Michael Noonan (Limerick East, Fine Gael)

It is very difficult for this House to have confidence in the Government. The election manifestos which Fianna Fáil and the Green Party put to the electorate in 2007 are redundant. The Progressive Democrats, as a party, are redundant. The Programme for Government is equally redundant because the economic circumstances have changed. The agreement made between the parties in Government when Deputy Cowen was elected Taoiseach is also redundant because the premise on which the present Government was established no longer pertains. More importantly, the conventional wisdom that no one could have foreseen the fiscal crisis until the summer of 2008 is untrue. It was clear immediately after the 2007 election that the 2007 budget was off the rails. This was pointed out by many commentators and I want to outline one personal example.

In June 2007, three weeks after Deputy Bertie Ahern's Government was formed, the then Minister for Finance, Deputy Brian Cowen, introduced a Bill to make minor amendments to stamp duty. In the course of the debate I read into the record the monthly housing start statistics from January 2007 to May 2007, which had just been published by the CSO. The decline in housing starts was dramatic and indicated that about 40,000 new houses would be completed in 2008 in contrast with the 90,000 new houses completed in 2006. The rule of thumb on tax yield from housing is that every 10,000 houses completed yield €1 billion in tax. I pointed out to Deputy Cowen, then the Minister for Finance, that the Exchequer in 2007 was facing a shortfall of at least €5 billion, and I asked him to bring forward proposals to close the deficit. I asked him to publish a White Paper in order that all parties in the House could contribute ideas because at that stage, three weeks after the 2007 election, it was evident that we were facing a fiscal crisis. The Minister did nothing.

I do not think he did nothing out of ignorance. I believe the Taoiseach in June 2007 knew exactly how bad the situation was and how it was progressing, but was afraid it would destroy his chance of succeeding Deputy Ahern if he took the necessary tough fiscal action that was required. Therefore, he waited until he was elected Taoiseach and he did not act until July 2008, 13 months after anyone who was keeping an eye on the figures knew that budget was off the rails. In the meantime, he introduced a bogus budget in December 2007 and relied on borrowing to carry him through 2008. I believe he knew how bad it was, and did not act. This first attempt at corrective action was 13 months too late, and all subsequent Government decisions have been too late. How could this House have confidence in this Government or in this Taoiseach?

In the nine months between July 2008 and April 2009 the Government has made four attempts at fiscal correction - expenditure cuts in July 2008, the annual budget brought forward to October 2008, the pension levy in January 2009 and the emergency budget of April 2009. The Government has not yet caught up with events and the country is facing the mother of all budgets at the end of this year. Against that background of failed attempts to correct the national finances, how could the House have confidence in this Government or this Taoiseach?

The Government is less culpable in not foreseeing the banking crisis, but is totally culpable in its handling of it. It introduced the deposit guarantee scheme without consulting its euro zone colleagues. It nationalised Anglo Irish Bank without knowing the potential exposure to the taxpayer. It re-capitalised Allied Irish Banks and Bank of Ireland without knowing the level of bad debts in either. It took a decision to establish NAMA without publishing the Bacon report, which is the foundation stone of the initiative, and it did not consult Mr. Michael Somers of the NTMA who is required to establish NAMA. How could the House have confidence in a Government or a Taoiseach acting in such a manner in correcting the banking crisis?

The banking crisis must be addressed, first and foremost. It is sapping the life-blood out of the economy. People cannot get credit. It is destroying viable companies. It is destroying viable jobs. Unless that is addressed first, properly and quickly, we will never fix this economy.

We have a broken economy, a fiscal crisis, a shattered banking system, a national credit rating at the bottom of the euro league and sleep-walking, zombie, talentless Ministers. The figure for unemployment is more than 400,000 and will be 500,000 by the end of the year, according to Government estimates. The Government has taken no action to protect or create jobs. How could the House have confidence in it or the Taoiseach? For the people's sake, let us have an election.

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