Dáil Éireann díospóireacht -
Wednesday, 16 Sep 2009

Vol. 689 No. 1

Leaders’ Questions.

Deputy Enda Kenny

As I go around the country on the Lisbon referendum campaign seeking an endorsement for a strong "Yes" vote, the number of people who express genuine concern about the NAMA legislation is quite astonishing. No Bill that ever went through the House cost anything remotely in the region of what we are talking about here. This Bill does not have the support of the people. It amounts to an act of economic madness to attempt to shift a burden of possibly €40 billion, €50 billion or €60 billion on to the taxpayers' shoulders. There are alternative ways to have liquidity flow into the banking system. When the Minister for Finance, Deputy Brian Lenihan, rang me last year and asked me if I would support the guarantee scheme for the banks, I said "Yes" because I believe in a vibrant, competitive and energetic banking system. There are alternative ways of having liquidity flow to business besides what is being proposed in the NAMA Bill.

There is a growing body of opinion, both at home and internationally, from very respected people and institutions, that what the Government is doing is wrong. There are a number of ways by which an alternative can be produced that would be fairer, would protect taxpayers and would not involve paying over the odds. In addition, it would allow liquidity to flow into business for the protection of Irish jobs. I am not dogmatic about my party's proposal. which was put out some time ago, because there are no perfect solutions here. I know that. In the interests of our country, however, and all the taxpayers, including those who are working and fearful for their jobs, and families watching these proceedings, let me make the Taoiseach a proposition, as leader to leader. If he is willing to withdraw the Bill, and there is time to do so, my party, for one, is prepared to sit down with the Government to work out a more acceptable and fairer alternative that will not involve taxpayers being exposed to an enormous liability. It would be fairer, in everybody's interest and would allow for liquidity to flow into the system so that jobs can be protected. The Taoiseach said earlier that he was open for business. There is a choice here. There will be a long Second Stage debate and a long Committee Stage debate also. He can still withdraw the Bill and do this another way in the interests of all the alternatives and opportunities that exist. In that way, he would not be locked into a cul de sac and pulled by the nose by the banks in one direction only. I am making a proposition to the Taoiseach in the interests of Ireland and all our people. If the Taoiseach is prepared to withdraw it, I am prepared to sit down with him and work out a more acceptable and effective alternative.

Deputies

Hear, hear.

Deputy Enda Kenny

Does he accept that proposition?

The Taoiseach

This Bill is being brought forward for one purpose, namely, to provide a stimulus to this economy by means of the mechanism we have devised. Making populist statements about it or misrepresenting it does not help anybody but if that is what the Deputy wishes to convey, I cannot dictate that.

Since last April the Minister for Finance has been very clear about putting forward this proposition and, as late as August, he made available to the Deputy an invitation to discuss these matters with his advisers and anyone else the Deputy wished within the Department. That offer was not taken up and that is a matter for the Deputy. The issue before the House is that we must take action now to bring forward this proposal. When we commence the Second Stage debate, we can hear what ideas are in this House but we put forward this proposal following due consideration and careful analysis, having sought advice both domestically and internationally and with the support of institutions that will provide funds for this mechanism in line with guidelines set out at EU level. This is a considered proposal by Government. It is being brought forward for the reason of confronting the challenge that faces us today and not for any fearful reason.

By bringing forward this proposal, we are giving an opportunity to Members to make their proposals and statements and we will put our position. We have had a view which, when I mentioned it earlier was regarded as patronising, but which is genuine. The Government has been open and has set out its preparedness, since it drafted the Bill and put it before everyone because of its complexity, importance and urgency, to listen to any views people have, to discuss them and to see how they wish to proceed. However, we have to do it in a way we believe has the best prospect of success.

