Joan Burton (Dublin West, Labour)

The former Taoiseach, Albert Reynolds, warned that it is often the little things which trip one up. I say to the absent Minister for Finance, who is rather discourteous in not attending the opening of this debate, not to dream of coming into the House on 7 April if he has not sorted out the Fingleton affair. Mr. Fingleton is not a single bad apple; there is a barrel full of bad apples.

The Minister has been incredibly slow in cracking the whip of extraordinary powers he took to himself in the legislation on the covered institutions. We pointed out earlier the four or five plenipotentiary sections of the Act which give massive powers to the Minister to impose what conditions he likes and which leave the way open to him to recover the €1 million bonus.

The Irish Nationwide Building Society is, in international terms, a tiny financial institution. When one recalls the furore and action in America regarding the $165 million in bonuses paid to the executives of AIG, which is a huge corporation by global standards, it is important to remember that Mr. Fingleton's €1 million bonus is on a par with the total bonuses of all the AIG executives. That is how much money this individual has taken.

There is nothing that corrodes confidence as much as the belief that sacrifices, like taxes, are only for the little people. Unless the Minister for Finance, Deputy Lenihan, can show in the emergency budget that he will have fairness and justice, he does not have a prayer of getting the plain people of Ireland on his side. It is the same when tough decisions have to be made about the whole edifice of political patronage and the whopping cost of the payroll vote that the former Taoiseach, Deputy Bertie Ahern, constructed. The Minister, Deputy Lenihan, will have persuaded the Taoiseach to have the reforms done and dusted before he rises to his feet on 7 April. If he does not have a plan fully in place by then to reduce the number of Ministers of State, as well as the numbers of committee Chairmen, Vice-Chairmen, and ministerial salaries, privileges and pensions, public hostility will be so great as to undermine any capacity to accept the really big adjustments likely to be announced in the budget.

I heard the story about Fianna Fáil and the Green Party's newly-appointed chairman of the Dublin Docklands Development Authority. He was given the honour by the Government of being chairperson of a large public corporation, a singular honour and responsibility. Apparently, all he was involved in was an ordinary piece of clever tax planning to abuse and utilise our non-residency laws by his family members. If that does not cry to heaven the need to close down on the tax exiles and super millionaires who continue to pay no tax, I do not know when this Government will ever bring in tax justice for ordinary workers. The people who work in this House, those who work as teachers, nurses and doctors up and down the country and ourselves are paying, if one is on a higher salary, approximately 10% in the public service levy, down to a level of 5% or 6% for people on much lower salaries.

People are angry and unhappy about it but they recognise that something has to be done to steer the economy back to fiscal stability. However, that cannot be done when one shoves in peoples' faces, on a daily basis, more stories about cronies such as Mr. Fingleton and Mr. McCaughey who get away with ridiculous schemes, whereby the little people pay the taxes and the super wealthy can walk away and laugh in our faces.

The Minister has had enough indication from ourselves and the Fine Gael Party that we are willing to co-operate regarding sacrifices which need to be made to turn around this economy and to rescue it from the state into which he has allowed it fall. He must, however, do it with justice and fairness. Justice starts with the wealthy paying and contributing proportionately more because they have proportionately more. The lower, lighter burdens, if burdens there should be at all, should fall on those people who are least able to bear them.

Every day I read the conventional wisdom for setting out cuts and more cuts, which makes me nervous. Like Galbraith, I fear the conventional view about cutting, and cutting serves to protect us from the painful job of thinking. I read many of the orthodox economists with a jaundiced view. How many of these experts recognised in time that the tax incentives of successive budgets, particularly those of former Deputy Charlie McCreevy post 2001, were in fact our road to ruin and the cause of a flawed construction boom? The Taoiseach, Deputy Cowen, inherited that and did not have the guts to address it, nor did the incoming Green Party and Fianna Fáil Government after 2007.

It is clear that the core issue this week and next week will remain, in terms of this country's status and ability to borrow — which we need to do — and the cost of that borrowing, the condition of our banks and their toxic debts. Right now our economy is being dragged down by our dysfunctional financial system. Overshadowing everything in the debate is the overhang of the flawed bank guarantee of 30 September last year. I recall the Minister for Finance, Deputy Lenihan, assuring me that his powers under the Act were so great that there was no need to cap the salaries of bank directors at the same level as his salary. Where is he now? He is to get a couple of people to report in a month's time. He is apparently passing on the reform of Ministers, Ministers of State and all such matters to the McCarthy commission. He is passing on the recovery of Mr. Fingleton's bonus to two directors. Does this Minister take any direct decisions himself? Is he just the Minister for passing on decisions to somebody else?

