Catherine Murphy (Kildare North, Independent) | Oireachtas source

I looked at the name of this Bill and the first thing that jumped out at me was its title, the Fiscal Responsibility Bill. The proper name for it should be the fiscal irresponsibility Bill because we cannot live up to it. We cannot meet the standards. It is unsustainable for Ireland to meet what the Government seeks this House to pass. We must bring the debt to a point not above 60% of GDP and the deficit below the 3% of GDP rule, which are pretty much the criteria set under Maastricht. I opposed the Maastricht treaty because I felt we were being locked in to a mechanism that did not give us any flexibility should the system not work.

Clearly, it has not worked, particularly for Ireland. When it does not work, one must ask for whom it does not work. The heaviest losers will always be those who are most dependent and most vulnerable, which is exactly what is happening. If one examines the agenda in the European Union, it is obvious that it is the countries in which there are problems are the ones that are on it. The European Union has been rewarding the bad behaviour of problematic countries. In being compliant we are taking ourselves off the agenda. There was no quid pro quofor Ireland in passing the referendum. This begs the question as to what is the Government's negotiating strategy. We had three finance Ministers from triple-A rated countries arguing that legacy debt was not going to be part of the overall solution, but our legacy debt is our main problem. The country took on the responsibility for the debts of private institutions, using taxpayer's money, but we should never have had an obligation to pay that debt. That obligation was more or less dictated to us by Mr. Trichet in a telephone call to the former Minister for Finance, the late Brian Lenihan. I do not see anything prudent or responsible in the passing of this Bill, particularly as we do not know what the outcome will be in terms of a debt write-down. At the very least, the Government should have viewed the passing of the legislation as premature until the negotiations on the matter were concluded.

In recent days the IMF has stated, "Whoops, we got it wrong." It has admitted that the adjustment programme is going to be far more costly in terms of jobs than it had anticipated. This is not an academic exercise, however; it is real. It is affecting people's lives. It is rare for the IMF to enter into a programme with a country without some debt write-down, but we did not have that provision. I have listened to Deputies on the Government side criticising the arguments made by Members on this side of the House, but they have short memories. I went through some newspaper archives from the period just before the last general election. At the time Deputy Eamon Gilmore, now Tánaiste, said the then Government's plan was too tight and austere and would halt growth. That is exactly what the IMF is now stating. Deputy Richard Boyd Barrett has been heavily criticised for saying what Government Deputies were saying less than 18 months ago when in opposition. Deputy Eamon Gilmore went on to say his party had proposed reductions in public expenditure which were sensible and which he described as "surgery" rather than "butchery", which is what he accused the Fianna Fáil-Green Party Government of engaging in. It is not that long since that Government was put out of office, but the Government is continuing what its predecessor did. I accept that there are legacy issues for it which must be acknowledged, but it is continuing the policy of the previous Administration, which is butchery. This is a one-way street, whereby we must comply with the rules or incur financial penalties and we are not receiving anything by way a debt write-off. We must have a debt write-off because what we are signed up to is completely unsustainable. It is not a question of we will not pay, but of we cannot pay and should not pay because it is private debt. We must continue to make this point.

According to the CSO, Ireland's general government debt at the end of the second quarter of 2012 was €114.3 billion. The debt-to-GDP ratio at the end of the first quarter of 2012 was 108.5%. Therefore, the amount above the 60% rule contained in the Bill is €51.1 billion. If it is prudent to write into legislation that we will pay off this sum, the word "prudent" needs to be redefined. It is not prudent to do this; it is downright irresponsible. There is no question of seeing light at the end of the tunnel. This debt is not just going to be a feature of this decade but of the next two, unless there is some certainty. The promissory note repayment schedule commits us to a figure of €3.1 billion annually until around 2030. This will run concurrently with servicing the debt, which will cost us somewhere between €3 billion and €4.5 billion per annum, which is patently unsustainable. The Government is asking us to trust it in negotiating a reduction or write-off of the debt. We appeared to receive a letter of comfort in June with the EU summit statement which referred to debt and Ireland specifically. However, the closer one reads the document, the more it becomes clear that there is a doubt about how our legacy debt will be dealt with. Furthermore, there has been a reluctance to publish the letter from Mr. Trichet to the late Brian Lenihan which demonstrates that the country was bullied.

The Bill is irresponsible because low to middle income groups will pay the heaviest price for its implementation. It imposes a set of rules and financial penalties for not adhering to the formula to be applied. Germany wanted this to be set at constitutional level to absolutely guarantee that the money borrowed by Ireland would be repaid. That money was borrowed to bail out bondholders, make sure a bank would not crash and prevent contagion in the banking system. We will be locked into a fiscal adjustment that will strip the Government of any ability to stimulate the domestic economy by investing in areas crying out for investment. The current adjustment programme is resulting in horrendous problems. I was contacted today by a disabled person who had complained about the quality of his incontinence sheets only to be told that they would be replaced when they started to tear his skin. That is what I am hearing, as a public representative. That is the level of depravity to which we have sunk and the punishment being meted out to some of the most vulnerable in our society. The Bill does not hold out any prospect of stimulating the domestic economy. While foreign direct investment and the involvement of multinationals in the economy is welcome, without a sustainable domestic economy, we will not recover.

I wish to refer briefly to a number of issues raised by the TASC recently. It argues that if the IMF's analysis of the data is correct, GDP will be significantly lower after we balance the budget than originally thought.

Therefore, we will have less money to run services and sustain interest payments on the debt.

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