bank for a break of one month from his repayments, they said that under no circumstances would they agree to it. It is absolutely appalling. He told me he has done business with the bank in question - National Irish Bank - for 30 years without ever owing a penny more than he should. He has repaid every loan, generally ahead of time. While I do not blame the Minister of State for such problems, there is on onus on politicians and leaders to do something about it. I want the Government to state that this should not be allowed to happen.

The Government should support what the President of France, Mr. Sarkozy, has said about bonuses that are earned in a certain way. He has said he will walk out of the G20 summit if international agreement is not reached on huge salaries and bonuses. Bankers' rewards have to be dealt with internationally. It cannot be done in any one country. I would like our Government to come out in favour of that.

Feargal Quinn (Independent)
Link to this: Individually | In context

I thank Senator O'Toole for sharing his time with me. The Minister of State, Deputy Mansergh, will be pleased that I do not intend to talk about the past. I will not comment on who was at fault or where mistakes were made because there has been too much of that. I will speak about the future. We have a truly serious crisis. According to a recent newspaper article, the State is spending €20 billion a year over our income. That is just huge money that I can see. The article continues:

Ireland is overspending its income, and having to borrow at a rate of €17 million an hour. This public deficit crisis is more serious than the €30 billion worst case scenario for Nama; the deficit will run up €30 billion of new debt in 18 months and continue to add debt thereafter.

As my former colleague, Mr. Vincent O'Doherty, wrote in the article in question:

In many respects, we are living an Alice-in-Wonderland existence. We are like a household that takes out an additional mortgage every week from an indulgent lender to meet its excess spending. We continue to live in an artificial comfort zone in which we can ignore reality.

The situation is not understood by the nation as a whole. The Government has to spell out what the problem is and how serious it is. Mr. O'Doherty continues:

The situation in which we find ourselves is extremely serious, but it is not complicated. Volumes may be written about the complex story of how we got where we are [I will not talk about that] but the solution to how we get out of it is, in principle, quite simple. The state must cut its expenses and raise its income through taxes to eliminate €20 billion of unsustainable over-spending. A country living so far beyond its means cannot expect renewed growth in the economy and the new investments essential to a fresh start, until it puts its own house in order.

The most recent Department of Finance monthly bulletin sets out the Government's planned reduction in spending over the next five years and estimates, based on IMF calculations, that debt will amount to 80% of gross domestic product by the end of 2013 if we continue what we are doing. Given that the Government proposes to spread the corrective measures over a further four years, the debt is even higher than necessary. The figure of 80% of GDP, or more if the banks need further funding, is comparable to the depressed conditions of the late 1980s when debt reached 100% of GDP. I do not think individual citizens quite understand all these millions and billions but an 80% proportion of debt suggests that 20% of tax revenue will be expended on interest payments rather than health, education or social welfare. Most of this money will go abroad because we are largely supported by foreign lenders.

This is effectively a permanent reduction in the nation's income which we will all experience through increased taxes and reduced living standards. People will say it is not fair but I recall the times when, as an employer, I had to tell a store it had problems. It was not fair but that is the way we were. I have had to decide to impose cuts on my businesses to survive. I was usually able to convince people because they saw the figures. We have to explain the situation to our public. In 1982 I had to close a shop because it could not survive. That hurtful experience is etched in my memory.

We have to return to the standard of living we enjoyed in 2002. If we are willing to accept the social welfare and standards of living we had seven years ago, we will be able to get on top of this crisis.

Will Ireland's populist policies continue with decisions delayed and watered down under pressure from interest groups until the slow progress, the surge in debt and interest and the waning of investor confidence bring in the IMF? I remind Senators of the story of Churchill during the Second World War. He is not someone who is regarded as a great hero in Ireland but he spoke about blood, sweat and toil. We have to take hard decisions now because we are responsible to the next generation. Let us act sooner rather than later and convince the public it is the correct thing to do.

John Gerard Hanafin (Fianna Fail)
Link to this: Individually | In context

There are four cornerstones to the Government's strategy for recovery, the first of which is closing the gap in our public finances. Our deficit, which currently stands at €20 billion, is being met through borrowing. Prior to the downturn, we enjoyed significant surpluses of €22 billion during the years 2005 to 2007. It makes sense for the Government to ease cuts and taxes into the economy in recognition that the world economy will pick up and that, for our size, we are a major trading and exporting country. Even this year, in what might be called the eye of the storm, exports have increased on last year's figures.

Further to what previous speakers have said about Ireland as a flexible economy, we are in a good position for the future because we were well placed to meet the current crisis. People predicted a slowdown or a soft landing in property prices but nobody can claim they foresaw that the world economy and the financial system would totter at the precipice last year. The most important reasons for this crisis were the instantaneous availability of credit to people who were not in a position to make repayments and a total lack of regulation in the international sector. These factors nearly brought down the financial system, which in turn would have destroyed economies.

Fianna Fáil has no brief for the banking sector; our brief is for the economy. The way to keep the economy vibrant is to ensure a proper banking sector. We have succeeded in this task. We ensured Ireland's banking sector continued through the eye of the storm by means of a Government guarantee. How much money might have left this State or how many banks might have failed in the absence of this guarantee is unknown. Had one of the major banks failed, we would be facing a depression scenario in which one third of people were unemployed. Sadly, we were not supported by everybody, especially in regard to Anglo Irish Bank. One Opposition spokesperson even said we were bailing out our developer friends. Nothing could have been further from the truth because we hold no brief other than to do what is right for the country. It is not as if all the political wisdom held by Fianna Fáil went out the window and we decided instead to look after the better-off while forgetting about everyone else. That never happened but, unfortunately, such are the claims made against us.

One of the main reasons the international banking sector almost collapsed was greed and a "Pirates of the Caribbean" attitude toward finances. The bonus system played a major part in this. Had the managing director of Lehman Brothers received a bonus of $1 billion in 2007 rather than $500 million, I do not doubt we would now be looking at a 1929 style depression. It is incumbent on us to add our voice to the G20 and at the EU and UN to ensure this never happens again.

