Finance Bill 2011: Second Stage (Resumed)

The following motion was moved by the Minister for Finance, Deputy Brian Lenihan, on Tuesday, 25 January 2011:
That the Bill be now read a Second Time.
Debate resumed on amendment No. 1:
To delete all words after "That" and substitute the following:
Dáil Éireann declines to give a Second Reading to the Finance Bill, having regard to the fact that the Bill contains virtually no proposals to encourage economic growth and job creation and the fact that certain provisions of the Bill have a very severe impact on the most vulnerable in society.
—(Deputy Michael Noonan).

Deputy Jimmy Deenihan was in possession.

I wish to share my remaining time with Deputy Pádraic McCormack, who is about to make his final speech in the House. He entertained Deputies on many occasions over the years with his celebrated one-liners and his laconic statements.

I would like to hand over to him now.

In the circumstances, it would be difficult to refuse.

I hope to get an opportunity to address the House again in a few weeks time.

I thank Deputy Deenihan for sharing his time with me. On my second-last day in the Dáil, I would like to make a small contribution to the debate on the Finance Bill 2011. This is the most unusual week I have experienced in the Oireachtas. We are discussing a finance Bill at a time when the sword of a general election is hanging over those who are contesting the election and those who are not for various reasons. It is a most unusual situation. My party's finance spokesman has outlined Fine Gael's reservations about this legislation. While we are determined to meet the objectives that have been agreed with the IMF and the EU, we would go about it in a different way from the Government. Therefore, we will oppose certain sections of the Bill.

Fine Gael plans to make the necessary budget correction through a combination of capital savings and incentives. We will make greater savings through reductions in expenditure than through tax increases. Every budget adjustment should be scrutinised from a political and an economic point of view. That is how Fine Gael has arrived at its current position. The only reason we are debating this Bill is that there has been such internal combustion in the Government parties. If that had not happened, we would not have had this opportunity. It is most unusual that we are dealing with this matter in advance of the election that is likely to be held on 25 February. We are in a vacuum while we are waiting for it to take place. The sooner it happens, the better.

I thank my colleagues for giving me an opportunity to make a final contribution to this Dáil. Perhaps I will have second thoughts. I hardly will.

The Deputy had second thoughts the last time.

It has been known to happen.

When I had second thoughts the last time, I got the bonus of a further three and a half years in the Dáil. I enjoyed that time, just as I enjoyed all 22 years I spent in the Dáil and the two and a half years I spent in the Seanad before that. I have made great friends here. I thank the Ceann Comhairle and his predecessors for the courtesy they have extended to me. Most of my colleagues who are retiring have told me they felt a great sense of relief after they made that decision. My circumstances are slightly different because I am not a voluntary retiree. I have not experienced that sense of relief. I have a sense of sadness as I leave the Dáil. That is the way politics is.

I have tried to make a contribution over the years I have spent in this House. I hope I did not insult too many people. The current Taoiseach and perhaps some of his predecessors often had to answer me back in the Dáil. If I said anything to upset them, I apologise for that. That was my style. People cannot change their style. I was true to what I felt as a representative. I hope I have been of some use to the people of Galway West. My constituents stood by me by returning me at the last five general elections. I was first elected in 1989. I leave this House with the privilege of never having failed to be elected to any body to which I stood for election. I am proud of my political contribution to this Dáil and the people of Galway West. I thank my constituents for giving me the great privilege of representing them in the Dáil over the past 22 years. The team we have selected in Galway West will certainly bring back two seats and has a great chance of three seats. It will take three people to replace me anyway.

I thank the Deputy. We wish him well. We have quite a number of retirees. We may have an opportunity to say a few words about them at a later stage.

We will need a special session.

It will not be possible if the Taoiseach goes to the park on a Sunday morning like the last Taoiseach did. I hope he will give those who are retiring the honour of having an opportunity to speak in the Dáil for a final time.

I would like to share time with Deputy Edward O'Keeffe.

Is that agreed? Agreed.

Táim buíoch as ucht an deis seo labhairt ar an mBille tábhachtach seo. I welcome the opportunity to speak during this important debate. I welcome the Minister's changes to the universal service charge for medical card holders. It was not just the Independent Deputies who had representations; we all had them. I acknowledge that the Minister has dealt with this in a satisfactory manner.

I will make a brief reference to section 23 properties. Deputies will have received many representations from ordinary people on this matter, and I believe a review is necessary. There are those who say the section 23 provisions were for big builders and developers, and there were certainly some of those, but I have been contacted by quite a number of ordinary people who invested in such properties, including schoolteachers, doctors, gardaí and nurses. They saw it as a means of providing a pension for themselves later in life.

I would have liked the Minister to deal with approved retirement funds, ARFs. From this year the assumed annual drawdown on which people will be liable for tax is 5%, rather than 3% as it was previously. Given the low level of investment returns at the moment, many people have contacted me to suggest that a drawdown of 5% per year will effectively deplete their funds in slightly over 20 years. I do not think it is in the national interest that people who have provided for their own private pensions will effectively become dependent on the State after 20 years. I would like to see a review of that.

I wish Deputy McCormack and all Deputies who are retiring well. I hope they will have the opportunity to say a few words in this Chamber before they retire, but much will depend on the actions of the Opposition. The last week has not been a good one for politics. We hear a lot of talk about Oireachtas reform, and I agree with that, but the first reform I would like to see is a bit of honesty in the House and less play-acting. Everybody outside the House agrees that the passing of the budget is necessary not just because they believe the State should provide for its finances but, more importantly, because our friends in Europe and the IMF have told us we need to bring in a budget and implement the four year recovery plan which has been agreed with them. They certainly want us, as a Parliament, to institute that.

It is inevitable, and it is accepted on all sides of the House, that there will be a change of Government and that Fine Gael and the Labour Party will form the next Government. The onus is on them today to make sure the budget is passed. I do not think it is reasonable that three Independents should be the fall guys if this budget fails. The leader of Fine Gael, Deputy Kenny, who will possibly be the new Taoiseach, is here today. I am saying to him that if the Opposition Deputies want to have any credibility and if they have any respect for the people of Ireland, they will make sure the budget is passed today. It is ridiculous for them to say "Yes, of course it should be passed", and then not make sure it is passed. I suggest that the only reason they want the Fianna Fáil minority Government to pass it is that they can go out on the streets and blame Fianna Fáil for the budget provisions. Deputy Kenny would then be able to come back in a month's time as Taoiseach, say that Fine Gael is not to blame for the budget provisions as it was not in government at the time, and then bring in supplementary budgets. It is ridiculous to talk for years about guillotining debates and then write out of the script issues such as bankers' bonuses, which everybody in this Chamber has talked about, because we have a deadline to complete our business by Friday. That is dishonest. I am asking Deputy Kenny, the probable future Taoiseach——

Speaking about dishonesty, the way this country has been run for the last ten years was dishonest. The Deputy should think about that.

I ask the Deputy to refrain from interrupting.

——to be realistic——

——and to be honest with people and vote this budget through because he knows it is necessary for this country——

Not the way Fianna Fáil is doing it.

——and to comply with IMF rules and regulations.

They have had 20 years at it and they have made a mess of it.

If we had that type of reform, for starters, it would be a good day for politics. The posturing that has gone on in the last couple of days——

What about the posturing that has gone on over there for the last five years? They should be ashamed of it.

Deputy Durkan, please.

They are trying to cod the people again.

——does not do the body politic any good. It will not do Fine Gael any good either if it intends to be the responsible Government that this country needs.

On a point of order, does the speaker realise the budget went through last November?

And that he voted for it.

He voted for it——

What are we on about?

——and he was aided and abetted by the three Independents.

On a point of order——

Deputy Coonan, we have limited time.

A Cheann Comhairle, if that is a point of order, the Dáil certainly needs reform.

On a point of order——

If we continue with the points of order and continue interrupting the speaker——

Is he for him or against him?

——we will run out of time. We are due to finish at 12 p.m.

I advise Deputy Coonan to go back to north Tipperary and get the principal of the school to send out the letter stating what Deputy Lowry has done for them.

