I wish to share my time with Deputy Fleming, the Minister of State at the Department of Finance, Deputy Parlon, Deputy Killeen and the Minister for Health and Children, Deputy Martin.
Private Members' Business. - Confidence in Minister: Motion (Resumed).
The following motion was moved by Deputy Richard Bruton on Tuesday, 12 November 2002:
That Dáil Éireann resolves that it no longer has confidence in the Minister for Finance, Charlie McCreevy T.D., in view of the incompetent manner in which the public finances have been managed over an extended period.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"affirms its confidence in the Minister for Finance and in the Government policies, as endorsed by the electorate, to secure continued economic growth, high levels of employment and further social progress within a stable and sustainable budgetary framework."
–(The Taoiseach).
Is that agreed? Agreed.
It is always difficult to speak on a motion of no confidence when the motion relates to oneself and it is especially difficult for a man as modest as myself. Even when thoroughly deserved and well earned, self praise can always sound hollow. I welcome the wise comments and observations of my colleagues who have opposed this motion. Equally, I fully understand the political desperation which motivated those who have misguidedly supported it. The real political significance of this motion has nothing to do with the discharge of my functions as Minister for Finance and everything to do with the terminal decline of Fine Gael.
I find it amusing to be at the receiving end of criticism over my alleged mathematical deficiencies from Deputies who have yet to comprehend the difference between being decimated and being halved. If Fine Gael had only been decimated in the last election, Deputy Noonan might still be leader and Deputy Kenny might have a prospect of achieving ministerial office at some point in the future. Instead, in an attempt to gain some name recognition east of Castlebar, Deputy Kenny is trying for a place in the Guinness Book of Records by being the first party leader to promote a vote of no confidence in a Minister before that Minister announces his budget.
In my budget speech last year, I said that my first five budgets were the five chapters in my first book. I would love to stand here and read that book for those opposite but time restrictions will not allow that. However, given that Christmas is quickly approaching, I will give the House a flavour of it and encourage the Members opposite to read it over the festive period, by which time I will have written the first chapter of my second book.
Since 1997, I have introduced major reforms to the tax system which has seen it transformed and made more equitable and efficient; I established the National Pensions Reserve Fund to provide for future generations, a measure ahead of its time; I put in place and defended at EU level a business tax environment which has played a key role in our economic success; I have increased social transfers to levels that those in Opposition could not aspire to; and I have provided resources and support for the aged, children and the more vulnerable sections of our people, as the electorate recognised last May.
These measures have ensured that Ireland has achieved one of the best economic performances in the world, economic growth has averaged nearly 10% per annum, unemployment has been reduced from over 10% to historically low levels, over 300,000 new jobs have been created and long-term unemployment has been cut by 80%.
The Taoiseach and the Tánaiste dealt comprehensively with the so-called "missing millions" last night and I do not intend to cover this ground again tonight. I would like, however, to ask some questions of my own. Does Fine Gael believe that it is a crime to give taxpayers back their own money and that this represents a squandering of public funds? Does it consider it an offence to share the fruits of growth with those on low incomes and those who have contributed so selflessly during their lifetime to the fortunate position we find ourselves in today? Does the Opposition wish the people to give the money back? What does the Opposition have to offer other than a notice to repay? I would love to hear the answers to these questions, assuming of course that the Opposition parties have answers which, if their respective election manifestos were anything to go by, I very much doubt.
The Opposition have started this Dáil as they finished the last, not that anybody on this side of the House is surprised – they want to run with the hare and chase with the hounds. Having spent five years describing spending increases as inadequate and consistently condemning me as tight-fisted, they now assail me for spending too much. I still have to hear from them a single proposal to reduce any specific spending programme. The electorate saw through this last May and the Opposition now appears well on its way to repeating that drastic error.
For some time now those opposite have had little constructive to offer other than to grumble that the electorate was misled. This allegation is a complete canard. I disposed of this false accusation point by point in the House on 9 October. I explained the chronology of forecasts during the year, the picture shown by early tax returns, the advice offered to me, the full parliamentary replies I had given and the crucial assessment of 1 May 2002 that we were on course. I do not intend to repeat myself other than to say that no one was misled. Moreover, following my Department's response to Deputy Bruton's freedom of information request, those opposite know this to be case.
Debt is an issue close not only to my heart but also to some of those parties opposite, though for very different reasons. I have always promoted the virtue of reducing our debt to a moderate and sustainable level and have presided over a reduction in the national debt, as a percentage of GDP, from 74% to 34%. As the Opposition has had so much practice in running up mountainous debt, it will appreciate the pitfalls in running it up to inappropriate levels. It knows in its heart that debt is not the solution. Borrowing can quickly use up resources. If any Minister for Finance failed to recognise this, he or she would indeed deserve a motion of no confidence, but I have done the opposite.
In recognising the problem of debt not only for this generation but also for the next, I set up the National Pensions Reserve Fund to address this looming problem in good time. This action will help smooth the future Exchequer burden and it introduces a strategic focus into planning the budget. It had been my strong view, which I have stuck to firmly and taken criticism on, that we should not deploy the fund to meet short-term problems. To be fair, the former Fine Gael spokesperson, Mr. Jim Mitchell, supported this logic entirely and wanted to go further and reserve more.
The economic and budgetary picture facing us is very different from that in our first five years. The media seemed surprised when I said recently that the boom was over. I was merely confirming that economic growth had slowed markedly this year. The latest CSO data for the second quarter of 2002 shows a domestic economy expanding at about 2% when measured by GNP. This is less than our medium-term potential growth rate. The outlook for 2003 is not much different and the average growth rate for the period 2003-05 is likely to be in or around 3% and 4% in terms of GNP and GDP respectively.
For the 2003 budget, the first priority must be to ensure a sustainable rate of spending growth. Even so, the Government will continue to protect those on limited incomes. We have made clear progress in reducing consistent poverty to very low levels with increases in social welfare allowances significantly exceeding the rate of inflation.
It had always been my ambition to be Minister for Finance. I can sympathise with those who served as Opposition spokespersons on finance but never got the opportunity to be Minister. The spokespersons opposite will understand if I do not wish them success as it is my intention to continue as Minister for Finance and to guide the economy to the point where we have achieved our objectives without undermining the stability of the public finances.
This House can be confident that I will take the requisite action to secure a sustainable financial position. Evidence of this will be clear when the 2003 Abridged Estimates are published tomorrow. This House can be confident that my continued stewardship will enable us to secure sound economic growth, high levels of employment and further social progress while staying within a stable and sustainable budgetary framework. This House can be assured that the budget is in safe hands, as it has been for the past five years.
I am proud to have served as Minister for Finance in the previous Government and to have been reappointed in the first Government to be re-elected by the people in over 30 years. I know I have the confidence of the people, the ultimate decision makers, the confidence of Government and, as we shall see tonight, the confidence of this House. I commend the amended motion to the House.
I am pleased to support the amendment before the House affirming the confidence of the Members of Dáil Éireann in the Minister for Finance and in Government policies as endorsed by the electorate. I find the criticism by the Opposition of the management of the economy extraordinary. It goes back to the election campaign. It is important that we on the Government side reiterate, for the benefit of the Opposition and anyone else who did not notice during the election campaign in May, that the people fully understood the financial situation of the country last year and early this year. I am confident of this.
When I canvassed in Laois-Offaly and others canvassed in their areas it was on the basis that the good financial times would not continue and that tougher times were ahead, and the public voted this Government back. The people felt that the Fianna Fáil and PD Government was the best choice to take charge of the economy in the difficult times ahead. The people knew that when they went out to vote and knew why they voted for us. They did not believe that the growth of expenditure and income tax receipts would continue for the next five years. They knew things had changed and voted us back on that basis.
Every main party in the House, Fianna Fáil, Fine Gael, the Labour Party and the Progressive Democrats, accepted the Department of Finance projections for the year ahead in regard to a budget deficit and that there would be a return to deficit spending in 2003 and 2004. That was in the manifestos.
Concentrate on what the Minister said.
It was printed in the manifestos and the Fine Gael Party predicted a budget deficit in 2004 of €6 billion. I will come back to the point that perhaps the party members never read the manifesto. We should understand that the leaders of Fine Gael and the Labour Party are proposing this motion because, for the first time in my memory, we had the extraordinary situation where the Opposition parties collectively lost a general election.
