Dáil debates
Tuesday, 15 June 2010
Confidence in the Taoiseach and the Government: Motion
2:30 pm
Séamus Kirk (Louth, Ceann Comhairle)
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The speeches of the Taoiseach and the Leaders of Fine Gael, the Labour Party and Sinn Féin, or a Member nominated in their stead, who shall be called upon in that order, shall not exceed 30 minutes in each case.
Brian Cowen (Laois-Offaly, Fianna Fail)
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I move:
That Dáil Éireann has confidence in the Taoiseach and the Government.
Inviting the Dáil to vote confidence in a Taoiseach and his Government is to invite them to reaffirm the mandate given by Dáil Éireann when a Taoiseach is elected to lead the executive authority of the State to discharge its duties in the interests of the people. Confidence is, therefore, about confirming that it is right that a Government should continue to serve the people because it has the capacity and determination to do what is required to address the challenges that lie ahead.
These are formidable challenges. I will speak about the measures which we are pursuing to secure financial stability and accelerate economic recovery but the truth is that we are operating at a period of grave challenge for our currency, for Europe and for the global economic system. It is a time when the capacity to sustain confidence abroad is just as important as the ability to deliver the correct policies at home. This Government has demonstrated its capacity to do both, as affirmed by fair-minded observers at home and abroad. The task is far from complete but the direction is set and the goal is clear. The journey is daunting but the will and capacity to succeed, whatever the ultimate political consequences, are unshaken.
Confidence is about the challenges of today and tomorrow. That is not to ignore issues that derive from the past. This Government, and I personally, do not seek to diminish or equivocate about our responsibilities, actions and decisions. It is right that all are held to account for what has been done, as well as what was left undone. Our determination in that regard is evident from our decision to appoint distinguished and independent experts to conduct a robust assessment of the reasons for the banking crisis which has dominated so much of the work of this Administration. We are determined to continue the examination, analysis and reflection so that full and fair assessments can be made, lessons learned and the basis established for a full political assessment of performance and responsibility to be made in due course.
I assert that the firm and unshakeable commitment to that process and that outcome is an integral part of the position from which this Government invites the Dáil to reassert its confidence.
I will deal with some of these matters in more detail. At this point, I wish merely to repeat my full acceptance of responsibility for the decisions I took, as Minister and Taoiseach. I believe that the record, informed by the expert analysis published over recent days, demonstrates that I acted to correct imbalances in our tax relief system and to rebalance the focus of economic policy from an excessive dependence on property and construction towards a more balanced and sustainable economy. That this was ultimately insufficient to prevent the vulnerabilities in our situation producing the critical situation in which we have found ourselves reflected severe failings in our banking and regulatory systems. These were compounded by failings on the part of external authorities who gave false comfort about the performance of both. This was all crystallised by the collapse in international financial markets to a degree which could scarcely have been anticipated. Accepting due responsibility as I do does not, however, oblige me to accept the re-writing of history and the bare-faced denials on the part of the Opposition.
I pay tribute to all of my Cabinet colleagues and my colleagues in the Fianna Fáil Parliamentary Party, the Green Parliamentary Party and the Independent benches. This has been the most volatile and demanding period in politics I have seen in over a quarter of a century in this House. The Government has worked long and hard in an effort to get Ireland through the crisis and our track-record has been acknowledged by international commentators to be the correct response for our circumstances. The recent banking reports from Mr. Regling, Mr. Watson and Professor Honohan confirm that.
The reports confirm the need for an extensive guarantee; confirm that Anglo Irish Bank was a systemic bank at the time of the guarantee; confirm that bank failure would have been disastrous for our economy; confirm that the timing of the nationalisation of Anglo Irish Bank did not result in higher costs; and confirm that steps have been taken to correct the main issues relating to regulation.
Our efforts are paying off. The most recent OECD Outlook has stated: "after a severe recession in 2009, the [Irish] economy appears to be close to a turning point". While painful, the tough decisions we have taken are working. I believe we have reached a turning point in our economy and the challenge we now face is to drive on with this approach in order that we can get more people back to work as quickly as possible. Other countries are now facing up to their difficulties as we have already done. It is clear that our determination to move early and decisively to address our public finances has generated approval and confidence abroad, from which we continue to benefit. Recent turbulence in the eurozone is the most vivid demonstration of the necessity of the decisions we made and the effectiveness of the policies we pursued.
The credit for this success lies squarely on the shoulders of Irish people. They have understood the need for tough measures and adapted to the most difficult of circumstances. While we face another difficult budget ahead, we are returning to growth and, with it, we are seeing an upturn in much needed confidence. While continued turbulence in financial markets is a strong signal that we cannot be complacent, the hard won gains of the past two decades remain despite the severity of the recession. This year, economic activity as measured by GDP will be around 30% higher than ten years ago and 150% higher than 20 years ago.
Every day, as Taoiseach, I meet and hear how people are struggling because of this recession and about the sacrifices families have had to make. I understand that. The Government has worked hard to develop a plan for economic recovery and it is working. The plan has four key parts, namely, to repair the banking system, restore order to the public finances, regain competitiveness and support enterprise to create jobs.
Repairing the balance sheets of our banks is arguably one of the most significant financial challenges ever faced by the State. However, the Government has faced this challenge for the simple reason that it is fundamental to getting credit flowing again, supporting economic recovery and creating jobs.
The recent reports conclude that major responsibility for Ireland's banking crisis lies with the directors and senior management of the banks. Anyone who denies that has not read the reports or is being deliberately mischievous. The reports highlight a number of mistakes which were made. This largely confirms my previous assessment of the key factors which were relevant, which were as follows. Fundamental errors were made within the management of individual banks which led to excessive risk taking. Banks became too dependent on wholesale funding.
Emmet Stagg (Kildare North, Labour)
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On a point of order, will copies of the Taoiseach's speech be circulated?
Brian Cowen (Laois-Offaly, Fianna Fail)
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Yes, I understand they will be.
Séamus Kirk (Louth, Ceann Comhairle)
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The Taoiseach should continue.
3:00 am
Brian Cowen (Laois-Offaly, Fianna Fail)
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As a result, when the international credit market unexpectedly froze, the banks were vulnerable and in need of Government guarantees. Inadequate financial regulatory controls were implemented in Ireland and other international economies based on a mistaken view of governance within banks. There were property tax incentives in place over the period from the mid-1990s which, with the benefit of hindsight, should have been abolished many years prior to my decision in December 2005 to abolish them. Individuals were left in dominant positions within individual financial institutions for too long a period. There were stunning failures of corporate governance and not enough turnaround in management personnel in the institutions in question.
There was a failure to impose international stability risk assessments and protection systems which took account of the interaction of global financial systems. This was not a peculiarly Irish problem, as recent events in Europe have demonstrated. There was also a failure to implement more intensive compliance regulation of those financial institutions which were too big to fail. Auditors, regulators and governments all share part of this responsibility. The higher capital requirements on speculative property loans in Irish banks which were introduced at the start of 2007 should have been imposed many years earlier before the rapid escalation in property lending took place.
The lessons which have been highlighted in the independent reports have now been fully taken on board and policies implemented to ensure that a banking crisis can never happen again in Ireland. While the Government shares and accepts its responsibility for its role in these mistakes, it is noteworthy that many of its strongest critics were proposing measures, such as higher spending and the radical reduction or abolition of stamp duty, which would have made the position much worse.
In considering these two reports, I am fully aware that the Government's response to the banking crisis, while necessary, has not of itself been popular. There has been justifiable anger about the conduct of the banks and it is anger I share. I am, however, confident that the right calls have been made to deal with this distressing situation and I have noted that the Central Bank Governor, in his report, broadly confirms that.
The Government response to the banking crisis has involved taking ten actions - the guarantee of Irish banking liabilities; the establishment of NAMA; the appointment of a new Governor of the Central Bank and a new Financial Regulator; the integration of the new Central Banking Commission and Financial Regulator structure; the setting of higher capital requirements for Irish banks by the regulator; the requirement of banks to increase lending to the enterprise sector; the restriction on bankers' pay-----
Brian Cowen (Laois-Offaly, Fianna Fail)
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-----supporting the Garda and the legal system in their independent investigation and prosecution of any criminal actions in the banking sector; the introduction of a radically changed regulatory system; and new rules on bank directors and corporate governance.
The Governor's report demolishes a number of mistaken views that have arisen which some have used in an attempt to damage the Government. These include the incorrect suggestion that policy advice prior to the crisis suggested that banks were inadequately capitalised and that the property markets would collapse and that the Government ignored that advice; the mistaken view that a widespread guarantee of the Irish banking sector was not the correct decision; and the myth that the timing of the decision to nationalise Anglo Irish Bank resulted in significant losses for the taxpayer. Due to the the damage to Ireland's reputation caused by these misconceptions it is important to review each of these in turn.
I have previously argued that the balance of evidence and advice to the Government was that Irish banks had sufficient capital and that a soft landing to the property sector could be expected. While this advice proved to be wrong, the suggestion that the Government was advised differently and ignored this advice never had any truth whatever. I note also that the two reports confirm that the official advice to the Government both from the Central Bank and from the International Monetary Fund and OECD at the time was that the banks had sufficient capital to absorb the likely losses but that there were vulnerabilities and risks.
We now know grave mistakes were made in the judgment of the capital adequacy of the Irish banks and the assessment of future loan losses and on the outlook for the property sector. It is, however, important to note that no one in the independent authorities ever advised the Government that the capital requirements were not sufficient or that higher capital adequacy ratios should be imposed. This is now confirmed by the independent reports and in the Governor's report he notes that the language of successive advice given was too reassuring throughout.
The independent report by the Governor also vindicates the Government decision to introduce an extensive guarantee.
Joan Burton (Dublin West, Labour)
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No. The Government introduced a blanket one not an extensive one.
Brian Cowen (Laois-Offaly, Fianna Fail)
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In particular, his report noted that:
As regards the substance of the guarantee itself, it is hard to argue with the view that an extensive guarantee needed to be put in place, since all participants rightly felt that they faced the likely collapse of the Irish banking system within days in the absence of decisive immediate action. Given the hysterical state of global financial markets in those weeks, failure to avoid this outcome would have resulted in immediate and lasting damage to the economy and society.
An issue, however, raised by the Governor's report relates to the merits or otherwise of including subordinated debt holders in the initial guarantee. The Governor's report indicates his views that the inclusion of existing subordinated debt in the coverage of the guarantee likely increased the potential share of the total losses borne by the State. He, however, acknowledges that subordinated debt holders have suffered losses, given the buy-backs that have occurred at discounted prices.
The Governor notes that in making this decision, considerations by the Government included the fact that:
...since many of the subordinated debt bond holders were also holders of Government Paper, their exclusion could adversely affect Ireland's debt rating. There was also concern that anything short of a comprehensive, simple to understand concept might cause confusion when markets opened and undermine the effectiveness of the Government's action. CBFSAI representatives did not challenge these propositions.
The decision to include Anglo Irish Bank in the Government guarantee has been one which has been a subject of understandable and critical debate.
The Governor's independent report points out:
There can be little doubt that a disorderly failure of Anglo would, in the absence of any other protective action, have had a devastating effect on the remainder of the Irish banks. Given the other banks' reliance from day to day and week to week on the willingness of depositors and other lenders not to withdraw their funds, and the certainty that those lenders would infer from the failure of Anglo that all the other Irish banks might be in a comparable situation, in all likelihood the main banks would have run out of cash within days. So either Anglo's disorderly bankruptcy had to be avoided or protective measures taken for the rest of the system, or - as was decided – both.
The Governor's report also deals with the decision not to proceed with the nationalisation of Anglo Irish Bank on the night of the guarantee. He indicated that two questions are raised. First, should policy makers have had a greater sense that Anglo was facing not only a liquidity but also a potential solvency problem? The answer is probably "Yes". The second was whether nationalisation of Anglo on 30 September – compared with its nationalisation five months later – would have made a significant difference to the overall cost of the bank bailout to the taxpayer. Here the Governor indicates that the answer is "Probably not".
The second element of the Government's plan is to restore order to public finances. Once again, people can have confidence that Ireland is back on track. The good news is stability has been restored to our public finances and we have made a fiscal correction of 5% of GDP in 2009 and 2.5% in 2010. Without these measures, our budget deficit would have ballooned to 20%. Today we are held up as an example and people are talking about the Government's resolve and capacity to deal with problems we have been confronted with. There is no room for complacency and we must persevere with the agreed deficit reduction programme over the coming years.
Confidence in Ireland is rising and the decisive action we took means our economic outlook is better than would otherwise have been the case. The ESRI has predicted that growth will return to the economy in the second half of this year and the European Commission is predicting that Ireland will grow at double the eurozone average next year. The markets too can see this. The Government's decisive action has brought us credibility. This credibility is reflected in our reduced costs of borrowing, which is crucial to keep the country running.
Money markets remain difficult and we must be constantly vigilant in this regard. This recession has changed the financial world. The lesson we need to take from it is that we are in a competitive global market and soft option solutions are not going to provide the basis for sustainable growth and the improvement of living standards we seek for the people.
As a former Minister for Finance, I want to respond to the criticisms of fiscal policy in the banking reports and especially where this relates to the role of property-based tax incentives. I want to emphasise that prior to the crisis, the Government took action to reduce the vulnerabilities of the economy to the property market, although I fully accept that in hindsight, it was not sufficient. The independent reports identify four main areas where actions were taken as follows.
These are the decisions in the budget I presented to Dáil Éireann in December 2005 to abolish a very wide range of property-based tax incentives; the refusal by the Government to abolish or dramatically reduce stamp duty; the decision of the regulator at the start of 2007 to increase the capital requirements on banks for speculative property lending from 100% to 150%; and the decision by the Government to allocate every year 1% of GNP into a National Pensions Reserve Fund. Without these actions the crisis in the Irish economy would have been far worse and I believe this is consistent with the analysis of causes contained in the two independent reports.
It is worth emphasising, in considering the role of various incentives given to the construction sector in contributing to the problem that in presenting the 2006 budget in December 2005, I decided to immediately restrict the use of property-based tax incentives by those on high incomes. I introduced for the first time in that Finance Bill a measure to ensure that such taxpayers were no longer able to use property tax incentives or other measures to reduce their tax bill in any year below a certain level. I subsequently announced the most radical abolition of property-based tax incentives made by any recent Minister for Finance. I did this because I was concerned that these incentives were contributing to an overvaluation of property with resultant vulnerabilities. This decision did not gain favour with many interested parties in the property market and it also represented a decisive policy shift because over a long period, successive Governments of all political persuasions had added more new property incentives rather than engage in a wholesale abolition of existing incentives.
I also abolished the property based incentives for the general rental refurbishment scheme. Similarly, the tax relief which was available for interest on loans taken out to acquire an interest in property rental companies was abolished for all new loans taken out after 7 December 2005.
The Government accepts that there are independent policy lessons to be drawn from our experience and, in particular, we accept those set out in Part IV of the Regling and Watson report. I agree with the assessment in the two reports that a more restrictive fiscal policy would have assisted in slowing the economy. Hindsight is always clear and clearly we would have taken such a course if we had known of the scale of the property collapse which was facing the country. I deeply regret that.
P J Sheehan (Cork South West, Fine Gael)
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Blame those in the Galway tent.
Brian Cowen (Laois-Offaly, Fianna Fail)
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The Regling and Watson report, in its consideration of the sources of some of the issues that arose for the economy during that decade, points out in some detail that joining the euro and not having access to an exchange rate policy - in the context of an open economy such as ours, which enjoyed substantially higher growth rates than those that obtained in other parts of the euro area - was an important factor in trying to deal with the situation.
We must all be honest with the people in respect of this matter because history is being rewritten at present.
Terence Flanagan (Dublin North East, Fine Gael)
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It is being rewritten on the Taoiseach's side of the fence.
Brian Cowen (Laois-Offaly, Fianna Fail)
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Let us be clear about this matter and engage in a civilised debate about it. During the decade to which I refer, demands that were made in this House in respect of increased spending in a range of areas, capital and current, are there for all to see. What those demands reflected were the raised expectations of our people who saw, for the first time, a country that had finally come to grips with the historic problems of under-employment and under-investment.
Pádraic McCormack (Galway West, Fine Gael)
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What is the position now?
Brian Cowen (Laois-Offaly, Fianna Fail)
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Does that in any way suggest that we were intent on being irresponsible in respect of any of these matters?
Shane McEntee (Meath East, Fine Gael)
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The Government did not tell the people the truth. It bought successive elections.
Brian Cowen (Laois-Offaly, Fianna Fail)
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In the context of framing a budget, any Minister for Finance - this was the position for all of my predecessors and it will continue to apply in respect of my successors-----
P J Sheehan (Cork South West, Fine Gael)
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Most of the Taoiseach's predecessors as Minister for Finance were from Fianna Fáil.
Brian Cowen (Laois-Offaly, Fianna Fail)
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-----must consider three main factors, namely, the level of resources available; projections regarding how the economy is expected to develop; and societal needs, particularly in respect of the matters in respect of which action must be prioritised. Successive Ministers for Finance - Members may consult their budgetary statements for as far back as they wish to go - have always set out the macro-economic position and the vulnerabilities and downside risks. Those are the facts of the matter.
I wish to make it clear to the House, in an honest and open manner, that I regret and am sorry about the outcomes that have come to pass. However, let no one suggest - and everyone should be fair and reasonable about this - that there were people in this House who predicted the imminent financial and economic collapse that occurred in the developed world in 2008. Let us all be fair to each other.
Alan Shatter (Dublin South, Fine Gael)
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The Taoiseach is back to the Lehman Brothers defence, which has been completely discredited in both reports.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Shatter should allow the Taoiseach to continue.
Brian Cowen (Laois-Offaly, Fianna Fail)
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I emphasise that I am not in any way trying to abdicate my sense of personal responsibility or my responsibility as a Minister in respect of any work that I have done.
Alan Shatter (Dublin South, Fine Gael)
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The reports clearly indicate that the crisis was home-grown.
Brian Cowen (Laois-Offaly, Fianna Fail)
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As stated previously, I will not accept that there was bad faith on my part in respect of doing the job to which I refer. I am prepared to engage in democratic debate on the political choices or decisions that have been made. However, I am not prepared to accept that others who at the time described my budgets as being measly, Scrooge-like or hopelessly inadequate can now suggest that we were spending too much during the period in question, when it is clear that the demands from the Opposition benches were to the contrary. The record shows that contemporaneous fact.
Bernard Durkan (Kildare North, Fine Gael)
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That is total rubbish.
Shane McEntee (Meath East, Fine Gael)
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Fianna Fáil hid the truth. That is why it stands at 17% in the opinion polls.
Séamus Kirk (Louth, Ceann Comhairle)
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The Taoiseach, without interruption.
P J Sheehan (Cork South West, Fine Gael)
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What about the involvement of those in the Galway tent?
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy P. J. Sheehan should allow the Taoiseach to proceed, without interruption.
Brian Cowen (Laois-Offaly, Fianna Fail)
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I am of the view, therefore, that those who proposed broadly similar fiscal policies in their election manifestos and policy position papers and others who lobbied for these and even more expansionary fiscal provisions also have cause to acknowledge those facts. The prospective budgetary positions set out by the various parties in the House prior to the most recent general election, from which we derived our mandate - in that context, the Government intends to spend its full term dealing with the issues with which it is confronted on a daily and weekly basis - confirm that the optimism which existed in respect of the economy was shared by all.
Bernard Durkan (Kildare North, Fine Gael)
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Created by the boom.
Brian Cowen (Laois-Offaly, Fianna Fail)
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The fiscal policy that was outlined-----
Brian Cowen (Laois-Offaly, Fianna Fail)
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-----by the Opposition parties during that campaign, when we had an opportunity to go to the people and outline our plans for the future-----
Shane McEntee (Meath East, Fine Gael)
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The Taoiseach did not tell them the truth.
Brian Cowen (Laois-Offaly, Fianna Fail)
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------were less restrictive on the Opposition side than they were on the Government side of the House. That may well sound to be an unusual situation-----
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Who is rewriting history now?
Séamus Kirk (Louth, Ceann Comhairle)
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Please allow the Taoiseach to continue without interruption, please.
Brian Cowen (Laois-Offaly, Fianna Fail)
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------but the facts and analysis of the time in relation to the policy positions we set out confirm that. What I am saying in this attempt to rewrite history is not in any way to dilute my sense of responsibility, which I accept and share with many others in relation to this report and other reports.
Alan Shatter (Dublin South, Fine Gael)
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The Government left the public finances entirely dependant on taxes from the sale of property.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Shatter, please allow the Taoiseach to continue without interruption.
Brian Cowen (Laois-Offaly, Fianna Fail)
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I want to make it clear to the people that it is not right in the context of-----
Alan Shatter (Dublin South, Fine Gael)
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The Government destroyed the economy of this State and is now trying to-----
Brian Cowen (Laois-Offaly, Fianna Fail)
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------a genuinely honest debate in regard to how we deal with the problems that beset this country to continue to come into this House and suggest that history was different then and that one now has the opportunity to rewrite that history. That serves no purpose. It is also intellectually dishonest and takes away from the credibility of those who wish to come and advocate a way forward in the context of the very different situation we find ourselves in today.
Bernard Durkan (Kildare North, Fine Gael)
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That is the problem: credibility.
Brian Cowen (Laois-Offaly, Fianna Fail)
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Fundamental errors in projections were made by the Central Bank, the IMF, OECD and others. As Messrs Regling and Watson state, the true burden of responsibility emerges as quite broad and extends to insufficiently critical external surveillance institutions. Fiscal decisions were taken in the context of abundant revenues, positive projections for growth and societal needs. It has been further suggested that there was a sense of irresponsibility in that we were not prepared to deal with our debt position either. We reduced the debt significantly during those times.
Brian Cowen (Laois-Offaly, Fianna Fail)
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We had an opportunity for a capital programme funded by cash.
Alan Shatter (Dublin South, Fine Gael)
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The Government ratcheted up public expenditure.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Shatter, please. One speaker at a time.
Brian Cowen (Laois-Offaly, Fianna Fail)
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That was the situation in which we found ourselves at that time.
Bernard Durkan (Kildare North, Fine Gael)
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The Government robbed the country in the process.
Alan Shatter (Dublin South, Fine Gael)
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The Government ratcheted up public expenditure.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Shatter please allow the Taoiseach to continue without interruption.
Brian Cowen (Laois-Offaly, Fianna Fail)
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The investments we made were not wrong in that respect. On the contrary, almost all were necessary and worthwhile. It is especially important to note that the tax revenues raised during those years were used to engage in unprecedented capital investments to provide key infrastructure such as roads, public transport projects, schools and third level research facilities. Infrastructure has greatly increased our productive capacity and will be essential in returning the economy to a sustainable growth rate when global conditions improve. These investments benefit the quality of life of our citizens and strengthen the prospects of recovery.
The report suggests that we should have had a totally counter-cyclical policy. I understand the macro-economic theory behind this but I know also, as a politician and public representative, that in the context of the debate that was being had in this House by public representatives of the people, many were asking, and rightly so, if not now, when are we going to deal with some of these historic under-investment problems in terms of education, health and social welfare and improvements in our pension provisions for our people? I do not suggest that this allows people to consider, based on how things developed subsequently, that one would not look back with the benefit of hindsight and would, if one could reasonably expect this was going to happen, have pursued a more restrictive fiscal policy in the previous years.
Shane McEntee (Meath East, Fine Gael)
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The Government was told it would happen.
Brian Cowen (Laois-Offaly, Fianna Fail)
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Let us remember that the context of the debate we were having in this House was quite to the contrary.
Shane McEntee (Meath East, Fine Gael)
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The Central Bank warned of it.
Séamus Kirk (Louth, Ceann Comhairle)
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The Taoiseach without interruption, please.
Brian Cowen (Laois-Offaly, Fianna Fail)
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We recorded budget surpluses in ten of the 11 budgets about which I speak
Shane McEntee (Meath East, Fine Gael)
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You all bowed to former Taoiseach, Deputy Ahern.
Brian Cowen (Laois-Offaly, Fianna Fail)
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We used money to more than halve the national debt as a percentage of GDP, from 64% in 1997 to 25% in 2007. If the assets of the National Pension Reserve Fund are taken into account, the net debt position at the time I ceased being Minister for Finance, was approximately 12% of GDP. This undoubtedly helped slow the growth rate of the Irish economy from what would have applied had we used the funds to either increase public expenditure or reduce taxes as argued by others at the time. This is now allowing us to borrow to help us through a very difficult period. The policies now being espoused by Fine Gael and the Labour Party are more about chasing popularity than confronting reality. At its conference in March, Fine Gael indicated that it would be willing to make a €2 billion adjustment in the 2011 budget. That approach puts the party in conflict with the adjustment of €3 billion for 2011, agreed with the European Commission. The Labour Party has called for an increased fiscal stimulus in the economy that would simply enlarge our deficit further and call into question our ability to continue to access continued funding. Were the Opposition to implement such proposals they would decimate the hard won credibility the country has gained internationally. Adopting such a budgetary stance would undermine the country's ability to pursue our economic strategy internationally and our economic recovery.
With regard to the need to regain competitiveness and the creation of jobs, people can also have confidence that Government is working. The good news is that prices are falling and competitiveness is being restored in Ireland. Between 2009 and 2011, it is expected that our unit labour cost will have fallen by 12% and consumer prices are already down by 2.5% this year.
Emmet Stagg (Kildare North, Labour)
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I raise a point of order. The time of other Members is being used by the Taoiseach.
Dermot Ahern (Louth, Fianna Fail)
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The Opposition do not want to hear what the Taoiseach has to say.
Séamus Kirk (Louth, Ceann Comhairle)
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I have displayed flexibility of all these occasions. The same flexibility will be applied to other Members.
Brian Cowen (Laois-Offaly, Fianna Fail)
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How much time have I left, a Cheann Comhairle?
Brian Cowen (Laois-Offaly, Fianna Fail)
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I do not wish to take up any other Member's time. I am simply outlining that the investments we continue to make are within the budgetary policy we are now pursuing. The country wants the Government to move on to deal with the crises and problems of today. The people do not believe we should spend the next three years dealing with the previous three years or ten years. There are committees in the Oireachtas and other processes, such as commissions of investigation, which can deal with these matters in a time-limited and cost-effective way. The Government has no difficulty dealing with those issues in whatever way is required.
In every one of the issues being dealt with by the Government and which the confidence motion addresses, we have taken the correct decision and made the right call. The reports confirm that to a far greater extent than the Opposition contends. Work remains to be done by Government in the coming months and years and for the remainder of our term of office. That work will enable us to go back to the electorate for confirmation that the Government did its duty as it saw it, in the midst of the biggest crisis we have seen, probably in the history of the State.
P J Sheehan (Cork South West, Fine Gael)
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When will the Taoiseach go back to the electorate?
Enda Kenny (Mayo, Fine Gael)
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Dáil Éireann does not have confidence in the Taoiseach, Deputy Brian Cowen.
Dick Roche (Wicklow, Fianna Fail)
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Fine Gael has no confidence in Deputy Enda Kenny.
Enda Kenny (Mayo, Fine Gael)
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This motion of no confidence was triggered by the language, extent and depth of the two banking reports. The verdict is in. The evidence has been gathered. The analysis has been made. The conclusion of the two recent reports into our economic crisis is devastatingly clear. Deputy Brian Cowen is guilty of creating an economic disaster that will forever carry the logo, "Made by Fianna Fáil." If he had any integrity he would already have resigned. If he had any respect for the people whose lives he has destroyed he would already have called a general election. However, for him the supreme political virtue, the only virtue, is loyalty to party. He puts that before loyalty to country and people. That is the Fianna Fáil way, but it is not my way.
I stand here today, on behalf of the people whom the Taoiseach has chosen to ignore, to accuse him in their name. I accuse the Taoiseach of being one of the chief architects of our economy's destruction and of condemning our people to a lost decade of unemployment, misery and emigration. I accuse him of hijacking our Republic and handing it over to a toxic circle of bankers, developers and speculators who, like a cancer, have sought to destroy our Republic from the inside out. I accuse him of attempting to deceive the Irish public about the causes of this crisis and his own responsibility for it.
Just over four weeks ago, the Taoiseach delivered two 7,000 word speeches defending his economic record. These speeches can be summarised in four short words, "it's not my fault". That has been the mantra for his entire political career and for the careers of many of his Fianna Fáil colleagues.
When he was Minister for Health, he insisted that his abject failure to reform and improve our health services was not his fault. Working in that Department, he explained, was like working in Angola. When his policies as Minister for Finance helped destroy our economy, he also denied all responsibility. He accepts responsibility for his actions but in doing so he is not prepared to do the necessary and put the matter to the country. It was, he argued, the fault of officials who gave him bad advice or of organisations like the IMF which failed to warn him. He even claimed it was the fault of the Opposition. When he became Taoiseach and our banks collapsed he very quickly identified the fall guy. It was not him or any of his failed policies. It was all the fault of Lehman Brothers. The pattern is clear. The Taoiseach is never there when there is a problem. He is never responsible when there is a failure. He is never to blame when things go wrong.
In all of this, he has shown himself to be a true disciple of his mentor, guide and predecessor, Deputy Bertie Ahern, a man who believed that all the cribbers and moaners, as he called them, should simply commit suicide. He appointed Deputy Cowen as Minister for Finance because he knew he would do whatever his leader required of him. How right he was. From the moment Deputy Cowen became Minister for Finance he did his master's bidding and unleashed a series of reckless policies designed to do one thing and one thing only, to keep Fianna Fáil in power. Deputy Bertie Ahern said his ethics consisted of getting into office and staying in. The record is clear and cannot be denied, even by the Taoiseach. He deliberately over-heated the economy and deliberately pumped up the property bubble.
Over his four budgets, from 2005 to 2008, he increased spending by a massive 51%, more than twice the rate of growth in the economy. To finance this massive spending surge he did everything he could to ensure the property bubble lasted as long as possible. In 2005 he decided to extend massive tax reliefs for property developers past the election in 2007 against expert advice. In 2006, at the peak of the housing boom, he even assured buyers that Irish house prices were based on what he called strong fundamentals.
In his devastating report on the banking crisis Professor Patrick Honohan makes it very clear that this was a home-grown crisis, created and nurtured by the Government. Professor Honohan says, "Macroeconomic and budgetary policies contributed significantly to the economic overheating .....This helped create a climate of public opinion which was led to believe that the party could last forever." That was the impression coming from the Galway tent year after year.
In their report, Klaus Regling and Max Watson also make it clear that the banking crisis "was in crucial ways home-made" and that official policies and banking practices added "fuel to the fire." The report said, "Fiscal policy, bank governance and financial supervision left the economy vulnerable to a deep crisis, with costly and extended social fall-out". How true those words are. By mid-decade "financial stability analysis should have sounded alarm bells loudly." Those alarm bells were ringing for a long time. The Taoiseach claims that no one shouted stop as he set us on the path to ruin, but he knows that is not true. As far back as 2005, the International Monetary Fund told him that house price overvaluation in Ireland "could not just be explained by economic fundamentals". The ESRI warned him that a collapse in the housing market could have "serious" short to medium-term effects on economic growth. As The New York Times looked on in disbelief at what was happening here, under the direction and stewardship of the Taoiseach, it could only describe Ireland as the "wild west of European finance". In 2006, The Economist warned that Ireland was experiencing "the biggest bubble in history". In the same year, Professor Morgan Kelly projected that property prices could fall dramatically, with catastrophic consequences for the banking sector:
We have spent the last five years learning to believe that exports and competitiveness do not matter, and that we can get rich by selling houses to each other. We are likely to spend a painful few years as we unlearn that lesson.
How right Professor Kelly was. In his report, Professor Patrick Honohan lays bare the bunker mentality into which the Government had retreated by 2007. He makes it clear that the conclusions of the financial stability report of that year were based on a "selective reading of the evidence". He states:
The central conclusion regarding a 'soft landing' was not based on any quantitative calculations or analysis. This appears to have been a triumph of hope over reality. More generally, a rather defensive approach was adopted to external critics or contrarians.