Our other remit is to protect jobs and restore competitiveness. There is no doubt that competitiveness is returning in the private sector by virtue of necessity. We had priced ourselves out of manufacturing and the property bubble did nothing to help. We would have been in a worse situation had that continued but we appear to be regaining our competitiveness. No job is safe if it is not competitive.

As people have seen the danger of bank failures and a recession, they are not spending. The only way we will get people to spend is by assuring them we will continue to introduce policies that ensure the stability of the Irish economy. At present, large sums of money are deposited in Ireland banks which would normally be circulating through the economy. In other words, people are saving or paying down debts and this money is not available for the type of ordinary spending which contributes to tax revenue. However, people will start to spend again because they will see the commitment of the Government to putting our economy on a solid footing.

The last point I wish to support - there are other points I wish to make for which, unfortunately, I do not have time - is the question of the repossession of houses. One of the most difficult things to hear is that this has happened to a family. It has a special resonance for the Irish people, in particular, when we think about the evictions during the days of the struggle with landlords. In particular, I am aware with 17 years with a building society, First Active, that there must be a change in legislation, not only to protect the home owner but to protect the lender. My suggestion is that the Government would look seriously at allowing the lender, which heretofore had no recourse other than the courts, to take an equity interest in the property if the money has not been paid back willfully by the borrower, in other words, that we would allow the bank or building society to take an equity interest on an ongoing basis and any income surplus to requirements by the person who is not willfully paying could be sequestered and garnered from his or her income. In that way we would ensure there would not be repossessions, which are so unnecessary, in the marketplace.

Dominic Hannigan (Labour)
Link to this: Individually | In context

I wish to share time with Senator Mullen.

Pat Moylan (Fianna Fail)
Link to this: Individually | In context

Equally.

Dominic Hannigan (Labour)
Link to this: Individually | In context

Seven minutes and five minutes, respectively.

I welcome the Minister. It is a long time since we were last here and as the motion is wide-ranging, I will limit my comments to the general economy. I do not intend to speak on banking policy other than to state that my party does not think NAMA is the most efficient way of sorting out the current crisis. I also do not intend to speak about the Lisbon treaty referendum other than to state that a "Yes" vote would send a clear message to international investors that Ireland is open for business and is at the heart of Europe, and as a result, it will be a positive development if we vote for the Lisbon treaty.

I want to make general comments about economic policy and Ireland's current state. The squandering of the boom by the current Fianna Fáil Government has led to a significant loss of confidence in its ability to manage effectively its way out of the current crisis. I refer to instances such as the PPARS fiasco, the amount of money spent on voting machines and general wastage. We heard only yesterday that the Minister is still spending €120,000 on security of a field in north county Dublin. Thornton Hall, which no longer will be a prison, is just a field. We really need to concentrate on tackling waste. The people have little confidence in the ability of their Government to tackle the current economic crisis and to work back from the brink.

There has been little economic analysis in the Government's approach so far. It appears it is just an approach of cut, cut, cut, and of slash and burn, but this is not always the best option. We all are aware the country's finances are teetering on the brink and extremely precarious. Where there is wastage we need to cut it, where there are excess levels of expenditure we need to cut them and where there are inefficiencies we need to do likewise. Earlier Senator Twomey mentioned inefficiencies in the health services. We heard today that Irish general practitioners are getting five times the rate of payment for the flu vaccine that the Labour Government in the UK is giving its general practitioners.

We need to tackle inefficiencies and waste in all areas of public expenditure. When we are doing this, however, we need to ensure we do not blame the poor for the greed of the rich, that we do not price people out of the education system, that we do not restrict medical care for those who cannot afford private health care and that we do not cut off our nose to spite our face.

We need to invest in areas that offer a clear return on investment - schools, green energy schemes, projects such as public infrastructure - and we need to invest in areas where we have a unique selling point. I will highlight two potential areas where Ireland has performed well historically, namely, in attracting people to our shores both in tourism and in new industry. However, we need to have the necessary infrastructure to attract tourists. I was appalled that over the summer the Government cut back in areas of tourism investment. In my area of Meath, the Kells heritage centre is under threat. What kind of a message is that to potential tourists when the Government is closing heritage centres because of a lack of funding? We need to ensure that in areas of tourism we retain sufficient funds to operate the system. I would also ask the Government to look again at the airline tax which is discouraging people from coming to the country. Other countries, most recently the Dutch Government, have reviewed their attitude toward the airline tax and recognised that it is better to remove it.

The other area where historically we have been very good is in attracting jobs to the country. Some have asked whether our wages are competitive. I ask whether Government regulation in the area of jobs is competitive with that of other countries. For instance, do we offer sufficient research and development credits to companies which set up here? Should we review our capital gains tax exemptions and see how they compare to those of other countries? Do requirements such as withholding tax provisions and frequency of VAT payments make it more difficult for businesses to operate in this country? We need to review issues such as these to ensure Ireland is an attractive and easy place from which to operate a business.

There has been much talk about the issue of public debt. Lord Thomas Macaulay, the 19th century British historian, once stated:

At every stage in the growth of the debt it has been seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt went on growing, and still bankruptcy and ruin were as remote as ever.

He was speaking of public debt in the UK in the 19th century but he could have been speaking about the public debt in Ireland today.

We need to take a step back when it comes to the issue of the public debt ratio. I am sure no country, perhaps apart from China, is running a government surplus at present. We are running a debt of less than 50% of GDP. This will rise to approximately 70% by the end of the year, according to experts. At worst, NAMA will probably raise that to 130% or 140% of GDP, and it will probably rise again the following year and the year after that. Let us put that in context. The IMF stated in June that the debt of Japan, for example, is set to rise from its current level of 220% of GDP. In Italy, the ratio is currently well over 100%, and it is due to rise further. By 2014, the IMF stated, the debt of all of the advanced G20 countries will be by over 100% of GDP. Therefore, we need to put the matter in perspective. Senator Quinn worries about the IMF coming to Ireland's door; its officials might be busier in Rome or Tokyo before they make it to Dublin.

