Martin Kenny (Sligo-Leitrim, Sinn Fein) | Oireachtas source

This proposal in this Bill flies in the face of most people's logic. It is proposed that we would have a rainy day fund. When hearing about it initially the public will say it is a good idea to have savings and have something put by. However, when one studies it, while the money is to be put away, it cannot be spent under Stability and Growth Pact rules and all the other rules in place on what would normally be considered a rainy day situation. It can only be spent on shoring up the financial services sector.

The bailing out of the banks bankrupted the country. In the context of this Bill, we are saying that we are going make sure that does not happen again, that we will not bankrupt the country and that we will have saved up to bail out the banks the next time they go down. What will that do? It will create a situation where the financial services sector will become as reckless as it was in the past because it will know it will have that buffer in place, and that the Government will bail it out with taxpayers' money. I do not believe that is right, and neither would any logical, thinking person.

It is time we recognised that the exceptional circumstances which happened in this country should not bring us to a situation where we repeat the same patterns again and again. That seems to be what we are setting out to do. We are putting a fund in place so that those guys can go mad again and we will bail them out. What will happen then? The economy will keep going down and down.

Thousands of people the length and breadth of the country have been destroyed by the economic crash. They cannot afford the repayments on their houses or to pay their debts. The sheriff is writing letters and threatening to evict them. Much of that is down to the greed of the banks and the fact the country and the economy were destroyed because of what they did.

Tonight is a very cold one, although not a rainy one. It is very harsh for the many people who are homeless and who have no place to stay. Efforts need to be made and funds need to be put in place to provide homes and a secure future for those people.

We have major problems in our health service, particularly in our health infrastructure. Apart from the situation with the nurses, I would point to the physical buildings we need to put in place, including a cath lab in Sligo as well as the various services needed around the country. We are abandoning all those projects and are saying they not are important and that what is important is to save up to ensure that if the banks get into trouble in a few years' time, we have money to bail them out. That is a terrible message to send the public, namely, that we are prepared to do this at this point in time.

The money in this fund can be used to remedy exceptional circumstances. Those exceptional circumstances are to ensure the stability of the financial services system. That is simply going back to where we were before which is what we need to avoid doing. If we consider our climate change obligations, we are facing approximately €600 million a year in fines if we do not meet the 2020 agreement in regard to our carbon sequestration target. We are putting €2 billion away when we have to meet fines like that. We are not going to invest and develop the sectors that we need to develop in order to sequestrate the carbon to meet those requirements. We have major problems throughout the country in terms of how we are going to manage all this. The farming sector is under major pressure, with pressure on farmers from every direction.

Basically, a plan is needed and sectors need to be developed. The Government needs to invest to resolve those problems and save the country millions of euro in fines, which will turn into billions of euro very quickly if we do not carry out those actions. At the same time we are talking about putting all this money away to bail out the banks.

Regional development is another major problem. As the Minister of State will know, rents in Dublin are going through the roof and people cannot afford to buy houses. Yet in other parts of the country, there are major problems with rural depopulation and rural decline. We need a Government that invests in the rural economy, and that invests in the areas that have the most potential and that ensures we develop those places, attract employment to them, get people to live in them again and get things happening in them again. The Minister of State is nodding in agreement that this needs to happen. Yet the Government is going to put €2 billion, or €2,000 million, into a fund and the only stated cause that it can be used for is to bail out the financial services sector if and when it gets into trouble again.

I am sure every public representative here has dealt with people among the public who have got into trouble with the financial services sector when their loan could not be paid or ran into arrears and it was sold to a vulture fund. The bank would not do a deal with a homeowner because it said there was a moral hazard and if they were not forced to pay the entire amount borrowed that it would set a precedent which would be bad for the future. We have already set the precedent that it is bad going into the future and a moral hazard by bailing out the same banks and financial institutions in the past. Setting up a fund to bail them out again is copper-fastening that moral hazard.

Under the EU rules, we cannot use this money for anything other than bailing out banks. That is the big problem with it. I do not think any logical person in a normal, functioning economy would say that it is a bad idea to put a fund in place to invest in the future when bad times or a downturn comes. But it is not for that: it is just for this one purpose. The other problem is that we do not have a normal, functioning economy yet. We still have large sections of the economy that are struggling. Many people cannot afford to live, are under significant stress and find the pressures of the costs of living very difficult. They are overtaxed for the services they receive.

I spoke to a woman recently who told me how she and her husband have an income of almost €80,000 coming into their house. When taxes are taken out of it, they have just under €50,000. Yet, when their child was sick and they went to the hospital's emergency department, they had to write a cheque for €100. She asked what we are paying all this tax for if we cannot get any service when we look for it except if we pay again for it. That frustrates people. She is paying a mortgage and almost the same amount again in childcare. These are real crises and real rainy days. I am not talking about people who are on the dole but people who are working. People who are unfortunate enough to depend on social services are in an even worse situation, yet the Government thinks it is okay to put €2 billion into a rainy day fund and grow that to €8 billion over the next years in case the financial services need our help again. The priorities here are all backwards and it is time to rethink this situation.

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