Richard Bruton (Dublin North Central, Fine Gael)

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann declines to give the Financial Emergency Measures in the Public Interest Bill 2009 a second reading because:

(a) the Government has not set out a fair and balanced five year economic approach covering the correction of the public finances;

(b) the Government has not set out clear proposals to change the policies and personnel executing regulation of the financial services sector to usher in a new culture in banking; and

(c) the Government has not imposed an income cap on bank executives and has not insisted on new boards, new executives or new auditors in those banks that have or are to receive recapitalisation from the State.".

As the Minister stated, we are indeed at a time of unique crisis in the economy. People seek a fair and balanced strategy from the Government to address the comprehensive range of challenges that we face. The Government has failed dismally to produce such a strategy, which is the reason it is in the dock and is suffering so much misunderstanding and abuse from people. No coherent set of proposals has emerged from the Government that would demonstrate there is a broad-based strategy that is fair in respect of sharing the burden fairly among different sectors, in respect of people's ability to pay and regarding the extent to which people were complicit in creating the problems we face. Nor has the Government articulated a strategy that would be perceived to address some of the sources of the problems that are the cause of our difficulties. I refer to the loss of competitiveness, the culture in the public finances that has damaged our standing and many other issues. This is the reason there is a sense of extraordinary frustration. As I have stated elsewhere, people perceive the measures under consideration today and on which Members will vote as one leg of a stool that has at least two legs missing. People perceive it to be neither coherent in terms of addressing the problems nor fair in the manner in which it is structured.

It is not simply Members in this House who hold such a view. I refer to a matter for which the Department of Finance must take a great deal of the blame and which can be seen by anyone who reads the addendum to the Irish stability programme update of January 2009. It constitutes our fiscal strategy at present and is all we have. It consists of a table with a few numbers that are not underpinned by analysis of any kind. One does not know from where these figures came, what is the basis for the tax and spending forecasts or which taxes will generate the projected revenues. It is simply stated that on the basis of this flimsy document, it will be €2 billion this year, €4 billion the following year and another €4 billion the year after. This is not a strategy and if the Department of Finance has sunk so low that it believes this constitutes a strategy with which one can go to our colleagues in Europe or before the Dáil, we are in a sad and sorry state.

Moreover, while the Minister denies the accuracy of the comments that were attributed to officials regarding the European reaction to this response, they summarise my view of it, namely, that these are not ideas that are developed in any shape or form. They are not convincing and we must move on. Equally, while the Government makes heavy play of its smart economy document, that document is pathetic. It is merely a bulldog clip put around documents that Members have seen for the past ten years. It includes no timescales or budgets and nothing underpins it. It is simply a hit and hope document.

The only document that contains chapter heads regarding what might be required is that which was presented to the social partners. While it at least contains chapter heads, it includes neither decisions nor even indications of decisions. Vague principles are set out but there was an absolute expectation that the Government, having failed to generate the hoped-for consensus from the social partners, would have document B, that is, its view, under all these various headings, of how to move forward and what will be done in year 1, year 2 and so on. Such a document would provide a sense of direction and would indicate there was a genuine strategy to deal with the various sections. Many would recognise that section heads had been set out. They included sections on stabilising the public finances, public expenditure reform, taxation, an equitable approach, short-term stabilisation, how the Government was going to deliver the five-year stabilisation framework, a reform agenda, a job retention agenda and so on. We are bereft of any of these.

There was an expectation that the Government had a strategy. Even though it had not secured agreement in this regard, we nonetheless expected to be presented with a comprehensive document that might instil confidence that the Government was moving in some defined direction and that notwithstanding scarce resources, certain issues would be clearly set out for prioritisation so that there would be a sense of where we were going. Even if the Minister did not propose to introduce taxation measures in year one, as he said he would not, we expected some indication of the changes proposed for years two and three. The crucial issue now is that people have the confidence to make investment decisions. However, the Minister knows as well as anyone that people will not make those types of decisions if there is great uncertainty as to the future direction of tax policy. An indication of the likely future trajectory of taxation policy would at least provide a framework within which investment decisions could be made.

I understand the anger of public servants at apparently being singled out. That is one issue. However, the greater difficulty is the lack of a balanced programme of measures to deal with all the challenges we face. When we were discussing the public finances yesterday, I asked the Minister several times what would happen if we are way off-target in year one. If we are unable to live within the borrowing limit of €20 billion, what then is the Government's strategy? Will we see the agenda of "Bord Snip" brought forward so that decisions on taxation can be taken straight away?

The public expected the Minister to set out clearly how he proposes to respond to the different challenges we may face. However, there is an unwillingness to face up to that. I am sure everybody in the House, including Members on the Government side, recognises that the figures published by the Department of Finance are likely to prove wildly optimistic. It seems certain that the savings of €2 billion will be insufficient to contain borrowing at €20 billion. That is the reality. More recent economic forecasts indicate a decline of 6% rather than 4.5%, which would add some €2 billion to public debt. We must get real in regard to where we are and how we should react to changing circumstances. My party has long advocated the introduction of a fiscal responsibility Bill under which Ministers would be obliged to account to the House for their Department's expenditure after the first quarter and, where it is off target, to set out their proposals to rectify that. Other countries have moved ahead with that type of legislation because they know that getting fiscal strategy right and putting it in a responsible context is vital to the survival of their economies. We have not done so.

What appals me as we debate these issues week after week is the failure of the Government to recognise any culpability on its part. It is as though terrible catastrophes befell us from abroad and blew us away, prior to which we were pursuing sound, sustainable and wonderful policies. If the Minister and those around him believe that, we are absolutely lost. We were not pursuing sound, sustainable and wonderful policies. It is not the case that a storm from overseas blew us off course. The reality is that the Government pursued policies that, as Fine Gael pointed out time and again, were destructive. It is not appropriate for a small, open economy to grow its building sector at the expense of destroying its export trade. It does not constitute sustainable management of public finances to grow public spending at twice the rate of growth of the economy, as was done in recent years. These are basic principles familiar to any first year economics student.

However, the Government dismissed the concerns put to it in this regard and claimed the economy was based on sound fundamentals and that everything should just go on as it was. Its entire general election campaign was built on the illusion that it had some magic formula to make water run up a hill.

See this speech in context