Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Wednesday, 4 Mar 2009

Vol. 677 No. 1

Public Finances: Motion.

The following motion was moved by Deputy Enda Kenny on Tuesday, 3 March 2009:
That Dáil Éireann recognises that:
the current Government strategy for restoring the public finances, the banking system and wider economy has failed to secure public support or international confidence, and that both the Irish public and international financial markets funding the banking system and our Government are losing patience;
unless we urgently take new measures to stop Government borrowing from spiralling out of control, other measures to support our struggling small businesses, exporters and job seekers will have little effect;
the Government no longer has the luxury of the time needed for the long consultation processes by advisory groups before taking further decisions on public spending, reform and taxation in 2010;
calls on Government to introduce a new budget for 2009 as a matter of urgency that:
sets out specific measures to substantially cut the €40 billion Government borrowing requirement for 2009 and 2010 that is being forecast by most commentators;
is ambitious, wide ranging and comprehensive in its scope;
is fair in its execution by showing what role is being played by all groups in society, particularly those who are in the best position to contribute more;
offers radical reforms to our budgetary system to squeeze out waste and poor value for money;
looks not just at spending cuts but at additional tax and other revenue raising measures that can drag our public finances back under control."
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"—commends the Government for its continued vigilance and management of the economy and public finances which has enabled Ireland to meet the current difficult economic challenges from a position of relative strength;
notes that Budget 2009 announced measures designed to raise almost €2 billion in additional taxation in 2009;
notes that the Addendum to the Irish Stability Programme Update published on 9 January last outlined a 5 year framework for the restoration of sustainability in the public finances over the medium term;
endorses the action taken by the Government in line with the Addendum through the introduction of further measures to secure up to €2 billion in expenditure savings in 2009 consistent with the framework for a Pact for Stabilisation, Social Solidarity and Economic Renewal which was agreed with the social partners;
acknowledges, in order to stabilise and restore the current budget to surplus by 2013, the importance of ensuring the implementation of the measures already announced and of those required over the years out to 2013, with particular emphasis on the period out to end-2011;
notes the disappointing end-February exchequer returns and the need to ensure that the General Government deficit in 2009 does not worsen from the previously forecast 9½% of GDP;
notes the Government decision today to announce further necessary measures by the end of this month to ensure the stabilisation and sustainability of the public finances;
endorses the Government's ongoing action in support of the country's banking system including the recapitalisation of the two main banks which will facilitate increased access to funding for SMEs and for first-time home buyers as well as offering protections for existing homeowners in arrears;
notes the need for the introduction of important reforms to financial regulation in Ireland which will secure confidence in the banking system through the introduction of new standards of banking regulation and corporate governance, will restore Ireland's international reputation and will reposition the country's regulatory system;
endorses the Government actions to reorientate and refocus the economy towards innovative and export-led growth through the promotion of policies and actions set out in ‘Building on Ireland's Smart Economy: A Framework for Sustainable Economic Renewal'."
—(Minister for Finance, Deputy Brian Lenihan).

How much time have I lost?

The Deputy should carry on.

I will start again with my time starting now.

It is important to realise that the Government is lining up to take the hard decisions simply because it has no choice. While it did have choices in the past, it always took the road not less travelled, to paraphrase Robert Frost, and took the easy option. Over the past decade, Fine Gael outlined the many choices that were available and pointed out in a pragmatic and reasonable manner how the Government could have avoided the current situation at which we have arrived. However, the position is as it is and people want Members to move on.

It is projected that Government spending for this year will reach €55 billion, while tax revenue will amount to approximately €35 billion. As borrowing must be under 9.5% of GDP, the Government must find €5 billion through a combination of increased tax revenue and public spending cuts. The best method of increasing tax revenue is to create jobs but regrettably, Ireland losing them. This would be a difficult task for any Minister and I believe the invitation to the Opposition from the Minister for Finance, Deputy Brian Lenihan, is more about saving Fianna Fáil then Ireland. However, there are more important things than Fianna Fáil and Ireland is one of them, and Fine Gael, as always, will put the country first. I fear to think what would have happened had the boot been on the other foot and wonder whether the VAT on hurleys mindset has been banished to a bygone era. Only time will tell.

