In May 2007, the numbers on the live register were 104,000. In April of this year there are 373,000 plus on the live register, an increase of 219,000 which is more than double the population of the Taoiseach's Laois-Offaly constituency, at 103,673. It is obvious the country is not working under this Fianna Fáil Administration. There is no plan for the future of the country, no plan for jobs and no plan for the economic development of Ireland. The Taoiseach tells us we will have 400,000, and possibly more, out of work by the end of the year and there is a drop in living standards of 10% or 12%, yet we are to have a budget in a little over one hour's time in which the people will be penalised for the mistakes of the party in office. In the context of this afternoon's budget, I challenge the Taoiseach to say whether he is prepared to put that budget to the people and let them decide in a general election who they want to lead the country out of the economic morass and mess caused in the main by his party in government.
Leaders’ Questions.
Hear, hear.
Deputy Kenny will be challenged sooner.
Take it easy, Johnny.
The Taoiseach without interruption, please. Allow the Taoiseach to reply to Deputy Kenny's question, please.
The Irish people are aware of the serious challenges faced by our country and of what is happening right across the world. This is probably the biggest recession in 80 years. This country has not been immune and in fact it has suffered more than most. Today's budget is another step by this Government — and I hope with sufficient support from the House — to enable us to get on with the business which the people expect us to do, to make the necessary adjustments. I believe the people are ready to take whatever sacrifices are necessary in the interests of the next generation and in the interests of getting this right over the period ahead. They know there is no silver bullet, no immediate answer to some of these questions but we will certainly put forward a strategy in the coming years that will outline how we can bring back order to our public finances as this is fundamental as a pathway to economic recovery. We will also indicate our intended strategy to ensure that the banking system provides us with the necessary financial stability to enable Irish business to get on with protecting as many jobs as it can in the most difficult operating climate for many years.
The Taoiseach might get a silver budget and go to the country.
As usual the Taoiseach will not answer the questions in here. I agree the Irish people are well aware of just how serious is this problem. I agree that the Irish people know well who caused this problem. I agree that the Irish people have convicted Fianna Fáil and they are waiting for them but Fianna Fáil does not have the courage to rise to that challenge politically.
Hear, hear.
At 11% and rising, Ireland's unemployment rate is now higher than Germany, France, Italy and the Netherlands. A total equal to more than twice the adult population of the Taoiseach's constituency of Laois-Offaly has become unemployed in 18 months. The EU estimates that Ireland will have a deficit of 11% of GDP this year. France is expected to have a deficit of 5.4%, Spain a deficit of 6.2% and Greece a deficit of 3.7%. Greece has been given four years to sort out its problems and the Taoiseach's Government has been given five. The global competitiveness report which is compiled every year reported that the quality of Ireland's infrastructure dropped nine places between 2008 and 2009 to become 64th in the world. We were the fifth most competitive country in 2000.
I listened to the Taoiseach's comments at the weekend about codding the people. I put it to him that in May 2007 the greatest con job of all was pulled by him as Minister for Finance and his predecessor as Taoiseach when they put out advertisements in the national newspapers to the effect that 97% of the taxpayers of Ireland would be better off under Fianna Fáil. I note from the communications unit the interview given today by the Minister of State, Deputy John McGuinness, in which he said that in respect of the last budget the two Brians made a bags of it and that it was unfair. I am not a supporter of Deputy McGuinness and I do not know if the Taoiseach heard the interview but that is what he said today. He said the two Brians made a bags of it.
We are aware that the country is not working under Fianna Fáil. Retail shops are closing down, small businesses cannot get credit and 1,000 jobs a day are being lost. Young people are forced to find a place in the world where they might find some work because of the despair and hopelessness they are experiencing here. I challenge the Taoiseach again; will he put this budget to the Irish people in a general election and give somebody a mandate to lead this country out of the mess that he and his people over there have created? Is he prepared to do that or is he not?
Deputy Kenny had a mandate for the last election.
I have already explained to Deputy Kenny that the House will decide when it divides whether there is sufficient support for this budget and I believe there will be. Fine Gael had a programme at the time that sought to spend more. Based on the Deputy's tax proposals it was true that people would be better off under us than under his rule.
That is totally untrue.
We live in a totally different world than that of May 2007.
That is right.
It is the same for Germany, where growth will be down by 5% this year. The industrial powerhouses of the world are going through a recession the likes of which has not been seen in very many years. The people know that.
Hear, hear.
With regard to what must be done now, the people are prepared to accept whatever impositions are necessary to get us back on the pathway to recovery. That is my belief. It will begin when the Minister for Finance, Deputy Lenihan, makes his——
Go and ask them.
He is the reincarnation of Judas.
I listened to Deputy Kenny with respect to what he had to say.
Deputy Kenny must listen in silence until the Taoiseach is finished.
The moment I start to speak there is a predilection to continue interrupting which does not add to the dignity of the House and does not impart any further relevant information.
