Dáil Éireann debate -
Tuesday, 19 Feb 2013

Vol. 793 No. 1

Leaders' Questions

Deputy Micheál Martin

An issue has arisen following the liquidation of IBRC for the credit union movement in this country. A number of credit unions had fixed-term deposits with IBRC, which were due to be repaid in September of this year. As a result of the decision to liquidate the IBRC, many credit unions will suffer huge losses. Sources within the credit union movement say the losses could be as high as €17 million for credit unions across the county. It would be an incredible situation if that were the case.

We were told much work went into the preparation of the legislation some time ago. Was the Taoiseach aware of the level of implication for the credit union movement or that there would be this consequence for credit unions as a result of the decision to liquidate the IBRC? Why did the Government not consider making special provision for credit unions when preparing to take the decision? The losses involved will at a minimum wipe out any shareholder dividends credit union members could have anticipated in 2013 and 2014, and worse, unfortunately, may have an impact on the stability of some of the credit unions concerned.

Could the Taoiseach clarify the situation and what he intends to do? He promised before the election to burn senior bank bondholders, which did not happen. He did not do that and now we are in a situation where credit unions - the banks of ordinary people - have essentially been burned as a direct consequence of the decision taken by the Government. It seems that this is the only instance in the eurozone to date where depositors have taken a direct hit as a result of the decision to liquidate IBRC in the manner decided by the Government. It is wrong and something must be done about it.

The Taoiseach

As Deputy Martin is aware, this is a liquidation and clearly the liquidator is now examining all of the issues that arise following the liquidation of IBRC. He is also aware that €15 billion worth of bondholders have been burned already. Normal deposits are guaranteed here. It is impossible to distinguish between guaranteed and unguaranteed. The liquidator must find out the facts of what is involved.

In regard to credit unions, I am not aware at this time of the extent of deposits lodged by any credit unions in IBRC. Clearly, the examination of the liquidator will bring that to light in due course. The question of what the extent of that liability might or might not be remains to be seen and, if that is the case, that is a matter that must be examined in respect of any funding that might be available for credit unions, but it is impossible to distinguish between depositors here. Normal deposits are guaranteed but I cannot tell the Deputy at this stage to what extent, if any, credit unions have been involved here.

Deputy Micheál Martin

I find it incredible that the Taoiseach is saying that he is not aware of the implications of this for credit unions and that he does not know about this. We were told that this legislation was prepared as far back as November and was just ready to be revealed to the House. The use of phrases such as "normal deposits" does not stand up. If one looks at the prospectus alone, the position is clear. They were offered 100% capital security at maturity through an eight year, three month, fixed-term deposit facility. There was never any indication that they would be burned as a result of any action by Government.

I find it extraordinary what the Taoiseach is saying in this respect. In the drafting of the legislation there must have been people who went through the implications of the legislation in terms of upon whom it would impact. It was not a secret to anyone in the Department of Finance, the NTMA or anywhere else that the credit unions had deposits with Anglo Irish Bank, subsequently IBRC. Surely the implications of the liquidation would have been spelt out to the Taoiseach before he and the Minister brought the legislation to the House. I find it incredible that the Taoiseach is saying he is not aware of this. This is a very serious situation for the credit unions concerned. The chatter around the credit union movement is that they are talking about €17 million as an estimate in this respect and it might be higher or lower than that. I asked the Taoiseach initially whether he was aware of this and he said he was not, which I find incredible. What does he intend to do to support the credit union movement as a result of this very significant hit?

An Ceann Comhairle

Thank you, Deputy.

Deputy Micheál Martin

Bank bondholders - senior bondholders - were protected and now we find ourselves in the incredible position where credit unions have been burned, essentially.

An Ceann Comhairle

Thank you, Deputy. You are over your time.

Deputy Micheál Martin

At this stage the question arises as to what the Government can do to protect and underpin the credit unions concerned.

The Taoiseach

Obviously the Government responded and listened carefully to credit union inquiries and anxieties arising from the report into the future of credit unions. The Deputy is aware that this was a liquidation. Therefore, we were not going to have the Government going around saying it intended to liquidate IBRC and that if people had money in it, to take it out. It is important to note that while there were comments and some allegations of these reports-----

Deputy Micheál Martin

They were told that there would be an orderly wind down. That is why they did not take their money out.

The Taoiseach

-----it is important to understand that I am not aware, as we stand here today, of the full extent of liability of any credit union or numbers of credit unions for moneys lodged in IBRC. That will emerge during the course of the next period ahead.

Deputy Micheál Martin

The Taoiseach must have had an idea.

An Ceann Comhairle

Deputy Martin, please desist.

