We will resume with Deputy Bernard Durkan.
Macroeconomic and Fiscal Outlook: Statements (Resumed)
Watch the clock.
I will.
At this time, we should all recognise and acknowledge that at least one thing has happened, which is that the economic issue has moved centre stage. There are no other deflections, no other pretence and no suggestion that we will have a soft landing. Does the Ceann Comhairle remember the soft landing we were promised three years ago? It did not come.
For clarity on the division of time, Deputy Durkan has five minutes, Deputy Brian Hayes has seven minutes, and Deputies Joe Carey and McEntee have four minutes each.
I think Deputy Durkan was supposed to get only four minutes.
I have no doubt Deputy Finian McGrath will tell me when my time is up but I ask the Ceann Comhairle to advise me when I have one minute remaining.
I will endeavour to notify the Deputy with one minute to go.
At least now it is recognised by all on the other side of the House that there is a serious economic issue. The soft landing has gone and if it was a soft landing it was not what was expected, anticipated or predicted by the Government.
The Opposition was blamed by the Government for the economic state of the country. We have to ponder this because it is serious. In what way was the Opposition to blame? Was it that it did not tell the Government where it was going wrong? However, it did do so, but the Government repeatedly refused to listen. Its Members went along with their heads in the air, or in the sand as the case may be, and did absolutely nothing.
Now we have a situation where all politicians are to blame, including the Ceann Comhairle. This is the Government's way of getting away from its responsibilities for failing to pull the handbrake in time and failing to recognise all the signs that were there. Over the past five or six years, the Government repeated that the fundamentals were right. They were not right and time has shown this to be the case.
I have noticed, and even former taoisigh have spoken about this from time to time, that the Government took advice and sought expert opinion. God knows we have heard much expert opinion over the past 12 or 14 months, most of which was wrong. The important thing about expert opinion is that while all bodies, groups and agencies should call on it, having done so they should then evaluate the basis on which it was formed and come to a conclusion. This is what a Government is for. The Opposition does not do this because it is not in government and cannot do so. It is sad that none of these things was done and we have arrived at this juncture.
It is as simple as this — the Government parties have called on the Opposition to join them in the mudbath they have created. They have asked us to join in to help them out as they are in terrible trouble. They created the mess but to spread the blame they want us all in and we are sure to be splashed. The Government called on the Opposition to share the burden and stated it would disclose all the information after which Opposition Members would know what to do. The Government was not able to give us this information three years ago, a year ago, two years ago or six months ago. It took three years to get to this juncture, when what is now believed to be the full extent of national indebtedness to banks and various other institutions has suddenly emerged. I have no confidence in this and nor should the Ceann Comhairle or anybody else.
The Deputy has one minute.
I have one full minute left. There is not much damage one can do in a minute.
One would be surprised.
Whatever package eventually emerges, whether it be three years, two years, four years or more, the ability of the Irish economy, taxpayer and consumer to carry the burden and work our way out of the debt created by the people in authority who did not do their job has to be the underlying factor and not what experts, banks or anybody else thinks.
Yesterday, I spent much time listening to the debate taking place in the House. If one listened to all of the contributions one could come to the conclusion that the only thing to do would be to sell up shop and leave the country immediately with one's family. We can get into a vortex of gloom which will do none of us any good. The people know exactly who is responsible for getting us into this crisis and they will make their verdict known in the course of the next election. They know that the Government, over the course of the past 14 years, has led us into this crisis. I will not concentrate on this, as others have done so in a far more comprehensive way than I ever could.
It is no harm to have it on the record.
Yes, it is on the record.
I wish to speak about some of the positives for the country. Things can change quickly. Within a two year period Ireland and the international economy could be in a totally different position. The question is whether we have the confidence of the people to make the decisions required over the coming two years. People speak about a four-year plan, which is important but what is very important is what will happen next year. My constituents ask me how much money they will have next year, how much they will have for the provision of their children's education and their family obligations. This is what they want to know.
We can get through this if we concentrate on what is good about Ireland. We are part of arguably the second largest currency in the world. This brings great comfort to our position because the euro cannot fail. We are a small country in the eurozone and economic and political solidarity mean we have big people behind us. This is a colossal opportunity the country would not have had were it outside the eurozone. This country still has 1.8 million people at work, which is 700,000 more than was the case ten years ago. Every effort must be made to protect every single one of those 1.8 million jobs. I agree the economy has shrunk considerably both last year and this year but it is still significantly bigger than was the case four, five or eight years ago and people will have to get used to income levels which pertained back in 2000 or thereabouts. We have significant wealth in this country and we are a much wealthier country than was the case ten years ago as shown by the billions of euro in personal deposits all over the country. I understand personal deposits come to approximately €80 billion, and the total is €160 billion if corporate and multinational depositors are included. This wealth needs to be tapped for positive employment-related activity.