I have some personal proposals that I would like the Minister to take on board. He should not listen to populist commentators who appear to believe that a change in tax policy is purely about placing a mathematical template on our current spending, earning or investment pattern. Changes in tax policy change human behaviour and I was glad to hear the Taoiseach refer to this point in the House earlier today. The securing of €2.5 billion by the stroke of a pen with regard to pension relief policy is an inaccurate and simplistic view that only assists in causing confusion among the public. Irish people do not like paying taxes but will willingly do so if it is fair and used for the common good in an equitable manner. I believe they are not satisfied that this is happening at present and until such time that Members can demonstrate clearly that it is, there will be widespread dissatisfaction.

I refer the Minister of State to Adam Smith's Wealth of Nations and his four maxims with regard to taxes in general. First, an individual’s contribution should, as nearly as possible, be in proportion to his or her respective abilities. Second, the tax ought to be certain and not arbitrary and the time, manner and quantity should be clear. The absence of these criteria in local authority charges certainly causes great difficulty. Third, every tax ought to be levied at the time or in the manner in which it is most likely to be convenient for the contributor to pay it. Finally, every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the State. In other words, one must be conscious of the cost of the collection, its impact on the creation of jobs and wealth and that it does not lead to innovation. I believe these maxims hold true today.

The push for profit, which turned into greed, has caused some of our current difficulties and many contributions in this House have spoken of the necessity to move away from the liberal capitalist model. However, I believe that ultimately, it will be the same push for profit that will get us out of the current crisis. Until such time as wealth and jobs move in a positive direction, we will face unpleasant choices. However, such choices must not dampen creative skills and ambition and we must not confuse these with greed. In the interim, we must get our regulatory house in order. However, if history tells us anything, it is that we never learn from it, as evidenced by the South Sea bubble, as well as the Dutch tulip and Irish money bubbles.

I wish to make some personal proposals, which I now will outline. I will not forward them to the Secretary General of the Department of Finance because it is important that this Department should take on board debates in this House and that Members do not simply speak in a vacuum. First, a change in the law to permit funds from self-administered pension schemes to be invested in their owners' companies could in many cases release much-needed cash for investment. At present, this is not possible as although such funds can be invested in almost anything, they cannot be invested in the owner's company. Any income taken from an approved retirement fund is taxed as income. Many businesses have availed of this scheme in the good times but now are in need of cash flow and cannot get it. This change should be introduced by the Department of Finance as it would assist in releasing money.

With respect to the public services and State agencies, I believe a pilot scheme of a reduced working week of, for example, four days should be offered for voluntary uptake in a couple of specific areas. This could prove beneficial to both the employees and the public finances. It would have to be carefully controlled to establish its impact and I believe this would be a much fairer method with which to cut back the public pay bill than the levy system. People should be given an option as it might suit many people to not work on Fridays.

The Deputy's time has elapsed.

I will conclude with my final points. As we export most of our goods, we should improve our marketing capacity and this should be done through embassies. Moreover, in-house personnel should be sourced for this task. In the past, I have mentioned the possibility of reducing VAT on those houses that lie idle at present. This should be done for a period of perhaps two years to act as a stimulus to the property market. Finally, I believe that Members will have no moral authority to implement any hard measure until such time as they look into their own hearts and make the necessary changes in these Houses and in local government.

I am glad to make a contribution to this debate and I commend my Fine Gael colleagues for tabling this motion.

In recent weeks, the ordinary people have been crying out for the Government and the Taoiseach and Minister for Finance in particular to get to grips with the situation and take control of our financial problems. They are willing to take some pain if they see it shared out in a fair and equitable way. I am glad the Government responded, albeit belatedly, to the need for a supplementary budget in this House yesterday. Although this was suggested by my party leader, Deputy Kenny, last week, at the time it was perceived to be completely unnecessary by the Tánaiste. One can only say that a week is a long time in politics.