Deputy Lowry kept Fianna Fáil here for the last four years.

Deputy Coonan, please.

He is as responsible for all the bad decisions as Fianna Fáil is.

Deputy Kennedy, just continue, please.

The people in this Chamber who have denigrated Ireland——

——for naked political purposes are doing themselves a disservice. They will probably be wearing the green jersey in a month's time and, as far as I am concerned, the green jersey——

The Green Party is gone. Does the Deputy not know that?

——will not be a paler shade of green next month. I suggest to the people who want to make derogatory remarks coming up to the election, saying the country is banjaxed and so on, that they reflect on this. They are the people who will represent us at European level. They will meet with our European counterparts——

——and deal with colleagues from the IMF. The lads should reflect on it, because all they are doing is letting themselves down.

We are a proud nation. No matter what has happened, we have the resilience to come out of it if we think positively. I hope to be back in this Chamber this year as an Opposition Deputy. This country needs budgets to be passed. It needs realistic four year recovery plans——

——to be implemented straight away. I would have no difficulty in backing that.

A soft landing. Good fundamentals.

The dishonesty we are hearing now does nobody any good. It does not do the reputation of the country any good. I say this in particular to the people who will be assuming the role of Minister and representing us at European level.

I must comment on the level of debate on economic matters in recent times, particularly by Sinn Féin. Deputy Morgan is here; maybe it is as well that he is retiring, because the man he hopes will replace him does not have a bull's notion of what economics is about.

That is sweet coming from Fianna Fáil, considering the state it has left the country in.

This perception that we should burn the bondholders——

——and use up the money left in the National Pensions Reserve Fund——

Can he add and subtract?

——to pay the wages of teachers, nurses, gardaí and so on——

Can any of the Fianna Fáil Deputies add and subtract? Idiots.

The Deputy should calm himself.

If we want to have an honest debate, let us realise——

Throw the ball in.

——that burning the bondholders at the stake may sound great — we all have our problems with certain bankers——

They are all in America now anyway.

——but the reality is that we need the bankers and we need the ECB.

The bankers are bankrupt.

A bit of honesty from the beginning would have been better.

We have €140 billion on loan from them——

Could the Deputies please refrain from interrupting?

——and for anyone to suggest that we literally tell them to get lost is ridiculous. Am I out of time, a Cheann Comhairle?

Just about 44 seconds.

Enough to apologise to the Irish people.

If we are to have an honest debate for the election, Fine Gael and the Labour Party must come clean and say what their plans are. Will they tell us where they will make the €6 billion saving? If the saving is only €4.5 billion, where will they get the rest of the money? I am asking them to give politics a decent start by having an honest debate.

That is right. Apologise to the Irish people for ruining the country. That is it.

Deputy Durkan.

Let us cut out all the shenanigans——

Bankrupting the country.

——we have been carrying on with in recent times.

He had his Weetabix.

I will hand over to my colleague, Deputy Ned O'Keeffe. I wish him well in his retirement. He can be proud of his contribution over a long time in Dáil Éireann.

I first entered the Dáil the same day as the Ceann Comhairle, and that is a few days ago, now. I want, first, to pay tribute to all the good people in the House before the Ceann Comhairle cuts me short, as I might have too much to say. I worked under four leaders including Taoiseach Charles J. Haughey, the brightest and best. I was at Leopardstown races some weeks ago and there was a poster saying, "Bring back Haughey, clean up the mess". I served under taoisigh Albert Reynolds, Bertie Ahern and now Brian Cowen and I enjoyed every day of my time here.

I did not get high office because I did not behave myself, which is a tragic situation. Blind loyalty is ruining every party and organisation in the country. I want to pay tribute to all my good friends on the Opposition side, even Sinn Féin. Deputy Arthur Morgan served with me on the Joint Committee on Enterprise, Trade and Innovation and we got on well. His contributions were always worth listening to. I had good friends in the Labour Party as well.

As regards Fine Gael, it is interesting to reflect that on the day I lost my job as Minister of State in the Department of Agriculture I met Deputy Enda Kenny coming out the door of Leinster House as I was coming in. He had lost a job on the Front Bench under Deputy Michael Noonan who had taken over as leader of Fine Gael. Deputy Kenny said: "We've no more business here. Come on away with me." He came back and is bound for greener pastures and I am going back to the hills and valleys of north Cork. I want to congratulate him on his efforts on behalf of Fine Gael. He has done wonderful things for Fine Gael since he was made leader. He has often been under pressure, and wrongly I would say. To our embarrassment and disadvantage he has done well for Fine Gael. I am confident that he will be Taoiseach, so I wish him well, and regret I will not be here to question him from the Opposition side, because I always loved being in opposition. I want to say "well done" to him and an overall majority might be within his grasp.

I thank the Deputy.

As it is, he has achieved a lot since that day at the front door.

As far as the Press Gallery is concerned, I have to say that I have gotten on well with every journalist here. If something happened on a Monday, it would appear in print the following day, so that Tuesday's newspaper mattered, not Monday's. After a few arguments about this I decided to accept the status quo , not try to correct matters and move on. I always got on well with the staff of the House as well, and got to know them all on a personal basis. I say “well done” to the Captain, the head usher and the Clerk of the Dáil. They have run a very efficient and orderly operation here, and that is very important. These are my parting thoughts to the House in my last few minutes here. As I have said, I am going back to the green fields and the golden vale of north Cork, having served under four leaders.

I have two e-mails to read out to the House before I conclude. These are very important and I want to put them on the record. The first, dated 24 January 2011, is from Mr. John Rafter, general secretary Garda Síochána Retired Members Association, and it states:

Please find attached copy of letter from the Garda Síochána Retired Members Association to Mr. Brian Lenihan, TD., Minister for Finance outlining the dissatisfaction of our association (with) the cuts to Garda pensions as a result of the changes made in Budget 2010.

I would ask for your support in having the measures contained in Budget 2010 rescinded when the Finance Bill is before the Houses of the Oireachtas.

The next one, dated 21 January 2011, is from Mr. Jim Groarke, and reads:

Can you explain to me what the universal social charge is, why it was introduced and where the money goes? Also, if you or your party form part or all of the next government, will you work towards removing this charge?

I will not be here, anyway. I wanted to put those on the record, and I have a bundle of e-mails. The country is in very serious crisis. We will finish up with no private banks in the high street and I beg the incoming Government to sort out the banking crisis and arrange for us to have a private banking system again. We trade internationally and as a trading country we will be very suspect if all our banks are State-owned. I hear the threat this morning as regards Bank of Ireland coming under State ownership as well. That to me does not augur well.

We had the regulators, Pat Neary and John Hurley. I worked as a member of the finance committee and ultimately they did not have the legislation and wherewithal their office required. Now we have a system of regulation, while there is no money available in the street. We need to put the Finance Bill through because there is no money available to extend credit to businesses as working capital over a short period of time, because of over-regulation. We cannot just go from having no regulation into a regime of high regulation. I beg whoever is in government to immediately sort this out. I have no confidence in either Professor Patrick Honohan or Mr. Matthew Elderfield.

Mr. Elderfield is here to chastise us, I suspect, and he has brought a team with him. That I resent very much and he probably believes the Irish are what Cromwell thought of us in the 1600s, and I say the same thing to him. Professor Honohan has said he would sell our banks. I do not think he can sell any bank. He made a point to the effect that the Chinese might buy them. I do not want to see the Chinese with a financial base in Ireland, neither do I want them to have a military base here — because that is the one they are really interested in — from which to take over the world. Ireland would be the ideal place for such a base, in the Atlantic. Let us recognise that such threats are very real. Such things have happened before and history can repeat itself. With that mentality one gets nowhere.

Today Allied Irish Banks goes on the ESM, and that to me is a real tragedy. We should manage our banks differently. We have too many theoretical economists telling us what to do and they cannot manage their own business, never mind mine and the banking business. I very much regret what has happened to our banking system. I come from the southern part of the country, like Deputy Michael Noonan, the Fine Gael spokesman on finance. The Munster and Leinster, in the old days, was the bank that kept the farming community in business. It gave extended credit in the valley periods and this worked very well for farmers. Sometimes farming is in great difficulty. The bank helped to develop our co-operative movement, which has been the driver of jobs in rural towns and villages in County Cork, as well as in Limerick, and indeed all of Munster, including parts of Kilkenny. That was the bank which served the rural community. It was generous and ran a good business.

