Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

Today should have been a day when the spotlight was solely on an appalling Fianna Fáil-led Government, which has been exposed as the principal cause of the recession in Ireland; it is a grossly incompetent Government. However, the pressure has been taken off one set of incompetents – Fianna Fáil - by the political ineptitude of another set of incompetents – Fine Gael.

The Irish people now know all too well where the political leadership of Fianna Fáil has brought the State and the economy. Where would the political leadership of Fine Gael bring us? With the Fianna Fáil Government on the ropes, Fine Gael has managed to deliver a knockout punch – to itself. We have no confidence in either Fianna Fáil or Fine Gael. However, the motion before us today is about the Taoiseach, Deputy Brian Cowen, and the Fianna Fáil and Green Party Government, and we have no hesitation in opposing this motion of confidence in them.

When a motion of no confidence in the Government was tabled this time last year, I stated the coalition of corrupt politicians, property developers and bankers brought this economy to its knees and they will not and cannot lead it into recovery. Those words have been vindicated by the reports on banking published last week. I doubt whether any Government during its term of office has been the subject of such a damning verdict on its stewardship of the economy over a prolonged period.

Fianna Fáil came to power with the Progressive Democrats in 1997 and it has been in office continuously ever since. It has shaped the economy in a way that no previous Government could have done because of its length of time in office and the massive resources at its disposal. Clearly, there is not a shred of credibility in its effort to shirk responsibility for what has happened to the Irish economy.

After a decade in office it brought the economy to a critical stage in 2007. In many ways this was a key year. The electorate was already disillusioned with Fianna Fáil but there was a sense that there might be economic problems ahead and so, during the course of the general election of that year, many wavering voters swung back to Fianna Fáil, seeking stability and continuity and believing that the so-called "Celtic tiger" could be prolonged.

In fact, the people were being deceived by the Government and the bankers. As the report of Patrick Honohan states, as late as 2007 the Central Bank was predicting a soft landing for the economy. Mr. Honohan's report states: "This appears to have been "a triumph of hope over reality". More generally, a rather defensive approach was adopted to external critics...".

It was in 2007, in the wake of the general election, that the re-elected Taoiseach, Deputy Bertie Ahern, lashed out at those he accused of "cribbing and moaning" and he wondered why they "don't commit suicide". It was a nasty little outburst that revealed the deep insecurity underneath the Fianna Fáil swagger.

There is a myth being peddled now by Fianna Fáil - we had evidence of it today in the Taoiseach's address - that all political parties in the Dáil were part of this collective self-delusion and encouraged the economic policies pursued between 1997 and 2007. I will let other parties speak for themselves but Sinn Féin stands on its record and during that period we repeatedly advocated a radically different direction for the economy. In the 2007 general election we were the onlyparty not promoting a policy of tax-cutting.

Let there be no mistake about it. Sinn Féin presented a real alternative approach and a sound analysis of the economy in every year since 1997 and pointed out years before it happened that the property bubble was just that, and would lead our economy and citizenry into a serious financial downturn. In successive pre-budget submissions from 1997 onwards we called for fundamental tax reform, the development of public services on a sound basis, wealth redistribution and housing policy based on social need and not the greed of speculators. The proposals of Sinn Féin and of other progressive voices were treated with contempt by the Fianna Fáil-led Government and – let it be recalled – by the vast majority of economic and political commentators who cheered on Ministers for Finance McCreevy and Cowen.

Before the property boom really took off, Sinn Féin identified the social and economic damage that would be caused by a housing policy based solely on the market. When the Housing (Miscellaneous Provisions) Act 2002 was being debated here in February of that year I stated:

[Government] housing policy, such as it is and as reflected in the Bill, relies almost totally on the market, and the profit motive of developers and the construction industry, to meet a massive social need. This policy has failed and always will.

The Bill provides a legislative basis for what is called social and affordable housing. The very terminology is an admission of failure. It reflects the reality that decent housing is beyond the affordable reach of huge sections of our society. The National Economic and Social Forum in its report on social housing concluded that "home ownership is now beyond the reach of most people on average incomes". ... In the marketplace, on which the Government relies totally for housing provision, what matters most is the price of houses as products for sale and as investments, not their value as homes for real people.