Deputy Micheál Martin

Somebody must have produced a paper on this internally as part of the preparation for this.

An Ceann Comhairle

Did the Deputy hear me?

The Taoiseach

The liquidator is entitled to analyse what exactly is the situation in the liquidated IBRC. The Deputy is aware that there is a fund of €500 million available for the recapitalisation of credit unions if they are in trouble. The first thing we should do is to have the liquidator determine what, if any, is the extent of credit union investment in IBRC, what deposits, if any, credit unions have made in it, the extent of those deposits, and if there is a serious situation-----

Deputy Micheál Martin

The Taoiseach must know the amount of the deposits.

The Taoiseach

-----as the Deputy alleges, and we do not know the full extent of that, clearly-----

Deputy Micheál Martin

He must know that.

The Taoiseach

-----the fund of €500 million that is available for dealing with difficulties in regard to the credit unions may be called into play.

Deputy Micheál Martin

The Taoiseach must have known how much was deposited by the credit unions.

An Ceann Comhairle

I call Deputy Gerry Adams.

The Taoiseach

You do not go around telling them that you are going to liquidate the bank, do you?

An Ceann Comhairle

Deputy Adams, please.

Deputy Micheál Martin

The Taoiseach must have known how much was deposited by the credit unions.

An Ceann Comhairle

In case he did not hear me, I call Deputy Gerry Adams for the third time.

Deputy Gerry Adams

Go raibh maith agat, a Cheann Comhairle. It is worth noting that Fianna Fáil voted with the Government on the very issue about which it is now protesting-----

(Interruptions).

Deputy Timmy Dooley

Check it out with teddy.

(Interruptions).

Deputy Gerry Adams

I want to deal with the issue of the negotiations for the successor to the Croke Park agreement. I took note that the Government gave notice of compulsory redundancies in the public sector at the beginning of those negotiations and then the Taoiseach gave notice that he would legislate for pay cuts. He must know this is not the way to engage in good faith. Lower and middle income public sector workers have seen their pay significantly reduced between pay cuts and the Fianna Fáil pension levy, and there are now two, or perhaps even three, tiers of pay for workers doing exactly the same job. That is the type of inequality the Taoiseach is now deepening within the public sector. Public sector workers are generally working harder, longer and for less money, particularly those at the front line who have seen their numbers reduced during the past two years. By contrast, and here is the rub, those at the top have been protected. Bonanza pay and pensions remain in place-----

Deputy Brendan Howlin

That is rubbish.

Deputy Gerry Adams

-----and this Government still pays the pay cap for its special advisers. Why is the Government disproportionately targeting front-line workers for more cuts when those workers have already contributed so much? Will the Taoiseach now move to tackle the gold plated pensions and high pay still being enjoyed by the current Taoiseach and former taoisigh, Ministers, officeholders, special advisers and senior civil servants?

The Taoiseach

What the Deputy has to bear in mind is that our deficit this year is €12 billion, next year it is expected to be €9 billion, and in 2015 it is expected to be just over €5 billion. We need to move to a point where the country can start to recruit front-line workers again and where we have sorted out the public financial mess we have inherited for quite some time.

The reductions in pay for those on the higher levels have ranged between 3% and 30%. On the other issues the Deputy raised, when they are seen in terms of the complete package, we will focus on the fact that there is not any individual sector being targeted deliberately by Government. The talks that are ongoing-----

Deputy Finian McGrath

Tell that to the nurses and to the gardaí.

The Taoiseach

-----are reaching a crucial stage-----

Deputy Finian McGrath

They are in breach of the Croke Park agreement.

An Ceann Comhairle

Deputy McGrath, please desist.

The Taoiseach

-----and are about the definition of where we want to be in a couple of years. The Deputy can talk about individual sectors if he wishes, but these talks are about an across the board situation where fairness is to be seen at the heart of it and where we can bring about the reductions we have set out of €1 billion by 2015 to sort out our public financial problem and allow for a situation where recruitment can take place in the future to front-line services.

I listened to many of the comments yesterday and I know that people can be very angry about these things.

Deputy Finian McGrath

And rightly so.

The Taoiseach

The person who stands in front of a classroom who may not be called out at night is also a front-line server, a front-line service person, and the person who works in critical elements of a local authority or Departments of State who might never be called out at night on front-line duty, as it were, is also a front-line person. There is no question of the Government focusing particularly on one sector here. This is an overall wage negotiation between Government and public service workers and, from that point of view, we have set our course here to rectify our public financial problems. Despite the very good news coming from the agreement of the ECB in regard to the promissory note, clearly the situation is still challenging for the country and we have to stay the course here in the interests of everybody.