I understand that Deputy Morgan's leader has suggested the two banks should be merged. What a foolish thing to do — the stupid ass. I suggest that each of the two main banks demerge and that we return to the Provincial Bank, the Royal Bank and the Munster and Leinster Bank once more. On the Bank of Ireland side we should return to the Hibernian Bank and the National Bank. It was the order of the day for them to merge, some 25 years ago or more, but it is different today, and we need much smaller banks. That is the way forward for the banks. I was in town last night, when I saw a pub that was formerly the Hibernian Bank, owned by Bank of Ireland and I thought it would be lovely if that was reopened as a bank, since the licensed premises was to close. Let us de merge the banks. It can be done, and it has been, before. I would urge the next Minister for Finance to consider this urgently. I appeal for a renewal of the banking system because there is no confidence left in that regard. The system is practically closing down because of the shortage of credit and the lack of overdraft facilities to deal with valley periods. Any Deputy in this House who is not aware of this situation is asleep, like Rip Van Winkle, because there is a crisis.

We previously had State-owned banks with the one policy of Government. We have had ACC and ICC and know how they worked. We have a few foreign banks and they are getting out as fast as they can. I want to see business people in charge of the banking system, people such as Denis O'Brien, Dermot Desmond or Martin Naughton of Glen Dimplex etc. There are about five such people who could do what is needed. We neither want regulators nor economists such as Peter Bacon who put us where we are, with NAMA and all those things.

It is interesting to hear the debate on the Finance Bill and what is being said in the national interest. Fine Gael and Labour want to uphold the national interest while at the same time wanting to vote down sections of the Bill. If I was thinking of the national interest, I would not vote against it, but rather let it through. It is in the Opposition's interest to let it through because the Government side is doing the dirty work for Fine Gael and Labour. I read out those two e-mails for that reason. Then we have the three musketeers, Deputies Jackie Healy-Rae, Michael Lowry and Mattie McGrath, whom I thank for coming in to listen to me. However, I think he should go to Dunnes Stores to get better value.

The Deputy might get better value in Dunnes Stores himself.

His shopping list extended beyond my arm, so I do not believe the economy can carry that; neither do I believe the people of Tipperary South expect it.

Deputy Michael Lowry is concerned about schools and the principal of Templemore school writes on his behalf. How interesting.

The Deputy's time has expired.

I cannot hear the Ceann Comhairle. If the principal of a school writes on behalf of a Deputy, he or she should be dismissed. Such a principal has no right to do such a thing, and we have seen this being done in respect of a toilet or an extra room.

In Kerry, Deputy Jackie Healy-Rae is rambling up and down the street telling us what to do. This Government has been a victim of those Independents who try to tell us what to do. I never want to see that again. I never want to see this Government or any Government held to ransom by people like that for petty matters like footpaths, schools and bits of roads.

That should be Government policy. If we have that kind of policy in this country, we will have no banks because that is where the banks went wrong.

My party was the party that built this country from 1932.

I am reluctant to interrupt but Deputy O'Keeffe is borrowing time from the next slot.

Am I? The Ceann Comhairle can give me another minute.

Deputy O'Keeffe should borrow it from the bank.

I can tell Members that Fianna Fáil went wrong when it became the party of the racehorse owner. We have more racecourses in trouble than we have ghost estates. They will soon be like ghost estates because there are too many racecourses and we do not have the money to back horses, feed horses or train them. If Fianna Fáil came back from the sport of kings to where it was founded, we would have a successful country and this Government would win 50 or 60 seats at the general election.

Did Deputy Edward O'Keeffe say 15 seats?

Deputy McCormack is in the same camp as me, he is retiring. Are 15 Fine Gael Deputies retiring?

Deputy O'Keeffe, please.

I am delighted to make this last contribution. I thank the Ceann Comhairle for his patience and I welcome Deputy Mattie McGrath going to Dunnes Stores. I will go with him if he wants.

Before he leaves the Chamber, I wish Deputy Edward O'Keeffe the best in his retirement.

I did not come into the Chamber to bounce heads with Deputy Kennedy.

I was just about to leave the Chamber but maybe I should stay for Deputy Deasy's words of wisdom.

When Deputy Kennedy points the finger at people like me and talks about self-respect and responsibility, he is confusing the self-interest of Fianna Fáil with the national interest. It is not the same thing.

I am afraid not, I referred to the hypocrisy just in case Deputy Deasy did not get the message the first time.

People are sick of members of Fianna Fáil talking about themselves on radio.

We are talking about people saying the budget should be passed in the national interest, then voting against it.

I ask Members to refrain from engaging across the floor.

I picked up an article over the weekend that caught my attention. The headline is "Hundreds of poor Irish buried in mass graves in UK each year". The article concerns hundreds of impoverished Irish people, with no known family, who are buried in unmarked mass graves in London by the local councils. In the case of Southwark Council, half of the 50 people whose funerals are organised and funded by the borough are elderly Irish men. Each borough has slightly different procedures but the majority of those buried in paupers' graves are laid to rest without anything to identify them and in graves with the remains of up to 25 other people. That is shocking.

I emigrated in 1986 and I witnessed the lives and hardship of people who, in many cases, have not returned to Ireland. It is important to accept in this Chamber the net effect of what has happened to our economy for many of the people who will not be returning. Some may think this is a slightly dramatic way of portraying the issue. Some people go abroad, they thrive, they learn new skills and they meet interesting people but many people do not do so well. One of my most vivid memories is being in the Rye River pub, off Jerome Avenue in the Bronx in 1987. It was 40°C outside and a line of middle-aged men were reading newspapers three days old and drinking pints of Guinness. Many told me they had not been back to Ireland in 20 years.

Yesterday, I canvassed a rural part of Waterford, Stradbally, and it was the issue on everyone's tongue. They all talked about emigration, their children leaving and the safeguarding of small businesses. In this Finance Bill, self-employed people are hit again. They will pay an additional 3% surcharge on income over €100,000. I want to address the treatment of self-employed people. I have just received the back to education allowance figures for Waterford. In 2005 to 2006 there were 275 participants. In 2009 to 2010, there were 902 participants. How many of those are self-employed people? Not as many as there should be. If a self-employed person loses his or her job, he or she can apply for jobseeker's allowance, which is means tested. However, if the spouse earns more than €400 per week, he or she does not qualify for the back to education allowance, work placements, retraining schemes or the back to work allowance. These people are leaving the system completely. They have become statistics and are completely disenfranchised. They are the ones emigrating.

If the percentage contribution for self-employed people is to be raised, at the very least they should be entitled to the basic facets of State retraining. They are the entrepreneurs and self-starters, the ones who have created jobs in this country. In many cases, they have never asked the State for assistance. If the rate of contribution increases for the self-employed, we must ensure these skilled entrepreneurs can get adequate retraining. As a State, we need to examine the question of self-employed workers generally.

Many of these Irish men and women will not come back to Ireland unless we recognise their value, their skills and, most importantly, their needs.

I welcome the opportunity to make a contribution. There are many areas I would like to touch on but the brief time available means I must highlight the failure of the Government in respect of, and the need for a new Government to respond to, those suffering from mental illness, stress-related illnesses and those who are suicidal. We must recognise the serious suicide situation resulting from the recession. We have seen this exposed by the media in the past number of days. The reduction in the mental health services budget from 8% to 3.5% of the total health budget is a disgrace. It marginalises those with mental health difficulties and does not give them an opportunity to recover.

The treatment of mental health problems must become recovery orientated. We can compare England's 12% and Scotland's 18% of the total health budget to our figure of 3.5%. We have failed to introduce the Government's policy and the recommendations of the A Vision for Change report. The key aspect of that was to introduce multidisciplinary, community-based psychiatric services so that we deal with people in the community. All disciplines should be available and the team can decide the best type of treatment for the person at an early stage.

