Private Members' Business. Economic Policies: Motion (Resumed).

The following motion was moved by Deputy Noonan on Wednesday, 20 March 2002:
That Dáil Éireann, noting the Government's failed economic policies which have resulted in:
–an increase of €13 billion per annum in the level of gross current spending or 79 per cent despite the Government's promise to keep the annual increase to 4 per cent;
–an underlying budget deficit of at least €1 billion in 2002;
–no real improvement in public services despite increased spending;
–a widening in the gap between the rich and poor;
–an inflation rate of 4.7 per cent which is almost double the European Union average; and
–125 job losses a day during this month alone,
condemns the Government for its failure to use the fruits of economic success to improve critical public services, or to achieve value for taxpayers' money.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann," and substitute the following:
"notes the sound and successful economic and budgetary policies of the Government which have resulted in unprecedented growth in living standards and employment, enabling strong improvement in public investment and service provision in tandem with a continued easing of the burden of taxation and national debt and the establishment of the National Pension Reserve Fund."
–(Minister for Finance).
An Ceann Comhairle: Deputy McDowell was in possession and I understand he is sharing time with Deputy Rabbitte. I call Deputy Rabbitte.

Last night we heard the Minister recite a long litany of the financial and economic achievements of the Government, some good and some foolish. I do not deny there were achievements, such as the expansion of employment and the improvement in the ratio of debt to GDP. However, it could not be otherwise, given the economic circumstances the Minister inherited in 1997. The test of this Government will be the shape in which it will leave the economy it inherited in 1997 on the cusp of a boom.

The Government foolishly pretends and persuades people to the belief that it is responsible for the boom. That is nonsense. I would not even claim that the previous Government was responsible for the boom. A conjunction of factors is responsible for the boom some of which go back more than 25 years in terms of investment in education and so on. The availability at a critical time of a pool of skilled labour attracted foreign direct investment and some of the lead players in the IT sector into this economy. It is nonsense to engage in games about who created the boom. The management of the boom is the issue and the question now is whether the Government is leaving an economy in the same shape as the economy it inherited in 1997. The truthful answer to the question is that the economy has changed dramatically for the worse in the past 15 months.

Yesterday in her annual speech on the Estimates, the Tánaiste told the House there were 19,800 redundancies registered last year. She went on to say that in the first two months of this year, the number of redundancies is 63% higher than the comparable period last year. For five successive months the rate of job losses has been higher than for any five consecutive month period even at the low point of the 1980s. That is how bad things are on the jobs front. Different colleagues on this side of the House have pointed to the job losses toll in their constituencies in recent months.

It is not just the question of job losses. Suddenly growth is stagnant and the rate of deterioration in the public finances is dramatic. Despite the Minister's conjuring job in the budget where he raided a number of funds including the social insurance fund, he cannot conceal the extent of the deterioration in public finances. It now appears all our eggs are in the basket of international recovery and the suggested expected recovery in the United States.

The Taoiseach may well regret his decision not to have a general election last May. Although the downturn had started by then and the economy was in a state of flux, the feel good factor still existed and he would have just about got away with it. To do so now is to perpetrate a fraud on the Irish people because the circumstances, as I have outlined them, have dramatically changed. The proposition that we can simply rely on recovery in the United States and on previous patterns to produce resurgent growth in this economy is not soundly based.

If I were to give one example to the House to show why we cannot rely on developments in the United States to lift all economic boats here, I would refer to one serious aspect of infrastructure deficit. I see that Deputy Michael Ahern is in the House. At 7 o'clock yesterday morning we attended a briefing on the rollout of broadband in this economy. It is an aspect that is seldom discussed in this House in the context of the infra structure deficit, but in terms of the casual reliance on us benefiting from any pickup in the United States economy, the whole question of broadband capacity in this economy is critical.

At present we are ranked at 27 in the OECD in terms of broadband capacity. Whereas in the public mind it might be associated with telecommunications, information transmission, entertainment transmission, etc., fundamentally the provision of broadband capacity in this economy is about economic development. Without that there is a real risk that improvements in the US economy will pass us by. Although I acknowledge roads are important, broadband is critical in tackling regional imbalance. In what is becoming a sickening pattern of deathbed announcements by the Government, we had to wait until the dying days of the Administration for a vague announcement by the Minister for Public Enterprise in this regard. As with so many other official announcements in recent weeks, it carries no credibility within the framework of no borrowing and no tax increases expostulated by the Minister for Finance last night and by the Taoiseach at his party's Ard Fheis.

Government intervention in this area is necessary and that means public investment. The Minister for Finance is grossly distorting the economic financial and budgetary reality. As my colleague, Deputy McDowell, showed convincingly last night, he concealed a budget deficit. I do not know what Deputy Roche is sneering about. The very sight of him sneering irritates me.

Deputy Rabbitte has a very low threshold.

As I commented before, a low threshold is something with which Deputy Roche would be familiar. Last night, Deputy McDowell, showed the Minister for Finance concealed a real budget deficit of the order of €2 billion as a result of the raids he mounted on the social insurance fund, etc. However, the chickens will come home to roost at the end of the year. The question for the Taoiseach and the Minister for Finance is how within the rubric of no borrowing and no tax increases he will fund the health strategy, the national development plan and the rollout of broadband. It is simply not possible for the Taoiseach, as he did at the Ard Fheis, or the Minister for Finance, as he did here last night, to feign to denigrate the notion of borrowing, to give an absolute commitment about no tax increases and at the same time to say we will tackle the infrastructure deficit, invest in our public services and implement the health strategy. It simply cannot be done, unless serious cutbacks are planned and perhaps that is the case.

Two days ago I attended a meeting of the Committee of Public Accounts. I am quite sure that one of the things that will be announced in the coming weeks is a public service embargo. In answering questions before the committee, the Secretary General of the Department of Finance can only be interpreted as foretelling that a public service embargo has been agreed in all but name. We should remember that Fianna Fáil fought the famous general election in 1987 on the slogan, "health cuts hurt the old, the sick and the handicapped". A month later in office it imposed the most savage cuts in the health service ever, from which we are still recovering. This represented a 180-degree turn. It was opposed to cuts the month before the general election and the month after it implemented them. It took 3,000 beds out of the system from which we have not yet recovered. I believe it will do the same now.

I wish to share time with Deputies Carey and Roche.

At the launch of Fine Gael's policy document Just Economics, a throw back to the just society which I believe they have thrown out, Deputy Jim Mitchell promised more borrowing. Of course, Deputies Mitchell and Noonan would know all about borrowing. Both of them were members of the Cabinet in 1982-87 which doubled the national debt and brought this country to its knees, indeed to the brink of bankruptcy. Does the country need a rerun of that period? It does not and I believe the people would say the same. Putting Deputy Mitchell at the helm of the financial ship would have the same result as when he was at the helm of Irish Shipping which he sank in all the ports around the world in the 1980s. How can one trust a schizophrenic leadership who, on the one hand, talk about economic hair shirts and, on the other, are all for throwing money, as evidenced from pronouncements in the past couple of weeks, where they think it will gain them a few votes? Deputies Mitchell and Noonan – dream team how are you. They are more like "d'Unbelievables" or "Tom and Pascal", two comic groups who, incidentally, also come from Limerick.

