Mary Lou McDonald (Dublin Central, Sinn Fein)

I welcome the fact we are at last having this debate, although I note there will not be a vote on the issue. I understand the document which was published last night is the basis upon which the troika will deliberate. The Taoiseach has indicated that it is possible the matter will return to the House and I believe we should vote on it. I make that point repeatedly because what is agreed between the Government and the troika behind closed doors will have serious ramifications in the long term for low and middle income workers and families and the vulnerable in society.

Earlier, the Minister for Social Protection, Deputy Joan Burton, spoke about poverty traps. I could not agree more. Nobody in the House would wish to see any individual or family trapped in a welfare trap. However, it is disingenuous to use that argument as a smokescreen for a continuing austerity programme which will inevitably mean hardship and cutbacks for people on very low, subsistence incomes. The Minister also referred to the general election and claimed correctly that she and her colleagues on the Government benches had secured a mandate from the people. However, it is worth reminding ourselves that in the course of the election the Labour Party promised a strategic investment bank to support businesses. Also, Fine Gael promised some form of burden sharing. Neither of those commitments sees the light of day in the document. Deputies in the House should have been afforded a full debate, followed by a vote on the EU-IMF programme. I hope that will happen in the near future, because the programme shapes the State's budgetary process to 2014 and ultimately decides our economic fate.

Fianna Fáil has pursued an austerity model since the financial and economic crisis of its making began. The current Government, despite its respective parties' election promises to the contrary, continues on the same path. The Government's budgetary strategy should be focused on recovery, not austerity. It is time now to begin addressing the real, underlying problems with the economy. A refusal to do so will only prolong and deepen the recession. Recovery requires investment, supports and a commitment to real stimulus that will create jobs and increase revenue.

The memorandum as revised and presented creates uncertainties and ignores the outworkings of its internal devaluation model. For example, despite rising unemployment, now at just under 15%, the Government intends to target social welfare recipients and extend the age at which a person can receive his or her social welfare pension. Working age payments, child income support and disability allowances are all to be "reviewed", a term favoured by Government. There is a particularly insidious reference to "making work pay for welfare recipients" in the memorandum. I have made known my heartfelt opposition to poverty traps. Targeting people who find themselves out of work and on welfare in this way is unacceptable. The proposal to make work pay for welfare recipients begs the question asked by Deputy McHugh earlier: "Where are the jobs?" I find it hard to believe that the Government could be so out of touch as to imagine that people are languishing on welfare payments because they do not want to work, since these people are in receipt of their payments because there is no work.

There is a commitment to lower personal income tax bands and reliefs year on year, but there is no detail on how many of the State's lowest paid workers the Government intends to bring into the tax net or what impact this measure will have on low and middle income families struggling to pay the Government's property tax, flat water charge and the universal social charge. The Government has steadfastly refused to countenance measures such as a wealth tax or a third income tax band of 48% on individual incomes in excess of €100,000 per annum. It has steadfastly refused to consider these measures, leading people to the conclusion that austerity is for one class of citizens but not for the other.

The memorandum also promises a reduction in private pension reliefs and general tax reliefs. However, there is no detail on how much of a reduction there will be or on whether the intended changes will reduce reliefs on the lower rate of income or the higher. Sinn Féin has argued since the crisis began, and before, for a standardisation of all discretionary taxation reliefs, including pension relief, with a view to eradicating tax reliefs that do not return value for society. Taxation reliefs have historically favoured the better off. An ESRI study from 2009 showed that 80% of pension tax reliefs benefited the top 20% of earners.

Carbon tax is to be increased but again there is no detail on what measures the Government intends to undertake to tackle fuel poverty. Some 115,000 households are in arrears in paying their gas bills and we have no way of quantifying how many older people or families have been forced to do without oil during the coldest months. The carbon tax continues to have a negative impact on people experiencing or at risk of energy poverty. No compensatory measures have been implemented or even identified by the Government. The carbon tax is pushing more low income households into fuel poverty and this will only get worse.

The memorandum commits to a reduction in public service numbers in line with the Fine Gael and Labour parties' programme for Government, yet there is no detail on where within the service these cuts will be made or how it intends to resource or manage any area with depleted personnel. The Government needs to publish in detail exactly where these jobs cuts within the public service will be made. It is difficult to give credibility to the Government's commitment to job creation given that it is so intent on increasing the numbers of unemployed public servants in a random and indiscriminate fashion.

A comprehensive Government review of expenditure is under way and is due to be completed later this year. In consultation with the European Commission, the IMF and the ECB, the Government intends to introduce further budgetary measures, which begs the following question. How much more does the Government imagine the people or front line services can take? I believe - the figures bear this out - austerity is not working. Pumping billions of euros into insolvent banks like Anglo Irish Bank and out of public services is not working. Cutting front line services is not working. Cutting public spending while refusing to invest in stimulus can only lead to lower economic growth and higher unemployment.

There are two glaring omissions from this document. It does not refer to investment in the real economy and there is only a paltry reference to job creation. Without these two things, we cannot pull ourselves out of recession. I agree with Deputy McHugh on the value of the all-Ireland economy and cross-Border projects, and with what he said about EU procurement rules. Very good work has been done in the North on interventions in that arena, a policy which we should also adopt in this State.

The Government told us that its first 100 days was to be all about jobs and yet this memorandum of understanding contains nothing of real substance in that regard. The memorandum contains an explicit commitment to dispose of State assets not to pump the money into job creation or to stimulate job creation, but in order to write down debt.

The Minister, Deputy Burton, reminded us that the renegotiation of the matter is a marathon and not a sprint, which, I am sure, is the case. However, even a marathon begins with a single step. The revised memorandum makes it very clear that the single step has not been taken.

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