The people were not told the truth and Fianna Fáil knows it.
It is important to remember that this motion has been proposed because of two important things which happened since the last election campaign. Fine Gael lost the election campaign and disposed of its leader. We now have Deputy Kenny leading the party. The Labour Party likewise, having lost the election, disposed of its leader and Deputy Rabbitte is its new leader. The new leaders of these two Opposition parties now have collective amnesia and forget what their previous party leaders said during the election campaign last summer.
What did the Minister say?
He said there were no cuts planned, only adjustments. What about the people in the public gallery? Tell them about the adjustments.
It has been extraordinary to face the reality of the Opposition parties here over the last couple of months. I am confused by them. They complained all summer that we were engaged in a programme of cutbacks and they are here for the last week complaining we have been overspending. Which way is it? Are we being accused of cutbacks or overspending? Does the Opposition know the difference between the two? They are contradictory—
Tell the 200,000 medical card holders.
We cannot have been cutting back and overspending at the same time, but we have been accused of both. Deputy Rabbitte spent the summer complaining about cutbacks yet came here last night and complained about overspending. It is well for the people that it is a Fianna Fáil and Progressive Democrats Government that is publishing the Book of Estimates tomorrow. If it was left to the Opposition it would not get past the second line as it does not know the difference between cutbacks and overspending. I look forward to hearing the Opposition approach to the Estimates tomorrow. One will say we are cutting back too much while the other will say we are spending too much. I would like to hear a single coherent voice from the Opposition as to a suggested level of increased expenditure. We have the job of managing the public finances and we will do that carefully. The Opposition better get used to the phrase we used dur ing the election – we have a lot done and we have more to do.
More people to do.
The election went to the lowest bidder and the Opposition cannot accept that.
We heard that before.
An Leas-Cheann Comhairle
Order please.
The Deputy is just a joke. He was elected as leader of Fine Gael but there is no way he can restore the party.
We now have mighty mouse in Limerick and church mouse in Dublin.
I am delighted to be present to make clear that I believe the current Minister for Finance, Deputy McCreevy, is one of the foremost Ministers for Finance the State has ever had. His record on the management of the economy speaks for itself. Since 1997, about 300,000 new jobs have been created, unemployment has fallen dramatically, involuntary emigration is no longer an issue, tax rates have been cut substantially and social protection has been enhanced significantly.
As everyone knows our economic growth has slowed substantially recently. This has been largely the result of the slowdown in the international economy. The EU Commission's autumn forecasts published this morning underline the current difficulties in the international economy. Real GDP for the euro area as a whole is expected to average 0.8% this year. For the US, the Commission forecasts a real GDP growth rate of 2.3% this year. These low rates of economic growth have created significant problems for Ministers of Finance throughout the developed world. The European Commission estimates that a number of countries will have substantial general Government deficits this year. As a percentage of GDP, it estimates that Germany will have a 3.8% deficit, France a 2.7% deficit, Italy a 2.4% deficit and Portugal a 3.4% deficit. These figures contrast with the Department of Finance's estimated general Government deficit this year of about 0.5%.
The figures show how this Minister for Finance has effectively and successfully managed the public finances of a small, open economy in the middle of an economic downturn.
Who wrote the Deputy's speech for him?
This Government has always promoted the virtue of reducing our debt ratio and keeping it at a moderate and sustainable level. The national debt as a percentage of GDP has fallen from 74% to 34% since 1997, a drop of 40%.
We all know that debt is not the easy road. We should remind ourselves that in 1987 the average worker had to hand over almost eight weeks pay in taxes to meet debt-service costs. Low budget deficits, and surpluses, cut this burden to just over two weeks pay for the average worker by 2001. That is a difference of six weeks pay. Meeting extra pension and health costs for us as we age will cost the next generation as much as 7% more of GNP than today. That is even after allowing for part prefunding of pensions and lower capital spending as a percentage of GNP in the future. A demand for more borrowing amounts to a call for improved services now for which tomorrow's taxpayers should pay.
Has the Deputy money for the flooding? All we want is €4.5 million.
Later, if the Deputy behaves.
Any finance Minister who failed to recognise pitfalls would deserve a motion of no confidence. The Minister, Deputy McCreevy, on the contrary, has taken early action on this front. He set up the national pensions reserve fund to address this problem in good time. This fund is a nest egg put aside for workers. The Government understands this and has stood firm in its belief that the fund should not be deployed to meet short-term problems.
This Government has also, since 1997, significantly reformed the taxation system, particularly personal tax. All taxpayers have benefited substantially from the major tax reforms and tax reductions that have been implemented.
That is not what the Deputy said before he came here. It was a different story then.
These tax reforms have also helped to cement the social partnership process that has played such an important role in the development of our economy.
In conclusion, this Minister has created the conditions for the recent record levels of growth which generated large increases in employment, incomes and living standards for all. He is therefore uniquely qualified to continue to steer our economy and public finances through the difficulties that lie ahead.
I welcome the opportunity to further affirm confidence in the Minister for Finance and to commend him and the Government for their commitment to securing continued economic growth, high levels of employment and further social progress within a stable and sustainable budgetary framework.
When we debated a similar motion here a little over a month ago the Opposition argued that the news of a deterioration in the nation's economy only emerged after the May election. At least they accept now that the dogs in the street knew more than a year ago that foot and mouth dis ease, 11 September and other international developments would lead to a downturn in growth.
The Minister for Finance said there would be no cutbacks.
The Minister told the Opposition in his budget speech last year and subsequently on numerous occasions that there would be such a downturn. I thought that little elementary lesson had been learned and that we had moved a step forward.
In party political terms, I welcome Fine Gael's continued adherence to its pre-election belief that it is possible to simultaneously reduce taxation, increase spending and sustain the economy. While the main political party remains in that cul-de-sac, it does not pose an electoral threat.
The people proved beyond doubt that they understand the economic realities. They elected a Government they believed would make prudent decisions.
They believed it then but they do not believe it now.
They elected a Government they believed would control public expenditure, encourage optimum conditions for employment creation and promote policies which would keep us in our position as the country of choice for United States development in Europe. As the Tánaiste said last night, we have 20% of the investment despite having 1% of the population.
She also pointed out that the PAYE income tax take has been reduced from 36% to 32% in the past five years, while at the same time the corporation tax take has increased from 11% to 15%. That is difficult for some people to accept when they have been claiming the Minister, Deputy McCreevy, has achieved the opposite. In 1997 we had 11% unemployment whereas we now have 4%. At that time 90,000 people were among the long-term unemployed whereas that figure is now 22,000 or 1.2%. Almost 400,000 extra people are at work who would otherwise be a drain on the resources of the State were they not employed.
The Deputy has the wrong script. He has the Tánaiste's script.
They are the correct figures.
The Deputy has not joined the Progressive Democrats yet.
To be fair, the Fine Gael finance spokesperson was aware of the figures before the election. Six out of ten workers depend on our success in international markets. Some 80% of what we produce must be exported and sold on those markets. Tax reforms have played a huge part in encouraging investment and enterprise and creating employment. They have also made Ireland the most attractive EU state from the perspective of foreign investors.
Are the Opposition parties arguing the increase in expenditure from €3 billion to €8 billion on health should not have happened? What are they saying should not have been done?
What about waiting lists?
Are they saying the Government, in exceeding its promise to deliver £100 or €130 per week to old age pensioners, is paying excessive amounts? Do they want tax rates hiked up to where they were five years ago? Are workers not entitled to a decent return for their efforts? Will the Opposition parties cut child benefit which has trebled in the past five years? Do they want to introduce taxation policies which will drive investment away from the country, accelerate the rate of job losses and stymie attempts to entice new employment to the country?
We are comfortably meeting our commitments under the Stability and Growth Pact. Many of our European neighbours and partners would wish they were doing as well. We have a positive ratio of current expenditure to tax take. There has been a massive improvement in the national debt. We have a gross domestic product deficit of 0.5%, which is a sixth of that of some of our European partners. I have no doubt we will continue with capital investment for strategic infrastructure.
Some €2 billion for roads has gone.
That is what I was thinking about. We have continued with prudent provision for pensions.
The deficit for next year was predicted last year by the Minister for Finance.
The Deputy has the wrong time. The Minister revealed it only after the election.
Perhaps the selective amnesia when it comes to budget day last year was caused by those on the Opposition benches blocking their ears.
