Timmy Dooley (Clare, Fianna Fail)

I welcome the opportunity to contribute to the debate on the Bill. There is little doubt that the economic situation in which the country finds itself is extremely serious. As the Minister stated, the country is facing its greatest challenge in 70 years. Based on what has been said by previous speakers, there seems to be a consensus building among people that we must work together and try to find common ground. We all have a common purpose and the vision that should accompany it must focus on achieving an acceptable level of fiscal rectitude. The term "fiscal rectitude" has not been heard for many years. In the 1980s when Ireland experienced similar but probably not as severe difficulties, people found it in themselves to work together to try to bring to reality the notion of a balanced budget. We have not been obliged to achieve a balanced budget for a long period. We have enjoyed budget surpluses, some of them significant.

The scale of the problem we face has been exaggerated by the speed at which the downturn occurred. In a two-year period, we have moved from having a considerable surplus to dealing with a deficit of almost €18 billion.

Consensus was achieved in 1987 following seven, eight or perhaps nine years of failed policies on all sides. People had failed to face up to the severity of the problem, to the serious issues that needed to be addressed and to the obvious and tough decisions which had to be made. Placing it in context, what occurred over seven years in the 1980s has effectively happened again in a seven-month period. The Government has been obliged to assist the public in understanding the reality that we have moved from a position of surplus to one of significant deficit and that severe economic measures are needed to address the problems that exist. Much has been achieved in this relatively short period in terms of the changes, including in the public mood, which have taken place.

The loss of jobs is the element that creates the greatest concern. Notwithstanding this concern, which we all share, the sentiments expressed and the level of hysteria displayed in some quarters would lead one to believe that 90% of the workforce was unemployed and the remaining 10% was in employment. Although the opposite is the case, negative perceptions have assisted the downward spiral of the recession and could, if we are not careful, lead us into a depression.

We must be balanced in our comment. While recognising the difficulties that lie ahead, we cannot allow commentary to exaggerate the problem to the extent that we instil unwarranted fear in the minds of many people. We are all aware of people, many of whom are recession proof, who decided not to purchase various items this year. Without wishing to understate the severity of the problems we face, balance is needed in the debate to ensure we do not further expose the economy to stress and undermine our capacity to return to a minimal level of growth in the coming years.

Under the Government plan, we could have a balanced budget in 2013. The decisions which will be needed in the next four years to achieve this objective will be significant and the resultant measures will cause considerable pain for many people. Members must be mindful of this and must share the pain. We will be affected by the measures set out in the legislation and I expect we will continue to share the burden in the same way as we expect others to share it.

Of the Government's expenditure requirement of €55 billion for this year, €20 billion will be expended on pay and pensions and a further €20 billion on social welfare. It is vital that we continue to support the most vulnerable in society. While we are under considerable strain and pressure through our financial commitments and the requirement to fund various State activities, it is important to maintain the progressive nature of our social welfare support system. We cannot allow ourselves to be deflected from ensuring that those who are caught in the poverty trap receive assistance. It has been suggested in some quarters that the social welfare budget should be examined. Given that no one in receipt of social welfare has an easy ride, we must be careful in this respect and ensure any such action is taken as a last resort.

We must continue to fund the back to education programme to ensure we continue to assist those who have not had an opportunity to escape the poverty trap or have been unable to enter or return to the employment market. This will be more difficult in the current circumstances because significant numbers of jobs are being lost, including among skilled employee groups and professions. The loss of these types of jobs makes it more difficult for those without skills to find gainful and meaningful employment. It is important, therefore, to provide appropriate housing and assistance for those who belong to this section of society to give them some quality of life, while at the same time maintaining a focus on breaking the cycle of long-term unemployment.

We must work towards the removal of the social isolation and deprivation which has bedevilled some elements of society, in particular those who did not see the benefits of the Celtic tiger. It would be a misrepresentation to argue that these people did not benefit from the Celtic tiger given that it provided the State with resources needed to establish a progressive social welfare system. Clearly, therefore, the Celtic tiger benefited those in receipt of social welfare. While they may not have succeeded in entering employment, they have benefited from the progressive social welfare programme.

It is also important to place in context the progress made through economic activity in recent years. We must try to trace the origins of the economic downturn. Certain statements made in the House, other fora and a variety of publications amount to misrepresentations. Nothing could be further from the truth than the notion that the Government, in concert with a number of bankers and assisted by a number of property developers, caused the current problems.