The past five years have been marked by, as the amendment states, sound and successful economic and budgetary policies of the Government. This has resulted in unprecedented growth in living standards and employment, enabled strong improvements in public investment and service provision in tandem with a continued easing of the burden of taxation and national debt and the establishment of the national pensions reserve fund. It is with growing incredulity I listen to many speakers from the other side denigrating the progress which has been achieved, particularly over the past five years. Much of their rantings bear no resemblance to the facts of life and the facts of the economy. The views of objective outsiders give a truer picture of our successes. Many countries, including countries of the former eastern bloc such as the Czech Republic, Poland, Hungary and so on, look to us as the example to be followed.

In 1997 this Government knew there was a need to change the economic climate to help the economy prosper. The sound management of the economy has been one of the cornerstones of the Government's success. Over the last four years we have achieved one of the best economic performances in the world. The economy has grown in GDP terms by an annual average of 10%, something which has not been achieved in any other country in the world. Living standards have been raised by almost one-third. Involuntary emigration has effectively ceased and more than 300,000 jobs have been created. Unemployment has decreased from 10.3% to less than 4%. Long-term unemployment has decreased from 5.5% to 1.2%. It is a fact that the public finances have been put on a sound footing. In 1996 46% of all income tax receipts were being swallowed up in servicing the national debt, which at that time stood at 74% of GDP. It is now down to 34%, a massive reduction of 40% over the past four and a half years. The proportion of income tax now being used to pay interest on the national debt is down to 21%, a reduction of 25%. Some 25% more tax receipts are now available for investment in other areas of the economy such as health, education, social welfare and so on.

We made a commitment to reduce personal taxation which we knew was essential to encourage people to take up work and put in a greater effort. Some €4.5 billion has been delivered back to the people in tax cuts. The standard tax rate has been reduced from 26% to 20%, the higher tax rate from 48% to 42% and the tax bands have been widened significantly. In 1996, 380,000 people who were registered with the Revenue were found to be outside the tax net. Today 690,000 people registered with the Revenue are outside the tax net, that is 37% of the workforce. All taxpayers have benefited substantially from the major tax reforms of the past five years. Criticism from the Opposition that the tax cuts only benefit the rich and very rich is not true. Just 11% of tax reductions went to cut the top rate of tax. More than 43% went to increasing basic tax credits, including PAYE allowances. Some 22% went to taking 370,000 people out of the tax net and more than 16% went to reducing the standard rate of tax paid by all taxpayers.

Our tax policies were aimed at promoting investment, rewarding effort, encouraging risk-taking and securing equality in the distribution of resources. In the business area we saw the need for incentives to create more jobs. The reduction of corporation tax from 36% in 1997 to 12.5% in 2003 helped in the creation of thousands of new jobs. Also the reduction of capital gains tax from 40% to 20% resulted in the freeing up of resources for investment and yielded more than a fivefold increase in the CGD tax take between 1997 and 2001.

Taxation is not the only area in which unparalleled progress has been made. Some 52,000 extra houses were completed last year. We are building 13 houses per 1,000 of the population, which is by far the highest rate in Europe. In the area of social housing, more than 4,000 local authority houses were completed or acquired last year. That is the highest level of output for more than 15 years. In the voluntary housing sector, 1,200 units were completed in 2001. Again, that is the highest level ever achieved by the sector.

In the health area, where there is grave concern, the facts show that great progress has been made in the past five years. Between 1997 and 2002, the spend in the health and children allocation increased by €4.5 billion, or 125%, compared to 1997. There are now more than 4,000 additional doctors, nurses and other health care professionals. Hospital waiting lists have been reduced by one fifth during the Government's term of office. The waiting list for cardiac surgery has been reduced by 49% and ENT waiting lists have been reduced by 22%. Behind this waiting list reduction lies a huge increase in the throughput and workload of our hospitals. The number of medical procedures performed has almost doubled over the past five years from 422,000 to 825,000 per annum.

There has been a massive increase in both capital and current funding in education. Capital funding for the building and refurbishing of schools has almost quadrupled.

The Deputy should conclude.

In conclusion, I commend the amendment to the motion, which shows the Government promised it would turn things around in the country. It has succeeded in doing so and we have a plan to continue to improve the economy over the next five years. I ask the people to show confidence in us and vote us back into power when we go before them in a month or so.

In normal circumstances in the life of a Government, a motion of this nature would come by way of a no-confidence motion from the Opposition to be countered by an amendment from the Government. It speaks volumes about the obvious terror in the Fine Gael Party and in the Opposition in general that they are not prepared to debate openly the policies of the Government and their policies and record. I am afraid I will hold some of their track record and the Government's record up to scrutiny.

The reality is that we are talking about which policies are best for the future. The Government has managed to achieve the highest level of employment ever seen in the economy, reformed the taxation system, especially personal taxation, improved public services and infrastructure, distributed resources fairly, significantly reduced the national debt burden and run budget surpluses, and made provision for the future by setting up the national pension reserve. Obviously there has been sound management of the economy by the Government.

Deputy Noonan suggested in his recent Ard-Fheis speech that Fine Gael, when last in office, restored economic security and sound fiscal poli cies after the first Haughey Government. This is a bizarre contortion of history. The Fine Gael leader must be reminded that in October 1986, a full four years after his party took office, this country had the highest debt per head on the planet. Barely a year after Live Aid – there are some who might remember that – Ireland had a higher debt per head than Ethiopia, Sudan or Chad, all thanks to four years of Fine Gael economic management. That same October, unemployment stood at 232,400 and emigration stood at its highest rate for 20 years. After four years of a Fine Gael-Labour Government, the figure had risen to an appalling 31,000 per year.

There has been criticism of what the current Government has done. Let us take the area of education as an example, an area about which I have heard a great deal. In 1998 the Government spent £133.2 million on first and second level education infrastructure, which was an increase of 45% relative to the spending of the previous Government. In 1999, the spending was £194 million, an increase of 113% relative to the allocation in 1997 by the previous Government. In 2000, the spend was £257.5 million or 181% of the previous Government's allocation for 1997. Last year we increased spending to £317.68 million or 246% of the previous Government's allocation in 1997. This year, when members of the Opposition at every meeting they can attend raise the lack of spending on education, the proposed spending is €337.6 million, an increase of 370% on or almost four times more than that allocated by the parties in opposition when they were in government five years ago.

In the area of social welfare, it must prove acutely embarrassing to members of the Opposition, including Deputy Rabbitte, that they voted for an increase of £1.50 per week for pensions.

He was delighted with himself.

The previous Government increased old age non-contributory pensions by just 9.9%. The current Government increased them by 48.7%. Widow's and widower's pensions were increased by 10.2% by the previous Government whereas we increased them by 36.6%. We have increased unemployment and disability payments by 38.6% compared with 10% when the previous Government was in power. Old age contributory pensions were increased by 10% by the previous Government and by 85.3% in the life of the current Government. I could go on but it would become acutely embarrassing for the Opposition, which is the reason it is not prepared to debate openly its record against ours.