We need to consider carefully the issue of Government debt. The debt of the US is currently at 100% of GDP and some eminent commentators, such as Robert Reich who won the Václav Havel Prize for Economics and was a United States Secretary of State for Labor under former US President Bill Clinton, pointed out that although the debt is high in the US, it is not as high as it reached in 1945, but yet ten short years later that debt was virtually wiped out by growth in the economy, not because of government cuts. That is what the UK and the US have always done. They have grown the economy as opposed to cutting expenditure. We need to learn that lesson.

Now is the time to set the seeds for economic growth. We can do that by investing in the green area through creating new jobs in wind or wave power. We need to invest in proper schools for our children to study in, update our public transport network and road networks and tackle the appalling crisis in the water systems.

There is a herd mentality on this in Government that cuts are the only way out. This is largely unquestioned by the media. We need to be extremely clear that it is not merely a matter of cuts across the board. We need to be looking at better efficiency and cutting waste, but at the same time we must ensure we invest in key areas which can generate jobs and get us out of this economic mess.

Rónán Mullen (Independent)
Link to this: Individually | In context

Cuirim fáilte roimh an Aire Stáit. Gabhaim buíochas leis an Seanadóir Hannigan as ucht a chuid ama a roinnt liom. Cé nár chóir dúinn beag is fiú a dhéanamh dos na dúshláin eacnamaíochta atá roimh na tíre ag an am seo, tá sé tábhachtach go dtuigfimid gur éirigh le tíortha eile déileáil leis an fhadhb seo nuair a theip ar mbainc eile. Bhí siad níos fearr ina dhiaidh sin. Bá chóir go mbreathnódh lucht déanta polásaí na tíre seo ar an méid a rinne muintir an Fhionlainn, nuair a bhí córais eacnamaíochta agus airgeadais na tíre sin briste, chun na córais a chur ar ais le chéile arís. Finland experienced an exceptionally deep recession in the first half of the 1990s. Within four years output was reduced by more than 10% and the unemployment rate quadrupled to almost 17%. The collapse of trade with the former Soviet Union in 1991 and also a sharp downturn in the West combined with a domestic banking crisis led to a collapse in consumption and investment spending. The Finnish Government was forced to take drastic measures to improve its competitiveness and to consolidate public finances at the same time as costly measures were needed to revive the banking sector - we can see the comparison. Public expenditure was cut almost across the board and some taxes were raised. The only exception was that research and development spending was increased rather than cut. In its analysis the OECD pointed out that the counter-cyclical support of Tekes, the Finnish funding agency for technology and innovation, proved very important in reducing the depth and length of the downturn in business research and development which in turn helped to lay the ground for a strong rebound. The Finnish Government decision to complement macroeconomic stabilisation measures with sustained investment in infrastructure, education and incentives for structural change helped to put the Finnish economy on a stronger more knowledge-intensive growth path following the crisis.

There is no doubt that the Government here must make steep cuts in public expenditure in the months and years ahead. However, today we must make a plea for education. We must be careful that in cutting into the fat from public expenditure we do not cut deep into those muscles that we will need to rebuild our economy. Education is not a cost for Government it is an investment. The courageous decision by the then Minister for Education, Donogh O'Malley, to provide free secondary school education was one of the fundamental building blocks of the Celtic tiger as we all know. In that regard I was very struck by what the Catholic Archbishop of Dublin, Dr. Diarmuid Martin, had to say yesterday at the mass to mark the opening of the school year on the subject of education. He acknowledged that our expenditure on education was below that which would be desirable. However, he said:

At the same time we have to recognise that education is different. Education is not just part of the problem of our expenditure but education is an irreplaceable part of the answer. It is people with their creativity and talent who are and will be the backbone of economic recovery.

He also said we needed to ensure that young people were not "held hostage to purely economic decisions in such a way as to create long-term damage for them... We owe our children the best even in leaner times." Those were very wise words.

If we are to build this smart economy we will need a cohort of smart and well trained researchers to act as pathfinders for our new economy. We must invest in fourth level education and PhDs if we are to aspire to be centres of research. However, we must continue to invest in primary and secondary education. It is a sobering thought that it costs more to keep a person in jail for a year than it does to educate a person up to graduate level. Caithfimid an infheistíocht sa chóras oideachais a choimeád suas. Ní caiteachas amháin atá i gceist le oideachais. Tá súil agam go dtuigeann an Rialtas go bhfuil infheistíocht in ár dtodhchaí, agus sa chumas atá againn dul i ngleic leis na fadhbanna atá romhainn, i gceist freisin.

Dan Boyle (Green Party)
Link to this: Individually | In context

Just as Zhou Enlai said when speaking of the French Revolution, it is a bit too soon to tell about the international crisis and our own particular variant of it. However, there are some hopeful signs. We do not know yet whether the international crisis will be a V-type recession or a W-type recession. We have seen encouraging signs that France and Germany, two of our main trading partners, are coming out of recession. As both are eurozone countries, it gives us some hope and confidence. We have also had a relatively positive report today from the Irish Exporters Association showing that Ireland is one of the few countries in the developed world that has an increasing amount of exports with a 5% increase in the past year alone. Having listened to the previous speaker refer to Finland, it is interesting to note that the decrease in Finland in the last recorded year was 40%.

While there are reasons to feel hopeful for the future, we have less control over other factors, which will have a serious impact on the social as well as the economic outlook for the country. Chief among those is unemployment, which is far too high and unfortunately will grow higher until it comes back under control. To restore an economy we need appropriate amounts of hope and confidence. Recession breeds the opposite; it breeds fear and uncertainty. The challenge for the political system and not just for Government is to build on what is good and what we can go forward with and build upon further. This week's global economic forum touched upon some of those themes. While we often take an industrial approach to the economy, what the country has going for it as a tradable commodity in which we can take a great deal of pride and from which we can get an economic value are issues like our cultural identity and how that translates into the wider world. That could be manifest in how we structure our tourism industry.

