Joan Burton (Dublin West, Labour)

I warned against the Japanese model. In the early 1990s after the Cold War, Japan's economy was devastated by a burst property bubble with house and land prices tumbling and undermining the property-related assets and loan books of many Japanese banks. Rather than encouraging their banks to come clean on their balance sheets and write off their bad debts, the Japanese Government facilitated an asset quality cover-up whereby the bad debts were not written off. The result was that the problems were stored up for the future and multiplied to the point where the banking system all but collapsed under the weight of this unacknowledged toxic debt. The result was Japan's lost decade.

The Labour Party will not commend Fianna Fáil, or the two Brians, as it leads our young people into another lost decade, based on a Japanese model rescue plan. What the Government delivered today and yesterday is a disgrace. It does not give people hope and confidence for the future. Before lunchtime today, the Taoiseach suggested with the bank recapitalisation programme of €8 billion next week, he would get tough with the banks' top guys who will see a 25% reduction in their salaries.

The top guys in the banks do not earn salaries like public servants. They get compensated in a variety of ways. Their compensation packages have fallen from between €4 million and €6 million to between a mere €1 million and €2 million. We do not know the full details because they are confidential even though we are bailing them out. Is the Minister claiming that the big plan is to reduce these guys' salaries by 25% to between €750,000 to €1.5 million? Public servants, the nurses, the gardaí, the teachers, after ten years' service, earn a basic of €45,000 plus various allowances. Does the Minister expect them to cheer him when they are subject to a 7.5% levy while the bankers' earnings tumble from €4 million to €1.5 million? On what planet is the Minister living? In America they say, "God bless America". We need God to bless Ireland to get out of this mess.

After the 1929 great crash and the tsunami of 4,000 bank failures across the United States, the then US President, Herbert Hoover, came up with a cunning plan to restore the economic fortunes of the US. He slashed Government spending to balance the books. The result was the Great Depression. After immense human suffering and the enlightened intervention of his successor, Franklin Delano Roosevelt, with some false starts, a path out of the Great Depression was charted for the US.

Ireland needs a new deal, not a bum deal like those we have had to listen to yesterday and today with short-sighted spending cuts. We bail out our banks while not providing any hope for credit resuming to small and medium-sized businesses. While the Minister allows the banks to hide the levels of their property loans by one device or another, the size of those loans on their balance sheets will freeze the banks' genuine capacity to lend or expand the economy. One developer, Mick Wallace, said on "Prime Time" last week that he is not paying interest on his loans. The implication is that his bank is rolling up the interest and capitalising it into the loan. If the Minister is contemplating allowing our banks to do this, does he realise it will take all the resources of the banks and completely kill their capacity for new and fresh lending to small, medium and large businesses employing people?

The US President, Barack Obama, has been in office 16 days while the Taoiseach and the Minister for Finance have been in office for 273 days. We have had 273 days of indecision, prevarication and steady economic decline. Many of their early days in office were wasted by their baseline desire to help the friends they had made in the build-up of the Celtic tiger property bubble.

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