The figures for unemployment given in the House this morning by the Taoiseach were frightening, namely, 354,000, with the possibility that this figure will exceed half a million before the end of the year, if present trends continue. Since 1 January, if my figures are correct, we have been losing approximately 1,100 jobs a day. Consequently, while it is vital to get spending under control, to widen the tax base and to increase revenue, the forthcoming budget also must include measures that will stimulate business and job creation, as well as job protection, because small enterprises with nine or ten employees make up the bulk of the job losses announced by the Government this morning. These figures are even understated because the owners of small businesses that have closed down are entitled to nothing. They received no assistance when they were up and running and providing employment and now they will not even get unemployment benefit because they were self-employed.

Everyone realises that difficult decisions must be taken and Fine Gael has made many wide-ranging suggestions that should be taken on board. However, a couple of other issues also must be addressed. If people have lost their jobs or are obliged to pay higher taxes or levies, the last thing they need to see from the top is wastage of public money or extreme extravagance. However, all Members are aware that plenty of examples of such wastage have occurred, even up to last weekend. For instance, new offices for the former Taoiseach were refurbished less than nine months ago at a cost of almost €250,000. As for the dearest sweetshop in town located in front of Leinster House, half a million euro was spent on the glass alone and its total cost was more than €1.3 million. The Tánaiste spent €50,000 on having a toilet refurbished in her offices. It cost €164,000 to fly two Ministers to America to meet the head of Dell Corporation. Almost half a million euro was spent in 2007 and 2008 solely on press launches in the various Departments.

The public needs to see evidence that lessons have been learned from the mistakes of the past. However, this had not happened up until Monday last, when the travel undertaken by the Minister for Arts, Sport and Tourism, Deputy Cullen, cost €8,000 for one day. Nevertheless, the next couple of weeks provide a good opportunity to illustrate belt tightening at the top, when the St. Patrick's Day celebrations will take place around the world. The cost of travel for St. Patrick's Day last year amounted to €560,000, which did not take into account the cost of the Government jet. In that context it is worth noting that €112 million has been spent on school prefabs since 2006. Reallocating some of this money to the schools building programme would surely offer better value for money. We are told that the annual rent for a prefabricated building is some €12,000. More than €500,000 was spent on the provision of prefabricated accommodation in Mayo alone last year.

The Taoiseach stated in this House recently that he has no plans to reduce the number of Ministers of State, even though, he claimed, there was a queue of these people some months ago offering to hand back their portfolios. I have learned over the years that to say sorry when one has made a mistake is a sign of strength. One always earns respect for so doing. We saw the effect when the new President of the United States, Mr. Barack Obama, apologised recently for a mistake he had made. Unfortunately, Members on the other side of the House have refused to apologise for the mess the Government has made of running this country in recent years.

Research into suicide since the 1890s shows there is an increase in suicide rates and mental illness during times of economic recession. I call on the Minister for Health and Children and the Health Service Executive to respond to the challenges that arise in this regard in the current economic crisis. There should be an immediate allocation of an additional €10 million to the National Suicide Prevention Office to allow it to respond to the suicide prevention challenges of society's changed circumstances.

There is a precedent for this. In November 2008, the Minister for Social and Family Affairs allocated almost €11 million in additional funding to provide for a range of marriage, child and bereavement counselling services and supports to help families to cope through the difficult times they face as a result of the recession. The Minister for Health and Children must now respond in a similar fashion to the challenges arising for mental health and suicide prevention services.

Economic strain and personal financial crises have been well documented as precipitating events in individual deaths by suicide. Stressful life events, financial and otherwise, have a significant impact on those vulnerable to suicide where typical coping mechanisms are compromised by the effects of mental disorder, substance use, acute psychiatric symptoms and the other risk factors associated with suicide. We have already seen several suicides that can be attributed to the difficulties and pressures arising from economic changes.

Increasing unemployment leads to an increase in the suicide rate. Unemployment has a profound effect on a person, especially the young and on those in middle age. Irish society awards status and prestige according to a person's position and contribution to work. Correspondingly, unemployment is associated with loss of face and of prestige. The unemployed are six times more likely to suffer from a psychiatric disorder than those in employment. Studies show that those who die of suicide are significantly more likely to have experienced unemployment, job instability or occupational problems. The Kelleher-Daly study conducted in Cork during the economic recession of the 1980s showed that of the male deaths by suicide analysed, two thirds involved men who were out of work at the time of their deaths.

