Joanna Tuffy (Dublin Mid West, Labour)

It is hard to believe what has happened to our economy since the last election. All who sat here on the first day of the new Dáil could not have imagined what would happen over the next two years. I include those, that the members of the Labour Party who were critics of the way things were and those of us who had alternative perspectives on housing and other issues. Who would have thought that capitalism and free-marketeerism, as practised in this and other countries, would actually fail?

Land speculation has brought this country to its knees and has brought the economy toppling around us. We have found that our economy was built on a house of cards. I watched Pat Kenny's new programme last night and there was a gentleman on it who said every family in Ireland has been affected. He was correct. Irrespective of our socioeconomic backgrounds, everybody in Ireland has been affected by the economic crisis, to varying degrees. None of us can assume what we used to assume. This applies to how we live our lives and to what we expect in our local communities. Nobody knows when school buildings that were campaigned for will be developed. When will we ever see the promised Luas and metro lines and other infrastructural developments?

Plans we have for our children are now in question. My daughter started primary school just a couple of weeks ago. Circumstances are now very different for parents and we cannot make the same type of assumptions about children's prospects in terms of third level education, for example. There are unfinished developments and empty buildings, including in areas such as Lucan, which I and the Minister of State, Deputy Curran, represent. We had great hopes for such areas. In places such as Adamstown, development has been very good to date but the building works have basically stalled. People do not know when Adamstown will be developed.

It is difficult for everyone in this country at present. It is a difficult time for politicians of any hue, both in Government and Opposition, even though it might seem like an opportunity for the latter. The economic prospects are as scary to the Opposition as they are to the Government. How can one promise a better future, better education system, better health system and better local government and be credible in light of the current economic circumstances?

The most galling figure for me is that €28 billion is apparently to be spent by the Government on buying out a bank which, to be honest, I never heard of until relatively recently. I speak for most of the population in this regard. As we know, one could not enter an Anglo Irish Bank branch in any town or village around the country; it was just not a bank with which most of us dealt. It is the bank that is to be bailed out the most under the bank guarantee scheme and NAMA. What is really surreal for me is that despite all that has taken place and despite everything being thrown into question in terms of the economic philosophy that underpinned the actions of our Government and governments in other countries, the same assumptions about how our economy should be organised prevail and NAMA is a part of those assumptions. The assumption of many commentators in the media is that we can go back to business as usual. It is unfortunate that the predominant voices in the media basically make the same assumptions we had in the past.

Let us consider some of the developments in recent months, including the report of the Commission on Taxation. There is a lot of jargon in the report and the idea that tax can somehow be revenue-neutral is a nonsense and is nothing more than Orwellian speak. The report addressed the need to limit tax on labour, which is income tax. The Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, has used the same language and spoken of the need to limit tax on labour, in other words, that there is a need to reduce income tax, the fairest form of tax. This is the predominant view now about taxation. I was amazed there was not more comment on the fact that the one proposal of the report of the Commission on Taxation concerning income tax cuts proposes that the top rate be reduced by five points and the lower rate be reduced by two points. This is exactly the taxation policy that was in place when Fianna Fáil was in government with the Progressive Democrats during the past ten or 12 years. When there were income tax cuts they always benefited the most well off. They were regressive tax cuts and other stealth taxes were introduced which have also been proposed by the Commission on Taxation which would hit middle and lower income people most. I will refer to the matter of taxing or means testing child benefit later.

The McCarthy report is concerned with rolling back the State and suggests that the State and the public sector is the problem. This is despite the OECD study from the year before last which found that Ireland's public sector was not too large but modest compared to other countries. The McCarthy report recommends cutting 17,000 public sector jobs despite the fact that we need jobs now more than ever in our economy and it is very difficult for the private sector to provide such jobs. Under the McCarthy report there would be more people on the dole and out of work.

The McCarthy report makes many suggestions concerned with reversing social progress such as reintroducing third level tuition fees and cutting 2,000 special needs assistant posts. It is very much a return to the old slash and burn approach of the 1980s which decimated our health system. There are alternatives to the slash and burn approach to which I will refer later. However, there is a view that in a time of plenty one should save money for a rainy day - something of which the Government did not do enough; it cut taxes when it did not need to do so and in an unfair way. One should spend in a time of recession. Many countries which have done this are showing a turnaround not apparent in this country.