The motivation behind the legislation on the part of the Government has continually been characterised in a very negative way by Opposition Members for their own reasons and I cannot dictate those reasons. I assure them that the motivation for bringing forward this proposal is to achieve the common good and to bring a stimulus to the economy in a responsible way and in a way which has the support of important institutions that are vital to making it work. That is our sole motivation and, rather than perhaps characterising it any other way, let us get on with the business now. There is a proposition before the House for discussion. Let us have a debate and meet, as the Deputy said, the concerns of the people, which are about moving forward, dealing with the issue and not continuing with paralysis by analysis. This is a considered proposal by Government, which is about to be brought before the House. Let us get on with the debate.

Deputy Enda Kenny

I am disappointed that, on an issue as fundamentally important as this, the Taoiseach has rejected an offer to sit down and work out an alternative, which can be achieved, and not proceed down this road of economic madness.

The Taoiseach

The Minister's offer has been open for months.

Deputy Brian Lenihan

The Deputy did not have the courtesy to reply.

Deputy Niall Blaney

The offer has been open for weeks.

The Taoiseach

I believe this is the right proposal.

An Ceann Comhairle

Deputy Kenny without interruption.

Deputy Enda Kenny

As the Taoiseach is set on this road, perhaps he might answer a few questions. We are proceeding to commence with a debate on the Government's NAMA Bill, which will not be the legislation that will emerge at the end of this process, principally because the Taoiseach's partners in Government and members of his own party have yet to decide what further changes they will demand.

Will the Taoiseach explain the circumstances in which an individual, Dr. Bacon, was chosen by Government to produce a report without any other economic analysis or input resulting in the Government being led down one road only without any flexibility to change? How much will the Government pay for the loans to be acquired? Will it be €40 billion, €50 billion or €60 billion? What discount will be applied? The taxpayer wants to know this and I would like the Taoiseach to respond to that.

Is the Taoiseach prepared to move away from paying the long-term economic value and paying over the odds for assets that, in many cases, are useless? What guarantee can he give that in the event of the Bill going through, the money acquired by the banks will be available for lending by them to businesses all over the country? Is it his intention, as reflected by one of his backbenchers, to remove the Minister for Finance from the valuation system in order that there would not be a perception — I do not suggest that the Minister would influence the system — of influence by the Minister of the day on the system? Is he prepared to deal with that? As we are proceeding down this road, the Taoiseach might answer these questions.

The Taoiseach

The position is we will commence the Second Stage debate and a detailed outline of the position will be given by the Minister for Finance in the next few minutes and I would like the House to hear that in detail.

Deputies

Hear, hear.

The Taoiseach

This is about the Government presenting bonds, which will provide access to ECB funds to provide a stimulus to the economy for the purpose of improving the lending capacity of our banking system. Throughout the last session, week in and week out, we discussed the insufficiency of lending in the economy. We are seeking to address that issue through this proposal. We are not in a position to provide a fiscal stimulus to the economy because of the state of our public finances but a stimulus can be provided through this mechanism.

It is, therefore, also not correct to continually portray this as costing the amounts to which the Deputy referred since we are seeking to design a mechanism that will ensure we protect the interest of the taxpayer to the greatest extent possible. We have no motivation other than that in coming forward with this proposal and enacting it after debate having listened to what Members have to say and making sure we can get this as right as we can. It is important that it works and what we are seeking to achieve is that the management agency manages the assets in line with guidelines set down by the EU with the support of the ECB, which supports this proposal.

Deputy Dinny McGinley

With serious reservations.

Deputy Joan Burton

The ECB warned the Government about this proposal.

An Ceann Comhairle

The Taoiseach without interruption.

The Taoiseach

This is supported by financial institutions, which will help us provide a stimulus to our economy. It is on that basis that we put the proposal. We have considered all the options as we have seen them. We have brought forward this proposal and we have dealt with all the issues in so far as we can. We are open to dealing with any issues raised in the debate in so far as that is appropriate or possible. We are seeking to look to the collective wisdom of the House. If parties want to proceed in a different way or have a totally different proposal, they are entitled to put their point of view on Second Stage. That is the way we conduct debate in the House. When we reach Committee Stage, it will be open to Members to decide what they wish to do at that point.

