Ciarán Lynch (Cork South Central, Labour)

I wish to begin by making a simple point. Twelve months ago Members sitting in this Chamber may have been asking themselves where would they be in a year's time. An obvious question needs to be asked. Who knew where we would actually be? I am of the view that the Government knew this time last year that the writing was on the wall. Civil servants in various Departments, including the Department of the Taoiseach and the Department of Finance, knew that the writing was on the wall. When the budget was brought before the House a number of weeks ago, the people expected two simple things to happen. They knew that we would have difficulties, that tough times were ahead, that hard decisions needed to be taken and that tough choices would be encountered. In the Budget Statement they expected a strategy to be put in place to deal with public spending and they expected an employment support package to be put in place to rescue the economy. In effect, we did not get either. The budget proved to be a record of unprecedented calamities, one after the other. For a number of years, as the economy expanded, there was an expectation that should a bad day arrive, we would be prepared for it. Like a builder leading a person to believe the roof will be fine as long as the sun is shining, we had one wet day and the water started pouring through the roof.

The Government claims foreign factors over which we have no control such as international banking and the global economic downturn are the source of our difficulties but this is clearly not the case. Two critical factors make the Irish recession unique — banking regulation and a developer-driven property market. A country can decide to elect a government that leads development or one that is led by developers. For the past 15 years, we have had developer-led government and the legislation passed during that period reflects that. Tax breaks were provided for homes that were not required while tax incentives were provided for landlords to generate further money.

Last night I watched the television programme about former Taoiseach, Deputy Bertie Ahern. In April 2004, he appeared on our televisions on a Friday night complaining about those who said the property market was in danger of collapse. He called them naysayers and so on. However, that year the price of property was beyond the reasonable grasp of middle income earners. If hard working families could not afford to buy a home, surely there was a significant problem in the property market. For whose benefit were houses being built? Were they being built for bankers or developers or the professionals who had a 2% cut out of every property transaction? If one bought at house at the beginning of the 1990s for IR£50,000, the auctioneer was paid 2% of the transaction in fees. In 2006 when the property market was at its peak, the house was probably worth €400,000 but if sold, the auctioneer would still have been paid 2% in fees, as would the solicitor and the estate agent. Nobody in the State received wage increases of that magnitude over that 15-year period. Everyone was at it because there was no regulation and the Government, even in the dying days of the Celtic tiger, when the manufacturing base of the country was collapsing, camouflaged the problem through the Exchequer figures and stamp duty generated by the property market.

The Government parties behaved like junkies, high on the returns from property speculation and in complete denial of the problems its addiction was causing for broader society. That is why our kids must clean up the mess the Government parties have created. Like junkies high on the fix of property taxation, they ignored every single factor telling them the economy was in danger. A total of 20% of our manufacturing base was linked to the construction sector, 10% above the European norm. We know why the Galway tent was in place. Meanwhile, sewerage systems, housings standards and energy rating for housing have not been addressed because these are after the fact matters when it comes to development. The Government was happy for developers to move their houses and it did not care what happened afterwards. As a result, housing estate after housing estate was built but communities were not and they are still reeling from the effects of this mismanagement.

Given the downturn, why are the most vulnerable carrying the can? In the budget old age pensioners were hit through their medical cards, young children through education cuts and teenagers and the disabled through other measures. The Government has rescinded a number of its proposals and it will rescind more. However, the construction sector could have been stimulated and redirected many years ago through a permit scheme. The entire population could not be buying and selling houses. Credit card debt stands at more than €2 billion and, until recently, banks and credit card institutions were calling 18 year olds on their birthday offering them unlimited credit. People were offered mortgages up to 12 months ago who now cannot qualify for assistance from a community welfare officer because their finances were in such bad shape when they guaranteed their mortgages.

The Government could have done 101 things but no strategy was put in place and a crisis-driven approach to everything was adopted. I refer to a number of the more anomalous scenarios in the budget. The Minister for Finance proposes the introduction of a €200 parking levy. Low paid workers go to work at 5 a.m. every day to stock shelves or work in the merchandising area of Dunnes Stores or another supermarket in Santry or another city suburb. They must drive to work because public transport is not available at 5 a.m. and one would not walk the streets of any city in Ireland at that time. They earn a minimum wage of €200 for a 15 to 20 hour week. They must pay for the parking space they avail of at 5 a.m. outside the supermarket and when the 1% levy is taken into account, they will lose two weeks wages next year because of the budget.

The budget will result in a litany of problems but the fundamental issue is the Government has lost touch and it does not know the value or cost of anything anymore. Sadly, the Government has no recollection of what is a recession and it does not know what are tough times but one only needs to ask one question of people of my generation in this regard. Ask anybody in their late 30s to mid 40s what is their PPS number and they will quote it off the top of their head. Why? It is because they went through the 1980s signing on and signing off social welfare. That is a legacy we inherited from the 1980s. It was something I hoped our children would not have as a mark of recognition as they grew up but, unfortunately, we may be back to that time again.

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