Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

Therefore, while we must reduce the debt, it cannot be done unilaterally; rather, it must be done in a structured way. I am insistent that it would not be a case of a hand-out or favour from the European Union. Countries in Europe would take their share of the reckless actions of their banks which lent to our banks. Money came into this country, some of it through the banks that were covered by the regulator, but a lot of it also came in through banks that were regulated abroad.

We have a huge problem. The amount borrowed by this country in the first nine months of 2012 amounted to a deficit of €11 billion. Interest associated with the sovereign debt has nothing to do with the banks. The money associated with bank debt amounts to €1.7 billion. We have borrowed €10 billion in nine months and one can estimate that it will be €12 billion by the end of the year, minus bank-related funds. We must close the gap to about €4 billion and have €8 billion to go. One cannot do this by raising extra taxation and making cutbacks. A reasonable part must be achieved by generating growth in the economy. We must have a clear way forward in order to generate growth. We must create confidence that the problem can be solved and explain to people the quantum of extra taxation we must raise, the size of the cutbacks we will have to make and how much we are expecting to gain through growth. The big problem with the plan we have entered into concerns the total lack of growth. The economy is stagnating because of what is being done to depress people’s confidence in the future, as well as consumer confidence. All of the rumours about the budget and the way we do our business creates uncertainty. We tabled a Private Members’ motion tonight on the uncertainty created about the cost of employment to the tune of €89 million. Many other uncertainties are being created.

It is time for us to reform how we do our business and move away from the crazy budget ritual in which we engage. In the old days at least the budget ritual did not continue in the way it does currently. From the time I came into this House until less than ten years ago the way the budget was produced was that we published the expenditure Estimates first and then the budget dealt with taxation issues and some minor expenditure items on the day of the budget. Now we have five months of uncertainty that depresses activity in the economy because it is all done in a big-bang way. I do not wish to return to the old way of doing things; what I would like to see the Government doing is deciding early on the final figures and then in an open way going through the choices Department by Department. Rather than playing games with leaks, we must openly discuss the choices, try to achieve consensus on them and agreement on how the budget should be framed. We must involve the House in what the Cabinet does behind closed doors in order that we work towards consensus. If we did this, there would be much more confidence in what we are doing and if we have confidence, we will have activity and investment and the tax take will increase. If that were to be the case, without putting up taxes or making cutbacks, the gap would begin to close, as happened in the late 1980s and 1990s, which would create a virtuous circle that would solve the problem. The reality of the way we are proceeding, with the depressed air we are creating around the country, is that the hole is just getting deeper and deeper. Even if someone were to wipe away the entire bank debt in one fell swoop, we would still not be able to handle the rest of the debt because, as I indicated based on the figures, we are still spending more than we are earning. There is only way one to ultimately resolve the issue, that is, to create more wealth and more tax revenue.

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