There are continuing imbalances in our economy. Our export-led growth comes largely from foreign direct investment companies. We lack an indigenous economic sector. We really need to develop that in the future. One of the main gains from the Celtic tiger era was the sense of self-confidence that never existed at any other time in our economic history. If we are to recover we need to tap into that again. We cannot allow it to be dispirited and disappear from the fragile place from which it seems to have come. If we believe in ourselves as a people we can achieve.

The Minister of State has referred to other parallel events in his opening statement. Getting the financial engine of the economy is key to that. There are ongoing debates among Government and Opposition parties as to whether the right approach has been taken. As someone who has been involved in the ongoing internal debates on this matter, I believe the Government is taking the right approach. NAMA is still a developing animal. From the original publication of the draft Bill as a consultative document earlier in the summer to the figures the Minister released on an indicative basis to the stock market's reaction to that in the subsequent rise in the value of bank shares, I believe continuing balancing needs to be done. While NAMA exists to make our financial services viable, it does not exist to profit the owners of the banks and those who work with the banks at the expense of the taxpayer. We need to complete that balancing. I encourage Members in this House from all parties to consider that exercise from that point of view. Even if we were so minded, I do not believe there are models we could put in place now that would achieve that.

Living in a deflationary cycle in our economy at this stage brings about the demands over where we stand in terms of public expenditure. This is open to misinterpretation. The Government's approach puts public expenditure cuts in a secondary place. The main instrument in dealing with our budgetary situation continues to be borrowing, which will amount to €20 billion this year alone. The plan for the period up to 2013 will require additional borrowing each year until we can try to get down to 3% over and above our annual budget to meet the criteria for membership of the euro. That will still be quite difficult. We are borrowing €20 billion now with possibly €16 billion next year and €12 billion the following year. In a sense we are lucky that our debt has become so low as a proportion of GDP. Even after this year the €20 billion we are borrowing and the money we will be putting forward towards NAMA will only put us at the average debt level of all European countries. Having had the lowest debt, we have come up to the average. Even at the end of this year, our nearest neighbour will have a higher level of debt than us. Although we are talking ourselves down, we must remember our economic standing and statistics are still quite favourable in international comparisons. If we use that as a platform, we can overcome our current problems. The challenge for the political system and, I accept, the Government is to make sure that platform can be reached in the quickest possible time, that it is done in the fairest possible way and that the benefits of the economic strength we achieve through improving our economic indicators are shared among all our citizens. There will be plenty of debates and initiatives. However, despite the catcalling and finger-pointing, my party is part of a Government which is trying to achieve this and, despite the circumstances, achieving it to the greatest extent possible. I am confident, given the timeframe we have set ourselves and the policies being pursued, that we can come through.

Paudie Coffey (Fine Gael)
Link to this: Individually | In context

I welcome the Minister of State for this important debate. I listened with interest to the previous contributors. It is essential for the country and the people that we maintain hope and optimism. However, we need to pass on that hope because people are confused, angry and hurt and need direction. That is what they are crying out for. We have just experienced the greatest deterioration in the history of the public finances over a very short period. It would be remiss of those of us in government and opposition not to consider how we have arrived at this point. We must consider the background and context and learn from our mistakes if we are to have any chance of recovery without experiencing further problems.

From the mid-1990s the economy was growing well. Export business was up, employment levels were rising and we were still competitive in the manufacturing sector. Agriculture was also doing well. These were sound foundations for strong economic growth. Unfortunately, however, as we entered the early 2000s, Government policy seemed to focus too much on property development. It is obvious that this was the case. There were tax incentives for developers and everything was being forced into the construction sector. The majority of the large rise in employment was in the construction sector. It was welcomed to a large degree, but it was unsustainable. We were building more than 90,000 houses per annum at one stage. Meanwhile, we were beginning to neglect manufacturing, especially with regard to competitiveness. We also neglected agriculture to an extent and can still see how that sector is suffering.

I do not like to see the Government in denial and not accepting any responsibility for the current economic mess. I remind it that it was quick to claim credit when the economy was doing well. Now it needs to show responsibility. If it showed such responsibility and honesty to the people at this time, it would gain more credibility and at least we could draw a line under it and move on.

Unemployment is rising rapidly. In 2001 it stood at 4%, which was to be commended. However, much of this was due to the strong construction sector. We are now at a figure of 12.5%, which is predicted to increase to 15% or more. There are major challenges. People are hurt and angry and looking for leadership. In particular, the 25 to 40 years generation are seriously exposed to financial pressure. They are the ones who have large mortgages and in negative equity. They are the ones in the family formation age group; they have young children but are losing their jobs. They make up middle Ireland - the ordinary people on whom we are hoping to rebuild the economy - and are crying out for help.

I can name multitudes of companies which are going to the wall, including marquee names such as Waterford Crystal, Bausch and Lomb, Honeywell and Teva Pharmaceuticals, which announced more than 350 job losses only two weeks ago. These are not low-end manufacturing jobs. Teva was one of the industries I hoped would see us through the recession. Highly qualified people working in the pharmaceutical industry are being laid off. There are serious concerns in this area. We must not forget the spin-off industries which serve the areas in which these companies were located. The reason for these closures, we are being told by the people running these companies, is our loss of competitiveness. The costs of energy, labour, overheads and services are too high. That is all stacked up in the recent Forfás report, Costs of Doing Business in Ireland, 2009, which repeats what the business leaders are saying.

We need to ask ourselves why this happened. Yes, international factors played a role; so too did the banking crisis. However, the failed policies of the Government were also important. I recall, as do many others, a former Taoiseach saying to those who questioned the economic policies of that Government that they should go and commit suicide. I hate to repeat it, but it is a fact. He was applauded at the ICTU national congress. Now we know the reality: when people were questioning things, they were right. I know hindsight is great, but we should take cognisance of what some people, who are academics or otherwise, are saying. If the Government will not listen to the Opposition, it should listen to the academics. The economy was overheated and we were uncompetitive.

