Dáil debates
Wednesday, 25 March 2009
Leaders' Questions
10:30 am
Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context
I welcome the fact that the Government has invited the ICTU to talks. I hope this invitation will be accepted and I hope the talks will result in the calling off of next week's day of action. It is critical at this time in our nation's development that public services be enabled to continue and that the reputation of our country be kept at a high level. From that perspective, I hope the day of action is called off and meaningful discussions can take place.
In that context, the Taoiseach has asked on a number of occasions for constructive suggestions from Opposition parties. Presumably, when the talks take place with the ICTU in the context of social partnership, they will be meaningful discussions and the Taoiseach will impart information, which he is not prepared to give to Oireachtas Members, who are the elected representatives of all the people and all sectors in this country. On 13 March, the Fine Gael Party through its finance spokesperson, Deputy Bruton, wrote to the Minister for Finance looking for information relevant to the budget to be introduced on 7 April. That letter has not even been acknowledged yet, never mind providing the information sought therein.
Pádraic McCormack (Galway West, Fine Gael)
Link to this: Individually | In context
It is worse than a county council.
Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context
On 3 March, the Taoiseach stated in the House:
. . . by the end of the month we will take whatever steps are necessary to ensure the framework we have set for ourselves, that is, a 9.5% general Government deficit for 2009, will be adhered to. It is important for the credibility of the country that we do so. Before the end of the month we will come forward with whatever measures are necessary, either in terms of expenditure savings or tax raising measures...We are committed to restoring the public finances to a sustainable position and action will be taken to ensure the deficit will not worsen from the forecasted figure of 9.5%.
The Minister for Agriculture, Fisheries and Food was not clear on television last Sunday whether the shortfall is €4 billion, €4.5 billion or €6 billion. I understand from reports that a gentleman, for whom I have a great deal of respect, Dr. Alan Ahearne, has advised the Fianna Fáil parliamentary party not to be concerned about the 9.5% requirement. Irish people across every sector have said they are willing to contribute to sort out this mess and they will do so from two perspectives. First, they need to understand that their contributions will go towards sorting out the problem and, second, they need to know it is being done fairly. That cannot be done unless we are absolutely clear about what we are trying to do, about the extent of the problem and about the parameters the Government is trying to close. The Taoiseach cannot expect members of the Opposition parties to come forward with meaningful suggestions when he will not impart information to us and he will not give us clarity about the gap he is trying to close.
Will the Taoiseach tell the House and the country that the borrowing requirement will be 9.5%, as he stated in the House a few weeks ago? Is that the figure the Government will adhere to in the budget on 7 April? I ask for a "Yes" or "No" answer.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
I welcome the fact we have a commitment to reduce the Exchequer deficit to 3% by 2013. It is imperative we do this in a way that takes account of the capacity of the economy to bear the burden of the adjustment required at each step of the process over the five-year period. The strategy to eliminate the structural deficit over the medium term has to be credible to financial markets and to our domestic audience.
We are in the middle of a budgetary process that requires us to look at various scenarios to see what impact they will have on a fragile economy this year. We have to take account of that. We will seek to be as close as possible to the 9.5% deficit in the context of what is best for the economy but it is important we reach 3% by 2013. That is our commitment and at every stage of the process as we go through a difficult period this year, we must ensure we take whatever action is required over that period to achieve it. The important point is that, in the context of a recession that compares to the worst recession we have seen in many decades, we have to identify the structural deficit, which has to be addressed and eliminated, because in any part of a recessionary cycle there also will be a deficit that is cyclical.
Pádraic McCormack (Galway West, Fine Gael)
Link to this: Individually | In context
A very intelligent answer.
Dermot Ahern (Louth, Fianna Fail)
Link to this: Individually | In context
It went over the Deputy's head.
Olivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context
Intelligent but unintelligible.
Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context
I am concerned about what will happen. It looks as if we are heading for another debacle. The Taoiseach's words are meaningless because, on the record of the House, he referred to a 9.5% general Government deficit for 2009. He said steps "will be taken to ensure the deficit will not worsen from the forecasted figure of 9.5%". I asked him whether that is the figure he is adhering to and he said, "as close as possible".
Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context
In the words of the Minister for Agriculture, Fisheries and Food, the shortfall is €4.5 billion, €5 billion or €6 billion? Will the general Government deficit be 9.5%, 10% or 11%? Did the Taoiseach inform the leaders of the European Union of the Government decision announced to the Dáil that the deficit would be 9.5% of GDP? Is it true that Dr. Ahearne told the parliamentary party not to worry about that? That the European Commission has given us five years to deal with our deficit is, on the one hand, a signal that it is possible to sort this out but, on the other, it also signals that we are in the worst position of any country in the eurozone, worse even than Greece which has four years to sort out its case.
