The Government should now prioritise investment in the National Development Plan (NDP), in schools, hospitals and economic infrastructure in order to take the long-term view on the State's economic development, Labour Party leader Eamon Gilmore said today.
Speaking on the hustings for the deputy leadership post in Kilkenny today, Mr Gilmore said government is "about making hard decisions".
He said he was not going to talk down the economy.
"Four months after the general election, and here comes [Minister for Finance] Brian Cowen again to tighten all our belts. It is all so predictable. Fianna Fáil always rein in spending after elections."
Mr Cowen yesterday signalled that double-digit spending growth is a thing of the past and that the rate of growth seen in recent years will have to be curtailed. However, both he and Taoiseach Bertie Ahern insisted the fundamentals of the economy remain strong.
But Mr Gilmore said today the Government "did not create the boom, and it has squandered a lot of its fruits".
"Five years ago, when reckless pre-election spending had to be reined in, the Government picked on the easy targets. There were cuts in aid to the developing world. There were cuts in the health service. There were the 'Savage Sixteen' welfare cuts. And crucial spending on capital projects was curtailed."
"Ireland has a strong economy now, and we can have a prosperous future, if we manage our affairs. And I'm not going to play politics with people's jobs and their homes and their futures," Mr Gilmore added.
"Yes, there are choppy waters ahead. The Government's refusal to manage the housing market in the interests of home buyers rather than developers, has left the economy exposed. We have major deficiencies in infrastructure. We no longer have export-led growth."
He said there are "significant uncertainties" in the global financial markets that may take a long time to unwind.
The Labour Party leader said that during the general election campaign earlier this year, his party had been asked what its priorities would be if economic growth was slower than expected.
"What we said then is what we say now: deliver on the national development plan, invest in the health service, protect the vulnerable in our society.
"We need to invest in the future, by maintaining investment in the NDP - investing in schools, in public hospitals, in economic infrastructure. Not the stop-go approach of 2002."
Mr Gilmore said what was needed was not "panic measures" such as the one-month embargo on health service recruitment or changing the format of Budget day.
"The days of throwing bad billions after good must be ended. The days of making the vulnerable pay for elections must be over. The days of ignoring chaos in the health service must be stopped. Government must start to deliver. If Government delivers, then the Irish economy will."
Both candidates for the post of the Labour Party deputy leader, Jan O'Sullivan and Joan Burton, also spoke at the hustings in Kilkenny.
The leadership position recently filled by Mr Gilmore following the resignation of Pat Rabbitte was uncontested. Labour Party members will vote for their preferred candidate in early October.