Shane Ross (Dublin South, Independent) | Oireachtas source

I concur with much of the latter part of Deputy Jerry Buttimer's contribution. I am not trying to be mischievous in welcoming comments such as those made by the Deputy, especially when they come from the Government benches. When the Deputy addresses the issue of middle Ireland, he is reflecting a growing body of opinion that the so-called coping classes, those who are somehow managing to make ends meet in the current difficulties, are finding that they may no longer be able to cope. The Fiscal Responsibility Bill is aptly and cleverly named, but it is, unfortunately, a reflection of the groupthink that has come to take middle Ireland for granted. While "fiscal responsibility" is a magnificent phrase, the Bill should be renamed, depending on which way one views it. It is, however, another part of the straitjacket and lack of flexibility to which the Government agreed in running the economy.

It is part of the area which Deputy Buttimer just addressed when he spoke about last week's bank interest rate rises and recent rises in health insurance premiums. What I find difficult about this agenda is that when the Government is asked about these rises, as happened on Leaders’ Question the other day, both of which are hitting the coping classes in middle Ireland very badly, it responds it is not its baby. The VHI is a State-owned and run organisation. The Government makes great play of the fact that AIB and Bank of Ireland are the pillar banks and in which it puts great store in developing its banking policy. Not only that, the Government owns 99% of AIB. When I asked the Tánaiste last week what he would do about AIB’s interest rate rise on the standard variable rate, which is unfair and unjust to those involved, he said as AIB is a commercial organisation it is not up to the Government to do anything about it. He also added that he thought I would be the last person who would suggest the State intervene in a commercial organisation.

He is wrong. I believe the Government should be interfering on a microbasis everyday with what is happening in AIB and other State-owned banks. For anyone on the Government benches to stand back and claim it is not the Government’s business is conniving in a crucifixion. It is up to the Government to intervene when State banks are behaving in an unacceptable way, leaving middle class people without any money at the end of the week. One cannot take the view these are somehow independent commercial bodies anymore and whatever they do has nothing to do with oneself. The view must be taken that there are grounds for interference in the activities in State-owned banks, which are making people’s lives impossible, if we own them or have been given guardianship of them.

The Fiscal Responsibility Bill is part of that austerity agenda which gives the Government the chance to cop out. Whereas it has the laudable objective in balancing the books, it again gives the Government the opportunity to say this is not its responsibility because it implements Articles 3 and 4 of the fiscal treaty. That is a terribly convenient stance to take. While in some ways it is difficult for the Government to sacrifice its independence - which it has done anyway - it makes it easier to point the finger overseas and claim they made us do it. It is a bit like Deputy Buttimer making laudable noises against the Bill, as well as making some courageous reservations about Government policy, but saying because he is under the party Whip he must vote for it.

The measures referred to by Deputy Buttimer are not the only ones that will put many middle class people over the edge. Hitting child benefit will actually hit the same people, many in negative equity, which the bank interest rates rise will hit. It is part of the fiscal responsibility agenda. The worst hit, however, about which a big head of steam is growing and which is dictated to a large extent by Europe, is the idea of property tax. I cannot understand how the Government has not seen that those whose mortgages are going up as a result of last week’s rise in interest rates are exactly the same people it will ask to pay property tax in December. They will be exactly the same properties on which they will be paying increased mortgages, say, €1,000 extra a month on a €300,000 loan, along with a fair amount in property tax. They simply will not be able to pay it. Fiscal responsibility, austerity and all the laudable objectives in trying to balance the books have their limitations. One cannot take child benefit away, impose a property tax, put people in straitjackets with their mortgages while introducing the Fiscal Responsibility Bill. People will be put over the edge by this type of measure.

The legislation was born out of the fiscal treaty referendum. That was a battle the Government fought and won and it is now imperative for the Government to ensure this legislation gets through. To some extent, however, this measure defines our relationship with Europe. That relationship is far from being the satisfactory one the Government always puts forward in the House but a very unhappy one. Our relationship with Europe is a happy one for Germany, Finland, the Netherlands, Austria and the other powerful nations because our compliance with their wishes could not be more impeccable. It is not a happy one for us. We satisfactorily sit in the bad boy’s corner, happy to be there because we get a pat on the head for staying there and striving to get out of it. If we were to get a dividend out of passing this referendum for Europe, it should have been more than a pat on the head.

