Today, 2 July, will see the production of probably the worst figures on our economy ever seen. I hold the Taoiseach responsible as the former Minister for Finance for presiding over this situation. He knew this would happen. He had the advice, he was given the warnings and he knew the signs. Can he outline one intervention that he made in the past six months to rectify the slide into which this economy is facing?
Leaders’ Questions.
I am glad to report that last year the economy grew by 6% in GDP terms and over 4% in GNP terms——
That is history.
——which was during my time in office as Minister for Finance.
Then the Taoiseach blew it.
Is the Taoiseach blaming this on the Minister for Finance, Deputy Brian Lenihan?
The situation that is being portrayed by the Leader of the Opposition that these are the worst figures ever — I do not agree with that characterisation — fails to take into account the context that being an open economy we are affected by the international downturn the same as everyone else. We are in a far better position——
A Deputy
Spin.
If people will continue to talk down this economy to the point of hoping the prophecy comes true——
What about himself?
That is their purpose. That is not a responsible position to take.
Tell that to the 100,000——
We in this economy have the ability to weather this storm better than ever before.
There was no intervention.
We are in a position to do so because our overall public finance position has greatly improved since we have had ten of the last 11 budgets in surplus.
When one meets a downturn, as we are meeting it, the ability to accommodate that through deficit is possible but we must work within our framework. We must recognise that our responsibility during the course of the remainder of this year is to work within the agreed spending limits we have set ourselves and ensure that the corrective action we take is such that we can devise during the course of the Estimates campaign a strategy for 2009 and beyond.
It is important to point out that the ESRI, which has had the most pessimistic forecast for this year, makes the point that, while in the short term we face that challenge, it acknowledges the underlying strength of the economy, the ability to return to growth rates of 4% over the medium term once we get over this present difficulty.
Those are the facts of the situation in terms of the context in which we must operate, and to suggest that this economy has suddenly become a poor or bad economy overnight is not correct, is not an accurate assessment of the situation and is basically a consistent political charge which is not backed up by the facts.
They are taking no interventions.
That is the usual Fianna Fáil response, that if one mentions a challenge to the economy one is guilty of national sabotage. The Taoiseach has been at this for 18 months. He has been in charge of this economy for the past three years. He saw these signs. He stated that the ESRI produced a report. The ESRI also stated that he blew the boom. The ESRI pointed out that this Government has blown the boom. As Minister for Finance, the Taoiseach increased spending to a reckless point with no return for the taxpayer.
His Minister for Finance stated recently that it is his misfortune to arrive in the Department of Finance at this stage to clear up the mess left by his predecessor, who happens to be the Taoiseach.
A Deputy
Hear, hear.
Deputy Brian Lenihan has come in at a time where the construction industry has come to a shuddering halt. He must clean up the mess left by his predecessor.
The Taoiseach has arrived at a position today, on 2 July, where tax receipts have collapsed; where he is facing an €8 billion deficit; where unemployment is rising at the highest rate in Europe; where the cost of living is at the highest rate; where, unfortunately, our economy is winning the losers' league; and the Taoiseach has presided over that. His Minister for Finance has stated that he is now in the unfortunate position of having to clear up the mess — the first time, I might add, that Fianna Fáil has ever had to clean up its own mess.
Deputies
Hear, hear.
A Deputy
What about the 1980s and the 1990s?
I will put it this way to the Taoiseach. If he will not accept any responsibility for the situation in which this economy finds itself, how can he with any credibility ask the people to believe that he can steer us out of this mess, which he has created and for which I hold him responsible?
Deputies
Hear, hear.
I explained yesterday that I stand over the budgetary positions I took during my time as Minister for Finance——
That is the problem.
——as a member of this Government, consistently. There have been growth rates during those three years which have exceeded any other economy in Europe.
Negative equity for 100,000 people.
Deputy Kenny's portrayal of this economy as having been dysfunctional during my tenure is incorrect. The second point——
He is the manager.
I will answer the question now because Deputy Kenny made many assertions. He made many nonsensical assertions that need to be corrected.
Mis-manager, that is what the Taoiseach is.
Let the Taoiseach finish.
Deputy Kenny spoke about us cleaning up a mess. Compared to the term in office in the past when they doubled the debt, we have halved the debt.
Some 200,000 on the dole.
