Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

I wish to share time with Deputy Costello.

I will read into the record the motion of no confidence in the Minister for Finance tabled by the four Sinn Féin Deputies:

"That the Dáil:

— expressing its serious concerns about revelations in the RTE Freefall documentary on 6 September, 2010 that Bank of Ireland Chairman, Mr. Richard Burrows and Chief Executive, Mr. Brian Goggin were informed by Anglo Irish Bank Chairman, Mr. Sean Fitzpatrick and Chief Executive, Mr. David Drumm, that Anglo Irish Bank was insolvent and requested a takeover of the bank;

— noting that immediately following this meeting Bank of Ireland management then contacted Allied Irish Bank and both banks immediately sought a meeting with the Minister for Finance, Deputy Brian Lenihan;

—further noting that following these meetings the Minister for Finance presented the Credit Institutions (Financial Support) Bill 2008 on 30 September, 2008 (the bank guarantee) claiming in the Dáil that the purpose of the bank guarantee was to deal with liquidity or cash flow issues within the Irish banking system;

— deploring the fact that the reality of the situation in Anglo Irish Bank was not revealed to the Dáil by the Minister for Finance before the passing of the bank guarantee;

— noting that due to the financial impact of the bank guarantee and the subsequent borrowing and the recapitalisation of the banks that the State's debt was being serviced at 6.8% in the week beginning 27 September, 2010, a record high since Ireland joined the eurozone; and

— noting that new estimates for the capital and recapitalisation costs of Anglo Irish Bank will reach €34.3 billion and that the total cost of the bank bailout will reach €49.3 billion;

has no confidence in the Minister for Finance, Deputy Brian Lenihan."

On Thursday, 30 September, the Minister for Finance, in a country with an €18 billion deficit and almost 450,000 people unemployed, stood before the House and announced that the cost of recapitalising this State's wayward banks would run up to nearly €50 billion. In carefully co-ordinated statements over two days, he moved to extend the bank guarantee and then reveal the details of the largest recapitalisation plan, proportionately, in the western world. On that day, the deficit in this State increased from 12% to 32% as a result of the announcement. The Minister does not have the mandate to implement a bank bailout of this scale. The Government is at record lows of support from the public. The largest stakeholders in this decision, the taxpayers, have no faith in what this Government is doing and they are being denied a say. Over the next decade, banks will be recapitalised to the tune of €50 billion in taxpayers' money will be put into NAMA operations.

The events of recent weeks smack of increasing desperation by the Government. First, we had the farce of the announcement of Anglo Irish Bank being split into a bad bank and a worse bank, with conflicting statements issued on their operation. The Anglo Irish Bank split involves Anglo deposits funding Anglo loans, but with two banks instead of one. When it became clear that this was not a solution but a demonstration of the incompetence of Government banking policy, the markets reacted as was predictable - our ten-year bond yields jumped a further 0.1% to 6.9%.

The Government has been adamant that bond yields are high due to uncertainty around the banks, without taking responsibility for the continuation and deepening of that very uncertainty through causing the economy to contract. It is clearly not in the taxpayers' best interests but, then, very little of the Government's policy on the banking crisis has been. NAMA is well on the way to becoming an expensive toxic sister of Anglo Irish Bank rather than a well-balanced asset recovery vehicle as originally envisaged by the Government. It is also becoming part of the problem rather than the hyped solution.

It should be remembered that NAMA was meant to help rescue the banks and get credit flowing. We were assured that it would make a profit for the taxpayer without disrupting or distorting markets or bailing out developers. It is not achieving any of these objectives. It will be too late to prevent the transfer of tens of billions of euro from taxpayers to wealthy private individuals, some of whom are certain to be domestic.

The scale of the money being casually distributed by the Government to the banks is incomprehensible to most people. To put it into perspective, we endured an entire year of lectures last year from the same Government about the need to reduce the deficit in the December 2009 budget. It took €4 billion from people's wages, social welfare rates and public services. The Government plans to take another €3 million to €4 billion from the economy at the end of this year, yet last week it committed us to spending nearly €50 billion on bank recapitalisations. What the Government forgot to mention was that this did not even begin to cover the cost of NAMA. This banking bailout will hit the taxpayers to the tune of some €85 billion, most likely over the years ahead. This means that every year, as the Government reduces the deficit, it will be adding a few billion more onto it to meet commitments to the banks.

Fiscal retrenchment from Government will undermine growth. At this rate the economy will be running to stand still for the next ten years at least. To attempt to repair the damage of such a huge financial crisis and return the State's debt to its previous level in just a few years places an intolerable burden on ordinary people. This is self-evident to any elected representative in this House.

Sinn Féin does believe the deficit needs to be reduced. However, we differ from every other party in believing that there is a way to do this, based on economic growth and an overhaul of the tax system. Sinn Féin recognises that the deficit caused by the disastrous policies of the Government has to be reduced but the plan to reduce it by 2014 by imposing savage cuts to public services, will be hugely damaging. It will deflate the economy and worsen the recession. This plan will cause huge hardship by cutting vital public services and social supports in health, education and social welfare. We are against cuts to public services and social supports but we support eliminating wasteful public spending where it exists.

We need a different strategy and a longer timeframe. We want a realistic deficit reduction strategy based on a fairer tax system, investing in jobs, which will increase State revenue and reduce the social welfare bill and eliminating wasteful public spending. We believe a stimulus will reduce the deficit. We believe that the Government's front line spending cuts plan is not merely unfair but is failing to reduce the deficit in any meaningful way.

Fianna Fáil's approach to the economy is self-defeating. By focusing almost exclusively on bailing out the banks, the Government has lost sight of what is really important. It has so far refused to tackle a jobs crisis that continues to spiral out of control. They look to children, old people and the sick to try to plug the hole left in our public finances arising from a decade of risky, speculative and corrupt practices undertaken by Government, bankers and property developers.

This Government has always placed private profit before the public interest, property before people and the demands of the wealthy before the needs of ordinary citizens. That is the mentality that has led to the current economic catastrophe and it is the same mentality that is being brought into to the forthcoming budget. We need a new Minister for Finance, make no mistake about it and we need a new Government and, most important, we need a totally new direction and radically different politics. Those politics must bring new policies that must be based on sound principles, the very principles that we celebrated on 20 January 2009 in the Mansion House. They are in the words of the First Dáil's democratic programme which we celebrated on its 90th anniversary:

We declare that we desire our country to be ruled in accordance with the principles of Liberty, Equality and Justice for all, which alone can secure permanence of government in the willing adhesion of the people.

I rest my case and conclude by saying it is very regrettable there was not a motion tabled by which we could force the Government parties and their supporters within the Independents to go through the division lobbies. Statements simply do not meet the bill.

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