We did not get it. As a result of this and the vote on the treaty in May the Taoiseach came home on 29 June and, like Neville Chamberlain returning from Munich, said we had secured the deal, that it was a game changer, that we had received the dividend and that anyone who had expressed reluctance about the treaty was wrong. We were to introduce the Fiscal Responsibility Bill because we had got the deal and I was the first to congratulate him in the House. I said the fiscal treaty had been delayed, but I congratulated him on what appeared to be a great deal and agreed that if the Taoiseach had secured a special deal on the bank debt for Ireland, the delay might have been worthwhile. However, as everyone knows, it is a phantom deal - it has been vanishing. The dividend for introducing this Bill is not that deal. Only two days ago the chief of the European Stability Mechanism in answer to a question about the Irish deal, which was, I believe, coded as legacy debt, said it had not even been discussed by a single European body.

What is Ireland getting out of the European Union in return for this fiscal responsibility deal? Ireland seems to be getting a slap in the face. It is looked upon as a chronic offender; it is being patted on the back for doing minor things and introducing measures which are utterly unacceptable to the coping classes. Should we not inform those in Europe that we are not to be taken for granted? Should we not inform Angela Merkel, François Hollande, the Dutch and the Finns that we have noted what they said some weeks ago to the effect that our deal was a phantom one? It is obvious that the banking deal in which we put so much hope is disappearing before our eyes. If we are going to behave in the way the great powers in Europe want, we are entitled to get something back. What are we doing? Who are our allies in Europe? It seems we are reduced to forming alliances with countries that are errant in their ways, like ourselves. It seems that we are in the corner of Greece, Spain, Portugal and Italy, which are not the strongest allies to have in Europe. We are taking our orders from the strong powers, but we get little back.

The European Union has reason to be grateful to Ireland. The Government has done as it has asked at every turn. As a result of a deal with the troika, the European Central Bank, the European Commission and the International Monetary Fund, the Government has decided to introduce property taxes, allow the banks to put up interest rates, cut child benefit and do other things that have made life especially difficult for those on middle incomes. Without a quid pro quo, the result of such measures will be that many on middle and lower incomes will be pushed over the edge.

This type of Bill could be passed if it were conditional on something happening in the interests of Ireland. If we were not treated as second-class citizens or a second-class country by the European powers, we could accept a Bill of this sort, but we are seeing exactly the opposite. The deal on the Anglo Irish Bank bonds which had been portrayed as possibly coming to a head and to be agreed in October has been postponed. The latest expectation, as the Minister for Finance noted recently, is that perhaps we should be looking more closely at a date in March because that is when the next €3 billion is due to be handed over.

I suggest to the Government that in order that it is not taken for granted by any of the great institutions or powers of Europe it should make it clear that the €3 billion payment is no longer a certainty. We have run out of rope with the bondholders because we cravenly paid all of that money over, but we should make it clear and give notice to those expecting payment that it can no longer be taken for granted if we continue to be treated in the way we are being treated by the European powers, in particular, by Germany, Finland and the Netherlands. These powers have clearly signalled to us that we cannot take for granted a deal that we believed was in the bag on 29 June. That deal on legacy debt appears to be off the table. It has not yet been discussed by any European body.

The idea of setting up a fiscal advisory council which forms part of the Bill is probably a good one. The Government has the apparatus and the propaganda organs of the State working for it so ardently. Therefore, it is right that the Government should set up a fiscal advisory council, but only if it is to be truly independent. However, I am doubtful about the possibility in Irish political life of politicians of any party setting up a truly independent body. It is almost impossible to point to any body or institution established in the past 20 years to which politicians have appointed independent directors who have made totally impartial decisions. The body politic has been so stained by party politicians appointing their protégésto such bodies. The Irish Fiscal Advisory Council may be a worthy body. It has produced some seemingly independent reports. However, such bodies have been tainted by the behaviour of past Governments which put their protégéson the boards with the result that the bodies made reports so partisan that they were lacking in credibility.

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