The Government was not willing to listen to the warning signs or to heed the alarm bells. It decided to continue with the party as if it would never end. Professor Honohan demolishes the Fianna Fáil line that no one was questioning the Government's policies. He points out that "for years many observers had raised some concerns publicly or privately, albeit sometimes in coded form, about the sustainability of the property boom, which was indeed dramatic by international standards". Fine Gael consistently warned the Government that its mismanagement would lead to disaster. It ignored our warnings and our proposals, which would have halted the destruction.
Dara Calleary (Mayo, Fianna Fail)
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Fine Gael wanted to spend more money.
Dick Roche (Wicklow, Fianna Fail)
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We remember its policy on stamp duty.
Enda Kenny (Mayo, Fine Gael)
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We proposed that the cost of public sector benchmarking be paid for from real reform and productivity improvements, that the Government stop creating new quangos and cut existing ones and that all Departments be subject to annual efficiency reports.
Enda Kenny (Mayo, Fine Gael)
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We suggested that dubious capital projects like PPARS and electronic voting, the cost of which represented small change for some Ministers, be subject to published cost-benefit evaluations in order to avoid massive waste.
Enda Kenny (Mayo, Fine Gael)
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We proposed that the health bureaucracy be streamlined. The results of the Taoiseach's failure to listen to anyone who did not share his views are clear for all to see. This country has experienced the most expensive crisis of almost any country. Some €74 billion is being pumped into the banks, while credit is being denied to thousands of businesses. The Minister, Deputy Brian Lenihan, said that NAMA would create a wall of cash, but that has not happened. The Taoiseach knows it is not happening. Despite the spin about green shoots, small and medium sized retail enterprises are starved of cash and are barely hanging on.
Enda Kenny (Mayo, Fine Gael)
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Ireland has suffered the biggest loss of jobs of any OECD country, with more than 250,000 fewer people at work now, compared to 2007. More than 100,000 young people have left this country since 2008. We have experienced the biggest rise in our national debt. It has tripled in two years, under the stewardship of the Taoiseach, thereby forcing painful cuts in services, pay and investment. Every Deputy in this House has been confronted by public servants and people who are out of work who are worried about the cost of living and the standards they have to meet. Tens of thousands of houses are lying empty in tax-driven developments that were built in the wrong places. Some 200,000 young families find themselves trapped in negative equity. More than 30,000 of them are unable to service their monthly payments. Does any member of this Government understand the stresses and pressures faced on a daily basis by families that are unable to meet their mortgage repayments? Very little assistance is available to them. There has been no response of any consequence from the Government.
These bald statistics do not tell us the real story. They do not tell us about families struggling to survive on one income, or no income. They do not tell us about the lack of hope of those burdened with the scourge of unemployment. They do not tell us about the despair of the weakest and most vulnerable in our society, as the services they rely on are shut down. In recent years, how many times has Deputy Neville spoken about the tragedy of suicide, which was hidden for so long, coming to the forefront around this country as a result of social and economic pressure? There have been many such cases in this city and across the entire country. That is the legacy of this Government. It has failed to heed the warning signs, or to implement real action that would have steered the ship of State and the economy in a direction that retained services for our people, created career opportunities for them and allowed them to maintain a suitable standard of living so they could raise their families in a normal way. The legacy of the inaction of the Taoiseach and his colleagues in government is a society in which fairness does not exist. When I spoke recently to a woman who complained about the removal of services from her 13 year old child, who has been blind since birth, she asked whether there is an understanding of the gulf of unfairness in this country when people are allowed to walk out the gates of agencies with €1 million in their back pockets, approved for incompetence and backed by the Government. That is not fair in any society.
Enda Kenny (Mayo, Fine Gael)
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That is not the kind of country the Taoiseach should be conducting. However, he has condoned such instances.
Shane McEntee (Meath East, Fine Gael)
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They are still doing it.
Enda Kenny (Mayo, Fine Gael)
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Our economy has been brought to its knees. It is clear that fairness is not evident in the daily lives of our people. The lack of fairness in our economy is badly hurting every household in the land. Society has been torn apart and ruptured by social pressure and the consequences of the Government's actions. Many of these issues are the fault of the Taoiseach because he failed to direct the Government's actions as he should have. Those outcomes result directly from the Government's policies. For example, it allowed the banking system to run wildly out of control. As late as September 2008, the Taoiseach claimed:
The Irish banking sector has very well secured loans. It is my intention to ensure that the Irish taxpayer will not be held liable in any way for any deficit that might occur in the event of there being a problem in the future.
He said the Irish taxpayer would not be held responsible for any debt that might occur in the future. He should reconsider that in the context of the €22 billion that is being put into Anglo Irish Bank. A few months later, he told the Irish people that the Government would write any cheque that was required for the banks. That is exactly what it has done. It has written a cheque, on behalf of the Irish people, for almost €25 billion for Anglo Irish Bank and the Irish Nationwide Building Society, even though those institutions are, in effect, dead. Nothing illustrates better the toxic triangle that existed between Fianna Fáil, the developers and the bankers than the manner in which the Government has handled these two failed institutions. Under the nose of the Government, they were allowed to convert themselves from simple savings and loans institutions into State-backed gambling machines. In the case of Irish Nationwide, the machine was willing to approve loans of 100% or more to former Fianna Fáil Ministers, without even the pretence of going through the usual credit-approval process.
They were machines gambling with the people's money.
The evidence from the Honohan and Regling and Watson reports and from other sources is clear. It was the Taoiseach, when Minister for Finance, who authorised the Dublin Docklands Development Authority to transform itself from a planning body into a development agency, which borrowed massively from Anglo Irish Bank, resulting in taxpayer losses of up to €400 million. It was Fianna Fáil that appointed Seán FitzPatrick and re-appointed Lar Bradshaw to the board of the DDDA despite the obvious conflicts arising from their membership of the board of Anglo Irish Bank. The Taoiseach knew this and condoned it. He let it happen.
It was also the Taoiseach who had supper with the board of Anglo Irish Bank in 2008, just before the bank's shares were placed with the golden circle of investors and the bank began to lose its deposits. Does anybody in the country believe that the guests talked about football and the weather at that fine supper? It was the Taoiseach and his Minister for Finance who decided, in September 2008, to guarantee not just depositors but risk investors in Anglo Irish Bank - a decision that cost the Irish taxpayer dearly and has been sharply criticised by the Governor of the Central Bank, Patrick Honohan.
The pattern is clear. At every point the Taoiseach did all in his power to protect the bank and its big investors, regardless of the cost to the Irish public. His actions have not only damaged our economy but undermined vital public trust in the institutions of our democracy. Last week this House was strangled and prevented from discussing the banking crisis or the catastrophe of pregnant women being told their foetuses had died. The House was the only place in the entire country where discussion on these sensitive and important issues was not allowed, while the Government prepared for its press conference in order to achieve some sense of credibility through spin.
Phrases such as "the golden circle", "crony Government", "cosy capitalism" and "the Galway tent" are what the Minister for Finance described as the socio-political context in which the banking crisis occurred. Of course, the Galway tent and its attendees were central to the socio-political context. These phrases all describe the same thing: the take-over of our Republic by the rich and powerful, aided and abetted by the Government. A republic, as the Taoiseach well knows, is not just a form of government or a set of institutions. It is a living, breathing thing nourished by the dreams and hopes of its people. Its lifeblood is the trust that binds us, which allows us to say, "We are all in this together".
It is that central trust which the Taoiseach has destroyed. He has divided Ireland between the insiders, who manipulate the system for their own benefit, and the vast majority of our citizens, who are left powerless on the outside. He has divided Ireland between those at the top, who never take responsibility or face the consequences of their actions, and the thousands of hard-working families who must now pay the price for his mistakes and incompetence. In a republic, the people are supposed to be supreme. Based on that simple criterion, the Irish Republic, which this party was proud to declare, is now a republic in name only. The Celtic tiger is dead and the Government has failed to harness the Celtic spirit. It is that spirit, deep within our people, and not the mandarins of Merrion Street, that will eventually pull this country through. It is about time the Government turned its face towards the people and towards that community spirit, rather than turning its back on them as it did when it walked out of here last week.
We now stand, thanks to the Taoiseach and his Government, in the wreckage of a great economy. When this party, along with the Labour Party, handed over to Fianna Fáil in 1997, there was a budget surplus, with a thousand jobs being created every week, high productivity and low costs. The Fianna Fáil Government has destroyed all the potential benefit from this. Around this country, families live in a world of shrinking hopes, withered dreams and texts from Australia and America. Without vision, we perish; but the Taoiseach, together with all those who surround him on the Government benches, is without vision.
The people of Ireland yearn for leadership, direction and a sense of hope and possibility. They yearn for a roadmap to recovery. The Taoiseach has not even bothered to try to provide any of these. Back in 2004, a Member of this House defined good government as follows: "Good government does not mean responding blindly to headlines or being pressured into half-responses. It means sensible policies, soundly based, with realistic, achievable and prioritised targets". That Member was the Taoiseach, who now stands condemned by his own words. Based on his own definition of good government, he has failed and failed again. He has turned poor, unaccountable Government into an art form.
His answer to the banking crisis is to write whatever cheques are necessary to bail out professional investors in banks, leaving the country in massive debt. His answer to the fiscal crisis is to hike taxes and cut services, pay and investment, while ignoring the bloated structures of politics and Government. His answer to the competitiveness crisis is to encourage cuts in pay for low earners while ignoring the costs of services administered or regulated by Government. Whenever he is queried on his policies, he relies for endorsement on the very same banks, stockbrokers and institutions that he now blames for giving him the wrong advice as Minister for Finance. To paraphrase the playwright, the Government is barren as a brick.
As the architect-in-chief of our economic crisis, how can the Taoiseach come here today and ask this House to vote confidence in him? As the man who has consistently denied any major responsibility for our economic crisis, how can he claim that he has any moral authority to sit in that seat? As the man who helped destroy trust in the institutions of this Republic, how can he possibly ask the Irish people to place their trust in him? Why should they?
This goes beyond the mere confines of banks and fiscal policy. When I asked him in the House about his predecessor's conduct in taking payments while holding the highest office in the land, he said the former Taoiseach was "not incorrect". Did he not express full confidence in, and vote to retain in the Cabinet, a discredited Minister in the knowledge that he had submitted a sworn affidavit to the High Court which he knew to be false? These standards, and his actions, are unacceptable in any quarter, least of all in the highest office in the land.
There is only one honourable action open to the Taoiseach if he accepts responsibility for the decisions that have driven our economy onto the rocks. My challenge for the Taoiseach, if he wants to put this acceptance of responsibility to the test, is to go to the country. Let us have a general election, so that the people can give their verdict, whatever it might be, on of the actions of this Government, which has destroyed the hopes and aspirations of so many and now commands the support of a mere 12% of the Irish people.
Eamon Gilmore (Dún Laoghaire, Labour)
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I wish to share my time with Deputy Quinn.
Séamus Kirk (Louth, Ceann Comhairle)
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Agreed. We must have some ciúnas for Deputy Gilmore.
4:00 am
Eamon Gilmore (Dún Laoghaire, Labour)
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Has the Taoiseach no shame? I expected he would come in today and present a robust defence of his Government's performance and of his performance. I expected he would have the usual thump at the Opposition or anyone else he could find to blame. Frankly, the Taoiseach excelled himself with the self-serving nature of his contribution in opening the debate. He has provided us with half an hour of the most shameless speech I have heard in Dáil Eireann for a long time. This was the thickest exercise in hard neck politics I have heard in a long time. It was all about the Government, justifying its action and performance and term of office. I heard very little about the problems people are facing in this country. I refer to the 440,000 people on the live register, the highest number ever. Even in the worst of days ever, the 1930s and 1950s, it never reached a figure like that. Some 250,000 people lost their jobs since the Government was elected in 1997 and in many cases their redundancy money is now gone. They are trying to survive on social welfare payments that have been cut by this Government. I refer to the hundreds of businesses that have gone to the wall and the many more trying to survive. People working in them and running them tell me it has been months since they were able to take personal payment from their businesses. Families are trying to pay mortgages on properties in negative equity. Young people are graduating from colleges and are worried, as are their parents, about the prospect of getting employment. Pensioners are worried they will be next on the target list of this Government.
The Taoiseach tells us everyone else is to blame. He gave us a long list of the people to blame. The closest the Taoiseach came to accepting any responsibility was when he spoke about the two reports published last week and how they blamed Governments. Where did the Taoiseach get the plural? He has been in government for the past 13 years. He was Minister for Finance for four of those years and Taoiseach for more than two. There is no plural. When the Taoiseach says "Governments", he means his own Government and he must take responsibility for what he has done, which he has not accepted today. The Taoiseach has come in to ask the Dáil to vote confidence in him and in his Government.
I have no hesitation in saying the Labour Party will not do so. We will not vote confidence in the Taoiseach because, like the people of this country, we have long ago lost confidence in him and in his Government. We want Fianna Fáil and the Green Party out of government, we want a general election, we want a fresh start for the country and we want to move on as do the vast majority of the people in this country.
At one level, this is a parliamentary exercise. The Taoiseach says his mandate to govern comes from having a majority in this House. This is a challenge as to whether he continues to have that support. This is a challenge for each Deputy – whether in Fianna Fáil, the Green Party, or Independents - whether they stand by their narrow, personal or party interest or by the people who elected them.
Everywhere I go I hear people ask when I am going to get this Government out and when will an election be held and a new Government elected? That can be answered today. I can speak for all Labour Party Deputies. We want this Government out and a fresh start for the country. How do the Independent Deputies, the Green Party Deputies and the Fianna Fáil backbenchers stand? That is the most important question.
This is a representative assembly. Each of us here has a duty to represent the views of the people who elected us. The people want this Government out of office. Putting the question another way, if it were the people voting on this motion, what would be the outcome? If the people had a vote on this motion, they would vote by an overwhelming majority to get this Government out of office. The question is whether Deputies stand for themselves or for the people. Deputies cannot come in here at 8.30 p.m. and vote confidence in the Taoiseach and then go back to constituencies and try to distance themselves from that vote. Any Deputy who votes confidence in the Taoiseach and his Fianna Fáil-Green Party Government must take responsibility, as must the Taoiseach.
The reason people want change is clear. The verdict on this Government is in. The two reports on the banking crisis are a clear statement of the damage done to this country by Fianna Fáil. No matter how the Taoiseach reinterprets them, the reports are a clear indictment of Government policy. The people know who is to blame and they want change but the country cannot have a fresh start while this Government clings to power. For as long as Fianna Fáil remains in government, it will be pre-occupied with self-justification, with defending the record and self-preservation. I heard one Minister say at the weekend that he could not remember ever making a mistake. Apparently the Taoiseach cannot remember making any mistakes either. We simply cannot afford to have a Government so far removed from reality. We will not tackle our problems with a Government serving out its notice, clinging on to power in the faint hope that some kind of recovery will revive its political fortunes while the rest of us are expected to contract mass amnesia.
We need a fresh start and fresh hope. We need a Government focused on three core tasks – creating jobs, reforming the way this country is governed and bringing fairness into the management of our affairs. Economic recovery will not come on its own and it will not come by focusing exclusively on rescuing the banks and dealing with the public finances. We need a strategy for jobs and for economic growth. We need a Government that understands what is happening in the global economy and how Ireland can prosper within it. We need a Government that gets the idea that jobs and growth will not come from a hands-off, light touch approach but from offering leadership and direction and from rolling up its sleeves to create jobs in a new, low-carbon, knowledge economy.
What the global economy is going through is little short of a new industrial revolution. The power centres of the world economy are shifting, billions of people are being brought into the global trading system and there is spectacular technological change. The great recession is slowing these processes down but they will re-assert themselves as the global economy recovers. This new economy, the knowledge economy, presents great challenges but also major opportunities to countries that understand it and know how to harness it. It will bring change, not just to one or two sectors or high-tech firms, but right across the economy. We have to capture that change and harness it.
The Government talks about the smart economy but it does not act on it. The innovation task force made several good proposals but they have not been implemented. The Government talks about hard decisions but it is dodging the greatest challenge our country faces, namely, creating jobs. The Government has taken on board some Labour Party ideas, like the earn and learn scheme or energy conservation in homes, but with no force, drive or energy.
The Labour Party has been unwavering in its focus on job creation.
The Labour Party's proposal for a strategic investment bank is designed to meet the financing needs of innovative Irish companies, and to assist in financing the infrastructure they need to thrive. Using capital from the pension reserve fund, we can build a new institution that will focus directly on financing the new economy. It can help to deal with the impact of the banking crisis, but it is a long-term solution to a long-term need.
The Labour Party's jobs fund is designed to support this sustainable, knowledge economy. It is designed to be allocated outside the Estimates process, as part of our broader proposals for reform of public expenditure management. The jobs fund proposed by the Labour Party will provide additional resources to agencies that can deliver jobs. It will be there to finance PRSI exemptions for new jobs, training schemes, and new strategies for agencies, provided they can show the money will be translated into jobs.
Labour's "Just the Job" proposals on training and work experience are designed to meet the new needs of our workforce. Instead of proposing one big scheme, we have suggested a range of ideas to meet the needs of individuals, so that those who have no work can equip themselves to find new employment. In that way we will avoid the build-up of long-term unemployment that happened in the 1980s.
Not everyone will find a job in a high-tech start-up firm. Labour's sectoral policies, such as those for clean tech and tourism, are designed, therefore, to build up sectors of the economy where Ireland has natural competitive advantages. As a country, we have great resources of wind and wave that can be converted into clean energy, to meet our own needs and those of other countries. In tourism, we can enhance and develop Ireland's tourism product in a sector with a presence in every region that offers employment across a range of skills.
These are all Labour policy initiatives. They demonstrate that the knowledge economy is a progressive project. It cannot be delivered by a hands-off Government that believes its role in the economy is to get out of the way. That was the thinking that led to the disaster in the banking sector. The same ideology is blocking the Government from taking action now. What we need is a Government that understands the extent of the change that this new economy needs, and a public sector that is infused with the same spirit.
This is the second time in a generation that Ireland has been confronted by a profound economic crisis. It happened at a time when public trust and confidence in our public institutions was already damaged. It cannot go on. We must stop lurching from one disaster to the next. We have to change the way this country is run, beginning with a change of Government but also changing the way that politics works. Last week we saw our national parliament reduced to a farce. We had national and international events that could not be discussed because the Government ran away from the Dáil. That cannot go on. We need real reform of how the Dáil operates. We need a national parliament that meets at least four days a week, cuts out the long recesses and deals with relevant issues in a relevant way. More than that, however, we must ensure that individual citizens feel a far greater sense of involvement in the decisions that shape their lives. We need a more practical democracy that will bring back the people into decision making.
Labour's proposal for a constitutional convention is designed to review the functioning of our institutions, with the direct involvement of individual citizens. The Constitution belongs to the people and if there are to be proposals for far-reaching change they must come from a process that involves the people directly. We need to get on with the business of reforming the public sector as the Labour Party has long proposed. Examples include reforming the HSE and our proposal to open up recruitment in the public service and encourage movement between the public and private sectors. We also need to see private sector reform. Many of those who sat on the boards of Irish banks during the making of this crisis remain in place. The unduly deferential approach towards the banks identified by Professor Honohan still exists, in Government itself. Labour's "Never Again" proposals for reform of corporate Ireland include far more demanding and modern standards of corporate governance, an end to the system of " You sit on my board and I set the remuneration for yours", a whistleblower's act, and a break in the link between big money and politics.
We must also change the structures of economic governance and management. We need far greater openness about our public finances and far more scrutiny of the effect of Government decisions, especially in respect of taxation. The era of design-your-own tax incentives is over. We need new structures to identify emerging threats to the economy, and to subject economic forecasting to greater scrutiny. We should, therefore, establish an independent fiscal council to act as an external check on macroeconomic forecasts, the sustainability of public finances and the true cost of tax breaks. We cannot just pretend the crisis did not happen. We have to build in new checks and balances to make sure it does not happen again.
We live in an era of limited resources, but that does not mean we have to ration our values. There are certain basic principles that must guide us, such as the notion that health care is different from other services. Health care should be delivered efficiently and with a clear eye to value for money but it should not be driven by profit alone. There is something far more important, far more basic to the human condition and to who we are as a people, in how we care and how we die, than the bottom financial line.
I firmly believe that the future of health care in Ireland rests in the Labour Party's proposal for a system of universal health insurance, where all are treated equally and not in the out-moded, out-dated ideological reflex of this Government that wants to privatise the VHI. It has no mandate to sell off the VHI. The Labour Party will not do so. We will retain it as a building block of a new and better health insurance system.
Fairness demands that we do not inflict the cost of Fianna Fáil's mistakes on a new generation. Once again, this State has been shamed, when it could not even count the number of children who have died in its care. It is time to hold a constitutional referendum and to enshrine in our basic law the rights of the child. It is long past time that we made a fundamental commitment to the future of our children and of our country by tackling the problems of literacy and numeracy. The decision by the Minister for Education and Skills, Deputy Coughlan, to withdraw the services of specialist librarians who work in 20 of the most disadvantaged secondary schools in the State, is a callous act of unbelievable folly.
This moment must be to this generation what 1958 was to a generation before - a watershed moment when old ways and past failures were left behind, and fresh thinking was embraced. For generations the political choices offered to the Irish people boiled down to two versions of the same thing. Now there is a hunger for real change, and the Labour Party is ready to lead that change.
It is time for Fianna Fáil to go. It is time for a new start, and a new Government. It is time to set aside the politics of division. This is too small a country for setting neighbour against neighbour. The Labour Party's vision is of one Ireland, a country that pulls together to get through this economic disaster and afterwards works together to build a better and fairer future. It is of a country infused with fresh hope and with the core underlying idea that has driven the Labour Party for a century – solidarity.
This is a great country. Together, from the embers of this crisis, we can build a new and better Ireland if we have a vision of what can be achieved and the commitment to work together to achieve it. It is time for a jobs strategy for economic recovery. It is time for reform to revive and renew our institutions. It is time for fairness in everything we do. It is time to move on, together as one Ireland. However, to do so we need to be freed from the politics of the past and from a Government that is now preoccupied with justifying its past. We need to move on and that moving on can come only with the defeat of this Fianna Fáil Government, the holding of a new election and an opportunity being given to the people to chart their own future, democratically, in a general election.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Ruairí Quinn has almost 11 minutes.
Ruairi Quinn (Dublin South East, Labour)
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This is the second time in my political lifetime in this Chamber that I have seen the Fianna Fáil party bring this country to the verge of bankruptcy. I sat on these benches in 1977 when the triumphant Jack Lynch came in with his manifesto of economic illiteracy that believed we could borrow our way into the future in other people's currencies. That economy collapsed amid its own contradictions when Jack Lynch was ousted two years later. Then there was Mr. Haughey, clinging to power for reasons we now understand, literally giving money to everybody and anybody.
For those of us who are old enough to remember and for those of us who still have the scars, the crawl back through three general elections between 1981 and 1982 was a difficult time for everybody, but we did crawl back. Slowly but surely, through that very difficult period in the 1980s, we tried to get the country back on its feet again. It was not just people on this side of the House who did that; people on the other side of the House tried as well. They recognised that mistakes had been made and they had the honesty to recognise them and to deal with them.
When we went into Government with Fianna Fáil in 1992 and when we left office in 1997, I had the honour of being Minister for Finance. I had the responsibility and the courage to ensure that we would not try to buy the next election. As a consequence, the Taoiseach and his colleagues inherited the first planned surplus in over 30 years and the most competitive economy in Europe at that time, creating 1,000 jobs a week, with unemployment rapidly falling. The 1997 to 2010 period should have been a wonderful period of prosperity, of shared opportunity, of modest and prudent investment, but the Government blew it and I can give one iconic example of this.
One hundred years ago in this city and across the country, children were getting out of overcrowded tenement buildings in urban Ireland and poorly built thatched cottages in rural Ireland, with no running water, no decent construction, dampness and cold in the winter and walking to school, where they were housed and educated in classrooms that were in state-of-the-art buildings at that time. The Taoiseach knows them because they are part of our rural landscape. Those children got the best and were educated in the best physical surroundings that were available to them; better than anything they lived in at home. If we fast forward to today, the grandchildren of those people get up in warm beds in centrally heated houses, double glazed windows and patios, walk to their cars and are driven to school, where they are educated in prefabs.
A total of 100,000 children are currently in prefabs in this country, and that population is growing. The children who are born tonight will be knocking on school doors in four years' time. As it takes the Department of Education and Skills five years to process an application for a school extension, they will be knocking on the door of a prefab.
Why did this come about? The money was there. Fortunes were made. Builders could not get enough people at home to work and they had to import labourers from everywhere else. Money was not a problem and the frequent cry was "I do not care how much it costs, just how soon can it be built?"
I acutely remember listening to representatives from the chambers of commerce in Carrick on Shannon when they met me in a deputation in the spring of 1997 when I was on a visit to Sligo and Leitrim. They told me they wanted the urban renewal scheme for Carrick on Shannon and I asked them what part of the town did they have in mind. They told me I did not understand, that they did not want to discriminate within Carrick or between Carrick and the different villages and towns in Leitrim, but that they wanted Section 23 urban renewal for all of Leitrim. I had to bite my lip.
If one goes to that part of the country today, one will see the prefab schools and the empty buildings. The whole of the north Shannon region is a wasteland of buildings that will never become homes, because the Government of which the Taoiseach was a member, under Mr. McCreevy as Minister for Finance, gave that section 23 facility to the whole north Shannon basin.
The legacy of the Celtic tiger will not be the soundly built buildings in which our grandparents were educated, but buildings that we will have to plough back into the ground. If ever there was such conspicuous, wilful and criminal waste, then this is but one example. Time prevents me from citing many more, but we never heard a word about the wasted money for a generation that will never come back again. That money is gone, like the savings people had in bank shares which made up their pension. These were prudent, middle class people who were at an age where they could not buy proper pension plans for themselves and were advised to put their money in banks. They were not advised to do this for an appreciation of the shares, but for the dividend that was to be paid out. They are now impoverished, and who do they think of when they look at the despair around them because they cannot sell buildings that have lost their value and they fear old age.
Does the Taoiseach appreciate or understand the deep seated anger, disgust and contempt in which the people hold him and his colleagues? I had to visit Glasthule this morning on personal business. I was asked at the DART station there when I was going "to get them out". I was asked "how long more can we put up with them".
There is palpable anger, disgust and a despair that does not affect just the Taoiseach and the Fianna Fáil Party. It has infected us all. The Government has contaminated the republican democracy that is enshrined in this Chamber. As some Members of this House were crooked, contemptuous or lax in what they did, we have all been infected. That is the virus that has become Fianna Fáil. That is why it is unbelievable that the Taoiseach would even have the temerity to come into this House and ask that we vote confidence in him and his colleagues. There is a litany of waste and contemptuous dismissal, as the Minister, Deputy Dempsey showed by saying "What is €50 million?" for the voting machines that even Robert Mugabe would not buy.
Ruairi Quinn (Dublin South East, Labour)
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That money would transform schools across the country and could be spent in so many different ways. Yet it was a piddling sum according to the Minister, or just petty cash. The Taoiseach has treated taxpayers' money as petty cash and he has the temerity now to seek confidence from us.
The Taoiseach spoke earlier about policies he has delivered and said that the Government is now on the right course. How do we know we are on the right course? Is it because The Wall Street Journal tells us? How do we know that he is getting good advice or implementing it? Why should we trust or have confidence that the people who have blown the boom will restore it back to some degree of credibility?
The Government Deputies will escape in four or five weeks into the summer, and I can see in all their faces and in the weariness of the responses to questions that they cannot wait. However, the people will not go away. The Taoiseach does not even have the courage to call three by-elections. As he does not have that courage, the children of this republic are not getting the referendum to which they are entitled. This is happening not because of legal complexities or because the Government cannot afford the referendum, but because Government Deputies are so scared of their political futures with the result that children of this nation are not being cherished equally. They are not being cherished equally due to mean and miserable political cowardice that prevents the Taoiseach from going to the country.
The republican Oliver Cromwell gave advice to a decrepit, corrupt and now defunct government and Parliament in Westminster many years ago. I offer it to the Taoiseach: "In the name of God, go".
Brian Cowen (Laois-Offaly, Fianna Fail)
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I am not corrupt, Deputy Quinn.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Today should have been a day when the spotlight was solely on an appalling Fianna Fáil-led Government, which has been exposed as the principal cause of the recession in Ireland; it is a grossly incompetent Government. However, the pressure has been taken off one set of incompetents – Fianna Fáil - by the political ineptitude of another set of incompetents – Fine Gael.
The Irish people now know all too well where the political leadership of Fianna Fáil has brought the State and the economy. Where would the political leadership of Fine Gael bring us? With the Fianna Fáil Government on the ropes, Fine Gael has managed to deliver a knockout punch – to itself. We have no confidence in either Fianna Fáil or Fine Gael. However, the motion before us today is about the Taoiseach, Deputy Brian Cowen, and the Fianna Fáil and Green Party Government, and we have no hesitation in opposing this motion of confidence in them.
When a motion of no confidence in the Government was tabled this time last year, I stated the coalition of corrupt politicians, property developers and bankers brought this economy to its knees and they will not and cannot lead it into recovery. Those words have been vindicated by the reports on banking published last week. I doubt whether any Government during its term of office has been the subject of such a damning verdict on its stewardship of the economy over a prolonged period.
Fianna Fáil came to power with the Progressive Democrats in 1997 and it has been in office continuously ever since. It has shaped the economy in a way that no previous Government could have done because of its length of time in office and the massive resources at its disposal. Clearly, there is not a shred of credibility in its effort to shirk responsibility for what has happened to the Irish economy.
After a decade in office it brought the economy to a critical stage in 2007. In many ways this was a key year. The electorate was already disillusioned with Fianna Fáil but there was a sense that there might be economic problems ahead and so, during the course of the general election of that year, many wavering voters swung back to Fianna Fáil, seeking stability and continuity and believing that the so-called "Celtic tiger" could be prolonged.
In fact, the people were being deceived by the Government and the bankers. As the report of Patrick Honohan states, as late as 2007 the Central Bank was predicting a soft landing for the economy. Mr. Honohan's report states: "This appears to have been "a triumph of hope over reality". More generally, a rather defensive approach was adopted to external critics...".
It was in 2007, in the wake of the general election, that the re-elected Taoiseach, Deputy Bertie Ahern, lashed out at those he accused of "cribbing and moaning" and he wondered why they "don't commit suicide". It was a nasty little outburst that revealed the deep insecurity underneath the Fianna Fáil swagger.
There is a myth being peddled now by Fianna Fáil - we had evidence of it today in the Taoiseach's address - that all political parties in the Dáil were part of this collective self-delusion and encouraged the economic policies pursued between 1997 and 2007. I will let other parties speak for themselves but Sinn Féin stands on its record and during that period we repeatedly advocated a radically different direction for the economy. In the 2007 general election we were the onlyparty not promoting a policy of tax-cutting.
Let there be no mistake about it. Sinn Féin presented a real alternative approach and a sound analysis of the economy in every year since 1997 and pointed out years before it happened that the property bubble was just that, and would lead our economy and citizenry into a serious financial downturn. In successive pre-budget submissions from 1997 onwards we called for fundamental tax reform, the development of public services on a sound basis, wealth redistribution and housing policy based on social need and not the greed of speculators. The proposals of Sinn Féin and of other progressive voices were treated with contempt by the Fianna Fáil-led Government and – let it be recalled – by the vast majority of economic and political commentators who cheered on Ministers for Finance McCreevy and Cowen.
Before the property boom really took off, Sinn Féin identified the social and economic damage that would be caused by a housing policy based solely on the market. When the Housing (Miscellaneous Provisions) Act 2002 was being debated here in February of that year I stated:
[Government] housing policy, such as it is and as reflected in the Bill, relies almost totally on the market, and the profit motive of developers and the construction industry, to meet a massive social need. This policy has failed and always will.
