Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I am very pleased to be able to support this Bill presented by the Labour Party and to reflect on some of its provisions. This legislation represents exactly the type of reform we should be looking to make to our public services.

I will start with a couple of personal anecdotes that reflect my perspective. I studied business studies in UCD in the early 1980s. On my first day my first class on macroeconomics was given by a man called Dessie Norton. In a big theatre like this Chamber, he started out by saying, "Remember this, boys and girls, and don't ever forget it. The first law, the first assumption upon which everything is built is that people are profit maximisers. All our rules and laws after that extend out." I did not realise that at the time I was getting what Kate Raworth has described as the classic economics education which has been set in stone almost for 50 or 60 years and which is still there to the current day even in the supposed best economic schools. I remember as an 18 or 19 year old thinking in my heart of hearts that that was too simple an assumption. It did not describe me: I was not just a profit maximiser. Throughout my life working in the business world and elsewhere my experience has been that we have had a real difficulty in that economic analysis is too narrow. The assumptions on which it is built are false because they start off with some of those flawed assumptions.

I will give a second personal reflection. During the depths of the crash we experienced almost ten years ago, someone using the advice of John Maynard Keynes, the great British economist, said in the course of the banking collapse that the first thing we needed to do was to stabilise, but we then needed to reform. We have done the stabilisation bit. We are beyond it and are now back in Celtic tiger boom years with 7% growth. However, we have not done the reform or certainly not to the extent we could and should. I refer to reform in the biggest sense of a completely different form of economics. It is not just the indicators we need to change: our core understanding of economics needs to change and beyond that politics.

I recently saw a video by George Monbiot, the British journalist, environmentalist and labour activist, which took a very broad approach. He asked, "What is the story in politics in our modern world?" He said that for 30 or 40 years after the Second World War the story was a social democratic one with big government providing services and protecting people against big bad businesses. For a variety of reasons that changed in the winter of discontent and the crisis of confidence, as the former US President, Jimmy Carter, called it, in the late 1970s. It became a different story in that markets would deliver what we wanted and would protect us from big bad government, which was seen as not the order of the day. Strangely the social democrats became the greatest disciples of that orthodoxy. People such as Tony Blair with his third way accepted the mantra that markets knew best and that one would have to let capital free to deliver the services we want. That, as an economic orthodoxy and a political orthodoxy, the Washington consensus, was there right through to 2008, but it is no longer credible.

Based on conventional economics, who could have believed that we would be printing money at scale, as we have done for the last ten years, and still have no inflation? The whole discipline of economics is in a crisis of confidence. Those outside have no confidence in it and those inside must be wondering what, in God's name, was the purpose of all those lessons they learnt because none of it seems to make sense anymore.

We need a new economics that knows how to value natural capital, which economics has never done. We need to put a price on the externalities that take place in our current industrial business system. I support this legislation because it addresses one element of that. We need to change our assumptions, some of the algorithms and the basic nature of economics. However, part of the shift is changing what we measure. I commend the Labour Party on trying to do this in the Bill it has brought to the House. We also looked at this briefly at the Committee on Budgetary Oversight. As well as through this legislation, we need to use that committee to try to bring it into effect.

Earlier I spoke about the nature of reform. This is a reforming Dáil. We have the potential to make real reform and we have achieved some of it. That we were able to establish the Parliamentary Budget Office signalled a huge advance in the workings of this Parliament. It has not really kicked in yet: we will only see the benefit in five, ten or 15 years. In this reforming process we have not exactly had huge support from the Department of Public Expenditure and Reform or the Department of Finance, which may be slightly caught in an old economics view of the world. That they for so long questioned the need for or the approval of a budget oversight office - indeed we have people here who were very involved in the process - shows that they were out of date with where the new economy needs to go. However, we have it now.

I suggested in the Committee on Budgetary Oversight that we should meet officials from the CSO to discuss this very issue. I have read the Minister of State's speech and I understand his perspective on the legal, administrative and other difficulties with changing the nature of our national accounts given the need to adhere to EUROSTAT rules and so on.

I think that we should, as a country, push to do the best we can to be part of the new economy. Our position in the world is very fraught because we have Brexit and Trump. I do not think we should do what I fear the Taoiseach did in Washington last week, which is to cling on to the old Washington consensus or indeed Donald Trump's warped economic nationalist version of it. We have to go to the Brexit talks or indeed to dealing with Donald Trump's administration with certain values and we have to stand for something. We have to stand for this new economic view of the world, one which recognises that we need globalisation but it cannot be a race to the bottom. It has to be fair. There have to be fair labour laws and environmental standards. The very nature of how we measure progress should change towards a sustainable economic model in every way.

I would like to see the Departments of Public Expenditure and Reform and Finance, the Central Statistics Office, CSO, the Committee on Budgetary Oversight and our own Parliamentary Budget Office going into some of the details of this. I think it is very much justified. Time spent on that would be very valid and we should tease out how whatever the concerns the Department has can be resolved and how we could make this real. We should make it real in the sense that it does not just affect statistics or national accounts but decision-making about where we go from here. The outcome is that it changes our budget decision-making process. It changes our whole industrial and enterprise policy, which may then become less reliant on just foreign direct investment, growth at all costs numbers games where we say that we are doing great because our economy is growing by a certain percentage and then find that we have another burst bubble three to five years later. This should develop towards a leap to a new economic model which manages the natural resource constraints that we have and gives us greater stability. It should not put us as we are increasingly seen in the world, as a low corporate tax location, as opting out on climate and being seen as a bit too cute in every way in the way that we gain from the international economic system at present. We should be seen as a leading, responsible country, developing new economics that bring poor countries out of poverty, that protect our standard of living, that use the transition to go towards a more equal distribution of wealth in our country and others and that set certain standards. One measures those standards by the sort of indicators that are set out here. I would like to see us doing that. I would like to see this legislation passed and, if it is not possible for us to pass it, for us to go into the Committee on Budgetary Oversight and to use the Parliamentary Budget Office to take this work further.

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