Our workforce is very well-educated with high levels of attainment in third level education compared to ten years ago. Other countries have come through this, such as Finland. In the early 1990s after the fall of the Soviet Union, its major trading bloc, within a matter of five years Finland came back to being one of the most sustainable, successful economies in Europe because it made the right, corrective decisions and put in place proper investment in education and new technologies.
We can learn lessons from the past. The first lesson we must learn is that the mistake of the 1980s was that we did not deal with the correction early enough. We allowed it to continue and a lost generation was the result. I am 41 years of age. People of my age and slightly older felt the only opportunity for them was to leave this country because throughout the 1980s we did not do what we should have done to clean up the mess that was once again created by Fianna Fáil. The Government of the early 1980s made an attempt at it but it was not enough. It was that failure, in my view, which led to a ten-year period of recession. If we have learned anything from that time, we will know we have to make the corrective decisions early and quickly as a means of trying to come out of a recession.
The other lesson we need to learn is that we must smash the cosy consensus. This place has been a doss house, effectively, for the past ten years or so, where people cannot speak their minds. Everyone one of us is elected in our own right but there is a dreadful centralisation of power on the other side of the House and on this side. As a result, people cannot speak their minds freely because in some way they will be off message or not exactly close to the position of their party or of the Government. Each of us elected to this House has a mandate in his or her own right to speak our own mind and to break the cosy consensus. One of the people who questioned budgets over the good years is Deputy Richard Bruton and he was told by the then Taoiseach, Deputy Bertie Ahern, to go off and commit suicide. I note Deputy Ahern is now writing in Polish publications, telling us what should be done in Poland and what should happen in Gambia. Where is he today? He is an elected Member to the Parliament of this country and he is not here — unless he takes his opportunity between now and 5 p.m. to speak. Where is he today?
He is in the cupboard.
Where is his apology to the Irish people for the mess he has created? We have to break that cosy consensus. It is inevitable people will have to get used to a radical reduction in incomes over the course of the next year or so as a result of whatever corrective action the Government takes. I hope the Government gives the information to the House as soon as possible about the proposed adjustment for next year. If we are asking people to live on less money we need a radical policy of reducing prices right across this economy. If there is one area where the Government can do more, it is with regard to the commercial semi-State sector, most of which are monopolies, that pay very little annual dividends to the State and as we see from recent discussions between the regulator and ESB, some of the price hikes are justifiable, based on increases in salaries within that sector. This is not good enough. If we are asking people to live on less, we need a radical reduction in prices. The one area where we have to take strong action is in the commercial semi-State sector. This sector is in a very privileged position. Its employees are, effectively, public sector employees, but they have not taken any of the burdens so far. It seems to me that if we are serious about this corrective action, a radical crisis policy must be kept in sharp focus.
I welcome the opportunity to contribute to this debate. Our great country and its people have been brought to the brink of ruin by successive incompetent Fianna Fáil Governments. In the short time available to me, I want to focus on the issue of youth unemployment in particular and unemployment in the mid-west region. In the past three years, there has been a threefold increase in the national unemployment figure and it is currently at a rate of 13.7%. A total of 460,000 people are unemployed. Those figures show that 85% of the job losses have been suffered by young people under the age of 34 years. A total of 96,000 people under the age of 25 are on the dole. A total of 200,000 people will be forced to emigrate in the next two years. This is a grim statistic and it is a grim prospect for families who are struggling, for young people who are looking for a bit of hope, for something to help them stay in this country. If we want to fix this broken country and if we want to fix the economy, we need to fix the jobs crisis. We need a radical job creation strategy, a plan that everyone can support and everybody will know what it will do for them and their families. We need to offer hope to everyone.
The Fine Gael Party focused on youth unemployment in our document, Hope for a Lost Generation, produced by Deputy Leo Varadkar. It is a simple plan which will take 38,000 young people off the dole queues by means of a very modest injection, a net cost of €254 million to the Exchequer. It is about creating job opportunities and educational opportunities for our young people. I ask the Government why it will not adopt such a strategy. It is available on the Fine Gael website. I challenge the Government to implement it.
