I wish to share time with Deputy McManus.
Last night was a sad occasion in this House when the Government forced through a vote which extended by another three months the blanket guarantee that had been operating for two years. This morning we see the extent of the guarantee and its effects on the economy — Ireland inc., so to speak — and taxpayers. The cost of the bailout will be at least €46 billion, the deficit has shot up to more than 32% and one of our major banks is to be nationalised. We find ourselves in a very sad position.
The Labour Party opposed the blanket guarantee from the beginning. Having opposed the pig in a poke, we now see what is in it, even if all tranches of the various portfolios have not yet been transferred to the National Asset Management Agency. The policy adopted over the past two years has resulted in an unemployment rate of 13.7% or 450,000 people, the emigration of more than 100,000 young people, a decline in gross national product of 20% and a further sharp dip into recession in the second quarter of 2010. These developments provide all the more reason for the Government to concentrate on a strategy for the economy and jobs. What we are seeing, however, is a Government with its face turned in the other direction.
We, on these benches, have repeatedly argued that the most important policy should be one to deal with small and medium sized enterprises. Every time the Government introduces a new element of its strategy, the main thrust is either to recapitalise the banks or to ensure they provide a credit flow to small and medium enterprises. As the Minister for Finance has indicated again and again, the latter forms part of the bank guarantee and NAMA process. There has not been a credit flow.
The small and medium enterprise sector provides 50% of jobs and 65% of all private employment, yet the Government does not have a strategy to retain existing jobs or promote expansion in a sector that is crying out for credit. The banks have not been able to provide credit and refuse to borrow from the European Investment Bank to do so within the parameters set down for expanding existing enterprises and establishing new enterprises. The Government has been in complete derogation of its duty in this respect.
The Labour Party proposes the establishment of a strategic investment bank using the National Pensions Reserve Fund to ensure that the SME sector, the lifeblood of the economy, is given the credit it requires. Every Member of the House has received letters from representatives of the retail sector in this city and around the country stating that it is being bled dry by the rise in commercial rents. In the past 12 months alone, 35,000 jobs have been lost in retail. Representatives of the sector argue that 80,000 jobs could be created if the Government reversed legislation providing that rent reviews for commercial leases may only be upward. This is a simple matter but the Government has not addressed it.
The Government's policy document, Trading and Investing in a Smart Economy: A Strategy and Action Plan for Irish Trade, Tourism and Investment to 2015, does not say a word about either of the sectors in which major job creation can take place. It will not be possible to get out of the economic mire without job creation and the key to achieving this will be to increase consumer spending and confidence. This cannot be done without a stimulus in the economy.
What is the main proposal with regard to the new quango, the foreign trade council, the Government announced last Tuesday? The new body will meet twice annually, will be chaired by a junior Minister, will not have a budget and will oversee the production of annual reports from heads of mission or ambassadors in overseas countries. That was the main thrust of the Government's economic policy. It is ridiculous that this is all it has to offer after such a long period of recession.
The Government hopes to increase employment in the tourism industry by 15,000 and will magically restore the 2007 tourism figures when 30 million people passed through our airports from a current figure of less than 20 million. How will this objective be achieved when an air traffic tax which imposes a burden on the airlines bringing passengers to this country has been introduced in the meantime? Surely in a recession, one does not want to establish obstacles for visitors coming here and spending significant sums of money. No ideas, even one as simple as that, are coming through. Retention of existing jobs, job creation, promoting consumer confidence and getting consumers to spend again are essential if we are to solve our problems. If we do not do this we will continue in the mire.
Listening to the Minister for Finance at his press conference this morning, I heard no sign of anything other than satisfying the international market. The Minister is satisfying the international market with all these austerity measures and with the old mantra of ensuring stability in the banking system, which of course we have not succeeded in doing, but where are the policies that will get the wheels of the economy moving? That is what this Private Members' motion is about and what we should be concentrating on. That is what is missing in the Government's strategy.