My colleague, Deputy Michael Ahern, mentioned housing. There has been comment on the amount of public housing provided. More than 5,000 local authority houses were completed or acquired last year, the highest number in 15 years. More than 1,200 were completed by the voluntary sector. In 2002 we will spend €1.7 billion on housing. Fianna Fáil will spend three and a half times more on housing this year than Fine Gael or Labour did in 1997.

The issue of infrastructure has been touched upon. There is no doubt that the task of the next Government will be to focus significantly on continuing the Government's record investment in infrastructural development. Wherever one travels throughout the country, one sees massive investment. Let us take as an example my constituency where we waited for 30 years for a decision from any Government on freeing up land for commercial and residential development. The Government provided funding of £30 million for the north fringe sewer and about £100 million for the north fringe water main.

The sceptics said Luas would not be delivered, but it is in progress. If one walks around St. Stephen's Green, one can see work being done there. The Dublin Port tunnel, which will take 9,000 heavy goods vehicles off the streets of Dublin each day, is being built. The largest tunnelling machine in the world is being constructed to bore the tunnel which will be ready for use at the end of 2004.

The water quality management plan for Dublin Bay will, after years of neglect, be implemented. The Acting Chairman will remember the debates we had on Dublin City Council about the appalling condition of the water in Dublin Bay. It will have blue flag status next year because of secondary and tertiary treatment of the water supply. Some 300 extra buses have been provided under the national development plan. The metro project is well on its way. The number of road projects being undertaken is such that there is no doubt that the level of investment is unprecedented. The paltry and pale record of the Opposition is embarrassing by comparison. Without reservation, I support the amendment.

This is an interesting debate and I am pleased to contribute to it. The economic record of the Government is by any objective standards an impressive and progressive one. On each occasion on which the House discusses the question of the economy, one is treated to an extraordinary display of histrionics and downright mendacious economic revisionism, especially from the leading Opposition parties. We were not disappointed as Deputy Rabbitte rose to his usual low standards, and the mere presence of a Member who would accost him with his record was enough to have him scurrying out of the Chamber. That is exactly what we expect of that gentleman.

On the previous occasion I spoke on the economy, which was the Finance Bill, we were treated to a characteristically rip-roaring, fantasmagorical and, even by Opposition standards, bizarre performance by that economic guru from the far west, Deputy Ring. I remind Deputy Michael Ahern that not all the comedians come from Limerick, although there are one or two clowns from there, but there are certainly one or two others in other parts of the country who rise to very high standards of economic clowning. One of the interesting aspects of Deputy Ring's contribution was that he suggested that the 1970s was where the economy of today began. In a sense, perhaps he is right. A great deal has been spoken about the period from 1977 to 1981 and it is always taken that economics began in that period.

Ireland's economic progress dates back much further than that. The current economic position in which we find ourselves in this country, one of the youngest in Europe, had its foundations laid by a Fianna Fáil Minister, which is appropriate because great economic progress has always been achieved under Fianna Fáil Ministers. That Minister was Seán Lemass who had foresight and vision at a time when Ireland was lacking people with those qualities and imagination. He had the foresight, vision and political courage to launch the country in a particular direction.

The modern economy goes back to the early 1960s. We hit a bad patch in the 1970s and there is no point in gainsaying that. We crossed an important Rubicon during the period of the Government which ran from 1973 to 1977, which Members opposite often wish to overlook. We started borrowing on a significant enough scale for the first time to meet current expenditure. Keynesian or neo-Keynesian policies were followed with vigour in 1977 and 1981 and, with the benefit of hindsight, we would perhaps say those policies should have been truncated earlier than they were. It is interesting to examine the period from 1977 to 1981. We started from a very low economic threshold and the objective was to reboot and re-launch the economy. Economic circumstances changed dramatically in the late 1970s with the wars in the Middle East and the activities of OPEC with a quadrupling of oil prices as well as near civil war on our northern Border. We tend to forget that when we revisit that time.

By 1981 there was virtually universal acceptance in economic circles – Deputy Richard Bruton will bear me out on this – that the kind of expenditure we were engaged in was no longer sustainable and that we needed to cut back. In particular there was an acceptance that we could not continue to borrow simply to fund current expenditure. The reality is that the Government which was in office from 1982 and 1983 up to 1987 doubled the national debt, as Deputy Ahern has pointed out. The analysis, that accepted the Keynesian policies of trying to fund economic growth had failed, already existed in 1981, and was well accepted in the political community in 1982 and yet, when the parties now in Opposition controlled the economy in the period 1983 to 1987, they doubled the debt. That is a record of which they cannot be proud.

It took another Fianna Fáil Minister to take the reigns in the Department of Finance and call a halt to the madness that existed. It was interesting to listen to Deputy Rabbitte's subjective analysis of the period. There was an extraordinary lack of generosity which we have grown to expect from Deputy Rabbitte because he does not recognise that if we had not taken control of our economy in 1987, the World Bank would have. The point has been made that we enjoyed a rate of borrowing that was on a par with impoverished Third World countries. The Irish economy was re-launched by courage from 1987 onwards. I well remember the period 1987 to 1989 when a minority Government that was trying to put the economy back on track was beaten time and time again, usually on Private Members' motions. The Opposition could if it wished have overturned the economic policies of that Government. It did not because of the foresight of one man who does not get enough recognition, the then leader of Fine Gael, and I am prepared to pay generous tribute to the Tallaght strategy.

The Tallaght strategy would only have been a success if there was a Government with the courage in office to turn the economy around. That is why the announcements yesterday by the Fine Gael finance spokesperson, Deputy Jim Mitchell, and his comments in the newspapers bring a smile to my face.

The political record in the more recent past is what we should judge politicians on. We should not judge them purely on rhetoric because everybody in this House intends to do their best but if one examines the record in relation to health, which will be a big issue until May, during the last Fine Gael-Labour Party coalition one will see it was a disaster, particularly when one recalls that Deputy Noonan was in charge. It brings a smile to my face and a chill to my heart to think that a person who had such a disastrous record on health could be in charge of the economy as a whole. Health spending increased by just £400 million to £2.5 billion in the period up to 1997, less than half its current level, and let us not forget that waiting lists increased during that period by 27%. Incredibly, the Fine Gael-Labour Party coalition cut funding for the hospitals waiting list initiative in 1997 by 20%.

Let us examine the record on social welfare because Deputy Rabbitte comes to this House and parades his ersatz socialism as he does on his Prime Time slots on RTE. While his party leader was Minister for Finance and his party president was in charge of social welfare, old age contributory pensions increased by only 9.9%. Child benefit increases of £1 and £5 were given in Deputy Quinn's budgets. Those increases compare miserably with increases of £25 and £30 in the last two Fianna Fáil budgets but the most derisory and insulting thing they did while in office was in 1995 when it gave old age pensioners a miserly £1.60 per week. That was the meanest act since the time many years ago when Fine Gael cut the old age pension. It is astonishing to sit here and see Deputy Rabbitte ascend the Everest of his own indignance and pomposity and discuss the economic record of this Government. The man voted to give pensioners £1.60. He should be thoroughly ashamed of himself, his party leader and his party president.