People ask where we will get the money for this. My reply is that because of the lack of community-based psychiatric services, people are in psychiatric hospitals who would not be there if they were treated in the community at an early stage. If that policy was introduced, we could reduce the number of psychiatric hospital beds by 500. The Ceann Comhairle can make the calculations, when it costs €1,000 a day for a psychiatric patient in hospital. Private hospitals charge approximately €500, which is paid by the VHI. We can save up to €200 million if we change the system, based on the €1,000 per day figure. We also have geriatrics, elderly, long-term patients who do not need psychiatric treatment and who need nursing home treatment.

We should bear in mind that it costs €7,000 a week for a patient to be cared for in a psychiatric hospital and if such a patient were moved to a nursing home, it would cost €1,000 a week to care for him or her. The system itself can produce the finances to introduce proper community-based psychiatric beds.

It is disheartening to read the report of the Inspector of Mental Health Services. As the report states:

[The inspector has constantly identified year after year] an unaccountable failure to implement policy which is 20 years old and, as a result, prevailing conditions in Ireland's mental health services remain a scandal. The inability to change policy in the past unfortunately raises concerns about the implementation of the new ‘Vision for Change' policy [which I recommended] unless the Government approaches the issues with a real will to change along with the absolutely necessary recourses [ as I have pointed out]. There is no doubt that the neglect of the psychiatric services over the last 10 years has, at its root, the decision by the Government to slash . . . . the Health Budget [for psychiatric services, which is totally unacceptable].

We hope that Fine Gael will have an opportunity in government to examine this. It will take time but it should be examined.

In the current economic climate it is important that all legislation that has come before the House now and that will come before it during the lifetime of the next Dáil is judged on the basis of two criteria — first, does it address the gaping hole in our public finances and, second, does it assist in some way in endeavouring to stimulate growth, create jobs and get people back to work? On the basis of the first criterion on addressing the public finances, I welcome the Finance Bill. It is well documented that the Fine Gael Party has committed and signed up to the target of a €6 billion adjustment over the period of four years in accordance with the four-year plan. However, I and my party disagree with some of the mechanisms employed in some of the provisions of the Bill, which set out to achieve this target.

The universal social charge has been much talked about in the media in recent weeks and it is being raised on the doorsteps, with people having received their pay cheques in the past week or two. The universal social charge is a very significant issue. I welcome the concept of a universal social charge in the sense it tidies up the various levies which were introduced in the previous two budgets. That is important as it adds clarity and streamlines the taxation system, to some extent, and this is necessary. However, I do not believe that the blunt instrument which has been used to introduce and implement it is correct. I acknowledge that the Minister, Deputy Brian Lenihan, on foot of lobbying by certain Independents, who no doubt will happily take credit for it, has made some changes in regard to medical card holders. This goes some way towards addressing some of the problems with the charge. However, it needs to be acknowledged, as referred to by Deputy Deasy, that the trade off is that the self-employed will be further penalised under the Finance Bill and that is an extremely regrettable prospect. Self-employed people will now reach a marginal rate of tax, that of 55% at a minimum. These are by and large significant contributors to the Exchequer through a variety of means of taxation, through their businesses as well their personal income tax.

Under the second criterion on which legislation should be judged, that of whether it assists growth and job stimulation, it is clear that this Bill, as with all the former legislation which has come from this Government, is basically lacking. What we have seen time and again is the complete dearth of ideas, of imagination and of a drive behind the Government and the Cabinet to start injecting a stimulus to our economy and start prioritising job creation. I look forward to the creation of a new Government under the mandate of the next Dáil. It is vital that we see new young, vibrant, energetic Ministers with new ideas and new concepts who will bring a new energy to Departments to drive forward our economy because it is clear that this tired Government has entirely run out of ideas.

I would like to pay tribute to the outstanding service given to Fine Gael by Deputy Pádraic McCormack, chairman of our parliamentary party. I wish him and his wife, Eilish, the very best.

I also pay tribute to the work of Deputy Jimmy Devins, my colleague from Sligo-North Leitrim. I have worked very closely and effectively with him since he was elected to this House in 2002. I found him at all times to be a man of immense integrity, having had the concerns of the electorate close to his heart. Despite his best attempts, he was very much let down by the Government when it came to the retention of critical services, those of cancer services, at Sligo General Hospital. I wish him and his wife, Mary, and family the best of good health and good luck. It was always a great pleasure to meet him and work with him as part of a team working for the people of Sligo-North Leitrim.

Turning to the Finance Bill, it has failed small companies in many ways. There are 86,000 small companies in Ireland, employing more than 700,000 people and generating €80 billion in turnover annually. They contribute to the economy in that they account for 37% of income tax receipts and 50% of VAT receipts.

At a personal level, these hard-working individuals play a central role in their local communities. They take risks, create jobs and generate enterprise. Fine Gael in government will encourage entrepreneurs to explore new business ideas, to invest and to take risks. The Government has a vital role to play in supporting new businesses and encouraging entrepreneurs to invest in and grow existing businesses, and Fine Gael in government will do that. The Government's record in this area is a disgrace. It has put billions into banks and nothing into enterprise.

Small and medium-sized enterprises represent 95% of all businesses. Of a total of more than 80,000 small businesses, 11,000 employ up to 50 staff. They incorporate the following critical sectors — accommodation and food, financial, insurance, real estate, information and communications technology, film and digital media, health care, agriculture, construction, utilities, wholesale and retail, administration and support services, and professional, scientific and technical services.

Fine Gael in government will understand the need to create an environment beneficial to the establishment of the growth of small companies and in government it will create this environment. Most important, Fine Gael will have concern for and will respect the role of entrepreneurs and small businesses. Many problems face small businesses, including undercapitalisation, weak financial structures, lack of funding from banks, difficulty in securing funding, lack of Government support and a high level of bureaucracy and red tape.

When one notes the stimulus that has been given to and the investment that has been made in the banks, nothing has been given to those business people who are the backbone of this economy. I have no doubt this economy will recover, but to kick start this economy, we need to support small companies in the retention and the creation of jobs. Rather than have 50,000 people leave this country, we should be working with bright young people with business ideas and investing in and supporting their proposals. Instead of investing money in property, Fine Gael will invest in people. It will invest in ideas, encourage people to stay in Ireland and invest in research and development in which there has been little or no investment. We will reduce the level of red tape. I heard these issues discussed on an RTE Radio 1 programme this morning and the business spokesperson on that programme said that 400 businesses will close this month. That is outrageous and it will have an adverse impact.

Speaking for my last time in this Parliament, I very much look forward to receiving the support of the electorate in Sligo-North Leitrim so that I will be re-elected with a strong mandate for the region. I wish well to everybody who has decided to retire. I have made many friends here and they are from every political party. I wish them well and continued health and good luck. I do not regard leaving political life as retirement but as a change of lifestyle. I hope those who make the change will enjoy it.

The way things are going, it appears as if the Ceann Comhairle's seat is the only safe one in the House. I wish him well in the new Dáil.

For over a decade, the Government, in various shades, spent the public's money in a wanton fashion. It never consulted or sought the advice of this side of the House. It never took on board the very many positive measures put forward by this side of the House. Now in the Government's hour of need, it seeks our help for the good of the State. This is a Pauline conversion on its deathbed.

Fine Gael believes the fiscal adjustment should be achieved through expenditure savings as opposed to tax increases. There is great scope for savings in the public service. People talk about fixing the political system. While there are steps to be taken in respect of the political system, its main fault is the practitioners therein. The system has worked in the past and can work in the future. We could spend another decade navel-gazing and return with the same system. The biggest weakness of this House is the failure to recognise the implications of measures we take on business and the business environment.

Whatever Government is formed in the next few weeks will have to introduce a new finance Bill with measures to facilitate growth and the creation of jobs. To date, there have been cutbacks. We must address bureaucracy in the form of the Health and Safety Authority, NERA and all the bodies set up during the Celtic tiger years.