The decision on the bank guarantee scheme exposed Ireland to a hostile audience among international lenders at a significant additional cost and has restricted our capacity to arrange funds for important capital investment projects which could stimulate the economy. It has left us with a tattered reputation for crony capitalism, something to which even the Minister had to admit in his meeting with the Financial Times last week.

As an Irish person, I was not happy to read the front page headline on the pink newspaper, the Financial Times, stating that the Irish Minister Lenihan wanted to try to clean up Irish crony capitalism. This was no way to talk about our country on our national day in a financial newspaper which is the most widely read around the world. It was a sad day for this country to have the Fianna Fáil Minister for Finance beating his breast and saying he would try to clean up our crony capitalism. It has left us with such a tattered reputation that this year the extra interest cost of our borrowing will be approximately €1 billion over the odds because of the rise in the cost of interest payments.

The bank policy decisions made since September have made a bad situation worse. I am disappointed that we have received no details of Dr. Bacon's proposals on toxic debts. It is one final opportunity for the Minister to get a grip on the banking crisis. He is in the last chance saloon and I urge him to engage with this side of the House before he makes a final decision. The core issue is the allocation of the bank losses and their debts. One can talk endlessly about bad banks, good banks, insurance schemes for toxic debts or special companies to handle the debts. No matter what one chooses, it will still come down to the core issue which is the valuation of the bad debts and how much of a hit the taxpayer will take.

Done badly, this will probably cost the Irish taxpayer and State €25 billion. Done well, it could cost us less than half of that. We have already spent €7 billion recapitalising the two big banks and, as the Minister and the Government knows, it has not worked. One needs to weigh up all the options, including nationalisation, and I fear the Minister has decided to rule out that option for misguided reasons and, in doing so, has run the risk of loading a grossly excessive and unjustified burden on current and future taxpayers.

I can see why Mr. Fingleton, Mr. Sheehy and Mr. Boucher are enthusiastic about schemes such as insurance policies. It should be equally obvious to Members on all sides of the House that this is a bad deal for taxpayers. Once the crisis is over, the shareholders of the companies which created it will have benefited from a whopping transfer of funds from the Government via the taxpayer. The public will be appalled by any proposal that involves paying over the odds for assets simply to keep insolvent banks in private hands. If the Government does this, it will forfeit all claims to an all-party consensus. There is a well founded suspicion which is denied fervently that the national interest in these decisions is identified solely with the interests of the very people whose wild excesses caused the problems in the first place. Is the Government the silent spider at the centre of a toxic web of dodgy land deals? This is what has brought the country down and it remains the issue Fianna Fáil will not confront. The Government has no right to barter the welfare of the country to protect the people concerned.

The budgetary process is a type of phoney process, as part of which the Opposition endures a drip feed of information. The Government must come clean in terms of its target to reduce the budget deficit and how much of the figure it proposes to recover in the five to seven-month period of tax collection after 7 April. If income tax changes are imposed on 7 April, it will not be possible to implement them, unless they are straightforward levies, until early July. On the other hand, any excise duty charges can come into force at midnight. Is the Government proposing to recover a full-year deficit of 9.5% in a five-month timeframe? This would be akin to the medieval practice of bleeding the patient except that, in this case, the Government will bleed the patient to death because consumers and the general economy will not be able for that degree of harshness.

The economic crisis does not have to be a great depression, as long as the Government makes the correct policy decisions. The 2009 allocation for the capital programme is €8 billion, of which, we are told, almost €6 million is already committed under contract. However, an area with one of the highest levels of non-contraction, as far as I can discover, is the schools building programme. Some €600 million or more is allocated to building and refurbishing schools at primary and secondary level but this allocation is not committed under contract. If the Government does the budget by rote, the schools building programme which would provide necessary infrastructure and jobs at local level will simply be replaced by a mini-programme. On the other hand, some Departments, including the Department of Agriculture, Fisheries and Food, are in a position where almost everything in their capital budget is contracted. As a result, these capital programmes will endure no reduction, whereas the schools building programme will face the chop. The Minister, Deputy Dempsey, must be aware that up to €800 million of the capital allocation for transport is not contracted and therefore in peril. Changes to the capital programme are ill devised and reflect the panic that besets the Government benches as it faces into an emergency budget arising from the mess it has made of a once vibrant economy.

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