The social partnership model brought benefits to Ireland from its inception in 1987 under the Programme for National Recovery. It is now time for new negotiations and a new programme for national recovery. I am trying to be positive when I say we need to be up-front and honest with the people. We need to engage with the trade unions and workers and business and clearly spell out the difficulties and challenges facing us. Let us put everything on the table and try to work our way out of this. The Government needs to show us a plan for recovery and a roadmap out of this economic crisis.

We are getting conflicting messages from the Government, which is causing confusion. We have the report of the Commission on Taxation and the an bord snip nua report. One will be proposing ways of raising taxes, while the other will propose cuts. The Taoiseach says one thing and the Tánaiste says the opposite; other Ministers are saying different things. This is not the way to govern a country through an economic crisis. We need to see strong leadership in government. That is what the people expect.

I compliment those who were involved in organising the think-tank in Farmleigh last weekend, to which the Diaspora came with new ideas and means of investment. Similar events should be organised at local and regional level with the universities and institutes of technology. Let us get the academics and business leaders, as well as workers, trade unions and community representatives, sitting around the table with State agencies to identify our problems and promote solutions. This may be possible through the county and city development boards, although they are too formal in their structure. They could be developed into a more informal structure to bring good ideas from the grassroots up and involve the various pillars in society. That would be a positive way of engaging with the people again.

We need to give the people hope. I was speaking with business people last week and they said they were really struggling but that if they could see hope, they would work that bit harder. That is what we need to give them.

Fiona O'Malley (Progressive Democrats)
Link to this: Individually | In context

I am glad to have this opportunity to speak on the economy because much has happened over the summer, both good and bad. Some of the signs are a little better. However, I will talk first about NAMA which is a necessary evil in that we needed some mechanism to provide liquidity in the banks. It was a case of having to call a price at a certain time in order to lance a boil, in a sense. Because the key to a sustainable economy is a good banking system, it had to be done. The solution arrived at by the Government is commendable. If the Government misses its projections by 10% up or down on the figures it calculated, and it may have over-valued the assets by 10%, even if that transpired to be the case in five or ten years, it was a risk worth taking by the Government for the nation. What we have had up to now has been utter and total stagnation. The economy cannot sustain that. We had to come to a point where a price was called and we moved on. Hopefully, transactions and business will be conducted again. What is proposed is a necessary evil that had to happen given the circumstances in which we found ourselves. I hope we will have a constructive debate as the legislation goes through the Dáil and comes to this House and that Members recognise that this is the solution we have because the Government is proceeding with it.

Irrespective of whether one cares about the economy, what the international markets think of the solutions the Government comes up with is vital for this country. I found it lamentable to listen to the Leader of the Opposition in the Dáil last week deplore the fact that bank shares went up the day following the introduction of the legislation. This is a man who wants to present himself as an alternative Taoiseach and he deplored the fact that bank share prices increased. I found his reaction confused and disgraceful. If banks shares had gone down, there would have been a run on the banks and we can imagine what would have happened. Is that what would have made him happy? People need to be careful.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

The Government was not careful.

Pat Moylan (Fianna Fail)
Link to this: Individually | In context

There will be no interruptions.

Fiona O'Malley (Progressive Democrats)
Link to this: Individually | In context

It was demonstrated extremely carefully in his approach how the putative next Taoiseach reacted to that position. We can imagine what signal that sent to the markets abroad. A man in his position needs to be extremely careful how he reacts here. Confidence is a fragile flower and confidence is what we need. Everyone is talking about the beneficial impact of the conference in Farmleigh last week. It was a simple gesture, it did not cost anything but it generated good ideas and was about restoring confidence. The nation was pleased that new ideas and initiatives were put forward. We benefited from that. It is more of that we need, rather than the blame game as to how we got here. The point is we got here.

We need solutions to move on to the next considerations. The next important step is the Lisbon treaty and then the budget, the critical measure for Government of its commitment to keeping balanced finances. We will all have to be honest and open about how that will be done. It will be an interesting time. Hopefully, in the lead-in time to the budget, as the Department of Finance and the Minister for Finance prepare the finances, we will have a reasoned debate. I listened with interest to what previous speakers said about the solutions they would put forward in allowing the debt ratio to rise by so much. Regardless of what happens, we must contain public expenditure and whatever that means. I am glad the Minister indicated he is not keen to increase taxes on labour as that would be counterproductive. That is an important message to send out.

There is only one other element to consider, namely that of public expenditure and how cuts or greater efficiencies in it can be achieved. A report in today's newspapers demonstrates how we lost the run of ourselves when we had too much money. Everyone of us in all walks of life needs to examine how we can change the practices which might release finances. I refer specifically to a report that revealed that GPs in Ireland will get four times the amount GPs in the UK will get for administering the flu vaccine. That payment level is not sustainable. Frontline services will not be affected if we bring those kinds of prices back into line. That example illustrates only one area where we could contain expenditure without diminishing the quality of services. We need to encourage medical and other professions throughout the country that are receiving public moneys to examine how the same service can be delivered for less money.