We have halved the debt. During the time of halving the debt we have seen unprecedented capital investment which has built up this economy. We have created a quarter of the total number of jobs created ever in the past ten years.
A Deputy
Pontius Pilate.
The Government has blown the boom.
Those are the facts. On this suggestion——
A shower of wasters.
——which is Deputy Kenny's problem, that this boom has been squandered——
It has.
——we have 2.2 million people working in this economy. I accept there is rising unemployment and there will be some more unemployment, but the fact of the matter is that the ESRI, which Deputy Kenny quotes selectively, also makes the point that the continuing investment that we are making in the capital programme is the right choice——
He blew the boom.
——that it builds up the capacity of the economy, and that the work that we have done in that area is the correct way of going forward, in terms of investment in science and technology and innovation, the national skills strategy, Transport 21, etc.
Look at their faces and call that savings.
That all has been good work that Deputy Kenny tries to denigrate.
The Minister for regrets is beside the Taoiseach.
That strategy is entirely correct.
Look at their faces.
A Deputy
They lost the election.
The Deputy can do all the shouting he likes now. That strategy has proven correct for this economy. In fact, the budget stance we have taken this year——
Look at their faces.
I have listened in silence to Deputy Kenny but he refuses to listen to me.
We must have silence.
That is his game the whole time.
(Interruptions).
Let the Taoiseach finish.
I am hearing him.
He is not. He is speaking while I am speaking.
Blame George Lee.
Please let the Taoiseach finish.
It is a sign of a weak argument, if one can not listen to what is being said. I listened to what Deputy Kenny stated.
What is the Taoiseach's——
It is not denial of the truth though, which is what the Taoiseach is doing.
The point is this, a budgetary strategy this year which provided a fiscal stimulus of 1.5% into this economy was the right stance given the outcome that we have now seen. We can take corrective action which is proportionate and allows this economy to withstand the challenges that are in front of us, but we will not do so——
It is called cutbacks.
The ESRI has not suggested that we should take such corrective action, as it would totally disrupt the provision of services for remainder of this year.
The Government blew the boom.
It was wasted.
I make that point because there is a contention by the Opposition that this is what the ESRI is saying, but in fact it is not saying that. What we will do——
Has the Taoiseach not been listening to George Lee?
We freely acknowledge that tax revenues will be down this year and the Exchequer returns for the first six months show this. We will work within the approved spending limits that we have set ourselves and we will ensure that we devise a budgetary strategy and carry out the Estimates process and the next budget in a way that will see this economy recover as soon as possible.
What about the cutbacks?
We will not defer the corrective action that is necessary now because we know from bitter experience under Administrations of which Deputy Kenny was a member that deferring corrective action only exacerbates the problem. The position of the Opposition is that it has a finance spokesman who says I spent too much, yet Deputy Kenny and everyone else say I spent too little. Fine Gael has policies that are meant to exacerbate the problem, not correct it.
The Government spent €15 million on advertising.
Bring in Eddie Hobbs.
The Taoiseach is responsible for today's figures. He led this country into the economic difficulties we now have. He has been in Government for 11 years and was the Minister for Finance for the past four years. All the political slagging the Taoiseach is undoubtedly capable of does not change these facts.
I wish to take this from the point of view of people on the receiving end. I have a letter from the parents of an 18 year old man with intellectual disabilities who has just finished special school and secured a place in a day training centre. This man had begun his induction course but his parents then received a letter stating that the school regretted to inform them that it had not yet received clarification from the HSE regarding funding for new clients who had applied for admission. Until it received this information and agreement on funding, it was unable to offer their son a start date.
I have another e-mail from a 25 year old woman which states that she uses a motorised wheelchair because she is unable to walk. She lives alone in her apartment and depends solely on the personal assistance service for getting up in the morning, toileting, having a shower, making meals and going to bed at night. Her personal assistance service is being reduced by 30% and she is now contemplating going back into institutional care.
I have dozens more letters and e-mails of the same kind, including one from parents which states, regarding their daughter, that:
we are now in a state of panic and are writing to you in desperation. What is to happen to our daughter? She cannot lead an independent life and without a day service she stands to lose everything that makes her day-to-day life worthwhile.
This is the cutbacks.