The non-contributory pension has increased by almost 60%, from £67 to €134, under Deputy McCreevy's budgets. The widows' and orphans' pensions have increased to €144.80. Much has been achieved and much more needs to be done. We have entered into commitments which will be honoured by the next Fianna Fáil-led Administration.

Another issue the Labour Party likes to address is housing. It was dealt with by the last two speakers but let us reiterate the record. Since 1997, a staggering 215,700 new homes have been completed. Last year over 5,000 local authority houses were either built or acquired, the largest number in 15 years. In Wicklow, we are undergoing the biggest programme for 30 years. Over 1,200 houses were completed by voluntary agencies. Under the last Fine Gael-Labour Party Administration, local authority housing output actually fell by 11% to a low of 2,632 houses. That Government's record was miserable and the misery of that record can only be appreciated when one looks at the final year. In 1997, the Government spent less that one third of the amount being spent by this Government on local authority housing in 2001.

The health record also bears examination. The health budget has doubled to £8.2 billion during the term of office of this Administration. People will say it is not enough and others will say one can never have enough money for health. We need not just more funding but better management. Public transport is another issue which is being celebrated on the billboards but when one examines the track record of this Government, it makes that of the previous Administration pale into insignificance.

The record of this Government is that it has achieved a level of employment never seen before. It has reformed the taxation system. Other parties have talked about it – Fine Gael had a strong commitment in this area but were not allowed to deliver by their partners in Government. This Government has delivered: it has reformed the taxation system, in particular personal taxation. It has improved public services and infrastructure, created the conditions for over 300,000 additional jobs to be created, shared the fruits of economic growth fairly throughout the economy, committed substantial amounts of money to social welfare, built the national pension reserve fund and created, through radical taxation measures, a sense of security into the future for pensioners. The Government has also significantly reduced the national debt. Our economy has grown, in GDP terms, by an annual average of almost 10%. Living standards, inper capita consumption terms, have risen by almost one third. Involuntary emigration is now virtually unknown. We are the envy of Europe because of economic policies masterminded by the Minister for Finance, Deputy McCreevy, and delivered by this Government. Involuntary immigration is now virtually unknown. We are currently the envy of Europe because of the economic policies masterminded by the Minister for Finance, Deputy McCreevy, and delivered by this Government.

I wish to share my time with Deputies Gerry Reynolds, Flanagan, Crawford, Jim Higgins, Boylan and Healy.

Is that agreed? Agreed. The Deputies have 30 minutes between them.

Five minutes will be plenty for me. Deputy Roche spoke about Ireland being the envy of Europe. We have an enviable economic record, a strong private sector and great growth in private sector employment, but we have a pathetic record in delivering serious public service reform. We are very like the American economy in the 1960s, which the economist John Kenneth Galbraith described as "public squalor in the midst of private wealth". He painted a vivid image where streets were strewn with litter, people lay on hospital beds in accident and emergency wards, and children left school without basic literacy. We have created the same phenomenon. The Government is particularly guilty because it had an opportunity during five years of almost double digit growth, yet it failed to deliver public service reform or any serious improvement in public services to the people we are here to serve.

The glib arrogance of the Government can be summed up in the statement of the Minister for Finance that now is the time to get out and party. That sort of frivolous arrogance has typified this Government's approach to public policy. We have serious problems in our economy and in public services, but far from reform we have had crude attempts by the Government to pay its way out of the problems we are facing. We will rue the day we took that approach. The disciplines of prudent public spending policies have clearly been abandoned, this year in particular. We have seen a 2000 surplus of €3,000 million turned into a projected deficit for this year, and an even bigger deficit in the following two years. The epitaph of this Government will be that never has an Administration spent so much to achieve so little. Critical areas crucial to our economic competitiveness have been handled in a ham-fisted manner thus affecting businesses.

Deputy Rabbitte has described the problems we are facing in the telecommunications sector where, while we once enjoyed a lead, we now find our broadband access behind that of Mexico and Poland. There has been no serious reform of the public service which will be one of the negative bequests to the next Government. Benchmarking has been a sham; it is only a way of deferring public service pay increases to the next Government. There has been no serious reform of public service structures to match pay increases. One trade union leader described benchmarking as an ATM machine. The process is unreconstructed and unreformed with everyone doing as they always have done, yet expecting large public service settlements. At a time when we are facing into economic difficulties, that approach will leave the next Government to cope with far greater problems.

It may have been party time for the close friends of the present Government but it certainly has not been for those involved in the daily struggle with the sort of public services that pass as adequate in this State. We now know that the health services are struggling close to breaking point. One third of nurses leave accident and emergency work every year because they cannot take the abuse and other difficulties they face there. These problems are now bubbling to the surface and there are belated attempts at reform. How arrogant it is for the Government to produce a ten-year strategy for health within two months of leaving office. It is a pathetic approach to managing serious public sector reform. Our health services need to be reformed, yet no such reform has been undertaken.

The education system is another case in point. One out of every five children still leaves school without sitting the leaving certificate, and one out of six leaves school with serious literacy problems. There has been no reform of our education structures. We have the most centralised Department of Education and Science which is leaving teachers to struggle without technical support, and which does not even measure literacy standards. How can that pass for reform of a crucial area such as education which is the source of our future economic growth?

Last week, I produced a report on traffic for the Committee on Public Enterprise and Transport. The Government's record in that regard is pathetic. The deficit of Dublin Bus has increased tenfold in the past five years and, despite increased spending, fewer passengers are using the service. We have no park and ride facilities, no integrated ticketing system, and no competition among bus companies, which was a darling issue for the Progressive Democrats of which the Minister of State, Deputy Cullen, was formerly a member. In addition, we have no Dublin transport authority, no real time information, and public transport is losing its share of the market, falling from 30% to 25% during this Government's tenure in office. The Government has failed to bring about public service reform and that will be its epitaph.

I thank my party colleagues for the opportunity to say a few words on the Government's failed economic policies. Agriculture has experienced serious problems, including BSE and foot and mouth disease, yet the Government has allowed the basic agricultural structures to become run down. In 1997, the last year of the rainbow Government, Deputy Yates held the post of Minister for Agriculture and about £104 million was paid out in agricultural grants for farm buildings and dairy hygiene. That was done with the support of Deputy De Rossa of Democratic Left who was highlighted by Fianna Fáil, in the run-up to the last general election, as having been the main problem of that Government. They are now questioning whether a new Government might be held back by the Greens, but what has the current Government done? It decreased grants for farm buildings and dairy hygiene from £104 million to £12 million last year. Is that inflation or deflation? It demonstrates the Government's lack of commitment to agriculture. In the same period, four agricultural colleges closed. The only agricultural target this Government will achieve is the suggestion by the Minister for Agriculture, Food and Rural Development, Deputy Walsh, that there will be less than 20,000 full-time farmers by 2010. If Fianna Fáil remains in Government after the election that target will be reached and, in fact, there will be a lot less than 20,000 full-time farmers.