A few years ago, we were all pleased that there was competition in the banking sector and we could all recount stories of the bad old days when the banks charged penal interest rates of 18%, 19% and 20%. We talked about the difficulties this created in a bygone era when farmers struggled to buy land to improve their lot and provide a livelihood for their families. We heard stories about bankers creating problems for those seeking to purchase a home by taking a stuffy approach, showing disregard for the common man and woman. We heard about bankers who refused to help people who needed money as they sought to ensure only a small elite group had the capacity to borrow. All this changed as a result of competition in the banking sector. As interest rates were reduced and money was made available, many people who would not otherwise have had an opportunity to do so found they could participate in the property sector. This is not to deny that a culture developed in the banking sector which allowed elements to engage in wrongdoing. Nevertheless, the motivation in the early stages, when a number of smaller banks emerged, was to bring about competition and ensure people were able to participate in society in a way they had not done in the past. Many people benefited from this development but we now have a certain degree of amnesia as people forget where the banking cycle started.

One of the fundamental mistakes or element of wrongdoing is to allow those involved in lending to do so on the basis that they will gain a significant bonus from arranging a loan. This removes the discretion and clear-mindedness required to ensure the risk being assumed is properly assessed by the bank.

The Minister has established a committee to examine remuneration among the higher echelons of the banking sector. In establishing appropriate levels of remuneration, cognisance must be taken of the bonuses available to banking staff who arrange loans or generate lending activity. This issue must be examined because it is not appropriate that bank staff should be remunerated on the same basis as a store assistant who is rewarded on the basis of the number of pairs of shoes, handbags or suits he or she sells. Bank lending is a different world which does not involve commodity trading or sales. We must, therefore, ensure action is taken on this issue.

Accusations have also been made about the manner in which the housing stock was developed. Not long ago, it was suggested that the supply of housing did not meet demand and the Government was accused of not doing enough to address the problem. As Members will recall, Dr. Peter Bacon was commissioned to produce a report on the issue. Based on his recommendations, certain policies were changed and new policies were implemented with a view to increasing supply. People forget that demands were made to increase the supply of housing to force down prices. At that time, Opposition and Government Deputies recognised that the lack of supply was causing an increase in house prices. The issue was then addressed by policy decisions. We now hear that this approach was wrong and that the Government should not have acted in this manner, notwithstanding the common view at the time that measures were required to remedy the supply problem. Sometimes intervention works and sometimes it does not. The market will eventually set the appropriate level. Clearly, the property market became overheated despite the best efforts of the Government — and indeed the Opposition — in terms of coming forward with valid ideas about controlling the property sector. The reality is that we can put in place certain controls but they do not always work. In this case we had an overheated property sector and we are now seeing the market rationalise and set a limit which is more appropriate and perhaps more sustainable.

In some cases there is considerable hardship associated with the imposition of this levy. Like every other Deputy in the House, I have been lobbied by various unions and different people whom I know. The people I have met who are on €40,000, €50,000 or €60,000 a year are just as disturbed as those on €15,000, €20,000 and €25,000. It is a fact of life that people, particularly those who have a legitimate expectation of a job for life and an expectation that they will retain their salaries based on current trends and expected growth, build a lifestyle around their expectations. I recognise the major inconvenience, difficulty and burden of trying to restructure the life plans they had in place. Those of us who are in political life know we are not here for a guaranteed length of time and therefore we do not plan our lives in such an orderly way. I have great concern and understanding for people who are in that position.

The people I met were at one in terms of their desire to ensure there was equity and, more particularly, that any wrongdoing was rooted out and dealt with in an appropriate manner. I am not just talking about the banks. Many people I met were just as concerned about those who find ways of breaching the social welfare code or are self-employed and find ways to obtain financial support for students in college. Many of them recognised that there would be a necessity to return to payment of college fees, and they wanted equity in terms of how people apply for and receive grants. There is a perception in some people's minds that there are some who find ways around that. We need to ensure that whatever safeguards need to be put in place work and appear to work to ensure the confidence of those people who are particularly affected by the introduction of this levy.

Wrongdoing has no place in this society and there can be no hiding place for the people who have committed wrongdoing.

See this speech in context