The cutbacks are already happening. When the Taoiseach talks about corrective action, this is what he is talking about. Let us be clear about it. Is this the corrective action about which he is talking? People with disabilities finishing school need a day service, but they are being told the HSE has no money. There was a story in one of yesterday's newspapers stating the HSE had diverted €75 million from these services to plug a hole elsewhere. This is the position to which the Taoiseach has brought us.
There will be much talk today about the economy, figures, Exchequer returns — billions this and that. However, it all comes down to the worries that people will have over the summer about whether their son or daughter will get a service in a day care centre, or the worry of a young woman about whether her personal assistant will be taken away. Can the Taoiseach say where the bottom line on all of this is when he talks of corrective action? Can the Taoiseach give an assurance to those parents that their children will have the services they had hoped for next year? Can he give an assurance to that young woman that her personal assistant will not be taken away.
Terms such as corrective action are all very well — they are economy-speak and political-speak. However, what matters to people is whether they get the services they need. When the Taoiseach talks about painful adjustments, who will bear the pain? Is it these parents and these people with disabilities?
I will not get involved in political-speak; I will be very direct with Deputy Gilmore. The Deputy was a member of a Government which provided €1 million for emergency services——
(Interruptions).
I have a record in this area that I stand over.
Tell that to the HSE.
Regarding the specific matters Deputy Gilmore raised, I am glad to be able to inform him that, as my colleague the Minister of State at the Department of Health and Children, Deputy John Moloney, informed the House last night, the commencement of planned developments as outlined in the HSE 2008 service plan will be proceeding. Developments will include new day places for young people leaving school and additional therapy supports for pre-school children and children with autism. The HSE hopes to finalise this——
We will give more examples.
The Deputy wants the answer to the question and he is getting it. The HSE hopes to be able to finalise the position regarding the commencement of the developments, including those required to meet the needs of school-leavers with disabilities, over the next ten days. We are trying to ensure that those people are not the sufferers. I stand over the record of the Department of Health and Children, the Government and my personal record in this area and compare them favourably to any record of Deputy Gilmore's or any Government he has ever had the pleasure of being involved in.
The financial review which took place was in an effort to ensure that we provide services. When Deputy Gilmore asks if it is all double-speak and political-speak, there is €3 billion less in tax revenues this year than was hoped for. We have to deal with that situation.
The Taoiseach slumped the economy.
We will seek to deal with that situation in the best way we possibly can. When I talk about corrective action, I mean we must cut our cloth to meet our measure on the basis of the revenues available. That is what we must do and we can do this on the basis of consolidating the progress that we have made thus far, if we go about it in a sensible manner. However, there is no painless or easy formula that the Opposition might like to suggest by which this can be done.
Does the Taoiseach understand pain?
It must be done in a certain way and we will do it as conscientiously as we possibly can. There is a contention that the economy has not grown this year compared to last year and it will not grow much this year, if at all. I make the point to those who are trying to run down the economy that output this year compares favourably to last year and is 30% higher than in 2002. The economy has grown by 30% since 2002.
That is rubbish.
If we can maintain the same level of output this year, compared to last year — which itself was a record output — that is not a bad position to be in, considering the international situation. Every other country is facing precisely the same issues we are and does not have as much ability to take the hit in the way that we have been able. We have tried to devise a strategy, because we have used the good times to reduce the debt, rather than increase it during the bad times as in the past. We have also used——
The Government has wasted it.
The Government transferred the national debt to personal debt.
We have also used current budget surpluses over that period as a means of providing an enhanced capital programme to try to build up the capacity of the country.
Regarding the specific issue raised this morning, I am glad to say that my colleague, the Minister of State at the Department of Health and Children, Deputy John Moloney, has been able to ensure that the provision of those services arising out of the extra €50 million for disability services that we are providing this year will come through. The 2008 service plan as set out by the HSE will be met. This follows from €75 million extra the previous year and €75 million extra the year before that again. That is not to suggest we have everything sorted out in the disability sector. However, the commitment of the Government compares very favourably to any Government of which Deputy Gilmore was a member.
The debt was transferred to other areas.
This is Leaders' Questions. It is not the right of any other Member to intervene.
The Government of which I was a member handed over the public finances to the following Government in the black. It also handed over an economy that was creating 1,000 jobs per week. Jobs are now being lost at the rate of 1,600 per week.
The electorate showed their appreciation for that.