Unemployment in the mid-west is above the national average. The mid-west task force was set up by the Tánaiste and then Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, in the wake of the 2,000 job losses in Dell. People across the political divide in the mid-west welcomed the publication of the report on 28 July 2009, but more than a year later virtually nothing has happened. The chairman, Mr. Denis Brosnan, complained on the national airwaves that nothing was happening. He called together all the local politicians in the mid-west region and he highlighted three specific projects, the Lynxs cargo facility in Shannon Airport, the upgrading of infrastructure at Plassey technological park and progress on the Limerick regeneration project. He was appointed by the Government as the chairman of a jobs task force, yet he is being ignored by the Government. This is not good enough. We need to get real about dealing with unemployment. If we do not deal with this crisis, we will not fix our economic crisis.
Budget 2011 should be about fixing this country and creating jobs and not just about cuts and increased taxation.
The last two people to whom I spoke on the day in July when the Dáil adjourned for the summer were my party leader and Deputy Coveney. I told them this country would be declared bankrupt within a month of our return to this House at the end of the summer. When representatives of the Labour Party and Fine Gael were going in to get a glimpse of the books, I did not realise they would confirm that was the case. It is incredible, after five years as a Member of this House, that I remember a statement which was made in May 2005. I cannot give the exact date. My party's then finance spokesman, Deputy Bruton, said things were going wrong.
All 166 Members of this House deal with the same people. At that time, we were beginning to get the message that spending was stopping, jobs were being cut and the finances were getting out of control. What happened? The Taoiseach went into a cupboard and brought everybody else with him. They did not have to go with him. Last week, Deputy Chris Andrews tried to tell the people that Fine Gael and Fianna Fáil are the same. We are not the same. The Deputy has a mind of his own. He could have stayed out of the cupboard of the then Taoiseach and faced up to what was happening.
We had a surplus of money. We could have put some away, but we did not. The election came along and promises were made on the basis of a false economy. As Deputy Brian Hayes rightly said, we have ended up with our young people having to take to the boats. At least those who are leaving are educated. That they have to leave is an insult to parents and grandparents who devoted every penny they had to ensuring their children and grandchildren would have an education in case things went wrong. In the past five years, every time we tabled questions to Ministers, we did not receive answers because Ministers were not prepared to take responsibility for their own Departments.
I would like to conclude by talking about County Meath, which has been left without a hospital service. I appeal to men, women and children of all ages to descend on Navan at 3 p.m. this Saturday to show their disgust and to protest at the manner in which the people of Meath have been treated. The Minister, Deputy Harney, originally asked the HSE to blame the staff, but we have finally learned the truth, which is that she pursued a policy of closing all local hospitals. That was supposed to happen after the construction of a new hospital, but the hospital in question has not been built. As a Meath person, I call on every man, woman and child to come to Navan to protest not only about the closure of the local hospital but also about the removal of services, jobs and school building programmes, etc.
I would like to share time with the Minister, Deputy Dermot Ahern.
Is that agreed? Agreed.
This debate marks an important point in the national discussion on this issue. Deputies on all sides of the House have been given notice of the scale of the challenges faced by Ireland. Most of the parties represented in this House are committed to reducing the national deficit to 3% of GDP by 2014. As a result, the public will get its first opportunity to compare and contrast the potential solutions on offer. Over the next few weeks, as we finalise and publish our four-year plan and prepare for budget 2011, the public will be watching closely, in the expectation that this House can demonstrate that Ireland has the political leadership necessary to overcome its current economic challenges. They will not be alone in that regard. Our EU partners, the ECB, the markets and our foreign direct investors will be also watching. The eyes of many people will focus on Ireland in the expectation that we will set out a clear path. They expect a multi-annual strategy that paves a course for economic recovery, meets our agreed commitments and has a certain measure of broad political agreement. This is not an easy challenge. I accept that politically, this is a difficult space for the parties opposite. They must be tempted to exchange soundbites for poll ratings, rather than getting involved in the business of making detailed and difficult choices. Therefore, I welcome the constructive nature of many of the speeches that were made yesterday. I repeat the over-quoted phrase that this is not a time for politics as usual.
The Government announced on Tuesday that an overall adjustment of €15 billion will be warranted over the next four years. The amount of work that has been already undertaken to rectify our finances could be forgotten in that context. Budgetary savings of 14.5 billion have been made in the past two years. As we know how difficult it was to achieve such savings, we do not under-estimate the challenge of achieving the same again, albeit over a longer period of time. The greater the savings that are required across the various areas of government, the more difficult it will be to minimise the impact on core services and commitments. The figures for the Department of Education and Skills are illustrative in that context. Its current budget of €8.59 billion accounts for 16% of the Government's gross voted current expenditure. Some 75% of the Department's Vote is accounted for by pay and pension payments, which are determined by the numbers in the sector and by pay and pension rates. Given that we have agreed not to change pay rates, any savings must be achieved by reducing staff numbers or from the non-pay component of the Vote, which comes to €2.14 billion. The employees in the education sector, more than 80% of whom are teachers, special needs assistants and lecturers, account for approximately one third of total public sector numbers. The non-pay component of my Vote covers areas like funding for schools and universities, supports for students who are less well-off, school transport, investment in research and development, training allowances for FÁS and other courses, and day-to-day office running costs.