A critical issue is what we can do to help the unemployed. Senator Coffey misquoted the figure of 12% in terms of unemployment, as the number unemployed has not yet reached that percentage, but unemployment is a worry for every family. We need to focus on the unemployed. That is the reason I regret the arguments made by some of the public sector unions when the Minister and the Taoiseach indicated we must examine the issue of public pay. We must show solidarity with the people who no longer have a job. That must be our priority. We must look after those people, not lose sight of the community and show solidarity to ensure we all come through this difficult period. We must not just look after our own interests but the interests of the community at large.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

Cuirim fáilte roimh an díospóireacht seo. Níl ár gcuid cainte faoi chúrsaí eacnamaíochta tábhachtach muna bhfuil éinne ag éisteacht linn. Is í sin an cheist is tábhachtaí. An bhfuil éinne ag éisteacht linn? Tá cúrsaí eacnamaíochta na tíre pléite againn anseo sa Seanad go mion is go minic. Tá moltaí curtha chun tosaigh ag páirtithe éagsúla, mo phairtí ina measc. Níl an Rialtas ag éisteacht leis na moltaí, nó ag glacadh na moltaí ar bord. Tá polasaí ag Sinn Féin chun an tír seo a chur ag obair arís, mar shampla. Tá moltaí againn chun é sin a bhaint amach. Níl aon cinneadh acu curtha chun tosaigh, nó curtha i bhfeidhm, ag an Rialtas. Tá sé soiléir go bhfuil níos mó daoine ag tarraingt ar na liostaí dífhostaithe, agus iad ag cailleadh a chuid postanna gach seachtain. Níl dabht ar bith ann nach bhfuil straitéis ag an Rialtas seo ó thaobh cúrsaí fostaíochta de. Lig siad don eacnamaíocht dul ar sruth. It is important, therefore, that this issue is debated in the Seanad. I hope those in a position to bring about policy change are listening to what others are saying. Sometimes it is a case of reading the Official Report because much of what is being said was said previously but has fallen on deaf ears.

I want to make a number of points because every time the Government talks about the economy it mentions the Lisbon treaty, which Senator O'Malley mentioned earlier. I raised the issue on the Order of Business because some Senators have spoken about Sinn Féin peddling untruths and they mentioned our party's posters. The reality is that our posters are the only posters which cite the articles in the Lisbon treaty that refer to the issue, whether it is crushing family farms-----

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

-----the World Trade Organisation talks or lower wages. All those issues are dealt with in the articles referred to on the posters but I refer to one of the myths peddled in the previous debate. I call it a myth because I knew it to be a lie on the basis of France's experience. It is that a "No" vote in the Lisbon treaty would result in foreign direct investment being withdrawn from Ireland. The IDA has come out and said that in 2008 foreign direct investment increased by 14%.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

Give it time.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

We should stop saying that foreign direct investment would be wiped out if we vote "No". It did not happen in France when it rejected the EU constitution. Foreign direct investment increased to a level of 10%.

The Minister for Finance has said that a "No" vote would be tantamount to a signal of withdrawal from the European Union. That is a lie. It is untrue and it is scaremongering. I am not the only person saying that. An editorial in an influential newspaper, The Wall Street Journal, on 16 September, stated that the Minister, Deputy Brian Lenihan, was "peddling phantom terrors to scare the Irish people into voting Yes". It further stated that the chief strategy of the Government is preying on fears. That is what The Wall Street Journal stated about this Government's attitude to the Lisbon treaty and to it trying to link it to the economy.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

That is an indication of what is being said in that influential newspaper. Let us be clear and have a proper debate on the issues. Senator O'Malley referred to NAMA as a necessary evil. I agree with her that NAMA is absolutely evil.

Fiona O'Malley (Progressive Democrats)
Link to this: Individually | In context

I have regretted saying those words.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

It is a rare occasion that Senator O'Malley and I can agree, even on half a statement. I agree with her that NAMA is evil. The fact that ordinary people, including young children, are paying up to €54 billion to bail out the banks is unbelievable.

Fiona O'Malley (Progressive Democrats)
Link to this: Individually | In context

Why is Senator Doherty calling it a bailout of the banks?

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

Earlier on a Government party Senator referred to an experience in most banks in this country that was especially acute in Donegal. I have raised this issue before. Many people in Donegal held what were known as bogus non-resident accounts, in particular people in my own parish who cut turf for a living, sold the turf to the turf burning station and who, when the turf burning station closed, were made redundant. Many of these people were elderly and did not have much education having left school at primary level. They went to their bank manager, were given an address and told what to do with their money. Years later this turned out to be illegal; it was tax evasion. The Government came after those people not alone in respect of the money they had offshore but with serious financial penalties. The pressure resulted in some of them - we heard the stories at the time - taking their own lives. Others had to sell their homes and so on. The pressure by Government on those individuals who were directed by bank officials to do what they believed was right was unbelievable. Today, those people who cut turf in Donegal and other people who believed that what the banks were telling them to do was legal are bailing out those banks to the tune of €54 billion. It is absolutely evil that the Government is putting the country in this position.

My colleague, Deputy Arthur Morgan, called last week in the Dáil for an apology from the Taoiseach in regard to the untruths he is telling when he says time and again that nobody shouted about the warning signals. Sinn Féin shouted time and again about the warning signals, which is evident from the Official Report and in parliamentary questions. We told the Government that the property boom was overheating and that the bubble was going to burst. We are the only party, who in the 2007 election, only two years ago, said the Government should not reduce taxes because the bubble was going to burst and the country needed money. Fianna Fáil, Fine Gael and the Labour Party promised to reduce taxes and did not give a damn about the reality, namely, that the property bubble was about to burst and there was too much dependence on fair weather taxes. It was election time, however, and parties say whatever they want during election time. The reality is that this Government did know about the warning signs. Not alone did Sinn Féin identify the problem to the Government but so also did other economists.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

Senator Doherty has one minute remaining.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

The Taoiseach should apologise because he screwed the economy and he is screwing the working people and future generations with this NAMA evil.

There is no accountability in our system. We heard earlier Senator Ross spoke about the board of FÁS. The Minister held on to a report on FÁS for 90 days before publishing it, an issue on which I made a statement. The board of FÁS remains in place. Many of the people who advised ordinary people in Donegal and other places to put money offshore remain in position in the banks. Some of them are in influential positions in politics but all is forgiven. The reality is that there is no accountability in our system and there needs to be a proper sense of accountability.

The event which took place in Farmleigh is to be welcomed. It is important to hear other people's opinion. We proposed to the Tánaiste, Deputy Mary Coughlan-----

Paddy Burke (Fine Gael)
Link to this: Individually | In context

Senator Doherty must conclude.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

There has been much talk about a 12% unemployment rate. We had that years ago. During the boom time, the Celtic tiger era, unemployment in Donegal stood at 18%. When we called for the setting up of a forum like Farmleigh, nothing happened. There is no strategy.