The Government has failed on many agricultural issues, including live exports. The main issue I wish to discuss, however, is the peace dividend. We all supported, and to some degree were involved in, the negotiations to bring peace to Northern Ireland. We were assured that if that happened there would be a peace dividend for the Border regions. I remember walking across the floor of the House to the then Taoiseach, Deputy Albert Reynolds, who, in fairness to him, gave me a commitment that some money would be made available for re-opening Border roads. What has happened in the last five years, however? There has been no restructuring of the N2 or N3, no gas pipeline and no broadband. Above all, in the health sector, Monaghan General Hospital has been almost completely ignored. A few patches may have been applied here and there but there has been no real commitment to restructuring the hospital. This Government will be remembered not for what it did in the Border regions, but for what it failed to do there.

The Government could have achieved something with cross-Border bodies but did not do so. A cross-Border body was situated in Cork, not in Monaghan. The Government will certainly be remembered in the Border regions for its failed economic policies. We were guaranteed that, if we provided the wherewithal for three by-passes, money would not be an issue. However, we have not even received one such by-pass. That is a disgrace because, in the absence of rail lines, airports, etc., roads are the only means by which people in the area can travel. The Government's economic policy has failed.

I apologise to Deputy Belton for interrupting him when he was commenting on the new gas pipeline. When one realises that Clara, County Offaly, will be connected to this new line, all one can say is that Ministers obviously count.

I welcome the opportunity to contribute to the debate on this motion. Like the character in the movie "Jerry Maguire" I am prompted to say "Show me the money". God knows where the money has gone. What happened to it?

The Deputy should look around.

I am my party's front bench spokesperson on regional development, a concept which is non-existent in the minds of the members of the Government. We have had unprecedented economic growth in the past five years. No country in the OECD has experienced such a high level of growth during that period. However, nothing has been done here to promote regional development. The country is creaking. The eastern seaboard is in a mess and there are no people living on the western seaboard. One does not need to be a genius to work out what must be done. There is a need for infrastructural development which, to date, has not occurred.

Public expenditure has risen to 22% this year. Deputy McCreevy staked his reputation on being a Minister for Finance who would keep public spending under control. In the first two years of its term of office the Government managed to keep spending within the 4% limit it laid down. However, in the past two years or so it has gone completely out of control and has now reached 22%. The sad aspect is that no results have been achieved despite this high level of spending.

I made a statement yesterday regarding the Bord Gáis announcement about the towns that will be connected to its new gas pipeline. I said the new natural gas pipeline has the fingerprints of Cabinet Ministers all over it, despite arguments from Bord Gáis that only commercial considerations were taken into account. That is not the way to run Government. Decisions of this sort should not be based on where Cabinet Ministers live. What is needed is a properly balanced regional development policy. However, the Government has failed to put one in place. I wish to highlight some examples of this failure.

The first of these is the brain drain from the north-western region. A total of 85% of all second level educated children in Sligo and Leitrim proceed into third level education. When they graduate, only 7% obtain their first job in County Leitrim while only 12% obtain their first job is County Sligo. Up to 48% of these people obtain their first job in Dublin and will probably remain here for the remainder of their lives. There is no third level university in the north-west.

There is none in the south-east either.

Another mistake on the Government's part. Both regions should have such universities. Sligo is supposed to be a spatial growth centre and the Ministers for the Envir onment and Local Government and Marine and Natural Resources continually state that it will be connected to the natural gas grid. However, this has not happened despite the fact that money is available for it. With regard to the spatial strategy, the NRA made an announcement about the inner relief road in Sligo – the most vital item of infrastructural development necessary for that growing city – but no funding was provided for the project this year, despite the fact that only €5 million is required.

The Government has squandered the money from the economic boom. It had the greatest opportunity ever presented to an Administration to implement its policies in order to ensure that the country could benefit from balanced regional development, but failed to take it. I guarantee that Fine Gael, when in Government, will make a much better fist of matters, even though it will have less money to do so.

All independent commentators agree the economy was in good shape when responsibility for it was handed over by the rainbow coalition led by Deputy John Bruton. A blind man could have steered the economy through its recent period of success. Regrettably, however, this inept Government was incapable of doing so. Following a period of unprecedented economic opportunity and growth, we are now faced with the fact that the wealth of the nation has disappeared. Everyone is asking what has happened.

I was in the Chamber approximately 14 or 15 months ago when the Tánaiste stated that there was so much money in the Exchequer that the Government would have to accelerate its programmes of national development in order to spend it. At that time we had a surplus of billions. Only 12 months later the Minister for Finance was obliged to raid the social insurance fund to plug a leaking hole in the economy. However, he only told half of the story as £1 billion was not sufficient because the shortfall had risen to £2 billion. It is no longer a leaking hole, the economy is like a sieve. The great projects, programmes and policies that were previously mooted have now been placed on the long finger.

I have in my possession a list of national schools in my area which are awaiting major refurbishment and extension works. The work on Butlersbridge national school, situated close to where I live, has been in the pipeline for five years but nothing has happened. The Department has been stalling on this project and all we have received is an insulting reply from the Minister, to which I will refer later. Refurbishment works are also required at St. Clare's school, Ballyjamesduff, and Lackan national school near Bellananagh, which is outside Cavan town, where the teachers are obliged to move desks away from the partitioning wall in case the glass falls out and injures the children. Outside this school, an area has had to be cordoned off to prevent children being hurt by glass falling out of windows. The teachers are obliged to plug holes with paper in order to keep the draught out. Work on this school has been in the pipeline for ten years but nothing has been done by successive Ministers.

On the list to which I refer there are many other schools, such as St. Anne's in Bailieborough, which require refurbishment works and improvements. However, all that has been forthcoming is an insulting and stupid reply from the Department of Education and Science to the effect that €153 million, a record level of funding, has been provided and demonstrates the Government's commitment. Where is that commitment if I alone can produce a list of schools that are in dire straits? If a child is injured in Lackan national school, the Minister will be held responsible.

Work on the national roads programme has also been placed on the long finger. That is not good enough; it is not acceptable. I advise the Government, before it does any further real harm to the economy, to pull down the blinds, get out of office and let Fine Gael assume power. We have a proven track record, we have successfully managed the economy in the past and we will do so again. The people are waiting for honest, decent management and accountability. We will stand over what we do in Government. We will not, as the Tánaiste did this morning, stand there and waffle on. For a person who stakes her political reputation on her integrity, she let herself and her party down badly. However, she did not let the Government down because we expected nothing more of it and we got nothing less.

The Government's amendment asks us to note its sound and successful economic and budgetary policies. The vast majority of people know that while there has been prosperity in recent years, there has been no fairness. That prosperity has been limited to Ministers' constituencies. Ministers have shovelled millions of pounds into their constituencies to the detriment of other constituencies throughout the country.