When will the Government tell the poor old age pensioners about their medical cards? That is the question.
I was anxious to come before the House to speak strongly in support of my colleague, the Minister for Finance and to articulate my sense of despair at an Opposition that would attempt to move a motion undermining him. Everyone in the House should be united about one thing, that the Minister, Deputy McCreevy, possesses certain qualities that many other politicians should aspire to possess.
One of his strongest characteristics is his independence of mind and spirit. He is prepared to take on all comers at certain times and to stand up against the prevailing wind. Irrespective of whether everyone is shouting in a certain direction, whether it be the media or politicians, he does not buckle. I have witnessed his strength of character at close quarters.
We need more of that in Irish politics. We have had far too many knee-jerk, reflex reactions to the latest story or storm of the day.
Charlie for Taoiseach.
Politics has been enhanced by the quality of the Minister for Finance, Deputy McCreevy, and any new politician recently elected to the Oireachtas should study his form.
It is a pity the other Ministers are not as good.
He or she should look at the storms he has weathered.
Look at the hurricane he has created.
I have no doubt he will weather many more in future because of his quality and ability.
Is this the man who lectured Charlie Haughey on overspending?
In addition, he has a philosophy in terms of how society should be organised and economies run. It is about enterprise and incentivising individuals and the collective to produce more and to reward enterprise and incentives. These were qualities, attributes and values to which the Fine Gael Party once subscribed.
What would the Minister know about that?
I salute the Minister for Finance for being unbending in terms of his pursuit of these values which are important in terms of the productivity of the nation and economy.
Make him leader.
It is one of the reasons we have one of the more productive economies in western Europe.
Why does the Government not assist old people in private nursing homes?
It is an undeniable fact that the Minister for Finance has shown the greatest commitment to financing the health services of any such Minister in the history of the State. It is demonstrated by the unprecedented level of increased funding made available during his tenure in the post.
He is not too convinced by the Minister's handling of the health service.
This year, €8.2 billion has been allocated to the health services. We often compare ourselves with other countries in terms of expenditure on the health services. The cry in recent years has been how we compare with OECD countries and our European partners. As a result of the commitment of the Minister for Finance, Deputy McCreevy, to health, in the past four years the per capita spend on health is estimated to have moved from fifth from the bottom of the European Union to just beyond the European Union average.
What about services?
The Minister is largely responsible for that development. In addition, the national development plan provides more than €2 billion for the health services at 1999 prices. The decision to include health for the first time ever in a national development plan—
The national delusion plan.
—was one the Minister for Finance took and has enabled those in the health service to plan appropriately for some of the largest health construction projects since the foundation of the State, and this is taking place throughout the country. In 2002 alone, funding of €497 million—
Not in Monaghan.
With respect, plenty of money was allocated to Monaghan.
No, there was not.
The Deputy is a member of the North-Eastern Health Board and it is about time he stood up and was counted as one and stopped trying always to shift responsibility back to the centre. He has a responsibility to deliver or else to remove himself as a member of the health board if he does not think it is good enough. It is about time he put up or shut up on this matter. I have had enough of that type of nonsense.
(Interruptions.)
In terms of hospital activity, last year a record 920,000 people were discharged following treatment in hospitals. There have been record increases year on year in activity levels within hospitals. This year for the first time since the 1980s we are investing in additional beds.
There is one area in which I pay a warm tribute to the Minister for Finance and for which he can take credit. Successive Governments did not treat people with disabilities adequately and that is an indictment of them. The Minister for Finance was the first with that portfolio to make a quantum leap forward in the level of funding allocated to people with disability. My predecessor, Deputy Cowen, and the Minister for Finance put together a three year programme and I oversaw two years of it.
The Minister for Health and Children is a great man.
This compares to anything before it in terms of rates of funding and allocation. It was a watershed decision for the funding of people with disability, intellectual, physical and sensory. I accept there is much more to do and more progress needs to be made.
There are 1,711 people on the waiting list. Does the Minister remember that number?
However, the Minister for Finance, Deputy McCreevy, took the decision to make that quantum leap forward when previous Governments involving the Labour Party never contemplated the scale of resources that he allocated. They cannot use the excuse that the resources are there now and were not there then because it could have been done before the Minister, Deputy McCreevy, arrived. He did it and he deserves the credit for it. It is one of the powerful reasons this House should endorse him as Minister for Finance and vote confidence in him to move forward and manage the Irish economy with the kind of backbone and strength of character he possesses, which so many on the other side of the House lack.
I wish to share time with Deputies Ó Caoláin, Harkin, McGrath and Higgins.
An Leas-Cheann Comhairle
Is that agreed? Agreed.
It is not my intention to praise the Minister with faint criticism. Part of his perceived success as Minister is that many who are meant to oppose him are perceived in the public mind as unlikely to have done anything different. Some of those people might even have begrudging admiration for what he does and how he does it. I am not one of those people and my party does not consist of members of his fan club.
The Minister has presented a front of self-confidence, independent behaviour and ability, when in reality it has been a mixture of diffidence and arrogance to those who portray a different vision of the type of society we have and the type of economic justice we can achieve in this society. The Minister has been responsible for presiding over an Ireland that has become more economically wealthy but has lost its sense of well-being. It is an Ireland that has become more competitive and individualistic but has lost its sense of community. This is an Ireland that has been developed by the economic policies of the Minister fir Finance and the economic and social poli cies of the Government. It is an Ireland that has lost its way and lost touch. Even by the economic indicators in which so much faith has been placed, it is an Ireland that is losing its way even in terms of conventional economic measurements.
The Minister has been responsible for policies that have seen those on incomes of €50,000 per year and more gain at a price of €243 per week, or €12,000 per year, over those depending on social welfare. This is Robin Hood in reverse. This is the type of Ireland we have because of the Minister for Finance and the Government.
Instead of reacting to criticism, the Minister has chosen to pad it off. When that criticism comes from domestic political sources, that may be understandable, but when it comes from organisations responsible for informing the Government, such as the National Economic and Social Council, through its strategy document in 2000, which was largely ignored by the Minister, or the ERSI, which in many bulletins pointed to a different economic vision that the Minister chose to ignore, it is a different matter, but that is his prerogative. When the criticism is made by international organisations, we have to be concerned that the Minister has chosen to portray Ireland in a way that has not been to our general or economic benefit internationally. I am referring to criticism the Minister received only this year. The OECD in April 2002 chided the Minister for producing a budget that was inappropriately large in terms of its deficit and suggested weakness in terms of the budgetary system. That was the budget the Minister produced in this House last year and will have to seek to correct in the coming weeks.
When similar criticism was made by the European Central Bank, the Minister sought to make political capital from it, but that is the way of the Minister and the Government. Criticism from whatever source has to be turned into some type of competitive slogan that ignores the reality of the criticisms being made.
The Minister has served his time in this Government when the ideas he pursued doggedly and ideologically have worked, because of circumstances, for part of that time. However, the circumstances that pertain now in terms of the global economy have no place for his trickle-down economics or his "poor dragging themselves up by their bootstraps" economics. We need an economic strategy that involves all the people in a socially just and economically fair way and we need to have confidence in those who create and promote our economic strategy. This is the Ireland which the Minister for Finance, Deputy McCreevy, helped to create and which the Government helps to sustain.
I wholeheartedly support this motion of no confidence and my party fully endorses it. In the words of the British MP, Leo Amery, speaking in the British House of Commons to Neville Chamberlain at the outset of the Second World War: "In the name of God, go."
Last night the Tánaiste said the Minister for Finance is a rock. If that is the case, we are certainly between a rock and a hard place. We are between the Minister on the one side and the hard neck of the Taoiseach and the Tánaiste on the other.
The Deputy has Labour's clichés.
They can boast of one achievement that exceeds all others about which they boast. They have pulled off what must rank as one of the greatest confidence tricks in the history of elections, not only in this country but universally. The Tánaiste's party, the Progressive Democrats, increased its representation in the Dáil on the basis of a campaign that convinced sections of middle class Ireland that it was needed for another five years as the watchdog of Fianna Fáil.
I looked at Ted Nealon's guide, launched this evening, and I saw a great photograph of the Minister for Justice, Equality and Law Reform, Deputy McDowell, up the pole ensuring that people get the message and that he put the frighteners on them, which was his intent in the first place, about the dangers of one-party Government. The party concerned was of course the one and only Fianna Fáil with which his party has so anxiously and willingly gone back into Government. Indeed the people have every right to be afraid of one-party Government if that party is Fianna Fáil, but they have as much right to continue to be afraid if it comprises Fianna Fáil and the Progressive Democrats.