The choices we have to make are extremely difficult. The challenges we face are compounded by the year-on-year upward demographic trend. The number of pupils in our primary schools increased by 5,000 in the past year. It is projected that total primary enrolment will increase by a further 7,000 in the 2011-12 school year, to reach a level of 517,200. It is further projected that it will increase to 529,000 in the 2012-13 school year and to over 543,000 in the 2013-14 school year. These figures mean that if the current pupil-teacher ratios and allocation models are deployed, we will have to provide funding for an estimated 600 additional teachers in September 2011. The additional pupil numbers will also require proportionate additional resources in terms of special needs assistants, etc. This is just at primary level — enrolments are also increasing at second level and in higher education, with the consequent demands on resources. The growth in the number of children of schoolgoing age also places considerable demands on the Department's capital budget. Every Deputy is aware of a school that needs an additional classroom or new school buildings to cater for additional enrolment numbers. It is difficult to meet all of these demands at a time of considerable constraint, when the Government has to reduce public expenditure in real terms.
I highlight these points not to cause undue concern but to set out the real challenges we face. Any perception that education can consider itself immune from the impact of a severe restriction in Government spending is mistaken. The challenge faced by my Government colleagues and I, which will have to be addressed by the parties opposite when they present their proposals, is how to achieve savings in the education sector in a balanced and measured way that does not have a detrimental impact on the systemic importance and strengths of our education and skills infrastructure. An effective education and training system can give our young people the skills needed to restore our economic well-being. It can play a major role in reducing inequality and helping to break the cycle of poor educational outcomes, poor employment prospects and long-term poverty in which some people get trapped. The majority of principals, teachers, lecturers and those who manage our schools, training centres, institutes and universities are deeply committed to ensuring young people, and increasingly the not so young, are in a position to access the best opportunities through education and training.
Given our role in this House in ensuring we get the best possible outcome and value from the taxpayers' investment in education, I am more convinced than ever that we must ask searching questions about what we do, and how we do it, throughout the education and training system. In the past seven months, I have instigated a programme of quiet but increasingly substantive reform. This has resulted, among other initiatives, in the implementation of a new system of induction and probation for teachers, parents and students being given a greater say in whole school evaluations, a new framework for the recognition of patronage at second level, the introduction of bonus points for achievement in higher level maths, greater involvement of the private sector in the provision of training for the unemployed and the decision to have a smaller number of stronger VECs. Many other reforms are in the pipeline. In addition to restructuring the higher level sector, I intend in the new year to provide for a renewed and freshly mandated training agency to assume the training work of FÁS.
Our focus on quality in the past has served us well but we need to do more.
The time is right for an overhaul of teacher education and we need to implement significant changes to the way in which we train our teachers, in particular post-primary teachers. I intend to roll out considerable curriculum reforms. I also intend that a greater number of education services will be delivered and managed locally through our strengthened VECs, among other initiatives. While the process of change and reform across our education system must be constant, now more than ever presents the opportunity to ensure our education and training system is strengthened and better equipped to serve our future needs.
Acceptance and implementation of the Croke Park agreement will be key in this regard. As the Taoiseach highlighted yesterday, it is an instrument not only to enable the public service to live within its means but to transform it to meet those future needs. In education, its full acceptance and implementation will ensure considerable reform and secure additional productivity from teachers and lecturers. It will bring visible benefits to parents and students as activities which up to now required school closures will be carried out without a loss of school time. For example, its implementation will secure an additional hour every week from teachers and lecturers. It will see teachers who participate in the supervision and substitution scheme being available for a third period of supervision each week. It will allow for the implementation of a much-needed scheme of redeployment at second level. It will allow for a wider review of the teaching contract and will also allow for more flexibility in the delivery of courses at third level. These are significant reforms that will result in welcome flexibility and productivity gains across the sector, the value of which should not be underestimated.
The challenge with the majority of these reforms, in particular in the context of our discussion on the macro-budgetary position, is that while reform on this scale will ensure much better value for the taxpayer's investment, in cold and hard accounting terms, the resultant savings in current expenditure are minimal in the short to medium term.
Therefore, as we face into the four year plan and budget 2011, this remains the challenge for those of us in Government and for those suggesting comprehensive alternatives to Government proposals. I look forward with interest to further reasoned proposals from Members and, where appropriate, will take them into consideration.