The high rate and threat of home foreclosures is of particular concern. For most Irish people, our homes are our primary investment and the locus of our identities and social support systems. When combined with loss of employment, home loss or the threat of home loss has been found to be one of the most common economic strains associated with suicides. The Minister for Health and Children must immediately respond to the psychological, emotional and psychiatric difficulties affecting people as a result of the changed economic times. In doing so, she must recognise the need to enable the National Suicide Prevention Office to respond adequately to the inevitably growing demand for its services.

Dr. John Connolly, secretary of the Irish Association of Suicidology, stated recently in a newspaper interview that despite the shrinking public finances, it is vital that the Government invests more in suicide prevention and mental health services in order to reduce the number of deaths. He stated:

We must be aware of the fact that research reaching back to that of Emile Durkheim in the 1890s shows that in times of recession, suicide rates inevitably increase.

As Dr. Connolly told a meeting of the Oireachtas Sub-Committee on the High Level of Suicide in Ireland:

Unfortunately, this will happen in Ireland in the coming months and years unless we ensure that funding for the implementation of the national suicide prevention strategy and other services is guaranteed.

I ask the Minister for Health and Children, Deputy Harney, to examine what her counterpart in the Department of Social and Family Affairs, Deputy Hanafin, has done in response to the changed economic circumstances. The Health Service Executive and the Department of Health and Children must respond in a like fashion. We are not asking for the €25 million per annum that has been recommended for mental illness treatment services. Rather, we call for a specific allocation of €10 million to the National Suicide Prevention Office in order to support groups working throughout the State to help those who are experiencing suicidal thoughts. The Government must ensure that people in crisis are encouraged to seek help and are pointed towards the appropriate help.

Imitation is the best form of flattery. As such, thanks are due to the Taoiseach for affording Fine Gael the endorsement, at last, of taking on board our suggestion of an urgent budget. Not only will the production of an emergency budget let people know where they stand in regard to our financial situation, it will also focus the Government's thinking on what precisely the problem is and what can be done to rectify it. People are crying out for effective leadership. They want to have their confidence in this nation's future restored. I hope the introduction of an emergency budget will go some way to eliminating the mist in which the Government seems to be operating to the detriment of the country.

As I said earlier today during the debate on the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Bill 2009, the Taoiseach and his Government turned a blind eye to the recession, failing even to recognise its existence until it was too late for short-term remedial action. Faced now with a long-term recovery period, the Government must finally outline its plans for economic recovery, fiscal stability and job creation. There must be an end to the large-scale wastage of resources evident in large bureaucracies such as the Health Service Executive, CIE and FÁS, which has remained unchecked under the Government.

More than any country in the world, Ireland has gone into a rapid downward spiral of economic deterioration. Unfortunately, we — again, more than any other country — had the means to cope with such deterioration. However, the Government squandered the wealth of the Celtic tiger and we are left struggling to retain our financial stability. Enthusiasm for a budget in the hands of the current Minister for Finance should be tempered with extreme caution. The savage and ill-conceived budget 2009 was a lesson to students of economics in how not to deal with a downturn. It is to be hoped that the mistakes of the past will lead to a well-conceived package of reform that will reduce the €45 billion borrowing requirement for 2009 and 2010. That is necessary if we are to meet the great challenges facing our economy.

Fine Gael has outlined a series of measures that could be taken to stabilise our economy, including a reduction in the number of Ministers of State and the elimination of half the Oireachtas committees. In France, for example, only eight parliamentary committees are in operation. Many of the wasteful allowances currently in operation must also be removed. There must be a revolution in the way politicians deal with taxpayers' money. The root of Ireland's unique difficulties is the crony capitalism of Fianna Fáil. That party is up to its neck in deceiving the people of this country. It is all about spin. Ministers do not read reports and officials do not report to Ministers. The Government is an international disgrace. It has been in bed with the banks and property speculators. Now the burden is on ordinary people who must bail out the banks and the other well-heeled wealthy who were wined and dined until they dropped in the Galway tent.

