Dáil Éireann debate -
Wednesday, 11 May 2011

Vol. 732 No. 1

Leaders’ Questions

Deputy Micheál Martin

When the Taoiseach downgraded yesterday's announcement from a jobs budget to a jobs initiative, one of the effects was that the Dáil and the general public were given only a fraction of the information that normally accompanies budget measures. For example, all preparatory paperwork from the tax strategy group would normally be published immediately online. This allows people to see all the advice received for and against any budget measure. In spite of the commitment in the programme for Government to increase budgetary transparency, the Government has reduced it by issuing no detailed supporting documentation. Information has not been published or made available about the likely net impact of the measures. There is a growing impression that this is because Ministers wish to focus on the public relations aspect of the announcement rather than the substance of the measures.

With regard to the €1.8 billion to be removed from personal pension funds, the Taoiseach will know that a similar move in Britain ended up having a disastrous impact. In that case, it took ten years for documents to be released showing that warnings were ignored before the decision was taken.

An Ceann Comhairle

Could you get to the question, please?

Deputy Micheál Martin

Under Standing Orders, I have two minutes to raise the matter about which I am going to ask a question. I will do that now.

It is not credible for the Government to claim it can remove €1.8 billion from personal pension funds without any negative impact. Will the Taoiseach commit to immediately releasing all documents and advices relating to this decision?

The Taoiseach

There is no secrecy about this initiative. I made it perfectly clear that it was a top priority of the Government to focus on creating jobs, getting people back to work and developing our economy. The Deputy is not interested in a Punch and Judy show and neither am I. In his statement yesterday, the Minister for Finance set out the details of this initiative and what it could mean in terms of job creation and getting people off the live register and back into work. I am sure the Deputy knows young people in his own constituency who had gone three quarters of the way through the process of acquiring a trade but have found themselves in limbo for the past two and a half years. They will now be able to complete their certificates and be provided with a currency they can use at home or abroad. There are thousands more people like this. If we can do this on such a scale with an injection of €450 million, the Deputy should think of what could have been done if we were not obliged to follow through on the promissory note signed by his Government of €3 billion every year for the next ten years for Anglo Irish Bank.

Deputies

Hear, hear.

The Taoiseach

The committees of the Oireachtas will probably be set up next week. They will provide an opportunity, as well as that provided in the House, for full debate on these matters. If there is any outstanding information the Deputy seeks, it will be provided to him, because there is not anything secret here. It was the declared intention of the Government to introduce this initiative, which will stimulate confidence in our indigenous economy and give people a sense of hope that the Government can provide an environment in which jobs can be created, and that is what we did yesterday. We have never held this up as being the answer to all our unemployment or economic problems, but it is a step in the right direction. As the Minister, Deputy Noonan, pointed out, it is a modest proposal in view of the economic constraints we are under.

Deputy Micheál Martin

Will the Taoiseach immediately release all documents and advices relating to the decision to take €1.8 billion from pension funds? That is the question I asked. He can argue that the €1.8 billion pension levy will have no impact if he wants. If this was a normal budget, the advices and supporting documentation would already be published online. If the Taoiseach wants us to believe this is more than a PR initiative, I do not see why he should not let people see now the full impact of this initiative. We do not have to wait for the committees to be set up in a couple of weeks' time.

The Taoiseach has given three speeches so far about the fact that export-oriented industry will be the driver of growth and job creation, which we on this side agree with, yet there is not even one measure in the proposal to aid such companies. Equally, none of the proposals leaked by the Minister for Enterprise, Trade and Innovation, Deputy Bruton, were in the package announced yesterday. Can the Taoiseach explain why yesterday's €2 billion package contained no significant allocation for any measure under the control of the Department responsible for jobs?

The Taoiseach

The initiative announced yesterday is what it says — an initiative to stimulate investment and job creation in our economy. I make no bones about saying how this is being funded, nor did I yesterday. As the Deputy is aware, pension funds have been the subject of massive tax concessions which have allowed them to be built up over the years. This is not a tax on any individual pension; it is a levy on the funds of a very modest 0.6% over four years. It is a temporary measure designed to stimulate the indigenous economy.