The Taoiseach has claimed credit for abolishing some of the property-based tax relief, which was done very late in the day. Again, in 2002, I stated:

In Budget 2002, the Government restored interest relief on rented residential property and reduced stamp duty rates for investors. This will worsen the housing crisis by increasing property prices.

In November 2000 we stated, in our pre-budget submission for 2001:

Sinn Féin's approach to the economy is distinctive, radical and rational. We are not prisoners of the unbridled free market thinking which has dominated the Fianna Fáil-Progressive Democrats Coalition. We reject their primary economic policy of cutting taxes in a way which has disproportionately benefited the higher paid.

To go back further, in November 1998, we pointed out that Irish banks enjoyed a return on their equity which was double the European average, making them among the most profitable banks in the industrialised world. It is clear now that greed and arrogance in Irish banks was inflated in such a situation and the ground was prepared for the property bubble and the lending spree to come. We called for an increase in corporation tax for Irish retail banks with the resulting tax funds earmarked for community and local development projects in the most disadvantaged areas throughout the State. We stated that ultimately, the banking sector should be nationalised so that the Irish people could be the true beneficiaries of this vastly profitable business. We know what happened. The only bank to be nationalised is the zombie Anglo-Irish Bank, the pet bank of the golden circle and now a parasite on the Irish economy.

In 1999, we called for no more reductions in corporation tax or capital gains tax. In 2000, we pointed out that the Government's agenda was to implement tax cuts that primarily benefited the highest incomes. While those on low incomes were rightly being taken out of the tax net, the Government refused to introduce wholesale tax reform.

On the banks we said:

It has been clearly shown that the private and public banking companies have at times been active participants in systematic tax fraud. Their activities were compounded by a regulatory system that, at worst, was unwilling to tackle tax fraud and was, at best, incompetent and unable to enforce the tax laws of the State.

That was in 2000. We pointed out the deficiencies and the almost entire failure of the regulatory system to address the financial institutions.

Crucially, in 2000 we also called for control of land prices with a statutory ceiling on the price of land zoned for housing to stop speculation and reduce soaring house prices, and we called for a constitutional amendment to allow for this if necessary. In November 2002, in advance of budget 2003, we called for a cost benefit analysis of the battery of tax reliefs set up by successive Ministers for Finance. That analysis was never done and untold millions were lost in property-based tax relief that fuelled the disastrous property bubble.

Speaking on the floor of this House on the Housing (Miscellaneous Provisions) Bill in 2004, my colleague Deputy Morgan said:

Rather than tackling the housing crisis through the provision of increased levels of social housing and taking real measures to tackle house and land prices, the government is appeasing bankers and developers by introducing measures which may result in over borrowing.

He went on to make another important contribution - if only the Government had listened. He said:

It is easy in a favourable economic climate to forget the dangers for those who over-borrow of any significant rise in interest rates. They will end up paying mortgages way beyond their means and facing the threat of repossession. If the house price bubble bursts, they will end up with negative equity.

Deputy Morgan made his contribution in 2004, years before that very event took place, but nobody listened. Today to listen to the Taoiseach one would think that nobody had ever sounded out these notes of caution, signalled these warnings or painted the reality of what was down the road as clearly as he did. Without doubt, the record of Sinn Féin's contributions here over all those years stands the test of any scrutiny.

In that same debate Deputy Ó Snodaigh pointed out that banks were giving mortgages of three times the salary of the principal earner and the amount of the salary of the second earner. He reminded the Government that these were the same institutions which had been involved in many scandals and ripped off the State time and again. Look at what it is doing today in 2010, six years later. It is ripping off the State and its citizenry daily. Let the record show that only eight Deputies voted against the Housing (Miscellaneous Provisions) Bill, the passage of which clearly helped to fuel the property bubble, the five Sinn Féin Deputies at that time and three other Members of the House.