I have no confidence in a Government that attacked pensioners, people with disabilities and students in the first instance. The economic principles that delivered the prosperity of the Celtic tiger under Fine Gael in the 1990s included keeping costs down through competition, high productivity, export-led growth, tight budgeting and strong regulation of the financial sector and housing market. This was abandoned by Fianna Fáil-led Governments since 1997 and they have much to answer for today. The wealth generating power of the private sector and the public service mission of the State were bent and broken by Fianna Fáil to serve the interests of a golden circle of banks, property developers, big shady businesses, senior public servants, regulators and some trade union bosses. There are many lessons to be learned and I hope the Government has learned its lesson. If not, the people will give the Government its answer. The people of this country will wipe out Fianna Fáil on 5 June in the local and European elections. After the next general election this House will be without three quarters of the Fianna Fáil membership it has today.

On that note of doom or gloom I call Deputy Perry.

Deputy Bannon set out a major agenda.

It is a prediction.

I thank Deputies Bruton and O'Donnell for tabling this motion on the state of the public finances. This gives us the opportunity to point out that the Government's finance decisions make for foolish economics and make the unemployment situation even worse.

I refer to the specific issue of the Government's proposed cut in the number of undergraduate nursing education places. Speaking in the Dáil on 26 February during an Adjournment debate, I stated that the proposed cut in the number of undergraduate nursing education places was short-sighted. In the course of the reply, the Minister of State, Deputy Haughey, stated that the reduction of 310 places in nursing training will result in savings of €1.65 million in 2009 and €3.3 million in 2010. Using the figures of the Minister of State, the proposed saving per trainee is approximately €5,200 in 2009 and €10,600 in 2010.

In justifying the proposed cutbacks, the Minister of State referred to an OECD report that indicates that Ireland has a large number of practising nurses. Ireland has twice the OECD average and the Minister of State referred to approving a strategic review of nursing degree programmes. The review is designed to provide systematic analysis and if this debate took place last year we could debate the merits of the strategy within the framework outlined. However, we must deal with the reality of this issue in 2009 when the country is in an economic crisis. The Taoiseach stated that we are in "the most severe global economic and financial conditions for a century". That indicates the starkness of the situation. Last week the unemployment statistics showed that the number of people out of work increased by 70,000, to 170,600, in the final quarter of 2008. This week, the CSO indicates that the number of people on the live register stands at 353,000 at the end of February.

This summer there will be 54,000 leaving certificate students who will seek training opportunities at third level and job vacancies. In the good times, approximately one third of these leaving certificate students would have entered the labour force, but that is unlikely on this occasion. In the economic crisis we are facing, we must concentrate on the essentials. Education, to secure a better future, must be one of the priorities in preparation for the recovery phase. As we continue into a period of rapidly rising unemployment, we must maximise investment in job-related education and training. Education must be our priority, as must training for those leaving second level education this year and next year. We cannot have future work prospects diminished by foolish economics and budgetary misallocation.

Cutting the number of nursing training places is a short-sighted and misguided proposal. According to the Minister, the cost of 310 nursing places is €10,600 and the welfare benefit is €10,400. The real gain is insignificant and I ask the Government to reverse the proposed reduction in the number of nursing education places. Given the scale of the job losses sweeping the country we should expand the number of nursing education places, not reduce them.

The Government and the country have been in crisis management since last July, and particularly since last autumn. Most of the rest of the world is in a similar position. Crisis management requires a series of actions or responses until the situation is stabilised and brought under control. While there is normally merit in deploying minimum force rather than engaging in overkill, sometimes the imperatives of the situation take over. Following the further steep fall in revenue in the first two months of the year, not just expenditure reductions but a full response is needed to maintain the previously announced budgetary course. There is a widespread public appreciation at this stage of the acute difficulties facing the country and an appetite to address the problems now, and if possible, remove at least some of the uncertainty facing all of us.