Everybody shares the view that our exports are strong. That is how it should be and that is how we want it to continue. For example, for Enterprise Ireland, whose representatives I met last week in New York, and quite a number of the companies to which it is providing grant aid under already voted moneys, this initiative is an addition to what is already happening. The Deputy is aware of the projected levels of export growth for this country. I see the ESRI has projected growth of 2% of this year, which is to be welcomed. However, these are only reports. All we can do is to continue to remove the red tape and obstacles to employment and drive forward our ambition for more and more people to get into the world of work, many of them in the export business.

I am not clear what information the Deputy is looking for.

Deputy Micheál Martin

The advices.

The Taoiseach

The Government has a mandate for this pension levy, because it was published as part of our programme.

Deputy Micheál Martin

The advice attached to it is what I am looking for.

Deputy Pat Rabbitte

Give us the advice on the bank guarantee.

Deputy Micheál Martin

There is no reason it should not be given.

The Taoiseach

The advice is political judgment.

An Ceann Comhairle

I must ask the Taoiseach to conclude.

The Taoiseach

We could sit here and whinge and complain and wring our hands in desperation——

Deputy Micheál Martin

Will the Taoiseach publish the advices? It is a very simple question.

The Taoiseach

——that nothing could be done about this. We have taken a very modest measure——

Deputy Micheál Martin

Will he publish the advices?

The Taoiseach

——to over four years inject funds into an area where we feel it is needed. For the first time from a Government it is an expression of joined-up thinking about how to get our country moving.

Deputies

Hear, hear.

Deputy Micheál Martin

Will he publish the advices?

Deputy Michael Conaghan

Will Fianna Fáil publish the bank guarantee advice?

(Interruptions).

Deputy Gerry Adams

I rith fheachtas an toghcháin bhí daoine ag lorg ceannaireachta. Nuair a tháinig Páirtí an Lucht Oibre agus Fine Gael le chéile, bhí a lán daoine dóchasach, ach níl siad dóchasach anois. The Taoiseach asked whether we were seeking any outstanding information. Yes: where are the jobs? That is information we would like to have, because that is what many citizens are asking, particularly the half a million who are unemployed.

How can the Government put €24 billion of public moneys into toxic banks? In this context how can the Government put only €29 million into what it now call a jobs initiative, which is probably more than it will spend on the Queen of England's visit? The sum total would probably give away pensions for nine bankers. If this really is a plan for jobs, where are the targets in terms of numbers and types of jobs? What happened to the general election promises made by Fine Gael and Labour to create 100,000 jobs and 60,000 training places? What happened to the billions of euro that was going to fund them? Did the banks get all that money? Did the IMF and the EU approve yesterday's measures?

Will the Taoiseach agree that before it is too late there needs to be more meaningful investment in job creation if we are to break the cycle of unemployment? Does he not accept that the economy needs a stimulus and will he make a statement on that le do thoil?

The Taoiseach

The Deputy was here yesterday and the announcement that was made by the Minister for Finance on behalf of the Government is a stimulus for the Irish economy. The Deputy talked about jobs. We are not in the business here of setting out boxes to say this will create 348, 256, 4,009 or whatever number of jobs the Deputy wants to mention.

Deputy Micheál Martin

The Taoiseach used to be. The Minister, Deputy Bruton tried——

Deputy Timmy Dooley

What about NewERA?

The Taoiseach

This is about confidence in a country and a Government that is demonstrating clear and decisive leadership for the people.

Deputies

Hear, hear.

The Taoiseach

To take the example of the initiative announced by the Minister for Education and Skills, there are 2,200 jobs in construction and the fitting out of the schools, which will start almost immediately. The announcement was made yesterday.

Deputy Billy Kelleher

That was there already.

The Taoiseach

Some of those will be in County Louth.

Deputy Ruairí Quinn

They are additional.

The Taoiseach

If the Deputy were to go to those people who are going to get the contracts on those schools and say that he thinks they need a stimulus he would want his head examined. This is about putting people back to work.

This morning at 11 o'clock the Minister for Communications, Energy and Natural Resources will announce a scheme for retrofitting which will provide 2,000 jobs starting almost immediately with money being available from 1 July.

Deputy Timmy Dooley

That was put forward by the former Minister, Eamon Ryan.

The Taoiseach

If Deputy Adams wants to laugh at anybody who will get a job out of this initiative, then so be it.

Deputy Billy Kelleher

That is Green Party policy.

An Ceann Comhairle

We could do without the background music, please.

