Joe O'Toole (Independent)
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I wish to share time with Senator Paul Coghlan.

Feargal Quinn (Independent)
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Is that agreed? Agreed.

Joe O'Toole (Independent)
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I express my appreciation to the Leader of the House for the opportunity to contribute to the debate and I know my colleague, Senator Coghlan, does as well. I thank the Minister of State, Deputy Mansergh, for spending his time in the House for these two debates. It is important that what people have to say is put on the record. It is important that the Government would listen to and engage with it.

I speak as someone who has supported every one of the Government's major proposals from the deposit guarantee two years ago. I have recognised what it is doing. I have stated on many occasions that some of the Opposition's proposals have not been without merit but that on balance I have supported the Government on those issues over the past two years. That is where I come from.

I must make an important point in this regard. When the Government talks about consensus and the ratings agencies look for political consensus, it is good to remember that consensus is a two-way track. The Government must show me, as an Independent Member, how many of the Opposition's proposals it proposes to take on board or has taken on board over the past two years. Regrettably, I have seen very little of that. I see this argument from all sides. It would be nice to see consensus, but consensus is a two-way street and both parties must buy into it.

I am getting the negative stuff out of the way at the beginning. In terms of the blame game, it is crucial to recognise the blame game is an important part of this process. People ask where it gets us. One might as well say we should get rid of the courts. We must look at how decisions were made, and the Government can see that from, for instance, Professor Honohan's report on banking. In many ways, that report exonerated much of what the Government has done. It was very fair but found aspects that were wrong in what the Government did. I go along with the view of former Taoiseach, Dr. Garrett FitzGerald, that one cannot blame the Government for all this, although perhaps one can blame the Government for some of it. It is important to look back and see where we came from in order that we learn from it. If we do not learn from it, we are creating a moral hazard. This idea of not playing the blame game is almost a licence for people to make mistakes in the future. If mistakes have been made, it is a moral hazard not to recognise them and indicate them.

The parties opposite, because they are in Government, will pay the price at the next election. That is the way politics works. Regardless of whether they are fully responsible for all that went wrong, that is the way the world works. The question that needs to be asked to give balance to what I am saying is whether we would be in our current position if Fine Gael was in government. I believe that if Fine Gael was in the Government, we would still be in a bad position. I will let Fine Gael and Fianna Fáil argue among themselves whether we would be in as bad a position as we are.

We need to look at where we are going and the positives as well. My view of the world is one I would recommend to most people. I only listen now to commentators who have some basis on which to comment. I look at the names of those writing front page stories and tend not to read those stories unless they are written by someone who has a basis for writing them. I do not care whether I disagree with them. I would be a long time in disagreement with Mr. Dan O'Brien, the economics editor of The Irish Times, but since he has moved from The Economist to The Irish Times his commentary has been extraordinarily balanced.

Martin Mansergh (Tipperary South, Fianna Fail)
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Hear, hear.

Joe O'Toole (Independent)
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The Minister of State might disagree with this.

Martin Mansergh (Tipperary South, Fianna Fail)
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No, I agree.

Joe O'Toole (Independent)
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Mr. O'Brien has been critical but has attempted to find balance, and we need more of that. While I do not mind people with whom I disagree offering their point of view, we need to be careful. Someone mentioned "Tonight with Vincent Browne". I watched that programme last Wednesday night when one of the experts said that if the Government had to put money into AIB the following morning, and by that stage we all knew it would, then we were in worse trouble then ever before and the yield on our bonds would rise. Someone, I think it was Mr. Vincent Browne, suggested perhaps in that case we should not go into the bond markets for the next few months, to which the reply was were we to do that, the yield would go through the roof. It was interesting, because one very rarely catches out economists, that precisely the circumstances he outlined occurred in the following 24 hours but the reverse of what he expected took place in that our coupon rate fell instead of rose. We should recognise that, because these people are putting themselves forward as experts in this regard.

An important point about the positives and the importance of exports was raised by Senator Mooney. This is a point I did not see on any front page. This country exported more in August of this year. I think the figure was €40 billion. It was the largest level of exports ever in the history of this State. It is important to recognise that. With all of the bad news, that is good news.

It is also important to look at employment. Our employment rate has now gone up to 86.4%. Being an optimist, I always prefer to look at the number in employment as opposed to the number in unemployment. Therefore, 86.4% of the workforce go out to work every day. As well as that, there are many pensioners who are comfortable and who get their pension every month or every fortnight.