There is not time now to enter into an analysis of the causes of the crisis as it affects Ireland. Until about this time last year we enjoyed by far the best period in our history over some 20 years. There were also mistakes made. In particular, we failed to modify our exuberance and underestimated the downside risks. No Government will ever succeed in abolishing the economic cycle. If critics were willing to give credit for the achievements, it would be easier to acknowledge responsibility for the mistakes. One of the saving steps we took was to put surplus funds into the National Pensions Reserve Fund, which enables us to deal with the banking crisis without having to compound the already horrendous scale of our fiscal deficit.

Government and opposition have distinct and equally honourable roles in a parliamentary democracy. When critical decisions have to be made, it is all the more important to have opposition expressed in the House rather than transfer it out onto the streets. The Tallaght strategy, which played an important role, was a product of particular parliamentary circumstances. This Government has a working majority, unlike then. I see no merit in calls for a national government, or what is in effect a suspension of democracy.

As to a mandate, every elected Government has a mandate to deal with unexpected crises and emergencies, short or prolonged, that arise during its time in office. With regard to the Taoiseach's position, it was clearly indicated to the electorate that he would be the likely successor to Deputy Ahern during the course of this Dáil and, therefore, he manifestly has a mandate. If anyone doubts the ability of the Government under his leadership to take all necessary action, just watch this space.

With regard to expenditure reductions, the Office of Public Works will shortly establish a national operations unit for public procurement, designed to achieve savings, or more from less, in Government expenditure. All public servants, including officeholders, have a duty to identify and implement savings wherever they can.

A supplementary budget will enable us to address issues that have arisen since last October without waiting until the autumn. It will enable the Government to demonstrate the fairness and balance the public demands on a broader canvass. The input of the social partners, as well as of all parties in this House, will be welcome. People will accept a great deal if they see it is fair. The tax system has to become a lot more broadly based, particularly as many of the sources of revenue, capital, corporate and stamp duty, which flowed so abundantly, have to a great extent dried up.

The generous scale of exemptions at all levels are bound to be more limited. The cost and benefit of tax breaks will have to be examined with new rigour. Those who benefited best of all in the Celtic tiger years and went far ahead of everyone else face, to recycle a phrase, payback time. Added to success and achievement, some of those who have greatly contributed to Ireland's standing in the world and to its prosperity could add to their nationality, citizenship and practical patriotism, the additional honour and dignity of being an Irish taxpayer.

I wish to share time with Deputy Kieran O'Donnell.

Is that agreed? Agreed.

We all recognise that our nation's finances are in a shocking state but until now the Government has been in denial. Even now I am not sure it realises or accepts how far it has allowed the country to drift. The spin from the Fianna Fáil press office is that this is a global recession; the message has gone out to all cumanns and it was noticeable at the Ard-Fheis as well. Even this morning in the Dáil, when strongly challenged by the Fine Gael leader, the Taoiseach three times tried to put on the record that this was all caused by global factors. He even refused to say the Government was sorry for the state it has brought the country to and the word "sorry" does not appear to be in his vocabulary. As our leader stated, the people deserve an apology for the ruthless mismanagement of the economy over the past 12 years and especially the past four years when the Taoiseach was Minister for Finance. One could count all the money that was wasted at that time.

I welcome the comments of the Minister of State, Deputy Mansergh, which are the nearest that anybody on the Government side has come to accepting some responsibility for the position we are in. He indicated the Government and country has been in crisis management since last July and particularly since last autumn. Everybody would agree on that but the Government has managed the crisis badly. There is no time now to enter into an analysis of the causes of the crisis as it affects Ireland but we must analyse the causes of crisis before we can solve them. The Minister of State also acknowledged that mistakes were made, and such an acknowledgement is welcome.

The Government and Opposition have distinct and equally honourable roles in a parliamentary democracy. The media seems to think everybody else should solve the Government's problem and although we in Opposition will be constructive, much of the responsibility lies with Government. The Minister of State sees no merit in calls for a national Government and what, in effect, would be a suspension of democracy. I completely agree with that as well. People will accept a great deal if measures are fair but people may feel they have been unfairly singled out.

