Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

Sinn Féin stands as the real opposition in this debate. Deputy John Gormley's call for talks between party leaders and all that followed served one very useful purpose; it cleared away the smokescreen of false party rivalry and exposed the alignment that exists in Irish politics. It is now very clear that Fianna Fáil, the Green Party, Fine Gael and the Labour Party stand together in their economic approach. They form a consensus for cuts. Sinn Féin stands apart from that consensus for cuts but we do not stand alone. The Irish Congress of Trade Unions and its constituent unions, the community and voluntary sector, the ESRI and a range of economists have warned against the strategy of attempting to cut the budget deficit to 3% by 2014.

Sinn Féin joins with those seeking real recovery and a fair way forward and we are convinced that there is a better way. We recognise that the deficit caused by the disastrous policies of the Government has to be reduced. However, the plan to reduce it by 2014 by imposing savage cuts to front line services and social supports will be hugely damaging. It will further deflate the economy and worsen the recession. Furthermore, the approach the Government is taking in its four year plan of front line and capital spending cuts as well as flat regressive taxes is the same approach it has taken up to now and it has not worked. Deepening the cuts will only compound the problem.

We need a different strategy and a longer timeframe. We want a realistic deficit reduction strategy based on a fair taxation system that ensures the wealthy pay their share, on investment in jobs which will increase State revenue and reduce the social welfare bill, and on the elimination of wasteful public spending. Our approach is based on the reality that there is wealth in the State and that 1% of the population controls 20% of that wealth. If that inequality had been addressed a decade ago we would not now be in recession. It is possible to reduce the deficit to 3% over a longer timeframe, provide real stimulus for jobs in the short term, raise revenue from wealth, eliminate wasteful public spending and ensure the delivery of public services while protecting those on low income.

The Minister for Health and Children has threatened cuts to our public health services of between €600 million and €1 billion. Our health services face devastation if this is allowed to proceed. I have no doubt that cuts to services on this scale, especially as they affect our public acute hospitals will cost lives. In Sinn Féin's pre-budget submission we identify €600 million that can be saved in the health system without affecting patient care. Take the drugs bill for example; tackling profiteering, waste and over-prescription and increasing the use of generic drugs can make huge savings. However, what is the Government's approach? It is to target the patients, such as those on the medical cards who had prescription charges imposed on them.

The report of the Comptroller and the Auditor General earlier this year on the National Treatment Purchase Fund, NTPF, exposed the waste that is involved there. It stated that of the procedures performed in public hospitals in some cases the patient was treated privately in the same hospital where he or she had been on a public waiting list. Even more extraordinary, and surely a conflict of interest, is that in 8.5% of treatments arranged by the NTPF, the consultant referring and treating the patient is the same. In other words, in a public hospital a specialist can refer a patient under the NTPF to himself or herself, thus ensuring the consultant a higher rate of remuneration for the work because it is being done so-called "privately" even though the State pays the bill. This surely exposes the folly and waste that is the NTPF.

In a reply to a Dáil question received from the HSE last week, I was told that to date a total of 296 hospital consultants had been written to by clinical directors and hospital managers regarding the need for them to address excessive levels of private practice. These excessive levels are of course in breach of their contract. This is only the number of consultants that hospital management has detected. Here is another indication of the massive waste of public money involved in the two-tier public-private hospital system. In another reply, the HSE admits that in Carlow it is paying rent of €1,000 per day to a private landlord for a primary care centre rather than develop the centre rent-free on an existing HSE site in the town. The reason for this expenditure is purely ideological; it is because developing the centre on HSE premises would not be in line with the Government's policy of developing all new primary care centres through public-private partnerships, even if these cost more than the fully public method. Sinn Féin has demonstrated that elimination of waste and delivery of equity and efficiency can go hand in hand. We will set out our proposals in detail in our pre-budget submission next week and my colleague, Deputy Arthur Morgan, will refer to them further in his contribution to this debate.

The enormity of what has been done to this economy by the reckless policies of the past decade and a half is difficult to grasp. Yet the stark reality is that Fianna Fáil and the Greens have brought the country close to economic ruin since 2007, their so-called solutions having made the situation worse. They have introduced four successive budgets, as well as emergency measures in February 2009, and the result is as follows - a total of 450,000 people are now out of work; a total of 100,000 more will have emigrated by next year; tax revenues have collapsed; almost €90 billion between recapitalisation and NAMA has been promised to bail out the banks; the interest rates being paid by the Irish Government on the international bond market are three times those paid by Germany.