The Bill provides a legislative basis for what is called social and affordable housing. The very terminology is an admission of failure. It reflects the reality that decent housing is beyond the affordable reach of huge sections of our society. The National Economic and Social Forum in its report on social housing concluded that "home ownership is now beyond the reach of most people on average incomes". ... In the marketplace, on which the Government relies totally for housing provision, what matters most is the price of houses as products for sale and as investments, not their value as homes for real people.
The Taoiseach has claimed credit for abolishing some of the property-based tax relief, which was done very late in the day. Again, in 2002, I stated:
In Budget 2002, the Government restored interest relief on rented residential property and reduced stamp duty rates for investors. This will worsen the housing crisis by increasing property prices.
In November 2000 we stated, in our pre-budget submission for 2001:
Sinn Féin's approach to the economy is distinctive, radical and rational. We are not prisoners of the unbridled free market thinking which has dominated the Fianna Fáil-Progressive Democrats Coalition. We reject their primary economic policy of cutting taxes in a way which has disproportionately benefited the higher paid.
To go back further, in November 1998, we pointed out that Irish banks enjoyed a return on their equity which was double the European average, making them among the most profitable banks in the industrialised world. It is clear now that greed and arrogance in Irish banks was inflated in such a situation and the ground was prepared for the property bubble and the lending spree to come. We called for an increase in corporation tax for Irish retail banks with the resulting tax funds earmarked for community and local development projects in the most disadvantaged areas throughout the State. We stated that ultimately, the banking sector should be nationalised so that the Irish people could be the true beneficiaries of this vastly profitable business. We know what happened. The only bank to be nationalised is the zombie Anglo-Irish Bank, the pet bank of the golden circle and now a parasite on the Irish economy.
In 1999, we called for no more reductions in corporation tax or capital gains tax. In 2000, we pointed out that the Government's agenda was to implement tax cuts that primarily benefited the highest incomes. While those on low incomes were rightly being taken out of the tax net, the Government refused to introduce wholesale tax reform.
On the banks we said:
It has been clearly shown that the private and public banking companies have at times been active participants in systematic tax fraud. Their activities were compounded by a regulatory system that, at worst, was unwilling to tackle tax fraud and was, at best, incompetent and unable to enforce the tax laws of the State.
That was in 2000. We pointed out the deficiencies and the almost entire failure of the regulatory system to address the financial institutions.
Crucially, in 2000 we also called for control of land prices with a statutory ceiling on the price of land zoned for housing to stop speculation and reduce soaring house prices, and we called for a constitutional amendment to allow for this if necessary. In November 2002, in advance of budget 2003, we called for a cost benefit analysis of the battery of tax reliefs set up by successive Ministers for Finance. That analysis was never done and untold millions were lost in property-based tax relief that fuelled the disastrous property bubble.
Speaking on the floor of this House on the Housing (Miscellaneous Provisions) Bill in 2004, my colleague Deputy Morgan said:
Rather than tackling the housing crisis through the provision of increased levels of social housing and taking real measures to tackle house and land prices, the government is appeasing bankers and developers by introducing measures which may result in over borrowing.
He went on to make another important contribution - if only the Government had listened. He said:
It is easy in a favourable economic climate to forget the dangers for those who over-borrow of any significant rise in interest rates. They will end up paying mortgages way beyond their means and facing the threat of repossession. If the house price bubble bursts, they will end up with negative equity.
Deputy Morgan made his contribution in 2004, years before that very event took place, but nobody listened. Today to listen to the Taoiseach one would think that nobody had ever sounded out these notes of caution, signalled these warnings or painted the reality of what was down the road as clearly as he did. Without doubt, the record of Sinn Féin's contributions here over all those years stands the test of any scrutiny.
In that same debate Deputy Ó Snodaigh pointed out that banks were giving mortgages of three times the salary of the principal earner and the amount of the salary of the second earner. He reminded the Government that these were the same institutions which had been involved in many scandals and ripped off the State time and again. Look at what it is doing today in 2010, six years later. It is ripping off the State and its citizenry daily. Let the record show that only eight Deputies voted against the Housing (Miscellaneous Provisions) Bill, the passage of which clearly helped to fuel the property bubble, the five Sinn Féin Deputies at that time and three other Members of the House.
We in Sinn Féin were not alone in calling for a different economic direction and warning of the consequences of Government policy, but all dissenting views were dismissed by an arrogant Administration that expressed supreme confidence in its own wisdom. Where is that supreme confidence now? It seems now that it was not in control at all and certainly was not responsible for the collapse. The Taoiseach has blamed the advice of the Central Bank and international factors. The Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern was the best of all when he said, "No one really is responsible. It just happened". I wonder how many times the dog ate the Minister's homework when he was going to school?
We know now who the culprits are but who is being made to pay the price by this Government? Not a banker or developer, speculator or so-called regulator has spent even a night behind bars. A handful have been removed from their positions but most of them have had a very soft landing. Mr. Patrick Neary, the chief executive of the Irish Financial Services Regulatory Authority, retired with a €630,000 pay-off. In addition, he is receiving an annual pension of €142,670. Mr. John Hurley was the Governor of the Central Bank until 2009 and received a payment on retirement of €525,000 and will receive a pension of approximately €175,000 a year. Mr. Eugene Sheehy was chief executive of AIB until 2009. He earned €2.1 million in 2007 and €1.15 million in 2008. His pension is some €450,000 a year. Mr. Brian Goggin was chief executive of Bank of Ireland until 2009. His pay peaked at €3.1 million in 2007 and his pension is approximately €650,000 per year. So much for soft landings. What about the crash landings?
The people who are being made to pay the price by this bankrupt Government are the 440,000 people unemployed in this State, the jobless young people whose dole has been cut, the social welfare recipients whose payments have been reduced, the carers whose already meagre support has been reduced further and the older people whose home help hours have been slashed. The price is being paid by children in our schools and by patients in our hospitals. It is being paid by families who are losing their homes or who are living in poverty and debt because they are saddled with huge mortgages, legacies of the Fianna Fáil property bubble. People are hurting and are living daily in anguish and fear of the future.
The tragedy is that this situation need never have developed if the right policies had been pursued but nothing has really changed and nothing will change under this Government. We have a Health Service Executive that has proven to be even more dysfunctional than we thought it was. How could it be otherwise? It was established to act as a buffer between the Government and, specifically, the Minister for Health and Children, Deputy Harney, who uses the HSE to insulate herself and her Cabinet colleagues from responsibility and accountability. The HSE was established to underpin a grossly inequitable two-tier health system. By the one act of maintaining such an inequitable and inefficient health system, the Fianna Fáil Government has forfeited any claim to have the confidence of the people or assert that it could expect it.
The atrocious stewardship of the Government and the HSE has been exposed yet again in the scandal of the deaths of children in State care and in the miscarriage misdiagnosis scandal. At this time, just to show that nothing has really changed, the Government has approved the appointment of the HSE CEO. He is the former CEO of the privatised Eircom with a salary greater than that of the Taoiseach or Cabinet Ministers at €322,000 per annum of public money.
Returning to the immediate issue that triggered this confidence debate, the banks, the two reports by Professor Patrick Honahan, and by Mr. Klaus Regling and Mr. Max Watson vindicate what we in Sinn Féin have warned about for years. We called for stronger regulation, caps on remuneration for bankers, an end to property inflation, a fair tax policy based on stable direct taxation, improvements to corporate law, a tax on speculative trading and counter-cyclical budget policies.
These reports show how Fianna Fáil Governments recklessly managed our economy and led us directly into the current financial crisis. They are an indictment of Government policy and particularly of the Taoiseach's role as Minister for Finance. They are also an indictment of the financial regulator, rating agencies and bankers.
Sinn Féin stood alone in our warnings among the political parties. Fine Gael and the Labour Party also wanted to feed the property bubble. Their call to lower direct taxes and to abolish stamp duty in 2007 would have added fuel to the fire.
The Government claims it has learned from its mistakes but it has not. One of the criticisms is that it followed a pro-cyclical budgetary approach and relied on unstable taxes. Pro-cyclical policy is Charlie McCreevy economics, that is, spend money when one has it and do not worry about saving. A counter-cyclical approach saves in the good times so that one can spend in the bad times, and spends in the bad times to re-inflate the economy. The Government is still pursuing these fundamentally flawed policies. Its pro-cyclical approach now entails cuts which intelligent economists say are wrong because they are deflating the economy.
The authors of the reports published last week were not permitted to investigate anything that happened in the banks subsequent to the night of the guarantee in September 2008. Since then the Government has nationalised one of the most corrupt banks in the world, Anglo Irish Bank; awarded a €1 million pension to the former CEO of Irish Nationwide, Michael Fingleton; established NAMA to buy €54 billion worth of bad loans that are probably worth much less; and recapitalised several banks to the tune of billions of euro, with the result that AIB is all but nationalised. Apparently inaccurate, if not fraudulent, accounts have been signed off at several banks by Government appointed directors and auditing firms that were subsequently awarded contracts with NAMA.
These reports could not be clearer in showing that the crisis is domestic and that the Government's excuses about the collapse of Lehman Brothers are spurious. They find, essentially, that the Government's economic policies caused the crash. The banking inquiry arising from these reports will start over the summer and run for six months but its terms of reference are already compromised by the Government because it is refusing to let the inquiry investigate its economic policies. It is instead appointing an Oireachtas committee, which of course will have a majority of Government Members, to report on its macroeconomic policies.
Mr. Honahan's report states that the bank guarantee was necessary and justified to prevent the banking system imploding but that the terms and conditions fell short. That is close to Sinn Féin's position. We accepted that action had to be taken on the banks to protect people's deposits but we wanted strict conditions. We urged that the guarantee be used as the first step to full nationalisation because we felt it was necessary to stop the banks imploding, based on the information put in front of us at that time. However, as the terms and conditions fell far short of what was required and amounted to a bail-out of the culprits, we voted against them. Between the proposal of the bank guarantee scheme and the presentation to this House of its terms and conditions, we met the Minister for Finance to lay out precisely what we required in return for our support. The Minister knew what he had to do but he failed miserably.
We called for the wind down of Anglo Irish Bank. We wanted taxpayers, not bondholders protected. We demanded that the main banks be taken into public ownership and turned into a State bank.
Regrettably the Labour Party took a totally short-term and contradictory position by opposing the guarantee without presenting an alternative. It did not state what it would have done when people found the next day they were unable to access their wages in their bank accounts. When it got around to calling for the nationalisation of the banks, which is a guarantee of sorts because the State takes on all deposits and loans, it proposed giving the healthy nationalised banks back to the private sector. Sinn Féin has been criticised by voices in the Labour Party since then but we will not accept criticism from that quarter about our position on the banks. Our position has been consistent and sound.
Sinn Féin would remove all the bank executives and directors involved in causing the crisis who are still in positions of power. We would also make sure the criminal aspects of what happened are pursued. We would take care of the ordinary citizens who were ruined by the banking crisis and are being forced to pay for it even though it was not of their making. That entails protecting those who are in negative equity, facing repossession and struggling with debt. It would include protecting viable businesses which are struggling to access credit. We would nationalise AIB and Bank of Ireland to create a State bank. We would wind up Anglo Irish Bank and let other banks fold if they cannot exist on their own and take their good assets into the larger banks.
We need rid of this rotten Government and we need a new beginning to Irish politics. That will not happen under a Government led by either Fianna Fáil or Fine Gael. For the first time it may be the case that a majority are prepared to vote for parties other than these two conservative blocs that have dominated politics for so long. We in Sinn Féin have a vision for a re-built Irish economy. This would be done through saving and creating jobs; reforming the tax system to ensure the wealthy are paying their fair share; eradicating waste in public spending, such as exorbitant executive salaries; reforming national and local governance; drawing up a realistic debt repayment structure on the basis of an economy that will grow if it receives investment; and fully regulating a new finance system with necessary secure measures like stronger capital requirements for banks and the supervision of credit rating agencies.
All of this would be done to build an economy that serves the people. It would provide the basis for a transformed, equitable and efficient health service, education with access for all, decent and affordable housing, sound social welfare support for everyone who needs it and security for our older citizens. That is our vision for the future and it is what we are committed to achieving. The first step must be removal of this Government and, therefore, we oppose the motion of confidence that it has so shamelessly moved. It is an absolute disgrace.
John Gormley (Dublin South East, Green Party)
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I am pleased to have an opportunity to speak in favour of the motion. On an occasion such as this I believe we, in Leinster House, live inside a bubble because instead of addressing real issues we usually have political jousting. People are fretting about their jobs and the economy.
Liz McManus (Wicklow, Labour)
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The Government should have made proper arrangements for business last week.
John Gormley (Dublin South East, Green Party)
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The publication of the Saville report today shows that we must confront issues directly, with courage and in a timely manner. I concur with Deputy Ó Caoláin that the report is a major issue which should be debated in this Chamber.
I will cut to the chase. The purpose of the Fine Gael Party's stance is to ask the Green Party and other parties to vote for a general election.
Tommy Broughan (Dublin North East, Labour)
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Yes, let us have a general election.
John Gormley (Dublin South East, Green Party)
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The question I must ask the Fine Gael Party is why would we want to do that?
Seán Sherlock (Cork East, Labour)
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Is that a rhetorical question?
John Moloney (Laois-Offaly, Fianna Fail)
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It is a friendly question.
Kieran O'Donnell (Limerick East, Fine Gael)
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Does the Minister need to be told the answer?
Brendan Howlin (Wexford, Labour)
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Please allow the Minister to continue without interruption.
John Gormley (Dublin South East, Green Party)
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The parties opposite have described my progressive planning legislation as "Stalinist" and would like to undo it. They have also stated that they wish to repeal my animal welfare legislation.
Brendan Howlin (Wexford, Labour)
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Please allow the Minister to speak without interruption.
Brendan Howlin (Wexford, Labour)
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I insist that Members are heard in the Chamber.
Jimmy Deenihan (Kerry North, Fine Gael)
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The Minister should not be provocative.
John Gormley (Dublin South East, Green Party)
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I am not being provocative but simply stating the facts. The parties opposite do not have any interest in protecting 32 raised bogs or in habitats. Last week, they indicated their opposition to a landscape conservation area. I also hear mutterings about civil partnership. The legislation on these issues is necessary and forms part of a progressive agenda.
Jimmy Deenihan (Kerry North, Fine Gael)
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It does not have anything to do with banking.
John Gormley (Dublin South East, Green Party)
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Sometimes I believe the Fine Gael Party, in particular some of its newer members, is much more comfortable with the politics of Ms Sarah Palin than those of President Barack Obama.
Kieran O'Donnell (Limerick East, Fine Gael)
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To which Deputies does the Minister refer?
John Gormley (Dublin South East, Green Party)
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I want to continue with our reform agenda. We have managed to reform the expenses regime, a long overdue measure, cap the number of junior Ministers and reduce the number of civil servants working in Ministers' offices.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Green Party managed to secure more ministerial positions for itself since entering government.
John Gormley (Dublin South East, Green Party)
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We want to go further by banning corporate donations and having a register of lobbyists. We also made two very good appointments in Professor Patrick Honohan as Governor of the Central Bank and Mr. Matthew Elderfield as Financial Regulator.
We hear much about the reports published last week. I remember Deputies opposite and members of the media arguing that they would be a whitewash.
Tommy Broughan (Dublin North East, Labour)
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We wanted a public inquiry.
John Gormley (Dublin South East, Green Party)
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They are not a whitewash but two incisive, hard-hitting reports which do not pull their punches.
Tommy Broughan (Dublin North East, Labour)
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They are an indictment of Government policies.
John Gormley (Dublin South East, Green Party)
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They clearly state that mistakes were made. The Taoiseach acknowledged the mistakes and took full responsibility.
The reports also make a number of important statements which have been ignored. The report of the Governor of the Central Bank, Professor Patrick Honohan, states that Anglo Irish Bank was systemically important and the guarantee was necessary. Mr. Regling stated before an Oireachtas committee that the steps the Government has taken since the guarantee have been absolutely necessary and the Government is doing the right thing. Nobody can argue with that.
Mary Upton (Dublin South Central, Labour)
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The Minister is being highly selective.
Seán Sherlock (Cork East, Labour)
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What did Mr. Regling say about subordinated debt?
John Gormley (Dublin South East, Green Party)
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We have taken very difficult decisions and worked conscientiously at all times to ensure the most vulnerable were protected. We protected education spending as well as expenditure on homelessness and regeneration in my Department.
Liz McManus (Wicklow, Labour)
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The Department is not building any houses.
John Gormley (Dublin South East, Green Party)
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We have closed the gap between rich and poor. Professor John Fitzgerald of the ESRI has stated that the measures the Government has taken have resulted in a greater transfer of wealth in the past two years than over the previous 25 years. This is something of which the Government can be proud.
Tommy Broughan (Dublin North East, Labour)
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What about the four years when the Taoiseach was Minister for Finance?
John Gormley (Dublin South East, Green Party)
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In terms of international capitalism, we need to be aware of some interesting developments taking place. I am in favour of the most recent calls by President Sarkozy and Chancellor Merkel for the introduction of a transaction tax. I have gone further in stating I favour the introduction of a Tobin tax.
If we were to imagine that the Fine Gael Party and Labour Party were in government tomorrow, what sort of brave new world would we have?Let us imagine that the Labour Party was in power tomorrow. Despite having majority socialist governments, people in Greece and Spain are on the streets because their governments have had to introduce cuts.
Liz McManus (Wicklow, Labour)
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Imagine if Deputy Ruairí Quinn were Minister for Finance. The Minister should remember the rainbow Government.
John Gormley (Dublin South East, Green Party)
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The Labour Party would have to deal with that reality, not in bogus economics in which it is argued that all will be fine, there is no problem and somehow one can make an omelette without cracking a single egg.
Tommy Broughan (Dublin North East, Labour)
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To whose reality is the Minister referring? Is it that of the Taoiseach?
John Gormley (Dublin South East, Green Party)
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Deputy Broughan should wise up and understand that this issue is not an easy one. I want to take the measures required to get the country back on the road to recovery. Establishing the efficiency review group is one such measure. For this reason, I will vote confidence in the Government.
Seán Sherlock (Cork East, Labour)
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The gospel according to John.
John Gormley (Dublin South East, Green Party)
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It is regrettable that I have again been constantly interrupted while trying to speak.
Jan O'Sullivan (Limerick East, Labour)
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The Minister asked us questions.
Tom Hayes (Tipperary South, Fine Gael)
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He provoked many of the interruptions.
Mary White (Carlow-Kilkenny, Green Party)
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I, too, welcome the opportunity to speak in support of the Government, which is making the right decisions. It is sorting out the public finances ahead of nearly every other country in the eurozone and rectifying the mistakes of the past, including taking measures to ensure strong banking regulation. The Green Party insisted that a person from outside the State be appointed to the position of Financial Regulator. We are also reforming the planning system, restoring competitiveness and increasing energy security.
The Government is making decisions of increasing importance to competitiveness and clean energy security. It is also increasing fairness and equality and environmental protection. The Green Party will continue to support the Taoiseach and remain in the Government for as long as such decisions are being made and important, sustainable policies are being implemented. Any self-respecting politician enters politics to have his or her policies implemented. This is what the Green Party is doing.
Not only is the Government implementing policies which are sustainable, we are ensuring that we undo the untold damage done by Opposition councillors over the years. For years, I sat on a local authority-----
Arthur Morgan (Louth, Sinn Fein)
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The Minister of State will back on it before long.
Mary White (Carlow-Kilkenny, Green Party)
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-----where I observed Fine Gael and Labour Party councillors rezone thousands of hectares of land which now lie in vast wastelands around the country.
Seán Sherlock (Cork East, Labour)
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Where was the Fianna Fáil Party at the time?
Brendan Howlin (Wexford, Labour)
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I insist that Members are allowed to speak without being shouted down. If interruptions continue, Deputies will be asked to leave the House. Allow the Minister of State to continue without interruption.
Tommy Broughan (Dublin North East, Labour)
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The Minister of State should speak the truth.
Mary White (Carlow-Kilkenny, Green Party)
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I am glad to have the protection of the Chair. In Carlow, zoning was provided for 6,846 units when we only needed 570 units. One then wonders about the boom and bust policies of councils led by Fine Gael and the Labour Party.
Brendan Howlin (Wexford, Labour)
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I ask Deputy Sherlock to desist from interrupting. He will have an opportunity to speak. This is the Minister of State's opportunity to speak and time is limited.
Seán Sherlock (Cork East, Labour)
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The Minister of State should tell us which councillors rezoned land. She should substantiate the charge she made against the Labour Party.
5:00 am
Mary White (Carlow-Kilkenny, Green Party)
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The banking inquiry reports published last week made little, if any, mention of the role of local authorities.
Although local authorities must take their share of the blame for giving irresponsible and unwarranted planning permissions which fuelled the housing bubble that led to part of the crisis we now face, I can assure the House that the Government is reforming the planning system and we will ensure that such catastrophic housing bubbles will not happen again.
There is a good quote that I have used many times in my political life: "The world isn't interested in the storms you encountered, but whether or not you brought in the ship." Coming from a seafaring family I know that rough seas make good sailors. On this side of the House we are good sailors and we are bringing the ship of State safely through.
Mary White (Carlow-Kilkenny, Green Party)
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Excuse me, my father was in the Navy.
Brendan Howlin (Wexford, Labour)
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Please allow Deputy O'Donnell to speak.
Jan O'Sullivan (Limerick East, Labour)
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Is it time to man the lifeboats?
Kieran O'Donnell (Limerick East, Fine Gael)
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I wish to share my time with Deputies Deenihan and Tom Hayes.
Kieran O'Donnell (Limerick East, Fine Gael)
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I believe the boat is well below the waterline. Deputy White is having considerable selective amnesia. When her party was in opposition it had a completely different viewpoint on how Fianna Fáil was operating in government. I want to be fair to the Taoiseach. We are speaking in respect of the two reports covering the period from September 2004 to early 2008, when the Taoiseach, Deputy Cowen, was Minister for Finance. Page 28 of Professor Honohan's report states:
Although Ireland's public debt level immediately prior to the crisis was low, the fiscal deficit and public sector borrowing surged quickly with the onset of the crisis. This was partly attributable to a rise in Government spending in GDP (after 2004) which became embedded in the system.
Not only did we have pro-cyclical budgets, but they were turbo-boosted by the current Taoiseach. The cyclical taxes that were property related represented 8% of our tax take in 1987 and in 2006 they represented 30%. According to Professor Honohan's report real expenditure rose by 11% in 2007 and 2008, which coincides with the general election year. I remember the then Minister for Finance, Deputy Brian Cowen, speaking on radio a week before the general election - when we were cautioning - telling the public there was not a problem and the fundamentals were sound. After the general election he spoke to the House about soft landings for months. The dogs in the street knew there were problems. Furthermore in his speech today he spoke about eliminating tax incentive schemes. He referred to "the decisions in the budget I presented to Dáil Éireann in December 2005 to abolish a very wide range of property-based tax incentives". However, they were not introduced for a further 2.5 years in July 2008, when the crash was happening. He gives the impression that he made all these decisions, but he procrastinated over eliminating the tax incentive schemes. We now have properties built - many of them sitting idle - and many people in negative equity. The consequences of negative equity are not just in terms of the house itself. It is affecting people's capacity to borrow and mobility of staff.
The facts speak for themselves. Three quarters of the fiscal and banking crisis was caused by local factors according to Professor Honohan's report. The Taoiseach did not give any evidence to those preparing either of these reports. He was Minister for Finance during the critical period. We need a proper commission of investigation to investigate the motivational aspects of why the Taoiseach, Deputy Cowen, as Minister for Finance introduced these aspects.
Two Green Party Members gave speeches - effectively on mature reflection. The problem is that neither of them once mentioned joblessness - the 400,000 people on the live register. What are they doing about that? They spoke about bogs and other matters, which are all very well in their own regard. The top priority should be jobs.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister, Deputy Gormley, stated that the Dáil is basically like a bubble. Real people are looking in. This is about jobs. It is about introducing policies that will create jobs.
Paul Gogarty (Dublin Mid West, Green Party)
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The Deputy should tell that to his own party.
Kieran O'Donnell (Limerick East, Fine Gael)
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We have already introduced a proactive policy on it and we would like to see that from the Government. The Taoiseach has no credibility in terms of moral suasion to continue to lead the Government and I hope Deputies will vote against the proposal.
Jimmy Deenihan (Kerry North, Fine Gael)
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The main criticism of the Government in the two reports was that it contributed significantly to the scale of the home-grown economic crisis because of the policies pursued in the past decade. This helped create a climate of public opinion that led people to believe that the party could last forever. The Honohan report concluded that "macroeconomic and budgetary policies contributed significantly to the economic overheating, relying to a clearly unsustainable extent on the construction sector and other transient sources for Government revenue". The report by Klaus Regling and Max Watson stated that alarm bells should have sounded when the property booms and lending trends in the banking sector expanded as far back as 2003. They added that vote-winning economic policies during the boom heightened the vulnerability of the economy and the then Minister for Finance, the Taoiseach, Deputy Cowen, began spending money while taxes were cut.
Both reports clearly state that the Government was at fault and that the Taoiseach, Deputy Cowen, as the then Minister for Finance should take responsibility for that. Even the present Minister for Finance, Deputy, Brian Lenihan, said during a radio interview on 10 June that he deeply regretted some Government decisions that led to the banking crisis. He admitted that wrong decisions were made. Speaking on "Morning Ireland" he said that the economy became much too dependent on tax receipts from the likes of stamp duty which created an asset bubble. He pointed out that during the property boom, there was no appetite for the property tax, which would have curbed some of the activity.
The two reports point the finger fairly and squarely at the Government that was in power at that time. The Regling and Watson report states: "Fiscal policy, bank governance and financial supervision left the economy vulnerable to a deep crisis, with costly and extended social fallout." We see that every day in health cuts, loss of hospital beds, welfare reductions, cuts in job-creation incentive, cuts in services for those with special needs etc. The Opposition had no option but to table this motion today. If Fianna Fáil was in opposition - which it will be soon enough - it would do the same thing. These are the most damning reports on any Government I have seen since I was elected to the House more than 23 years ago and the Government should take responsibility for them.
Tom Hayes (Tipperary South, Fine Gael)
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I am glad to have the opportunity to speak to this motion of confidence in the Taoiseach's leadership. I have no confidence in the Taoiseach, Deputy Cowen, in Fianna Fáil or the Green Party in the leadership they are providing for the country. As we speak approximately 500,000 people are unemployed. They are looking for jobs and looking for a way to contribute to their families and communities. They are looking for leadership from the Government to make this happen and are getting none of it. For months and years we have been pointing out the lack of action and ideas from the Government on job creation. I spoke on many occasions on the potential for job creation within our tourism, agriculture and food-production sectors to develop and grow in these difficult times. I have highlighted on numerous occasions the skill and expertise we have among those people who are forced to sign on. A stimulus package should have been created and brought to the House by the Government to help those 500,000 unemployed people.
Policies to promote job creation and lead people into starting their own small businesses are non-existent. The county enterprise boards which have provided a significant leadership role in allowing many small businesses to start up are starved of finance by the Government.
The recession has had a devastating impact on families in this country. People are struggling with money and lie awake at night in the fear that some of them will lose their homes. That is not an empty fear but real for thousands of people. It is not good enough for the Government, led by the Taoiseach, Deputy Brian Cowen and including the Green Party, to stand by and see so many people frightened in their homes, and fearing for their families and children. We can laugh and sneer in this House from time to time but I am opposing the motion because the Government has stood idle and not acted to help the thousands of people leaving our shores. Many young people are emigrating from every corner of the country, which is a national disgrace. People should not say they have the interests of the country at heart when this is allowed to happen.
Mary Coughlan (Donegal South West, Fianna Fail)
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I wish to share time with the Minister for Health and Children, Deputy Mary Harney.
Mary Coughlan (Donegal South West, Fianna Fail)
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It is a disappointment that on a day when we should be discussing the Watson and Honohan reports and getting on with the work of placing Ireland on a path of sustainable economic growth we are, because of political difficulties on the other side of the House, having to dedicate so much time to an unnecessary confidence debate.
Kieran O'Donnell (Limerick East, Fine Gael)
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The merits of the debate stand on their own.
Mary Coughlan (Donegal South West, Fianna Fail)
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It presents the Government with an opportunity not only to set the record straight but to reaffirm our commitment to recovery. The recovery we have in mind is not a short-term opinion poll recovery but real and lasting economic recovery about which the Irish people will pass judgment in the only poll that counts in two years.
The people know Ireland is on the correct path but they also know we have some distance to travel. To make the journey safely, the country needs a steady, determined and calm hand on the tiller. If events over the past number of days have crystallised anything for the people, it is that the leadership necessary for a nation in difficult times is available only on this side of the House. This Government can take the heat, hold firm in its course and will not lose its nerve as there is simply too much at stake.
Our debate this afternoon, which should have been on the merits of the reports, has been personalised to one of confidence in the man who over the past two years as Taoiseach has skilfully led Ireland through one of the most difficult and challenging periods in our post-independence history. The capacity of any Taoiseach to lead a team of Ministers, particularly a team formed from a coalition of political parties, and through that team lead the nation, is best tested during a period of significant challenge where difficult choices must be made. The leadership capacity demonstrated by Deputy Brian Cowen in this regard over the past two years is without precedent. It is evident in his ability to understand the silent majority and appreciate the importance in leadership of bringing the people with him to achieve enduring change and progress.
Deputy Cowen has mapped a course for this country that will not just see it recover from current challenges but see it achieve long-term and sustainable growth. The actions taken to stabilise our public finances, restore our competitiveness, rebuild our tax base and repair our banks, run in parallel with the strategic vision for the development of a smart economy investing in critical infrastructure, job creation and the productive sector, have been prioritised. In the past week crucial progress has been achieved in the reform of the public sector.
The leadership demonstrated by Deputy Brian Cowen and this Government on these critical decisions received only hollow support when it suited from the main party opposite and even less from its would-be partners in any alternative government. No Government can expect the Opposition to be cheerleaders on its behalf but there are times when the national interest must be put above political interest. If, at such times, a proposed course of action by a Government is not to be supported, the minimum the public deserves to know is the alternative Opposition course of action. At such critical times a simple cry of "We would not start from here" does not hold up to scrutiny as it offers no solution.
Leadership is about being honest with the public and setting out a position. Today, nothing but the question of leadership is on the minds of the Deputies directly opposite in the blue corner. The issue of leadership and a cohesive policy position is so lacking from the red corner that neither the Irish public nor the rest of us in Dáil Éireann knows where that party stands in a spectrum of issues. The most prominent recent example has been the party's position on the Croke Park deal but even in my own new portfolio dealing with education there appears to be a complete divergence of opinion emanating from within the party on issues of significant importance to the future direction of education policy.
The disingenuous nature of Opposition contributions this afternoon are no surprise as they reinterpret the words and sense of the banking reports to suit their political target of the day. There has been no scrutiny of their own policies or words during that period. We know there are significant lessons for us all to be learned from the course taken by our domestic banking sector over the past decade.
Support of the economic consensus and orthodoxy of the day was either explicit or implicit across all parties of the House and the proof of this was in the election manifestos. It exists in many of the statements on the record of this House, calling for more homes to be constructed, more stamp duty relief for home buyers and for more spending on each area across the remit of the Government.
Tommy Broughan (Dublin North East, Labour)
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What was wrong with that?
Mary Coughlan (Donegal South West, Fianna Fail)
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To suggest we have blown the boom is probably the most disingenuous accusation often made across the Opposition benches. We have faced into the challenges of today from a position of strength, coming from the good years when we invested smartly with purpose in Ireland's economic and social infrastructure and in our long-term future while also paying down national debt. That should not be forgotten.