In the middle of all of this, there is a substantial level of saving, as was mentioned by a number of Senators. We must unlock those savings but we cannot do so unless people have certainty. Ordinary people are the same as companies or entrepreneurs in that they need an element of certainty. If, for example, a Minister says the Government will cut back pensions and salaries, a couple thinking of going away to Cavan for a weekend, putting in new windows or extending their house will change their mind, ask whether they can afford it and decide they had better wait and see. The Government worsens the situation. One must create an optimistic certainty among people. This is not foolish optimism but a certainty of knowing their income will be maintained. One of the values of the Croke Park agreement is that it should commit public sector workers to spending their money rather than saving it for the rainy day because it will not come in the next two to three years.

I rarely quote ISME reports with any sense of confidence but I nearly swallowed my egg last week when I heard ISME state that the position between banks and the small and medium-sized enterprises had improved. It was the first positive note I had ever heard from Mr. Mark Fielding. He normally depresses me. There are pieces of good news.

It is important to recognise that the disaster with Allied Irish Banks was not caused by anything going bad in the economy. To make assurance doubly sure and for belt and braces, the Financial Regulator has insisted the amount of money the bank needs in assets should be raised from €7.5 billion to €10 billion. That is the reason AIB has had to get the extra funding. It is not that the prognosis has got worse. There are issues in that regard we need to examine.

We also need to look at an ongoing major debate on whether pension funds - not just our own but also private pension funds of pension companies - should be allowed invest in our bonds. I hope the Minister of State responds to this. Many pension funds are invested abroad at 2% or 3% at a time when they could be invested in Irish bonds at 4% or 5%, but they can only do that with a change in legislation and I would ask the Minister to do that.

The points made by the voluntary and community pillar in recent days are worth looking at. They were positive, optimistic and certain about what they could do and I agree with them.

The tax take needs to be increased. If I were to find fault with the Government, it would be on that issue. The tax take is far too low.

I again thank the Minister of State for coming to the House to participate in the debate.

Paul Coghlan (Fine Gael)
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I also welcome the Minister of State. I found much of what Senator O'Toole had to say refreshing. We all accept that he is fair and independent-minded. He told us that he was surprised, if not disappointed, that some of the good proposals from this side of the House had not been accepted by the other side.

We all know from those involved in the business world that we are in a bad place. We are crippled by costs that we are not able to control or get around, but we have to travel on with hope. I believe Fine Gael and, no doubt, the Labour Party will independent-mindedly examine the books.

Forgive the interruption. I am not sure that I know how to operate this phone. I apologise to the Acting Chairman, but I cannot switch it off.

Joe O'Toole (Independent)
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Pass it to me and I will do it.

Feargal Quinn (Independent)
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I forgive the Senator, but I am not sure the Cathaoirleach would.

Paul Coghlan (Fine Gael)
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I know what the Acting Chairman means.

Fiona O'Malley (Independent)
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The Senator could be fined and thrown out of the House.

Paul Coghlan (Fine Gael)
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A sensible proposal was made by Senator O'Toole in regard to pensions and restrictions on pension funds. It would be worth examining in the national interest and the amending legislation should be introduced as a matter of urgency in order that we could invest in ourselves, so to speak.

Fine Gael also agrees that the debt to GDP ratio must be reduced to 3% by 2014, the target agreed by the Government and the European Commission. We also accept that, because of higher debt servicing charges and a projected lower growth rate, the fiscal adjustment required needs to be at an amount above what has been agreed. We will make independent-minded decisions on what expenditure and tax measures are required to achieve the targets set. We will not be bound by the decisions made on particular expenditure cuts and tax increases which the Government may announce. We have had an enlightening chat about the matter, as one would expect. We are not, as Senator Mooney said, into having a one party State or one party rule. We do not need a national Government at this time for these and other allied reasons. We will continue to play a constructive role in the forthcoming debate on the budget. However, there will not be a second Tallaght strategy, as we all accept the context now is different.

Everybody is appalled at the waste of funds and the new revelations yesterday of FÁS-style waste in the HSE. Colleagues spoke about the issue on the Order of Business. Unfortunately, I was not called to speak about it, but sin ceist eile.

It is important that we hear from the Minister with responsibily for the public service. No one seems to know what cost reductions and savings are being made in any Department. The message seems to be that some Departments-----

Martin Mansergh (Tipperary South, Fianna Fail)
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I will inform the Senator about mine.

Paul Coghlan (Fine Gael)
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I have no doubt the Minister of State is top of the class. I would not expect him to be anywhere else. However, there are Departments which we are led to believe are lax and I have no doubt this is true. I was appalled recently to hear about an official in a certain Department - I will not name the official or the Department - who had told a person in a body under the aegis of the Department that he was not interested in making savings. He wanted something else, a direct contribution, but was not interested in making savings. That was a crazy comment for that public servant to make. Allegedly it is true; that is the story as it was relayed to me.

There is so much we could say about the banks, but I will not go into that matter now. I hope we will have a full debate on the issue in the House.