The weeks ahead will be challenging. In Government we will continue our work of careful consideration of the different options and choices to ensure we meet our commitments, balance our books, renew our economy and secure our ability to determine our own future. Our statements this week and our debate in the weeks ahead are essential to ensure our people understand the choices facing this country, the decisions being taken by Government and the alternatives that will be argued and the reasons for each.
To create jobs and growth, we need to stabilise the public finances. There is no other way. The path is clear. We have general consensus in this House. The goal of a 3% GDP deficit by 2014 must be reached. The question is how we reach it. The people look to the Houses of the Oireachtas for an answer, for the path to that goal. That goal must be realistic, deliverable, fair and must fill the gap between income and expenditure.
Talk will not fill that gap neither will vague political declarations about locating uncosted waste nor will merely repeating the words "change" and "leadership" over and over. That is over. Ireland needs concrete proposals now. That is what the four year plan is about.
Thanks to the hard work of the people, we can start from a position which is not all that bad, despite some of the negative remarks earlier. Our exports are showing resilience. Foreign direct investment is holding up extremely well, employment is stabilising, costs are falling and business confidence is improving. We are proceeding from a platform which is stabilising, with an immensely talented, educated and intelligent workforce.
We are number one in the world for jobs created by foreign direct investment. Our stock of direct investment is five times greater than the OECD average. The value of exports in July was up 12% when compared with July 2009. Irish businesses are competing internationally, and are winning.
Crucially, as we drive recovery forward, unemployment will begin to fall. September's live register fell for the first time since February. Both the ESRI and the Central Bank are now forecasting reductions in unemployment in the period ahead. It is not recognised and we should accept that there are 1.86 million people at work today. That is approximately 0.5 million more than in 1997. However, it is not enough. The number of people — our friends, relatives and neighbours — who are out of work is far too high. The only way to get people back to work is by making the reforms and the adjustments that are now being made and which will be set out further in the four year plan.
There is consensus on the end game. Again, that is to reach the target of a 3% GDP deficit by 2014. The House is all but united in its shared determination to achieve that goal. That alone sends out a very strong signal internationally. Where there is no consensus yet is on the detail of achieving that. Greater consensus is possible and I urge the parties opposite not to run from the constructive approach set out by the Taoiseach in the past few weeks.
We all know there are millions of ways to avoid consensus. It is easy to say before one presents any concrete costed proposals that we need this figure or that figure, that we need to see this forecast or that forecast and that we need to see the other party's plans first. I believe we should be past all that now.
We all know that parties do not want to associate themselves with bad news, and that is understandable. We all know that parties want to stick to talking about change and leadership while avoiding all definition of change and leadership, and that too is very understandable. However, it is not tenable at this time.
There is a gap of billions of euro to be filled. It is not rocket science. There is a gap between what we spend and what we take in of €19 billion.
Sometimes those guys are unreal.
It is up to people like the Deputies opposite to bring forward proposals in that respect.
They have brought the country to ruin and then the Minister has the cheek to lecture us about rocket science.
Allow the Minister to continue.
How many proposals has the Minister put forward so far in his speech?
The Minister is in possession.
Last week the Taoiseach and the Minister for the Environment, Heritage and Local Government, Deputy Gormley, invited the leaders of the Opposition to meet to discuss the budgetary crisis. The Taoiseach proposed that the Opposition should have full access to briefings by the Department of Finance so that it would appreciate fully the scale of that challenge and to afford it the opportunity to formulate its proposals for putting the public finances on a firm footing. In fairness, I believe many on the benches opposite are up for that challenge and are working hard on policies which Government must and will examine in a considered and serious way.
The Labour Party produced proposals yesterday, despite the criticism from Deputy Rabbitte. I have looked at them and the Government will do so also. In regard to capital spending, it proposes a €2.5 billion cut. It does not say which projects it will cancel but perhaps we will hear in due course. In regard to current spending, it talks about payroll reductions.
This guy is unreal.
Whole-time equivalents in the public sector have dropped by 10,000 from 319,000 in January 2008 to 309,000 in mid-September 2010. Under the Croke Park agreement, if fully implemented, it is estimated there will be a net reduction of 13,000 people in the public sector by the end of 2014.
The Labour Party proposes a strategic investment bank capitalised by €2 billion from the National Pensions Reserve Fund. The model of that bank is based on a German bank which was described in the German media as Germany's dumbest bank.
(Interruptions).
The Minister without interruption.
The Guardian praised the proposal yesterday.
The truth is bitter.
(Interruptions).
We must have one speaker at a time.
The lead article in The Guardian yesterday praised the proposal.
Will the Deputy show respect for the Member in possession?