There are measures we can take outside our economic remit that will have implications. Over the years during which I have been a Member, I have been harping on about the issue of early intervention in education. Our education system is going down the Swanee because of the failure in respect of numeracy and literacy in the primary curriculum. A report published in recent weeks identifies this problem. People ask me how this has happened and state we need another report to establish the facts. It happened because we have a curriculum that does not facilitate development.

It is essential that the new Government introduce a finance Bill that will create hope, a stimulus and jobs. The difficulty in Britain in recent days will have an impact on our exports. Interest rates will probably increase in the coming year or so, thus affecting mortgage holders. There are many negatives on the horizon and this is why we need to instil confidence. Let us renegotiate and conclude the interest rate deal with the IMF as soon as we can in order to run our own affairs.

I pay tribute to all those who are retiring. I am sorry I was not present for the speech of Deputy Edward O'Keeffe, who is a very outspoken man. I wish him, his colleagues, my colleagues on this side of the House and others well in the weeks ahead.

I compliment Deputy Edward O'Keeffe, who is from a neighbouring constituency, and all Members who are taking the opportunity to retire. I thank them for their public service.

The legislation being discussed is most important. I believe from the bottom of my heart that it is being rushed through the Houses with indecent haste. I have sat through so many debates in recent months and years in which the Opposition frequently criticised the Government for the use of the guillotine, thereby rushing legislation. Now that the prize is in sight, there is no time for due diligence and proper debate.

Leaders of the Opposition and others have been publicising with great gusto the view that they are the custodians of the national interest. Only now, when this coincides with their own interests, are they throwing caution to the wind.

The Green Party was a partner in Government. It destabilised the Government in a major way in November, at which time it wanted to be in and out of Government. It is now appealing to the Opposition to carry the Bill. It has great responsibility and is answerable to the public for its actions.

I welcome the effective deferral into next year of the curtailment of the tax reliefs on section 33 properties. There is now a tendency to consider property as a dirty word. Anyone who speculated on or invested in property is now regarded as a rogue or crony. The reality is that section 33 provisions were availed of increasingly by some very ordinary people. The provisions were promoted by the Government and people were advised by solicitors and accountants that the section 33 scheme was wonderful. It was regarded as one of the safest schemes one could opt for because it was State backed and one entered into a contract with the State.

In many cases, people leveraged their own properties, affecting their future and that of their children, to engage in small-scale property investment. They rejuvenated many derelict areas in small towns in the process. They were not major developers. They were ordinary people in ordinary positions. They included self-employed people, teachers, doctors and others who are valued in the community. They are not connected in any way to the property moguls or the high-level speculators involved with NAMA or who engaged in reckless borrowing and lending, from Anglo Irish Bank and other banks.

These small-time investors entered into a contract and were advised by legal and financial experts to do so. They paid dearly for that advice. The section 33 scheme was regarded as guaranteed. When we enter into contracts by mutual agreement, that is fine; when one enters into a contract with the State, one believes the contract will be honoured by it. People who now wish to revisit their contract with the State are not allowed to do so. Some have taken the tax reliefs but many have not.

What is occurring is unconstitutional and it will be proven to be such. I welcome the 12-month deferral and acknowledge the serious effect the removal of the scheme will have on the trust of the people. The trust of the people has been shattered in so many ways. The people in question were willing to make an investment, enter into a contract, put their money where their mouths were to better their communities, and build for themselves and their families without trying to get rich quickly. Their plight is sad. The section 33 scheme is to be abolished in the interest of resolving the national crisis brought about by the banks and light-touch regulation, as a consequence of which nobody in the Government shouted "Stop".

I am appalled that no banker has been brought to justice to date. Everybody is innocent until proven guilty and I respect due process, which must never be questioned. I was surprised and heartened last year when the then Garda Commissioner stated he expected people to be brought before the courts before the end of the year. He has now retired and I wish him well. We are now one month into the new year and there is no sign of anyone being charged. That those responsible have not been brought to book constitutes an appalling vista for the Government, bearing in mind that we cannot interfere with investigations.

As a small businessman, I know the legalities involved. When one does one's accounts every year, one's accountant or auditor signs off on them based on the information supplied. Huge tranches of money were moved out of banks into other banks and this was basic, naked, unadulterated fraud. There is to be a huge, lengthy trawl to ensure everything is right but that is only a cop-out and excuse. People are hiding behind this trawl. They need to be charged for their wrongdoing in the courts and must pay the price.

Budget after budget, it was promised that so many quangos would be disbanded. They are a drain on the resources of the country and comprise a wasteful exercise. We have handed over power from this Parliament, to which I and every other Member was elected. I wish every candidate well in the forthcoming election. I hope the next Government will be able to sort out the issues that the people want addressed.

With regard to the property market, rent dried up for investors. There are human tragedies involved. Families with children who have mortgages will be affected and small business owners with mortgages on their properties will be forced out of business. I hope the new Government — we all have an idea of the complexion it will have — will put its money where its mouth is. After the review next year, it will have the time to ensure the measure is constitutional and revisit it.

I welcome the amendment to the universal social charge and make no apologies for lobbying the Minister for Finance to reduce from 7% to 4% the rate for medical cardholders. That section of the community cannot afford 7% and needs to be supported. However, I do not welcome the quick decision made by the mandarins in the Department of Finance and with the obvious agreement of the Minister. I am glad that my colleague, the Minister of State, is present, as he has listened to me at many meetings around our county in recent months. While €100,000 is a good income, foisting the shortfall onto the self-employed on the grounds that they can take it is wrong. They cannot take a further scintilla of tax because they already have been taxed and regulated out of existence. At a time when there was no regulation of bankers, the self-employed endured health and safety regulations, hazard analysis and critical control point, HACCP, regulations, insurance, courses and so on.

Regulating our best and brightest, those who have the courage to invest in business and create money to pay their own wages, provide for their families and create employment, has become an industry. These people are our future, but they are not receiving help from Enterprise Ireland or the IDA. Nor do they ask for it. In some cases, they get good support from local authorities and county enterprise boards. This has been acknowledged on programmes like "The Frontline". These are the people Ireland needs to get out of this mire, not us. They have ideas and the courage and initiative to run with them. They are our brightest and best. Some might not be our brightest and best, but they are hard workers. Sheer hard work has got them to where they are and kept them there for many years. Crucifying them by regulation must stop. I welcome Deputy Timmins's comments to this effect.

An army of officialdom has crippled our State and grown up around the political system. My former party has been in government for the longest time. I lobbied my party to call a halt to matters, but no one wanted them to stop as they were going well. Instead, people wanted to make money. Rightly or wrongly, we became associated with big developers and builders. This is our taint and we must pay the price. We need to rebuild and revert to the ideals of de Valera and Lemass by setting up a country in which people can be proud to be in business and to have property. Without such people, we will not have a country.

I will address the bringing forward of the deadline for self-assessment tax returns from 31 October to 30 September. This is another dream by some bright spark — there are many good officials in the Department — who has never been self-employed, needed to file accounts or understood the difficulties involved. It is a nonsensical proposal for a number of reasons. First, cash flow has dried up. Traditionally, people are paid quarterly or at the end of the year. One needs money to pay one's self-assessment, but many businesses do not have it. Banks have been of no help, seeing as how they have removed overdraft facilities and refused to provide loans despite the fact that some of the businesses in question have track records of 30 or 40 years. They are a safe bet for the banks, but their lifeblood is being drained away.

August and September are holiday months for the House and others, so we know that finding an accountant in that period can be difficult. Accountants would tell one of how their staff are on holidays, meaning there is no one to do the books. As such, the new deadline is a nonsensical, ill-conceived and ill-judged idea. Those who dreamed it up have never created a job. Instead, they will put people out of business. The new deadline must be reconsidered, as the people who will be affected promote enterprise and are those to whom we must turn.

Although we are attracting some multinationals and I compliment all involved in Intel's announcement last week, we are not attracting enough. Small indigenous businesses must be encouraged and supported. Banks are not helping them despite last year's budget promise that they would each lend €3 billion. The Minister told us the banks would submit plans in this respect, but we never saw any plan or money. The only money we saw was what they took off business people.

