Taoiseach says he needs public opinion with him to deal with current financial crisis, writes Stephen Collins, Political Editor
TAOISEACH BRIAN Cowen rejects the charge that he is not providing leadership in the current economic crisis, insisting he has to make a serious effort to bring public opinion with him on how to deal with it.
Responding to critics, including Labour leader Eamon Gilmore, who have claimed that he is not providing the leadership the country needs, Mr Cowen said: "I don't accept that, obviously. Where we are at really at the moment is trying to bring public opinion with us on the size of the problem facing us and on the method we are using to address it."
In an interview with The Irish Timeshe insisted that the framework for economic renewal, published before Christmas, was designed to show people what the country could look like in the years ahead if the right decisions were taken now.
"I made it clear that the short-term requirement now is to use the social partnership process as a means of setting out a pathway to recovery and renewal. So it is a two-step process.
"We have indicated to the public what the strategic strengths of the economy are, where we can do the best for the future in terms of job creation and the type of economic activity that we can keep a comparative advantage in, but we also now in the short term have to address competitiveness issues and the public finance position where a serious gap has opened up that has resulted in a serious reduction in tax revenues."
He called for a spirit of innovation in the public service to get the country through its current difficulties with the minimum loss of jobs.
"Innovation isn't simply about people in white coats in science labs. Innovation is as much about the day-to-day stuff that we do all the time and how we organise Government itself. How we organise the public sector reform for instance," Mr Cowen said.
He said short-term measures would have to be taken this year in the health service and other areas of the public service to get better value for money and ensure that the first casualties would not always be those who required the services.
"That is a change of thinking between the State and those who provide the services that need to be demonstrably seen on the ground in the coming year, let alone in the longer-term future," Mr Cowen added.
"Those changes are being brought upon us because of the fact that there is only a certain level of resources we can apply to anything, as much as we would like to have more. That puts a responsibility on all of us to say that business as usual will not do.
"We have to look at every area of activity, at every part of public spending, and satisfy ourselves that we are doing it in the most efficient and best possible way so as to minimise the adverse impact on those who require these services.
"That seems to me to be as important a part of the innovation agenda as the high-tech industry or providing new goods and services by reason of scientific advance in the future. It is about the here and now as well. The innovation island we are talking about, for the future of the country, is about showing everyone at home and abroad that Irish people are innovative and can do things and change things as required to meet the circumstances of today and that is what we have to do.
"That can be no assumptions and no one saying such and such a thing is a sacred cow. That is the sort of openness and comprehensiveness that I would like to bring to this discussion we are going to be having this month in trying to meet reasonable expectations on essential services, all of us putting our shoulders to the wheel to get the maximum output from the very considerable resources the taxpayer is being asked to put up and, not only put up, but borrowed."
Mr Cowen said there was no doubt that a drop in living standards would occur this year. "We are in a recession. The fact that it is such a global recession makes it harder because we depend on selling into these markets. Some markets are more buoyant than others. So a switch of emphasis may be needed.
"What we have to do is very simple. We have to roll up our sleeves and just try and be as competitive as others in other markets." He said that the weakness of sterling against the euro made things even more difficult in a market that was still very important for Ireland, particularly for small and medium-sized enterprises.
The Taoiseach said the Government had three big challenges. "Providing confidence that we are addressing the public finance issue over a credible timeframe; assisting industry in terms of promotion and marketing and all the rest of it; and doing whatever we can in terms of re-skilling and training programmes for those who face the prospect of losing their jobs because of this recession."
He insisted that while people should not lose sight of the fact that 2009 was going to be a difficult year, the country has had 12 good years.
"If we go back, and we will go back in our standards of living, we will still be, hopefully, a lot better off than we were four, five or six years ago. We have made a lot of progress over the last 10 or 12 years but we are going to have to take a couple of steps back in order to move forward again when the upturn comes. If we don't do that then, quite candidly, we put at risk all the progress we have made and we can't contemplate that either.
"There are no easy choices. There are difficult decisions that are part and parcel of doing this job in the coming years. It is really about keeping as many as possible in work in these difficult circumstances and being ready for the upturn when it comes." He said that politically it might be much easier to simply cut the capital programme but he was not going to do that.
"I don't think that is the right thing to do. We need to build up the capacity of the economy through better transport networks.
"We need to continue to invest in education. We are putting a lot of money into research and development. We believe that is a worthwhile investment for the country that will bring benefits.
"One of the things we are emphasising in the framework document for economic recovery is that we need to commercialise a lot of the knowledge and know-how that comes from that development both in the multinational sector and, indeed, in the Irish sector. That is really the engine for growth for the future."
Mr Cowen said it would also be necessary to continue to develop our traditional resources and develop areas like tourism and the food industry but that also required that the basic infrastructural investment should continue. "An easier way to deal with the financial problems, if you weren't thinking about that, would be to cut back a capital programme that is the biggest in Europe at the moment; to cut it back by €4 billion and you would be avoiding the changes that need to come on the day-to-day side.
"I think we just have to, over a period of time, more likely five years than three years in my opinion, bring that equilibrium back between the current spend and the tax revenue. You can then continue to borrow for capital investment purposes. There is a return on that. It is a huge challenge to the system."