We have rising unemployment figures because of the recession and because we earn our living on the basis of our exports and there is less demand for our goods and services now than in the past. That situation has been brought about by this recession. The important point is that we will come through this recession as we have in the past and will do so by taking whatever corrective measures are necessary.
Now the Taoiseach tells us this.
This will be done over a period of years, given the scale and magnitude of the challenge facing us. It will involve people having to take some steps back in order to go forward again. It will involve an imposition. Unlike Deputy Kenny, I say to the people openly and honestly that there will be a greater imposition of tax and a greater degree of sacrifice required of all of us. At the same time, it is far better to be straight and honest about that.
Like they were in 2007.
They filleted the economy.
There was no honesty.
The Taoiseach should look up the meaning of honesty in the dictionary.
I call on Deputy Gilmore. Deputy Kehoe, this is Leaders' Questions.
The Taoiseach is leading the House astray by talking about honesty. He never talked about honesty in his life.
On Leaders' Questions, only party leaders are allowed ask questions.
It is fair to say that this afternoon the mind of the country is on the announcement from the Minister for Finance, Deputy Lenihan, of the second budget for 2009. This will be announced in an hour's time and no doubt it will have implications for the pay packets of people all over the country with regard to taxes and levies, and so on. That is probably what most people will be discussing over their dinner this evening.
However, as the Taoiseach stated, that is only one aspect of the issues being considered by the Government at present. The other has to do with the future of the banking system. As we know, the Government has made a couple of attempts to deal with the banks, including the guarantee last September, the announced recapitalisation in December which was not proceeded with, the nationalisation of Anglo Irish Bank in January, followed by the recapitalisation of the two larger banks at a cost of €7 billion to the taxpayers. Over recent weeks and particularly over the past few days, there has been increasing speculation that the Government will make a further announcement of some decisions in respect of banking. There has been speculation about the possibility of the establishment or creation of a "bad bank" to corral the bad debts. There have been some suggestions about the establishment of an asset management company under the National Treasury Management Agency and there have been suggestions that the Government may be considering some kind of arrangement or mechanism whereby taxpayers' money will be used to buy up the bad loans of the banks.
What decisions have been made by the Government in respect of the banks? Will the Government publish the report of Dr. Peter Bacon on which I understand such decisions to have been made? Would the Taoiseach agree to the suggestion made yesterday by my colleague, Deputy Joan Burton, that Dr. Bacon's report might be published as a Green Paper on banking?
Deputy Gilmore will be aware that the Minister for Finance, Deputy Lenihan, has indicated that in part of his Supplementary Budget Statement he will make some comments with regard to these matters that are important for the future of our economy. The motivation of the Government is to ensure we get the Irish banking system to serve the people within its core franchise of providing lending capacity to families, personal borrowers and to Irish businesses. This will enable it to protect as many jobs as possible.
As the Deputy is aware, there is an EU set of guidelines on dealing with what are called "impaired assets" and we will be working within that framework. Other countries have indicated already what they intend to do in this regard. The decisions we have taken thus far in respect of Irish banking and the State guarantee were absolutely necessary at the time in order to avoid any systemic failure of the Irish banking system and all the chaotic consequences that would have arisen from that. The recapitalisation policy was a prudent one on behalf of taxpayers and was taken after due diligence.
The question of how we manage risk in the future in respect of impaired assets and banks is an important issue for the people. Our motivation in this regard is to ensure that the problems which are causing the reduction of credit into the real economy, with all the accompanying effects, must be addressed in a very determined, sustained and strategic way. It is on that basis that the Minister will make some comments on this matter during the course of his Supplementary Budget Statement.
The Government has made its decision not simply on the basis of any individual report but based on the advice of the Central Bank and the National Treasury Management Agency. The latter has done a great deal of work in this area and has built up a very fine reputation over many years with regard to treasury management issues in this country, the management and reduction of our debt and in dealing with our public finances in that respect. These were the advisors, along with the Department of Finance. The official advice we received is built around the consensus of opinion that has developed with regard to deciding which is the best way forward. It is on that basis that the Minister, Deputy Lenihan, will make some comments.
As the Deputy is aware, these matters concern some very commercially sensitive, market-sensitive issues and therefore I do not believe at this remove that it is possible to publish such reports. However, the decisions that will be taken by Government can be explained and brought to the House and any legislative changes that will be necessary on foot of those decisions will provide an opportunity for further debate.
I am curious about the way in which the Government is planning to do this. I understand from what the Taoiseach said that the issue of the banks is to be dealt with in the Budget Statement by the Minister, Deputy Lenihan. The significance and scale of what is being done, or intended to be done, is very large. What has been done already is very large. The guarantee exposes the Irish taxpayer in a considerable way. The cost of the recapitalisation, namely, taxpayers' money already provided to the banks, is apparently about double what the Government proposes in the budget, in terms of the total impact of the budget's €7 billion.
