Joan Burton (Dublin West, Labour)

The Labour Party moved an amendment to extend the terms of reference to include the Government and the Department of Finance. Unfortunately, the Ceann Comhairle ruled our amendment out of order. Down the road, the Minister and Fianna Fáil will come to regret that, for reasons of political expediency, they have sought to exclude from the commission of inquiry's terms the roles of the Department, successive Ministers for Finance and the Government. This is a mistake of historical proportions.

Ours is a parliamentary system with a Cabinet Government. Under the Constitution, the Minister for Finance is the Cabinet member with responsibility for financial decisions. He should bear in mind that this is no ordinary crisis. This is a crisis of such proportions as the country has not experienced before, unless one considers the period between the Easter Rising and the foundation of the State. Therefore the notion that Fianna Fáil would seek to exclude the institutions of governance, namely, the Minister and Department of Finance and the actions of Government, in effect, from the terms of the inquiry is ludicrous. The Minister and the Government are excluded entirely from the inquiry, and the Department of Finance has a very small role to play.

I do not believe that Fianna Fáil will emerge well from the historical decision in the greatest economic crisis the country has ever faced to exclude its role and actions and those of the Department of Finance. That is a fundamental historical error on the Minister's part. It is a bad choice and bad authority in terms of his proposal for the terms of reference of the commission.

I tabled a series of amendments on behalf of the Labour Party, one of which included extending the date to 15 January 2009. I thank the Minister for the spirit in which he examined the Labour Party's proposal and accepted it. I believe the Minister accepted that this would make the commission of inquiry much more sensible in terms of its scope and operation. The events that led up to the crisis and the fatal blanket guarantee the Government adopted are included in the terms of reference as is strange decisions we never understood regarding Anglo Irish Bank, including the collapse in its share price.

The property market capped itself towards the end of 2006 and was on the slide thereafter. The House will recall the various television programmes such as "Future Shock" by RTE in the spring of 2007 involving Richard Curran and the "Prime Time" team and articles by people such as Professor Morgan Kelly in UCD. Large numbers of people in business, politics and I presume the Civil Service, were concerned. Nobody doubts the dedication to the public interest of the people in the Department of Finance, who are very smart. A legitimate question is whether those smart intelligent people who operate in the Department of Finance in the public interest said, at any stage, from 2003 onwards, in effect, to the incumbent Ministers, "This policy is inadvisable. It will create a bubble in the property market. Bubbles in property markets internationally eventually burst, history shows, and cause economic ruin for the people involved".

As Regling-Watson and Honohan said, our enormous crisis is home-made and is a plain vanilla property burst. It is inconceivable to me that the people in the Department of Finance – as the key Department – were not, at the very least, nervous and concerned, and did not express their opinions to the governing Minister of the day. During this period I had repeated debates with the former Minister for Finance, Deputy Cowen, now Taoiseach, when I pointed out to him the folly of the property based tax reliefs, and the cost of those. I received information from the Revenue Commissioners to the effect that millionaires paid no tax. The then Taoiseach, Deputy Bertie Ahern and then Tánaiste, Deputy Mary Harney agreed that this was a scandal that had to be brought to an end. Please do not tell me that people in the Department of Finance were not aware of this and did not offer advice.

One must pay all due respect to the Minister as a lawyer. In a lawyer's way he seeks to avoid that aspect. The terms of reference include the need to get the advices or communications from the Department of Finance to the Regulator and the Central Bank but there is nothing about what was said to the Minister or what the Department of Finance officials might have considered among themselves, as public servants. This is a very clever confinement of the supposed role of the Department of the Finance in this investigation to a very specific point.

We are spending €1.8 million on this to the end of the year, which appears adequate for the type of inquiry into the banks the Minister has in mind. Many taxpayers might believe that it is even on the high side. However, it is extraordinary the way the Minister has sought to draw a line of exclusion around Fianna Fáil and the various Ministers of Finance. On the Minister's part that may be a political desire to protect his boss, the Taoiseach, from any inquiry into the conduct of his role as Minister for Finance and how he steered the ship onto the rocks.

I want to refer to the Labour Party's proposal to widen the terms of examination of the commission into the role of auditors. I have great respect for the Attorney General and know he is exceptionally hard working. The problem is the terms of reference and whether the auditors actually advised the banks as regards policies which were wrong. That is not the role of an auditor, however. If Michael O'Leary, for example, decides to make Shannon Airport the hub of his operations and chooses to have all his flights out of there, it is not the role of an auditor to tell the businessman that his fundamental idea is wrong. That is business decision. It is the role of the auditor to decide whether such a decision is within the powers of the company, not to tell the business person that this or that is what he or she may or may not do – or to suggest an idea about lowering prices is crazy, or that basing Ryanair at Shannon Airport is unwise. That is not the point of an audit, yet I fear that the response the Minister's investigator will come up with is predetermined.

The former Comptroller and Auditor General, Mr. Purcell, is undertaking some inquiries, I believe, for the Institute of Chartered Accountants in Ireland. God only knows when we are going to see them. I do not believe the terms of reference will give the quality of answer and insight into the role of auditors that is needed. Despite this I believe there is agreement in this House in regard to what we want to find out.

Turning to the issue of confining the date in regard to the Central bank, the Regulator and the small reference to the Department of Finance, to 28 September.

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