On this side of the House we have overseen transformations in transport, water, communications and investment in education. I take umbrage at the comments on education by Opposition Members. When the Labour Party left the Department dealing with education we only had 300 special needs assistants but we now have 10,000. There has been significant investment in 1,490 schools across the country this year, benefiting very much from investments in summer work schemes and capital.
We know the path to recovery will not be easy and I am sure the political temperature will remain high in future. I am honoured to have worked closely with the Taoiseach, Deputy Brian Cowen and I believe in his competence in leading this Government and the country through the difficult and challenging tasks ahead.
Mary Harney (Dublin Mid West, Independent)
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Motions of no confidence, or in this case the motion of confidence tabled by the Government, are serious matters. It is not a game, show or a piece of political theatre very often described afterwards as a damp squib. The first duty on all of us as elected Members is to provide a strong and stable Government, and nowhere is this more important than during times of recession and economic difficulties.
Under the 1937 Constitution, the Dáil has elected 11 taoisigh. Some have been defeated in general elections, others have resigned during office while others have seen the writing on the wall that they did not command sufficient support and did not allow themselves go forward for election in this House. The House has never formally withdrawn its support from any Taoiseach heretofore and I do not believe Deputy Brian Cowen should be the first Taoiseach to have confidence formally withdrawn by this 30th Dáil.
I say this as somebody who has sat at the Cabinet table with Deputy Cowen for 13 years. At that table I see a man who puts the national interest first on all occasions. He advocates on behalf of the people of this country as he sees it. I do not see, as has been suggested here, a man who is in any way corrupt. Anybody aspiring to the office of Taoiseach knows that in Deputy Brian Cowen we have somebody who is straight, honest and hard-working. We have a person of substance and enormous courage.
As Minister for Health and Children I have seen this very clearly over the past two years. He was rock solid on the cancer control plan and even when there was political pressure to dilute the plan, he did not waver. Unlike others he did not march in his constituency for his local hospital but he put patients first.
Charles Flanagan (Laois-Offaly, Fine Gael)
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He would not have marched in Tullamore.
Mary Harney (Dublin Mid West, Independent)
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There was a pharmacy dispute last summer
Arthur Morgan (Louth, Sinn Fein)
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He allowed the Minister wreck the service.
Mary Harney (Dublin Mid West, Independent)
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I have just a short few moments to contribute so the Deputy should listen.
Arthur Morgan (Louth, Sinn Fein)
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She wrecked the health service.
Mary Harney (Dublin Mid West, Independent)
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When the dispute was ongoing Deputy Reilly predicted that hundreds of pharmacies would close and patients would die but the Taoiseach did not waver.
Arthur Morgan (Louth, Sinn Fein)
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The beds in hospitals have been closed.
Mary Harney (Dublin Mid West, Independent)
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Everybody acknowledges we have taken €100 million from the sector. There are other issues, such as the recent effort to reform health insurance to protect the old and the sick, as well as the fair deal scheme. There are many other examples. For too long party politics were often put ahead of patient safety.
I know of no Minister for Finance in any democratic jurisdiction who takes the advice of the outlier; instead, they take the advice of the consensus. The reality is that the consensus advice from all institutions and economic commentators was that the country would grow by between 4% and 5% annually. Fine Gael, the Labour Party, the Progressive Democrats and Fianna Fáil all based their 2007 election manifestos on that consensus advice and not on the outlier advice to which I refer. That fact must be accepted.
The challenge for us in the coming years will be to ensure, as is currently the case, that the flow of news from Ireland is positive. We have a good reputation internationally that was hard won. Ireland is seen as a country seeking to return its economy to growth. It is from such growth that employment stems. Ireland is also seen as a country that is stabilising its public finances, making its banks fit for purpose and reforming its public services and placing them on a sustainable footing. The last thing the Government needs is to be deflected from that task. Whoever is in government must place that task to the fore in the coming years.
I am confident that Ireland has the positive, "can do" attitude necessary to achieve that which I describe. We work well with others, we trade well on the international stage and we attract good investment. We have done it before and we can do it again. There are now almost 1 million more people at work than in the 1980s when we last experienced a serious economic recession. We should not be afraid to place in perspective the positives in our economy as the negatives are continually highlighted in this House.
Arthur Morgan (Louth, Sinn Fein)
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One health scandal after another. That will be the Minister's legacy.
Michael Kennedy (Dublin North, Fianna Fail)
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Deputy Morgan will have his opportunity to contribute. The next speaker is Deputy Charles Flanagan, who is sharing time with Deputy Varadkar.
Leo Varadkar (Dublin West, Fine Gael)
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It is the other way around, I will speak first.
Leo Varadkar (Dublin West, Fine Gael)
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I welcome the opportunity to speak against the motion, which expresses confidence in the Taoiseach, Deputy Cowen. Needless to say, this debate comes at a difficult time for my party. However, the Government should not make the mistake of thinking that Fine Gael is weakened or that its resolve is diminished. We remain united in our determination to remove this broken and discredited Government and to replace it with a new one led by Fine Gael.
The reports produced by Regling and Watson and Professor Honohan confirm our worst suspicions about the Government's involvement in creation of the economic crisis. They also confirm that the crisis was home-made and that the worst of it could have been avoided if the Government had introduced different policies when it had the opportunity to do so.
Since the economy went into recession two years ago, those on the Government benches have informed us that the collapse of Lehman Brothers was to blame for the current crisis and that an economic or financial storm created on Wall Street crossed the Atlantic and affected Ireland's economy. We now know that this is untrue. As the reports indicate, the crisis was home-made and could have been avoided if the Government had pursued different policies.
The reports blame the banks, the Central Bank and the Financial Regulator - those Government institutions which barked but which did not bite - and the Government. They blame the Government for its policy to reduce tax at a time when it should not have done so and certainly not to the extent to which it did. They also blame the Government for increasing spending when it should have applied the brakes. Furthermore, they blame the Government for allowing the banks to run amok by permitting inappropriate regulation and appointing the wrong people to regulatory roles.
There has been some debate regarding ideology in recent times. This is an interesting debate and it was touched upon in last night's television documentary on the Progressive Democrats. People love to talk about Christian Democrats, Social Democrats, new liberalism, and so on, as if possessing an ideology or being idealistic is a bad thing. Having an ideology and being possessed of some level of idealism - regardless of whether one is on the right or the left or one pursues a different philosophy - is good.
The problem with the Government during the ten-year period of the boom was that it had no ideology or principles. During the period to which I refer, the Government acted like a left-wing administration by increasing spending and throwing more and more money and resources at problems as if that were the only possible solution. At the same time, it acted like a right-wing administration by cutting taxes, thereby undermining the tax base, and failing to put in place the crucial regulatory structures that were required. The Government's major failing was that it believed in nothing and had no ideology.
We would be in a much better position if a Government such as the rainbow coalition, which combined different senses of idealism and ideology and which tried to do what was right, not what was popular, had been in power. The only matter of interest to those opposite is re-election. They have been very good at doing this but consider the consequences of their actions for the country. On every occasion, those opposite sought to buy the people's votes with the people's money. In that context, one need only consider the extent to which public spending increased in the two years leading up to the general elections of 2002 and 2007. If one put this information on a graph, one would be presented with a picture of twin peaks. In the two years prior to elections to which I refer, the Government ramped up spending, cut taxes and bought the people's vote with their own money. I am sure those in government will try this approach again. They will introduce tough budgets and then try to throw in a pleasant one in its final year in office in the hope that people will fall for its brand of politics for a third time. I sincerely hope that this will not prove to be the case.
Speakers referred to my party's general election manifesto from 2007. I accept that some of the criticism relating to said manifesto may be legitimate. However, one thing is absolutely certain: nothing in my party's manifesto was responsible for causing this crisis. As the reports of Regling and Watson and Professor Honohan show, the crisis was caused by decisions made by the Members opposite. Those reports make no findings against the parties in opposition.
It is crucial that there should be proper accountability. In the banking sector, almost all of the chief executives and the chairmen and members of the boards have gone. Messrs. Fingleton, Fitzpatrick and Sheehy are gone and good riddance to them. On the regulatory side, the former Governor of the Central Bank and the former chief executive of the Financial Regulator have also gone. The only people who remain in place and who have not accepted responsibility or been held accountable for what they have done are the Taoiseach, Deputy Cowen, and his Cabinet Ministers. The position in that regard must change.
It is not that I do not believe the Taoiseach to be a decent man. I regard him as such. Neither is it because I believe him to be corrupt; he is not. However, the Taoiseach is responsible, in substantial part, for the current crisis and he is the only person who has not accepted responsibility and moved aside in the way that all others who were found to be responsible have done.
Charles Flanagan (Laois-Offaly, Fine Gael)
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What is the test of whether a Government should remain in office? The answer to this question relates to the nature of the quality of life of citizens. I am acutely aware of the appalling challenges faced by the ordinary people, with whom I am in contact on a daily basis, in my constituency, Laois-Offaly. The economic collapse has affected those who live in the commuter belt, the small villages, the large towns and the countryside of Laois-Offaly on many fronts. Every one of the areas to which I refer has been affected by the economic collapse and has suffered the negative side-effects of the Celtic tiger boom.
In the so-called good times, the population of Laois-Offaly expanded considerably and anyone hoping to buy a house in the locality was forced to pay an enormous price and be saddled with an onerous mortgage they would pay off for between 30 or 40 years. This was thanks to the inept economic policies of the Government, which continued to throw petrol on the flames when the property market was spinning out of control and crucifying ordinary working families. Many of the buyers of these grossly overpriced homes discovered they could not obtain school places for their children. It was as if such places were a unique prize rather than an automatic right. Those who did find a place for their child, often discovered that the classroom was a shabby prefab located on what used to be the playground. The former Minister for Education and Science, Deputy Batt O'Keeffe will be aware of the schools in my constituency in which 80% of students are housed and taught in prefabs.
Promises were made repeatedly by successive Fianna Fail-led Governments that new schools would be built or significant extensions would be granted throughout my constituency. In most cases, however, those promises turned out to be nothing more than election gimmicks. The town of Portlaoise was promised a new Garda station prior to the 2007 general election. To date, that promise has not been honoured. In rural areas, smaller Garda stations are in a vulnerable position. People are constantly concerned about a lack of police presence in such areas. That lack of a police presence obtains despite a rise in the number of burglaries and a real problem with anti-social behaviour and credit crunch crime.
My constituency bears the physical scars of poor planning, evidenced by the existence of several ghost estates. There was no difficulty building houses during the past decade but it was apparently impossible to build schools or to deliver infrastructure at hospitals. The Minister for Health and Children referred to the hospital near the Taoiseach's home but did not mention Portlaoise Hospital, which was promised a maternity unit to cater for the dramatically increased demands on an overstretched under-resourced service. To date, nothing has happened in this regard.
In recent months, Laois-Offaly has been hit by factory closures and numerous small businesses are going to the wall. The level of job losses has surged. There are now 16,653 people on the live register in Laois-Offaly. Our children face a bleak future in terms of unemployment and emigration. I represent in the main a rural constituency. According to a recent Teagasc survey, farm incomes have plummeted to a ten year low. Almost 80% of farm families are now reliant on some form of non-farming income, including other employment, pensions or social welfare payments.
How can we have confidence in this Government? Its legacy in Laois-Offaly is reflected in ghost housing estates, negative equity, over-stuffed school prefabs, absence of school places, diminished local hospitals and a long list of broken promises. It is clear to me that this House cannot have confidence in the current failed regime. I believe the test for this Government will be to hold the three by-elections, following which, having accepted that mandate, it should go to the country and have a general election.
Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I wish to share time with the Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe. I welcome the opportunity cúpla focail a labhairt ar an ábhar tabhachtach seo.
The Opposition's main thesis appears to be that the increases in public expenditure during what became known as the Celtic tiger years were unnecessary and wasteful. I believe this to be a remarkable argument coming from an Opposition, the biggest criticism of which at the time of that expenditure was that we were not spending enough. If I heard once I heard a hundred times the phrase, "The country is awash with money, why is the Government not spending more?"
Emmet Stagg (Kildare North, Labour)
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The Minister for Health and Children, Deputy Harney, said that.
Charles Flanagan (Laois-Offaly, Fine Gael)
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The Government blew it.
Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The Taoiseach, Deputy Cowen, when Minister for Finance was described by Fine Gael as Ebenezer Scrooge. The Labour Party described his spending as hopelessly inadequate and totally insufficient. There is a great deal of revisionist rhetoric going on today. The reality is that the Opposition was not then asking us to spend less money but was screaming at us to continue to spend more. At no stage did it seek increases in taxes to fund extra expenditure. The Labour Party was the first to promote income tax cuts in its manifesto prior to the last general election. Deputy Varadkar has admitted Fine Gael also made mistakes in its manifesto prior to the last election.
Charles Flanagan (Laois-Offaly, Fine Gael)
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The difference is that this Government was in office.
Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I am not highlighting these issues to be partisan in terms of the nature of this debate as obviously that would not be helpful to anybody and will not get us out of the mess we are in. However, it shows that the Opposition parties accepted the same independent advice and forecasts that informed us as it was the best international and national advice at the time. The Government acted on that advice. I accept that mistakes were made but it is wrong for the Opposition to say nothing was gained and that people did not benefit from the expenditure made. I say that having spent almost four years as Minister for Education and Science.
Emmet Stagg (Kildare North, Labour)
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The Government made the decisions and is responsible for where we are.
Mary Hanafin (Dún Laoghaire, Fianna Fail)
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It is clear that far from being a waste of money every parish and child in the country has benefited from the expenditure on education.
Emmet Stagg (Kildare North, Labour)
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Some 100,000 children are being taught in prefabs.
Mary Hanafin (Dún Laoghaire, Fianna Fail)
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When it came to spending on school buildings, expenditure increased from €600 million to €700 million to €800 million. The situation has been transformed all over the country. There is not one child, parent or teacher in any school who will say that because of the manner in which expenditure overran, their school should not have been built. Every one of those projects were valuable. I accept this work was necessary owing to under-investment in this area for a number of years. However, the fruits of that investment are now to be seen throughout the country. Only last week I opened a new autism unit. There are now 395 such units in the country where only six years ago there was none.
The same is true for children with special needs. For the first time every school has access to resource teachers to assist those children. Previously, this was not the case. That is not a waste of expenditure but the targeting of good money to people who needed their potential recognised and to be supported. From an economic perspective, expenditure on our higher education system during the past number of years - again I say this having spent four years in that portfolio - and the creation of extra places and improvements in infrastructure has ensured we have an economic resource that will attract and create jobs when the global upturn comes, as inevitably it will.
We can show that in terms of education, the arts, tourism and sport facilities we are substantially better off than we were in 2002. Some €730 million has been spent on sports facilities. We all value and appreciate how important sports can be to our communities. Deputy Flanagan spoke about quality of life. Our education and sports facilities are part of our quality of life. We have made that investment. The same is true of our arts in terms of the number of new theatres and art centres there are now around the country. There has been much investment in our cultural institutions and we are currently investing in the tourist industry.
This Government has made mistakes. We acknowledge that and apologise for any wrong that may have been done.
Charles Flanagan (Laois-Offaly, Fine Gael)
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That is not enough.
Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Many of the good things that have happened have spurred on communities to do more for themselves.
This debate is about confidence in the Taoiseach and about this Government as a team which will work to get us through the next couple of years.
Emmet Stagg (Kildare North, Labour)
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The mess it made of the country.
Mary Hanafin (Dún Laoghaire, Fianna Fail)
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We will do so by focusing on our economic policies.
Emmet Stagg (Kildare North, Labour)
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The Government did not do it in time.
Mary Hanafin (Dún Laoghaire, Fianna Fail)
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There is already evidence that we are turning the corner. Exports are up, our public finances are stabilising and retail and manufacturing sectors have improved. All of the indicators are good. This Government has invested in what is important to people's quality of life in order to get the economy right. I believe this is a Government in which this House and the country can have confidence.
Batt O'Keeffe (Cork North West, Fianna Fail)
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I welcome the opportunity to support the Government's motion of confidence in the Taoiseach.
The Taoiseach has, during the past two years, led a united Government, supported by the majority of Members in this House in implementing courageous policies that have won praise at home and abroad and have set Ireland on the road to economic recovery. Our resolute action and determination to act as one in the common good has offered this country solid government at a time when solidarity and stability were needed more than ever. The measures we are implementing include repair of the banking system, restoring order to the public finances, regaining our competitiveness and creating jobs. Although many of these measures have been unpopular, they have been effective. The economic fightback is on. Because of the steps we have taken our country, led by the Taoiseach, is emerging from recession.
While this may be the age of austerity, it also can be the age of endeavour. The decision last week by the trade unions, SIPTU and IMPACT, to back the Croke Park Agreement means we now have an opportunity to underpin industrial stability and to build economic prosperity. By framing the agreement and urging that it be ratified, the Taoiseach has shown leadership and foresight in the effort to modernise the delivery of our public services. The Labour Party's move to characteristically fence-sit on this important deal and to then welcome the unions' decision to back it shows that party would rather be all things to all people than make decisive calls when needed.
Fine Gael, on the other hand, has moved from a position in which it rejected the public sector wage reductions and efficiency measures to help close the deficit and boost our competitiveness to one in which it urged trade union members to accept the deal. As a Government, our focus is on securing recovery and reclaiming our prosperity. The Government and its supporters have stepped up to the plate and have worked hard and long to get Ireland through this crisis. We can look back to this recession and can say hand on heart as time goes by that we answered these questions with great pride and absolute conviction.
Today, the Government is debating this motion which has arisen following machinations within Fine Gael. We will later get on with running the country. If this debate is to be of any service to the country, the Labour Party will it is hoped use it as an opportunity to tell us its policies. Day after day, week after week, Deputies Gilmore, Burton and others denounce everything. Does anybody know for what they stand? To paraphrase Winston Churchill's comment on Communist Russia - a nation Deputy Gilmore and his old friends in the Workers Party admired so much - the Labour Party's policies are a riddle wrapped in a mystery inside an enigma. It is easy for the Labour Party to attack Government policy without providing a credible alternative. This debate offers it the opportunity to put up or shut up. If it has solutions then let us hear them. The Government has moved with acknowledged speed to address the fiscal challenge, a way now being followed by many others across Europe. The decisive corrective measures we have implemented for our economy and banking system means we are now well positioned to grow once more. We have weathered the recession. Now, it is time for recovery.
Ireland's recovery is due, in no small measure, to the stability of the Government and the leadership of the Taoiseach. His vision for Ireland is based on integrity and fairness, the primacy of principled politics and the ideals of the founders of the Republic. The Government he heads shoulders its responsibility with courage. We take pride in our efforts to bring about a future steeped in social justice and forged in the promise of enterprise. Unlike the party opposite, the stability of the Government will endure because we put the country's interests first and not our own narrow political self-interest.
On both sides of the House, we must take a road of post-partisanship. The country is recovering and that effort is being led steadfastly by the Taoiseach. The Government will hold firm to its decisions and will see Ireland through recession and back to growth. We will do that with common cause and in the common good.
Brendan Howlin (Wexford, Labour)
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With the permission of the House, I will share my time with Deputy Pat Rabbitte.
I hope the Minister for Enterprise, Trade and Innovation will remain in the House for the contributions from the Labour Party. I am flattered that he has focused on the Labour Party. He, clearly, was not listening to the Labour Party leader-----
Dara Calleary (Mayo, Fianna Fail)
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There was nothing to listen to.
Brendan Howlin (Wexford, Labour)
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-----lay out an array of policies we have published, more than any other party this year. Instead of taking the spin doctor's line, the Minister might occasionally read some Labour Party policy to inform himself.
Dara Calleary (Mayo, Fianna Fail)
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What is the Labour position on the Croke Park deal?
Emmet Stagg (Kildare North, Labour)
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We have told the House several times what it is. Government Deputies do not listen.
Brendan Howlin (Wexford, Labour)
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I respect Parliament and our constitutional role. The Government got its mandate from this House and it is to the House that it is answerable. Some regard the tabling of a confidence motion as politics as usual, to borrow the Taoiseach's phrase. That is to misunderstand the role of Parliament and its Members. We are the people's representatives. We must be the people's voice. The people have spoken, not in an opinion poll published last week but on every street corner and in every workplace, dole queue, shop, factory and home throughout the land. The people have no confidence in the Government and they want rid of it. Despite the bravado performance of the Minister, Fianna Fáil, the Green Party and the Independents, Deputies know the people want rid of them. I do not need to make the case to indict the Government. In the minds of the people, the case has already been made and the decision arrived at.
It is, however, galling to listen to the rewriting of history by the Taoiseach. He insults the people's intelligence. His Government's case would be better served if genuine remorse for the lives so grievously wounded by his policies had been expressed. I refer to the quarter of a million men and women added to the list of the unemployed since the last election, the thousands of young people in negative equity, who will spend the rest of their working lives, if they are in work, paying for overpriced houses and the thousands of Irish men and women who will follow these debates from Australia, Canada or England, a plague we thought we had overcome.
The Taoiseach, tellingly, said that when it came to including subordinated debt holders in the bailout, anything short of a comprehensive simple-to-understand concept might cause confusion when the markets opened. Unfortunately, the markets required no such simple-to-understand bailout for burdened mortgage holders saddled with disastrous debt.
We need a change. We need a new Government with new policies. We will lay them out for the Minister if he wants to read them. My party leader laid out some of them. Our plan for a new strategic investment bank was comprehensively laid out. A jobs fund was comprehensively explained. A package for training, upskilling and job placement was published 18 months ago. We plan a new approach to healthcare involving universal health insurance, abandonment of the disastrous privatisation co-location policy and reform of the monster that is the HSE. We have presented a programme for public life and the public service, and so much more.
Confidence never comes from knowing all the answers. It comes from being open to all the questions. The Government is closed to all views but its own. It has led us to ruin and no one outside the Government's ranks believes it has the capacity to lead the country to a better place. The destroyers cannot suddenly become the rescuers. A Government mandate is not frozen in time, as the Taoiseach seems to think. On the historic day when the long-awaited Saville report is published, the responsibility of the House and of each of its Members to hold decision makers accountable is clear and inescapable. If we claim to represent all the people, our duty is to vote no confidence.
Sometimes the national interest is so clear that no other interest - personal, party or any other - is relevant. This is one such time. The members of the Government know they have lost the confidence of the people. It is our duty to reflect the people's will.
Pat Rabbitte (Dublin South West, Labour)
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Ministers have made mistakes since the State was founded. They have taken decisions that have hurt ordinary people ever since Earnán de Blaghad cut the old age pension by a half crown. However, nothing has ever been visited on our people on the scale of the devastation inflicted on them by the legacy of the Fianna Fáil-led Governments of the noughties.
The Government inherited an economy in 1997 that was growing employment at a rate of 55,000 per annum, being managed to live within its means and producing consistent improvements in social provision. Fianna Fáil has brought it all crashing down. They have given us the highest jobless figures in Europe, a reduction in living standards for most of our people, including those dependent on social benefits, and educated young people waiting for emigration opportunities to get out of the country. Worst of all, they have deprived the people of hope. The Taoiseach has lost his confidence and his style of leadership is spreading pessimism like contagion.
There has been only one Government in this country during all of the years when our problems accumulated. At any point, that was a Fianna Fáil-led Government. The Opposition is not responsible for the disaster that has befallen us. Nor are our people responsible for the worst recession in living memory, even if the new mantra is that we all lost the run of ourselves. We did not all lose the run of ourselves but it is clear that the revellers in the Galway tent lost the run of themselves, and now ordinary people must pay for their excesses. When the crash came, the message that flashed on Fianna Fáil BlackBerrys was, "Blame the global crisis and keep mentioning Lehman brothers". The independent reports on the collapse of the banks have put an end to that mantra. The Lehman brothers did not cause our crash. The main agent of our economic downfall was the grossly irresponsible mismanagement of our economy by Fianna Fáil.
Now we have a new mantra, best expressed by the Minister for Transport, Deputy Noel Dempsey. He said Deputy Brian Cowen may have led us into the crash but he is also leading us out of it. Disaffected backbenchers express it slightly differently. They say, "Look how Brian Lenihan is getting the public finances under control". It never seems to occur to Fianna Fáil spokespersons when they praise Deputy Brian Lenihan for the skill with which he is driving the fire brigade through the crowded streets of this country, that he is heading to put out a fire that was started and fuelled by Deputy Brian Cowen. We are supposed to marvel at the driving skills of Deputy Brian Lenihan.
The major parties in this House, unprecedentedly, supported the Minister for Finance in taking €4 billion out of public spending in the last budget, even if we differed as to how it should be done. There is no escaping the fact that Fianna Fáil-led Governments have brought us to the edge of ruin. They did it because of cronyism, because of their addiction to the insider nod and wink culture, because of their unhealthily close links to builders and developers and because of laziness. I take no pleasure in saying that the then Minister for Finance, Deputy Cowen, did not use his undoubted talents to monitor, supervise, interrogate, question, intervene and direct. He surfed on the tide of property taxes and unthinkingly thought it would go on forever. There is no point in trying to rewrite the banking reports - they could scarcely be more critical of the irresponsibility and inaction of the Government. The failure of the regulatory system was total and seemed to have official acquiescence.
Before I conclude, I would like to recall the time when the late Séamus Brennan was sent out, three days before his party's Ard-Fheis, to tell the public that Fianna Fáil did not intend to engage in auction politics. Three days later, the then Taoiseach, Deputy Bertie Ahern, made a speech to the Ard-Fheis that left the assembled masses dumbfounded. I would like to quote from a book, "Showtime", by the political correspondent, Mr. Pat Leahy.
Kieran O'Donnell (Limerick East, Fine Gael)
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He is in our presence.
Pat Rabbitte (Dublin South West, Labour)
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The relevant section reads:
Noel Dempsey grabbed one adviser in the corridor of the hotel a few hours before the speech was delivered. 'What the fuck is going on?', he hissed. Eventually copies of the speech, along with the briefing document on the tax changes it proposed, the pension promises and the associated costings, were hastily put into envelopes and handed to the cabinet .... Two points off the standard rate of income tax, one point off the higher rate, the halving of the rate of PRSI, increasing the old age pension to €300 a week-----
Michael Kennedy (Dublin North, Fianna Fail)
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I hope the Deputy is not planning to read the whole book, because he has gone way over time.
Kieran O'Donnell (Limerick East, Fine Gael)
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It is a very good book.
Dara Calleary (Mayo, Fianna Fail)
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Political correspondents can get embarrassed too.
Pat Rabbitte (Dublin South West, Labour)
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I will not take the Acting Chairman through the entire book.
Michael Kennedy (Dublin North, Fianna Fail)
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The Deputy has gone almost a minute over time.
Pat Rabbitte (Dublin South West, Labour)
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I can recommend it as ideal bedtime reading. This is the unfortunate history of the haphazard way this country was governed.
Pat Rabbitte (Dublin South West, Labour)
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I did not reach the Luas lines, the 2,000 extra gardaí, the 4,000 extra teachers-----
Michael Kennedy (Dublin North, Fianna Fail)
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The Deputy will have to conclude.
Pat Rabbitte (Dublin South West, Labour)
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The Acting Chairman is right - I would be here until midnight if I were to exhaust the speech made by the then Taoiseach, Deputy Bertie Ahern. Is that any way to run a country?
Dara Calleary (Mayo, Fianna Fail)
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The Deputy should tell us about his own past.
Pat Rabbitte (Dublin South West, Labour)
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It is time this Government called it a day.
Noel Dempsey (Meath West, Fianna Fail)
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I would like to share time with the Minister, Deputy Smith.
Michael Kennedy (Dublin North, Fianna Fail)
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Is that agreed? Agreed.
Noel Dempsey (Meath West, Fianna Fail)
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It is a pity Deputy Rabbitte based some of his speech on incidents that never actually happened.
Emmet Stagg (Kildare North, Labour)
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The Minister would not use that word.
Noel Dempsey (Meath West, Fianna Fail)
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I grabbed an RTE journalist at one stage, during a presidential election campaign, but I did not grab an adviser.
Pat Rabbitte (Dublin South West, Labour)
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The Minister should not be picking up bad language from Deputy Gogarty.
Noel Dempsey (Meath West, Fianna Fail)
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We are coming through the greatest economic trauma Ireland has ever faced. Deputy Rabbitte should stick to his fairytale reading. I have read an interesting book about him, his origins and the origins of the party he used to be in. We should seek to understand what has happened. People want to apportion blame. Ultimately, we want to learn so that what has happened never happens again. Over the last two years, the Government has tried to give people the necessary answers they have been looking for, even-----
Brendan Howlin (Wexford, Labour)
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It cannot even answer a parliamentary question.
Noel Dempsey (Meath West, Fianna Fail)
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-----when that damages the Government's own reputation. The Opposition offers nothing but more anger and empty promises. In times of crisis, it is easy to sell blame, anger and pipe dreams.
Ruairi Quinn (Dublin South East, Labour)
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The Minister should know.
Noel Dempsey (Meath West, Fianna Fail)
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We have experienced that with the Deputies opposite in the past. Such an approach is not the path to recovery and does not represent a credible way of restoring employment. At a time like this, people need a clear direction for economic recovery, which is what they have got from this Government. We have shown that we are prepared to take unpopular decisions that will shape a positive future for people and their children, regardless of the impact on our poll ratings and our popularity. The Government agreed many months ago that it would disregard politics and popularity in order to take the right actions.
Emmet Stagg (Kildare North, Labour)
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It is a pity the Government did not do that many years ago.
Noel Dempsey (Meath West, Fianna Fail)
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Politics should be about facing challenges squarely with such courage and integrity, rather than crumbling at the first sign of unpopularity. Every member of the Government can truthfully say that we are unambiguously sorry for what people are going through. We are acting on the basis of what we believe to be best for the people, rather than on the basis of poll standings.
Noel Dempsey (Meath West, Fianna Fail)
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That gives the Government unity, which is the strength that is needed to lead this country to economic recovery over the next five years. If one accepts the criticism of past Government performance made by independent commentators and international observers, as the Deputies opposite seem to do, one must also accept their view on the Government's performance over the last two years. Quite an amount of revisionism and selective quoting from the two reports is taking place.
Noel Dempsey (Meath West, Fianna Fail)
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The most prestigious international economic commentators, such as the European Central Bank and the Organisation for Economic Co-operation and Development, have said that Ireland has implemented the right policies since September 2008.
Noel Dempsey (Meath West, Fianna Fail)
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Many of them have cited Ireland as an exemplar of how to approach this global financial crisis. I do not particularly like the phrase "difficult decision", although I am probably as guilty as anybody else of using it, because it makes it seem that the decision-maker is doing the suffering. We are under no illusion that the harsh but necessary decisions we are taking are affecting the Irish people, who are leading Ireland to recovery, one by one. The Government took the most important steps towards recovery last year, amid the most difficult political environment. The Lisbon treaty was passed, public sector finances were addressed and NAMA was established. More needs to be done quickly. Credit to business most flow more freely. Those guilty of corruption in the banking system must continue to be brought to justice. More must be done to make political structures protect and serve citizens more effectively and efficiently. The Opposition's approach is in sharp contrast to those aims. Fine Gael has at least produced some policies, even if they are uncosted and unworkable.
Noel Dempsey (Meath West, Fianna Fail)
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The Labour Party is selling snake oil policies and relying on personal attacks.
Kieran O'Donnell (Limerick East, Fine Gael)
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It is obviously not passing the Fianna Fáil test.
Noel Dempsey (Meath West, Fianna Fail)
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The Opposition parties will learn that anger and popularity are not policies, and neither will lead Ireland to recovery.
Pat Rabbitte (Dublin South West, Labour)
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They served Fianna Fáil all right for ten years.
Noel Dempsey (Meath West, Fianna Fail)
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The public realises that the Opposition consists of two parties which oppose each other-----
Ruairi Quinn (Dublin South East, Labour)
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What about Fianna Fáil and the Green Party?
Noel Dempsey (Meath West, Fianna Fail)
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-----and, in some cases, oppose themselves. Fine Gael, which veers to the right, chokes itself on political convulsions whenever it approaches its Holy Grail of power. The Labour Party, which is covertly moving to the left, is hiding its paucity of ideas and policies behind meticulously manicured media messaging.