The Taoiseach

That is what happened with the previous Government which lost touch with the people who were about to lose jobs or who were unemployed.

Deputies

Hear, hear.

The Taoiseach

What is happening here is a direct injection of confidence into this economy so that people can have the dignity of being able to go to a job, of being able to contribute to their community and their country and of having the satisfaction of getting paid for a day's work and of having been taken off the live register. I am sure the Deputy Adam's supports that.

If the Deputy were to go through the initiatives that were announced yesterday, in each and every area they represent a direct Government injection into sectors where there are people unemployed. He and I have often spoken about what politics essentially is about. It is about people, their lives and their careers. For some people this morning, although not for everybody, there are opportunities arising from this initiative. It is not a full budget for the year and was never intended to be but it is a clear demonstration in respect of which we got a mandate from the people to make jobs our top priority. This is but the first step in that process.

Deputies

Hear, hear.

Deputy Gerry Adams

Deputy Pearse Doherty acknowledged yesterday — the Minister for Finance was not here for most of his remarks — that there are positive elements in the Taoiseach's proposals. There are some modest — that is the Minister's description, not mine — common sense small elements to them.

The Taoiseach mentioned County Louth. This initiative has more to do with bringing forward a plan for a town like Dundalk or Drogheda. It is a plan for a town, not one for a State that has half a million citizens unemployed. We have schools and we need improved hospitals, primary care centres and child care facilities. We have the people to build, maintain and staff them but we do not have the money. Why do we not have it?

Deputy Paul Kehoe

The Deputy will not have that opportunity.

Deputy Gerry Adams

It is because the Government is committed at every turn——

An Ceann Comhairle

Can we have a supplementary question, please?

Deputy Gerry Adams

——to putting more money into bad banks and into big bankers' pensions.

Deputy Jerry Buttimer

That is Voodoo economics.

Deputy Gerry Adams

The crux of the problem is that Government is also at every point committed to supporting the IMF-EU plan. The Taoiseach describes the initiative as a modest proposal, there is much to be modest about. It reminds me very much of Jonathan Swift's modest proposal in that in this case the solution could be worse than the problem.

I put it to the Taoiseach again, and I do it not for the sake of banter or rhetorical neighbour sabre rattling, that one cannot create jobs unless the economy is stimulated.

An Ceann Comhairle

A supplementary question, please.

Deputy Gerry Adams

That cannot be done unless money is put into it and that is not possible when money is being given to these toxic banks. Will Taoiseach introduce a change of plan? People are looking for a change of direction. This reads of Fianna Fáil——

An Ceann Comhairle

Can we have a supplementary question?

Deputy Gerry Adams

——and the Green Party. People want a change of direction. Will the Taoiseach come forward with a jobs plan which is about stimulating the economy and doing the things which I think he would like to do but he cannot do under this current strategy?

The Taoiseach

Jobs cannot be created unless the economy is stimulated; likewise children cannot be fed unless there is bread in the bread bin. The situation in which the Government found itself on taking office 60 days ago——

Deputy Micheál Martin

The Taoiseach is waxing lyrical.

The Taoiseach

——was that it first had to deal with the problem of the banks. There were six dysfunctional banks and there was confusion, uncertainty and concern. That was dealt with by clear decisions of the Government and the follow-on from that is under way.

The scope available to the Minister, Deputy Noonan, and the Government in respect of stimulating the economy is not to the extent that we would like. I am sure that the Minister would love to have told the Dáil yesterday that the Government had €3 billion to allocate to the economy which would be spent on job creation. What we had was €450 million from a very modest levy on pension funds that were built up with generous tax reliefs and the adjustment of moneys within voted moneys for Departments. This will be used to provide the stimulus to the extent that we can in these circumstances. The Government focused on the areas where job creation is of such critical importance and a priority, namely, in tourism, construction, in terms of schools and the retrofit scheme and in the protection from complete disintegration of many the roads of the country and so on. That will provide, as Deputy Adams knows, jobs and employment for people who are currently out of work.

This is not a case of having millions of euro to spend where huge firms can come in and do most of the work by machinery. This is labour intensive work and it is designed to create a sense of confidence and will in its own way leverage private spending as well, which is good for the economy. It will also release some of the savings that people have put by because of the concerns and anxiety that they had.