In the past 12 months there has been an increase of 22,800 on the dole queues. My constituency, Tipperary South, has experienced a significantly higher level of unemployment than the remainder of the country in recent years. The rate of unemployment in Tipperary town and Carrick-on-Suir is running at three or four times – between 12% to 15% – the national average. Unfortunately, both are listed as among the four most deprived towns in the country. In addition, a large part of Clonmel is listed in the deprived category in the recent RAPID report. In the past 12 months, unemployment levels in Carrick-on-Suir have increased by 12.5% and 1,000 people out of a population of 5,500 in the town are unemployed.

The figure for Cahir is up by 10% over the past 12 months and the figure for Cashel is up by 13.4% in the past few months.

As far as south Tipperary is concerned, the Government has been a liability. It has promised decentralisation on four occasions over the past two years but that has not been delivered. Cahir has a housing waiting list of up to six years, with 120 people on the waiting list for this small town. There is no radiotherapy service in the region and cancer patients have to travel to Dublin or Cork on a regular basis, with consequent trauma to their families and themselves. As other speakers have said, our schools are awaiting extensions and refurbishment, right across the county from Mullinahone in the east to Annacarty and Mount Bruis in the west and many other places also.

This debate has shown that the essence of the problem lies in management and a complete lack of managerial competence at Government level in relation to the national development plan. It has now been revealed that the national roads programme is grinding to a halt as no new major road projects will commence this year. The Monasterevin bypass, the Ennis bypass, the Carrickmacross bypass, the Cashel bypass and the Sligo town relief road are at construction stage but there is no funding available to complete those projects. This reveals a total absence of forward planning across a range of Departments. As year three of the national development plan begins, there is an immediate need for an urgent review of all aspects of the national roads programme. The Government needs to put in place a management system and professional expertise capable of implementing the plan within the time scale. That is seriously lacking.

The national development plan proposes to eliminate infrastructural deficit which is severely hindering Ireland's ambition to be a world class economy. Business and enterprise are suffering as a result of failure to meet the targets under the national development plan. This is one of many failures on the part of the Government. Essentially, we are suffering from systems failure and management failure. Our transport infrastructure is in a ramshackle state. The Kildare bypass will finish but the Monasterevin bypass will be years behind. The bottleneck is simply being shifted six miles down the road from Kildare to Monasterevin. I can tell the Minister of State, who perhaps does not use that road on a daily basis, that this has seriously hampered the enterprise expansion programme for the midlands and beyond.

The health service is a shambles. There are 850 schools in need of repair. One would be forgiven for thinking the Government had been penny-pinching in relation to public spending. As recently as 1999, gross current supply services spending amounted to less than €20 billion. This year, the figure will be more than €30 billion, an increase of 50% in three years or over 15% per annum on average. Over the same period, capital spending will have risen by almost 70%. Those are frightening rates of increase, with very little return. If those figures are sustained, big increases in tax rates will be required or else there will be a return to large scale Government borrowing. Either way, the growth potential of the economy would be fatally undermined and we would be plunged back into a fiscal crisis. That is a real danger and the Minister of State has some responsibility in that area. How can public spending grow so rapidly while the quality of many public services remains appallingly low and the quality of other services continues to deteriorate?

Let the message be clear, the Government has presided over a massive rise in inflation, the highest in the Euro zone and twice the EU average. It has allowed an increase of €13 billion per annum in current spending, which is totally out of line with commitments given in its manifesto. The economic reality is that the Government has gone completely off the rails. Meanwhile, the rich get richer, the poor get poorer, jobs are lost and public services continue to deteriorate. The blame for this massive failure clearly lies on the desks of the Taoiseach and the Tánaiste. In essence, the Government has squandered the boom.

Mayo): When the Government assumed office, following the rainbow Government, the Celtic tiger was rampant, its roar could be heard internationally and the prognosis for the future was exceedingly bright. Today, the Celtic tiger is well and truly back in its cage and its roar has been reduced to a purr. When the Government took over five years ago, we had a huge budget surplus, a huge surplus on our balance of trade, low inflation and massive foreign investment. I vividly recall sitting in Cabinet and having memoranda presented in relation to new industry coming into the country. There were two or three mega scale job announcements every week and home grown industry was thriving. Emigration had dried up and we now had immigration, with people seeking work permits, visas and, in the case of some who had been here for a number of years, Irish citizenship. We had a stable industrial relations climate. We had sorted out an industrial relations problem which had been one of the major obstructions to national growth and prosperity.

However, the Celtic tiger has gone into the sand. In the past five years, we have had unprecedented industrial relations problems in sectors where they had not occurred before. We had the first national farmers' strike, when farmers were compelled to sit for weeks on end, heating themselves with tar barrels, trying to make their case in relation to cattle prices and to break up the cartel. We have had two national nurses' strikes, for the first time ever in the history of the State. For the first time ever the Garda Síochána, one of the cornerstones of democracy and the preservation of law and order, was forced to go on strike in what became infamously known as the "blue flu". Secondary teachers went on strike last year and again this year there is a very inconvenient work to rule in place. In Aer Lingus, there have been strikes by pilots, cabin crews, ground staff, baggage handlers and caterers. Taxi drivers and train drivers were also on strike. In the public sector, which should be leading the way in terms of industrial relations, further strikes are threatened in search of their pound of flesh before the expiry of the Government.

During the rainbow Government, there were job announcements every week. We are now losing 150 jobs every day, but the 25 to 50 job enterprises that are closing down, with devastating consequences for the employees, no longer make the headlines. We hear of job losses in the range of 200, 300 and 400 every day and there are no replacement jobs coming on stream. In the public sector, Aer Lingus has had to shed one third of its staff. Some 1,200 jobs have to go in An Post and 200 in RTE. In both the public and private sectors, jobs are being lost by the new time, without any replacement jobs. In reality, the bottom is fast falling out of this economy. Neither the infrastructure nor the forward planning are in place and the Government seems to act as if there was no tomorrow, as if we were riding on a magic carpet, as if the economy was on autopilot and as if management did not count. At the end of the day, management, foresight and planning are absolutely crucial.

Nowhere has planning been more abjectly absent than in relation to the national development plan, a plan that has not delivered the infrastructure which this country so desperately needs. If we look at the revenue figures for the first two months we find them hopelessly behind target. If the revenue yield is as abysmal for the next four months as it has been for the past two months, the next Government may be forced to introduce a mini-budget. That would be the first time that happened since the former Taoiseach, Deputy Garret FitzGerald, took office in the period 1981-82.

There is traffic chaos and there is an abysmal need in the areas of insurance and infrastructure. The verdict is that these have been five wasted years. The Government has blown the boom, the jury is out and will give its verdict in the next three months. I am convinced that the verdict will be one of guilty on the part of the Government in terms of performance.

It is very sad to listen to the Opposition, in particular Fine Gael which is very much bereft of ideas, policies or any original thought process. God be with the days when their late colleague, the former Deputy John Kelly, came into the House to put forward a vision of what Fine Gael had in mind.

(Mayo): They were just economics.

Whether I agreed with him, at least he had vision, but all Fine Gael seems capable of now is carping from the sidelines and misrepresenting the facts. I am convinced the party is disappointed the economy is not in recession as that would suit it. If it could talk it into one that would certainly be an objective as it seems to be the only policy emerging from Fine Gael.