I welcome the review of the curtailment of tax relief on student fees. PAYE workers had legitimate complaints in this respect. The idea that the self-employed could do what they liked led to mistrust, so we must tread with caution. No tax relief will be afforded on the first €2,000 in charges for full-time students or on the first €1,000 for part-time students. Among the unemployed of all ages, there is a considerable need to up-skill or retrain to meet the needs of industry and to create growth. We must support them because they are our brightest and best. From the figures, we can see how many people have been forced to emigrate. We want to keep them at home. To do so, they must be up-skilled and reskilled if they are to be able and willing to create jobs, get work and attract companies to Ireland. This measure must be examined.

I am disappointed about the tax on the bankers' bonuses. I negotiated with the Minister, Deputy Brian Lenihan, on making changes to the cuts in allowances for the disabled, blind people and carers. He decided to introduce the 90% tax on bonuses, but it has been forgotten. I do not want to penalise those people, but "bonus" is a dirty word. Why has it been forgotten? Departmental officials were allowed their bonuses two weeks later, yet there was not a word about that. There is no fairness.

This Bill ignores an area that has been crying out for reform. I have consistently argued that, in the interests of fairness and accountability, a maximum wage needs to be introduced. I was with the Minister until he walked into the Chamber with the budget. He told me he was introducing a €250,000 cap. For many years, I had lobbied for €200,000, which would be a fine sum for anyone. He introduced the measure, but we have not heard a word about it since. It was tokenism to get the likes of me on side. The situation is unfair. A couple of days later, we decreased the minimum wage. No questions were asked; it was just slashed. The ordinary people who want to work are being leaned on again. Worse still, the message being sent is that working is not viable. One must always have a system in which it is rewarding to work. It cannot be more rewarding to stay at home. This is the problem with our lengthening dole queues.

The reduction in the minimum wage was an attack on the weakest. I am an employer and 99% of the employers I know were not troubled by the minimum wage. They were willing to pay it. If one has good employees, they are entitled to good pay. In smaller businesses in particular, there are good relationships between employers and employees. It is quid pro quo, in that one cannot work without the other.

Ordinary people, be they business people or workers, who want to get on with their lives without looking for handouts are being crucified while the rich are getting away with it. This is the saddest indictment of our outgoing Government and it is something on which I, as someone who was a part of it, must face the public. However, I reject out of hand an accusation levelled against me. The Opposition has a responsibility. If it so wishes, it is ready to do some governance by passing this Bill.

I voted against the so-called EU-IMF bailout. It was a clean out.

The Deputy made sure it was passed first, though.

The amount involved was not €85 billion. By my simple arithmetic, we will need to invest €17.5 billion of our National Pensions Reserve Fund, NPRF, in the bottomless pit that is the banks. It is a bad deal. It was negotiated by the mandarins and the Minister, not a business person. Had a business person advised them, for example, had Albert Reynolds when he was a Deputy or someone with business ideas gone out there, our friends from Europe and the IMF would have come to us the next morning and offered us a betterdeal.

I welcome the Opposition's positive promise to renegotiate. The deal must be renegotiated because we can never repay it. I believe it was set up for default, either mischievously by the Government or by the Europeans. I hate the word "default". Anyone who is in business knows that, if one defaults even once, one is listed in Stubbs Gazette, one’s record is damaged and one’s business and credibility diminishes. We should have rejected the deal and brought back the EU and IMF, as doing so would have suited the national interest better.

I will not put local politics ahead of national politics. I never got into deals with our Ministers for Finance, but I will stand up for the basic rights of ordinary people who cannot understand what is occurring and were appalled by events in the Oireachtas last week when the Government put party interests ahead of the public interest. This can never be allowed in politics and the public will deal with it at the ballot box. It was a fundamentally flawed miscalculation. I wish the retiring Taoiseach and Ministers the best, but they misread the situation and brought rancour from all over the world down on top of us.

Although I am proud to represent my constituents, I am not speaking for them now. I do not see the wisdom in rushing the Finance Bill through the Dáil. Last year, it took us until April to pass it. While we should not continue until next April, we should continue until next week to discuss the Bill properly paragraph by paragraph. It is a large document. In recent weeks, we have all been treating it like a Bible and saying it needed to be passed, yet issues have now arisen. I could not believe it when we adjourned at 8.30 p.m. last night. I was looking for speaking time and I thank the Chief Whip, Deputy Curran, and his staff for affording me some. However, I could not believe that we did not sit until midnight or whatever to have some discussion——

Fianna Fáil allowed the Deputy. The Deputy will vote with the Government.

I did not say I would.

The Government gave him this slot.

And I am glad it did.

It is a set-up. Why did the Government give the Deputy a slot?

Deputy English, please.

Deputy English can make up his own mind, but we will see what he does when he gets into government.

Deputy McGrath, please.

I was watching the clock and did not believe my time had concluded.

The Deputy will still vote for the Bill.

The eyes of the world are on us, yet we walked away from the Chamber at 8.30 p.m. last night. I expect we will be here until midnight tonight and I expect the House will give due diligence to this Finance Bill. The complaints I heard about the guillotine being imposed by the Government of which I was a part ring hollow now. I respect the fact that the Opposition wants an election, we all want it and the country wants it but we have to give due diligence and due respect to this Bill, and not cherry-pick it.

The Opposition has stated it will table amendments on the civil partnership provisions and this is another issue with significant consequences and costs for the taxpayer in the future. That was rushed legislation and the Greens are pronouncing that they achieved it. Good riddance to bad rubbish in Government, so far as I am concerned. I have said many times that they were a dangerous party in Government. Ideology is fine and they can talk about policies but look at the price of petrol at the pumps. Thankfully, our coursing festival is being held in Clonmel next week. I invite each and every Member, if they have an hour to spare on Sunday or Monday to come down to enjoy that festival of rural pursuits at their best and an important industry which attracts foreign investment.

I thank the Ceann Comhairle for his co-operation and I thank all colleagues, staff and officials for being nice to me while I served in this Dáil.

I will be calling the Minister to reply at 11.45 p.m. so Deputies Costello and Rabbitte have about five minutes.

I will share my time evenly with Deputy Pat Rabbitte. Is there any extra time available to us?

Perhaps they could have five more minutes.

I will allow that.

I thank the Ceann Comhairle and we will each speak for five minutes. I thank the Minister of State for agreeing to give us a few more minutes.

I wish all Members well, a number of whom will be retiring from the House and it is unlikely that very many or certainly that all of us will be here in this Chamber again. I have appreciated being here for the past three and a half years and I have always been treated with courtesy and friendship by Members on all sides of the House.

We are now in the dying days of this Government but it has been in free fall for many weeks. This free fall started with the bank guarantee which destroyed the economy and the nation's sovereignty. The IMF and the EU entered the country unopposed and dictated savage financial conditions for the banks' bail-out on the taxpayers. The Government went AWOL, so to speak, Fianna Fáil fiddled and the Greens went chasing the stag-hunters of Meath.

Today, as the House debates the Finance Bill 2011, there is a very serious aviation dispute taking place between Aer Lingus and the IMPACT trade union. The former Minister for Transport, Deputy Noel Dempsey, has indicated he plans to retire and has therefore resigned as Minister. The new Minister for Transport, Deputy Pat Carey, is overwhelmed by multiple responsibilities. I wish to make a plea that we would not lose sight of what is happening. This dispute is escalating at a fast rate and more than 180 cabin crew staff, mostly women, have been taken off the payroll and another 21, at least, will be taken off today which means that 20% of the entire cabin crew staff are gone. Aer Lingus has stated it will be reducing its operations by 10%. The company is hiring in carriers such as Ryanair and others and it is spending significant sums in an effort to break this dispute. This is not the way forward. Any Government and Minister worth their salt would be intervening at this stage.

This is a long-running dispute which has escalated over the past two weeks and has gone out of control. I ask that the new Minister for Transport, Deputy Pat Carey, would use his good offices to intervene to speak to both parties, to Aer Lingus management and to IMPACT. This State has a 25% shareholding in Aer Lingus. If necessary, the Minister should arrange for third party mediation, binding arbitration, as this will resolve the dispute. If the Minister for Transport is not listening in the House today I ask the Minister of State to relay that request. We are dealing with Fianna Fáil elections, a Finance Bill and a budget ——

I know the Deputy is hoping to accommodate Deputy Rabbitte.