Perhaps the Minister of State will outline how many tax exiles were at the Farmleigh event. Some of the people who were there, the greatest brains in Irish society, do not pay a penny in tax in this country.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

I must ask Senator Doherty to conclude.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

Many of them are registered offshore and pay their taxes to another government through foreign industries. The Irish Government allowed this to happen by way of tax loopholes in the property sector.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

Senator Doherty must conclude.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

The love affair between the banks, property developers and the Government is responsible for this problem.

I will finish with a statement that is three words in Irish and three words in English, namely, "I am sorry", "Tá mé bronach." Whether said in English or Irish, they need to be said. The Government has wrecked our economy and if it gets away with implementing NAMA, it will be the worst evil perpetrated on the people since the foundation of the State.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

I wish to share two minutes of my time with Senator Buttimer.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

The Senator has only four minutes as the Minister of State is to be called upon to reply at 7.50 p.m.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

I will give one minute of my time to Senator Buttimer.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

Is that agreed? Agreed.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

I welcome the Minister of State. I have a number of questions I wish to ask him.

We are bailing out the banks to the tune of €54 billion to restore confidence in the banking sector. This no doubt will be good for the banks - I acknowledge we need a functioning banking system, but there is no guarantee it will be good for the economy or jobs.

Fiona O'Malley (Progressive Democrats)
Link to this: Individually | In context

Helping the banking sector will be good for the economy.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

What about the reality for people in trouble? I received an e-mail which I am sure everyone received today. It states:

Myself and my partner have been out of employment for over one year and have been struggling with our mortgage payments since the mortgage relief has been stopped. Can anybody please explain why Fianna Fáil are doing nothing to protect homeowners in arrears in the NAMA proposal.

Where are the legal guarantees in regard to payback to the people?

Liam Twomey (Fine Gael)
Link to this: Individually | In context

There are no such guarantees.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

We had to return twice to Europe to get legal guarantees in regard to the Lisbon treaty. If, as we are being told, NAMA is the only game in town, why do we not have legal guarantees built into it? I am not convinced about NAMA. Perhaps the Minister of State can tell me what is in it for the people. I am concerned for the people. I, too, am experiencing problems; this is my reality too. People entered into loans in good faith based on their ability to pay. Many people, including everyone in this House, has taken wage cuts by way of levies and so on which makes it difficult for them to pay their loans and mortgages. In this regard, one has only to look at the facts on personal indebtedness. Middle income families are in serious and deepening debt. There has been a 110% increase in the past year in those with overdrafts who are seeking debt counselling. The boom sparked the credit frenzy. In 1995, the ratio of household debt to income was 48%. The figure for the debt mountain is 176% of the income of all households, largely because of mortgages.

We are bailing out the banks. Who is going to bail out the citizen whose first duty is not it not to themselves but to the State because of the mess created by Government, in particular Fianna Fáil? I would like an answer to the question of how the Government will help the people.

Jerry Buttimer (Fine Gael)
Link to this: Individually | In context

I thank Senator Healy Eames for sharing time with me. We are putting aside €54 billion for the banks, developers and Fianna Fáil, a cosy cartel. The Minister of State, when on "Tonight with Vincent Browne" last night, had an opportunity to apologise to the people for the mistakes made by his Government but he did not do so. Senator Healy Eames is correct that today there are many hard-pressed families in negative equity, who are unemployed and are struggling to pay bills. The hours provided to children with special needs have been cut, as have home help hours, leaving many carers in trouble while this Government continues to live a champagne lifestyle and makes no apology for its actions.

The Tánaiste withheld a report on FÁS for 90 days. Why is that? Banks are knocking on the doors of hard-pressed mortgage holders demanding keys and money. I regret I have only one minute to make my contribution. Where was the control in the growth of public services expenditure? Senator O'Malley spoke about the economic policies of the Progressive Democrats. To borrow an American phrase, we were subject to voodoo economics and are all now paying the cost. Will the Minister of State say who will bail out ordinary citizens who are suffering because of the decisions made by Fianna Fáil in government?

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

Hear, hear.

Jerry Buttimer (Fine Gael)
Link to this: Individually | In context

Neither the Taoiseach nor the Minister for Finance has answered that question. I hope the Minister of State will address that fundamental point.

Martin Mansergh (Tipperary South, Fianna Fail)
Link to this: Individually | In context

I thank all Senators who contributed to what has been a mainly constructive debate. I will try to answer as many as possible of the questions raised within the time available.

Senator Twomey asked about the status of the reports by an bord snip nua and the Commission on Taxation. Both reports offer recommendations to the Government. Decisions on the matters raised will be made by the Government in due course. In the case of the report of the Commission on Taxation, decisions will be made on a rather longer time scale.

Government waste is certainly something about which we should be concerned. It is an eternal struggle to ensure value for money. Comptroller and Auditor General reports have contained criticisms of Government spending since that office was established a long time ago. However, I accept Senator Twomey's point that when revenues were overflowing into the Exchequer, it was not always the case that the same care was taken as must clearly be taken today. To that extent, I accept a degree of criticism. The Senator also referred to raiding reserves. In general, the purpose of the latter is precisely and rightly to meet critical and emergency situations.

In so far as Senator Twomey is asking me to pre-empt budget decisions, that is obviously something I cannot do. I refer him to any statements that have been made or will be made by the Minister for Finance. The Senator also raised questions about NAMA and how it was to be financed. The Minister for Finance has estimated that 40% of the relevant loans are cash flow producing and that the cash flow produced will be sufficient to cover interest payments on NAMA bonds and operating costs. The Minister expects-----

Liam Twomey (Fine Gael)
Link to this: Individually | In context

The Minister of State is providing no new information. The details to which he refers are already in the public domain.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

The Minister of State should be allowed to continue without interruption.

Martin Mansergh (Tipperary South, Fianna Fail)
Link to this: Individually | In context

The Minister expects-----

Liam Twomey (Fine Gael)
Link to this: Individually | In context

The lack of information is incredible given the vast sums involved.