The Government's record on management of the economy speaks for itself. Since 1997, about 300,000 new jobs have been created; unemployment has fallen dramatically, from 10.3% in 1997 to 3.9% last year; long-term unemployment has fallen from 5.6% in 1997 to 1.2% last year; involuntary emigration is no longer an issue; disposable income levels have risen substantially; social protection has been enhanced significantly; and the long-term public finances have been put on a more stable, sustainable footing.

While it is true that economic growth slowed from mid-2001, this largely reflects factors outside our control. For instance, the moderation in growth reflected external factors, such as the slowdown in the US economy, the threat of foot and mouth disease, global difficulties in the IT sector and the terrorist attacks in the US. Despite the temporary set-back, the prospects for the Irish economy remain favourable and I am confident it will return to GDP growth rates of around 5% from next year onwards, which will still be by far the best in the OECD and certainly the best in the EU. This is a prospect which is the envy of our EU partners. However, nothing can be taken for granted. We must ensure that Ireland remains a competitive place in which to do business.

Indeed, we are aiming to do even better. We are vastly improving the economy's infrastructure, encouraging investment and enterprise, and working hard to improve the regulatory framework within which business operates, as well as facilitating cost moderation through our commitment to social partnership. This year's budget was framed against the background of ensuring that the economy is in a position to benefit fully from the rebound in global economic activity. Indeed, on the basis of some indicators, there are signs that economic activity is already improving, most notably in the US. Developments there are particularly important from an Irish perspective, given that the US is the main source of foreign direct investment into Ireland, our second largest export destination and one of the main drivers of world economic conditions.

As I outlined earlier, the Government has put the public finances on a more stable and sustainable footing. We have run budget surpluses during our time in office, the national debt has fallen substantially and is now the second lowest in the EU. We have significantly reformed the taxation system, particularly in the area of personal tax. All taxpayers have benefited substantially from the major tax reforms and tax reductions which the Government has introduced. The tax reductions have helped to cement the social partnership process, which has played an important role in our recent strong growth.

The Government has substantially improved the country's stock of infrastructure, with major resources being committed to roads, public transport and housing. The first two years of the national development plan have seen a sustained roll-out of the infrastructure programme in terms of roads and public transport. The evidence of this is available throughout the country where large infrastructural projects are currently under way. In relation to social housing, over 5,000 local authority houses were completed or acquired last year, the highest level of output for over 15 years. The Government is also delivering on its promise to improve public services, most notably in relation to health, education and social inclusion. Between 1997 and 2002, we increased the gross allocation to the Department of Health and Children by over €4.5 billion or 125%. Hospital waiting lists have been reduced by one fifth during the Government's term of office. The Government has also delivered in terms of investment in the area of education, where capital funding for building and refurbishing of schools has almost quadrupled since we came to office.

We are strongly committed to social inclusion. The rates of social welfare, child benefit and old age contributory pension have been increased substantially during the Government's term. The facts speak for themselves. The latest figures from the Economic and Social Research Institute show that the level of consistent poverty continues to fall, to 6% of the population in 2000 from 15% in 1994. However, there are still challenges to be met and the Government is determined to build on the progress achieved.

Looking to the future, the Government has moved to place the long-term public finances on a more stable footing by establishing the national pensions reserve fund. The aim of the fund is to smooth the Exchequer burden arising from the additional cost associated with the ageing of our population. By pursuing sound, consistent and clear economic policies, the Government has delivered the conditions which have created strong economic growth. This has generated large increases in employment, incomes and living standards for all, and will continue to do so into the future.

There was a time when I respected the Minister of State as a serious thinker and an honest contributor in this House, but his opening remarks were unworthy of his previous record. His vicious and unfounded attack on Fine Gael flies in the face of the economic policy document we published this week in which we praise the economic achievements of the country. We state that the economy is very strong.

The Deputy should have said it to the previous speakers from his party.

The economy was destroyed by one manifesto in 1977 and it has taken us 20 years to recover from it. By means of the Tallaght strategy, which built on earlier efforts, the economy was turned around, but the Government is trying to wreck it again. I do not understand why the media is complicit in this. Why does it not highlight the fact that our public finances are hurtling out of control?

The Minister of State did not refer to the fact that last year current spending went up by 22%. These are not our figures, they are the figures of the Minister for Finance. Income went up by 4% last year, which is a gap of 18%. This year the Government estimated in the budget that expenditure would go up this year by 12%. In February, having taken into account the developments up to the end of the year, the Department of Finance revised that to 14%. Yesterday the Minister of State, speaking on behalf of the Minister for Finance at the Select Committee on Finance and the Public Service, said the figure is 14.4%.

Growth of 14.4% this year on top of 22% last year will come to a compound of 39.6%, and that is if the Government meets its objectives. There has been almost a 40% increase in expenditure and to make matters worse, there is underspending on capital, implying that the percentage on the current side would be even higher. The Exchequer finances are hurtling out of control and we are heading for a crash unless something is done. The figures for January and February are much worse than the Government expected in terms of expenditure. Incomes rose by less than 4% in the first two months. If we add 22% for the first two months of this year on top of 22% from last year, we get close to a compound of 50%. There has not even been the slightest indication from the Minster of State that he understands the problem.

The Deputy accepts that is not the outcome.

The Minister of State used to be an honest speaker in the House. It is the type of politics that the Minister of State promoted earlier in his speech that brought this country to its knees. It involves a lack of honest, clear thinking. I appeal to Ministers to get their acts together and to put their national duty first, not squander the tremendous achievements of our country. That is what our document "Just Economics", published on Wednesday, is about. It sets out a reasonable format for continued economic growth and for continued, well-managed growth in public services. We are not asking the Government to cut anything, we are simply asking it to stop increasing spending at an untenable rate. The scenario is like that of a car travelling down a motorway at 150 miles per hour. It is going to crash, whereas if it stuck to 70 or 80 miles per hour it would be doing very nicely. If the economy did that, it would continue to grow.

Fine Gael has set out the formula for the highest tenable growth in current expenditure, which is nominal growth plus 2%. Nominal growth pays for itself because that is the growth in the economy, being inflation plus real growth, and as most of the Government's commitments go to dealing with inflation, one has something left. One can, therefore, afford to spend a little more than nominal growth to improve public services. If one spends more than that one gets an inflationary scenario rather than one of output. Spending more allows things to grow too fast and one loses value for money, which is what is happening. If one is growing at anything like 22%, one is heading for a crash and one will cause an awful lot of damage and heartache. After the crash, one will have to impose taxes to make good the damage done and those taxes will, in turn, have a depressing effect on the economy, leading one into a vicious circle like that into which we got ourselves post-1977.