With the Minister for Finance, the other half of the double act was the Taoiseach – what a team. Those words of the Minister for Finance are now etched into Irish political history. On 13 May 2002, four days before the general election, he said: "I can confirm there are no significant overruns and no cutbacks whatsoever are being planned secretly or otherwise." We are expected to believe that after the general election the real state of public finances suddenly struck the Minister and his Department like a bolt from the blue. We are supposed to accept that proposals for €900 million in public spending cutbacks were being prepared in his office, without the knowledge of the Minister. The now infamous Department of Finance memorandum dated June 2002, which must have been at an advanced stage of preparation if not complete before the general election, is also something of which people are now well aware and it will probably end up on school curricula at some time. If none of this deception had happened, the Minister would still not deserve a vote of confidence. The policies he has implemented over the past five years have widened the gap between the wealthy and the deprived in our society.
Untrue.
This is truly a tragedy because the last Government had two enormous advantages it enjoyed over any previous Government in the history of the State. It was in office at a time of exceptional prosperity, resulting in budget surpluses in four successive years. Despite its slim Dáil majority and the crutch of the four musketeers, over the past five years it was able to plan for five budgets in a row. Those advantages were scandalously squandered by the Government and especially by the Minister for Finance.
Not only did he and his colleagues fail to tackle the structural inequalities which warp our economy and damage our society, they actually worsened them and widened the gap between rich and poor. On behalf of Sinn Féin – and I know the Minister looks forward to it annually – I have prepared a pre-budget submission, as I have done every year since 1997. I am sure he pays it avid attention.
I always do, particularly the section on banks.
Self-service tills.
In case the Minister has forgotten his bed time reading, I will recap. In our first submission we stated that there was never a more favourable economic climate in which to cultivate equity and to share prosperity. The Minister will not read it and now he will not even listen – it is no wonder he has got it all wrong. The Minister for Finance began his term in office by giving record tax cuts to the highest earners and big business and he repeated the exercise in each of his subsequent budgets. True.
In 1998, we urged that the budget should dramatically improve the quality and quantity of services provided by the State in health, education, housing, social welfare, infrastructure and employment creation. The budget of 1999 led us to state that improved conditions for many sections of our society and the conspicuous luxury enjoyed by a minority contrasted sharply with the plight of those who have not been allowed to benefit. That is the reality people have faced under this Minister's stewardship.
In the budget 2000, three times more money was spent on tax reduction than on social welfare increases. In budget 2001, there was a further reduction of 2% in the top rate of tax and, again, those who needed it least benefited most from the tax cuts. It has been estimated that the gap in disposable income between a person earning £40,000 per annum and a person who was unemployed widened by a full £159 per week.
I am sure the Deputy has noted that the recent report by the ESRI flatly rejects that assertion.
I believe that gap has widened since. After four Fianna Fáil and Progressive Democrats budgets, the ESRI stated in July 2001 that the high rate of relative income poverty is a serious structural problem that needed to be tackled while the resources were available. I would like to have said more but, undoubtedly, I will join colleagues in voting no confidence in the Minister for Finance.
Before we get into the nitty-gritty of the debate, I wish to address what the Minister for Health and Children, Deputy Martin, said about the amount of money directed towards people with disabilities. According to recent figures, 1,711 people with intellectual disabilities are in need of residential services, 861 need day care services and 462 are without any service. Last night the Minister for Enterprise, Trade and Employment, Deputy Harney, spoke about the reduction in the number of unemployed to 4.4% but the reality is that for disabled people unemployment is 70%. Is that the Celtic tiger?
I support the motion before the House. It is about confidence in the Minister for Finance and particularly the way he has mismanaged the public finances over an extended period. The debate is about the public finances and not the economic boom. The bottom line is that the Minister did not do the right thing at the right time. I blame the Cabinet too because, as a group, it must take responsibility. I am not looking for a head on a plate on the serious issue of our public finances but rather accountability from the elected members of this Government. They have failed to manage our finances and the public is losing confidence and demanding leadership and good practice in managing our money. Let us remind ourselves that, as taxpayers, it is our money.
In the past seven years, we had the opportunity to end the housing crisis, to create services for the disabled and to do something about poverty in society, but the Cabinet blew it. The Government gave tax cuts to the well-off and walked away from providing services and taking the tough decisions in the interests of ordinary people. It squandered the boom and there is no way of walking away from that fact because it is a sad reality for many families. The Minister's leadership regarding our finances was not good enough.
Of course, we must be responsible and manage our finances properly, but this is not just an economy but a country and a society, despite what some may think. We must be creative with our accounting and make sure everyone gets their fair share of tax. This is not happening at the moment. The Government writes off uncollected tax each year. In 2000, the total was €103 million; in 2001 it was €140 million and between 1997 and 2001, €987 million of tax debt was written off by the Revenue Commissioners according to its own figures. These are conservative figures but they show from where finances could be obtained to prevent cuts in public expenditure. They also show that tough decisions are not being made and that the Government is taking the easy option of cutbacks, thereby making ordinary people pay for the mismanagement of the public finances. I urge the House to support the motion.
Speaking as a Socialist Party Deputy, I have no confidence in this Minister for Finance. Over five years, he has transferred enormous wealth from working people to the very wealthy, big business and the major corporations. When he announced the budget last year, at a stroke he gave €329 million to big corporations in tax cuts, a further €347 million in reductions of employer's PRSI contributions. That is a massive €676 million in one year at a time when big business could not believe the profits it was raking in. The Minister intends to further reduce corporation tax to 12.5% – a further €300 million to €400 million in this budget. That means he is giving €1,000 million per annum to the minority business sector while 200,000 hard pressed working people will not have medical cards extended to them.
The Minister for Enterprise, Trade and Employment, Deputy Harney, yesterday proclaimed the Minister for Finance as her rock. It is no wonder because they have a long history of ideological bonding as well as bonding with big business with whose philosophies they are saturated. These are the Minister's policies. One can imagine the tone of the economic policies they discussed when they shared millionaire tycoon McElvaddy's sumptuous villa on a jaunt to the south of France a few years ago. Over the beef bourguignon and fine Côte de Nuit burgundy, one can be sure they were not talking about shifting the burden of taxation from working people to the super rich or closing down the disgraceful rules by which multi-millionaire citizens of this State seek refuge in tax havens abroad so they do not pay their fair share.
During yesterday's Question Time, the Taoiseach hypothetically said that perhaps one could take the view that the whole capitalist system was finished. I wish it was and the sooner the better because it will get rid of this Government and this Minister and allow a society to develop for the benefit of ordinary working people.
At least the Deputy has always been consistent.
Smash capitalism.
When the Minister for Finance launched the national development plan two years ago, he said the achievement of balanced regional development was one of the fundamental objectives of the plan. Whether one refers to the Fitzpatrick report, the INBUCON evaluation of public transport priorities or net employment figures in the BMW and the south and east region, it is clear the economic gap continues to grow. Balanced regional development will never happen under the current national development plan unless the Minister takes immediate action in the mid-term review or in the spatial strategy. I have no confidence in a Minister who was unable to achieve a fundamental objective of his own plan in terms of balanced regional development.
I wish to share time with Deputies Enright and Burton.
The Minister said it is not a crime to give back money to those who own it. Of course it is not a crime – it is in fact a responsibility to do so. Unfortunately, it is also not a crime to deceive the people, despite the fact that it is morally wrong. I will point out to the Minister how people were deceived in recent months, particularly in the run up to the general election. On 13 May 2002, a few days before the election, the Minister wrote to the leader of Fine Gael as follows: "I can confirm that there are no significant overruns projected and no cutbacks whatever are being planned, secretly or otherwise."
What did I say in the next sentence?
The next sentence stated: "Having had considerable experience in Government yourself, I am sure you realise that, with a Government spending programme of €40 billion, some programmes will be underspent and others will overspend."
Precisely.
The Minister went on to say, in the third paragraph:
In relation to revenue, I am sure you will also welcome the recent strong rebound of our economy from the effects of the global downturn. In terms of employment, industrial activity and so on, all the key indicators have recently improved considerably.