This Government is planning a budget in December that will attack people on low incomes and devastate vital public services. The Government has decided that someone who earns €300,000 a year contributes enough but a person on the minimum wage, or someone who has lost his or her job and is receiving €196 a week, must survive on less.

The Government has signed up to a four-year timeframe for deficit reduction which it knows it cannot meet and which the IMF, OECD and ESRI, know it will not meet. Fine Gael and Labour have once again followed the Government's lead, just as they did in the general election in 2007 when they, too, offered to cut taxes and just as they did in the Lisbon referendum in 2009 when they promised there would be jobs if people voted "Yes" to Lisbon.

This is not just a question of the 3% by 2014 target being too short in time; it is also about how the Government proposes to go about reaching that target. It is preparing a slash and burn approach to the economy that will cause untold damage. It will attack the least well off but it will also attack the overall economy and delay recovery. The consensus for cuts parties are determined to plough on, tying this State's future to a formula brokered with the EU Central Bank, regardless of the consequences. It is no coincidence that these are the same parties who campaigned for a "Yes" vote in the second Lisbon treaty referendum, having refused to implement the people's decision to reject that treaty when first put to them. In Lisbon Two they urged the people to, "Vote Yes for Jobs". We ask where are those jobs as we contemplate the reality of over 450,000 people on the dole queues and emigration on the rise. Those young people forced to emigrate, the hundreds of thousands unemployed and the people struggling on low incomes are ill-served by the capitulation of the so-called main Opposition parties. Slash and burn and all will be well by 2014, is the new mantra and anyone who does not accept it is being labelled as economically insane.

Sinn Féin was labelled as economically illiterate in 2007. Yet, had our policies been taken on board in 2007 and before it, we would not now be in the depths of this recession. Alone among the political parties in this Dáil, we did not call for tax cuts. We called for Government housing policy to be based on the need for decent housing for all the people, not a policy of inflating the property bubble. We called for wealth to be shared on the basis of a fair taxation system. We called for the banks to serve the economy and the customer and for the unbridled greed of financial institutions to be curbed by Government. Fianna Fáil-led Governments pursued exactly the opposite policies, driven by greed and totally devoid of any real vision for the future of the Irish people.

When we spoke of a golden circle we were derided but such a golden circle existed and what we have found out since shows that we and others actually underestimated the extent of the corruption and the avarice at the top of the ladder in this economy. The so-called regulators were in collusion with the bankers and developers. Ministers and top civil servants allowed it all to go on unhindered. The elite executives at the top of the public service and the semi-State companies were awarded massive salaries and perks on a par with the high-flyers in the private sector. Auditing and accountancy firms played their part and profited handsomely by it. What has changed? In many ways, very little. I will give one concrete example. Loan valuation for NAMA is being carried out by Ernst and Young. Last April in the Dáil I raised this issue with the Minister for Finance. Ernst and Young was the auditing firm for Anglo Irish Bank when accounts were published in February 2009. That report effectively gave Anglo Irish Bank a clean bill of health, yet we now know that the 2008 year-end figures included cash that had been transferred from Permanent TSB. We know that directors' loans were concealed and loans were given to shareholders to buy more shares. Loans were also given to directors, senior executive members of Anglo Irish Bank, to buy more shares, yet none of those matters was exposed in the end-of-year accounts presented by Ernst and Young. KPMG is now audit co-ordinator for NAMA. KPMG audited Irish Nationwide. Its 2008 results, announced in April 2009, showed a pre-tax profit of €300 million after having set aside €500 million for bad debts. In April it was confirmed that Irish Nationwide required €2.6 billion in funds from the Exchequer, a mere 11 months after KPMG gave it a clean bill of health. I asked the Minister for Finance at that time how it came about that these firms got the top contracts for NAMA, given the questionable role they played in presenting figures allegedly as facts when we now know they were nothing of the kind. I asked if those auditing and accountancy firms were being investigated for their specific roles in what some would suggest was an orchestrated cover up of the facts on those financial institutions.

The Minister replied that the questions raised by me were legitimate and that he would ask NAMA to examine what I said about the professional advice involved. He said the matters to which I referred are serious and will require investigation both by the accountancy bodies and the banking inquiry. Where stand those investigations now? If the situation were not so serious it would be amusing to listen to the Taoiseach and his Ministers talking about the need for us to preserve our economic sovereignty. Whenever we in Sinn Féin pointed to the erosion of economic sovereignty as a result of successive EU treaties, we were ridiculed.