Pat Rabbitte (Dublin South West, Labour)
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The old múinteoir is coming out with the alliteration.
Noel Dempsey (Meath West, Fianna Fail)
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I wish to make it clear that a political party that is in the process of voting no confidence in its own leader is hardly in a good position to pass judgment on a Government that has worked together through the most difficult period in our history. The Taoiseach, Deputy Cowen, offers the steadfast commitment, integrity and competence this country needs.
Emmet Stagg (Kildare North, Labour)
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He got us where we are now.
Noel Dempsey (Meath West, Fianna Fail)
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Most fair-minded people will agree that he has delivered that in spades. He has avoided the temptation to make knee-jerk reactions and populist statements to inflate his own poll ratings. He has acted decisively when required, for example by implementing new regulations in the financial services sector. I will send the rest of my speech to the Labour Party, as its Deputies seem to be in need of bedside reading.
6:00 am
Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I am pleased to have an opportunity to contribute to this debate and to affirm my full confidence in the Taoiseach, Deputy Cowen. I have worked closely with him in my various capacities as a Deputy, as a Minister of State and, more recently, as Minister for Agriculture, Fisheries and Food. He has been a supportive colleague at all times, particularly since he became Taoiseach. He has shown excellent leadership in that role. The Government and the Taoiseach fully understand the importance of the Irish agri-food sector and appreciate the potential of the sector in terms of economic recovery, job retention and, importantly, job creation throughout the country. It is important that there is a regional spread in job creation that benefits all provinces.
This country is extremely fortunate to have tremendous farm resources at its disposal. Our challenge is to ensure we maximise the use of those resources and fully harness and secure the potential of the farming sector. The Department of Agriculture, Fisheries and Food's 2020 strategy, on which an enormous amount of work has been done, will be central to that. The strategy will chart the course for the sector over the next decade. My Government colleagues and I look forward eagerly to considering the outcome of that process. We are acutely conscious of the potential of the sector. The Taoiseach said recently that he hopes the strategy will include ambitious targets for growth in these sectors and will secure sustainable employment over the next decade.
The agri-food sector will make a significant contribution to export-led growth. Despite the unprecedented pressures on the public finances, the Taoiseach has supported the maintenance of vital investment in agricultural schemes. We all acknowledge the importance of these schemes in terms of both on-farm investment and contribution to farm incomes, particularly in providing some stability to farm households.
The Government's consciousness of the potential of agriculture and the agri-food sector, not only in an Irish context but also in Europe, was demonstrated earlier this year when the Taoiseach played a leading role in ensuring that the EU Heads of Government recognised that a sustainable, productive and competitive agricultural sector would make an important contribution to the new Europe 2020 strategy for the development of Europe's economy. Through the intervention of the Taoiseach, the EU Heads of Government have underlined the importance of the Common Agricultural Policy to the future of Europe.
Although concrete proposals for the new CAP will not be put on the table by the Commission until the middle of next year, I have been fully engaged with my counterparts in other member states and the European Commission in putting forward Ireland's view at every opportunity in this important phase of negotiations. I am strongly of the view that the future CAP must support farm incomes and address the issue of price and income volatility while avoiding market distortions. Promoting sustainability in all its dimensions and rewarding farmers for the public goods they provide are essential for the future of the industry. In this way we can ensure the sector contributes to green growth as envisaged in the Europe 2020 strategy. These negotiations are vital to the future of Irish agriculture and the agri-food sector.
The Government's position is clear: we must maintain a strong and properly financed agricultural policy in Europe, and we must make sure the CAP of the future encourages competitiveness and innovation through appropriate measures, including support for farm investment. I intend to take every opportunity to ensure that Ireland's position is both voiced and heard when there is any consideration of CAP post-2013 at the European Council. Irish farmers and those operating in the agri-food sector can be assured of the absolute support of the Taoiseach for Ireland's stated commitment to a strong and adequately resourced CAP after 2013, which will preserve the principles of solidarity, support for primary production, food security, quality and safety and the protection of farm families.
Although there are those opposite who would try to misrepresent the Government's support for the agri-food sector, the facts do not bear out this contention. The Government has invested and is continuing to invest in this productive sector and is determined to ensure the sector is robust, resilient and competitive in years to come. Given global population growth, increased urbanisation and changing dietary habits, there are enormous opportunities for Irish agriculture and the agri-food sector in the coming years and decades. With those opportunities come challenges, and the Government's commitment is to stand with this most important indigenous sector to meet those challenges and fully exploit the undoubted opportunities that exist. The sector can be assured of my full support as Minister, as well as that of the Taoiseach and the Government.
Michael Kennedy (Dublin North, Fianna Fail)
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Deputy Olivia Mitchell is sharing time with Deputy Michael Ring.
Olivia Mitchell (Dublin South, Fine Gael)
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I hope he will be here.
This country is experiencing the greatest financial crisis the western world has seen in the past 80 years. Over the two years of the crisis, the Government would have had us believe that Ireland was somehow a victim of circumstances outside its control - that the collapse of Lehman Brothers resulted in a series of events that caused our otherwise healthy economy to implode, and that somehow the Government was a blameless victim of circumstances. The public, however, are not fools, and the realisation dawned that despite the spin, this was not altogether true. They realised there had been reckless management of the economy, both on the fiscal front and as far as oversight of monetary policy was concerned. Now, however, we know for sure, because the Government's own experts have confirmed its reckless behaviour. Its cover has been blown.
The Government's own two banking reports clearly show that the financial crisis was largely a common or garden, vanilla-flavoured, home-grown problem, and that our banks and national financial system were so inappropriately overheated that they would have collapsed anyway, even if the collapse of Lehman Brothers had never occurred. I do not deny that the banks are to blame. In addition, there was a lack of regulation, and the Financial Regulator must also bear much of the responsibility. However, the Government's mismanagement of the economy is clearly demonstrated in these shocking reports. It is to blame for what it did and for what it failed to do.
The Taoiseach has graciously accepted that he made some mistakes, but what he has not actually grasped is that these were monumental mistakes which have had catastrophic consequences for hundreds of thousands of people - consequences which will continue for a generation. Young people who have got into negative equity will carry this debt through their entire productive working lives. They and their families will pay for the mistakes for which the Taoiseach today said he took full responsibility. He cannot seriously expect people to move on as if it were time for the next item of business. This will not be accepted.
Almost everything the Government has told us since 2007 has been disproved. It told us the banks were secure and sound, but within days we were told we had to rescue them. The Government then told us that NAMA was the solution, and the discount on the NAMA loans would be of the order of 28%; we now know the discount was around 58%. It told us the impaired loans at Anglo Irish Bank had a value of about €800,000; within weeks, we were told they had a value of €22 billion.
Even now, the Government is telling us the economy is at a turning point. In fact, it has been telling us that for 12 months. However, a total of 430,000 people are unemployed, and that number is growing. We have the greatest asset deflation of any country. Our pensions have disappeared and share values have dropped completely. Businesses are closing and savings have disappeared. Young home-owners will be carrying the ball and chain of negative equity debt for probably the next 20 years. Only extreme arrogance could make the Government think it was right, and only extreme arrogance could allow it to think that people will believe it is right or accept its leadership. It has quite simply used up all its credit with the public. It now owes it to them to accept that and resign.
Not only should the Taoiseach resign, but the party should also resign from Government, because its members are all tainted with this. They cannot deny the fuelling of the property bubble and the creation of long-term spending streams from what could only be regarded as short-term taxes. They ignored concerns about tax incentives and benchmarking, and they solved every single problem by throwing money at it. Every vested interest was satisfied and everything was done to avoid rocking the boat. The Government allowed export growth and competitiveness to collapse as it spent and spent.
Having overspent, it now tells us - in fact, it is its mantra - that the whole world is lost in admiration of the Government's spending cuts. Unfortunately, the markets do not believe it. In fact, they are completely unimpressed, because almost every week the Government's spending cuts, painful as they are for people, are more than dwarfed by the debts they are incurring to further bail out the banks. In particular, the continued provision of money to Anglo Irish Bank is throwing good money after bad. The decision to bail out the bank was a bad one to begin with, but the Government is compounding it by continuing to do so while refusing to accept it was wrong. It was wrong, and the people are paying and paying as a result.
The time has come for the Taoiseach to show that he has some humility and shame. He must recognise that it is time to go and let somebody else get on with the job, because he will not accept that he was wrong from day one.
Michael Ring (Mayo, Fine Gael)
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I support the motion of no confidence. In fact, if the Government were to do the right thing it would go to the country and let the people decide. I look over at my three colleagues - the Minister for Community, Equality and Gaeltacht Affairs, Deputy Carey, the Minister for Social Protection, Deputy Ó Cuív, and the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Calleary - who are now punishing the poor, the weak and the sick for their misfortune and their handling of the economy. The Minister for Social Protection is now talking about taking money away from the poor, including lone parents, those with no houses, and pensioners. Yet he is pouring it out to Seanie FitzPatrick and the banks-----
Michael Ring (Mayo, Fine Gael)
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-----giving them more and more to make sure their investments will be safe. It is outrageous that the poor have to pay for the rich.
Michael Ring (Mayo, Fine Gael)
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Has anything changed in this country? The poor must always pay.
Kieran O'Donnell (Limerick East, Fine Gael)
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It is the Fianna Fáil order.
Michael Ring (Mayo, Fine Gael)
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The poor have a vote and they are waiting for the Government. Almost 500,000 people are unemployed and many families have suffered over the past two years and will suffer for the next 30 years. People bought property because of the tent in Galway. The builders, the bankers and the friends of Fianna Fáil were told to keep building while the Government made sure it kept building up the economy. They made sure the greed continued. They made the builders rich and made the banks pour out the money. I compliment the people who produced the two reports published last week. At least someone was blamed at last. The Government and the Taoiseach of the day, Deputy Cowen. The regulator must have been at the Galway races and must have stayed there for the past ten years because he regulated nothing in the office in this city.
Kieran O'Donnell (Limerick East, Fine Gael)
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He was out playing golf.
Michael Ring (Mayo, Fine Gael)
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He was probably out playing golf. Where was the Taoiseach, the Minister for Finance and the bankers? Now we must bail them out. This reminds me of an incident a few years ago. I think of the poor old woman from County Mayo who came into me. Her son used to send her a few pounds from England. The bank manager told her to put it in an account but she did not know where the account was. She had £12,000 in that account when they called it an offshore account. Her family from England had to pay almost £40,000 and it nearly killed the woman. What did we do with the bankers? We rewarded them and gave them bigger jobs.
A colleague of mine is a builder and told me he used to send his staff all over the country on holidays, trips and golfing outings. He did not know have enough staff to distribute all the benefits the banks were giving him as long as he was borrowing money to build more and more houses. This country is in a terrible state and we need a new Government and new ideas. We need fairness.
I have always had time for the Minister for Social Protection, Deputy Ó Cúiv. I hope he will not be introducing the budget in December. If the Minister does not protect the poor, the weak and the sick, he will let down his people who the generation before them stood for and the republic. What he will be defending is the bankers and the builders and they should all be in prison, rather than a poor person who cannot pay a television licence or the person who might get into a row at night. The bankers and the builders should be in prison and if they are not the people will be outside the Dáil.
Éamon Ó Cuív (Galway West, Fianna Fail)
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Ba mhaith liom mo chuid ama a roinnt leis an Aire, an Teachta Pat Carey.
Michael Kennedy (Dublin North, Fianna Fail)
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Is that agreed? Agreed.
Éamon Ó Cuív (Galway West, Fianna Fail)
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Ba mhaith liom an deis seo a úsáid le labhairt ar na gnóthaí tábhachta atá ar bun ag an Rialtas. Ar ndóigh, tá an t-ádh linn gur ceannaire láidir stuama is ea an Taoiseach, an Teachta Cowen, agus an tír ag tabhairt aghaidh ar na dúshláin suntasacha atá romhainn faoi láthair. Nuair a chas na cúinsí eacnamúla, sheas an Taoiseach an fód. Tá sé ag tabhairt ceannasaíocht láidir don tír, agus é ag dul i ngleic leis an méid a tharla sa gheilleagar agus sna bainc. Tá a chroí agus a anam ina chuid oibre chun leigheas a fháil ar na dúshláin sin, níos mó fostaíochta a chruthú agus tacaíocht a thabhairt do theaghlaigh na tíre.
I am pleased to speak in favour of the motion of confidence in the Taoiseach, Deputy Brian Cowen, and his Government. The energy and hard work of all parties in this House would be best focused on driving forward the solutions that will create meaningful work for people and deal with the day-to-day challenges faced by them. That is what the Government is focused on doing.
Under the leadership of Deputy Brian Cowen, this Government is taking a number of key actions to protect the most vulnerable people of all ages. We are directing €20.9 billion towards social welfare expenditure in 2010. We have set up a group, which is due to report soon, to examine the issues facing those in mortgage arrears and those facing personal debt. We are also focused on assisting those who have lost jobs and creating work opportunities for them.
I agree with one minor point made by Deputy Ring. The greatest challenge facing our people is joblessness and the major challenge it visits on households around the country. People often think of unemployment in terms of income loss but it is also about dignity, confidence, the loss of something challenging to do everyday and the loss of social contact with workmates. One of the important decisions taken by the Taoiseach and the Government, and one of the priorities given to me, is to place a particular focus on job activation. The new Department brings a joined-up approach to examine job activation in its widest context, with income support. We need to create a better future for unemployed people, with work activity in the short term, to upskill them and give them opportunities to get back into the mainstream workforce as speedily as possible. We face a number of challenges in the next two years in creating opportunities for those people to work but we will make progress by being positive, finding new ways to draw on our traditional strengths and making ourselves competitive again.
The Taoiseach has given my Department the sensible aim of ensuring that when a person visits the local social welfare office, the officials dealing with work placement will in time be working side-by-side with those dealing with payments. The new Department will provide a one-stop shop for people who face the prospect of unemployment. This will give people a better service. In the wider context, the reorganisation announced by the Taoiseach focuses on the main challenges we face. We speak about an innovation economy but for that we must have the best system of giving people new skills so they can avail of changed opportunities. In the reorganisation we will be able to tackle the issues of work and support for people and communities and upskilling, training and education.
Deputy Ring referred to the banks and the financial sector. The reason we are straightening out the banks is not to make life easy for those in the banking sector, who got us into a mess, but to set a solid foundation on which we can support enterprise and create new jobs. It is also about protecting people's investment, either made directly or indirectly through life assurance or pension policies, etc.
Pat Rabbitte (Dublin South West, Labour)
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There were plenty solid foundations. That is what got us into trouble.
Éamon Ó Cuív (Galway West, Fianna Fail)
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We are not unique in the world in having had to stabilise our public finances and our system of money. However, thanks to the decisive leadership of the Taoiseach, we have been ahead of many countries in acting so quickly. This will stand us in good stead as we seek to create new sustainable jobs. Ba mhaith liom an rún seo a mholadh, go bhfuil muinín ag an Teach seo as an Taoiseach agus an Rialtas.
Pat Carey (Dublin North West, Fianna Fail)
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Is cúis áthais domsa mar Aire, mar Theachta Dála agus mar bhall bhródúil de Fhianna Fáil, an deis seo a thapú, labhairt ar son an rúin seo. Since his election as Taoiseach, Deputy Brian Cowen has shown the backbone, conviction and courage that are the hallmarks of strong leadership in times of difficulty. For the past 18 months, the Taoiseach has led the Government that has taken tough and painful decisions in order to secure the future economic well-being of our country. In a time of great financial upheaval, when to falter would have been to fail and when to waver would have had dire consequences for Ireland, he stood his ground and the Government stood its ground. We made hard and necessary choices and when others questioned their judgment or lost their nerve, we stood by our decisions. As we take our first steps on the road to economic recovery, we can be thankful the Government showed such resolve, that we held our nerve and that we made those difficult decisions in such difficult circumstances and at the right time.
Emmet Stagg (Kildare North, Labour)
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It is a pity the Government did not make them five years earlier.
Pat Carey (Dublin North West, Fianna Fail)
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It is to his credit that Deputy Brian Cowen was more interested in making sound decisions than soundbites. He realised it was the opinion of the international markets, and not the opinion of the few, that mattered. Like some others, he realised political action was required and not populist posturing. Playing to the gallery would not secure the future of our country.
For example, he stood firm and delivered on the Croke Park agreement. While some stayed silent, for political reasons, he took a stand that will deliver the basis for stability and progress for public servants and citizens alike.
Emmet Stagg (Kildare North, Labour)
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Of what union is he a member?
Pat Carey (Dublin North West, Fianna Fail)
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He has led a Government that is on its way to achieving its most important goal, namely, restoring fiscal and financial stability for the people.
Before Christmas, when the first round of the talks failed, I remember there was derision and cynicism, particularly from the Members on the left, or sort of left, to the effect that he had thrown away an opportunity and squandered the future of the public service. What did he do? He worked hard and reassembled a negotiating team and, together with the public service unions and the Labour Relations Commission-----
Emmet Stagg (Kildare North, Labour)
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You scuttled it before that. You scuttled it for political reasons.
Pat Carey (Dublin North West, Fianna Fail)
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He has now got an agreement-----
Dara Calleary (Mayo, Fianna Fail)
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He put it back together again.
Pat Carey (Dublin North West, Fianna Fail)
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-----which will underpin the recovery in this country. As we continue down the road to recovery we realise that while the worst may be behind us there are still difficult days ahead-----
Billy Timmins (Wicklow, Fine Gael)
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One cannot get a passport for the past five months. Do not twist the facts.
Pat Carey (Dublin North West, Fianna Fail)
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-----for many people across the country. Nobody understands this more than the Government and the leader of our country. When it comes to twisting facts, I am afraid there are some people in and around this Chamber who are past masters at doing that.
Seymour Crawford (Cavan-Monaghan, Fine Gael)
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The Minister is not one but there are plenty of others.
Pat Carey (Dublin North West, Fianna Fail)
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As a former Chief Whip, and now as Minister for Community, Equality and Gaeltacht Affairs, I have worked closely with Deputy Brian Cowan since his election as Taoiseach. Without any hesitation, I can say he has always acted in the very best interests of the people of Ireland. In a time of great uncertainty he has kept his nerve and has shown himself to be a leader of character and compassion, dedicated to securing the future of his country, irrespective of any short-term political consequences.
The commitment shown by the Government has now been recognised, as international and domestic commentators have acknowledged there are signs of a return to growth. Of course, the composure and conviction shown by the Government would have been to little avail were it not for the backbone shown by the Irish people throughout these challenging times. I believe future generations will look back with a sense of gratitude for that fortitude shown by this generation.
Meanwhile, the sound judgments shown by this Government have ensured that, step by step, we are leading Ireland back to a position of sustainable economic growth. Today, we heard much political posturing and cheap rhetoric from the Opposition benches. We have heard little or nothing by way of constructive criticism or credible alternative policies. While it might be too much to expect our critics to acknowledge the real work this Government has done in facing down a series of international challenges we will not be swayed from the path we have taken. It is the correct one and is the path to recovery. As we continue on this difficult path to recovery we will not be distracted by selective readings of history or dishonest attempts to misrepresent the regret we have expressed in regard to mistakes we made. As Minister for Community, Equality and Gaeltacht Affairs, I utterly reject the notion that communities across Ireland did not benefit from the investment made in recent times.
Mar fhocal scoir, ceannaire cróga agus stuama is ea An Teachta Brian Cowen. Mar a deir an seanfhocal, níor chaill fear an mhisnigh riamh é. Creidim go láidir go bhfuil an mianach ar mhuintir na hÉireann teacht slán óna fadhbanna atá againn faoi láthair. Tabharfaidh an Rialtas seo an ceannaireacht dóibh é sin a dhéanamh. Go raibh maith agat, a Chathaoirligh.
Michael Kennedy (Dublin North, Fianna Fail)
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Deputy Timmins is sharing his time of ten minutes with Deputies Crawford and Bannon, allowing himself four minutes and three minutes each to his colleagues.
Billy Timmins (Wicklow, Fine Gael)
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I thank the Acting Chairman.
The Minister, Deputy Carey, stated the Government has not heard any constructive criticism. It has not heard it because it has not listened. It has not listened to anybody. A great number of constructive proposals were put forward by this side of the House but they fell on deaf ears and the country has suffered as a result.
In the past week I heard a number of Ministers repeat something that has become a mantra for members of the present coalition. They stated that since the Government and the Taoiseach decided to put the country first and take the hard decisions, they knew they would suffer at the polls and therefore they were expecting their present poor ratings. I have one simple question for the Taoiseach and his Ministers. When did they decide to start putting the country first? In this explanation for its poor showing in the polls, the Government has unwittingly identified the cause of many of our problems, namely, the failure of the Taoiseach and his Government always put the country first.
There were many examples of this during the past number of years. The most recent examples were evident in the banking reports published last week. Blaming the present poor showing of Fianna Fáil in opinion polls for its recent decisions is incorrect. The disdain in which Fianna Fáil is held is a direct result of its failure over many years to put the country first. In regard to these reports, the Taoiseach stated he accepts full responsibility for his actions while he was Minister for Finance. What exactly does this mean? In any other arena such a statement would be followed immediately by a resignation. Surely that is the logical outcome of accepting full responsibility for the economic disaster he has caused to this country.
The trickery engaged in by the Taoiseach and Fianna Fáil has never been exposed so ruthlessly as it has been since this economic crisis began. The Fianna Fáil modus operandi was always bad for this country; now it has become almost ruinous. We cannot have any more of it and that is why this Taoiseach and his Government must be removed from office. This country will never reach its full potential while the nod and wink standards that apply in the present-day Fianna Fáil party also apply to the governing of the country. There has been a serious lack of leadership in many aspects of Irish life in recent times, whether in the business, political or religious spheres. It is now time for a new leadership to assert itself and an example can be set from this House.
The Taoiseach is known as a man who values loyalty above all else. He seems to fail to realise that life is full of competing loyalties and whenever the Taoiseach's loyalty to Fianna Fáil competes with any other loyalty it has always been the loyalty to Fianna Fáil that wins out. This has had devastating consequences for this country and has led to the betrayal of a generation for whom forced emigration has become a reality.
There are things that are more important than Fianna Fáil and the Taoiseach, or indeed, Fine Gael, the Labour Party or any political party. One such is Ireland. Ireland and its people have been badly let down by this Government and its immediate predecessors. Fianna Fáil and the Green Party have seats at the Cabinet table but Ireland does not have a seat at that table. Every decision taken is in the interests of the parties at the table, even when those decisions are against the national interest. The national interest is not represented by this Government.
It is clear the economic cycle was bent by the Taoiseach and his predecessor to suit the political cycle. It is time this Taoiseach and this Government left.
Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I thank the Acting Chairman and my colleague, Deputy Timmins, for allowing me some time. I have no confidence in our present Taoiseach, his party or his Green Party colleagues. Having listened to the Green Party personnel some minutes ago, it is clear to me they are much more committed to wildlife, bogs and dogs than to the 440,000 people who have no jobs.
From the first day I met him, then Minister for Health, the Taoiseach has proved himself to be incompetent in whatever job he held. He failed to do anything about the health service and when he left it all he could do was refer to it as Angola. In this context he was supposed to deliver €5 million to Monaghan General Hospital but all he did was promise €500,000 while, at the same time, he was giving all sorts of money to hospitals in his own constituency.
The fact that he still allows an Independent Deputy, Mary Harney, to hold such an important ministry raises further questions regarding his ability. When there was plenty of money available she encouraged young people to train in specific services such as physiotherapy but when they finished their course no jobs were available as she had not planned how to use them even though such jobs were badly needed. Now, the first services to be removed are those for the elderly and the disabled. Only yesterday I received a telephone call to say that day care services were being curtailed at St. Mary's Hospital, Castleblayney.
The Taoiseach built all his structures on the building boom and this has now left the situation in a total mess. Today, 39 families in Ballyjamesduff, County Cavan, are left with a sewerage system switched off because their builder did not pay the ESB for the power to run the necessary sewerage pumps. Would the Taoiseach or any of his Ministers like to live on that housing estate in weather conditions such as today's?
Last week two important banking reports were published, instigated by the Government. These state clearly that the present banking system conditions were very much Government related rather than created by the international community. The reports specifically advised that decisions made by the then Minister for Finance, now the Taoiseach, Deputy Cowen, had serious implications for the entire economic downfall of our country. There was the then Minister's failure to control the building boom, his failure to control the regulator and, above all, his failure to deal with the banking outrage. How could the Taoiseach sit down with the board of Anglo Irish Bank a short time before it had to be bailed out and not know there was something seriously wrong? The Taoiseach and his Government have left a legacy for the next generation which it will never forget.
James Bannon (Longford-Westmeath, Fine Gael)
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The leader of the Government has presided over the greatest abuse of the elderly, the sick, the vulnerable, the young and the unemployed in the history of this State, both as Minister for Finance and Taoiseach. We did not need these reports to tell us what we already knew, namely, that the Government was guilty of the most outrageous cronyism, mismanagement and attempted cover-up that this country has ever seen. Nevertheless, the rubber stamp was important to give validity to what was common knowledge. It is, and always has been, a sick joke that the man who was primarily responsible for the mistakes of his Government should be voted captain of the ship, which is attempting to find its way out of the financial storm.
The banking reports label the current fiasco as a homemade crisis. While this is primarily meant to close the escape hatch for the Taoiseach to blame Lehman Brothers and international factors for the fall-out, it also gives a feel of the contempt the authors of the report seem to have for the judgment of the Taoiseach.
When I see the impact the Taoiseach's actions have had in my constituency of Longford and Westmeath, I see it as a testament to the forbearance of the Irish people that he is here today to fight this confidence motion. The queues at my clinics are crowded with decent hard-working people, whose lives and livelihoods have been destroyed by the actions of the Taoiseach. I feel incredible anger that he has the nerve even to attempt to justify his actions. Has he even the smallest idea of what it is like for people to lose their employment, their homes, their children's chance of going to college, their health and all for no reason other than that they worked hard and trusted the Government? Does he feel the weight of their suffering on his shoulders and the scales of justice tilting towards retribution? How can he sleep at night, knowing the havoc that his policy of government for the few at the expense of the many has brought to hard-working families, who never saw any of the benefits of the Celtic tiger, but nonetheless were content with their lot and who had their lives set up?
As usual, the Taoiseach waffled here this afternoon, blaming the usual suspects on the international scene for our woes. He said he did not want history re-written. Every time he opens his mouth, this is exactly what he does. If he had any decency, he would have resigned months ago and not put the House through a time-wasting exercise this evening. Knowing that he will win by strength of numbers unless some of his backbenchers or independents decide that enough is enough makes any vote of confidence a complete farce. In any other country, he would be facing retribution for his actions.
Tony Killeen (Clare, Fianna Fail)
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Ba mhaith liom tacaíocht a thabhairt don rún muiníne sa Taoiseach, an Teachta Brian Cowen. Is ceannaire láidir, cumasach é don tír ag an am práinneach trioblóideach seo. Ní chreidim go bhfuil ceannaire d'aon pháirtí sa Teach seo, seachas é féin, in ann tabhairt faoi na fadhbanna eacnamaíochta atá á shárú aige. Tá sé dochreidte go bhfuil na daoine ag dúirt go raibh dóthain á chaitheamh aige nuair a bhí sé ina Aire Airgeadais ag rá anois gur chaith sé iomarca.
It is very important to take account of the points which were made in the report by Professor Honohan and in the report by Mr. Regling and Mr. Watson, in respect of the two major issues that were under consideration in this House prior to the publication of those reports. One of those issues related to the lead-up of the bank guarantee and theories about it. The reports set out very clearly that it was absolutely necessary at the time to introduce the bank guarantees. That is very important. While an element of this debate is historical, going back over a decade or more, there is no doubt but that the concern of the vast majority of people is for the policies that are being adopted by the Government over the next three or four years while the difficulties persist. That element, which was open to an enormous amount of criticism, has been dealt with very comprehensively in the two major reports.
The other element that drew much criticism of the Taoiseach was the decision to ensure that Anglo Irish Bank did not fail. It is very clear from any thorough reading of the reports that the failure of Anglo Irish Bank would have had the most serious ramifications for the Irish banking system. In the context of the information currently available, it is very clear that an immediate wind-up of Anglo Irish Bank would have been disastrous for the Irish banking system and for the economy itself. We sometimes do not spell out what the impact of that failure would have been. It is clear that those who rightly worry about the impact of the financial cutbacks on the poorer sections of society, or indeed on many other people who had made commitments on foot of the kind of incomes that they enjoyed at that time, do not consider what the alternative would have been. Had the bank guarantee scheme not been put in place, the inevitable economic collapse would mean that there would have been no payment for any of these people. Unless we face up to that fact, the parties in the Government will not be able to bring forward the policies and to deliver on them in the manner in which Deputy Cowen has done as Taoiseach.
It is an extraordinary achievement, for someone who is frequently depicted in the media as a man who puts party before country, for the Taoiseach to lead the Government in making what have been shown to be necessary decisions, notwithstanding the fact that they have had a negative impact on people and which he knew would have an impact on the standing of the party. These decisions indicate clearly that the Taoiseach is a man of action, a man of great leadership qualities and a man who can claim quite fairly to have put the country before the party.
There are lessons to learn and there will be a process in the Oireachtas committees and in the commission of inquiry to be set up. An element of this process will examine historical issues and we will argue across the House whether it was better to do what the Government did or spend €40 billion more if we were to do all the things that were touted as desirable by various people on the Opposition benches. Undoubtedly, people will be looking for the kind of leadership that the Taoiseach has produced over the last two or three years and will continue to provide for the next two years.
Dara Calleary (Mayo, Fianna Fail)
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I too am happy to stand here this evening in support of the motion of confidence in the Taoiseach. I do so because I am happy that the reports presented to us last week by the three experts present very serious challenges to the State and to the way that we govern the State. For once, these are challenges that will be dealt with in this House, in the Oireachtas committees and in the various institutions that will report on them.
We have already learned the lessons of the light touch regulation that have led to this situation. The appointment of Professor Patrick Honohan as Governor of the Central Bank represented the first time somebody from outside the system has come to that position. The appointment of Mr. Matthew Elderfield as Financial Regulator is also clear evidence that we are going down a different path than that pursued before. The policies pursued by the Government in the past two years, which have resulted in genuine hardship right across the country, have given us stability today and we can use that stability to grow this economy and to start creating employment for those out of work.
That stability has entered into our relationship with the Civil Service and the public service, through the acceptance of the Croke Park agreement this evening by the public services committee of ICTU. I look forward to working with Deputies and Senators on the implementation of that agreement and on the implementation and construction of the new public services board and implementation body. Many of the blockages we find in our daily lives as public representatives may be unblocked and we will be able to deliver basic entitlements to people in a better and more efficient way which respects their dignity.
The agreement was encouraged and fostered in very difficult circumstances by the Taoiseach, Deputy Brian Cowen. It was put to him by many in the House that he had destroyed the relationship with the unions that had been the foundation of so much. However, he persevered through the first half of the year to come up with an agreement that was more reflective of the economy and the times we are in that those that preceded it. We are moving forward with confidence in implementing the agreement.
The relationship to which I have referred is being changed in the context of the transformation that has happened throughout the economy since 1997. Many would ignore the changes in infrastructure and services and the changes throughout the country that were brought about by the investment and surpluses achieved during that time. We are in serious difficulties now and nobody will ignore that. However, to ignore the fact that such visible physical progress was made as well as progress in other areas is also unfair and is not true of a real debate.
We have had the standard Punch and Judy debate, with each side saying it is right and the other is wrong. Let us go forward and decide, on the basis of these reports presented to us by outsiders to the political system, that those of us in the political system can, through the Joint Oireachtas Committee on Finance and the Public Service make the various changes that must be made on the back of those reports so that there will be a new politics. It will be a politics that is more reflective of the pressures people are going through and of what people have gone through in the past two and a half years. It challenges all of us to change and up our game and to move away from the Punch and Judy politics we all engage in as a matter of course. That is the message of the two reports published last week as much as they contain lessons on banking and on what went wrong in the economy. It is a matter for all of us in both Houses to take that on board.