However, the bottom line is we must bring forward this legislation to deal with a fundamental problem affecting the economy generally, taxpayers and business.

Deputy Damien English

It is flawed.

The Taoiseach

We have to do that and that is the total motivation behind this proposal. There is no other motivation behind it but that.

Deputy Paul Connaughton

It is flawed.

Deputy Eamon Gilmore

I seek the Ceann Comhairle's indulgence before I ask my Leaders' question. I understand there has been a bad crash on O'Connell Street, Dublin, between a Luas tram and a bus. I wonder if the Minister for Transport might take an opportunity during the afternoon to report to the House on it and perhaps to exchange views with transport spokespersons.

The Taoiseach is asking the people to bear a very heavy load. The legislation the Government will bring before the House will mortgage the future of taxpayers for decades to come. He is asking people to consider increases in taxation and cuts in pay. People are already losing jobs and businesses. It is a very difficult time. While the Taoiseach is asking people to do that, we are being informed on a weekly and daily basis of the extent of the waste of taxpayers' money which his Government has presided over for the past number of years.

Last week the report of the Comptroller and Auditor General on FÁS was issued. FÁS was going to hold a raffle. It bought a car for the raffle. The raffle was never held and the car disappeared. It ordered a television advertisement for €600,000 which was never screened. In fairness to the board of FÁS, its members have done the decent thing and offered their resignations. However, the Minister, Deputy Cullen, who was responsible for expenditure 100 times that of the television advertisement and spent some €60 million buying an electronic voting system that was never used, has not resigned and came out at the weekend to justify it.

On top of that, we learn of the splurging and indulgence of ministerial expenses over the period of that Government. I acknowledge the Ceann Comhairle's letter of apology he issued today, but it suggests that this was by no means the exception and appears to be the norm.

I saw the Taoiseach giving a number of newspaper and television interviews during the summer recess and I want to put a question to him this afternoon. Does he accept that the Government he served in for 12 years, during which he was responsible for the Government's finances for four years and which he now leads was responsible for a huge waste of taxpayers' money? Will he apologise to the Irish people for that waste of taxpayers' money?

The Taoiseach

It is not a question of seeking to mortgage the future of taxpayers. We are seeking to crystallise the losses that have to be transparently shown now in order to ensure that international finance will continue to fund our banking system and return it to a viable future for our country. That is what we are seeking to do. The Bill is again being portrayed as an attempt to mortgage futures. It is about trying to make sure that we deal with the present situation to avoid a continuing contraction in the economy by means of improving lending into it. We are doing it by crystallising losses for banks and those who hold those loans so we can present bonds to obtain money to get it into the economy where is it badly needed for Irish businesses.

Another point raised by Deputy Gilmore concerned my time as Minister for Finance. I stand over the budgets I brought into this House, which were regarded by people in Deputy Gilmore's party and the other Opposition party as being mean and not sufficient. The critique at the time was that the Government was not doing enough to provide further expenditure programmes in a whole range of areas. I brought forward surpluses on those occasions——

Deputy Damien English

The Taoiseach is rewriting history.

The Taoiseach

——and continued to reduce debt. These are the recorded facts.

(Interruptions).

The Taoiseach

The people want to know where we are going from here and I am here to say that the initiatives we are bringing forward are seeking to address that problem.

Regarding the question of expenditure that was wasted, no Member of the House can stand over wasteful expenditure since it is taxpayers' money. We have seen accountability being exercised through Comptroller and Auditor General reports on an annual basis in successive Governments. It is a continuing challenge and the need to reduce and eliminate waste is a continuing challenge that is part of the functioning of Government and of the committees of this House, including the Committee of Public Accounts.

None of us holds a brief for that but I want to know what part of the expenditure that related to improvements in pensions and increases in education allocation and the health service people opposed at the time. The critique at the time was that we were not doing sufficient work in those areas. That is the record of the time, in respect of what the House thought of what I was doing.