In regard to the Labour Party's proposal for a 48% tax rate for higher earners, that would push the top marginal rate to approximately 62%, including levies. The top marginal rate currently is 52%. It has not been so high since 1991-92.
And the Government is putting us into the stabilisation fund.
In contrast the effective tax rate for middle income and lower income earners is no higher than it was in 2005-06. The difficulty with the higher tax rate is——
(Interruptions).
As I stated, Ireland is one of the most successful countries in the world in attracting foreign direct investment.
The Government has brought the International Monetary Fund to the door and ruined the country. Bond spreads are at 7% this morning.
The problem with imposing a 62% marginal rate of tax on the executives of the companies we expect to come into this country is that many companies considering doing business here will view marginal rates of tax from the point of view of their executives. When they find that individuals will have to pay an income tax rate of 62% they will go elsewhere.
The Minister clearly cannot do tax arithmetic. That is the reason he is so incompetent.
I ask Deputy Burton to restrain herself.
The Labour Party has also suggested generic drugs could yield savings of €300 million.
The IMO made that suggestion.
The Labour Party adopted the IMO suggestion.
We stated that the IMO had suggested savings of €300 million could be made.
If the Deputy checked, he would find that the value of the entire generic drug market in this country is approximately €300 million. The Labour Party is effectively asking the generic companies to provide drugs for free.
The Minister is innumerate.
The Labour Party has not provided proper costings for its other proposals. For instance, it states it would save €50 million per annum on trade union subscriptions. The latest figure available costs the trade union subscription relief at €19 million. To be fair, however, the Labour Party and other parties have produced proposals and these will be examined.
The Minister is innumerate.
Deputy Burton should allow the Minister to continue without interruption.
The Government intends creating a new vision for social partnership. Government capital investment will aim to support those projects which will help the development of a productive and internationally competitive economy and a smart green economy——-
What about a smart Government?
——support sustainable long-term employment and provide a modern social infrastructure. Crucially, the four-year plan will have a key focus on structural reform and making the economy, the public and private sectors, work better.
It is a matter of public record that, over the past decade, the vast majority of Deputies backed lower taxes and higher expenditure. In 2006, Deputy Burton stated there was a massive underspend in health. In December 2006, Deputies Burton and Bruton stated not enough assistance was available to first-time buyers. In 2005, both Deputies called for greater expenditure on social welfare. In the same year, Deputy Burton, in calling for more spending on child benefit, argued that an increase of €20 per month was much less than had been expected. She was also critical of the number of people who were paying tax at the higher rate. Her party now proposes to introduce a new tax rate.
It was not only parties on the opposite side——
I proposed the abolition of tax breaks for Fianna Fáil Party cronies.
The Minister is in possession and must be allowed to speak without interruption.
The other day, while reading through a few documents, I came across an interesting property supplement published on the day following the 2007 budget.
Does the Minister often consult the archives?
It is not only in this House that we have had collective amnesia about what went wrong. The august supplement in question stated: "Anxious? Worried? Relax — next year's property market will be steady rather than heady say the experts." A number of august economists and property consultants, including some famous and infamous ones, were then invited to give their views on what they believed would happen in the years ahead.
I ask the Minister to conclude.
The publication in question makes interesting reading as it shows that collective amnesia regarding what took place over the Celtic years era is not confined to the Opposition benches. It also features outside the House.
My record on property tax breaks is clear. The record of the Minister's party in the matter of corruption is also clear.
The Deputy should check the record.
This is the Minister who climbed every tree.
I call Deputy Richard Bruton. I ask the Minister and Deputy Burton to refrain from engaging across the Chamber and allow the Deputy in possession to proceed.
I have listened with respect to the contributions of the Tánaiste, Deputy Coughlan, and Minister for Justice and Law Reform, Deputy Dermot Ahern. While we heard about the need for constructive debate and honest consideration of our problems, I did not hear one proposal from either Minister on how to achieve savings in expenditure or through tax, on employment initiatives, growth or any other area. Instead, I heard an attempt to distort the past by using obscure quotations to seek to present Opposition views in a distorted manner. Either we try to approach our problems in a constructive manner or we enter the warped world of the Minister for Justice and Law Reform, one in which he seeks to score points against the Opposition by finding obscure statements to try to pretend we said things we did not say.
I gave credit to Fine Gael and the Labour Party for producing proposals.
The Minister had an opportunity to speak.
I ask the Minister to allow Deputy Bruton to continue without interruption.
The Deputy is misrepresenting what I said.
I am not misrepresenting anything the Minister said. I can produce umpteen statements I made in the House pointing out that the Government was expanding expenditure recklessly on the back of unsustainable tax revenues from the property sector. I did not get a hearing when I made those statements.