I am happy that we will take those lessons on board, and that Deputy Brian Cowen's leadership as Taoiseach is the most stable that can be provided. It is a leadership that is willing and encourages all of us to push through the tough decisions needed.
We may have introduced stability to the economy but we must continue down the road we have taken. The Government has shown it has the backbone to take those decisions and see them through. We will have no difficulty in showing the electorate that when we were challenged to take those decisions we took them in the interests of the country.
This debate and the debate on the other side of the House are overshadowed by what has happened today. The House should welcome the findings of the report into Bloody Sunday. We will have statements on it next week. Nobody in the House could have imagined when waking up this morning that we would have read some of the statements that have come from that report or heard the statements made in the House of Commons.
Joan Burton (Dublin West, Labour)
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I join with the statement of the Minister of State on the report of the Saville inquiry. It is interesting that the new British Prime Minister gave an extraordinarily heartfelt apology. It was a very statesmanlike way to revisit the past policies of previous British Administrations.
Coming to our debate, a week is most definitely a long time in politics. The focus of media attention is on Fine Gael but the focus of this debate is on the Taoiseach, Deputy Brian Cowen. The focus of next general election will also be on him and on what Fianna Fáil did in failing the country. It is Deputy Brian Cowen who more than anyone else must survey the wreckage that now surrounds him. His supporters hoped and expected that the international examiners, Regling and Watson, would give the beleaguered Taoiseach a get out of jail card. Instead, they did the opposite and identified domestic policy failures by Deputy Brian Cowen as Minister for Finance as the primary cause of Ireland's current economic woes. The terms they used to describe the property bubble were "homemade", "plain" and "vanilla". The mumblings of the Taoiseach's loyalists in defence of their hero ring hollow because he is as much the culprit as the casualty of the circumstances that now threaten to overwhelm him.
Much of the present crisis is of the Taoiseach's own making. He can argue that he inherited much from Deputy Bertie Ahern as Taoiseach and Deputy Charlie McCreevy as Minister for Finance but he should have taken responsibility as a leader. Instead, he took the inheritance and failed to deal with the legacy of toxic and poisonous issues that faced him when he came to his desk. He reminds me of the Charles Dickens character from David Copperfield, Mr. Micawber, who was always certain that "something will turn up". Something did turn up. It was called Anglo Irish Bank but he willfully ignored it.
Warning bells about Anglo Irish Bank rang time and again in the spring of 2008, with the St. Patrick's day massacre in its share value and the collapse of the share price. In his report, the Governor of the Central Bank, Mr. Honohan, goes back even further to show that the warning signals were known to the authorities even earlier but former Minister for Finance, Deputy Cowen, postponed any remedial action and through most of 2008 continued to ignore the gathering clouds. Surely the Northern Rock collapse in the UK in the late summer of 2007 should have been enough to force a reappraisal of policy on our own economy's excessive exposure to construction as the country's primary engine of growth and public revenue. It was a love affair that had gone on too long and had become toxic.
I want to look at two aspects that feature in the reports. In his defence, the Taoiseach, Deputy Cowen, analysed the reports even when they are highly critical of him and his predecessors as Taoiseach and Minister for Finance. The Cabinet held on to the two reports for as long as ten days before they were ready to publish them. That tells its own tale of the shockwave that must have gone through Government Buildings when Ministers first read them. They needed ten days, and an effective Dáil adjournment of a week, to go through both reports with a fine toothcomb just to find some tiny crumbs of comfort they could use to claim vindication of their policies for the whole of the past decade. Crumbs of comfort were few and far between so they opted for wholesale distortion of the findings to suit their purposes, steadfastly refusing to accept any shred of responsibility for the policy errors that were the overwhelming contributing factors to our current economic and baking woes.
Let me take the example of the Honohan view of the 2008 bank guarantee. Ministers have tried to claim he endorsed the type of guarantee given on 30 September 2008 and that he had rejected the Labour Party's policy position. He did no such thing. He endorsed the idea of - to use his phrase - an extensive guarantee that would cover deposits and future senior bonds. He most certainly did not endorse - and specifically says so at several points in the report - the type of blanket guarantee that was the key element of the Government decision that night.
Our objection was always to the notion of a blanket guarantee. We never had any objection to an extensive guarantee of deposits. I wrote to the Minister for Finance and issued a statement a week or so prior to the guarantee urging that deposits would be guaranteed. We baulked at the scale of the Government guarantee proposal and nothing in Mr. Honohan's report last week disputes the wisdom of our approach.
Joan Burton (Dublin West, Labour)
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This is what he had to say as distinct to what Ministers pretend he said:
The inclusion of existing long-term bonds and some subordinated debt was not necessary in order to protect the immediate liquidity position. These investments were in effect locked in. Their inclusion complicated eventual loss allocation and resolution options.
We should think even for a moment about those simple sentences. They do not sound to me like any kind of support for the guarantee of the Minister, Deputy Lenihan, and the Taoiseach. Quite the reverse in fact, it reads as though it is written by someone with grave doubts about the wisdom of a blanket guarantee which had two failed institutions, Anglo Irish Bank and Irish Nationwide, at its core, not the high street banks we needed for ordinary deposits and business. A statement that recognizes the need to do something extensive to stabilize the banks cannot be read as tacit agreement with what was actually done, a blanket guarantee that went far beyond what was wise and prudent, and which will probably end up costing this country at least €20 billion to €35 billion more than a more limited kind of guarantee of deposits would have involved.
Ministers and spin-doctors refuse, understandably, to read nuanced comments. They deliberately confuse the words "extensive" and "blanket". Like in Alice in Wonderland, words mean what they choose to make them mean. The truth is that the guarantee of the existing bonds and the subordinated bonds was a critical and expensive error that will haunt taxpayers for a generation. Fianna Fáil Ministers are understandably fond - I share much of it - of commending the National Treasury Management Agency and, in particular, its senior management, and allocates a lot of different responsibilities to it which the agency has taken on and handled in a way that is admirable.
Mr. Michael Somers, who was head of the NTMA for all of the years since its inception until recently and was chief executive at the time of the guarantee recently said:
As an independent observer, I was aghast at what was happening and feeling what a shame, all this effort that we had made at making the country solvent blown like that. It's incredible and it's going to affect us for several generations.
That is what the Government's favourite person in the NTMA whom the Government has quoted again and again has to say about the guarantee.
I want to discuss tax breaks. Mr. Regling and Mr. Watson ranked property breaks as one of the main ingredients of the home made triggers of the collapse. This has been my song for so long that it was a pleasant surprise to hear it sung with so much gusto by others. According to Mr. Regling Irish property tax incentives were three times the scale of similar breaks elsewhere in the eurozone and that by 2005 the cost of these breaks was larger than the remaining income tax receipts. That is how big they were.
The Taoiseach has tried to present a misleading picture of himself as the great reformer who abolished them. As both reports show, the Taoiseach, who was the former Minister for Finance, extended the tax breaks. He had headline abolition of the tax shelters, tempered by small print expansion, from 2005-08. Both reports suggest that it was at this point that the tax breaks ended up costing the Irish taxpayer such a colossal amount.
The Taoiseach was reckless and cowardly in the face of mounting evidence of tax avoidance and the excessive bank lending in one sector. Indecon and the Department of Finance officials pointed this out in various reports. He had the evidence before him on his desk. He procrastinated. He caused immense damage and in the end he caused a huge transfer of wealth from the ordinary, average working Irish person to the super rich. Time and again in this House I exposed the issue of the millionaires who were paying no tax because of the Fianna Fáil tax breaks. The Taoiseach stands condemned out of his own mouth by the very faulty self-defence which he tried to put forward.
Dick Roche (Wicklow, Fianna Fail)
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I wish to share time with the Minister of State, Deputy Haughey.
Dick Roche (Wicklow, Fianna Fail)
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I am delighted to speak immediately after Deputy Burton because as I came into the House I said there is an air of unreality about the debate today in that the proposer of the original motion is not here. I will not dwell on that; it is a matter for Fine Gael. I will, however, dwell on the Alice in Wonderland that has been adopted by the Labour Party. I want to illustrate this, in particular, by reference to the two extraordinary reports which were published last week. Let us recall for a moment that when the reports were first proposed the Labour Party suggested they would be whitewashes.
In his opening comments today Deputy Gilmore, with all his theatrical splendour, did better than I have seen him for a long time. He produced a flourish that would have done justice to Lawrence Olivier in his best moments. Let us think for a moment. Where was the Labour Party on 30 September 2008 when the real test of political leadership in this country was coming to reality? To give credit where credit is due, when the Minister, Deputy Lenihan, at 7 a.m. on that day telephoned Deputy Enda Kenny he was assured that Fine Gael would behave in the national interest. I want to recognise that because Fine Gael has done that before and it is right and proper to do so.
What was the response from the Labour Party? It was extraordinary by any standard. This country faced one of the worst challenges it had ever faced. We can debate as much as we want backwards and forwards and engage in Punch and Judy politics about what happened.
Kathleen Lynch (Cork North Central, Labour)
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Who are responsible?
Dick Roche (Wicklow, Fianna Fail)
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It is at the time when one faces a crisis that leadership is tested. What happened with the Labour Party? It did what it always did, it panicked, ran away and failed to address what was of interest to the nation. Quality of leadership is tested in those times and when the Labour Party was tested it failed. It did not have the capacity in those days. As I said, when the Minister, Deputy Lenihan, approached the Leader of the Opposition, Deputy Kenny, he was given a positive response, and I want to acknowledge that.
Let us consider what the reports actually say, as oppose to the mythological interpretation given by Deputy Burton. For example, in the case of the reports produced by Mr. Regling and Mr. Watson and Professor Honohan, their judgment on the case of Government and the responses to the crisis are very positive, but not unquestionably so. For example, when they appeared before the Joint Committee on Finance and the Public Service last week, Mr. Regling and Mr. Watson were specifically asked by the Opposition spokespersons on a number of occasions about their response to the Government's handling of the banking crisis.
Mr. Regling said, "Both of us have the view that the crisis management in this country has been very good, in particular when compared to other countries in the European Union".
Kathleen Lynch (Cork North Central, Labour)
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What do they say caused it?
Dick Roche (Wicklow, Fianna Fail)
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The guarantee scheme, a decision which was attacked, in particular by the Labour Party, is examined in detail, as has been said, by Professor Honohan. He said, "It is hard to argue with the view that an extensive guarantee needed to be put in place-----
Joan Burton (Dublin West, Labour)
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He condemns the blanket guarantee.
Dick Roche (Wicklow, Fianna Fail)
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-----since all participants-----
Brendan Howlin (Wexford, Labour)
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Allow the Minister of State to speak.
Dick Roche (Wicklow, Fianna Fail)
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He said an extensive guarantee needed to be put in place since all participants rightly felt that they faced the likely collapse of the Irish banking system within days in the absence of decisive action. He continues: "Given the hysterical state of the global finances in these weeks, failure to avoid this outcome would have resulted in immediate and lasting damage to the economy and society". He raised the issue of subordinated debt which was about 3% of the total amount in that issue.
7:00 am
Dick Roche (Wicklow, Fianna Fail)
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It was approximately 3%. We should remember what some of it, in particular the senior debt, involved. Some of it was from other banks within the institutional framework in Ireland. Some was from treasury management activities by international companies which have invested in this country and some was from credit unions. It was great credit to the Labour Party that it would have flushed them all down the toilet.
Consider another of the Labour Party's favourite issues, Anglo Irish Bank and the question of whether it was of systemic importance. Professor Honohan is unequivocal in stating:
Anglo was clearly systemically important in the prevailing conditions at the end of September 2008...There can be little doubt that a disorderly failure of Anglo would, in the absence of any other protective action, have had a devastating effect on the remainder of the Irish banks.
Given the clarity of these reports, I find it incredible that Punch and Judy politics continues to be played in this Chamber. Instead of focusing on how we can combine such wisdom as exists in this House to craft a new approach, we have the nonsense we just heard from the Deputy. I suggest the best service she could do for this House and the nation would be to spend next weekend reading the reports before showing some of the clarity and positivity we have seen from other parties.
Kathleen Lynch (Cork North Central, Labour)
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A copy should be sent to every household in the country.
Seán Haughey (Dublin North Central, Fianna Fail)
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The Government has already welcomed the publication of the two recent reports on the banking crisis and it is prepared to accept responsibility for decisions made at the time. One of the factors which resulted in our present predicament was the property bubble but in the interest of fairness it must be pointed out that the Taoiseach, as Minister for Finance, decided to do away with property related tax incentives even though there had been no outcry for their abolition. Furthermore, we are experiencing a worldwide crisis and many other economies, including the United States, Greece, Spain, Britain, Italy and Iceland, are also suffering at present. The Opposition may, however, wish to blame us for the problems these economies are experiencing.
We are committed to putting the economy and the country ahead of short-term partisan or party political interests. It is more productive to concentrate our energies on resolving our current difficulties and planning for economic recovery than to spend countless hours in political navel gazing about recent events.
Kathleen Lynch (Cork North Central, Labour)
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We do not need to navel gaze. We have two reports which tell us who was responsible.
Seán Haughey (Dublin North Central, Fianna Fail)
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It is more constructive to analyse our current problems, investigate what actions can be taken now and fine tune the Government's strategies to prepare us for the economic upturn when it inevitably comes.
Kathleen Lynch (Cork North Central, Labour)
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Hope is not a strategy.
Seán Haughey (Dublin North Central, Fianna Fail)
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It is now widely recognised by independent commentators that we are taking the right approach and making the tough decisions. The Central Bank, the IMF and the ESRI are broadly in favour of the economic policies we are pursuing. Other bodies, such as the European Commission and the OECD, forecast a return to positive growth in the near future.
The fact we are meeting our budgetary targets for public expenditure and taxation illustrates that the economy is stabilising. Manufacturing output and retail sales figures are improving and labour costs are falling. Unemployment figures, while still high, show signs of stabilising.
Perhaps Opposition Deputies, with their rose tinted glasses, would have us believe they had the foresight to predict our current difficulties but this is far from the truth. Their 2007 election tax policies and their proposals on stamp duty for first time buyers would have added further fuel to the property bubble had the previous Government followed their inappropriate advice. Over the past decade, few people called for increases in stamp duty. Many more wanted it to be reduced but, thankfully, this demand was resisted by the Government. If the structural deficit that is now apparent in our public finances was to have been avoided campaigners in recent elections should have called for increases in personal taxation, a property tax, water rates and the abolition of certain tax reliefs.
Perhaps there is a need for a collective mea culpa from all the main political parties. Focusing on past activity is a necessary part of the discourse of every democratic society but a preoccupation with past events to the detriment of addressing present difficulties is like fiddling while Rome burns. We are attempting to stabilise the public finances and we have taken steps to protect the banking system and implement several measures to enhance our competitiveness. The Government has published its economic blueprint, Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewal. Any fair-minded person would agree that the Taoiseach and the Government have made great strides in tackling the unprecedented crisis we face.
Kathleen Lynch (Cork North Central, Labour)
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While they are going forward.
Seán Haughey (Dublin North Central, Fianna Fail)
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Opposition Members are responding as theatrically as possible by instigating a confidence motion and a blame game. However, they are unable to suggest realistic or viable alternatives to the policies this Government is pursuing. As they cannot win the debate on current economic issues, they think it is better to muddy the waters by casting doubt on our policies, even to the extent of accusing the Taoiseach of treason.
Kathleen Lynch (Cork North Central, Labour)
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It is as clear as crystal.
Seán Haughey (Dublin North Central, Fianna Fail)
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However, the mudslinging will not work. The Government is pursuing the correct policies under the leadership of the Taoiseach and for that reason I am happy to support the motion.
Deirdre Clune (Cork South Central, Fine Gael)
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I wish to share time with Deputies Perry and Creighton, by agreement.
Deirdre Clune (Cork South Central, Fine Gael)
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I have no confidence in the Taoiseach. The Minister of State, Deputy Roche, referred to "Alice in Wonderland" and he must have been watching the movie because his reaction to the two reports under discussion was a far cry from my understanding of them.
Last week the Honohan report and the Watson and Regling report set out the Taoiseach's legacy. These reports reveal beyond doubt that, as Minister for Finance, he followed a course that led to our current disaster. Fault for our economic collapse lies not with the international markets but with Fianna Fáil's mismanagement of the economy, inept regulators and bankers who lost the run of themselves.
The new Governor of the Central Bank, Patrick Honohan, carried out an inquiry into the regulatory regime, Government policy and the actions of bank management. He blamed macro-economic and budgetary policies for contributing to economic overheating and stated the Government relied to an unsustainable extent on the construction sector and other transient sources for revenue. He further stated: "The Government's pro-cyclical fiscal policy stance, budgetary measures aimed at boosting the construction sector, and a relaxed approach to the growing reliance on construction-related and other insecure sources of tax revenue were significant factors contributing to the unsustainable structure of spending in the Irish economy".
We all know the history. Tax revenue was buoyant and the response was to forget about prudent economics when spending the money. Any prudent housekeeper knows that excess funds should be invested in improvements to the house rather than blown at a party.
Mr. Honohan debunked the myth that the weakness of Irish banks was caused by external factors. He stated: "Even before the failure of Lehman Brothers in September 2008, Irish residential property prices had been falling for more than 18 months and few observers expected their fall to end soon". He argued that banking practice and Government policy both played a central role in creating the crisis. As Minister for Finance during this period, the Taoiseach closed his eyes to the realities facing the country.
The report by Klaus Regling and Max Watson also found that budgetary policy veered towards spending while revenues were buoyant. In addition, the pattern of tax cuts left revenues increasingly fragile because they were dependent on taxes on the property sector.
The public never had the chance to vote for Deputy Cowen as Taoiseach but they will have to live with his legacy in terms of inadequate health services and lack of investment in infrastructure. The Chief Whip, Deputy Curran, stated on radio this morning that he expects the Government to win the vote on the motion but the real vote will be when the people have an opportunity to decide on the Taoiseach's legacy. I know how they will vote.
John Perry (Sligo-North Leitrim, Fine Gael)
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How can anyone have confidence in a Government which has brought the country to its knees? That we are in the midst of the worst crisis ever to hit the country is obvious to every citizen. For every action there is a massive reaction in every home. The crisis is especially obvious to all those who have lost their jobs. Employment is being lost in all areas, including the retail and restaurant sectors and small companies. Unemployment has increased by nearly 12% in County Sligo and almost 6% in County Leitrim in the past 12 months. The total number of unemployed in the two counties is more than 9,000. Each one of these unemployed persons represents a personal tragedy and wasted opportunity.
That we are in the midst of the worst crisis ever to hit the country is obvious from the scale of youth unemployment, a problem that diminishes us all. Not only does youth unemployment damage individual families, it corrodes entire communities.
That we are in the midst of the worst crisis ever to hit the country is obvious from the return of forced emigration. As in the past, it seems this Fianna Fáil-led Government plans to rely on emigration to solve the unemployment problem.
That we are in the midst of the worst crisis ever to hit the country is obvious from the fact that the standard of living of those lucky enough to still have a job is sinking by the day and people are struggling to meet their mortgage repayments. Mortgage companies have massive arrears on their books because people are defaulting on their payments. Homes are being repossessed and the impact is unbelievable. The cost of Government services and charges are increasing, while incomes are being squeezed by income levies and tax increases.
That we are in the midst of the worst crisis ever to hit the country is obvious in the slashing of public services and the closure of community based projects. Following the closure of breast cancer services at Sligo General Hospital, it is now proposed to reduce coronary care services at the hospital.
These issues and many others are the direct responsibility of the Government. The independent banking reports state clearly that the crisis is home grown and that the Taoiseach, when Minister for Finance, pursued policies that proved catastrophic for the nation. Throughout the developing crisis, the Government's attitude to the future problem was one of evasion. The Taoiseach continues to adopt the evasion tactic, informing us, for example, that no one told him the ship of State was heading for the rocks. I have news for him. As captain of the ship, it is his job to know when it is off course. It is a sign of incompetence to argue, as he does, that no one told him. This is the traditional Fianna Fáil style of leadership, with the Taoiseach the actor-in-chief in an artistic environment of the performing arts, make-up and all. His job was to be sufficiently competent to pull the brake as the ship of State headed for the rocks. To argue that he would have done so if someone had told him is the lamest leadership excuse I have ever heard. The country has no confidence that he is the man to lead us out of the crisis. It is time for the Fianna Fáil led Government to go to give the nation an opportunity to determine who can lead the country.
We have had appalling losses. Small companies have a major role to play in job creation, yet the Government has decided to provide €24 billion for a bank which is closed. Anglo Irish Bank pretends it is open for business, but it is not taking on new customers or providing money for existing customers. The Government should be honest enough to state the bank is closed for business. It has done everything bar place a "Closed for Business" sign on the door.
A sum of €24 billion of taxpayers' money has been invested and there is more to come. Despite this, the banks are not providing funding. Loans are provided with so many caveats to preclude them from being drawn down. If a branch states it is granting 100 loans a week, the question is: how many of them are being drawn down? The number of caveats attached to these loans means that perhaps ten of every 100 loans granted are drawn down. The banks are seeking double security, audited and retrospective accounts and various other figures. They are giving ten reasons to prevent companies from obtaining funds and enable them to build their cash reserves.
One must understand the catastrophic circumstances faced by employers who are finding it increasingly difficult to survive. Businesses must meet excessive requirements to obtain tax clearance certificates. Small companies employing fewer than ten people, the backbone of the economy, are on the rocks and being hounded out of business. When one considers what could be done with €1 billion in terms of job creation, it is astonishing to learn that €24 billion has been provided for a closed, zombie bank which capitalised Fianna Fáil developers. The politically well connected did not need accounts or a tax clearance certificate to secure a loan from Anglo Irish Bank. All they had to do was turn up to be given whatever they wanted.
People are in an unforgiving mood. When Minister for Finance, the Taoiseach had a critical role in propelling the building boom which was generating annual revenue of €8 billion. One did not need to be an economist to know this money would not continue to be forthcoming from the construction sector.
John Moloney (Laois-Offaly, Fianna Fail)
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I will share time with Deputy Blaney. I welcome the Saville report published by the British Government today.
I cannot pretend that I had not made up my mind on how I would vote before entering the Chamber. However, nothing I have heard in the past five and a half hours has gone any distance towards changing my mind.
Kathleen Lynch (Cork North Central, Labour)
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The Minister of State is demonstrating a well known Fianna Fáil Party trait.
John Moloney (Laois-Offaly, Fianna Fail)
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I will use the five minutes available to me to-----
P J Sheehan (Cork South West, Fine Gael)
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If the Minister of State is so convinced of-----
Brendan Howlin (Wexford, Labour)
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Please allow the Minister of State to continue without interruption.
John Moloney (Laois-Offaly, Fianna Fail)
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My ministerial colleagues have eloquently outlined the Government's successful economic policy and how they are dealing with the responses to the reports. In the few minutes available to me, I propose to discuss the character of the Taoiseach because he has been the subject of a well organised strategy to attack him as an uncaring, incapable politician and poor leader. When one considers the many aspects of his ministerial career, this is clearly not the case.
For the past two years I have had responsibility in the Department of Health and Children for dealing with people with disabilities. The Taoiseach is credited by all sides with introducing a multiannual investment programme. This decision will be to his eternal credit. Having lived in the same constituency as the Taoiseach for the past 40 years, I know him well. It is pity Deputy Quinn is not present to respond because I resent his attempt to attach the tag of "corrupt" to the Taoiseach and link it with Oliver Cromwell.
The Taoiseach has the full support of the Fianna Fáil Parliamentary Party on the basis of his honesty and integrity as a politician. As my colleagues noted, he has at all times gone out of his way to place the country first and pursue policies that will safeguard our economic solvency. In doing so, he has risked his popularity. It is, unfortunately, a truism that politicians often take the soft option. That is not the case with the Taoiseach.
I must repudiate the allegation that the Taoiseach has committed economic treachery. This accusation has never been made previously in the House and does not stand up to scrutiny. If the Governor of the Central Bank, Professor Patrick Honohan, were permitted to survey and inspect the banking and economic policies of other countries, I am certain there would be the same level of opposition.
There were suggestions during today's debate that the Taoiseach had little success in the Departments in which he has been Minister. One could say the opposite to that. I have already explained about his major involvement in the multi-investment programme. I reiterate the point made by the Minister for Health and Children, Deputy Harney, about his total involvement in promoting reform in the health service. I heard criticism today from Deputy Kenny about the levels of suicide and that there was little investment in mental health. These matters go unnoticed when things go right. The Government commitment, proposed by the Taoiseach, on the reform of mental health under A Vision for Change, has seen this year alone €45 million committed to mental health and a further €50 million each year ongoing. That clearly indicates a Taoiseach who not alone has a serious grasp of the economic realities, but also has a great understanding of the difficulties on the social aspect.
It goes without saying that I have the greatest pleasure in supporting the motion. I might say that if I had two more votes I would cast them also.
I thank the Minister of State for sharing time. There has been much smudging of facts in the past week by many Members of this House, most of whom should know better. The two reports that came into the public domain last week on our economic situation provided some clarity on the root of Ireland's difficulties. Needless to say those on the Opposition benches focused on those aspects of those reports they felt might bring political advantage to themselves, a case of opportunistic politics at its best.
Many issues were addressed in the financial reports. Lessons must be learned by those in power, including those in the banks, the regulator and those in Government. The Taoiseach has never shirked his responsibilities and has shown great courage in accepting any responsibility he may have had in this regard. He has rightly focused on righting any wrongs that might have taken place. Professor Honohan reported that the major responsibility lies with the directors and senior management of our banks that got us into trouble. He also acknowledged the good work that has been done since by the Government in ensuring these institutions will never be able to repeat their actions again. As Minister for Finance, the Taoiseach, Deputy Cowen, introduced measures in various budgets in an effort to curb spiralling dependence on the property market. In hindsight these measures were inadequate, but then hindsight is always clear. This week it has been confirmed that advice from the OECD, the IMF and the Central Bank at the time was inadequate. A large share of responsibility must also lie there.
In the past week Members of this House have called for the Taoiseach's head, have called for a general election and, I suppose, have called for everything under the sun except common sense in regard to this matter. These are the same people who called on the Government to spend more when we were enjoying good times, even going so far as to call Deputy Cowen's budgets measly. Now that we are experiencing changed times they are telling us that we spent too much. Despite pressure from Opposition parties when the Taoiseach was Minister for Finance to abolish stamp duty over a number of years, thankfully he refused to relent to these populist demands. These are the same parties that are now engaged in finger wagging. Rather than curb the reliance on property, they called for the introduction of measures that would have increased the overheating of the economy at the time.
The Labour Party moved to the top position in the opinion poll last week leading it to believe it will form the next Government. I am particularly pleased to see the Labour Party with such popularity at this time. To reach the peak is one thing, but staying there requires leadership, policy and economic direction. These are attributes that the Labour Party and in particular Deputy Gilmore do not have in abundance. This afternoon Deputy Gilmore accused the Taoiseach of having a hard neck. It takes a hard neck for him to put himself forward as an aspirational Taoiseach, when he lacks policy and leadership. Over the next year to 18 months I believe he will go back down the polls. Deputy Gilmore should enjoy his current days of glory because they will not last. He and his party have sat on the fence on every tough decision that needed to be taken in recent years. It opposed the bank guarantee scheme, which has been hailed as necessary by Professor Honohan in his report last week. This is the same guarantee that other countries around the world copied in an effort to stabilise their banking systems. The Labour Party also sat on the fence regarding the Croke Park deal with the unions. This is the Labour Party that could not make up its mind on what is ultimately a labour dispute. Is this the kind of party we want running our country? I certainly do not think so. History will not be kind to it and I believe its time at the top of the polls will be short lived.
Fine Gael proposed a motion of no confidence in the Taoiseach and the Government, while at the same time its own leader is facing a leadership bid within his own party. Even those within do not have confidence in him to lead their party never mind the country. It cannot even get its own house in order, never mind getting the country back on its feet.
I acknowledge that every party has its own internal issues and Fianna Fáil is not immune. The difference is that in Fianna Fáil we are not focused on internal rifts but on bringing the economy back from the brink. That is what we were elected to do. We are not engaging in popularity contests. We did not expect to be doing well in opinion polls given the tough decisions we have taken which are affecting every family. We take no joy in taking tough decisions, but I believe we are reaping and will reap the benefits of these decisions in the years to come. In the meantime if we suffer in the opinion polls so be it. We must continue on the path of corrective action we are taking. The decisions taken by the Government in the past two years have been courageous. We need to continue on this road and that is what we intend to do with the Taoiseach, Deputy Cowen, at the helm.
The people are angry that the banking meltdown took place. In two years' time when the media and nation look back over the Government's handling of the economy, the Taoiseach, Deputy Cowen, and his Government will be appreciated for the guidance they have given the country. We will then see the opinion poll that matters, the general election, what proper policy for the sake of the nation has gained for the Taoiseach, his Government and Fianna Fáil, and what the cheap populist policies of the Opposition have gained for it.
Pat Breen (Clare, Fine Gael)
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I wish to share time with Deputies Sheehan and Neville.
Pat Breen (Clare, Fine Gael)
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While the Government might win the vote tonight the people will be in the long grass waiting for them when the election is called. The banking crisis was home-baked. This week, when Max Watson was speaking at the Oireachtas Joint Committee on Finance and the Public Service he said it was clear there was a culture of not rocking the boat here in recent years. He is right that such a culture existed during the Fianna Fáil period in Government in recent years. The ingredient for this home baked crisis was a cosy cartel which developed between the Government, the bankers and their developer friends. Nobody wanted to rock the boat. Good banking practices and regulatory controls were abandoned in the stampede to keep pace with the property boom.
To compound our difficulties when concerns were raised that our economy was overheating and that corrective action was required, those who spoke out were accused of being the prophets of doom. Even in July 2008, when the dogs in the street knew corrective action was required to deal with the country's deteriorating finances, the Taoiseach urged people to stop talking as if the economy was facing Armageddon. Turning a blind eye to any alarm bells was common practice. The Central Bank of Ireland buried data from a crucial report months before the collapse of the housing market here in 2007, which bears remarkable similarity to what happened in the United States and Goldman Sachs.
It is now the most vulnerable and weakest in our society who are suffering because of the Government's mismanagement of the economy. Yesterday, the respite day centre which is run by the Brothers of Charity in Limerick, and which accommodates a number of people with disabilities and their families from County Clare closed its doors because €150,000 could not be found to keep it open, yet every householder in the country is being saddled with a €30,000 debt by this Government to support the €54 billion gamble on NAMA.
An opinion poll over the weekend indicated that 57% of people want a general election. The Taoiseach should consider that and dissolve this Dáil to give the people a say in what they want.
The economy has been mismanaged and the Government has been there too long. It is tired, jaded and has run out of ideas. That is what has put us in the current position.
P J Sheehan (Cork South West, Fine Gael)
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I rise tonight to state that I have no confidence in the Taoiseach or his tired, stale and incompetent Government. I wished to address the ladies and gentlemen of the Government but there are no ladies present.
Dan Neville (Limerick West, Fine Gael)
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There are two ladies on the Labour Party benches.
Micheál Martin (Cork South Central, Fianna Fail)
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There are some on the Opposition benches.
P J Sheehan (Cork South West, Fine Gael)
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There are no ladies present on the Government side. It is time for the Government to change the team captain.
Kieran O'Donnell (Limerick East, Fine Gael)
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He is referring to ladies on the Government side.
Ciarán LynchP J Sheehan (Cork South West, Fine Gael)
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I have served the people of south-west Cork in politics in this House for more than 25 years. I am a realist and I know we do not have the numbers on this side of the House to force a change but the people opposite have that choice tonight. If it does not happen today, it will happen very soon.