With regard to the Finance Bill, I would have thought there exists an opportunity to improve on the budget but instead the property taxes have been done away with. The Minister also promised to deal with the bonus payments paid in bodies now under the State guarantee but he did not do so. A job creation scheme is essential but nothing has been put in place to support job creation. The opportunity to improve the budget and to put together a proper Finance Bill has been lost. A new Government will need to intervene. I hope a new, fresh Labour-led Government will be in control to try to improve the situation and to give some hope to the country in the future.

This is no way to enact a Finance Bill but then, this is no way to govern a country, with a half of a Cabinet, and with a Taoiseach driving through a truncated Finance Bill that has been dictated from Frankfurt, Brussels and Washington. This is a Finance Bill to legislate for a budget that had a majority in the House on budget night but now the Minister for Finance is bartering with Independents to conclude the process. The reckless mismanagement of our country's affairs has made a severe budget unavoidable and this is the most severe budget of modern times.

However, severe or not, this House is entitled to demand that the measures being enshrined in law are fair. The manner in which the universal social charge is being introduced is not fair. It is not credible in the circumstances in which we find ourselves, to argue that 45% of what the Minister calls, "tax units", pay no tax. However, to bring in a new universal charge that kicks in at an annual income of €4,000 is manifestly unfair. Workers on low incomes are hit by a double whammy. This Government has cut the minimum wage and introduced the universal social charge.

I welcome the minor change for medical card-holders announced yesterday by the Minister, the cost of which will be sourced from high earners. However, he could hardly have persisted with the universal social charge that had an employee on €35,000 per annum losing €12 per week while the self-employed person earning more than €200,000 per annum was gaining €11 per week.

In view of the brief time available I will summarise my contribution. The cumulative tax changes brought in by the present Minister for Finance are so severe that there is no further scope for increases in personal taxation for anyone earning less than €100,000 per annum. The Labour Party alternative budget before Christmas would have raised some €870 million in personal taxes. The actual increases imposed by Fianna Fáil in this budget increase personal income taxes by €1.2 billion. We cannot further tax people on low and middle incomes.

The challenge facing whoever comprises the new Government is to wriggle out of the strait-jacket that is the legacy of the outgoing Government. We have no choice but to get our public finances under control but we cannot bear the burden imposed on us by the IMF-EU bail-out. Our sovereign wealth fund, the National Pensions Reserve Fund, has been thrown into the pot by the Government in the bailout negotiations. The National Pensions Reserve Fund will be cleaned out before the end of the current year. Our freedom of movement to stimulate growth is severely restricted. Everyone knows that unless our economy can be returned to growth, the kind of growth that produces employment, that begins to put people back to work, we will be unable to pay our way.

Finally, I must mention the huge bitterness among the public about what the banks have done to our country. Ordinary people are convinced that no banker will be required to hang his Armani suit on the back of a door in Mountjoy Prison. The circumstances and the damage done to our standing in the Councils of the European Union, where we used to punch above our weight, where our networking was professional and effective, has been damaged in recent years. As a result, the ECB kicked around this country when it came to agreeing the terms of the bailout.

If it is true — as it undoubtedly is — that our banks behaved recklessly, it is also true that those who loaned to them behaved recklessly and the terms of that IMF-ECB bailout was as much to protect the eurozone and to protect German and French banks as it was to aid Ireland. The first challenge for whoever comprises the new Government will be to revisit that bailout and take advantage of developments happening in the wider eurozone to negotiate a eurozone-wide debt relief programme which would give some freedom to move in this country and some capacity to lift the restrictions to stimulate growth and to get people back to work again.

I thank Deputy Rabbitte and on a personal level I wish him well. I hope that does not get me into any trouble.

I thank Deputy Rabbitte. I call on the Minister for Finance, Deputy Brian Lenihan, to reply to the debate. He will be interrupted for the vote at noon.

As I stressed at the beginning of the debate, the discussion on the Finance Bill takes place in unprecedented circumstances. The Government finds itself in a minority position and the House finds itself in a position where it must face its national responsibilities without recourse to cheap and easy rhetoric. The House must decide what is in the best interests of the country in terms of the Finance Bill. The enactment of this legislation is vital to our international credibility and this has been made clear by the European Commission and in all of the international commentary about which there has been comment during the debate.

There has been much attention in media reports regarding the possibility of reduced interest charges being agreed for the EU loan assistance to Ireland. Many Deputies have raised this issue, including Deputy Rabbitte near the conclusion of the debate. I assure the House that I have been as vigorous on this subject in practice as the Members of the Opposition have been in talk. I will attend the relevant European meetings in February irrespective of the fact that a general election is taking place to ensure that Ireland's vital interests are fully protected in this matter.

I hope you will be more successful than you have been in the past.

I am allowed to proceed without interruption.

I will do everything in my power as Minister for Finance in the remaining weeks available to the Government to work on this subject.

Let us be under no illusions. These are difficult complex negotiations involving many member states and the interest rates were set and determined well in advance of any application by Ireland. This is the factual position. Following the agreement with Ireland, Greece sought the same terms so it is not correct to state our arrangement was less favourable. It was in accordance with precedent.

There was no precedent.

We need to build on the international discussions, which will not be concluded in an instant. Talk about renegotiation is entirely fallacious. What is needed is hard determined negotiation, building up relationships where we have them and ensuring these changes take place. I assure the House that in so far as the negotiations take place prior to polling day I will participate in them——

——while other Members canvass and spread hot air throughout the nation. I state this particularly to the Labour Party which would have let the banking system in the country collapse with mass unemployment several months ago.

The time to negotiate was prior to the deal being signed.

I will now turn to the banking system and the serious challenges facing the State in this regard. Deputies Noonan, O'Donnell and Maureen O'Sullivan raised the question of burden sharing. This is provided for in the Credit Institutions (Stabilisation) Act 2010. We know senior bondholders rank equally with depositors in having claims in Irish banks. We know the long debate in Ireland on the mere possibility of default has caused immense problems for the Irish banking system. If one insists that one will torch a house does one expect to leave the house next door alone and leave one's deposit in it? This has been the quality of debate on this subject in this country for the past two years and we have paid a heavy price for it. Again, these issues will be determined in co-operation with our European partners——

Blame everybody else except the Government which should be in charge.

——because we are in an arrangement whereby our funding comes from the European Central Bank and any progress in this area will have to be made in co-operation with it. It will not be possible to take unilateral measures in this respect and any party which in the course of the campaign promises unilateral default measures is misleading and deceiving the people.

Deputy Noonan raised the question of Spanish banks. The Spanish Government announced that its banks will have to raise more capital. This is the same as what is happening here under the EU support programme.

Deputies raised the issue of the universal social charge. I will consider the issue Deputy Noonan raised on the threshold but it is necessary to have an exemption threshold at the lower end of the charge to avoid very low levels of income attaching to a tax liability. I am pleased that Deputy Noonan has welcomed my proposed Committee Stage amendments. He has, however, questioned the surcharge on self-employed income being applied at income levels of €100,000 rather than at income levels of €200,000 where the gain first appears. I must inform the Deputy that the gain only occurs at €200,000 and above but first shows itself as a diminishing loss on earnings from €100,000. If the surcharge were placed at income levels of €200,000, those above that level would still gain from the budget. I can provide the Deputy with a table that demonstrates this effect.

Deputy Noel Ahern queried why the 3% surcharge would apply only to self-employed income earners. This is because an unintended effect of introducing the social charge was that self-employed income earners above certain high levels of income actually made a gain from the original budget measures. The surcharge rectifies the position. Deputy Burton stated the highest income earners actually benefited as a result of the budget. This is simply not the case. All PAYE workers regardless of their income levels are worse off after the budget. It gives me no joy to state this but it is the factual position.

With regard to Deputy Burton's confusion over the nature of the universal social charge, let me make clear that the charge is a tax. All revenue goes to the central fund and is then used to fund services and other expenditure. It is certainly correct that the revenue from the health levy went directly to fund health services but this accounted for only 13% of what the HSE required in 2010.