The Deputy called for additional spending.
No, I did not. The Minister should examine the record of my party. We were not listened to when we stated we needed to rationalise the structure of government and start reducing the number of quangos, 200 of which were created by the Government in the past ten years. We were not listened to when we stated the Government's banking strategy was reckless, would bring the country to the brink of ruin, was the most expensive option and would put the taxpayer on the hook. Now that the Government is in a hole of its own creation, it wants to pretend it is listening to the Opposition. The Minister, however, out of the other side of his mouth, has now produced this bile, which he appears to have stored up in his Department, and had a go at everyone. I want to play a constructive role.
The Fine Gael Party proposed the establishment of a national recovery bank two years ago. The Tánaiste and Minister attempted to smear that proposal, as if credit is racing through to small businesses, there are no problems and the existing strategy is working perfectly well. In what planet are they living? Does the Minister ever get out of the comfortable seat of his Mercedes and listen to people on the ground speak of what is happening in their businesses or on their streets? The world in which we live is not the world he projects.
If we can make a national recovery bank based on the French model, let us do so or if there are lessons to be learned from other models, let us examine them. Why should we have billions of euro sitting in the National Pensions Reserve Fund holding overseas shares when businesses that could sustain employment and start-ups that could create jobs are being starved of credit? Why does the Minister rubbish our proposals without offering anything in their place? The Government offered a glimmer of hope that some form of guarantee scheme would be introduced to stimulate bank lending but extinguished it as quickly as it was proposed.
I welcome some aspects of this debate. For the first time, we are talking about a plan for the next four years. What problem are we seeking to solve? If we want to fix the public finances and banks, which has been the Government's mantra for the past two years, we will fail. The plan has to focus on fixing people's lives against the real constraints we face. There is a world of difference between these objectives. The policies emanating from the Government are the policies of insiders who want to pull up the ladder behind them, batten down the hatches and try to get through the crisis. The trouble is that the outsiders who will be left on deck exposed to the full brunt of the storm are our young people. In the past two years, 90% of those who lost their jobs lost in the economy were aged under 30 years. They are the people the Government's strategy on banking and the public service — the zero reform agenda — is exposing to the brunt of the storm. Many of these young people could create value and opportunity here. However, having invested more than €100,000 in the education of each of them, we will find that they emigrate to Sydney, Frankfurt and other destinations far beyond our shores.
We need to start thinking about what we can do against the background of the constraints facing us. For this reason, I welcome the announcement by the Taoiseach and Minister for Finance of a plan. However, it must be an honest plan which focuses on our strengths and weaknesses as well as the threats facing us. It cannot be the sort of plan that pretends the public services are being managed effectively, that the manner in which budgets are presented in this House operates satisfactorily or that we are addressing our competitive needs because this is not the case. Government failure goes to the heart of many of our problems and we need a plan that accepts the Department of Finance and its Ministers successively have failed this country. A plan is needed that will ask what is to be done about the serial failure of the Department of Finance and its Ministers. What is to be done about it? What is to be done about the serious failure to deliver strategies that are launched by Ministers at big glitzy affairs but which never succeed? What is to be done about the fact that six months after the Croke Park agreement, which offered an opportunity to reform the manner in which we do things, nothing has happened? No one is driving it, no one has responsibility, there are no programmes of changes and there is no one with the authority to make such changes. Fundamentally, nothing has changed.
The Minister spoke of the need for structural reform to which I look forward to seeing. Although Members were told in 2007 that 43 agencies would experience such structural reform and be merged or rationalised, it has not happened. In most cases, the legislation has not been produced and savings have not been made. It is business as usual and until one recognises that the rigid silos in which the public service are managed are not fit for purpose and that a new approach must be taken, we will continue to fail. This is the reason an economic plan emanating from the Government must begin by addressing how it intends to reform itself. Its central focus should be on the silos in which the Government works, the lack of accountability and the lack of taking responsibility for failure. Were Ministers or the Taoiseach to make a start on an economic plan by honestly recognising their own failures and then begin to put them to rights, people would begin to have some faith and confidence.
I am sick of the plans that the Government has produced. It has produced a smart economy document and another document that promised 300,000 jobs. However, those documents do not contain a single policy change. If one considers the most recent document on the 300,000 jobs, it does not contain a single policy change. It simply states that the targets will be increased so that more will be achieved by doing nothing differently. If one considers the document on the smart economy, it was simply a big bulldog clip wrapped around approximately 1,000 different ideas that were in circulation. No implementation plan has been produced and its single major initiative concerned a €500 million innovation plan. Where is that plan now when small businesses are being denied start-up money? It is not yet in place but still is being talked about.