The Government has bankrupted the State and mortgaged its people for decades to come. It has nothing to offer the people - not even an apology - except a litany of excuses about how everybody else is to blame except the first mate who took the captain's role.
P J Sheehan (Cork South West, Fine Gael)
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I will deal with him. This man, the Taoiseach, who sailed on a high tide, now finds himself on the rocks by taking every shortcut around the map. He sailed with the encouragement of dinner friends from the banks and his so-called friends also dined under the canvas of the Galway tent and built towers in Babel on every mucky site they could get their grubby hands on.
P J Sheehan (Cork South West, Fine Gael)
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There are over 20 former Ministers and Ministers of State who have been retired or downsized during the life of this Government.
Pat Breen (Clare, Fine Gael)
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The women are walking out in protest.
P J Sheehan (Cork South West, Fine Gael)
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It is a tired, stale and incompetent Government which has run out of lifebelts and is using the deck planks to keep the engines running in a forlorn hope that one day it may reach landfall. God help us.
The Government's policies of supporting the speculators and bankers in the Galway tent have failed with catastrophic consequences for every man, woman and child in this country. Has the Government no pride in its country and its fellow men and women? One of the Taoiseach's predecessors, the illustrious father of the Minister of State, Deputy Seán Haughey, said to me on his last day in office that the battle was over and it was time to replace the sword in the scabbard. These were the last words in office of that effective and efficient Taoiseach, Charles Haughey. I had made a query on an issue pertaining to west Cork.
Martin Mansergh (Tipperary South, Fianna Fail)
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Does the Deputy miss him?
P J Sheehan (Cork South West, Fine Gael)
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I listened to him and admired him, although his own party did not.
Séamus Kirk (Louth, Ceann Comhairle)
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The Deputy is eroding his colleague's time.
Dan Neville (Limerick West, Fine Gael)
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He is more effective than I.
P J Sheehan (Cork South West, Fine Gael)
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The Government should act patriotically and fall on its sword. It is time it did so.
P J Sheehan (Cork South West, Fine Gael)
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The Taoiseach might listen to the voice of his immediate predecessor when he spoke of those who forecast this sorry day. If the Government is to show any patriotism for this country, it should go now and have an immediate general election.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Dan Neville has limited time; he has just over two minutes left.
Dan Neville (Limerick West, Fine Gael)
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I wish to oppose the motion of confidence because of the lack of recognition from the Government of the problem of depression out in society, caused by the recession. It affects people who are immediately touched by unemployment, financial crisis and fear of losing one's home and consequent interpersonal relations difficulties within families. There is a sizable need to ensure that the psychological, emotional and mental well-being of people is looked after and the resources are allocated.
We have criticised the Government for reducing the level of social welfare but it has substantially increased the cost of social welfare because of the numbers out of work. Some 440,000 people now receive social welfare payments. I am making the point that there is another need caused by this crisis; there must be support for the psychological, emotional and mental well-being of our people.
People are inherently vulnerable and can go through life doing well at school and college and being in a good marriage and job. If people lose that job and are in a financial bind, they would be extremely vulnerable. The Government should not reduce the resources for protecting and assisting such people.
There are statistics for the first three quarters of last year showing an increase in suicide rates of 26%. That was predictable as all recessions bring about an increase in suicide rates around the world but some states respond differently to it. When Finland experienced serious recession, the country responded in a different way than New Zealand, which experienced a substantial increase in suicide rates. The suicide rate increase in Finland was limited. The Taoiseach and Government should recognise that there is a serious issue that needs resourcing.
Dermot Ahern (Louth, Fianna Fail)
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I wish to share time with the Minister for Foreign Affairs, Deputy Micheál Martin.
Dermot Ahern (Louth, Fianna Fail)
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There is no doubt the Opposition has a very short memory; either that or it is trying to rewrite history. During the boom years it constantly criticised the Government and told us to spend more.
P J Sheehan (Cork South West, Fine Gael)
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What did it do with the boom?
Dermot Ahern (Louth, Fianna Fail)
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Had we followed the Opposition's policies, the dole queues would have been much longer, the downturn would have been much deeper and the recovery would have been delayed. The Deputy will remember how this happened in the 1980s when Fine Gael flunked decisions.
P J Sheehan (Cork South West, Fine Gael)
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The Galway tent has exploded.
Dermot Ahern (Louth, Fianna Fail)
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No party got it right with respect to the international downturn, including Fine Gael, Labour or ourselves. The Opposition's arguments are very flawed. We are currently on the path to securing recovery and we are not involved in personality politics. We have seen some of the happenings in the past couple of days which clearly come from personality politics. In the past number of years the Opposition wanted to be all things to all men and women but they would have prolonged the pain rather than shorten the difficulties.
Over the past two years we have shown that we are prepared to take the necessary decisions. We are repairing the banking system and restoring public finances. We are regaining competitiveness.
Róisín Shortall (Dublin North West, Labour)
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Repeating the point does not make it true.
Dermot Ahern (Louth, Fianna Fail)
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We are trying to support and sustain jobs.
Kieran O'Donnell (Limerick East, Fine Gael)
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Who created the problem?
Dermot Ahern (Louth, Fianna Fail)
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Other countries are following our example. We only have to read an independent publication like The Wall Street Journal-----
Róisín Shortall (Dublin North West, Labour)
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Talk about rewriting history.
Dermot Ahern (Louth, Fianna Fail)
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One can put it no better than RTE's Seán O'Rourke, who recently stated that the Opposition bought into the climate of the day. At least we acknowledge that we made mistakes. The Opposition does not do so.
Kieran O'Donnell (Limerick East, Fine Gael)
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That is revisionism.
Róisín Shortall (Dublin North West, Labour)
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It is pathetic. The truth is of no importance to the Minister.
Dermot Ahern (Louth, Fianna Fail)
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In the 2007 general election campaign, Fine Gael and Labour came together and agreed an agenda in respect of tax and jobs. In a nutshell, this meant more spending.
Róisín Shortall (Dublin North West, Labour)
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This is despicable stuff.
Dermot Ahern (Louth, Fianna Fail)
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Does Deputy Shortall recall that her party promised a baby bond of €1,000 in respect of every child under the age of 18?
P J Sheehan (Cork South West, Fine Gael)
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What was wrong with that?
Dermot Ahern (Louth, Fianna Fail)
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The Labour Party stated it would reduce income tax by 2%. We refused to do so. It also stated that it would slash stamp duty, which would have led to house prices increasing again. We refused to take such an option. The Labour Party also wanted us to increase spending. Fine Gael wanted the VAT on houses to be decreased by 1% which, again, would only have fuelled the boom.
Finian McGrath (Dublin North Central, Independent)
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They were all wrong.
Róisín Shortall (Dublin North West, Labour)
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Why does the Minister not refer to his party's record for a change?
Dermot Ahern (Louth, Fianna Fail)
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Fine Gael also wanted to slash stamp duty.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister was in government at the time. He should refer to his own party's record.
Séamus Kirk (Louth, Ceann Comhairle)
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May we just have the speaker in possession contributing?
Dermot Ahern (Louth, Fianna Fail)
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Fine Gael also wanted free GP visits.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister was in government at the time, he should concentrate on that.
Dermot Ahern (Louth, Fianna Fail)
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It also wanted free health insurance for children and to abolish VRT.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister was in government at the time.
Dermot Ahern (Louth, Fianna Fail)
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Even now, the Labour Party has it completely wrong. Deputy Burton tried to suggest-----
Róisín Shortall (Dublin North West, Labour)
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Obviously the Government-----
Dermot Ahern (Louth, Fianna Fail)
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-----that Professor Honohan was wrong on the need for a guarantee. Deputy Burton still does not accept that the guarantee was necessary. The Labour Party was again proved wrong in respect of how the banking crisis should be dealt with.
Kieran O'Donnell (Limerick East, Fine Gael)
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Professor Honohan stated that the guarantee was too wide-ranging.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy O'Donnell should allow the Minister to continue, without interruption.
Dermot Ahern (Louth, Fianna Fail)
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Deputy Gilmore is a veneer politician.
Róisín Shortall (Dublin North West, Labour)
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What did Professor Honohan say with regard to the role of the Department of Finance?
Séamus Kirk (Louth, Ceann Comhairle)
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Only the speaker in possession may contribute.
Dermot Ahern (Louth, Fianna Fail)
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There is no substance to anything Deputy Gilmore says. He operates on the basis of the emotional soundbite.
Róisín Shortall (Dublin North West, Labour)
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It was controlled by the then Minister for Finance and it distorted the analysis.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Shortall should desist.
Dermot Ahern (Louth, Fianna Fail)
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Deputy Gilmore cannot take a stand on anything. His attitude is "There is a crowd, I must go and follow it". He finally stated two days ago-----
Róisín Shortall (Dublin North West, Labour)
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This is really hurting the Minister.
Dermot Ahern (Louth, Fianna Fail)
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-----that he would not enter coalition with Fianna Fáil. I wonder if he will change is mind in light of the debacle on the Fine Gael benches.
P J Sheehan (Cork South West, Fine Gael)
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Deputy Gilmore would have nothing to do with Fianna Fáil.
Róisín Shortall (Dublin North West, Labour)
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You wish, Minister.
Dermot Ahern (Louth, Fianna Fail)
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He sat on the fence in respect of the Croke Park agreement. Today, however, he stated that we must reform the public sector. If he cannot come down on one side or the other, is he capable of providing leadership or so-called change?
Róisín Shortall (Dublin North West, Labour)
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The Minister sounds like a broken record.
Dermot Ahern (Louth, Fianna Fail)
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Deputy Gilmore was asked about water charges last month and had an "Enda Kenny moment".
Jack Wall (Kildare South, Labour)
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The Minister refers to the politics of others but-----
Dermot Ahern (Louth, Fianna Fail)
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This time last year the Labour Party was talking tough in respect of crime.
Róisín Shortall (Dublin North West, Labour)
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The Minister should-----
Dermot Ahern (Louth, Fianna Fail)
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When it came to taking action, however, those in the Labour Party were totally weak-kneed.
Róisín Shortall (Dublin North West, Labour)
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The Minister is pathetic. He is a nasty piece of work.
Dermot Ahern (Louth, Fianna Fail)
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Deputy Burton stated that she predicted everything. I remind the Deputy of her comments regarding the 2006 budget when she stated that not enough was being spent on social welfare and when she sought further tax cuts. In 2007, she criticised us for not introducing tax cuts in the budget and sought more spending.
Róisín Shortall (Dublin North West, Labour)
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The Minister cannot bring himself to comment on his party's record.
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister's time has expired.
Dermot Ahern (Louth, Fianna Fail)
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In 2008, she stated that the budget contained only minimal social welfare increases.
Róisín Shortall (Dublin North West, Labour)
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The Minister should speak to his own party's record. He should stop trying to-----
Dermot Ahern (Louth, Fianna Fail)
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Deputy Rabbitte devoted an entire speech to criticising us for the fact that - this was his claim - Ireland was below the EU average on public spending. Those in the Labour Party speak out of both sides of their mouths. They want it every way.
Kieran O'Donnell (Limerick East, Fine Gael)
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Straight from the mouth of one of the experts in that regard.
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister must give way to the Minister for Foreign Affairs.
Dermot Ahern (Louth, Fianna Fail)
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The country has turned the corner in recent times and we will not be deflected from our course.
Dermot Ahern (Louth, Fianna Fail)
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If we continue not to receive the support of the Opposition in respect of the tough job we must do in the coming years, we will do that job on our own.
P J Sheehan (Cork South West, Fine Gael)
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Those currently in government will not get the chance to do it.
Micheál Martin (Cork South Central, Fianna Fail)
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It is a great pity that it was necessary to table a motion of confidence. This debate is unwarranted and unjustified. Many of the contributions of Opposition Members bear out what I am saying. We should engage in a detailed, reflective consideration of the two reports published last week. From what I have heard, however, it appears that most people have not read them.
Kieran O'Donnell (Limerick East, Fine Gael)
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We have read them.
Damien English (Meath West, Fine Gael)
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The Ministers opposite are the ones who do not read the reports they receive.
Micheál Martin (Cork South Central, Fianna Fail)
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I only have five minutes in which to contribute and I did not interrupt previous speakers.
Kieran O'Donnell (Limerick East, Fine Gael)
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We do not receive two-page briefing documents relating to such reports.
Séamus Kirk (Louth, Ceann Comhairle)
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I appeal to Members to desist. The Minister only has four minutes remaining in which to contribute.
Kieran O'Donnell (Limerick East, Fine Gael)
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The people are far more intelligent than the Minister believes.
Micheál Martin (Cork South Central, Fianna Fail)
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If people read the reports, they would gain instruction in how we formulate and develop policy. I will deal further with that matter in a moment.
Deputies referred to our record. During the past decade, there has been unprecedented growth and development and the country has been transformed.
Kieran O'Donnell (Limerick East, Fine Gael)
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Where stands that growth and development today?
Micheál Martin (Cork South Central, Fianna Fail)
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Many of the benefits from it are still with us. During the period to which I refer, we managed to halve the national debt. That was a significant achievement which has stood us in good stead in the context of the current crisis.
Kieran O'Donnell (Limerick East, Fine Gael)
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What is the level of that debt now?
Micheál Martin (Cork South Central, Fianna Fail)
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We established a levy of 1% of GNP to create the National Pension Reserve Fund. That was a wise and conservative move, particularly as the fund has been of enormous assistance in the context of recapitalisation of the banks.
P J Sheehan (Cork South West, Fine Gael)
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The Government has robbed that fund.
Róisín Shortall (Dublin North West, Labour)
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Yes, it raided the fund.
Séamus Kirk (Louth, Ceann Comhairle)
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Will the Deputies refrain from interrupting?
Micheál Martin (Cork South Central, Fianna Fail)
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Up to 2007, we used cash surpluses to transform road, health and education infrastructure.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Government doubled the national debt in the past two years.
Róisín Shortall (Dublin North West, Labour)
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The Government has-----
Micheál Martin (Cork South Central, Fianna Fail)
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Will I be given the opportunity to speak? Are Members interested in engaging in a sensible debate?
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister, without interruption.
Micheál Martin (Cork South Central, Fianna Fail)
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The level of infantile comment with which one must put up is ridiculous. People outside the Houses expect a bit more of Members.
P J Sheehan (Cork South West, Fine Gael)
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They also expect a bit more of the Minister.
Róisín Shortall (Dublin North West, Labour)
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They expect some honesty.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Government has doubled the national debt.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy O'Donnell should desist.
Micheál Martin (Cork South Central, Fianna Fail)
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Deputies referred to property and to relationships in politics, and so on. We have been treated to many slogans in that regard.
Róisín Shortall (Dublin North West, Labour)
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Is the Minister referring to the property bubble?
Micheál Martin (Cork South Central, Fianna Fail)
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We are in the national Parliament. Will Deputy Shortall respect my right to make my contribution?
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Shortall should allow the Minister to continue, without interruption.
Róisín Shortall (Dublin North West, Labour)
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Let us have some honesty. Is the Minister referring to the property bubble?
Micheál Martin (Cork South Central, Fianna Fail)
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If people read the report by Regling and Watson, they would be aware that it states that our taxation system favoured the property and construction sectors. Regling and Watson identified two issues.
Kieran O'Donnell (Limerick East, Fine Gael)
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What issues were those?
P J Sheehan (Cork South West, Fine Gael)
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One was the Galway tent.
Micheál Martin (Cork South Central, Fianna Fail)
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They instanced the fact that there was mortgage interest relief and no property tax. In recent years, would any Member of the House have advocated the introduction of a property tax and the elimination of mortgage interest relief? It is to obtain the answers in respect of questions such as this that it is necessary to read the reports.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister is being selective.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy O'Donnell should stop interrupting.
Kieran O'Donnell (Limerick East, Fine Gael)
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I have read the reports.
Micheál Martin (Cork South Central, Fianna Fail)
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The profound impact of the adoption of the euro has not been mentioned during this debate.
Kieran O'Donnell (Limerick East, Fine Gael)
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It has been mentioned.
Róisín Shortall (Dublin North West, Labour)
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It is everyone else's fault.
Micheál Martin (Cork South Central, Fianna Fail)
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Regling and Watson's report refers to a quantum change in terms of the volume of wholesale money that came into our banks.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister is being selective.
Róisín Shortall (Dublin North West, Labour)
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Why does the Minister not accept some responsibility?
Micheál Martin (Cork South Central, Fianna Fail)
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There is also the matter of competition in the banking sector.
Kieran O'Donnell (Limerick East, Fine Gael)
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What about the increase in expenditure?
Róisín Shortall (Dublin North West, Labour)
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Had this nothing to do with bad policy decisions?
Micheál Martin (Cork South Central, Fianna Fail)
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I did not say that.
Róisín Shortall (Dublin North West, Labour)
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Well then to what is the Minister referring? He should accept some responsibility.
Micheál Martin (Cork South Central, Fianna Fail)
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With the greatest of respect and as the Minister for Justice, Equality and Law Reform pointed out, the Labour Party favoured increased public expenditure and less taxation.
Róisín Shortall (Dublin North West, Labour)
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The Minister was in government at the time and should accept some responsibility
Micheál Martin (Cork South Central, Fianna Fail)
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Before the 2007 general election, the then leader of the Labour Party, Deputy Rabbitte - who was subsequently removed from that position - was first out of the traps in the context of promising further tax reductions. We accept some culpability in respect of reducing the tax base, a matter to which both reports refer. However, the Labour Party wanted to reduce that base further and to abolish stamp duty. That would have only exacerbated the overheating in the property market.
Róisín Shortall (Dublin North West, Labour)
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What about Fianna Fáil bringing in its millionaire friends?
Séamus Kirk (Louth, Ceann Comhairle)
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I will be obliged to ask Deputy Shortall to leave the House if she does not stop interrupting.
Micheál Martin (Cork South Central, Fianna Fail)
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The level of interruption is appalling.
Kieran O'Donnell (Limerick East, Fine Gael)
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What about the tax incentive schemes?
Séamus Kirk (Louth, Ceann Comhairle)
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I do not wish to be obliged to ask the Deputy to leave.
Róisín Shortall (Dublin North West, Labour)
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Let us have a bit of honesty.
Micheál Martin (Cork South Central, Fianna Fail)
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Tax incentive schemes relating to property were not introduced today or yesterday. The first urban renewal schemes were, for example, introduced in the 1980s. The parties opposite are well acquainted with schemes because it was they who introduced them.
Damien English (Meath West, Fine Gael)
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That is because there was a need for them at that stage.
Micheál Martin (Cork South Central, Fianna Fail)
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I accept that they were needed. Do the Deputies recall the seaside resorts scheme? That was quite a recent scheme that was pioneered by Deputies Kenny and Quinn. Earlier, Deputy Quinn referred to the horror in the midlands and section 23. Does the Deputy not recall the seaside resorts scheme?
Dermot Ahern (Louth, Fianna Fail)
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Deputy Quinn speaks out of both sides of his mouth.
Micheál Martin (Cork South Central, Fianna Fail)
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What was pathetic about that scheme was that there was one for everybody in the audience. By audience, I refer to those who served in the Cabinet of the rainbow coalition.
Kieran O'Donnell (Limerick East, Fine Gael)
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Those schemes were supposed to be brought to a conclusion at a much earlier date.
Micheál Martin (Cork South Central, Fianna Fail)
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Once one Minister in the Cabinet to which I refer was granted a seaside resort scheme, they all wanted one.
P J Sheehan (Cork South West, Fine Gael)
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The Minister's party retained the scheme.
Micheál Martin (Cork South Central, Fianna Fail)
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I invite the Deputies opposite to visit some of those seaside resorts-----
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister's time has expired.
Micheál Martin (Cork South Central, Fianna Fail)
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-----in order to witness the appalling consequences of the scheme.
Kieran O'Donnell (Limerick East, Fine Gael)
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The scheme was kept in place by the Government until July 2008.
Séamus Kirk (Louth, Ceann Comhairle)
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Will Members refrain from interrupting?
Micheál Martin (Cork South Central, Fianna Fail)
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The Taoiseach, when he was Minister for Finance, was the first person to-----
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister's time has expired. He should conclude.
Micheál Martin (Cork South Central, Fianna Fail)
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----take action in respect of tax reliefs. He was the first Minister for Finance to do so.
Kieran O'Donnell (Limerick East, Fine Gael)
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He waited 18 months to do it.
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister must conclude.
Micheál Martin (Cork South Central, Fianna Fail)
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All of those opposite were lobbying for tax relief at the time.
Kieran O'Donnell (Limerick East, Fine Gael)
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It took him 18 months to do anything about it.
Róisín Shortall (Dublin North West, Labour)
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This is all purely for the optics.
P J Sheehan (Cork South West, Fine Gael)
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The scheme was kept under wraps in the Galway tent.
Micheál Martin (Cork South Central, Fianna Fail)
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Deputy P. J. Sheehan was lobbying for-----
Dermot Ahern (Louth, Fianna Fail)
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Neither of us was ever in the Galway tent.
Kieran O'Donnell (Limerick East, Fine Gael)
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Was the Minister for Justice, Equality and Law Reform never in the tent? Did he never take a peek inside?
Dermot Ahern (Louth, Fianna Fail)
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No, I had better things to do.
Kieran O'Donnell (Limerick East, Fine Gael)
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Following Dundalk FC, no doubt.
Finian McGrath (Dublin North Central, Independent)
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I wish to share time with Deputy Maureen O'Sullivan.
Finian McGrath (Dublin North Central, Independent)
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I thank the Ceann Comhairle for affording Independent Deputies the opportunity to contribute to this important debate.
For me, this matter is not about personalities and I do not engage in personal attacks. This debate relates to being straight and honest with people. When someone messes up, he or she must take responsibility, accept the consequences, apologise and make amends. It is only then that we can try to move on. Sadly, such an approach has been lacking in recent weeks. The use of terms such as "I regret" or "I take full responsibility" does not go down well with me or the rest of our people. This is where we are in terms of this debate during a time of economic crisis. People do not mind taking hits provided they are fair and just. I will put all of this into perspective by highlighting two cases brought to my attention last week at the my constituency clinic. The first involves a young man with a severe disability who had to go into hospital and is now ready to be released but has been told by his disability service that they cannot take him back because they are one staff member short. The question that arises from this debate is about the vulnerable. The second case brought to my attention relates to a young disabled man whose five day service with the Central Remedial Clinic in Clontarf has been cut to three days. What is going on? I brought this to the attention of the Minister and the Health Service Executive but nothing has happened. For this reason, I have no confidence in this Government. This is the reality for many people on the ground. It is about credibility, competence and confidence. I might add that I do not necessarily have confidence in some of the other parties who cannot make up their minds on particular issues and do not know where they stand on these matters.
I have in the past made some unpopular decisions in regard to banking but I did so in the national interest.
Finian McGrath (Dublin North Central, Independent)
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Unlike others, I do not play politics with the economic future of this country. The Government must accept responsibility for its part in wrecking this economy.
The Minister, Deputy Martin, referred earlier to the banking reports and alleged that many people in this House have not read them. The following are the conclusions of those reports: Ireland was heading towards an economic crisis long before the collapse of Lehman Brothers; section 23 tax incentives and mortgage interest reliefs were behind the property bubble; Anglo Irish Bank was not the only bank at fault; the banks often ignored lending guidelines, which was a disgrace; bonuses for senior and middle management created the wrong incentives; supervisors right up to the end clung to the hope of a soft landing for the economy and property market; and regulators had little experience and bankers were overly optimistic. These are the conclusions of the reports. It is further stated that regulators were too "timid" and excessively deferential to their bosses and the banks. Another important conclusion is that the Central Bank and IMF failed to warn about the danger in vivid terms. Also, there was no supervision of building when lending to developers began. They are the main conclusions of the banking reports which point clearly to the cause of the situation in which we now find ourselves.
In the overall context, the blame lies at the hand of the Government, the bankers, the developers and those in the broader society, not yet mentioned in this debate, who were greedy and lost the run of themselves. This includes some sections of the media. To these people I say get off the high moral ground and face up to your own mistakes. I believe it was one of the Kennedys who said that integrity is the lifeblood of democracy; deceit is a poison in its veins. These words are true and relevant to this debate. For me politics is about integrity and public service. For me integrity means more than the absence of corruption. It means more than just transparency, accountability or honesty in Government or business. It is the sum of all these values. This is what the country needed some years ago and is what it needs now. Part of the solution to the further development of the economy, banks and public service in this country is groups such as Transparency International, whose work, efforts and commitment on these issues I commend.
I have cautiously welcomed the Government's proposals in regard to whistleblowers and a crack down on white collar crime. However, I have concerns.
Séamus Kirk (Louth, Ceann Comhairle)
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The Deputy's time has expired.
Finian McGrath (Dublin North Central, Independent)
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As an Independent Member I take this motion seriously and will be voting against the Government.
Maureen O'Sullivan (Dublin Central, Independent)
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Go raibh maith agat don deis a labhairt ar an ábhar seo. On 7 May 2008, some months before his untimely, death my predecessor, the late Deputy Tony Gregory, spoke on the nomination of Deputy Brian Cowen as Taoiseach. On that occasion, he offered his good wishes to Deputy Cowen while also saying he would not be voting for him. He stated he hoped Deputy Cowen would see the justice in taking steps to end the divisive inequalities that exist in Ireland today, in particular in our health service and education and housing sectors. He continued that it was his view that the increasing social inequalities of recent years was the major issue facing all of us elected to the Dáil by the people.
In regard to this motion of confidence in the Taoiseach, I bear those words in mind and ask if justice is being served by this Government under the stewardship of the Taoiseach, Deputy Brian Cowen, in the areas of health, education and housing and how much is being done to lessen, never mind completely reduce, social inequality. The positive steps that have been taken are the appointment of real experts, Mr. Patrick Honohan, Mr. Matthew Elderfield, Mr. Regling and Mr. Watson who believe in truth, honesty, transparency and accountability, qualities which sadly have been lacking. It is the lack of those qualities that have been the hallmark of successive Governments.
I welcome the Taoiseach's statement in his speech that he will continue with examination, analysis and reflection leading to full and fair assessments. Another positive is the full acceptance of the Taoiseach of responsibility for his decisions as Minister for Finance and Taoiseach. I welcome the acknowledgement of the mistakes in management of banks' excessive risk taking, inadequate financial regulatory controls, property tax incentives that should have been abolished many years before and acknowledgement of failures of corporate governance. However, I note that not once are the words "greed and self interest" used.
"A turning point in our economy" is a phrase that has become somewhat hackneyed at this stage. We may have turned a certain corner statistically - the Taoiseach referred in this regard to a recent OECD outlook - but on the ground in terms of homes, workplaces, community, youth and drugs projects, schools and hospitals we have not turned that corner to optimism. My difficulties lie with the continued propping up of the institutions that have failed this country so drastically owing to those institutions being led by men motivated by greed and self interest and supported by their political friends. Has one developer, banker or board member of those institutions in any way suffered let alone faced appreciable penalties or a prison term? It was gratifying to see the recent apprehension of drug barons, men who brought so much devastation to communities in Ireland. Another group of men involved in banks, financial institutions, property development and speculation have brought equal if not more devastation to our country. I accept the need for due process but these men had no regard for due process. How can I have confidence in a Government and a Taoiseach who leaves this unpunished?
Those suffering today because of this recklessness are hardworking families, people who have worked all their lives and are now jobless and young people. I recently visited a school in my constituency and met with the leaving certificate class of 2010. I was struck by their lack of possibilities and how difficult it will be for them to realise their career dreams in this country. Again, it is the vulnerable and poor who are being penalised with cuts in individual allowances, local services, regeneration housing and integrated primary community care. Funding for community swimming pools has been withdrawn and there have been cuts in respite, special needs and learning support. There is no replacement in schools for posts of responsibility. There are cuts in health services and there are not enough places in education and training for the unemployed. Homelessness has increased. What will happen to our commitment to overseas aid?
I wonder if anything has been gained from this debate or from the various activities of other parties during the past two days. I recently received a letter from a constituent who stated she feels helpless, disenfranchised and a victim of other people's greed and laziness. There are too many examples of increasing social inequality to enable me to support this motion of confidence in the Taoiseach.
8:00 am
Martin Mansergh (Tipperary South, Fianna Fail)
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I welcome this opportunity to express full confidence in the Taoiseach and Government, courtesy of Fine Gael. No doubt they will take care in future to check out the possibility of a clash of engagements.
The Fine Gael motion of no confidence in the Taoiseach was an instant response to the publication of two major reports into the causes of the banking and financial crisis before most people even had an opportunity to read and digest them.
If one wants a prime example of political and media spin, it is the crude oversimplification of these two reports through reductionist personalisation. There is a great deal of relevance in them to many organisations and sectors and even to our entire society, and such an approach does no justice to these reports. Perhaps dealing with this motion today will facilitate more concentration on the substance. Earlier fears that these reports would not go near the heart of the matter have proved entirely unfounded.
Each Deputy elected to this House has a mandate for up to five years, unless the Dáil is dissolved earlier. It is the Dáil who elects the Taoiseach and who mandates and sustains the Government, in case of doubt by an explicit confidence motion such as this. The notion of an electoral policy mandate, or a mandate contingent on opinion poll ratings, while it may have a place in political debate, has no constitutional foundation, quite rightly from the point of view of political stability. All Governments have to manage unforeseen crises and contingencies. As a matter of fact, it was clearly indicated to the electorate in 2007 that Deputy Bertie Ahern would hand over to a successor in the course of this Dáil, and that successor was likely to be Deputy Brian Cowen.
Michael D Higgins (Galway West, Labour)
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I am reluctant to upset the Minister of State's flow. However, given the complexity of the argument he is making, are copies of his speech being distributed?
Martin Mansergh (Tipperary South, Fianna Fail)
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I am afraid not. I am not making a ministerial opening statement. I will happily give the Deputy a copy afterwards.
Government by opinion poll is quite impossible, especially in difficult times. I am incredulous that anyone aspiring to be in government should treat an opinion poll as a catalyst for anything, especially one that stretched core votes of 16%, 21% and 22% respectively to 17%, 28% and 32%, or whatever you are having yourself, with the promise that next time there will be a new improved methodology. The issue, not least stated in these two reports, is whether, in the words of Edmund Burke, we offer the public our best judgment and lead or whether we follow whatever the last poll, constituent or campaigning organisation said to us. The Taoiseach and the Government since 2008 have provided a new style of leadership in the handling of the economic crisis, which has been widely praised by influential opinion formers on whom, indirectly, our future credit standing and our ability to meet our social welfare, pay and interest bills depends.
P J Sheehan (Cork South West, Fine Gael)
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The Minister of State was in Bandon six months ago and we are still waiting for the money he promised us.
Martin Mansergh (Tipperary South, Fianna Fail)
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Anyone in government over the next few years had better be prepared to become very unpopular. There is no evidence of preparation for that from parties opposite. The prayer of many, I suspect, is to put them in government, but not just yet. They obviously hope for a virtual blank cheque given in anger in an election, because no coherent or convincing, let alone united, alternative policy platform for government has been produced.
P J Sheehan (Cork South West, Fine Gael)
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The Minister of State promised a blank cheque to Skibbereen and Bandon six months ago.
Martin Mansergh (Tipperary South, Fianna Fail)
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The Labour Party is very articulate, but there is no clue what their future macroeconomic policy is. The Fine Gael Party, to its credit, has put forward alternatives, but I think the NewEra policy has to go back to the drawing board, because the projected increased net indebtedness in an attempt to provide a stimulus and jobs runs directly counter to the absolute need to reduce sovereign indebtedness. Ireland is in no position to swim against the tide.
With regard to the past, the claim is that the then Minister and Government should have known better, better than the Central Bank and the Financial Regulator, better than the IMF, the EU, The Economist and the Financial Times and better than the broad consensus among most economists in this country, that there would be a soft landing for demographic and other reasons. EU President Van Rompuy told the Financial Times yesterday: "The euro became a strong currency with very small interest rate spreads. It was like some kind of sleeping pill, some kind of drug, we weren't aware of the underlying problems." We are talking about a far wider failure than just Ireland. Indeed, I bought a book at an airport recently by Thomas Wieczorek entirely about Germany called - and I translate - The Plundered Republic: How banks, speculators and politicians drove us to ruin. Does it sound familiar?