Successive Governments have abandoned economic sovereignty. They have allowed international bondholders and the European Central Bank to determine how many euro go into the pockets of the least well-off in our society. We should not doubt that it comes down to that. In the last budget the Government, which is tied to a doctrine of fiscal rectitude, took €8.50 per week from the pockets of those who care for elderly, ill or disabled relatives in their homes. It halved the level of assistance given to the young unemployed. It took the Christmas bonus from social welfare recipients and cut welfare payments across the board.

Fitch Ratings recently called for more evictions in Ireland in order to enhance the reputation of the banks. This is what happened when we had landlord rule under the Union Jack. It is only one step removed from what the Government is doing to the least well-off. Far worse is planned in the next four budgets. I put it to the Minister for Finance last week that international bondholders are now more important than the Irish people in the consideration of this Government. The Minister indicated in May that he could not say who the bondholders are; I have a list of 80 possible suspects. I cited a number of them on the floor of this House last week. They include Alliance Global Investors France SA, Barclays Wealth Managers France, BlueBay Asset Management Limited, BNP Paribas Asset Management, Brown Shipley & Co. Limited, Credit Suisse Asset Management, Deutsche Asset Management Investmentgesellschaft, European Credit Management Limited, Frankfurt-Trust Investment, W & W Asset Management and WGZ Asset Bank Luxembourg.

I understand that this list of 80 suspects contains Anglo Irish Bank bondholders, and that the composite figure of the face value of the bonds they hold exceeds €4 billion. These people, rather than ordinary taxpayers, should have taken the hit from the collapse of Anglo Irish Bank. The Minister replied that many of them are also subscribers to Irish Government bonds. We rely on them for the Government's massive borrowings. I understand that Goldman Sachs, which advises the Government on its approach to bondholders, also appears on the list of Anglo Irish Bank bondholders. The next time Mr. Peter Sutherland, who is the chairman of Goldman Sachs International, descends on us from the clouds to give his advice, perhaps reporters from RTE and The Irish Times will ask him about the conflict of interest that is certainly involved. In the meantime, the Minister might like to address this conflict of interest in his contribution at the end of this discussion. The bondholders invested in a bank and not in a state. They should have read the disclaimer at the bottom of bank advertisements, which we all know off by heart. It states the value of one's investment may go down as well as up. What part of that did they not understand?

The budget plan that the Government is working on has nothing to do with deficit reduction. For every cent that is cut from front line services next year, at least 10 cent will be redirected into the Government's bank bailout. If spending cuts could fix the deficit problem, we would not have a growing deficit. What has happened after had three years of spending cuts? The deficit has grown. The Government, with the support of Fine Gael and Labour, is planning a savage four-year timeframe in which to fix the deficit problem. Sinn Féin is advocating a different six-year approach which could see the economy recover sooner. The consensus for cuts believes that to grow a little, one must cut a lot. We believe that to grow at all, one must invest. The relationship between jobs and the deficit is a clear one. If more people are in work, more tax is brought in and fewer welfare payments have to go out. It does not take a genius to work out that reductions in expenditure put people out of work, bring the tax take down and increase welfare spending.

The policy of cutting social welfare is a false economy that ultimately causes misery for those on the receiving end. People on social welfare spend every cent of their income in the local economy. If one cuts their welfare, one inflicts cuts on the local economy. Rather than targeting welfare, the Government should target wealth. It has been estimated that there are approximately 33,000 millionaires in this State. In the five years since 2005, they have been the main beneficiaries of approximately €20 billion as a result of tax break schemes introduced by Governments led by Fianna Fáil. The schemes in question include tax relief on pensions, a myriad of property tax reliefs, reliefs on private nursing homes and hospitals, capital allowances and the PRSI ceiling. On 17 October last, Dr. Michael Collins, who is a member of the Commission on Taxation, reiterated that 110 of these tax breaks are still in place and are costing the public purse €11 billion per annum. If this millionaire section of the Irish people paid a 1% wealth tax, the Government could receive €1.2 billion in 2011 and every year thereafter.

We believe that the parties of the left should be joining trade unionists, those involved in community and voluntary organisations and other progressive voices in demanding an alternative way forward. We are calling for the abandonment of the unrealistic and damaging target of 3% deficit reduction by 2014. We want revenue saving and raising to be based on fairness and efficiency. We demand stimulus measures to protect and create jobs. Vital front line public services, including health, education and social supports, should be supported. I thank the Minister for the Environment, Heritage and Local Government and the Minister of State with responsibility for children for staying to hear my contribution. I hope they will heed some of the arguments I have presented this morning. A consensus for real recovery is needed now more than at any time in our shared political experience as elected voices. We do not need a conspiracy of political parties against the people.

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