Martin Mansergh (Tipperary South, Fianna Fail)
Link to this: Individually | In context

It is unclear whether Senator Twomey is interested in my response.

Liam Twomey (Fine Gael)
Link to this: Individually | In context

The Minister of State is telling me stuff I can read about in The Irish Times.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

The Senator should allow the Minister of State to respond.

Liam Twomey (Fine Gael)
Link to this: Individually | In context

He is insulting us.

Martin Mansergh (Tipperary South, Fianna Fail)
Link to this: Individually | In context

I have not insulted the Senator; I am attempting to reply to his questions.

Liam Twomey (Fine Gael)
Link to this: Individually | In context

The Minister of State is telling me nothing.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

There must be no further interruptions.

Martin Mansergh (Tipperary South, Fianna Fail)
Link to this: Individually | In context

The Senator should listen to the answers I am giving. I am sure he will have further opportunities to raise his objections to the answers.

Liam Twomey (Fine Gael)
Link to this: Individually | In context

I can go to the local pub for waffle. I expect proper answers in the House.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

Absolutely.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

I have asked Senators to allow the Minister of State to proceed without interruption.

Liam Twomey (Fine Gael)
Link to this: Individually | In context

I am merely asking for straight talking instead of the usual old rubbish.

Martin Mansergh (Tipperary South, Fianna Fail)
Link to this: Individually | In context

The Minister for Finance has said he expects the institutions which require additional capital to explore all available options for raising such capital. The Government's preference is that private market solutions be found. The banks and building societies benefiting from NAMA are expected to increase the equity component of their capital as the NAMA asset transfers are implemented. The Exchequer has invested €7 billion in Allied Irish Banks and Bank of Ireland by way of recapitalisation this year. These moneys pay a coupon of 8%, which pays a total of €560 million per annum to the State. The State also holds warrants in both institutions and these shares have, as has been pointed out, increased in value.

Senator MacSharry is correct that it is often difficult in the polemics that rage to obtain objective assessments. Senator O'Toole has pointed out that much nonsense is talked in the midst of serious debate. Like the Senator, I am quite an admirer of the French President, Mr. Sarkozy, who has a good deal of chutzpah. I listened with interest to his comment that we were not part of the G20 and would not directly participate in that forum.

Senator Quinn was right to highlight, as I did, the Exchequer deficit of €20 billion and the interest payments associated with servicing that debt. Interest charges may not be too onerous in the early years as one builds up debt, but if we keep going as we are, the associated interest payments will create a huge burden for the next generation. Senator Hannigan addressed the same topic but seemed to suggest we should perhaps not take the required borrowing too seriously. He referred to Lord Thomas Macaulay's comments on the ruinous effects of debt and the rhetoric about this in the early 19th century. I would go back a century earlier to Dr. Johnson who observed that there was a lot of ruin in a nation. It is no accident that one of the bases and foundations of the prosperity of the Celtic tiger years was that we managed to drive down debt and associated interest payments to very low levels. We are fortunate that we did so, given the crisis that has since hit us.

While I agree with Senator Mullen on the value of educational investment, it does not mean to say of that or any other area that there are no conceivable economies to be made and that nothing can be done more efficiently. No area, however important and valuable and however great a priority it is, can be immune from action in securing better value for money and achieving more for less.

Senator Boyle is correct to be cautious about what have been referred to in other countries as the green shoots of recovery. It is uncertain whether such signs of recovery will be sustained bearing in mind that stimulus packages are due to be withdrawn by various governments. Only time will tell. I agree with the Senator's emphasis on the importance of restoring confidence.

Senator Coffey made a very constructive contribution. The question of how social partnership may function in the future is worthy of consideration.

Senator O'Malley is absolutely correct regarding the importance of the view of the markets. The danger at the end of last September was that, regardless of objective realities, the markets could have brought the entire banking system crashing down. The Senator is also correct in her observation that professional costs and fees, including those of the medical, legal and dental professions, are in many cases out of line with those in other countries. This is an issue that must be addressed, but it is open to question whether market forces alone will be sufficient to achieve this.

The reasons advanced by Senator Pearse Doherty as to why it is quite okay, economically, to vote "No" in the referendum were totally unconvincing. I believe it would be a huge mistake. He referred to certain investment figures. It must be borne in mind that most foreign investors are hoping, assuming or assessing that the Lisbon referendum will be passed and are making their decisions on that basis. If, on the other hand, the vote goes in the other direction, I believe it will have serious consequences. People such as Senator Pearse Doherty and other members of Sinn Féin really must pay some attention to people who have experience of business and decision making.

It is richly ironic to hear requests for apologies coming from Sinn Féin. For about 30 years, a very long time, there were as few apologies from that organisation as there were condemnations, and real evil was involved in many of those instances. Before making such calls, people like Senator Doherty should look at themselves in the mirror.

Senators Healy Eames and Buttimer made broadly the same point, that is, who will look after people under pressure? Practically everybody in this society, with some limited exceptions, is under pressure or certainly under a great deal more pressure than heretofore. Some people are in a position to adjust their habits; they would probably include most Members of the Oireachtas and others who are on relatively good incomes. However, others are under very serious pressure. There are various forms of assistance for employment and there is, of course, the social welfare system, which is being called on to a hugely greater extent. It is not possible for the State either under this Government or any alternative to be able to-----

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context

Make the banks pay.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

The Minister of State should conclude.

Martin Mansergh (Tipperary South, Fianna Fail)
Link to this: Individually | In context

The reason measures have been taken with the banks is that if the banks collapse, the economic consequences and hardship would be infinitely more catastrophic than they are at present. That is the sole reason those actions have been taken with the banks.

Paddy Burke (Fine Gael)
Link to this: Individually | In context

That concludes statements on the economy. When is it proposed to sit again?

Marc MacSharry (Fianna Fail)
Link to this: Individually | In context

At 10.30 tomorrow morning.