While Fine Gael was critical of benchmarking, and Labour of property incentives, mainly for equity reasons, both parties in aggregate sought more spending and lower taxes. Deputy Quinn spoke today about how Fianna Fáil bankrupted the State, but a few years ago his mantra was that we were the second richest country in the EU. As finance spokesperson in the Seanad pre-2007, I can testify that what Deputy Bertie Ahern said is true. The only reason the Seanad discussed the economy about once a month was that Fianna Fáil put down Private Members' motions. Opposition interest in promoting discussion of economic policy was nil.
The Taoiseach, as a Minister, made important contributions to funding disability, to restoring the integrity of policing reform in Northern Ireland and to more egalitarian fiscal policy. As Taoiseach, both he and his colleagues have been tough and determined. They have steered the ship of state safely through mountainous seas. It is not time to change the captain.
Michael D Higgins (Galway West, Labour)
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We have heard a stream of consciousness from the Minister of State. He can use that speech again tomorrow.
Ciarán Cuffe (Dún Laoghaire, Green Party)
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Tough decisions have been made by Governments in the past few years. It was a tough decision for the Green Party to enter Government and it has been tough to stay in government during the perfect storm. I know, from my own experience of stormy weather, that hindsight is a luxury one does not possess when one is at sea and the barometer falls. One needs a captain who can make the right, not the popular, decisions when one is in the eye of the storm. I am no friend of Deputy Brian Cowen-----
Damien English (Meath West, Fine Gael)
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He is Deputy Cuffe's boss.
Ciarán Cuffe (Dún Laoghaire, Green Party)
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-----but he made a good speech earlier. He not only regretted some decisions that were made, he apologised for certain decisions. I respect someone who knows when to apologise. I will not say I have warmed to Fianna Fáil in government but I like to think I get on with those I work with on a daily basis in that party.
I am critical of decisions that were made during the boom years but I am critical of my own party also. We talked about moving away from boom time taxes, such as stamp duty receipts, but we also, along with the Opposition, advocated more spending. If we could relive the boom years every party would advocate different approaches to taxation, spending and not losing the run of ourselves when the tricolour was raised on London's Savoy Hotel.
That was then. This is now. How are we restoring confidence in providing the conditions to allow Ireland to recover? We have made appointments. Many speakers have talked about Matthew Elderfield and Patrick Honohan. I have much respect for both of those individuals. We have put in place a pay deal. The Labour Party sat on the fence when it came to the pay deal. They came down in favour of the deal once it was approved. That is not leadership. It is following the flock.
Ciarán Cuffe (Dún Laoghaire, Green Party)
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Fine Gael Members talked out of both sides of their mouths. They said the pay deal did nothing to tackle many issues but, on the positive side, said it offered stability. The Green Party and Fianna Fáil proposed, supported and delivered that pay deal.
We have made tough decisions on taxation. The Labour Party has proposed a third rate at 48%. That would mean a marginal rate of income tax of 62% for self-employed people earning more than €100,000. In economics, marginal tax rates are important because they are one of the factors that determine the incentives to increase income. At high marginal tax rates, the individual has less incentive to earn more. We must encourage small and medium sized enterprises. We will not do that if we tax them at 60%.
We are taking action on the environment and creating green jobs. A carbon levy was talked about for years and, despite the Opposition's efforts, it is in place. Fine Gael and the Labour Party wanted opt-outs for commuters, agriculture, rural dwellers and whatever you're having yourself.
Róisín Shortall (Dublin North West, Labour)
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For low income families.
Ciarán Cuffe (Dún Laoghaire, Green Party)
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We did not do it. The next time the Labour Party talks about opt-outs, remember that six months ago, in their proposals for taxation, they said they would raise €500 million from taxation. One cannot do that if one gives opt-outs to everybody.
Fine Gael talked about rebuilding Ireland. That is what we are doing. At times of huge difficulty, companies like Airtricity, Microsoft and the ESB are creating jobs in the green economy, renewable energy and clean technology. They do not talk about this in a debating forum. They deliver real jobs.
I was struck by the many references to planning made by Deputy Richard Bruton over the last 24 hours. In Dún Laoghaire, Fine Gael councillors have been burning the midnight oil recently trying to rezone agricultural land, take buildings off the list of protected structures and convert architectural conservation areas to shopping centres. We are providing a better planning system.
There is no Nirvana around the corner if the captain and the crew are changed. Tough decisions have to be made by any party, and have been made by ours.
Paul Gogarty (Dublin Mid West, Green Party)
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This motion to call an early election is opportunistic, cynical and pointless.
Damien English (Meath West, Fine Gael)
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It is a Government motion.
Paul Gogarty (Dublin Mid West, Green Party)
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One could cite many reasons for calling an election and I would relish it. Fianna Fáil have squandered the fruits of the boom and filled the pockets of their developer paymasters. However, an election will not be called. The two parties favouring an election would be seriously inconvenienced if one were called. Voters would be given the choice between an incompetent Fianna Fáil Administration and a bland uninspiring Fine Gael alliance with their Labour Party clones, chips off the old block. It would be the Dolly alliance.
We Greens love to recycle. That is why I have quoted a speech I made in July 2006. Today, Deputy Éamon Gilmore said we need to be free from the politics of the past. His speech was back to the future. It was full of the same old populist cant.
Róisín Shortall (Dublin North West, Labour)
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We have heard lots of recycled speeches from the Government.
Paul Gogarty (Dublin Mid West, Green Party)
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Today, Deputy Gilmore said we need to be free from the politics of the past. His speech was "Back to the Future" - the same old populist cant. Deputy Kenny spoke about dodgy donations from developers. He continues to take them himself. He knows all about them. The Labour Party talks the talk. When the Green Party tabled a motion on corporate donations in 2006, the Labour Party tried to water it down.
Róisín Shortall (Dublin North West, Labour)
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The Deputy really has bought into it.
Paul Gogarty (Dublin Mid West, Green Party)
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If Caligula were alive today, he would appoint Deputy Gilmore as his general because he is a one-trick pony.
Joe Costello (Dublin Central, Labour)
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I like the way the Deputy walks the walk.
Paul Gogarty (Dublin Mid West, Green Party)
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Fianna Fáil has been accused of being all things to all people.
Jack Wall (Kildare South, Labour)
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The Deputy said that himself.
Paul Gogarty (Dublin Mid West, Green Party)
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The Labour Party says nothing to anyone in case it offends any party. We need leadership. We are staying in government to plough on with the implementation of the green policies that are needed.
Paul Gogarty (Dublin Mid West, Green Party)
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The alternative, frankly, is not worth two hoots.
Róisín Shortall (Dublin North West, Labour)
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Very impressive, Paul.
Damien English (Meath West, Fine Gael)
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That was a very interesting quickfire round. It was like 20 questions. I thought I talked fast. Can I confirm that we are speaking on a motion of confidence in the Government? Perhaps the Green Party Deputies were confused when they were speaking.
Joe Costello (Dublin Central, Labour)
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It was a stream of consciousness.
Damien English (Meath West, Fine Gael)
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Those who thought the movie "Wall Street" was far-fetched should read the two banking reports, which highlight a world of corporate greed, political ineptitude and disastrous regulatory failure. One could not make this stuff up. The cycle of boom and bust is as old as recorded history. Wise leaders should use the wealth of good times to weather the storms that inevitably follow. It is a question of prudence. Many members of recent Cabinets were supposed to be accountants, although I would question Deputy Bertie Ahern's qualifications as an accountant. They should have known that in good times, one should save money for the bad times. That did not happen, however. Over the course of more than ten years of prosperity, sufficient wealth was generated not only to address our infrastructural deficits but also to retain enough in the Government kitty to carry us safely through the global financial crisis. The Government squandered the fruits of the boom, however, and allowed the banking community to lose the nation's wealth on a massive property crap game. The greatest economic opportunity ever given to any Irish Government was not just missed - incredibly, it was turned into a financial trap from which people of my age and my child's age will struggle to escape for the next 30 or 40 years. Not since Herbert Hoover sleep-walked America into the Great Depression has a political leader destroyed so much in such a short space of time. The Taoiseach, Deputy Cowen, and his predecessor, Deputy Bertie Ahern, have entered the record books for all the wrong reasons.
Many people will have a noose around their necks for the next 30 or 40 years as they try to repay mortgages, credit union loans and other personal debts. In many cases, their houses are not even worth half the value of their mortgages. We have spoken about credit unions. They are stuck with their debts because the boom suited Fianna Fáil, for many reasons. Every time a house was sold, the Government received taxes - PRSI, PAYE and VAT, etc. - worth approximately 40% of the total cost of the house. It was worth its while to maintain that position. Year after year, it used that money to drive up expenditure and buy elections. The biggest thing that went wrong was that the Government planned an election in 2001, but that was prevented by the outbreak of foot and mouth disease. We had another year of massive expenditure in advance of the 2002 election. Spending was hyped up for two years to try to buy votes. The Government did the same thing in 2006 and 2007. The two reports make it clear that expenditure increased by 11% and 10% in those years. I suggest that was done to buy votes at election time.
I do not have confidence in the ability of the Taoiseach and his Ministers to run this country and get us out of these problems because their decision-making in past years was fundamentally wrong and will have a serious impact on people's lives in the years ahead. These decisions were made consciously - not by mistake. The Taoiseach has come in here with a half-hearted apology. On other occasions, he said he received bad advice but I do not accept that. There were enough Ministers to make good decisions. They received warnings from this side of the House. Deputy Kenny was right earlier when he said the former Taoiseach, Deputy Bertie Ahern, appointed Deputy Cowen as Minister for Finance because he knew he would do what he was told. Year after year, I sat behind Deputy Bruton on budget day when he clearly warned that what the Government was doing was wrong.
Paul Gogarty (Dublin Mid West, Green Party)
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He took money from developers to rezone land all the same.
Damien English (Meath West, Fine Gael)
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The Government is trying to suggest that nobody warned it, but that is not the case at all. The people do not have confidence in its ability to get us out of this. It is time for the Government to accept that. These reports give it a chance to accept that it got it wrong. The Government should go to the country and thereby give all parties a chance to set out their plans for the future. We should have a proper debate on their spending plans and their plans for getting us out of this. The Government does not have the backing of the public to be in office and to be in government.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I was interested to hear Deputy English refer to the former US President, Herbert Hoover, who is mentioned by other speakers in this House from time to time. It is worthwhile to note that his core, central decision after the great Wall Street collapse of 1929 was to let the United States banks collapse, which is what Fine Gael has advocated in recent years, and to default on the repayment of senior debt.
Damien English (Meath West, Fine Gael)
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He could not afford to do otherwise.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As a result of his decision to let the banks collapse during the Great Depression, by 1933 the US unemployment rate amounted to 33% of the total adult population. We decided not to do that, in the teeth of fairly heavy opposition from Fine Gael.
Damien English (Meath West, Fine Gael)
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The truth is that the Minister's plans will not work.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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A kind of economic literacy needs to be developed in this country. Glib references to Herbert Hoover should be discontinued because they do not address the core issues facing this country here and now.
Damien English (Meath West, Fine Gael)
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I was making a comparison with Herbert Hoover as a leader who brought his country into a depression.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I wish to refer to the ultimate test of any Government. It is a pity this debate is taking place in a particular context. I refer to the internal convulsions in the main Opposition party and the publication of an important report that throws light on an important period in our national history. It is disappointing that this debate is taking place in that context because it will not get the attention it should. This debate should focus on the economy and on the reports that were published last week.
Damien English (Meath West, Fine Gael)
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It should focus on the failures of the Government.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The ultimate test of any Government, in the context of the type of economic crisis we have had to deal with, is its ability to take decisive and courageous action, react rapidly in changing times, hold its nerve in the face of enormous domestic and international pressures and say "No" to sectional interests.
Damien English (Meath West, Fine Gael)
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Did the Government say "No" to benchmarking?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Such a Government should have a determination to make difficult and unpopular but fair decisions in the teeth of opposition, should be able to communicate successfully the need for such decisions and should have the ability to lead citizens towards the common good. By any reckoning, this Government, led by the Taoiseach, Deputy Cowen, has passed those tests in response to the worst economic and financial crisis in the history of the State.
Róisín Shortall (Dublin North West, Labour)
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What is the Government's idea of the common good?
Emmet Stagg (Kildare North, Labour)
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Who got us into this mess in the first place?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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More especially, it has passed those tests by the reckoning of two men who, in the last week, have won the respect of all the Members of this House. Two days after the Leader of the Opposition tabled a motion of no confidence in the Government, Mr. Klaus Regling told an Oireachtas committee that "both of us have the view that crisis management here has been very good, particularly compared to some other countries in the European Union".
Kieran O'Donnell (Limerick East, Fine Gael)
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The House has yet to debate that report.
Damien English (Meath West, Fine Gael)
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They could not give an answer when they were asked why the Government chose to adopt certain policies.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputies might not like the massage, but they should have the courtesy to listen to it.
Kieran O'Donnell (Limerick East, Fine Gael)
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How was the crisis created?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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They told the committee that "both of us have the view that crisis management here has been very good, particularly compared to some other countries in the European Union".
Damien English (Meath West, Fine Gael)
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The Minister should give the full quote.
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister, without interruption.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Mr. Regling continued:
With the right policies there will no doubt be growth again. Incomes will again begin to go up. My firm view is that Ireland is not ruined.
That is what was stated since this motion was tabled.
Damien English (Meath West, Fine Gael)
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He clearly said he did not understand why the Government chose to do what it did.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Mr. Max Watson elaborated on that point at a press conference later that day, when he said that Ireland "got out in front" of the problem and was not consistently driven along by events. He suggested that some other countries reacted "slowly" to markets when they were trying to explain these matters to their populations. Mr. Watson said that by staying "ahead of the curve", Ireland has been effective in dealing with markets.
The Leader of the Opposition decided to table this motion. The collective basis of the motion is not quite clear.
Damien English (Meath West, Fine Gael)
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The Minister should stick to the point.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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This motion was tabled before the views of either of these gentlemen on their report, which purports to be the basis of the Opposition's charges, were listened to.
Kieran O'Donnell (Limerick East, Fine Gael)
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The report is self-explanatory.
Damien English (Meath West, Fine Gael)
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We can read the report ourselves.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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These are the judgments of two independent experts whose report has been universally welcomed and whose findings have been accepted by the Government.
Liz McManus (Wicklow, Labour)
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On a point of order, while I do not want to interrupt the Minister I have to say there is no such position in this House as "Leader of the Opposition".
Peter Power (Limerick East, Fianna Fail)
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That is not a point of order.
Liz McManus (Wicklow, Labour)
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It applies in the British Parliament only.
Séamus Kirk (Louth, Ceann Comhairle)
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That is not a point of order.
Liz McManus (Wicklow, Labour)
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It is a point of information for the Minister.
Séamus Kirk (Louth, Ceann Comhairle)
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It is not a point of order.
Dermot Ahern (Louth, Fianna Fail)
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It will be an interesting election.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am happy to use the phrase "the leader of the principal Opposition party" if that satisfies Deputy McManus.
Willie Penrose (Longford-Westmeath, Labour)
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It is a point of clarification.
Michael Noonan (Limerick East, Fine Gael)
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On a point of order, the Minister is reading from a script. Will the script be circulated?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am reading from material. It is not a script.
Michael Noonan (Limerick East, Fine Gael)
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It looks like a script.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy will have noticed that I have not referred entirely to the material. Quite a few of my comments have been-----
Michael Noonan (Limerick East, Fine Gael)
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If it quacks like a duck-----
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I needed the material to be in a position to refer verbatim to certain quotations.
Damien English (Meath West, Fine Gael)
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I can give the Minister a quotation from the same guy if he wants it.
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister, without interruption, please.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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These are the judgments of two independent experts whose report has been universally welcomed and whose findings have been accepted by the Government.
Dermot Ahern (Louth, Fianna Fail)
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This delaying tactic means we will miss a few minutes of the World Cup.
Damien English (Meath West, Fine Gael)
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It is clear that the Tánaiste is supporting Holland.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We have responded firmly and decisively to the unfolding financial and fiscal crisis in the teeth of considerable opposition. The fiscal correction of 7.5% of GDP in the last two years has resulted in the stabilisation of the deficit.
Damien English (Meath West, Fine Gael)
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The Government bought votes. The Minister might not have, but his leader did.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The measures that were taken are working. There is a consensus that we will return to growth in the second part of this year. Some monthly economic indicators are already pointing towards growth. Consumer spending has improved and measures of business sentiment have moved into positive territory. That achievement is due in no small part to the efforts made by our citizens themselves-----
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----who have shown foresight in accepting reductions in their standard of living in order to secure a better future for their own children and the people who live in this country.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Opposition, however, either collectively or as individual parties, have shown no appetite for fiscal restraint.
Damien English (Meath West, Fine Gael)
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That is not true, and the Minister knows it.
Séamus Kirk (Louth, Ceann Comhairle)
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The Minister without interruption.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The difficult questions about how our resources should be spent are sidestepped.
Emmet Stagg (Kildare North, Labour)
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Tell us what the experts said about the cause.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Labour Party has warm feelings for every cause, but no idea about how to fund its ever-lengthening wish list. There is no analysis.
Kieran O'Donnell (Limerick East, Fine Gael)
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Our budget in 2008 was far more fiscally prudent.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy O'Donnell, please.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Deputy Quinn represented himself in his contribution-----
Séamus Kirk (Louth, Ceann Comhairle)
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I will be forced to ask people to leave the House if they do not start behaving.
Damien English (Meath West, Fine Gael)
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You would not do that, a Cheann Comhairle.
Willie Penrose (Longford-Westmeath, Labour)
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Now the Ceann Comhairle reveals that he hates listening to this nonsense.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Deputy Quinn represented himself earlier today as the father of fiscal responsibility. This was the Minister for Finance who abolished the only property tax we had in the run-up to the election of 1997. It is clear that this was a mistake.
Liz McManus (Wicklow, Labour)
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That is rich, coming from Fianna Fáil.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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This was also the Government that decided to eliminate water charges-----
Damien English (Meath West, Fine Gael)
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It created a thousand jobs per week.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----which every economist of repute has told us we should have.
Róisín Shortall (Dublin North West, Labour)
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This Government has had 13 years.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Let us be clear. We do not know where the Labour Party stands on the issue of water charges. Its spokesperson on the environment opposed water charges, as did Deputy Stagg.
Emmet Stagg (Kildare North, Labour)
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I would still oppose them.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Its party leader says it has yet to decide, as a party, on the issue. Again, it is sitting on the fence-----
Róisín Shortall (Dublin North West, Labour)
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I thought the Minister would talk about his own record.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----as it did on the agreement that was signed up for today.
Róisín Shortall (Dublin North West, Labour)
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Why will he not talk about his own record?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We all know that we must broaden our tax base. The Regling report recommends such a course of action.
Kieran O'Donnell (Limerick East, Fine Gael)
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What about the tax incentive scheme?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Of course we will continue that process in the next budget. However, I do not expect to obtain much support from Deputies opposite.
Kieran O'Donnell (Limerick East, Fine Gael)
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What did Regling say about tax incentive schemes?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Any more than they want to listen to this speech, they do not want it pointed out that they are not prepared to support-----
Damien English (Meath West, Fine Gael)
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Read the report on tax incentive schemes.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----the essential measures that are needed. We know what their position will be on tax well in advance of the budget.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Labour party will suggest there is a tiny group of people who can pay for everything, and Fine Gael will oppose any taxation measures whatsoever. I know that before the ink is dry on any budget speech and well in advance of it.
Kieran O'Donnell (Limerick East, Fine Gael)
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He must have a crystal ball.
Joan Burton (Dublin West, Labour)
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The Minister looked after his friends, the developers and the bankers, from a tax point of view. He looked after them well.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Last month, Deputy Gilmore could not bring himself-----
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister should deal with the tax incentive schemes.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----to decide whether he supported the Croke Park agreement. That would mean taking a stance.
This Government gave a textbook example of political leadership on 29 September 2008 when it introduced the bank guarantee.
Kieran O'Donnell (Limerick East, Fine Gael)
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Which the Government will not allow to be looked into.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Again, this was opposed by the Labour Party. Let us see what Professor Honohan had to say about that.
Joan Burton (Dublin West, Labour)
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He took the Labour Party's position.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Our guarantee was opposed as a matter of principle.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Let us see what Professor Honohan said about this.
Kieran O'Donnell (Limerick East, Fine Gael)
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He said the notes were sketchy.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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He said:
Closure of all, or a large part, of the banking system would have entailed a catastrophic immediate and sustained economy-wide disruption involving very significant, albeit extremely difficult to quantify, social costs, reflecting in particular the fundamental function of the payments system in a modern economy.
These costs would have been broad-based in terms of income, employment and destruction of the value of economic assets and would have been on top of the recessionary downturn which has actually occurred.
Kieran O'Donnell (Limerick East, Fine Gael)
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What about the wide-ranging nature of the guarantee scheme?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Let us be clear about what Professor Honohan also said.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister knows what he said.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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He said that a disorderly failure of Anglo Irish Bank would have brought down the whole banking system, with devastating consequences for the economy. Professor Honohan then concluded: "[T]he systemic importance of Anglo Irish Bank at that time cannot seriously be disputed."
Róisín Shortall (Dublin North West, Labour)
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Three quarters of the problem was home grown.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Two weeks ago, Deputy Burton said that only a fool-----
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----would view Anglo Irish Bank as being of systemic importance.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I take it, by inference, that she views the Governor of the Central Bank as a fool.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Burton, we can only have one speaker at a time, and the Minister is in possession.
Joan Burton (Dublin West, Labour)
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The Minister is speaking directly to me.
Séamus Kirk (Louth, Ceann Comhairle)
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I ask the Deputy to refrain from interrupting.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Here is the difficulty that the Irish Government faces in addressing these issues. We have the constant repetition-----
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----of economic nonsense from some quarters in this House.
Joan Burton (Dublin West, Labour)
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Does the Minister speak through the Chair to the House as a whole, or is he simply continuing our constituency dialogue-----
Damien English (Meath West, Fine Gael)
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He is trying to convince himself.
Séamus Kirk (Louth, Ceann Comhairle)
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That is not a point of order. I ask the Deputy to resume her seat.
Joan Burton (Dublin West, Labour)
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-----and speaking only to me?
Séamus Kirk (Louth, Ceann Comhairle)
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That is not a point of order. Just resume your seat, please.
Joan Burton (Dublin West, Labour)
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It is a point of order. Does he speak through the Ceann Comhairle?
Séamus Kirk (Louth, Ceann Comhairle)
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The Deputy must resume her seat when the Chair is on his feet. I ask the Minister to continue.
Emmet Stagg (Kildare North, Labour)
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Tell the Minister to behave himself.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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This type of pre-crisis politics just will not wash any more.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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If we have learned anything from this crisis-----
Kieran O'Donnell (Limerick East, Fine Gael)
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Who caused the crisis?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----it is that short-term, populist politics does not serve the common good.
Kieran O'Donnell (Limerick East, Fine Gael)
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It was 75% home-grown.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We are all talking about the need for change in political culture. I quite agree.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Government caused the crisis.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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However, I do not believe this stricture applies to my party alone.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Politicians across all parties need to learn to say "No". We cannot go on with a situation in which parties are susceptible to every vested interest that drives by the gates of Leinster House or sets up camp in Buswell's.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister should look at the Government's pre-election budget in 2006.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government has accepted the findings of the Regling and Watson report that these expenditures should have been discontinued earlier. They were introduced by successive Governments-----
Kieran O'Donnell (Limerick East, Fine Gael)
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Yes. When were they discontinued?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----and it is clear that the tax expenditures contributed to the property bubble. However, the truth is that the love affair with tax incentives continues. As recently as last February, Deputy Bruton, during the under-reported Report Stage of the Finance Bill, tabled an amendment which proposed tax reliefs for general practitioners setting up primary care centres. He did so, I assume, in response to a campaign by general practitioners and a report from the Oireachtas Joint Committee on Health and Children which he must have known provided no reasoned case for the various tax incentives it recommended for a sector which is already in receipt of substantial public funding.
Kieran O'Donnell (Limerick East, Fine Gael)
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For the common good.
Thomas Byrne (Meath East, Fianna Fail)
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He looked after his own.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Lest I be accused of interfering in internal Fine Gael politics, I will mention that of course Deputy Reilly, a doctor, supported this vigorously.
Kieran O'Donnell (Limerick East, Fine Gael)
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It is not the same.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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This was a request for yet another property-based tax incentive. No matter how the Deputies try to argue their way out of it, that is exactly what it was.
Emmet Stagg (Kildare North, Labour)
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The Government caused the problem.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We were in power and we took responsibility, despite the pressure, of rejecting that proposal.
Séamus Kirk (Louth, Ceann Comhairle)
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Deputy Stagg, the Minister is in possession and only one person can speak at a time. I ask the Deputy to refrain from interrupting.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Again, there is a demand for transformative change, but once a lobby group sets up camp in Buswell's or arrives within the precincts of this House, there is a totally different response. This type of politics is over in this country.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Finally, I despair at the level of political debate here today.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is most embarrassing to see Deputies abusing the reports that were published last week. It is clear that few Deputies have read the reports in full-----
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----and it is a denigration of the good work of the authors that they should be used for opportunistic political purposes.
Kieran O'Donnell (Limerick East, Fine Gael)
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I would not say that. The Minister is being very selective.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Despite the entreaties of the Opposition-----
Michael D Higgins (Galway West, Labour)
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Deputy Mansergh read out a verse from Finnegans Wake.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----the authors of the reports refused to indulge in the blame game when they attended the committee in the past few days. Herr Regling made the point that it would be quite easy to blame persons or institutions. This would be far too simple, he said.
Kieran O'Donnell (Limerick East, Fine Gael)
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He said the tax incentive scheme should have been discontinued.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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However, the simple soundbite is what we have listened to all day. The manner in which Deputies have sought to traduce the Taoiseach is entirely unedifying. I have worked closely with Deputy Cowen as Taoiseach throughout this crisis.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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He has shown great steadfastness, judgment, intelligence, courage and determination. History will judge these qualities.
Róisín Shortall (Dublin North West, Labour)
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He has a lot to answer for.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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He, of course, like all members of the Government parties, is concerned about the hardship this crisis has visited on families in this country.
Emmet Stagg (Kildare North, Labour)
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The crisis the Government caused.
P J Sheehan (Cork South West, Fine Gael)
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Who created the crisis?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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His record of fairness and equity during his time as Minister for Finance has been widely recognised.
Kieran O'Donnell (Limerick East, Fine Gael)
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It was unsustainable.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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When the dust settles on this motion, it will be clear that the Taoiseach did provide leadership. The Opposition Deputies have opted, throughout this contribution, to shout and scream and roar because there are certain facts they do not want to hear.
Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister does not want to hear the truth.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We do need a change of political culture in this country. It is a change the public wants to see on all sides of the House. If there is any good to come of this motion, let it be that we dedicate ourselves to that change.
Róisín Shortall (Dublin North West, Labour)
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Let us clear out those responsible.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Let us discard the economic nonsense to which we have had to listen in recent years. If the Opposition parties want to provide a real alternative Government-----
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----let them provide a real alternative policy to this Government, as it has signally failed to do for a period of more than two years.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Opposition Deputies have the responsibility, as Members of this House-----
Kieran O'Donnell (Limerick East, Fine Gael)
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The Government had the responsibility of making certain that it was not creating a property bubble.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----to give the public an honest and true view of where we stand economically-----
Emmet Stagg (Kildare North, Labour)
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Go to the public and test it.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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-----and how we can emerge from the crisis.
Michael D Higgins (Galway West, Labour)
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Why does the Government not test it?
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We, as a Government, will not shirk our duties.
Michael D Higgins (Galway West, Labour)
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Off they go to the public for a decision.
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We have not done so in the past two years and we will not do so in the next two years either.
Michael D Higgins (Galway West, Labour)
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The Minister should test it with the public.
Kieran O'Donnell (Limerick East, Fine Gael)
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Let us go to the country for the result.
Séamus Kirk (Louth, Ceann Comhairle)
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A division has been challenged. As this is a motion of confidence in the Government, in accordance with Standing Order 71(1), the division will proceed through the lobbies.
The Dail Divided:
For the motion: 82 (Bertie Ahern, Dermot Ahern, Michael Ahern, Noel Ahern, Barry Andrews, Chris Andrews, Bobby Aylward, Niall Blaney, Áine Brady, Cyprian Brady, Johnny Brady, John Browne, Thomas Byrne, Dara Calleary, Pat Carey, Niall Collins, Margaret Conlon, Seán Connick, Mary Coughlan, Brian Cowen, John Cregan, Ciarán Cuffe, John Curran, Noel Dempsey, Jimmy Devins, Timmy Dooley, Frank Fahey, Michael Finneran, Michael Fitzpatrick, Seán Fleming, Beverley Flynn, Paul Gogarty, John Gormley, Noel Grealish, Mary Hanafin, Mary Harney, Seán Haughey, Jackie Healy-Rae, Máire Hoctor, Billy Kelleher, Peter Kelly, Brendan Kenneally, Michael Kennedy, Tony Killeen, Michael Kitt, Tom Kitt, Brian Lenihan Jnr, Conor Lenihan, Michael Lowry, Martin Mansergh, Micheál Martin, Jim McDaid, Tom McEllistrim, Mattie McGrath, Michael McGrath, John McGuinness, John Moloney, Michael Moynihan, Michael Mulcahy, M J Nolan, Éamon Ó Cuív, Seán Ó Fearghaíl, Darragh O'Brien, Charlie O'Connor, Willie O'Dea, John O'Donoghue, Noel O'Flynn, Rory O'Hanlon, Batt O'Keeffe, Ned O'Keeffe, Mary O'Rourke, Christy O'Sullivan, Peter Power, Seán Power, Dick Roche, Trevor Sargent, Eamon Scanlon, Brendan Smith, Noel Treacy, Mary Wallace, Mary White, Michael Woods)
Against the motion: 77 (Bernard Allen, James Bannon, Seán Barrett, Pat Breen, Tommy Broughan, Richard Bruton, Ulick Burke, Joan Burton, Catherine Byrne, Joe Carey, Deirdre Clune, Paul Connaughton, Noel Coonan, Joe Costello, Simon Coveney, Seymour Crawford, Michael Creed, Lucinda Creighton, Michael D'Arcy, John Deasy, Jimmy Deenihan, Andrew Doyle, Bernard Durkan, Damien English, Olwyn Enright, Frank Feighan, Martin Ferris, Charles Flanagan, Terence Flanagan, Eamon Gilmore, Brian Hayes, Tom Hayes, Michael D Higgins, Phil Hogan, Brendan Howlin, Paul Kehoe, Enda Kenny, Ciarán Lynch, Kathleen Lynch, Pádraic McCormack, Shane McEntee, Dinny McGinley, Finian McGrath, Joe McHugh, Liz McManus, Olivia Mitchell, Arthur Morgan, Denis Naughten, Dan Neville, Michael Noonan, Caoimhghín Ó Caoláin, Aengus Ó Snodaigh, Kieran O'Donnell, Fergus O'Dowd, Jim O'Keeffe, John O'Mahony, Brian O'Shea, Jan O'Sullivan, Maureen O'Sullivan, Willie Penrose, John Perry, Ruairi Quinn, Pat Rabbitte, James Reilly, Michael Ring, Alan Shatter, Tom Sheahan, P J Sheehan, Seán Sherlock, Róisín Shortall, Emmet Stagg, David Stanton, Billy Timmins, Joanna Tuffy, Mary Upton, Leo Varadkar, Jack Wall)
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Paul Kehoe and Emmet Stagg.
Question declared carried