Séamus Healy (Tipperary South, Workers and Unemployed Action Group) | Oireachtas source

I welcome the opportunity to speak on the Fiscal Responsibility Bill 2012. I ask the Minister to withdraw it, as it effectively enshrines permanent austerity in this country. The Bill’s proposals and measures, if implemented, will continue to destroy the domestic economy, increase unemployment and emigration levels and put pressure on low and middle income families - the coping classes or the squeezed middle, as they are called. The Bill encapsulates the Government’s austerity policy to target low and middle income families, a continuation of the previous Government's, with no stimulus for growth. Neither does it contain a demand that significantly wealthy people pay their fair share of taxation.

The legislation is bad for the economy, for families and for business. One only has to look at the main streets of our villages and towns to see the effect of the austerity policy that the Minister is now proposing to put into law. We see closed shops, less footfall and more unemployment while the domestic economy is left reeling by the withdrawal of up to €26 billion from it in recent years. A further Government target amount of €8.6 billion will be taken out over the next three years, and the 0.5% structural deficit rule and the 60% debt-to-GDP rule will add another €10 billion per annum to this figure. This will simply draw the lifeblood out of the economy, resulting in company closures and unemployment as well as hardship for families. Ireland’s debt-to-GDP ratio will peak next year at 120%. With the 60% debt-to-GDP rule contained in this Bill, it will take 20 years to reduce Ireland’s current ratio, which, it is estimated, will lead to further cuts of more than €4 billion per year. This will destroy the economy and make matters worse. With Ireland’s structural deficit at 3.7% next year, the rule in the legislation specifying that this should be no more than 0.5% could lead to additional cutbacks of €5 billion per annum. We are enshrining perpetual austerity in law and targeting low and middle income families who are already stressed, stretched and under severe financial pressure with more taxation.

The background to this issue is the fact that through the EU-IMF deal Ireland and its people have effectively been made subordinate to Britain, Germany and France and the bankers and speculators of these countries. The treachery of the previous Government and the self-serving greedy behaviour of the Irish elite continue to lead to savage attacks on poor and middle-income earners. There is no doubt that this is a real national, economic and social emergency. The crisis is resulting in an unprecedented onslaught on living standards, spiralling mass unemployment and a dramatic rise in poverty levels. Meanwhile, we are paying out billions of euro which are being taken from working people and given to bankers, developers, international speculators and finance houses. We were told by the new Government that there would be a new beginning, that it would ensure all would change and that we would put behind us the policies of the previous Government. Of course, that did not happen. We were told that the bondholders would be burned, that there would not be another cent for the banks and that it was going to be "Labour's way, not Frankfurt's way". We were told that the vulnerable would be protected. Of course, nothing like this has unfolded. Some people in the country are under serious pressure from cuts and increased taxes. We are far from the promises and commitments made during the general election. What happened subsequently - it is still taking place - was that the banks received billions of euro; the bondholders were paid; there were closures of health facilities and beds in hospitals and homes throughout the country for the elderly; military barracks were closed; higher taxes were imposed; and there were various cuts throughout the education system.

I reject solutions to the economic crisis based on slashing public expenditure and cutting welfare payments and workers' pay and pensions. There can be no just or sustainable solution to the crisis based solely on market circumstances. Instead, there must be democratic and public control of resources such that social need is prioritised over profit. We must end the bailout of banks and refuse to pay the private debts of banks to international speculators and finance houses. Allowing private banks to borrow €90 billion abroad between 2003 and 2007 was an act of treachery by the then Government and the Irish Establishment generally. We must stop it, call a halt to it and say we are not responsible for the private debts of bankers. Naturally, it will be said this would be a risky strategy, but the riskiest would be continuing along the path taken by the Government and the previous one. That is the path of robbing people to pay off the debts of private banks and developers and it will end in a devastated country and economy and families throughout the country.

It has always been suggested the country is being bailed out, but the fact is we, that is to say, the country and its people, have bailed out the European Union and foreign banks. There is no doubt that the European Union and the banks are not good Samaritans. They are not helping out a neighbour in trouble; rather, we have been ripped off by the European Union and the banks. Europe's major banks were owed tens of billions of euro by Irish banks and hundreds of billions of euro by the banks and the governments of Greece, Portugal, Spain, Italy and other countries. Every cent was private debt, but the European Central Bank feared contagion if an Irish bank defaulted. It, therefore, decided that every bond would have to be paid in full. Its solution was to use its financial muscle. It coerced a weak Irish Government into converting private debt to sovereign debt, a policy which it now accepts was wrong. It is clear that the austerity programme which has resulted from this policy has failed. We need a new direction. We need to set aside the policies we have been pursuing during the term of the Government which amount to a continuation of the policies of previous Governments. We need to set them aside because austerity is driving down domestic demand. It is creating mass unemployment, high welfare costs and lower tax revenues. This is being done to divert borrowed moneys into bank, bond and interest repayments. The wealthy are being protected, while working people are suffering as a result of a policy that is deepening the recession and making the economic crisis worse. Vast amounts of money have been taken out of the economy and it is proposed to continue in this vein. The inclusion of these two rules and making them legally binding in Irish law will perpetuate the problem, take further money out of the economy, depress the economy further, increase unemployment and create vast problems for ordinary families throughout the country.

Some 12 months after the Government entered office there were approximately 440,000 people unemployed, giving a 14.8% unemployment rate, up from 14% when it took power. There are fewer jobs in the economy now, although there have been several so-called initiatives taken. The most recent Central Statistics Office figures show that for the year to June 2012 which coincided with the Government's first year in office, there was a net decrease of 33,400 jobs.

This is the result of the austerity which the Government has been pursuing. It is also the result of the austerity being imposed by the EU and being accepted by the Government. Despite what was stated in these so-called initiatives, if money continues to be taken out of the economy and if austerity is to be effectively made permanent as this Bill will do, there will be further job losses.

The austerity has also created emigration, as has been covered by previous speakers. Recently, there have been health cuts which have brought about a situation where hundreds of thousands of home-help hours have been cut. Those with disabilities have been targeted. Child benefit has been targeted. In that regard I recently came across an article in a newspaper which showed a poster in the most recent election in 2011 by the Labour Party, stating "Protect Child Benefit. It has been cut too much already. Labour is against Fine Gael's latest proposal to cut Child Benefit by €252 p.a. for the average family. Families Need Labour in Government". However, we all know where that has got us - promises made but promises broken. There have been more child benefit cuts and now there are kites being flown and promises of additional child benefit cuts. The elderly have already been targeted with reductions in the fuel scheme and the electricity scheme. The numbers of special needs assistants in schools have been reduced. Guidance counsellors have been put into the quota and, effectively, their numbers have been reduced. College fees, which the Labour Party promised would not be re-introduced, are now effectively being introduced by the back door.

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