That was last May. Very shortly afterwards, with the ink scarcely dry on the Minister's letter, the cost of a visit to a hospital casualty department has increased by 26%, VHI charges are up 18% and ESB charges are about 10% higher. College registration fees for students are up by 69% and the drugs refund scheme costs 22% extra. This is despite the Minister's statement that there would be no changes.
I also wish to refer to a further deception. Last April, in the run up to the election, the Department of Education and Science set up websites with information on the status of various schools building projects. One such website carried the heading, "Major primary school projects approved to go to tender". In anybody's understanding, if a project is approved to go to tender, that indicates that prices will be obtained and a decision will be made as to whether the project is to go ahead. There were 30 primary school projects listed and, in all of the areas concerned, letters were circulated by Fianna Fáil candidates stating that the projects had been approved and everything was in order. However, in reply to a parliamentary question on 5 November, I was informed that, of the 30 projects listed last April, only 17 have gone to tender and only six have actually commenced construction. Is that not deception?
Lest the Minister might be under the impression that we are the only ones saying he deceived the public, I will quote from the opinion column in The Irish Times of 12 November which stated:
The coalition Government's response to the publication of a highly sensitive memorandum from the Department of Finance, calling for a reduction of €900,000 in spending on existing services in the coming budget, was pathetic. Rather than apologise to voters for misleading them at election time or considering whether ministerial resignations were in order, the Government chose to embark on a hunt for the individual who had issued the damning material.
The circumstances which gave rise to the Fine Gael motion are quite different to what the Taoiseach outlined in his speech last night. The present situation would not have arisen if the economic boom had been managed properly and if the Minister for Finance had the foresight to realise that the good times would not just keep on rolling. I am referring to proper management, not simply cooking the books. The standard media presentation by the Government is to give a litany of the expenditure on various programmes. Nobody is questioning ability to spend. The real issue is value for money, something we have not had from this Government.
Some of those on the Government side who supported the Minister tonight were those who were most vocal in their criticism two months ago, before his trip to County Kerry. At that time, they complained of how little information they were getting from the Minister for Finance. Now, they are congratulating him on the work he has done. Deputy Bruton referred to the hangover from which the country is suffering as a result of the Minister's spending splurge. There is little to show for it and we are back to belt-tightening times. The Minister should consider the people who will be most affected in this. At least 100 of our schools are still substandard, with rat infestation and antiquated toilet facilities. The Minister should visit some of those places to appreciate how little has been achieved. School managements seeking approval to go to tender are being slowed down and put on hold. I have been informed today of what is, in effect, a cut in the capitation grant, which will no longer keep in line with inflation. That is another backward step for which the Minister is responsible.
This Government has allowed €30 million to be spent in the last year on employing substitute supervisors in secondary schools. That is a total waste of money, as a result of which the Minister for Education and Science has had to cut back significantly on programmes and increase charges. He has cut back €36 million from initiatives planned to help those most vulnerable in society, including €6 million to reduce the school drop-out rate, €5 million to attract socio-economically disadvantaged school leavers into third level education and €3.8 million from adult education programmes. When the Minister for Finance demanded savings, the Minister for Education and Science responded by taking out his scissors and cutting. Value for money was irrelevant. The 69% increase in third level registration fees hits the same families again, due to the ineffectiveness of this Minister, who has spectacularly failed to realise the importance of our young people. He has failed to recognise the return which investment in our young people can bring to the economy in future years. I believe the Minister for Education and Science, as a result of pressure from the Minister for Finance, is actively contemplating the reintroduction of third level college fees. In the House last night, the Tánaiste gave her rendition of "Stand by your man" in supporting the Minister for Finance, whereas before the Nice referendum she spoke vociferously against the reintroduction of third level fees. I hope she and her party colleagues will continue to ensure that does not happen.
Due to the incompetence of the Minister for Finance, the Minister for Education and Science, Deputy Dempsey, is about to set a new record. In his previous term as Minister for the Environment and Local Government, his achievement was to put house prices out of the reach of many people. He now looks set to put education equally out of reach of many people. The Minister for Finance asked why this motion was brought forward before the budget. He appears to be anticipating another motion of confidence in him in three or four weeks time.
Fianna Fáil claimed a unique selling point in the general election last May, namely economic competence. Voters were led to believe that Fianna Fáil could handle the economy best. A party with a commanding lead on economic management is usually electorally unbeatable. However, there is no free lunch in developing and sustaining such a lead. It comes at a cost and, when lost, remains so for a very long time.
Ten years ago John Major trounced Labour in Britain because of economic competence. On black Wednesday, five short months later, he lost it completely in just one day. His party has not recovered from that loss of belief in its capacity to run the economy. Comparisons can be deceptive but I suspect the Minister for Finance has caught the Norman Lamont bug and no amount of medicine will cure the infection. His sunny smile coaxed us to party through the boom and ignore the Cassandras who warned of the inevitable hangover and the social downside of his policy. It was fine then, but it is not so fine now. No way is he now the Minister for Finance who can candidly face the truth and set in reverse the policies that brought him fame but are now inappropriate to the new economic realities.
One of these new economic realities emerged only last evening from the World Economic Forum which downgraded Ireland's competitiveness in the international competitiveness league from 11th to 24th place. The mask of economic competence is slipping very rapidly indeed and that fact was paraded before the whole world. Every year during the boom the Taoiseach and the Minister for Finance could bask in the glow of international reports such as this which boosted Ireland's international ratings. If they took the kudos then they must take the rap now for our falling positions.
Equally disturbing is the revenue shortfall exposed in recent Exchequer returns. Tax receipts under most headings are way down. Some of this is due to reduced overtime and fewer bonuses but one alarming feature is the tax agenda of the Minister, Deputy McCreevy. The pride and joy of the McCreevy reign in Merrion Street is the elaborate framework of tax shelters he has purposely created, year in and year out, to enable a reduction, or indeed elimination, of tax for the very rich people. If tax shelters are created it must follow, as night follows day, that tax revenue from this well-to-do sector will fall dramatically.
The impact of the ill-judged special savings scheme exacerbates this. Whatever its merits, it is inexcusable that the cost estimates were so totally off the mark. This is no simple error of calculation, unforgivable though that would be, it is an error of judgment which on its own deserves the sanction of the loss of office.
For five years the Minister, Deputy McCreevy, had a golden economy and his leader's remarkable personal authority. He could have moved mountains, but he barely managed to move a molehill. Look at the turnabout so far on the national development plan. This was the flagship of the Government for the past six years. The flag looks rather frayed and shabby now and the ship is barely above the water line. There is not a single heading in the plan where significant progress can be reported and many projects, such as the Dublin metro, are effectively in the bin. More will follow tomorrow. Cost overruns and woeful project management have resulted in a roads programme which is in serious disarray. The same applies to public transport and investment in a central communications infrastructure. The World Economic Forum reported last night that our communications infrastructure has fallen to No. 31 in the world league. We have fallen behind Northern Ireland and parts of eastern China.
This failure to deliver on targets will destroy, and deserves to destroy, the Minister's reputation for competence. He, more than any other Minister, oversees the national development plan. When faced with funding difficulties in his current spending he simply chose to raid the surplus, which was earmarked for capital spending, to cover his blushes and hide the evidence of economic mismanagement. Rather than face the music for allowing a deficit he simply let the capital programme run behind and endure intentionally created delays so that the surplus could be diverted into a reckless, politically motivated spending binge on headline-making tax cuts.
This was always the case with Fianna Fáil, but unfortunately the country will pay dearly for the mismanagement of capital plans and use of cutbacks on capital as the easy route to a balanced budget. Predecessors of the Minister have ensured that the intersections on the Naas Road, the M50 and Blanchardstown were built to a poor and shabby design. It will cost a fortune to rectify them. That is the standard of management the Minister has brought to the economy. Shoddy decisions with huge costs to be paid in the future by Irish workers. The stunning part of this is the breathless U-turn which the Minister made from the days when he starred as the tormentor of the squire of Kinsealy. We remember it well. How that old fox must smile into his champagne cup as he sees the saint of fiscal rectitude stray from the holy path into the same kind of temptation for which he was notorious and for which the Minister castigated his former leader. Not since St. Paul on the road to Damascus has there been such a conversion from fiscal rectitude to total recklessness.