Anybody in politics would love to be able to say there was a huge amount of money to spend. It is very easy to govern when the State is awash with a surplus of funds coming in from taxes, even though that structure in previous years was clearly built on a foundation of sand. We are being very realistic here in sorting out the banks, creating an incentive and an initiative in investment in confidence for job creation and moving on to deal with our budget deficit.

We live in the world of reality here, as does Deputy Adams, and what we are doing is within our range. This was not over-hyped. The expectations were never that it would remove 440,000 people off the live register but it is designed to create the first steps towards confidence and progress and people having jobs and opportunities to go to work.

An Ceann Comhairle

I call Deputy Shane Ross.

Deputy Gerry Adams

Do I not have the facility to respond?

An Ceann Comhairle

No, one can ask one supplementary question for which one minute is allowed and that applies to both sides. One minute is allowed for a supplementary and one minute for a reply. Deputy Shane Ross to proceed.

Deputy Shane Ross

There seems to be a broad consensus around the House that this was a modest effort at creating jobs and nobody seems to disagree with the efforts made by the Government to do so. The problem is on the other side, on the tax on what the Minister referred to yesterday as the pensions industry. There is a certain misnomer or misunderstanding about what he was saying. If he was tackling the pensions industry, I would not have too much of a problem with what he is doing.

The pensions industry is a goldmine, a gravy train for a large number of people who perhaps ought to be taxed. It is divided into two sections. What the Government has done is hit the contributors to the pensions industry and the victims of those who benefit from the industry rather than tackling those who are benefiting and milking the industry. It is very difficult to get exact figures because it is such an opaque industry. Rough estimates on what fund managers receive, who under-perform consistently on behalf of their members, vary between €250 million and €500 million per annum.

An Ceann Comhairle

Has the Deputy a question?

Deputy Shane Ross

Yes. In view of the fact that a whole industry is looting pensioners and benefiting from their contributions, did the Government consider putting a cap on pension fund fees — in other words, charges for managers — and then putting a 50% tax on them? Such a move would have produced a figure very close to the €470 million figure the Government came up with for its job creation fund.

The Taoiseach

The levy imposed on pension funds and the industry is modest at 2.4% over four years. Contributors to pension funds were also heavily subsidised over many years. As this is a temporary levy, it is designed to be specifically directed at sectors where employment can be created.

Alternatives to this levy, as raised by Deputy Shane Ross, are a matter that can be discussed at the finance committee and in the Dáil when the comprehensive expenditure review is completed and preparations begin for the 2012 budget. As I already indicated, the preparation for the 2012 budgetary process will be very different to those in the past. Deputies will have an opportunity to give their views well in advance on proposals such as that made by Deputy Shane Ross.

There may be some merit in Deputy Shane Ross's point about an alternative levy. The Government, however, took its decision in this case to impose the levy in this way for a temporary period. I have pointed out the reasons why this was done and the opportunities that will spring from it.

Deputy Shane Ross

I thank the Taoiseach for his constructive reply. Will he consider going further and investigating the entire pension funds industry?

Deputy Timmy Dooley

Another investigation. That is all we need.

Deputy Shane Ross

It is a swamp of hidden fees, upfront fees and riches for people who do not deliver to the people they are milking.

Deputy Billy Kelleher

Like stockbrokers.

Deputy Shane Ross

The Taoiseach is taking straight out the hands of the contributors when he could take, if not an equivalent a proportionate sum, out of the hands of those drawing large amounts of money in hidden and upfront fees.

The Taoiseach

That is a constructive suggestion. At yesterday's brief press conference I conducted with the Tánaiste and Minister for Foreign Affairs, I mentioned that the administrative costs in the pensions industry could be reduced to the level applied in the UK. Similar costs that apply in the UK are a fraction of what they are here. In that sense, an equivalent amount approaching the Government's levy could be made available.

The Deputy made a valid point about swamps being associated with some of these industries. I will transfer the Deputy's request to the Minister for Finance. It is a matter which should be examined. The House has a duty to reflect on the current structures of the pension funds industry, to see if they can be improved and if they can be of better benefit to their contributors. Pension contributors were well supported by tax concessions in the building up of these funds. The Government's levy is on the funds. There could be a reduction in the administrative costs associated with these funds and, consequently, the take by those in senior positions in the industry. I will refer this matter to the Minister for Finance.