With regard to the changes to self assessment, I refer to the points made by Deputies, in particular Deputy O'Donnell. It is true that implementation of the proposals would reduce the over-concentration of tax receipts in late October and mid-November and thus enhance the accuracy of next-year budget forecasting. It would also help facilitate an earlier budget and lengthen the period available for the development of policy and legislation for the Finance Bill. As many Deputies, including Deputies Roche and O'Connor have noted, the Finance Bill is one of the key pieces of legislation which goes through the Oireachtas and needs an appropriate level of commitment from all parties. However, bringing forward the pay and file deadline to 30 September would have a huge negative impact this year on small businesses and the self employed. Deputy Lowry advised me the harsh treatment of the self-employed is unfair. Likewise, Deputy Healy-Rae made a strong case in this regard. This measure would also have serious consequences for farmers because the single farm payment will not have been paid by 30 September, leaving farmers with no financial resources to make this payment prior to the deadline. In all these circumstances I am prepared not to proceed with the proposal to bring forward the pay and file deadline to 30 September. It was a worthy proposal and would have improved our budgetary process. It would have removed the criticism that we are constrained to introduce a budget in early December but one must weigh up this against the real difficulties which the self-employed and farmers face in the Irish economy and this is not the year for such a fundamental reform. Hence, I will not proceed with this particular element of the Finance Bill. It was not part of the original budgetary measures and therefore I am free to not proceed with the matter and I do not propose to do so.

It is appalling and unacceptable that the proposed taxation measures on bankers' bonuses were not dealt with because of the time restrictions placed on the passage of the Bill by the Labour Party and Fine Gael. I noted what Deputy Mattie McGrath stated a few moments ago in this regard that the constraint in the discussion on the Finance Bill to one week rather than two constrained the Department in what we could do. Nevertheless, having discussed the matter with my officials and having regard to what Deputy Mattie McGrath raised with me I will be in a position to bring forward an amendment on bankers' bonuses on Committee Stage. However, I will need all-party co-operation on this amendment because it has not been published with the other Committee Stage amendments. I know it is an issue about which all sides of the House are concerned.

A number of other tax issues were raised in the course of the debate.

Does all of this mean the lads are on side?

No, it is a matter for the House to determine whether it wishes to vote for the Finance Bill. This has been a tremendous week in one sense in that political parties on all sides have had to face up to their responsibilities for once. I hope we can face up to our responsibilities in the course of the national debate that is now beginning. One thing about the Finance Bill which has become very clear to me, and which applies in a wider sense to the management of our finances and expenditure, is that one cannot make a concession without providing for how the concession can be paid for elsewhere. This is how our public finances will be managed in the future irrespective of what Government is in office.

If one wants a concession on a particular tax matter, one will need to show how it will be paid for on the other side of the account. If one wants an increased expenditure somewhere, one will need to explain what additional taxation or what reduced expenditure will fund it. That is basic public finance and it will apply in this House from now on. We have begun to see signs of it in this debate, which is very welcome.

Question put: "That the words proposed to be deleted stand."
The Dáil divided by electronic means.

As we are near the termination of this Dáil, under Standing Order 69, I propose that the vote be taken by other than electronic means.

As Deputy Paul Kehoe is a Whip, under Standing Order 69 he is entitled to call a vote through the lobby.

Question again put: "That the words proposed to be deleted stand."
The Dáil divided: Tá, 80; Níl, 77.

  • Ahern, Bertie.
  • Ahern, Michael.
  • Ahern, Noel.
  • Andrews, Barry.
  • Andrews, Chris.
  • Ardagh, Seán.
  • Aylward, Bobby.
  • Behan, Joe.
  • Blaney, Niall.
  • Brady, Áine.
  • Brady, Cyprian.
  • Brady, Johnny.
  • Browne, John.
  • Byrne, Thomas.
  • Calleary, Dara.
  • Carey, Pat.
  • Collins, Niall.
  • Conlon, Margaret.
  • Connick, Seán.
  • Coughlan, Mary.
  • Cowen, Brian.
  • Cregan, John.
  • Cuffe, Ciarán.
  • Curran, John.
  • Dempsey, Noel.
  • Devins, Jimmy.
  • Dooley, Timmy.
  • Fahey, Frank.
  • Finneran, Michael.
  • Fitzpatrick, Michael.
  • Fleming, Seán.
  • Flynn, Beverley.
  • Gogarty, Paul.
  • Gormley, John.
  • Hanafin, Mary.
  • Harney, Mary.
  • Haughey, Seán.
  • Healy-Rae, Jackie.
  • Hoctor, Máire.
  • Kelleher, Billy.
  • Kelly, Peter.
  • Kenneally, Brendan.
  • Kennedy, Michael.
  • Killeen, Tony.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lenihan, Brian.
  • Lenihan, Conor.
  • Lowry, Michael.
  • McEllistrim, Thomas.
  • McGrath, Michael.
  • McGuinness, John.
  • Mansergh, Martin.
  • Martin, Micheál.
  • Moloney, John.
  • Moynihan, Michael.
  • Mulcahy, Michael.
  • Nolan, M. J.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • O’Brien, Darragh.
  • O’Connor, Charlie.
  • O’Dea, Willie.
  • O’Donoghue, John.
  • O’Flynn, Noel.
  • O’Hanlon, Rory.
  • O’Keeffe, Batt.
  • O’Keeffe, Edward.
  • O’Rourke, Mary.
  • O’Sullivan, Christy.
  • Power, Peter.
  • Power, Seán.
  • Roche, Dick.
  • Ryan, Eamon.
  • Sargent, Trevor.
  • Scanlon, Eamon.
  • Smith, Brendan.
  • Wallace, Mary.
  • White, Mary Alexandra.
  • Woods, Michael.


  • Allen, Bernard.
  • Bannon, James.
  • Barrett, Seán.
  • Breen, Pat.
  • Broughan, Thomas P.
  • Bruton, Richard.
  • Burke, Ulick.
  • Burton, Joan.
  • Byrne, Catherine.
  • Carey, Joe.
  • Clune, Deirdre.
  • Connaughton, Paul.
  • Coonan, Noel J.
  • Costello, Joe.
  • Coveney, Simon.
  • Crawford, Seymour.
  • Creighton, Lucinda.
  • D’Arcy, Michael.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Doherty, Pearse.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Feighan, Frank.
  • Ferris, Martin.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • Gilmore, Eamon.
  • Grealish, Noel.
  • Hayes, Brian.
  • Hayes, Tom.
  • Higgins, Michael D.
  • Hogan, Phil.
  • Howlin, Brendan.
  • Kehoe, Paul.
  • Kenny, Enda.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • McCormack, Pádraic.
  • McEntee, Shane.
  • McGinley, Dinny.
  • McGrath, Finian.
  • McHugh, Joe.
  • McManus, Liz.
  • Mitchell, Olivia.
  • Morgan, Arthur.
  • Naughten, Denis.
  • Neville, Dan.
  • Noonan, Michael.
  • Ó Caoláin, Caoimhghín.
  • Ó Snodaigh, Aengus.
  • O’Donnell, Kieran.
  • O’Dowd, Fergus.
  • O’Keeffe, Jim.
  • O’Mahony, John.
  • O’Shea, Brian.
  • O’Sullivan, Jan.
  • O’Sullivan, Maureen.
  • Penrose, Willie.
  • Perry, John.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Reilly, James.
  • Ring, Michael.
  • Shatter, Alan.
  • Sheahan, Tom.
  • Sheehan, P. J.
  • Sherlock, Seán.
  • Shortall, Róisín.
  • Stagg, Emmet.
  • Stanton, David.
  • Timmins, Billy.
  • Tuffy, Joanna.
  • Upton, Mary.
  • Varadkar, Leo.
  • Wall, Jack.
Tellers: Tá, Deputies John Curran and John Cregan; Níl, Deputies Paul Kehoe and Emmet Stagg.
Question declared lost.

I declare the Bill to be read a Second Time in accordance with Standing Order 121(2)(i).