The Minister, Deputy McCreevy, is a professional accountant. He knows the rules and he knows what false accounting means. He has presented accounts which do not present a true and fair view of the economy. No conscientious board of a private company would tolerate what has been foisted on the people. The only people who would tolerate it are those caught up in a spiral of false accounting like Enron or WorldCom. They cover up their losses by one device or other, leaving a false picture of the true state of the financial affairs they managed.
The Minister can hardly be proud when he surveys the country that he could have shaped but did not. Few finance Ministers had the numbers to put their individual stamp on the face of the country. The Minister should eat his heart out. He had the chance to leave a stunning legacy and he has blown it. In years to come voters will look back in anger at the lost opportunities, the reckless spending and the rash tax cuts for the better off.
The Minister has stayed too long in the job. He can do no possible good by staying on now. If his party and leader let him stay it will tell a revealing tale of their true beliefs. For the sake of the country the Minister should call it a day.
I am pleased and honoured to come into the House and express my support for the Minister for Finance—
When will the ship arrive in Egypt?
It is difficult and mind-boggling to believe that Fine Gael has the gall to table an opportunistic and unjustified motion of no confidence in the Minister, Deputy McCreevy. He has been undoubtedly the most successful Minister for Finance in recent decades.
Is it the Marie Celeste?
What really rankles Fine Gael? Is it the massive growth he has inspired in the economy since his term of office – almost 10% per annum. Is it that he has effectively wiped out unemployment? Is it that he has put more money in people's pockets? Is that what rankles them? Is it that we are now one of the strongest rather than one of the weaker economies in the European Union? Is it that we are one of the favourite locations in the EU for foreign investment? Is it that we are still the fastest growing economy in the European Union? Is it the Minister's approach, which has enabled us to eliminate emigration and now enjoy net immigration?
Maybe in the midst of all this success Fine Gael does not know what is happening. I would like to remind it what the Minister, Deputy McCreevy, has done in good international economic times now that we are facing more difficult times. Let me remind the House what the last Fine Gael Minister for Finance did – Members will need some recall for this. It has been some time since Fine Gael had a Minister for Finance—
It will not be long.
—but I will remind the House and the Irish people of the awful state of the—
National roads.
—national finances and the economy—
At present.
—under the stewardship of the last Fine Gael Minister for Finance, and contrast Fine Gael's difficulties with the prudent and careful response of the Minister—
It was handled well by Fine Gael.
It does not make for enjoyable listening. The top income tax rate was at an unbelievably and unacceptably high level of 65% under Fine Gael.
There you are.
It stands at 42% today.
The Minister is letting farmers down.
The standard income tax rate was 35%, but now it is 20%—
Tell that to the farmers.
—thanks to the good management of the Minister for Finance, Deputy McCreevy.
What about the beef industry?
(Interruptions.)
What about corporation tax?
Fianna Fáil threw it away.
What about corporation tax?
(Interruptions.)
Silence, please.
Corporation tax stood at 50%, but it is now 12.5%.
(Interruptions.)
Fianna Fáil Ministers wrecked the country before and they are doing it again.
The Minister should be allowed to conclude.
That is it.
The Minister is entitled to the same courtesy as other speakers.
He is not down at the Gaiety.
He is entitled to put his speech on the record of the House.
He is not at a Fianna Fáil meeting.
If Members do not refrain from interrupting I will ask somebody to leave.
Deputy McDowell, for example.
For the benefit of the House and the Irish people, I am contrasting how Fine Gael and the Minister, Deputy McCreevy, deal with economic problems.
I will ask Deputy Hayes to leave the House if he does not stop interrupting.
Do not be so sensitive.
Corporation tax was 50% under Fine Gael, but it is now 12.5%.
What about 1977?
Foreign investors see Ireland as the best location in the European Union, thanks to our low level of corporation tax. It should not be forgotten that the national debt was 122% of gross national product at the end of Fine Gael's stewardship of the economy.
Fine Gael doubled it in five years.
It is 38% today, thanks to Deputy McCreevy.
He saved the Minister's seat.
That is not all. Almost one fifth of the workforce was unemployed at the end of Fine Gael's term in office.
The Minister has skipped a page.
Up to 50,000 well-educated young people left the country in despair each year.
That is what happens when a Fine Gael Minister is in charge of the Department of Finance.
The Tallaght strategy saved Fianna Fáil.
Fine Gael has an appalling record.
It is sobering for those of us who lived through that depressing period to reflect on how depressed the economy and the national finances were. The fact that the then Minister had no vision of a solution made things worse.
Did the Minister meet the IFI workers today?
The Minister, Deputy McCreevy, has a solution.
The IFI employees were here today.
I have outlined what happened when we were supposed to be building on reality.
Does the Minister have the solution to the problems at IFI?
The Fine Gael national plan, called Building on Reality, collapsed as did the Government at the end of the day, as a result of poor fiscal management.
The poor Minister is stuck in the past.
I am reminding the House of the contrast—
Poor old Joe.
—between a proven manager of the national finances—
The Minister should go back to 1977.
Allow the Minister to speak without interruption.
Fianna Fáil bought the election in 1977.
Deputy Crawford, please.
Do Members know what Exchequer borrowing was at that time? It was 13%.
Fine Gael had a lot more seats then.
Absolutely.
Does Deputy McDowell remember the former Taoiseach, Charles Haughey?
The country was in a bad state after Fianna Fáil bought the election in 1977.
Allow the Minister to continue.
It is worth reminding the House that almost the entire PAYE take was being used to service the national debt.
It is a long time since Charlie Haughey would not allow the Minister to get on his helicopter in west Cork.
The entire take went to service the national debt as a result of the appalling mismanagement under Fine Gael's stewardship.
The sorriest thing of all is that Fine Gael had 69 seats at the start of that Government, but it has only 31 now.
I ask the Minister for Finance not to interrupt the Minister for Agriculture and Food.
The people have not yet judged this Government.
Fine Gael has 31 seats now, if my memory serves me correctly.
Not surprisingly, national output was less at the end of Fine Gael's term than it had been at the start of it.
The people are watching now.
Almost 250,000 people were unemployed, which was the worst aspect of it all. What a record and what a party to put down a motion of no confidence in the Minister, Deputy McCreevy.
The Minister is the great defender.
Some 1 million people were employed at the start of Deputy McCreevy's term as Minister for Finance, a figure that has increased to 1.7 million.
The former Deputy, Paddy Sheehan, would not agree with the Minister's argument.
The Deputy will get a chance to contribute.
The number of people in employment has increased by 700,000.
The Minister is good at sums.
Fair play to the Minister for Finance for taking such a prudent course of action.
The Minister has one minute remaining.
That is a pity—
He has little to say.
—because I was going well.
The Minister's days are numbered.
A Deputy
We could not take any more.
He is lucky.
I had better skip part of my speech.
The Minister's ship has landed.
Allow the Minister to conclude, please.
Needless to say, we have finished with Argentinian style economics.
What about Egypt?
I would like to briefly address the crucial issue of how the current downturn in tax receipts can be resolved. No member of the Government will shirk his or her responsibility to bring the country successfully through this international downturn. All sectors of the community will make a contribution and we will keep spending in line with our ability to fund expenditure.
It is a little late to be converted to that.
The Minister is taking people for fools.
It is a great pity that Fine Gael will not show more respect for such a successful Minister for Finance.
Should we show respect?
That is the only way to deal with a problem like this. It is a great pity that his unprecedented success appears to rankle so much with Fine Gael. The Minister's assessment that Fine Gael was the first Opposition to be voted out in a general election was true. Consequently, Deputies from that party would be better employed taking stock of their position rather than putting down such a petulant motion of no confidence.
The Minister's time is up.
He should tell the truth.
This motion is an exercise in escapism and I call on the House to strongly reject it.
It does not give me any pleasure to promote a motion of no confidence in the Minister for Finance, a man who has always had strong principles and who stood by them in the early 1980s. In his speech, the Minister, Deputy McCreevy, said that Fine Gael is trying to establish a record by putting down a motion of no confidence before the budget has been issued. This motion, however, relates to the Minister's mismanagement of the public finances during his tenure as Minister for Finance since 1997, particularly in the past two years. When the people judge the Minister's budget in four weeks time, it may not be necessary to put down a motion of no confidence as their verdict will be clear. It is not true to say that we are looking to set a record by putting down this motion before the Minister delivers his sixth budget, as this motion relates to the past two years. The story of the missing billions is one of the greatest mysteries since the world was asking who shot J.R.