From the best of times, the Government has walked the country and the public finances back into the red. If I had been on the benches opposite for 11 years, like the Government, I would not turn around pathetically——
I can stand over my own record.
——to ask the Opposition if it has any ideas that can dig it out of the hole.
Hear, hear.
Hear, hear.
I stand over my record.
Rubbish.
The Deputy is trying to turn this to his own political advantage.
From the best of economic times, the Taoiseach has sleepwalked this country back into a recessionary state.
The Deputy is talking it down. He wants it every way.
The Deputy has no idea.
When we ask what the ideas are to get us back out of it, the Taoiseach is very slow in coming forward with what he is going to do and positive ideas of how he will get us out of it. He is full of bluster.
(Interruptions).
Bluster will not get him out of this.
A Deputy
Put it on a horse.
The Deputy has no idea.
Let him finish.
I am glad of the answer given to me in respect of people with disabilities.
It is all bad news.
The Deputies should behave themselves.
It will not happen.
I hope it will deliver and materialise. For example, €50 million was mentioned for the disabilities fund. The reply to the parliamentary question that my colleague, Deputy Lynch, got on the same issue was that only €20 million was to be released.
True.
We will see. I am not a millions person and I want to see what is happening on the ground. We will see, as we go on, whether these services will be provided.
If they are not provided — in respect of disabilities or any other area of the public service that people are dependent on — we will be back here asking the Taoiseach about it morning after morning.
Hear, hear.
Hear, hear.
The Deputy will get his answer now.
With regard to the matter mentioned again by Deputy Gilmore, it is correct that employment was being created when his party was in Government, at a rate of 1,000 per week. We raised this to 1,500 per week, creating 600,000 jobs in the past ten years. He blew over that very quickly.
The Government did not create them.
The Government did not. Business created those jobs.
So we are not responsible for the good times but we are for the bad times. I will stand over my record in good times and bad, which is the honest action to take.
We will give him every chance.
I will discharge my responsibilities to the best of my ability in that respect.
There is not much sign of it yet.
The Deputy has a different comfort zone to deal with but I will deal with my job as I see it. With regard to the disability sector, we will of course seek to protect to the greatest extent possible people in those positions. We have done it consistently over the years and we will continue to work on it. We have put unprecedented resources in and we still have problems with that sector. It is about the organisation of services as well as resources, and reforms will have to continue in that area. We will continue to do our very best.
In the meantime, the reality is €3 billion less is coming in from tax revenues.
They are cuts.
We will deal with that. We are setting out to work within the budget spending limits we have set ourselves and ensure that with the extra costs there will now be as a result of rising unemployment — greater than predicted — we will find savings in other areas to deal with it. That is what we and any responsible Government must do. If the Opposition were in Government, it would have to do it as well. That is fair enough.
We would not have wasted money over the past few years like the Government.
The Minister for Finance will make a statement when the figures are published today. The Government will make its decisions and the Minister will come to the House.
There is an effort being made in some quarters to suggest we have to engage in wholesale disruption of services all over the place and we must make up the €3 billion by the end of this year. That is not the position. Nobody is suggesting, in any of the more pessimistic reports and analyses, that we should do that because it would be wrong to do so. In good times we build surpluses and in more difficult times we will have some deficits.
The good times were wasted.
That is the way the economy is managed through periods of difficulty to ensure we come out the other side.
The Taoiseach is sounding like Gordon Brown now.
The Deputy has no record.
We will do it in a responsible way and on the basis of providing for a sustainable level——
That sounds more and more like Gordon Brown.
——of public services going forward. It is a challenging environment and there will be difficult choices and decisions to be made over the course of the next weeks and months, and perhaps next year. We will see what the story is after that.
We will see what the story is all right.
We will seek to do that. In the meantime, we will maintain the level of output in this economy, which is 30% higher now than it was five years ago. We have a good economy, although it is going through difficulties. It is a far more sophisticated and resilient economy than it has been given credit for by some in this House.
We need a more sophisticated Government.
The idea that suddenly all our pluses and benefits are gone is not the case if we are prepared to take necessary action now that is appropriate and proportionate, so we can get out the far side in a reasonably good position——
A reasonably good position.
——taking account of the realities that this Government, or any Government in current circumstances, must acknowledge. Other governments in the euro area and beyond have to contend with them also.
Is the Taoiseach sorry for the money he wasted?