Trevor Ó Clochartaigh (Sinn Fein)

They are unable to take the hard decisions required to get the State's finances back in order. Therefore, in the absence of politicians of real calibre, with backbone and determination to do the right thing, no matter how unpopular it is, we need institutionalised mechanisms to save politicians from themselves — enter fiscal responsibility. If governments will not make the right decisions, we need checks and balances to force them to do so.

Senator Sean D. Barrett's Bill is what might be described as a soft mechanism. It would introduce balanced budgets as the fiscal rule — spending should never exceed revenue. It would require the production of a fiscal responsibility statement should a Government break this rule. It seeks to make Governments more compliant with the European Union's Stability and Growth Pact's excessive deficit procedure in order to restore the rule and return to what deficit hawks call sound finances.

Last Friday in Brussels Fine Gael and the Labour Party signed up to what can only be described as a hard mechanism, agreeing to enforce a new and draconian 0.5% of GDP structural deficit ceiling. This new excessive deficit procedure proposes to go much further than the existing Stability and Growth Pact. Both the European Court of Justice and the European Commission are to be given new powers to enforce compliance and, where necessary, impose alterations to a member state's budgetary and fiscal policy. While these two mechanisms differ in detail, they serve the same aim, namely, the reduction of public expenditure. While the narrative proposed by the proponents of so-called fiscal discipline may sound like common sense, it is, in fact, pseudo-economic science mobilised in the service of a regressive and right-wing political agenda, otherwise known as austerity.

The problem is that economies do not operate like households. Fiscal discipline, or austerity as it is more commonly known, does not reduce structural deficits. If Members do not believe me, they should consider the facts. Since the onset of the recession Fianna Fáil, Fine Gael and the Labour Party have drained more than €20 billion from the economy in spending cuts and tax increases on low and middle income earners. Despite this massive adjustment, the underlying deficit has hardly declined. It fell from 11.7% of GDP in 2009 to 11.5% in 2010 and a projected 10.3% this year. By the end of this year the Government deficit is expected to reach €22 billion. However, the advocates of so-called fiscal discipline forget to say that in the past 12 months the Government pumped €20.4 billion into banks, including the first €3.1 billion instalment of the Anglo Irish Bank promissory note.

It does not take a genius to do the maths, given that we have a deficit of more than €20 billion and a bank bailout cost of over €20 billion. Our problem is not fiscal irresponsibility but Government adherence to a failed banking policy that forces ordinary citizens to pay the full cost of the failure of the banking system. I agree with the sentiments expressed by Senator David Norris. I also agree with Senators Tom Sheahan and Feargal Quinn who said it was important to have a good reputation and pay back one's debts. However, I have yet to come across a business which is willing to pay off the debts of another, which is what is happening. We are paying off the bills of others.

Austerity and bank bailouts are the cause of our debt and deficit problem, not excessive public spending. Behind these two policies lies the human misery of 440,000 people on the dole; the 6,000 emigrating every month; the chaos in hospitals; the inequality in schools; the hundreds of thousands of families in mortgage distress; and the hundreds of thousands of families living in poverty or on the poverty line. This is the real human cost of so-called fiscal responsibility.

Are deficits good? They certainty are not. Do we need a credible strategy to reduce our debt and balance the books? We certainly do. However, the Bill before us and the more extreme proposal contained in last week's eurozone deal are not part of the solution. Instead of bank bailouts and austerity — the real policies that lurk behind the rhetoric of fiscal responsibility — we need to argue for restructuring of our debt and investing in jobs, as detailed in Sinn Féin's fully costed pre-budget submission released last month. Debt sustainability and economic growth are the keys to sound finance, not excessive deficit procedures and arbitrary deficit ceilings.

We will not be in a position to support the Bill, but we appreciate the work Senator Sean D. Barrett put into it. It is important that there be extensive debate on these issues and we would like to bring our viewpoints to the table. We certainly will not block the Bill proceeding to Committee Stage. Therefore, we will abstain in a vote in order to allow the debate to continue.