Joanna Tuffy (Dublin Mid West, Labour)

I wish to talk about the influence of the Irish Business and Employers' Confederation, IBEC, and the Small Firms Association, SFA. Both of these groups, as well as other business lobby groups, appear to have had a considerable influence on the budget. The reason I am singling them out is that they were prominent in the pre-budget debate and they hold a particular ideology about how the Government should approach the budget that has essentially won the argument and now holds sway in the media and elsewhere. The cuts in public sector pay and social welfare sought by IBEC and the SFA in the budget were delivered. The SFA, in its pre-budget submission, stated:

A tough budget is vital to restoring confidence... We are simply no longer capable of generating the tax revenues necessary to maintain the scale of the public sector that we now have, or the generous social welfare rates that are prevalent... We are advocating that the €4bn cuts are shared three ways; namely one-third from a reduction in the unit cost of the provision of public services (through decreases in real public sector pay and radically altering the public sector pension provision, rather than simply cutting numbers and services), one-third through a reduction in the social welfare bill, and one-third through efficiency gains across the broader current public expenditure heads. The McCarthy report should serve as the basis for these cuts.

Similarly, IBEC recommended in its pre-budget submission that the €4 billion saving in current expenditure should comprise €1.4 billion in public sector pay cuts; a €1.3 billion cut in the cost of social welfare; and a reduction of €1.3 billion in the delivery of services. I noticed the prominence of these two organisations in the pre-budget debate and I do not recall this being the case previously. I am old enough to remember the last recession and I do not remember business lobby groups telling the Government how to deal with public sector pay and social welfare. There used to be a much more prominent voice in defence of social welfare entitlements. I am aware that a coalition of groups have come together to form The Poor Can't Pay, but we used to have a very strong body, the Combat Poverty Agency, whose voice the Government has taken away.

What is the motivation of IBEC and the SFA? Why do they not concentrate on their own side of things or on suggesting practical things that can be done to help the businesses they represent? They have done this to a certain extent, but their emphasis was really on public sector pay and social welfare cuts. When the Government was in negotiations with the trade unions, I received e-mails from people advocating that the Government should not accept the deal involving unpaid leave and should pull out of the talks. Many of those people were associated in some way with IBEC.

I do not know whether IBEC and the SFA are driving this ideology or are merely buying into it, but the important point is that they are mistaken. The changes they called for in the budget did no favours to the people they represent - that is, the business community. The net effect is that a large portion of the customer base of the businesses they represent have been left worse off. People on social welfare and those on low and medium incomes in the public sector have less money because of the budget.

IBEC has been complaining about cross-Border shopping. It recently issued a statement entitled "November cross-border shopping to cost 1700 jobs". What does it expect people to do when their incomes have been reduced and they are struggling to make ends meet? The SFA issued a "Christmas Spend" press release urging all sections of Irish society to make a special effort to buy Irish this Christmas. It states:

Consumer spending over the Christmas season will reach €1.6bn, down from €4.46bn in 2008... it is essential that Irish business should seek as much as possible of this money to be spent on Irish produced goods... If everyone spent just €10 extra on Irish products the result would be an extra spend of over €20 million on Irish made products during Christmas.

If the SFA wanted Irish people to spend more in Irish businesses, why did it not ask for the reinstatement of the Christmas bonus for social welfare recipients? That would have cost around €200 million, if I have my facts right-----

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