I want to make a general point. At present it is all the more important that taxpayers' money is spent efficiently, effectively and wisely and there is a need to prioritise, eliminate certain programmes and ensure that the manner in which moneys are spent in the course of conducting our public affairs here is such that it has public confidence, and that is the challenge we wish to confront.

Deputy Eamon Gilmore

The Taoiseach did not understand the question I asked him or has deliberately decided to avoid answering it. I did not ask the Taoiseach to give his opinion on the waste of public money; I am taking that for granted. None of us stands over the waste of public money.

I asked the Taoiseach if he accepted his Government's responsibility for that waste and if he would apologise to the people for it before he looks them in the eye and asks them to dig into their pockets to pay extra taxes or suffer reductions in services or, in some cases, reductions in pay and loss of employment. The Taoiseach said none of us holds a brief for waste. He did hold a brief for waste. It was his brief. He was in charge. His Government was in charge when all of this was taking place and some of his Ministers have direct responsibility for the agencies, Departments and, in some cases, for the direct expenditure involved.

We are not engaged in some kind of academic commentary here. The people of this country are being asked by the Taoiseach and Government to pay now for the consequences of what they did. In some cases they are being asked to pay for it with their employment and businesses. They are being asked to pay for it with taxes and the loss of services provided to the public.

All I am asking the Taoiseach to do — something he has avoided doing in interviews he gave during the summer — before he says to hardworking people that he wants more money from them in taxes, that he wants to cut their pay or that they might lose their job, is to look them in the eye and say he accepts he has been in Government for 12 years, that he was responsible for the country's finances for four of those and that he is now in charge of the Government, and that he accepts, on behalf of the Government, that a huge waste of taxpayers' money was perpetrated by that Government. I want him to say to them that he is sorry and say it before he asks them to contribute any more.

The Taoiseach

I have said unequivocally on many occasions — maybe not to Deputy Gilmore's satisfaction — that I accept responsibility for every decision I have taken in government and that I did so at the time from the best advice and my best judgment, and that every initiative I took——

Deputy Eamon Gilmore

It was a waste of money.

The Taoiseach

——was for the purpose of improving the common good in this country. If, as happens every year, a report from the Comptroller and Auditor General, who holds that constitutional position, demonstrates——

Deputy Eamon Gilmore

Did the Taoiseach waste money?

The Taoiseach

——that there are instances where taxpayers' money is not used to best effect, of course I have to take responsibility for that. However, it is a situation that is part of the accountability mechanism in this House.

No one can stand up here and say with certainty that the €55,000 million that is spent on current programmes in this country is spent exactly as it is sought to be spent from this House by those to whom it is given. That is the story.

Deputy Eamon Gilmore

That was the Taoiseach's job.

The Taoiseach

In every case, on every occasion, we seek to effect the principle of accountability so that if something goes wrong we bring in changes to make sure it does not go wrong again. That has been the constant effort of Government, the constant role of the Committee of Public Accounts and the constant job of every Comptroller and Auditor General since the foundation of the State.

I take full responsibility. I have never sought to evade any responsibility in my life, but I do not claim that there is a perfect world under me or anyone the Deputy served under. I say to everybody that there is a role for all of us in public service to make sure that taxpayers' money, which is hard earned as I well know — I represent constituents as much as the Deputy does and meet people from all walks of life — is not wasted. It is incumbent on us to make sure we do whatever is necessary and that is why we are bringing forward an expenditure control programme throughout all aspects of services to see where we can find savings and improve efficiencies and effectiveness before we have to ask people to go further than that. That is one of the responsibilities we will seek to discharge in the coming months, as we prepare for what will be a difficult budget in difficult circumstances. It cannot be avoided because the facts on the ground will not change, regardless of who sits on this side of the House.

Deputy Paul Connaughton

The horse has bolted.