Alex White (Dublin South, Labour)

I am sharing time with Deputy Colm Keaveney. I welcome the opportunity to speak on the Finance Bill 2012. It is interesting that we can reflect on the different atmosphere in which the Finance Bill debate is being conducted compared to this time last year when the Finance Bill was debated in the closing days of the last Dáil. Many things have changed since then and political atmosphere and the opportunity for discussion, discourse and debate on these issues has freed up in the year since that politically chaotic situation in this House and in the country. It is important to reflect on that because the atmosphere in which these debates take place is extremely important.

Deputy Kelleher referred to Greece and countries that have far more acute pressures and it is important to reflect on the fact that we can debate in a democratic Parliament where we are free to exchange ideas, views and principles on the main economic and financial policy of the country for the next year. I agreed with much of what Deputy Kelleher had to say and it is welcome that he supported much of the thrust of the Finance Bill. He had points to make about the action plan for jobs but that debate is due to start in one hour's time. I did not know that colleagues would be referring to that document in any detail so I did not bring it with me. That is for this afternoon. Some of the points raised by Deputy Kelleher in respect of incentivising SMEs and that programme of work, some of which he is familiar with because of his involvement as a former Minister of State in that Department, are contained in the action plan for jobs. It is not sufficient to pick up the booklet and say there is nothing in it. It cannot be said that there is nothing in it, which is manifestly untrue, even if Deputy Kelleher wants to argue that it is insufficient or does not go far enough.

Some 11 months ago, a new Government was formed by my party, the Labour Party, and Fine Gael. We talk about the mandate of political parties and the mandate of this Government is a pooled mandate, a combination of the mandate for Fine Gael and the mandate for the Labour Party. We agreed a number of basic important questions in the programme for Government, such as the configuration between tax and public expenditure cuts. We agreed that the deficit had to be reduced within a period of time and agreed to take an aggressive stance on jobs. We considered that actions do not go far enough but it is not true to say the Government sat back and did nothing on the question of jobs. Within a number of months, an initiative was brought forward and the job plan was published this week. People can say that wider questions should be addressed, such as the strategic investment and the searing problem of the availability of credit, which is difficult to address. Certain areas of the economy require the strategic intervention of the State and State money, whether through the proceeds of the partial sale of State assets through NewERA or locating State funds in circumstances where the private sector has pulled back. It happens in every recession that the private sector is found wanting and sometimes the public sector must step in. I do not underestimate the difficulty for the Government in achieving that policy outcome. Money is short, the availability of funding is short and capital programmes had to be cut but we should not abandon it and the Government does not intend to do so. There is a role for stimulus measures to be taken by the State in the period ahead. I agree that the action plan for jobs is a very fine document and contains proposals, plans, objectives and targets that will do a great deal for the creation of jobs but we must go further.

By analogy, the fiscal compact is worthy of support given what it contains but it does not give us all of the answers to the questions we face. It goes no further than what it claims to do, which is to introduce a degree of fiscal discipline within the eurozone. It does not purport to be the solution to all problems. Deputy Kelleher's reflections on the future role of the European Central Bank are well taken but it remains a problem. Whether a national central bank or the novel idea of a European Central Bank, there must be measure of independence for central banks. Whether the Bank of England, the Central Bank of Ireland, central banks in other countries or the European Central Bank, its remit within the economic and monetary policy of an entity such as the eurozone, which is still an experiment, is such that one must guard against it becoming the political plaything of an individual country or even of the European Council. I know Deputy Kelleher is not suggesting that and we must always have a measure of independence for the European Central Bank.

On the point that we have gone so far with the fiscal compact and must go further, there is a looming problem of sovereign debt in Europe. It is not just for this country but for the wider community and it has not been settled. The German emphasis on fiscal discipline is a reality and if the proposals are not inimical to our interests, we should support it. The debate on the role of the European Central Bank, whether it involves euro bonds or addressing sovereign debt across the eurozone, must come to a head and be addressed in the near future.

I look forward to going through the Finance Bill on Committee Stage in the Select Sub-Committee on Finance. It contains many technical proposals, which the Minister flagged in the budget. These include tax incentives, each of which can be justified in its own right in so far as I have had a chance to look at them. However, I agree with people who say we must be on our guard against policy-making based on tax incentives because we have had a bad experience in this area over the past ten or 15 years. Too many of our tax incentives were predicated on incentivising people in respect of property. Now we want to incentivise people into productive activity, such as through the relief on research and development. We should do that but also guard against the possibility that they go too far, go on for too long or are at risk of abuse. The Minister and the Government are alive to it because there are limitations to an economic policy that relies too much on tax incentives in achieving its objectives.

There has been reform in this House but we need to be more involved in the budgetary process as committee members and as Members of the Dáil. The Minister for Public Expenditure and Reform has written to all committees inviting them to take a more active role on budget 2013, particularly the expenditure side. It is vital because the day is gone when we all file in here in December, hear what the Minister has to say and file through the lobbies before leaving. We must be active parliamentarians on these issues. We know the specifics for next year. They are 2.25% and 1.25% in expenditure cuts and tax measures, respectively.

It is not a huge mystery for us to get down to the work of looking at where savings should be made on the expenditure side and on the revenue side. When the Joint Committee on Finance, Public Expenditure and Reform went to Berlin recently to meet members of the German finance committee it was believed, for some reason, by the press in Dublin that we went to conduct some sort of investigation into why there was a leak from the committee. We went for no such reason.

If I found anything embarrassing about that episode it was that there appeared to be a level of discussion in the German Parliament about budgetary options for Ireland prior to there ever being such a debate in this Parliament. That cannot be allowed to happen again. There is a constitutional prerogative that the Minister for Finance introduces a budget to the Parliament for the approval of the Dáil which I respect and understand but there is a lot of room for involvement and input from Members of this House, not just on the expenditure side which will happen through the committees, but also on the revenue side.

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