Arthur Morgan (Louth, Sinn Fein)

I wish to begin by expressing my opposition and the opposition of my party to this legislation. I appreciate it is largely a technical Bill but it is what it enables that causes me concern. We have opposed the recapitalisation of AIB and Bank of Ireland because the Government is effectively handing over to the banks €7 billion worth of taxpayers' money without seeing sufficient material return to the taxpayers.

In the past six weeks the Government has taken thousands of euro from the budgets of low and middle income families through the pension levy. It has cut back on special needs education and is in the process of imposing the most damaging of health care cutbacks the country has experienced since the 1980s. All of that is being done for the benefit of the banks.

The legislation before us effectively proposes to give the Minister for Finance carte blanche to raid the pension fund whenever and however he wants provided it is for his pals in the banking sector and he decides it will rectify a serious economic disturbance. Given the Minister's abysmal failure to deal with the banking crisis so far, I am dreading the notion that he will be given such significant discretion.

At the time of the budget last October my party proposed the use of the pension fund for critical infrastructure so we could fight the recession and preserve jobs. Despite the obvious need for investment in job creation and job retention the Government is continuing its exclusive focus on the banks while cutting back on essential public services. There is nothing in this Bill which enables the use of the National Pensions Reserve Fund for labour-intensive transport infrastructure, there is nothing for the building of new schools or school extensions and nothing for other public services which would have a far more positive impact on the economy than what is currently being done with our financial institutions.

What is this legislation all about? It is about using the pension fund for the Government's only real concern, which is the banking sector. The public, the media and most economists are now sick and tired of listening to the Government waffle on about the critical importance of the banks when it has not even bothered to implement changes of any real significance to their governance or to financial regulation. It has only put bonuses on pause for 12 months, taken out a token 25% stake and done nothing to address the credit crisis which is continuing to destroy our small and medium enterprise sector. It is this lack of action on the banks coupled with the Government's quite brutal cutbacks on the public service workers, especially children in special needs education, which is causing much anger.

A number of weeks ago an article by John McManus in The Irish Times mentioned the notion of group-think which seems to be endemic among senior management in our financial and State institutions. He pointed out that PricewaterhouseCoopers is the auditor of Bank of Ireland while at the same time being employed by the Financial Regulator to carry out an assessment of its loan books. He went on to describe this conflict of interest when he said actors were ultimately the judge of their own case. This is bad practice. This conflict of interest is exactly what is wrong with the Government. It is because of the corrupt relationship between dodgy developers, the bankers and other special interest groups that the Government is now a prisoner of its own alliances.

I remind the Minister he unwisely boasted at the time of the bank guarantee scheme that this "was the cheapest bailout in the world". This guarantee has left us with a potentially crippling debt of €440 billion. With the recapitalisation of the banks we are now on the verge of using our last stash of money to pay for their mistakes. It is the banks that should pay and not the workers in our SMEs. We will therefore oppose this legislation.

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