The money is in the pockets of the people.
The workers of Ireland handed the Government a surplus of €4.8 billion, but, true to Fianna Fáil form, it was taken care of. The Government took care of it by handing the people a deficit which, as I speak, is rising to €1 billion. The hard-pressed workers of Ireland, 300 of whom were outside this House today and thousands of whom are doing the most important job of all by rearing children, are saying, "Thanks a lot, big fella" to the rock, Deputy McCreevy. The rock has been found out in recent times as his attempt to do the national equivalent of paying off the overdraft by putting it on the gold card has come back to haunt him.
The Minister's dire need to extricate himself from the awful financial quagmire we face dawned on him long before it became apparent to everyone. As soon as he came back into office, he instigated a survival plan. He knew he had been discovered and that someone would have to pay. It became a simple matter of choosing a victim, so he decided, as a start, to napalm the public services. Some €36 million was taken from education schemes devised specifically for disadvantaged children and 800 jobs in the health sector were lost. National road projects worth a cool €2 billion were scrapped and overseas aid was cut by €40 million. The Minister was playing it safe in the latter instance, as it is highly unlikely that the world's most destitute people, such as women who walk for hours each day to get water for their children, will ever be asked to endorse Fianna Fáil. Local authorities have been told that if they want to provide social housing, they will have to build the houses themselves. There is no room at the inn for the estimated 100,000 people on housing waiting lists.
The Deputy should get his facts right; the figure is 48,000 people, not 100,000.
Celtic tiger Ireland is leaving its own people homeless.
The Deputy is engaging in Bart Simpson economics.
Deputy Kenny should be allowed to conclude without interruption.
Deputy Kenny must get his scripts from "The Simpsons".
Some €20 million has been removed from the fund to provide broadband technology, which is the lifeline to the BMW region and the electronic linchpin of the spatial strategy. The cost of a visit to accident and emergency wards has increased by 40% and VHI charges have gone up by 18%, after a previous rise of 9%. ESB charges have increased by an average of 10% and an extra 69% has been added to college registration fees. The threshold for the drugs refund scheme went up by 22%. We have the highest inflation rate in the European Union. The Minister is now extending these slash and burn tactics with the imprimatur, as opposed to the tacit approval, of the Taoiseach and the Minister for Enterprise, Trade and Employment, Deputy Harney. The Government has decided that it can wring a bit more life from our most vulnerable citizens – the old, the sick and our children. These people are, ironically, those to whom the Minister for Finance owes a critical and constitutionally important duty of care.
Coldly, the most fragile people have been selected for special treatment because they are being driven relentlessly and mercilessly into the economic killing fields. Leaving massive cuts in the public service aside – those I mentioned are just the opening salvo – Government spending is now running at €1 billion ahead of budget day targets. At the same time tax revenues are €1 billion below target. As I said earlier this week, even the manager of the local Christmas club could understand that. In pure economic terms, this represents a swing of €2.3 billion. If this continues, based on the Minister's own figures, we face a budget deficit of more than €5 billion in 2003, rising to more than €6 billion in 2004. All of that assumes that by some unique fiscal miracle the Minister, Deputy McCreevy, will stick to his spending target for those two years. That is hardly likely when one considers his terrifying grasp of accounting procedures. Spending growth is rising at more than 20% each year. He has abdicated his responsibility by demonstrating beyond doubt that neither he, his Department, nor his Government have the remotest notion of what these tax concessions have cost. However, he actually believes that spending, which has been running at 20% for ten months, will nose dive to 6% for November and December. Is this real? Is this competency? Is this confidence?
On a Friday night some time ago on "The Late Late Show", the Minister chose to deliver a bizarre state of the nation address. He brazened out the oral indignation of the audience to announce that tax revenues would be €500 million below target. A week later he told a press conference that he would revise that figure upwards to €750 million. Two weeks later we discovered by a mistake, a felix culpa in the Department of Foreign Affairs, that we had left behind the realm of missing millions. This time we were going the whole hog –€1.3 billion. Our Minister for Finance, an tAire Airgeadais agus gach uile a bhaineann le sin – with all its connotations in our native language of duty, care, minding and responsibility, lost the country €1 billion in October alone. That is €250 million a week. Now the people will have to make it up. The Government did a runner with the public purse but the citizens must pay.
(Interruptions.)
Deputy Kenny, without interruption.
On budget day the Minister, Deputy McCreevy, will prescribe a lash of nettle tea, sackcloth and ashes, hair shirts and tight belts. His new year message will be to "abandon hope all ye who enter here". One thing is for certain, the financial agony devised and now inflicted by the Minister will not abate. The Taoiseach said this evening that the 200,000 people who were due to get medical cards will not now get them. The people will pay an exorbitant price for this uncharacteristic fit of fiscal rectitude. If the Minister, Deputy McCreevy, were the financial controller of a private company he would be gone long since to "pursue other interests". As "Catch 22's" Joseph Heller put it, "If I'm going to be trivial, inconsequential and deceitful, I might as well be in Government."
Deputy Kenny is not in Government. I know that is difficult.
For Fine Gael, public business is always the most important business. The management of the public finances is always critical. The Estimates to be produced tomorrow are equally so. The budget just three weeks away will be the most critical in over a decade and consequently it deserves serious debate. I regret, however, that it will probably not get it. In fact, the shallowness and crassness of the Government was amply illustrated by the Taoiseach and Tánaiste last night. The Taoiseach said that health spending has risen by 134% since 1997. He said the numbers working in the health service were up by 22,000 in the same five years. He proudly announced the numbers of extra nurses and consultant doctors at 6,150. Less than one-third of those jobs were for front line medical personnel. Bureaucracy devoured the rest.
The Tánaiste said last night that so far this year we have granted as many work permits as we did for the whole of last year. That, she said, does not indicate an economy in crisis or difficulty. I agree absolutely with her. What it indicates, however, in health terms is an unreformed health service in deep crisis. The very fact that so many of these permits are for doctors and nurses from overseas shows the Government's spectacular success at making a career in medicine in this country a singularly unattractive option. It is now a ramshackle, disappointing, deeply frustrating prospect for so many of our best and brightest people who care and who genuinely want to contribute to the society in which we live. Publicly and here in this House, the Government has waxed lyrical about a renewal of politics. A good place to start would be for the Government to show some moral leadership and a good place to start giving moral leadership would be to have an open discussion about the state of the public finances. Let everyone have the facts transparently because a cut could then be a cut, not an adjustment.
Since the Government took office, it spurned every opportunity for serious debate and analysis of the outlook for the public finances. It is in confronting problems that we begin to solve them. There is no sign of the Government even admitting to the problem, never mind confronting it.
The Deputy would not debate it on the radio this morning.
As I speak, the 2003 Estimates round is being completed and will be published tomorrow. Critical decisions are about to be taken about public finances and the capital programme. These decisions, which will affect every citizen and will have an impact on the competitiveness of the economy and on every business and household, were taken in a vacuum without any public debate.
Serious discussions to formulate a new partnership agreement have begun, an agreement which will incorporate the recommendations of the benchmarking body. This partnership agreement will have a powerful and enduring effect on our economy. After all public sector pay accounts for half of Government spending. Without an understanding of the current state of the public finances, how can there be constructive suggestions or constructive commentary that will inform debate on this critical agreement? I am demanding in the name of the people honesty in the Estimates. There must be no more monkey business. I do not want dodgy accounting pretending that public spending is not quite as bad as we all know it to be. I do not want capital spending hidden away in the National Development Finance Agency. I do not want dodgy transfers from the social insurance fund, Central Bank, capital services redemption account or the NTMA. I do not want to find that the Minister is deferring EU budget contributions to next year or that spending normally for 2002 will be transferred to 2003. I do not want apparent increases in health spending to prove illusory because health boards are already at maximum overdraft limits. I want evidence of real reform, the kind that gives us confidence, that an increase of 8% in the Estimates volume will not become 19% by 2003, as happened this year and last year. I want to see value for money. I want proper management of the public finances. I want a fiscal responsibility Act introduced which will mean that each Minister will comply with his or her budget and that no over-spending will occur unless specifically authorised by Cabinet. If the Minister, Deputy McCreevy, is not part of the solution, then he is very much part of the problem. The state of the economy is a serious business. If there are problems, pretending they do not exist or that they will somehow go away is a route we have travelled in the past, with woeful consequences.