Deputy Gerry Adams

The Taoiseach talked about fairness but there is very little that is fair about how this Government does its business. There is nothing fair about those in the upper echelons of the public service having such big salaries while all the time those in the lower echelons are subjected to cuts to pay and to these negotiations where the Government has already set out its objective - if it does not get its way in these talks - of bringing in its own diktats. We think that negotiations on increased flexibility are fair enough but they must be done in the context of the contribution of the work that rank and file public servants are doing and have done in tackling this crisis. Attacking pay from the bottom up is not a reform and it is certainly not fair. Senior managers and officeholders, like the Taoiseach, are paid more than their European counterparts.

When the Prime Minister of France was elected he took a pay cut, voluntarily, of 30%. The Taoiseach took a pay cut of 6%. He cannot say that nurses, gardaí, fire officers, teachers and others who provide a very valuable service need to contribute more than those at the top while those at the top continue to be protected. In his own Department, two special advisers are paid €168,000 and in the Department of Social Protection, the special adviser is paid €127,000. That is the nub of my question - how can the Taoiseach credibly call for cuts in the negotiations while those at the upper level continue to have lavish pay and pension rights which are protected by the Government?

The Taoiseach

Deputy Adams can get the details of all of the changes that have been made in regard to pay and pensions for higher-paid public servants. As I said already and repeat again, for the higher ranks the pay reductions range from between 3% and 30%. In the case of position I occupy, the salary is 40% lower than it was for the person who occupied it before me.

Deputy Micheál Martin

That is not correct. It is not 40% lower.

The Taoiseach

A lot of what went on in the past has been eliminated. I still walk to work in the morning and walk home in the evening. Unlike Deputy Adams, none of the advisers in the Department of the Taoiseach have had the privilege of having their fare paid to America for medical attention they sought there.

Deputy Gerry Adams

The Taoiseach is not paying for that.

Deputy Mattie McGrath

I hope the Taoiseach had the opportunity to hear the passionate words of Father Michael Cusack on RTE last Saturday. The Taoiseach was away on very serious business in London but I hope somebody relayed Father Cusack's words to him.

With the lack of basic equipment, the withdrawal of Garda vehicles and the lack of access to information and communication technology, morale is at an all-time low in An Garda Síochána. We have heard stories of blocked toilets in Garda stations, broken cells which are closed and of many months before repairs are carried out. To make matters worse, we heard of Detectives leaving the scene of a crime because they had to return to the Garda station to have their sandwiches. All of these attacks on the Garda Síochána ---

Deputy Michael McNamara

A tax on the Garda Síochána?

Deputy Mattie McGrath

----are contributing to an all-time low in morale. I ask the Taoiseach and his colleagues to listen to the Garda Síochána. The Minister for Justice and Equality, Deputy Shatter, refuses to listen to them and demonises them, saying that the GRA has "form". This is different and anyone who watched the rally last night could clearly see the frustration on the faces of all of the front-line staff, including nurses and gardaí, at the constant erosion of their salaries and payment levels and the lack of support for them in going about their duties and providing us with the safety we enjoy. It behoves all of us in this House to support the front-line workers in their duties, which are very serious. There is a very thin line between law and order and mayhem.

I ask the Taoiseach to respond to issues raised by members of the Garda Síochána. They are outside of the Croke Park extension negotiations and they feel the proposed cuts are a breach of the original agreement. I ask the Taoiseach to insist that the Minister for Justice and Equality, Deputy Shatter, has respect for the members of the Garda Síochána and offers words of support and commendation to them, especially at this grave time, with them having lost one of their colleagues so tragically in County Louth recently. He must listen to the words of the passionate Father Cusack, who made eminent sense. He was not talking from any pulpit but was speaking the plain language of the ordinary people who have fear in their eyes. I ask the Taoiseach to ensure that there are some cuts to free legal aid and that the approach is balanced and not all on the side of the criminals. I ask the Taoiseach to ask his Minister to support the Garda Síochána and the front-line services.

The Taoiseach

The Deputy's question ranges over free legal aid, statements made by a member of the Catholic Church, pay and vehicles. I can assure Deputy McGrath that we have the utmost respect for the work that members of An Garda Síochána do.

Deputy Mattie McGrath

The Taoiseach needs to show it.

The Taoiseach

They are the line of defence between ordinary citizens and criminal elements. I know of no garda who will not get involved in law abiding and crime prevention activities, whether on duty or not. We have seen evidence of that over the years, where gardaí, in their off-duty hours, have performed heroic deeds in preventing crime and in seeing that the law of the land is upheld. We have the utmost respect for the Garda Commissioner and for every member of the force for the work that they do.

