Mick Wallace (Wexford, Independent)

There are many elements I like in the Finance (No. 2) Bill, especially the VAT proposal which will be an enormous boost to the hotel and restaurant industry. I believe in the principle of investment. Investment stimulates an economy whereas austerity drains it. Unfortunately, we are probably not getting as much investment as we would like and are getting much more austerity than we would like. Unfortunately, too, austerity probably hits the less well off in our society more than anybody else.

There is a big problem in regard to getting things moving in this country, namely, the lack of a banking system that functions. We were told about a strategic investment bank. Perhaps it is still on its way but it is really needed. Bank lending is a problem - banks are not lending. They do not see our businesses as safe to lend to and do not believe in them. I read an article in the Financial Times today about the HSBC in Britain which stated that in the first quarter of the year HSBC's lending volumes rose by €28 billion. The writer asked where most of that money had gone. It went to the fast-growing markets in Asia: "in stark contrast to western markets like Britain and Ireland, where, more than two years after the peak of the financial crisis and despite repeated agreements with governments to boost the availability of finance banks are still reluctant to lend to businesses".

Believe it or not, the Irish Government is in a privileged position in that it owns a couple of banks. I might prefer if it did not but it does. We must stop asking the banks to lend money to us and must tell them to do so, given that the State owns them. It would be a great boost to our economy to have again a banking system that functions.

The biggest problem with the Finance (No. 2) Bill is the pensions element. A great number of people have telephoned me to express serious disillusionment with what has happened. One might claim that 0.6% does not seem to be very much but that amount is calculated on the full value of a pension each year. What really worries people is that may only be the beginning; it may not be the end. It will be perceived as the thin end of the wedge. For the past number of years we have talked a great deal about the need to encourage people to begin a pension. It is difficult enough to do that because one is asking people to store away money for 30 or 40 years in the hope it will be there ultimately when it is really needed. When something like this happens it dents people's confidence and there is no doubt that confidence has left many people. It was bad enough that many pensions suffered badly because of the recession but it was a new phenomenon to find that the Government would raid them. This will have a really negative impact on trying to persuade people to invest. We have an aging population and we need to work at persuading people to have pensions. Robbing them is not a good idea.

If we are not going to rob the pensions where will we get this €1.9 billion? Deputy Peter Mathews spoke very well today. He suggested there must be a negotiated restructuring of €75 billion; €50 billion with the ECB and €25 billion with the bondholders. He suggested the money should be cascaded down and invested in the economy to deal with household debt. For this to happen, if there is to be a negotiated restructuring, Europe has to see sense. In my view, Europe does not believe how bad things are in this country. Unfortunately, because of our export figures a false picture is created. Things are not as good as people abroad seem to think. We must reinforce to Europeans that the figures do not add up and we will not be able to meet all the repayments. Therefore they must treat us more fairly.

In the short term, while we wait for the Europeans to see some sense, salaries over €100,000 must be dealt with. A wealth tax of 1% would bring in €1.2 billion in this country. There is a wealth tax in countries such as France, Switzerland and Norway which seems to work well enough. Surely the wages that Deputies and Ministers get and the pensions and lump sums they get when they leave here amount to outrageous money. People cannot believe that we can still get this money in the present climate. There are people with State jobs getting more than €500,000 per year but we are cutting resource teachers for Travellers in schools.

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