Martin Mansergh (Tipperary South, Fianna Fail)
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I thank all Senators for their contributions to what has been a very good debate and will try, with whirlwind speed, to go through some of the points made.

Senator Twomey asked for a progress report on the Croke Park agreement, an issue which, I gather, was also raised on the Order of Business today. It is a very important part of the reform programme in respect of the public finances, certainly in the case of my own quasi-Department, the Office of Public Works. I discussed the matter only yesterday with the chairman who, in turn, was due to meet trade union representatives on the subject. Obviously, the proof of the pudding will be in the eating. It is fair to say the agreement was subject to reconsideration if there were certain dire financial circumstances, but I am certainly in favour of seeing whether we can make it work to release some blockages in the public service.

In an ideal world one would maintain capital spending. In the very early stages of the crisis that was the Government's intention, but that did not prove to be tenable. Our capital spending is still relatively high compared to most EU member states, but obviously it cannot be excluded from the savings programme. I watched with interest the debate within the Labour Party on the subject of metro north, the immediate short-term cost of which would be very small. Like the DART, it would be financed over a period of 20 years. I personally would like to see it happen.

Senator s:

Hear, hear.

Martin Mansergh (Tipperary South, Fianna Fail)
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Senator Twomey made a point, with which I agree. He said the next Government - I mean this in a broad sense - would be tied to commitments entered into by the Government. I have seen this operate at eurozone meetings and it is nothing particularly new. I remember that in the late 1980s the incoming Fianna Fáil Government spent three years paying the housing grants granted by the previous Government. Obviously, the current context is much more serious, but, in terms of broad parameters, the commitments made will, under the Stability and Growth Pact, bind a successor Government. In case that seems intimidating, the main Opposition parties agreed the broad parameters - a cut of €4 billion - in the budget last year; therefore, it would not be an impossible challenge.

Senator MacSharry raised a number of questions about pension liabilities. I will give him a more detailed note later, but the net point is that, because the Government took over certain pension schemes from universities and non-commercial State bodies, there was or will be no payment into the fund in 2010 or 2011 and there will be only a partial contribution in 2012. The Senator also made a point about the current pension fund standard. That matter is under examination. In reply to Senator O'Toole, many issues relating to pensions will be considered and reviewed in the context of the budget. Senator O'Malley spoke about pension payments of €100,000 per annum. The real cost of pensions can be associated with the large lump sums that are paid.

Senator Quinn rightly highlighted the importance to commerce of services. Many job announcements come from that quarter. One also needs fundamental sources of production, such as manufacturing, agriculture, tourism and forestry. Germany, which is the most successful economy in Europe, has not abandoned manufacturing for services. That would be a more accurate description of the British model, which I am not sure is a good one.

I agree with a point made by Senator Boyle. I try to restrain myself from offering any false confidence because it elicits a negative reaction, rather than a positive one. I agree with his point that over the last 20 years, we have acquired an entrepreneurial belief in ourselves - certainly inside this country - for the first time.

Like Senator Burke, I am conscious of the importance of tourism. We need to do our best to improve, make accessible and keep open the heritage facilities that come under the aegis of the Office of Public Works.

I disagree with Senator Burke's comments about the visit of the Minister for Education and Skills to the United States. Education is one of the services we can supply to the US and to more distant places like China. There is great potential in this area. I accept his point that the visa situation needs to be straightened out in some instances. A Bill on that issue is being discussed in the other House.

I believe in cutting out waste. Since 2008, my office has cut its budget by 35%. I have also slashed the cost of my personal office.

A number of speakers, including Senator Hanafin, emphasised the importance of relations with China. I fully agree with them.

While I appreciate that people should always tell the truth, at the beginning of a crisis period it is not always realistic to expect people to be able to get immediately to the bottom of every aspect of a fast-moving situation in which judgments may have to be revised. I accept that some things may have been said in bad faith, or may have been hopelessly over-optimistic, but I do not think it should be assumed that everything that has since been proven to be wrong was necessarily said in bad faith.

Reference was made to Commissioner Rehn's comment that Ireland will cease to be a low-tax country. As far as I am concerned, Ireland ceased to be such a country in late 2008 or early 2009. A table in one of today's newspapers indicated that Ireland now has the sixth highest level of income tax in the EU. On the other hand, our level of PRSI is very low by comparison with most other countries. I heard somebody say we should decrease it further. We are very competitive with other countries on that front.

Senator Alex White suggested the House should hear submissions from organisations like CORI. The committee system exists to bring such organisations in, question them and allow them to make presentations.

I am afraid that reluctantly, I do not agree with Senator Norris's comments about the nominal 50 cent prescription charge. Perhaps I would have agreed with him 20 or 30 years ago. The evidence of the introduction of the plastic bag tax etc., suggests that a great deal of waste can be cut out by means of a very low nominal charge.