Neither I, my party, this side of the House nor all the Opposition Members have any confidence that the Minister for Finance will address these problems or, at the very least, recognise they exist. We are not yet in economic crisis. However, as night follows day, we will have a crisis if the Government does not confront it, analyse it and begin to solve it now. In the words of Henry Kissinger, "An issue ignored is a crisis ensured".
These days, the Minister, Deputy McCreevy, arouses a lot of public feelings – everything except trust. But those who say there is no friendship at the top are wrong. The Taoiseach and Tánaiste, neither of whom are here, are standing firmly by their man, their rock. As we have seen to our cost, to have the Tánaiste or the Taoiseach turn on the remaining member of their triumvirate would be about as likely as L'Osservatorio Romano turning on the Pope. The Minister has diminished competitiveness and destroyed confi dence. He has shown complete ineptitude and exposed thousands of working families to the threat of economic ruin in the times ahead. This problem is the Minister's and it is of his making. It must now be of his fixing. He has proved undeserving of public and political confidence. His democracy is simply opportunism, therefore, he must go. If he had any sense, he would go. I hope he will.
Amendment put.
Tá
|
Ahern, Bertie.Ahern, Dermot.Ahern, Michael.Ahern, Noel.Andrews, Barry.Ardagh, Seán.Aylward, Liam.Brady, Johnny.Brady, Martin.Brennan, Seamus.Browne, John.Callanan, Joe.Callely, Ivor.Carey, Pat.Carty, John.Cassidy, Donie.Collins, Michael.Coughlan, Mary.Cowen, Brian.Cregan, John.Cullen, Martin.Curran, John.Davern, Noel.Dempsey, Noel.Dempsey, Tony.Dennehy, John.Devins, Jimmy.Fahey, Frank.Fitzpatrick, Dermot.Fleming, Seán.Gallagher, Pat The Cope.Glennon, Jim.Grealish, Noel.Hanafin, Mary.Haughey, Seán.Healy-Rae, Jackie.Hoctor, Máire.Jacob, Joe.Keaveney, Cecilia.Kelleher, Billy.Kelly, Peter. |
Killeen, Tony.Kirk, Seamus.Kitt, Tom.Lenihan, Brian.Lenihan, Conor.McCreevy, Charlie.McDowell, Michael.McEllistrim, Thomas.McGuinness, John.Martin, Micheál.Moloney, John.Moynihan, Donal.Moynihan, Michael.Mulcahy, Michael.Nolan, M. J.Ó Cuív, Éamon.Ó Fearghaíl, Seán.O'Connor, Charlie.O'Dea, Willie.O'Donnell, Liz.O'Donoghue, John.O'Donovan, Denis.O'Flynn, Noel.O'Keeffe, Batt.O'Keeffe, Ned.O'Malley, Fiona.O'Malley, Tim.Parlon, Tom.Power, Peter.Power, Seán.Roche, Dick.Ryan, Eoin.Sexton, Mae.Smith, Brendan.Smith, Michael.Treacy, Noel.Wallace, Dan.Walsh, Joe.Wilkinson, Ollie.Woods, Michael.Wright, G. V. |
Níl
|
Allen, Bernard.Boyle, Dan.Breen, Pat.Broughan, Thomas P.Bruton, Richard.Burton, Joan.Connaughton, Paul.Connolly, Paudge.Costello, Joe.Coveney, Simon.Cowley, Jerry.Crawford, Seymour.Crowe, Seán.Cuffe, Ciarán.Deasy, John. Deenihan, Jimmy. |
Níl–continued
|
Durkan, Bernard J.English, Damien.Enright, Olwyn.Ferris, Martin.Gilmore, Eamon.Gogarty, Paul.Harkin, Marian.Hayes, Tom.Healy, Seamus.Higgins, Joe.Higgins, Michael D.Kehoe, Paul.Kenny, Enda.Lowry, Michael.Lynch, Kathleen.McCormack, Pádraic.McGinley, Dinny.McGrath, Finian.McGrath, Paul.McManus, Liz.Mitchell, Gay.Mitchell, Olivia. |
Morgan, Arthur.Naughten, Denis.Ó Caoláin, Caoimhghín.Ó Snodaigh, Aengus.O'Dowd, Fergus.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Pattison, Seamus.Penrose, Willie.Perry, John.Rabbitte, Pat.Ring, Michael.Ryan, Eamon.Ryan, Seán.Sargent, Trevor.Sherlock, Joe.Shortall, Róisín.Stagg, Emmet.Timmins, Billy.Upton, Mary.Wall, Jack. |
Tellers: Tá, Deputies Hanafin and Kelleher; Níl, Deputies Durkan and Stagg.
Amendment declared carried.
Question put: "That the motion, as amended, be agreed to."
Tá
|
Ahern, Bertie.Ahern, Dermot.Ahern, Michael.Ahern, Noel.Andrews, Barry.Ardagh, Seán.Aylward, Liam.Brady, Johnny.Brady, Martin.Brennan, Seamus.Browne, John.Callanan, Joe.Callely, Ivor.Carey, Pat.Carty, John.Cassidy, Donie.Collins, Michael.Coughlan, Mary.Cowen, Brian.Cregan, John.Cullen, Martin.Curran, John.Davern, Noel.de Valera, Síle.Dempsey, Noel.Dempsey, Tony.Dennehy, John.Devins, Jimmy.Fahey, Frank.Fitzpatrick, Dermot.Fleming, Seán.Gallagher, Pat The Cope.Glennon, Jim.Grealish, Noel.Hanafin, Mary. |
Haughey, Seán.Healy-Rae, Jackie.Hoctor, Máire.Jacob, Joe.Keaveney, Cecilia.Kelleher, Billy.Kelly, Peter.Killeen, Tony.Kirk, Seamus.Kitt, Tom.Lenihan, Brian.Lenihan, Conor.McCreevy, Charlie.McDowell, Michael.McEllistrim, Thomas.McGuinness, John.Martin, Micheál.Moloney, John.Moynihan, Donal.Moynihan, Michael.Mulcahy, Michael.Nolan, M. J.Ó Cuív, Éamon.Ó Fearghaíl, Seán.O'Connor, Charlie.O'Dea, Willie.O'Donnell, Liz.O'Donoghue, John.O'Donovan, Denis.O'Flynn, Noel.O'Keeffe, Batt.O'Keeffe, Ned.O'Malley, Tim.Parlon, Tom. Power, Peter. |
Tá–continued
|
Power, Seán.Roche, Dick.Ryan, Eoin.Sexton, Mae.Smith, Brendan.Smith, Michael. |
Treacy, Noel.Wallace, Dan.Walsh, Joe.Wilkinson, Ollie.Woods, Michael.Wright, G. V. |
Níl
|
Allen, Bernard.Breen, Pat.Broughan, Thomas P.Bruton, Richard.Burton, Joan.Connaughton, Paul.Connolly, Paudge.Costello, Joe.Coveney, Simon.Cowley, Jerry.Crawford, Seymour.Crowe, Seán.Cuffe, Ciarán.Deasy, John.Deenihan, Jimmy.Durkan, Bernard J.English, Damien.Enright, Olwyn.Ferris, Martin.Gilmore, Eamon.Gogarty, Paul.Gormley, John.Harkin, Marian.Hayes, Tom.Healy, Seamus.Higgins, Joe.Higgins, Michael D.Kehoe, Paul.Kenny, Enda.Lowry, Michael.Lynch, Kathleen. |
McCormack, Padraic.McGinley, Dinny.McGrath, Finian.McGrath, Paul.McManus, Liz.Mitchell, Gay.Mitchell, Olivia.Morgan, Arthur.Naughten, Denis.Ó Caoláin, Caoimhghín.Ó Snodaigh, Aengus.O'Dowd, Fergus.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Pattison, Seamus.Penrose, Willie.Perry, John.Rabbitte, Pat.Ring, Michael.Ryan, Eamon.Ryan, Seán.Sargent, Trevor.Sherlock, Joe.Shortall, Róisín.Stagg, Emmet.Stanton, David.Timmins, Billy.Upton, Mary.Wall, Jack. |
Tellers: Tá, Deputies Hanafin and Kelleher; Níl, Deputies Durkan and Stagg.
Question declared carried.