Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Tá Sinn Féin i gcoinne an Bhille seo. Sinn Féin opposes this Bill. The concept of a rainy day fund is one with which most people instinctively agree and if there was a proposal before us to establish a real rainy day fund, I would give it serious consideration but the truth is that we do not have such a proposal before us this evening. A rainy day fund would be truly counter-cyclical in that it would remove money from the economy during times of growth, as this fund would do, but it would also allow that money to be re-injected as a recession hit or growth slowed. That is where the crucial flaw in this legislation lies. It lets us put away money but does not allow us to take it back out.

We must also consider where our economy stands at this point in time. The Government is asking us to support putting money away that could be used to build homes, open hospital wards, support new crèche facilities where they are desperately needed as well as for many other areas. The European Commission, the IMF and others have all pointed to the lack of infrastructure, especially housing, as representing a major threat to our economy. In that context, we must ask if moving €8 billion into a fund that cannot be reopened is the best use of money at this time or indeed, at any time. This is a fund that cannot be spent tomorrow when times are bad and which reduces our capacity to catch up on infrastructure that is needed today.

There is also a very real question as to why this legislation explicitly opens the door to this fund becoming another bank bailout fund. That is in black and white in the legislation before us. It states very clearly that one of the criteria under which this fund can be accessed is for exactly that purpose, thus preventing potential serious damage to the financial system in the State and ensuring the continued stability of that system. That is in black and white in the Bill in terms of one of the three criteria for using the fund. This is about bailing out the banks once again. In fact, this is really the only concrete area where the money can be spent. The other two possibilities in the legislation are likely never to be used, short of a major crisis such as a migrant crisis or major reform of our pension system, for example. These "exceptional" circumstances will be deemed to be thus not by Members of this House but by the European Commission. The Minister for Finance is relying on people failing to differentiate between a nice-sounding scheme like a rainy day fund and this fund, which, when one reads it closely, can only be described as a bank bailout fund in the making. I am sure that a Bill called the bank bailout fund Bill would be very difficult to get through the Houses of the Oireachtas and rightly so.

One of the claims made in relation to the establishment of this fund is that it will tackle the issue of overheating in the economy. Let us examine that claim more closely. First, we must note that the latest CSO figures show a very modest level of inflation in the economy which is not exactly evidence of imminent overheating. The idea that moving money into this fund will prevent overheating simply does not stack up. The greatest sectoral source of overheating within the Irish economy is in the property market with ever increasing housing and property prices and an ever growing demand in Dublin city and its environ, as well as in other cities. Overheating in the Irish housing market is best addressed through increasing the supply of housing, a policy which is inhibited by a supply and skills problem within the labour market. The biggest threat from construction, however, is not from residential but from commercial property, as consistently pointed out by the Irish Fiscal Advisory Council and nothing in this Bill will reduce that threat. The skills gap is a threat too, as has been pointed out time and again, yet today we are being asked to siphon away €0.5 billion each year, which should be used to build crèche and educational facilities so that our population can be trained to fill the gaps and parents, especially mothers, can be empowered to return to the labour market if they so wish. We know about the threat of climate change to our economy and our world but there is no possibility that this fund could be utilised to bring about the green industrial revolution that is badly needed. The risks a rainy day fund seek to address are best combatted by transitioning the Irish economy from one which is dangerously exposed to global markets to one which possesses a stable economic base. Such a transition would require sustainable investment in infrastructure, in skills and in the renewable energy and industry strategy.

Let us not forget that we already have a Strategic Investment Fund, SIF, that can be directed to make interventions and investments on a commercial basis. It has €8.9 billion of resources at its disposal. It is a sovereign fund, investing and accumulating for the people. How does the proposal before us this evening in any way improve on that? In reality, the fund contained in the Bill before us actually raids the SIF to lock away money that is needed at this point in time. If the aim is tackle overheating, this is a very bad policy choice and the excuses for it do not stack up. This Bill is about championing austerity, normalising homelessness and third rate infrastructure. It tells rural Ireland that it can wait for quality broadband. It tells communities seeking their health rights that they can wait. It says to the 10,000 people who are homeless, including 3,000 children, that they are second level priorities to be dealt with only after an arbitrary fund is filled.

We also have fiscal rules, championed by some parties in this House, which are supposed to keep us on the straight and narrow. Sinn Féin has always said that those rules are too restrictive and conservative. They copper fasten low spending but now it seems that for Fine Gael and Fianna Fáil, they are not tight enough. When times were tougher we were told by the aforementioned two parties that they would like to provide services but the fiscal rules would not allow it. Now we are in a situation where we are making up our own tighter fiscal rules. Fianna Fáil wants to be associated with this plan. Its members are clapping themselves on the back, claiming that they were the first to introduce the concept which they have now delivered through their negotiations with Fine Gael. Let us look at what Fianna Fáil originally promised. Had we gone with Deputy Michael McGrath's plan and the promise in the Fianna Fáil election manifesto, we would have to put €3.785 billion into the so-called rainy day fund this year. That is what the Fianna Fáil manifesto stated. Surely that party would have delivered on its promises, or would it? Fianna Fáil said that once a balanced budget was achieved in 2017, any increase in corporation tax revenue above a base line of €6.6 billion would be put aside to lessen the impact of any future slow down in the economy. Perhaps Deputies Michael McGrath or Fleming, who are so eager to claim credit for coming up with this policy, can tell us where the nearly €4 billion will come from this year, next year and every year thereafter. How many nurses would they sack? How many public servants would face the chopping block again, just as they did under the Fianna Fáil led Government of ten years ago? How many social welfare payments would be cut under this policy? This is policy on the hoof and its original aim was to rehabilitate Fianna Fáil which was the party of Government that drove the economy off the cliff and drove tens of thousands of our brightest and best to the four corners of the world. Fianna Fáil cannot be trusted. Sinn Féin will not be the party to make Fianna Fáil look fiscally responsible when its policies would be disastrous. The root of the Fine Gael proposal is the Fianna Fáil proposal. I urge the Minister to rethink. I urge him to get his priorities right and to put tackling the housing crisis, the cost of child care and the high cost of living above some half-baked, recycled Fianna Fáil idea.

A hard Brexit is now a real possibility. Today the Minister for Finance released a statement on the possible impact of a hard Brexit and it makes for sobering reading. The idea that hours later he would come into this Chamber and talk about reducing our ability to invest is simply mind boggling. Deputy Michael McGrath said the European Commission might let us use the money we have put into the fund to deal with Brexit but if there is a hard Brexit, it will happen before a penny goes into this fund. The idea that we would lock money away in this fund and hope that the Commission would allow us to use it in the face of Brexit is absolutely daft.

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