That is the Exchequer reality at present. People say to us that we cannot realistically expect the Government to do anything with six or eight weeks to go to an election. I do not expect the Government to announce in blaring headlines in the newspapers that they have got things wrong. It is not going to do that, but in the interests of the country every Department should be told categorically that it is not to exceed expenditure as projected in the budget. Those targets at least must be adhered to. Regardless of the election, it should not entertain or permit growth in expenditure which exceeds what was provided for in the budget. What was provided for in the budget was 12% and that can be lived with under the Fine Gael formula because we expect growth of 3.5% this year while inflation will be 4.5%. That is 8% and 2% on top of that comes to 10%. We could get away with 12% for this year, but already spending has climbed to 14.4%. Given what we saw in the figures for January and February it is going south and that is not a nice legacy to leave to an incoming Government after the tremendous time we have enjoyed over the past seven or eight years. In fact, we have enjoyed tremendous years since 1987, as the economy began to turn in 1985, so I appeal to the Minister and the Government to take such steps as are necessary to ensure that, at the least, the budget projections are not exceeded. That is not unreasonable. It would mean coming back from the present projection of 14.4% to 12%.

I am glad to see Deputy McDowell in the House as I heard him go out of his way to criticise me on radio recently. He thinks it is right wing and conservative to manage one's finances well. The reason a Labour-Fine Gael Government has never been re-elected is that there is a perception that we do not manage things well, even though that is not true. The perception is that there is an urge to spend, regardless of whether we have the money. There is lots of money to spend and there will continue to be. Under our projections there will be €11.5 billion in today's money to spend every year from 2006 onwards and there are lots of things that can be done with that money, but if we spend more than that we will crash and cause inflation. If we get inflation we will not get value for money and if we spend twice what we project will be available, as the Government did last year and may do this year given the figures for January and February, we will be heading for serious trouble.

The Government is spending €13 billion more per year than when it came into office and if the original budget figures are adhered to, there is an underlying deficit of about €1.1 billion. Chicanery with the books has permitted the forecast of a nominal surplus of €170 million, but that will not be there given the figures for the first two months of the year. Bloxham Stockbrokers and another economic commentators are now saying that there will be a minimum real deficit of €1 billion this year, which is on the conservative side, unless there is corrective action.

The Government is projecting a deficit next year of €3 billion, assuming we keep to our budget targets this year, and for the year after next it is already projecting a deficit of €3.8 billion. I highlight the fact that when this Government took office in 1997 it continued with the good economic management of the previous Administration into 1998 and 1999. I pay tribute to Deputy Quinn who, as Minister for Finance, managed public moneys to provide significant growth in expenditure and improvements in public services at a rate which was less than the growth in income. That meant we could afford what we spent while reducing the national debt, which was still a serious problem five years ago. This Government continued with that pattern during the first half of its tenure and it managed the Exchequer very well. It did the same thing Deputy Quinn and Deputy John Bruton did whereby the growth in expenditure was significant, but was less than the growth in income. Overall, Exchequer and national finances were much better and the national debt was much less.

In 2000, 2001 and this year, assuming the budget projections are adhered to, the Government will have allowed expenditure to grow by £7.9 billion more than income and that cannot be sustained. That is the Government's own figure. The growth over the five years of the Government's term of office has been £13 billion anyway and if one allows expenditure to grow to £7.9 billion more than income in three years one is in serious trouble. That represents overspending of approximately £2.6 billion each year. One could get away with that for one year, but one cannot continue to do it. There is a very, very serious problem and, as the House will know, once one gets on a trajectory of spending it is as difficult to change course as it is to turn a ship at sea quickly. Things can go wrong very quickly.

I compared the current scenario to that which pertained in 1977. The Government that year was returned by the greatest majority ever, but within two years it ruined the economy. Within two years the Government was hammered in the local and European elections and a couple of months later it was beaten in two by-elections, whereupon Jack Lynch was thrown out for wrecking the economy with one bad manifesto, which is what is happening again here.

It is the duty of the Opposition to point out that there is scope for significant growth in public expenditure. There is also great need for it. Despite the already huge expenditure, there is much deprivation. Children in school are waiting ten years for orthodontic treatment. They are not getting their assessments. Nearly 20% of primary school students are leaving school with no assessments and with avoidable learning difficulties. There is also the example of the widow living on £96 per week and who cannot afford to get her hair done, the disabled who cannot get out and about because they do not have personal assistants and the person on €130 per week who does not have a medical card. Can the Minister explain this?

The Deputy should look at his party's record.

The Minister of State has defended the indefensible. That is deplorable.

Be fair, Deputy.

Amendment put.

Ahern, Dermot.Ahern, Michael.Ahern, Noel.Andrews, David.Aylward, Liam.Blaney, Harry.Brady, Johnny.Brady, Martin.Brennan, Séamus.Briscoe, Ben.Browne, John (Wexford).Byrne, Hugh.Callely, Ivor.Carey, Pat.Collins, Michael.Coughlan, Mary.Cullen, Martin.Daly, Brendan.Davern, Noel.de Valera, Síle.Dempsey, Noel.Dennehy, John.Ellis, John.Fahey, Frank.Fleming, Seán.Foley, Denis.Fox, Mildred.Hanafin, Mary.Haughey, Seán.Healy-Rae, Jackie.Keaveney, Cecilia.Kelleher, Billy.

Kenneally, Brendan.Killeen, Tony.Kirk, Séamus.Kitt, Michael P.Kitt, Tom.Lenihan, Brian.Lenihan, Conor.McDaid, James.McGennis, Marian.McGuinness, John J.Martin, Micheál.Moffatt, Thomas.Molloy, Robert.Moloney, John.Moynihan, Donal.Moynihan, Michael.Ó Cuív, Éamon.O'Flynn, Noel.O'Hanlon, Rory.O'Malley, Desmond.O'Rourke, Mary.Power, Seán.Roche, Dick.Ryan, Eoin.Smith, Michael.Treacy, Noel.Wade, Eddie.Wallace, Dan.Wallace, Mary.Woods, Michael.Wright, G. V.

Níl

Bell, Michael.Belton, Louis J.Boylan, Andrew.Bradford, Paul.Broughan, Thomas P.Bruton, Richard.Burke, Ulick.Carey, Donal.Connaughton, Paul.Coveney, Simon.Crawford, Seymour.Creed, Michael.Currie, Austin.Deasy, Austin.Deenihan, Jimmy.Durkan, Bernard.Enright, Thomas.Farrelly, John.Gilmore, Éamon.Hayes, Brian.Hayes, Tom.Healy, Seamus.Higgins, Jim.

Higgins, Joe.Hogan, Philip.Kenny, Enda.McCormack, Pádraic.McDowell, Derek.McGahon, Brendan.McManus, Liz.Mitchell, Gay.Mitchell, Jim.Mitchell, Olivia.Moynihan-Cronin, Breeda.Neville, Dan.Ó Caoláin, Caoimhghín.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Perry, John.Quinn, Ruairí.Rabbitte, Pat.Ring, Michael.Ryan, Seán.Shortall, Róisín. Spring, Dick.

Níl–continued

Stagg, Emmet.Stanton, David.Timmins, Billy.

Upton, Mary.Wall, Jack.

Tellers: Tá, Deputies S. Brennan and Power; Níl, Deputies Bradford and Stagg.
Amendment declared carried.
Motion, as amended, agreed to.