Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

Ba mhaith liom buíochas a ghabháil le mo comhghleacaí, an Teachta Pearse Doherty, as am a roinnt liom ar an mBille tábhacht seo. Mar adúirt an Teachta, táimid go léir ag fanacht lenár gcroí inár mbéal le fada le rud éigin a chloisint maidir leis an infheistíocht seo.

The impending arrival of the Bill has been announced by Ministers with such regularity over the last three years that we had all been expecting big things on this side of the House. Our disappointment when faced with the legislation before us can, therefore, readily be imagined. The economy is entering the second half of a lost decade. As he tried to explain the crushing defeat of the Labour Party in the local and European elections, Deputy Pat Rabbitte stated two days ago in the Chamber that the State is in the middle of the worst economic crisis since the Famine. One would imagine that the worst economic crisis since the Famine would necessitate the largest and most robust response by the Government to deal with it. We have 400,000 men and women languishing on the live register while 90,000 families are on the housing waiting list. Close to half a million of our people have been forced to emigrate since the start of the crisis. These issues alone should have motivated the Cabinet to respond proportionately.

What we are getting is a lukewarm response. Three years of the Government's term have passed and hardly 22 months are left. By acting so late in the economic cycle, the Government has deepened the trough and lengthened the duration of the recession. During the elections we listened to it promise a stimulus and during the fiscal treaty campaign the lampposts were festooned with promises of jobs. Throughout Europe we heard that a new approach would be taken and that we would see a stimulus. Sinn Féin has urged the Government at every point to tailor the response to match the size of the economic problem. We hassled and harried it to act with speed, but it has not happened, which is shocking. We did so for good economic reasons, including because investment in critical infrastructure increases productivity and investment opportunities. Targeted investment would have increased efficiency and created a competitive advantage. It would have made it easier for local businesses to survive the crash and thrive and made the country far more attractive to foreign direct investment. Centrally, it would have reduced significantly the level of unemployment in the State. It would have delivered a social dividend to the hundreds of thousands of families sinking into poverty. That this has not happened, three years into the Government's term, is a damning indictment. That we have had an insipid and inflexible response and investment mechanism is an opportunity lost for the people.

In response to the strategic investment fund Social Justice Ireland has expressed its regret that the Government did not take a broader perspective to assist investment in public services to facilitates socio-economic benefits that would far outweigh their cost over their lifetime. By deciding to limit the purpose of the fund to commercial investment, the Government is, in effect, excluding investment that would be of significant and immediate benefit to the people. We understand the vast majority of the fund’s investments are to be long-term, with the minority to be used to encourage employment creation. From the outset, the Government has hamstrung the ability of this €6.8 billion investment fund to provide the stimulus necessary to cause a significant number of people to go back to work in the short to medium term.

The CSO publication, Quarterly National Household Survey, communicated an extremely worrying picture showing that sentiment among businesses was not very strong. Jobs growth is grinding to a halt and we saw a meagre increase in the past quarter - 1,700 jobs in total. This shows that expectation and confidence are flatlining. That the Government has not understood the reason behind it is shocking. It is seeking to rifle the pockets of families throughout the country through water charges. The retail industry is a good weather vane for expectations in the economy and in the past quarter the industry lost 5,600 jobs. Representative groups of SMEs have made negative comments on the Government's plans, stating they are frustrated with the Government.

The Small Firms Association warned that €500 million was a tiny fraction of the current €27 billion business banking market. ISME expressed concern that the bailed out banks would revert to form and divert loans to safer, larger businesses. Chambers Ireland has expressed a worry that the timescale is vague and disappointing. Real and ambitious stimuli are desperately needed and we have the Government tinkering around the edges. It has previous for such tinkering when real change is needed. We now have an ecosystem for funding small businesses that is going nowhere. Micro-finance, loan funds, the credit guarantee scheme and the seed capital scheme are not meeting the objectives set. They are not having the effect that we desire on the real economy. That the Government has used these measures to tinker around the edges rather than going to the centre of the problem - a banking industry unwilling to function in the real economy - is an example of the mistakes it has made, yet this investment fund is a similar measure.

While the Government has announced it is intent on setting up a State bank, no one in his or her right mind has confidence that it will deliver it, especially as it has changed into being a lame duck Government in recent days. Even if it gets its act together, the bank will be underfunded and lending will still be in the gift of banks that are desperately trying to deleverage. Currently, Irish businesses are being hammered by a number of cost disadvantages, one of which is the cost of credit. Under the Government's proposals, there appears to be no guarantee that the lower cost of funding or sourcing funds will be passed on to SMEs. As the Minister noted, a fraction of the strategic investment fund is to be directed towards SMEs, with just €375 million to be allocated to three new long-term funds providing equity, credit and restructuring investment for Irish small and medium-sized businesses. Successive budget cuts to capital expenditure have put tens of thousands of people on social welfare payments and have stalled investment, making the capital supply in the country desperately in need of new investment. To date, the Government’s policy has been anti-stimulus. The economist Mr. Paul Krugman recently described fiscal austerity as "a negative stimulus". He correctly observed that if European leaders, including the Government, had been right about the way the world worked, the austerity agenda imposed would not have had such a devastating effect.

In my three years as a Deputy I have learned that change is creepingly slow, but it does come. Sinn Féin has pushed the Goverment in small steps. It is welcome that it no longer sets its face against the concept of a State-supported stimulus. Despite accepting the need for a State-sponsored stimulus, it has turned its attention away from labour intensive and regionally spread projects and those that would increase Ireland’s competitiveness in the longer term. We need an ambitious social housing programme. Increasing the social housing stock in Dublin is important to cool down the market, improve competitiveness and reduce rents. We need to increase the level of employment and increase tax revenue. If the grand plan had come to fruition, cuts to Government expenditure and the refusal to invest in a stimulus package would have been offset by rising private spending, but the opposite has happened.

Austerity has delivered stagnant employment figures, in real terms, and a fall in investment by the private sector. The banks are still in difficulty, a fact borne out by the provision in the legislation to allow the fund to invest in banks should they need to be propped up again. Not only has the Government failed to secure a deal in Europe on Ireland’s legacy banking debt, it is also preparing to pump public moneys into bad banks. Ireland is a small open economy and it appears the Government is looking to emulate the United States. While the US Administration embarked on a state-sponsored stimulus programme, it was not enough. In the short term an ambitious stimulus programme acts as a defibrillator for a stalled economy, while in the medium term it improves competitiveness and creates an environment in which recovery can be maximised. What we have is a half-hearted, half-baked Government stimulus that is limited to a purely commercial programme. It will not create jobs within the necessary timescale and not get the economy out of the doldrums.

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