We in Sinn Féin were not alone in calling for a different economic direction and warning of the consequences of Government policy, but all dissenting views were dismissed by an arrogant Administration that expressed supreme confidence in its own wisdom. Where is that supreme confidence now? It seems now that it was not in control at all and certainly was not responsible for the collapse. The Taoiseach has blamed the advice of the Central Bank and international factors. The Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern was the best of all when he said, "No one really is responsible. It just happened". I wonder how many times the dog ate the Minister's homework when he was going to school?

We know now who the culprits are but who is being made to pay the price by this Government? Not a banker or developer, speculator or so-called regulator has spent even a night behind bars. A handful have been removed from their positions but most of them have had a very soft landing. Mr. Patrick Neary, the chief executive of the Irish Financial Services Regulatory Authority, retired with a €630,000 pay-off. In addition, he is receiving an annual pension of €142,670. Mr. John Hurley was the Governor of the Central Bank until 2009 and received a payment on retirement of €525,000 and will receive a pension of approximately €175,000 a year. Mr. Eugene Sheehy was chief executive of AIB until 2009. He earned €2.1 million in 2007 and €1.15 million in 2008. His pension is some €450,000 a year. Mr. Brian Goggin was chief executive of Bank of Ireland until 2009. His pay peaked at €3.1 million in 2007 and his pension is approximately €650,000 per year. So much for soft landings. What about the crash landings?

The people who are being made to pay the price by this bankrupt Government are the 440,000 people unemployed in this State, the jobless young people whose dole has been cut, the social welfare recipients whose payments have been reduced, the carers whose already meagre support has been reduced further and the older people whose home help hours have been slashed. The price is being paid by children in our schools and by patients in our hospitals. It is being paid by families who are losing their homes or who are living in poverty and debt because they are saddled with huge mortgages, legacies of the Fianna Fáil property bubble. People are hurting and are living daily in anguish and fear of the future.

The tragedy is that this situation need never have developed if the right policies had been pursued but nothing has really changed and nothing will change under this Government. We have a Health Service Executive that has proven to be even more dysfunctional than we thought it was. How could it be otherwise? It was established to act as a buffer between the Government and, specifically, the Minister for Health and Children, Deputy Harney, who uses the HSE to insulate herself and her Cabinet colleagues from responsibility and accountability. The HSE was established to underpin a grossly inequitable two-tier health system. By the one act of maintaining such an inequitable and inefficient health system, the Fianna Fáil Government has forfeited any claim to have the confidence of the people or assert that it could expect it.

The atrocious stewardship of the Government and the HSE has been exposed yet again in the scandal of the deaths of children in State care and in the miscarriage misdiagnosis scandal. At this time, just to show that nothing has really changed, the Government has approved the appointment of the HSE CEO. He is the former CEO of the privatised Eircom with a salary greater than that of the Taoiseach or Cabinet Ministers at €322,000 per annum of public money.

Returning to the immediate issue that triggered this confidence debate, the banks, the two reports by Professor Patrick Honahan, and by Mr. Klaus Regling and Mr. Max Watson vindicate what we in Sinn Féin have warned about for years. We called for stronger regulation, caps on remuneration for bankers, an end to property inflation, a fair tax policy based on stable direct taxation, improvements to corporate law, a tax on speculative trading and counter-cyclical budget policies.

These reports show how Fianna Fáil Governments recklessly managed our economy and led us directly into the current financial crisis. They are an indictment of Government policy and particularly of the Taoiseach's role as Minister for Finance. They are also an indictment of the financial regulator, rating agencies and bankers.

Sinn Féin stood alone in our warnings among the political parties. Fine Gael and the Labour Party also wanted to feed the property bubble. Their call to lower direct taxes and to abolish stamp duty in 2007 would have added fuel to the fire.

The Government claims it has learned from its mistakes but it has not. One of the criticisms is that it followed a pro-cyclical budgetary approach and relied on unstable taxes. Pro-cyclical policy is Charlie McCreevy economics, that is, spend money when one has it and do not worry about saving. A counter-cyclical approach saves in the good times so that one can spend in the bad times, and spends in the bad times to re-inflate the economy. The Government is still pursuing these fundamentally flawed policies. Its pro-cyclical approach now entails cuts which intelligent economists say are wrong because they are deflating the economy.