Regarding the pay talks, it should be said that the place to deal with the anxieties, concerns and issues that arise in respect of pay is at the table. I would say again from this forum to the representative associations who have removed themselves from those talks that the best place for them to make their case, to articulate and negotiate their case, is at those talks.

This year, the statistics speak for themselves in respect of the increased number of arrests made by gardaí, the increase in activity levels, in vigilance and in access to gardaí for the public because of the changes to garda rosters. There is evidence already that in a number of cases where Garda stations have been closed, because of those changed rosters and of the extra capacity, the public see more----

Deputy Michael Healy-Rae

Crime is up in those areas.

The Taoiseach

-----and have more access to the gardaí.

This year €5 million has been set aside for the acquisition of Garda vehicles which I hope, depending on the deal reached, will provide very many vehicles for the many stations and officers who need them around the country. It goes without saying that in the three years prior to 2011, very few Garda vehicles were actually acquired or provided. I recently saw one with 298,000 kilometres on the clock and the expense of having to maintain a failing vehicle is evident.

Deputy Timmy Dooley

That was not the car in which the Taoiseach was being driven.

The Taoiseach

That is why this year, in 2013, the Government has provided €5 million for the acquisition of Garda vehicles. That will be enforced as time goes on because they do need the very best of facilities, including communications technology and access to proper vehicles to enable them to do their job.

The pay element of the discussions are taking place at a very critical time. I repeat again that the place for the representative associations of the gardaí is at the table and that is where I would request them to return to articulate their concerns and issues.

Deputy Mattie McGrath

There is a huge breakdown in communication here. What the Commissioner is telling the Taoiseach and the Minister for Justice and Equality is totally at variance with what we all of us are hearing on a daily basis. The GRA is urgently requesting a meeting with the Garda Commissioner and wants him to outline how he is going to support his force. The Taoiseach is saying one thing here and another thing elsewhere. He and some of his Ministers have said that they will legislate to cut garda allowances if the cuts are not accepted in the Croke Park talks. Is that the way to support An Garda Síochána? I think not. In my own county of Tipperary and in Clonmel in particular, Garda cars have been taken from other areas to shore up support. Clonmel Garda station has the lowest number of gardaí per head of population in the country. Superintendents are fighting and scraping to get Garda vehicles. The Government promised us 200 vehicles last November but we have not seen any of them yet. The force cannot wait any longer. The vehicles are falling apart. The Taoiseach cannot speak out of both sides of his mouth. We need to support the members of the Garda Síochána and give them the tools of the trade to do the job they want to do, for all of us, on a daily basis. That cannot be done by the Minister for Justice and Equality insulting and denigrating them. Even on the day after the sad burial in County Louth recently he was on radio again condemning and bemoaning the gardaí. That is the not the way to support them. They need his full support and that of the Government. They need all our support.

The Taoiseach

It is beneath Deputy Mattie McGrath to suggest that the Minister for Justice and Equality, who has constant contact with the Garda Commissioner, would in any way disparage the Garda force or any officer of the force.

Deputy Mattie McGrath

He left them waiting for over an hour for a meeting.

(Interruptions).

The Taoiseach

I will not accept from Deputy Mattie McGrath a disparaging of the Garda Commissioner either, who has a hands-on involvement with the day-to-day running of the Garda Síochána.

Deputy Michael Healy-Rae

What did Deputy Mattie McGrath say about the Commissioner?

The Taoiseach

Last year, in 2012, €4 million was provided for Garda vehicles when precious little had been provided in the years previously.

Deputy Michael Healy-Rae

He has put a gagging order on the gardaí.

The Taoiseach

This year we are providing a further €5 million for the acquisition of Garda vehicles. Everybody knows that we cannot expect gardaí to prevent crime with inferior vehicles that are clapped out. That is why, between last year and this year-----

Deputy Mattie McGrath

They have no telephones.

The Taoiseach

-----€9 million has been provided for the acquisition of vehicles. I am glad to note that a number of those vehicles will be fully Internet equipped and will allow gardaí to do their job as they are required to do instead of sitting in Garda stations for two hours on a daily basis.

Deputy Mattie McGrath

That is an insult. They never sat in stations. They were out talking to the public.

Deputy Timmy Dooley

The Government will be giving them camper vans shortly.

The Taoiseach

The public want to see the gardaí, to have access to them and to know they have proper facilities and equipment. They need to know gardaí will be there when they need them. I thank the gardaí for the changes they have made to rosters in stations all over the country which has allowed greater visibility, access and attention. The other day, a burglary took place and a Garda car was on the scene in three and a half minutes, which would not have been possible without the new rosters.