Michael D Higgins (Galway West, Labour)

I want to outline the Labour Party's analysis of this Bill. I studied it with great interest and welcome its engagement with the real economy. I am afraid, however, that the Government's response consists of a rather dry rebuttal. I will begin by addressing the assumptions on which the Bill appears to be built.

When the costs are aggregated, the net loss to Government revenue arrives at a certain figure and it is reasonable to investigate how that gap can be filled. The explanatory memorandum to the Bill suggests that the shortfall can be met through the proposals of the so-called McCarthy report, such as the elimination of quangos and wastage. This is perhaps the weakest element of the proposed Bill. The lack of specificity leaves it open to the suggestion that the services that might be lost and the employment necessary to sustain such services would be significant. An alternative would be to seek to recover from general taxation such funds as would fill the gap in revenue. This, however, would contradict one of the central deflationary assumptions of the Bill.

I will be positive by suggesting an analysis of the economy which is radically different to that put forward by both major parties. We are not in dispute about certain facts, perhaps the most frightening of which are the 430,000 people who are unemployed. I agree with Deputy Varadkar when he suggests that we should consider the report of the National Economic and Social Council on the different crises that we face, namely, a banking crisis, a fiscal crisis, a real economy crisis and a social crisis. I propose to speak about the social crisis because the weakness in the Government's response to this Bill is its continued clinging to a residual theory of the real economy. It described yet again the adjustment to the outrageous collapse in the banking system but it cannot deny the obvious gap between income and expenditure which is the basis of the fiscal crisis and it falls down entirely in its analysis of the implications for unemployment.

If one wanted to approach the matter differently I would suggest beginning with the social crisis to which the National Economic and Social Council refers and the consequences for unemployment. In trying to reconstruct citizenship in an atmosphere of lost trust and institutional bankruptcy, we would be better off speaking about a social floor. If, for example, we want a productive economy in an inclusive society, we could define a social floor below which citizens can not be allowed to fall. We could then consider discretionary consumption above the social floor and the different ways this could be structured. In the absence of a social floor and the necessary social protection legislation to sustain it, we will not address the unemployment problem or exclusion.

The National Economic and Social Council report discusses the social consequences of unemployment. If the economy is deflated in such a way that the unemployment figure is increased we will lose taxation, increase the cost of social welfare provision and, most importantly, erode solidarity and social cohesion by contributing to social misery. This debate has revealed some interesting facts about the two major parties in regard to the role of the State. On behalf of the Labour Party, I assert that the State has a role to play in social protection and establishing a social floor which would make inclusion possible.

Beyond this, however, we should also investigate the role of regulators. Deputy Varadkar usefully draws attention to the role of the regulator in his Bill. In a speech to the UCD law society former EU Commissioner, David Byrne, spoke about the relationship between the Minister and the regulator. I believe it is unconstitutional for a Minister to the divest him or herself of responsibility to the Dáil. No Minister can give away functions for which he or she has constitutional responsibility. When one transfers powers to a regulator one is expected to do so in a way that makes it perfectly clear where policy begins and administration ends. One of the problems with the regulatory framework which the Government is so anxious to defend is the lack of clarity on the boundary between policy and administration. This problem arises, for example, between the Minister for Health and Children and the HSE. I do not believe that Minister was entitled either under the Constitution or by law to divest her responsibilities to the HSE, particularly in respect of accountability to this House. A close reading of Mr. Byrne's paper would support my assertion.

The contribution from the Minister of State at the Department of Enterprise, Trade and Innovation, Deputy Calleary, revealed Fianna Fáil's extraordinary mixture of ideologies. He claimed, for example, that competition will automatically sort everything out and then referred to telecommunications and infrastructure. What we have done in the area of telecommunications has been a nightmare. A State company that was quite capable of expanding our infrastructure to bring us into the modern age was used to make a speculative run at the markets and four or five owners later our infrastructural deficit is disastrous.

I cannot agree with Deputy Varadkar's proposed reductions in respect of the licence fee, which sustains public service broadcasting. The right of citizens to participate in the common discourse and have access to education, information and entertainment should be sustained rather than abandoned to the commercial market. We have already paid a heavy price in this regard.

As I do the sums on the savings of €5 here and €10 there, I am reminded of the oldest principle in taxation, that the administration of gathering such adjustments should not exceed the yield itself.

I am afraid the Bill does not stand the test in this regard. It would create a large gap and the unemployment and services consequences of filling this gap remain unspecified. For this reason, on behalf of the Labour Party, I must refrain from supporting the Bill as it stands.

See this speech in context