It is in place.
If one is serious about changing what happens, one must be serious about delivery. The National Competitiveness Council and Forfás have listed what must be changed for the benefit of the Government. Real changes are proposed, such as, for instance, a statement that the Government's waste policy is dysfunctional and must change. However, the Government is doing nothing about it. It tolerates the indulgence of a Minister who for local reasons is obstructing the emergence of a sensible waste plan that would support employment. Moreover, 74 of the recommendations made by the Competition Authority remain outstanding as the Government sits on them but does nothing. The Minister for Justice and Law Reform has just left the Chamber, having lectured the Opposition on how it should be changing things and coming up with proposals. He has to hand 30 recommendations about how one should reform the legal system that he refuses to implement.
One should get real. I am all for an economic plan but it must be credible. It must be about how the leaders of the Government will change what they are doing and will do different things from what it does at present, rather than lecturing the Opposition or simply squeezing tighter the existing framework. It must be about breaking out and changing this by finding real change and efficiency in the manner in which business is conducted. I look forward to this economic plan but am depressed that Members still are debating this budget in a dialogue of the deaf. The Government talks about the need to confront our problems but offers nothing by way of solutions. Moreover, cold water is poured on any solutions that come from the Opposition. They are described as being mealy-mouthed, stupid or fantastic or that some German newspaper states they are no good. This does not constitute constructive dialogue and it is time that Members got real. Either this is the greatest crisis ever faced by this country, which it is, or one has a political theatre in the form of a Punch and Judy show in which one simply bashes on in the way one always has. That Punch and Judy show is over and the sooner Ministers cop on to this change the better to have a decent debate on the options facing the country.
I concur with the previous speaker on the lack of content or proposals on how to pave the way forward. However, I have picked out one consistent term used by many of the Cabinet and its backbench supporters, namely, fairness. One hears on radio and from Cabinet members that everything will be done in the interests of fairness. On the second day of this debate, I have given a little time to thinking about the concept of fairness. Having sought to establish where is the emphasis, I note it is firmly on "how" and "when". The "when" is quite simple as the Government intends to introduce a budget on 7 December and a finance Bill in January. As for the "how", the Government is considering broad sectoral areas, including taxation, growth stimuli, job creation and public expenditure cuts, which comprise the macroeconomic element of this debate.
In respect of the "what", vagueness starts to appear as to the effects on monetary protection, standards of living, career progression, unemployment or pension protection. Furthermore, as a Deputy representing a rural constituency, I note there is something of a grey area on where this fairness will be introduced in respect of the relationship between the core and the periphery. If one considers the core-periphery model that operated during the good times, whereby money went to the large population centres, I am worried about funding for capital programmes in rural areas with regard to health services or physical infrastructure.
The Tánaiste must take a strong interest in who will be affected. Will students who already have emigrated consider this to be fair? The Tánaiste should ask engineering graduates who were obliged to depart for Brisbane whether they will be considering the possible fairness of this budget. How will parents with children with special needs who need 24-hour care or those with children with spina bifida who have services at present be treated in respect of fairness? It is possible they will lose hours of care. What about farmers on €12,000 per annum who may face an increase of registration fees to €3,000? Were such farmers to have three children, this would take €9,000 out of their wage income straight away, thereby leaving them to live on €3,000 a year. Is their predicament fair? What about the 300,000 mortgage holders who may enter mortgage default in the next two years? Where will they sit with regard to the Government's concept of fairness?
Such fairness does not exist and this is the first premise that must be completely negated in this debate. The Government's model of fairness is dysfunctional. Its philosophy of government since 1997 has been to throw money at any problem that arose without evaluation of outcome or cost-benefit analysis. This was because it was politically expedient and because it fulfilled the Fianna Fáil mantra of vote-getting. This is what happened and within the guts of two months, all this money will be pulled back even though the Government has created a high dependency social model based on high costs. In addition, for the next six to seven weeks, people will be absolutely scared out of their wits as to how this will affect their lives in January or February.
Is this what the Deputy will say in Letterkenny on Friday evening? I look forward to receiving a copy of his speech.
The problem with this debate is that it is based on the philosophy of fairness although no such fairness exists. Moreover, one should be honest and state there will be no fairness. Moreover, there should be no fairness for parents who have a child with spina bifida, as they should experience positive discrimination. It should not be a fair, broad spectrum model in respect of monetary or percentage cuts or taxation. There should be positive discrimination in favour of those who will lose out seriously. This is the point at which the Government's principle and philosophy of fairness is wrong, dysfunctional and will not work. The Tánaiste and her Cabinet colleagues have time to consider this point over the next number of weeks.