Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

Yes; credit is an issue I will discuss in a moment.

None of these areas is improving. Moreover, the incidence of suicide is increasing, as is homelessness, housing lists are lengthening and people must look forward to paying hundreds of euro more in property and water charges and a further €700 million in cuts to the health service, which the Government promised the troika it would deliver in the budget. In recent weeks, a major crisis arose as a result of additional cuts of €130 million in the health service. What will €700 million of cuts in the budget look like? There will be no health service left. Who will the Government attack and what will it cut next, having gone after the disabled, respite services, care allowances and care packages? Its position is immoral, socially and economically unsustainable and a recipe for destruction.

Deputies on this side have been arguing for the past two years that imposing crushing austerity on countries on the periphery such as Greece, Italy, Ireland, Spain and Portugal will have a contagion effect as the recession spreads to the core of Europe. Finally the IMF has admitted that this is precisely what is taking place. We were ridiculed when we made this argument two years ago. The Government told us the books would be balanced, market confidence would be restored and investment would start to flow. The exact opposite has occurred, with economic contraction spreading into the core of Europe and choking off the only hope for economic recovery. We all know that austerity has crushed the domestic economy. The Government was riding on the hope that we would get out of the economic difficulties by increasing competitiveness and exporting our way out of the crisis. We now find that our biggest trading partner, the European Union, is in recession and may be heading towards a depression. This has choked off the only prospect the Government held out for the country to emerge from its current problems. This approach is not working. At some point one must stop digging if one is in a hole as otherwise one ends up digging one's grave. The Government is digging the grave of our economy and society.

Every time Deputies make this argument the Government argues that we are good at levelling criticism but unable to produce alternative policies. I will set the record straight on this false claim, which the Government also used during the referendum campaign, by setting out our alternative in broad terms. We will do so again in the economic debates that will take place in the weeks ahead. Our alternative is to cancel all of the debt that was not our debt. Irish debt in 2007 amounted to €27 billion and debt servicing cost 3% of Government revenues before the crash. Since then, debt has increased to €170 billion and debt interest will account for 15% of Government revenues next year. This increase is not the fault of ordinary citizens but that of bankers, speculators and the political elite in Europe and Ireland. It is critically important that we repudiate this debt because it is not ours.

The Government's argument that we are spending well beyond our means and that repudiating our debt would leave us with a huge deficit of €15 billion we could not possibly repay is not true. According to the fiscal council, which produces useful information, we will have a primary budget surplus next year. Even now, the primary deficit is only €3.1 billion. That is the gap we must make up to match revenue with expenditure. The rest of the €15 billion is accounted for by interest on a debt that is not ours. If we repudiate this debt, we will not have to repay it or the interest on it and will be required to cover a deficit of only €3.1 billion. The fiscal council has provided these figures. Would this be the morally correct position to take? Yes. Would it also be an economically sustainable position? Yes, because otherwise our debt will reach €200 billion at the end of next year and we will be required to make €9 billion in interest repayments. That is an unsustainable position. As the markets and society know, recovery is not possible with such a high level of debt and forcing us to pay it down at interest rates of 5% per annum will require crippling austerity for many years. If, on the other hand, we were to pursue the policy of debt repudiation, we would have to find €3.1 billion. This would be achieved by taxing the wealthy. Every time we make this argument the Government tells us not to be ridiculous as there is no pot of gold.

Last week, again, I tabled parliamentary questions on the tax yield to the Minister for Finance. I will be screaming about the facts that I gleaned from them coming up to the budget. The top 5% of earners, 108,000 people, have a gross income of €20 billion. Their average earnings are €185,000 a year. To get a yield of €3.5 billion, one would have to take €32,000 extra in tax off that group. Could they afford it? I think they could. They could certainly afford it a hell of a lot more than our health service, our disabled citizens, people on social welfare, low and middle income workers and all the other vulnerable sectors of our society such as those in mortgage distress who are being crucified. Would it be such an imposition for those with average earnings of €180,000 a year to lose €30,000 of that to save the rest of our society? One could graduate that tax take so that those at the top end paid more.

When one sees the figures broken down, decile by decile, of who is earning what in society, it is shocking. The 120 richest people have average earnings of €8 million a year. Could they afford to take a hit of a few hundred thousand quid? Up to 2,000 people are on earnings between €500,000 and €750,000. Could they not afford to take a bit of a hit instead of hitting people on social welfare, the disabled and the poor?

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