Dáil debates

Tuesday, 21 October 2008

Financial Resolution No. 15: (General) Resumed

 

5:00 pm

Photo of Michael D HigginsMichael D Higgins (Galway West, Labour)

I welcome the opportunity to say a few words on this budget. The budget should be judged in terms of its effects in a particular context. It was brought forward for a particular reason, to respond to international economic circumstances which had changed. While those who prepared the budget have used these external circumstances as a kind of apologia for their actions, there is no doubt but that there has been a crisis in fiscal terms here since 2006.

The reason I say the crisis has been with us since 2006 is because I want to talk about real economics. In 2006, our imports exceeded exports. Without being partisan about it, between 1995 and 2000 the economy performed well in terms of growth, which was sustained by export growth. Exports then flattened out and dipped in 2006 after which imports exceeded exports resulting in a serious balance of payments problem. It is not accidental that in approximately January 2007 property prices reached their peak. There was an international bubble and within that a home-grown bubble based particularly on property speculation and also fed by a series of instruments that could be regarded as virtual financial products. Some people suggest these were invented in the United States and sub-prime lending spread through the international system and made its way into the Irish banks. I do not accept that excuse. There were serious failings in regulation by the Financial Regulator and the Central Bank.

Those responsible for economic policy promoted the kind of property speculation we had. In time, people will look back at the McCreevy budgets as the most irresponsible of all time in being totally indiscriminate in the consequences created by tax breaks. While there was an international atmosphere, there is also that for which we have responsibility. This was brought home to me very dramatically when I was in Westland Row church this morning looking at frail elderly people coming up to stand behind a microphone to state they had worked all their lives. In some cases, women said they had retired from the Civil Service and were, therefore, in a particularly vulnerable pension position. They might have got a lump sum and reared their children. How are they now to purchase on a private market the health security people want?

I have been thinking about what is at stake here. It is the loss of citizenship by the Government action. The previous Taoiseach announced some kind of campaign which was supposed to be about citizenship, but turned into a lacklustre appeal for more volunteerism. It was not citizenship in any sense. Citizenship is about inclusion. Amartya Sen, the Nobel laureate in economics, once said that the purpose of economics was "the ability to appear in public without shame". Genuine citizenship is about inclusion and that is the debate about universalism. We make universal provision for those who want to come in and out of citizen participation in their society. This is why we should have universal provision for children in education, etc., in order to give all citizens a chance to be able to participate in society without shame and to be able to earn a living. There is a debate in philosophy that I cannot deal with in 15 minutes as to whether this should be based on capabilities.

At the other end, people want security. Having spent their lives working, they want to be assured. While they are not looking for material benefits, they want to know, if they have need or are ill, that they would be able to have access. Those who came to Westland Row this morning wanted to be secure in regard to health needs. Apart from everything else, this makes practical sense. On average, a person lives for three years after going into a nursing home. I was a sociologist in another life. The proportion of people who want to spend their final years in their own home has never sunk below 80% in any survey. People want to be at home. While some of people never used them, the knowledge that if they felt unwell they could use their medical cards and go to a pharmacy with which they had a relationship served as a kind of instrument of security.

These two ends of the spectrum are represented by the elderly and children in education. It is a pity that the previous speaker is not here. A woman spoke about the school in which she works in Tallaght. That school, in which almost 50% of the children have difficulty with English, is losing two language teachers. Nobody wants that to happen and it should not happen. However, there is a great laziness about this budget. When I was a Minister, the message would come from the Department of Finance that I needed to prepare my budget on a no-change basis. The Department of Finance would always come back for the second round in which it suggested it needed a cut of a particular percentage. This has all the marks of that lazy indiscriminate thinking with no flexibility or discretion for, for example, the school that with half its pupils——

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