The Government's strategy appears to be based on short-term political gain. It seems to want to struggle on until the local elections are over and it seems quite willing to do anything except take the necessary corrective action. It set up an bord snip and the Commission on Taxation, pretending there was no problem or that somebody else could solve the problem. This was instead of having the responsibility resting with the Government although it will have to solve the problem in the long run. The Government left the country adrift and did not take decisive action. Even last week the Tánaiste stated there were no problems with our finances. People are looking for leadership but not getting it. The Government has not come clean in telling people the real solution.

The estimates from last July were that the Exchequer would be €500 million short in revenues. Later in the year the estimate was €1 billion and in January the estimate was €2 billion, although the Government did nothing about it. We discovered today that €4 billion must be raised to balance the books. At the eleventh hour and when the horse has bolted, the Government has invited the Opposition to look at the books, although our positive suggestions were scorned over the past eight or nine months. The Opposition will play its part in a constructive manner but the Government must accept its responsibility. I am glad the Minister of State has outlined this in what is one of the best contributions from the Government side since the debate began.

It will be significant if the Government and Taoiseach do not accept responsibility for their serious mistakes. They must recognise and admit the problem before it can be solved. The Minister of State referred to fairness but those in the public sector do not consider it fair that people on €25,000 or €35,000 must pay the so-called pension levy despite already paying a 1% income levy. Those on €80,000, €100,000, €150,000 or more are not proportionately penalised to the extent of those who are low paid. People are ready to make the necessary sacrifices if leadership is forthcoming from the Government. We have seen a bit of this leadership from the Minister of State.

I am delighted to contribute to this motion put forward by our deputy leader and finance spokesman, Deputy Richard Bruton. It is extremely important that we deal with what is probably the greatest economic crisis this country has ever faced. We find ourselves in a position today looking at approximately €22 billion of a borrowing requirement for 2009 and based on today's Government figures, we must find through tax rises and expenditure savings approximately €5 billion. That is broken down to between €1 billion and €1.5 billion in terms of expenditure. Some €700 million of this relates to social welfare payments, a direct consequence of unemployment. Some €300 million relates to increases in medical card payments which are also related to difficulties in employment.

The Government is lacking a proper job retention and creation programme. For every unemployed person, the cost to the State is €20,000 per year. That is apart from the social consequences for people losing their jobs. The Government has talked about finding these extra taxes and savings in expenditure but that should be matched by a proper job creation programme to keep people in jobs and by a proper economic plan.

We have heard that the Government has an economic plan but it is nowhere to be seen. This started in last October's budget, when the Government stated there would be an increase in taxes of the order of 1% over the previous year. That was not realistic. At that time it should have introduced a budget that was measured and which dealt with the ongoing difficulties that would arise. Instead we have had piecemeal activity in the form of the income and pension levies. Various Government members have referred to the Taoiseach bringing forward this supplementary budget but when he was in the House yesterday he made no mention of the word "budget". When he was in the House today it had to be dragged out of him that he would bring a budget forward in early April.

The problem we are facing is in the making of decisions. The Minister of State, Deputy Mansergh, said the Taoiseach will make decisions but it is not always just about making decisions, it is about making the right decision. When the social partnership talks broke down, the following morning the Taoiseach introduced a pension levy which was clearly divisive and had not been thought through. That measure has created, for the first time, a major divide between public and private sector which I very much regret.

These problems must be addressed as people want to see fair measures being introduced. We need proper reform. The Government has spoken about co-operation and Fine Gael has brought forward proposals on recovery through reform in Deputy Bruton's documents, both in July and October last year. These proposals were constructive but the Government did not accept them. Furthermore, members of Government has spoken about co-operation in dealing with the current difficulties in terms of the €5 billion shortfall, but they have not provided us with details of the spending programmes in individual Departments. They are effectively saying they want us to co-operate but they want to keep one hand tied behind our backs. They cannot expect us to be able to fully contribute without giving us the full facts.

The way the budgetary system operates requires major reform. Global increases are given to various Departments at budget time but no detail is provided in that respect. Every item of expenditure in every budget should have to be justified. It should not be a matter of giving standard increases across areas. We are dealing with taxpayers' money, which must be valued.

The Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Bill to recapitalise the banks was dealt with earlier. We put forward proposals to ensure taxpayers' money is properly scrutinised. The Government has brought in legislation that allows the Minister for Finance and the Government to put further taxpayer's money into the banks in addition to the €7 billion that is now being put into them without having to come back to the Dáil to discuss such a proposal. That is not democracy. We put forward proposals to ensure proper scrutiny of taxpayers' money, given that the Government is putting €7 billion of such money into the two main banks. It is seeking to raise €5 billion, €1 billion to €1.5 billion by way of cuts in expenditure and €3 billion to €3.5 billion by way of tax increases.

More than 1,000 people per day are losing their jobs. Since last November more than 100,000 people have lost their jobs. These are all individuals, some single people and some with families. The Government is engaging in a sequence of events to raise €1 billion by way of cuts in expenditure and to raise revenue by increasing taxes, but it has put no economic plan to deal with job creation and to keep people in jobs. If people were kept in their jobs, the €1 billion in cuts would not be required. Those people make a contribution to the State in terms of taxes. Tax revenue is down in every area. In particular, corporation tax revenue has fallen, which is a clear indication of job losses.

I welcome the fact the gas and electricity prices will decrease by 12% and 10%, respectively, from 1 May. However, that overlooks the fact that gas prices increased by 20% last September, which means there will still be a 8% net increase in gas prices. Electricity prices increased by 17.5% last August and with the 10% proposed decrease there will still be a 7.5% net increase in electricity prices. Yet, the price of oil has dropped by 70% or more since July. We have to become competitive. A few key components are required, but the Government is not putting these in place.

I commend the motion to the House. I hope the Government will provide more detailed figures for individual Departments and specific proposals on items of expenditure in order that we can make a meaningful contribution.

Amendment put.
The Dáil divided: Tá, 75; Níl, 68.

  • Ahern, Dermot.
  • Ahern, Michael.
  • Ahern, Noel.
  • Andrews, Barry.
  • Andrews, Chris.
  • Ardagh, Seán.
  • Aylward, Bobby.
  • Blaney, Niall.
  • Brady, Áine.
  • Brady, Cyprian.
  • Brady, Johnny.
  • Browne, John.
  • Byrne, Thomas.
  • Calleary, Dara.
  • Carey, Pat.
  • Collins, Niall.
  • Conlon, Margaret.
  • Connick, Seán.
  • Cregan, John.
  • Cuffe, Ciarán.
  • Cullen, Martin.
  • Dempsey, Noel.
  • Devins, Jimmy.
  • Dooley, Timmy.
  • Fitzpatrick, Michael.
  • Fleming, Seán.
  • Flynn, Beverley.
  • Gallagher, Pat The Cope.
  • 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.
  • Kirk, Seamus.
  • Kitt, Michael P.
  • Lenihan, Brian.
  • Lenihan, Conor.
  • Lowry, Michael.
  • McEllistrim, Thomas.
  • McGrath, Mattie.
  • McGrath, Michael.
  • 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’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.
  • Treacy, Noel.
  • Wallace, Mary.
  • White, Mary Alexandra.
  • Woods, Michael.


  • Bannon, James.
  • Barrett, Seán.
  • Broughan, Thomas P.
  • Bruton, Richard.
  • Burke, Ulick.
  • Burton, Joan.
  • Byrne, Catherine.
  • Carey, Joe.
  • Clune, Deirdre.
  • Coonan, Noel J.
  • Coveney, Simon.
  • Crawford, Seymour.
  • Creed, Michael.
  • Creighton, Lucinda.
  • D’Arcy, Michael.
  • Deasy, John.
  • Doyle, Andrew.
  • English, Damien.
  • Enright, Olwyn.
  • Feighan, Frank.
  • Ferris, Martin.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • 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.
  • Penrose, Willie.
  • Perry, John.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • 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 Pat Carey and John Cregan; Níl, Deputies Paul Kehoe and Emmet Stagg.
Amendment declared carried.
Motion, as amended, put and declared carried.