There has been speculation over the course of recent days that proposals are being considered by Government which effectively will use taxpayers' money to buy up the bad loans. This means buying up the half-finished housing estates, the land bought at enormously inflated prices, the property that was the cause of speculation. Is it the case that in addition to the bail-out of the banks already undertaken by Government there will now be a bail-out of the property speculators who ruined the country? Is it the case that the announcement of that bail-out will be buried in the Supplementary Budget Statement to be made later today? At that time everybody's eye will be on what their tax liability is to be and where they will stand in terms of levies, and so on. Is it the case that there will be a significant announcement concerning banks buried in the Supplementary Budget Statement? I would have thought that the scale of what must be done in respect of the banks required a separate announcement by the Government, one that might be examined and debated on its own merits rather than being part of the bigger Supplementary Budget Statement.
I do not accept what the Taoiseach said about market sensitivity. The markets have been sensitive to the banks for a very long time and we see the consequences. I accept what the Taoiseach said about market sensitivity. The markets have been sensitive to the banks for a very long time and we see the consequences in the share price.
The Bacon report is of major significance to the public. This is our money. One of the banks has been nationalised and €7 billion of public money has already been put into the banks. This is not private business any longer; this is public business. If one compares it to what happened in Sweden in the early 1990s, all of this type of information was put into the public domain and it was this fact that helped to restore confidence. If the information and the reports on which the Government is making decisions on these matters is not shared with the Opposition parties and made available to the public, it is very difficult for the public to regain the kind of confidence we all accept is required in the banking system.
Again, I ask the Taoiseach to tell us straight out what the Government intends to do with the banks. Will it buy up the bad loans? How much taxpayers' money will be used in this regard? Can we have sight of the Bacon report, which the Taoiseach now says is just one report? What other reports is the Government considering in regard to the banking system?
I want to make it clear to Deputy Gilmore once again that this is not a question of doing anything other than trying to secure the future of the economy. The whole purpose and motivation of Government involvement and Government policy in this matter is to try to ensure that we maintain financial stability in this country, which is absolutely essential for the purposes of dealing with the issues that are often discussed in this House, namely, the need to create jobs, maintain investment and ensure businesses have access to credit.
The continuing effort to try to portray this in the pejorative way in which it has been outlined by Deputy Gilmore does a grave injustice both to the gravity of the situation we need to deal with and the motivation of everyone in this House. Whatever our differences, we must do whatever we can to try to ensure that the Irish economy has a solid future going forward. The difficulties of our financial system and banking system have been no different from the difficulties that have arisen in respect of other financial systems and financial institutions in other countries, where governments have had to intervene, as this Government has had to intervene for the purposes of trying to bring forward an economic programme and economic policy that will ensure a future for this country. That is the truth of it. Any suggestions to the contrary by anyone in this House does an injustice to that situation. I am simply saying——
I am only asking for information.
I am giving the Deputy the information but I want first to address the political charge that was involved in his question, which was part of the legitimate tactic of any politician, which is to seek to first misrepresent the Government's position in this matter.
I made no charge.
The Government's position in this matter is to do everything it can to secure the future of the economy, maintain jobs and help business to grow and prosper in what is the most difficult recession we have seen in this generation or, indeed, for the past two or three generations. That is the purpose of our involvement. We have had no support from Deputy Gilmore's party in respect of any of the issues we have taken on board — that is a matter for his party to take up and articulate.
They did not work. We were right to oppose them.
Please allow the Taoiseach to finish.
The point is this — these decisions have worked because in the absence of those decisions being taken, we would have had systemic problems in regard to the Irish banking system.
They did not work.
The Taoiseach must be allowed to finish.
I did not interrupt Deputy Stagg's party leader when he spoke. Deputy Stagg often reminds us of the need to adhere to rules and procedures in the House.
Second, in regard to the matter that has been raised, the Minister, Deputy Brian Lenihan, will outline the policy position and strategic approach the Government believes needs to be taken now in the interests of the economy and for no other reason. The third point I wish to make to Deputy Gilmore is that, from our point of view, everything we seek to do here is to protect the taxpayers' interest at all points.
With regard to the capitalisation programme which Deputy Gilmore regarded as a bailout, this is about ensuring that we get a return on that money and that the Irish taxpayer is protected in respect of those public funds that have been made available to ensure there is sufficient capital in our banks to enable them to operate. We also need to see the banks functioning to a far more dynamic extent for the benefit of the economy and business, and the protection of jobs, about which many people talk in this House. There are major decisions to be taken to ensure that this happens.
Part of this is to ensure that we have a banking system which serves its core franchise of looking after businesses and jobs, personal borrowers and those who have mortgages. These are the people who are at the centre of our concern, not this continuous pejorative attempt to suggest there is any other motivation in regard to discussions we are having on these important matters.
That is a bit risky, coming from the Taoiseach.