The authors of the reports published last week were not permitted to investigate anything that happened in the banks subsequent to the night of the guarantee in September 2008. Since then the Government has nationalised one of the most corrupt banks in the world, Anglo Irish Bank; awarded a €1 million pension to the former CEO of Irish Nationwide, Michael Fingleton; established NAMA to buy €54 billion worth of bad loans that are probably worth much less; and recapitalised several banks to the tune of billions of euro, with the result that AIB is all but nationalised. Apparently inaccurate, if not fraudulent, accounts have been signed off at several banks by Government appointed directors and auditing firms that were subsequently awarded contracts with NAMA.

These reports could not be clearer in showing that the crisis is domestic and that the Government's excuses about the collapse of Lehman Brothers are spurious. They find, essentially, that the Government's economic policies caused the crash. The banking inquiry arising from these reports will start over the summer and run for six months but its terms of reference are already compromised by the Government because it is refusing to let the inquiry investigate its economic policies. It is instead appointing an Oireachtas committee, which of course will have a majority of Government Members, to report on its macroeconomic policies.

Mr. Honahan's report states that the bank guarantee was necessary and justified to prevent the banking system imploding but that the terms and conditions fell short. That is close to Sinn Féin's position. We accepted that action had to be taken on the banks to protect people's deposits but we wanted strict conditions. We urged that the guarantee be used as the first step to full nationalisation because we felt it was necessary to stop the banks imploding, based on the information put in front of us at that time. However, as the terms and conditions fell far short of what was required and amounted to a bail-out of the culprits, we voted against them. Between the proposal of the bank guarantee scheme and the presentation to this House of its terms and conditions, we met the Minister for Finance to lay out precisely what we required in return for our support. The Minister knew what he had to do but he failed miserably.

We called for the wind down of Anglo Irish Bank. We wanted taxpayers, not bondholders protected. We demanded that the main banks be taken into public ownership and turned into a State bank.

Regrettably the Labour Party took a totally short-term and contradictory position by opposing the guarantee without presenting an alternative. It did not state what it would have done when people found the next day they were unable to access their wages in their bank accounts. When it got around to calling for the nationalisation of the banks, which is a guarantee of sorts because the State takes on all deposits and loans, it proposed giving the healthy nationalised banks back to the private sector. Sinn Féin has been criticised by voices in the Labour Party since then but we will not accept criticism from that quarter about our position on the banks. Our position has been consistent and sound.

Sinn Féin would remove all the bank executives and directors involved in causing the crisis who are still in positions of power. We would also make sure the criminal aspects of what happened are pursued. We would take care of the ordinary citizens who were ruined by the banking crisis and are being forced to pay for it even though it was not of their making. That entails protecting those who are in negative equity, facing repossession and struggling with debt. It would include protecting viable businesses which are struggling to access credit. We would nationalise AIB and Bank of Ireland to create a State bank. We would wind up Anglo Irish Bank and let other banks fold if they cannot exist on their own and take their good assets into the larger banks.

We need rid of this rotten Government and we need a new beginning to Irish politics. That will not happen under a Government led by either Fianna Fáil or Fine Gael. For the first time it may be the case that a majority are prepared to vote for parties other than these two conservative blocs that have dominated politics for so long. We in Sinn Féin have a vision for a re-built Irish economy. This would be done through saving and creating jobs; reforming the tax system to ensure the wealthy are paying their fair share; eradicating waste in public spending, such as exorbitant executive salaries; reforming national and local governance; drawing up a realistic debt repayment structure on the basis of an economy that will grow if it receives investment; and fully regulating a new finance system with necessary secure measures like stronger capital requirements for banks and the supervision of credit rating agencies.

All of this would be done to build an economy that serves the people. It would provide the basis for a transformed, equitable and efficient health service, education with access for all, decent and affordable housing, sound social welfare support for everyone who needs it and security for our older citizens. That is our vision for the future and it is what we are committed to achieving. The first step must be removal of this Government and, therefore, we oppose the motion of confidence that it has so shamelessly moved. It is an absolute disgrace.

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