The NAMA proposal is based on the assumption that we can go back to a property bubble; that is what NAMA is about. The Green Party is making hay of the fact that it will introduce a windfall tax. I will believe it when I see it but that is another point. The fact is one must rezone land to get money from a windfall tax and there is no way such a tax could be retrospective on land already rezoned and for which planning permission has already been granted. It is a return to the old thinking of raising property values and rezoning land. I presume from the statements made by the Taoiseach and the Minister for Finance that some of the land NAMA will own is not rezoned. Will there be pressure now under NAMA from the different interested parties to have such land rezoned so that more money can be made out of it in the long term? Despite numerous announcements by the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, that he will reform the planning laws and stop unsustainable planning, there is no sign of this happening. I tabled a question last week about that Bill but it is not on the list of Bills for the next legislative season; as far as I can see the Government list of Bills extends to 2010 but there is no reference to this type of planning Bill. When I put a question on the matter to the Taoiseach he did not have much to say about any such Bill.

It is also disappointing that the majority of the media seems to be totally buying the same economic philosophy that we have had in this country, including that we must have NAMA, we must have the Commission on Taxation report implemented and that we must have the McCarthy cuts implemented. That is what I interpreted from The Irish Times editorial which suggested the Government is lily livered if it does not implement the recommendations of the Commission on Taxation. It refers to the Commission on Taxation being established to spread the burden of tax and to make taxation fairer. In no way will the recommendations of the Commission on Taxation make our taxation system fairer; they would do the reverse, make it more unfair and undo much of the social progress we have made in recent years.

I do not believe the media - in the broadest sense of the term - is representative, although I recognise there are different voices. However, the predominant voices in the media and in the editorials of such newspapers as The Irish Times and Irish Independent are out of step with the public. The people I meet in my day-to-day work as a public representative question the way things were and the way our society was organised during the era of the Celtic tiger. In on-line debates about our economy and NAMA there is a good deal more diversity of voice in terms of political blogs and so on in which young people question the way things were and believe things can be different.

If everything we did brought us to where we are it is time to start to consider doing things differently. There are alternatives and there is a different way of approaching recessions, depressions, good times and economic growth. Such an approach is being implemented in other countries throughout the world. The IMF has said one of the reasons France has been cushioned against the recession is because of its large public sector. Having a reduced public sector may not help a country but having a large public sector may help because the public sector provides jobs and necessary public services. It has educated our children and looked after our sick people and so on.

I refer to fiscal stimulus such as those proposed by the Labour Party. We propose building schools. I have tabled parliamentary questions about school buildings that are badly needed in my area and which are so rated by the Department of Education and Science but I have ascertained from the replies that nothing is happening and that there are no plans for building such schools. If we built schools we would put people back to work and they would pay taxes which would return to the Exchequer. These people would buy goods in shops, make the economy more confident and get it moving again. This is the type of approach which has been implemented in other countries, such as in the United States of America by President Obama. This approach was also implemented by Franklin D. Roosevelt during the "New Deal". Not only did this approach help the economy, but it helped to address a hardship in society by ensuring as many people as possible had jobs and it did as much as possible to protect people in terms of work and income. It seems the opposite approach has been taken and will be taken here by the Government.

There have been alternatives all along including those proposed by the Labour Party. Deputy Michael D. Higgins in an article in The Irish Times recently pointed out it is not true to suggest everyone was cheerleading the Celtic tiger. There were people who proposed alternatives about how to provide homes for young people. Deputy Eamon Gilmore, the Labour Party leader, led a commission on housing in 1999 which recommended taking the decisions about where housing should go, namely out of the hands of developers and into the hands of the State, local authorities and local communities.

Let us consider new Labour in Britain. Where new Labour in Britain went wrong - if it did - was buying into the idea that the market is supreme. We must decide that in future there are areas in our lives where the market has no place. That can be done as much in bad times as in good.

The NHS was established in Britain after the Second World War, and the French also brought in their health service, a universal state system found by the World Health Organisation to be one of the best in the world. In Ireland, children's allowance was introduced in 1943 at two shillings and six pence for each third and subsequent child under 16. It was not means-tested and it helped 320,000 children at the time. It was extended to the second child in 1952 and all children in 1963. Having experienced great wealth, we find bankers are now being bailed out and €28 billion is going to Anglo Irish Bank but we are talking about taking away children's allowance from some. Unfortunately, the media is a cheerleader for that. Despite children being our future, we are talking about taking away something we introduced in the 1940s when food was rationed.

There is an alternative to NAMA. If the State and taxpayers are handing over an amount of money which could easily buy those banks, we should own them. That has been done in many other countries. If we go back to normal we will have the banks go off into the sunset, leaving taxpayers burdened and resulting in the loss of social progress made since the State's foundation. We can act differently by nationalising the banks and setting out to genuinely create a much fairer and more sustainable society from the current economic recession.

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