I respect the Taoiseach's decision to engage with the Irish Congress of Trade Unions and the social partnership and I hope it results in the day of action next Monday being called off. The Taoiseach must have meaningful discussions with the partners about health, education, social welfare and the general income stream.
We are expected to prepare for a budget on 7 April without any projections or statement from the Minister for Finance as to its implications for the revenue stream or where the Government is seeking cuts and withdrawal of services. The Government may not get 100% support from the Opposition but it could at least narrow the parameters of disagreement if it gave the information to the Opposition parties they requested. The letter we wrote on 13 March to the Minister for Finance has not been even acknowledged. The Taoiseach has moved away from his words of three weeks ago. What has changed in the meantime? Is he now aware of some other set of figures? Is there something else we should be told now, in advance of the budget on 7 April which has made the Taoiseach change his tune?
Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context
Are we not entitled to know the parameters the Taoiseach is trying to close? Will the Taoiseach confirm that he has moved away from the 9.5% figure he gave the Dáil with such certainty three weeks ago? Are we to head into this budget on 7 April as ill-prepared as we were for the one in October?
What will happen if the tax figures that the Taoiseach projects are worse in three months' time than the projections? Will he come back in here with another budget or will he go to the country?
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
We are seeking to achieve a return to the stability and growth pact guidelines of a 3% deficit by 2013. I have to take into account how to bring about a reduction in the structural deficit over that period that brings order back to the public finances in a way that does not undermine the ability of the economy to function. If Deputy Kenny believes that, regardless of the consideration we must give to all those factors, we should fixate on a particular percentage as the determining factor——
Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context
The Taoiseach gave the figure on 3 March.
Olivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context
It is the Taoiseach's fixation not ours.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
Yes but the Deputy should let me come to the point. I outlined our position as a result of the last budgetary forecast in the House. The public finances deteriorated in January and February. It has been difficult for every country because this recession has seen a fall off in tax revenues across the emerging Asian economies, the former Asian tiger economies——
Pádraic McCormack (Galway West, Fine Gael)
Link to this: Individually | In context
The Taoiseach can keep on at that.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
That is a fact around the world.
Seymour Crawford (Cavan-Monaghan, Fine Gael)
Link to this: Individually | In context
The Taoiseach is innocent.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
That is one of the issues that one must take into account. Small, open economies are finding the impact more difficult to handle than other economies. That is also a fact.
Economic recovery can be brought about only by a multi-annual approach that indicates the pathway to recovery we can achieve, and that will involve putting the public finances back into order. We must ensure that by 2013 we return to that 3% deficit.
The scale and magnitude of the task is great. It affects every citizen. Government is entitled to take into account all those considerations not because we do not wish to reach the target but because we want to do so in such a way that from year to year the burden of adjustment at each step is such that everybody can bear it. The Opposition wants to be dogmatic and decide to take out X billions regardless of the impact. I know what I said on that occasion.
Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context
I, too, know what the Taoiseach said.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
That was my position. We have to sit down and organise a budget, get to the meat of the issue and decide how to return to 3% over five years in a way that is proper and right, taking into account all considerations including economic impact.
Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context
Is what the Taoiseach said meaningless?
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
It is not meaningless. There is nothing meaningless about what I had to say; we are committed to restoring order in the public finances.
Fergus O'Dowd
James ReillyBrian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
We will emerge with an outcome that seeks to find a balance between the need for cuts in expenditure, the need to raise taxes and the need to revise capital programmes, all of which will happen, for several years hence in a way that protects to the greatest extent possible those whom people would like us to protect. That is not an easy task and, if necessary, based on a detailed consideration of the matter, it might involve more than the 9.5% this year. The important point for the financial markets will be the Government's determination to eliminate the structural deficit over the period concerned.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
I was answering a question on the day the Exchequer returns came out, based on the information available to me then, which was an honest assessment of the situation. I remain committed to bringing order to the public finances. If the Deputy wants me to do it in a way that seeks to destroy the economy, that is his view.
Seymour Crawford (Cavan-Monaghan, Fine Gael)
Link to this: Individually | In context
The Taoiseach has already destroyed it.
Paul Connaughton Snr (Galway East, Fine Gael)
Link to this: Individually | In context
That is lucky bag politics.
Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context
The Taoiseach has already destroyed it.
Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context
The Taoiseach did that already as the Minister for Finance.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
If Deputy Kenny were in my position, he also would have to give due consideration to all of that as full and detailed analysis and projections for the remainder of the year become available. That is what we must do.
Pádraic McCormack (Galway West, Fine Gael)
Link to this: Individually | In context
The Taoiseach knows all about that.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
The Deputy can proceed with the semantics of that argument. I am saying that the Government is determined to deal with this matter in a way that seeks to find a balance that will not be easily achieved.
Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context
How much has the Taoiseach achieved?
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
For some time the Labour Party has argued that the restoration of our economic fortunes and the settling of our public finances needs to be done over a period of years, not just in one year. The Labour Party agrees with the objective of getting back to the 3% figure by 2013. Now we must address how we will achieve that. I welcome the Taoiseach's decision yesterday to invite the Irish Congress of Trade Unions back into discussions. I called for this at the weekend and I am glad the Taoiseach responded to that call. I hope those talks will take place soon and that they will avert the prospect of a national strike next Monday or industrial strife or strikes in the future.
The starting point of those discussions will be where the Taoiseach left off in January when he agreed a framework with the ICTU which provided for a €2 billion adjustment in the public finances. That was subsequently taken up by the pension levy and the other measures announced in January about which working people are angry. The first item on the agenda will be to determine the target now. Since the Taoiseach agreed the framework of €2 billion with the ICTU the February Exchequer figures have come in and the Taoiseach has decided to have a second budget. When I asked the Taoiseach two weeks ago what the target would be, he said €4.5 billion. The Minister for Agriculture, Fisheries and Food, Deputy Smith, intimated on television on Sunday night that it could be as high as €6 billion, and subsequently retracted that. The Minister for Foreign Affairs, Deputy Micheál Martin, stated on "Questions and Answers" on Monday night that nobody should be at all fixated on a target. There have to be some goalposts. The Taoiseach must tell the House what is now the Government's target for 2009 and, in so far as he can, perhaps he might indicate what this means for 2010 and beyond. We must have some clear idea about the target.
I saw, as did Deputy Kenny, what Dr. Ahern told the Fianna Fáil Parliamentary Party last evening. It is very similar to what he told a Labour Party meeting two or three weeks ago, to which the Government now appears to be subscribing, namely, that the 9.5% borrowing limit is no longer set in stone. The Taoiseach must tell us what is his take on that now.
The third thing he must tell us is what is the trend in the March figures. He seemed to have been caught by surprise in February in respect of the Exchequer returns of that month. He told the House that the first he knew about them was when he heard about them at a Cabinet meeting. That information subsequently caused the Government to bring in a second budget. Presumably, the Taoiseach and his Minister for Finance have been monitoring what has been taking place in March. Can he tell us if the position will be worse by the time we get to budget day because of what is happening with the March returns? By now, well into the third week of the month, the Taoiseach must have some take on these.
The two questions I want the Taoiseach to answer are, first, what the target is for the 2009 budget and, second, what the trend is in the March figures and if that will make the February position worse.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
The Cabinet is in discussions at present on budgetary issues. We are looking at all the different case scenarios and taking all the advice one would expect us to take. I am not aware of any Taoiseach who came into the House during budgetary discussions to give a progress report, week on week, on how those discussions were going——
Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context
We used to have only one budget.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
——except to say that we are committed to bringing forward a multi-annual approach that will seek to reduce our deficit to 3% by 2013. That is our objective and in the meantime we are working out the best way by which that adjustment can be made on a yearly basis, taking account of all the situational requirements. I am not in a position, nor would Deputy Gilmore be if he were in my boots, to come into the House on a daily or weekly basis to give progress reports on budgetary discussions. These continue, with the overall objective I outlined. I indicated to the House this morning what our position is in general terms. I am not in a position to go into further detail on that and anybody who ever had anything to do with budgetary discussions would know why. That is the situation.
The Minister for Finance, Deputy Brian Lenihan, will come on the appointed day, 7 April, with, as a result of those deliberations, a full multi-annual approach which will set out in clear detail a pathway to return order to the public finances as I outlined in general terms today. I am not in a position to give further detail at this point because it would not reflect the considered and final decisions to be taken by Cabinet.
With regard to the social partnership issue, obviously we are trying to build on the framework agreed at the end of January and to see if it is possible to proceed with an agreement on a range of issues. As Members will know, since then we have had a National Economic and Social Council, NESC, report which has deepened the shared analysis about the nature of the problem, the inter-related aspects that are causing it and how we might resolve it. I would proceed to discuss those matters with social partners on that basis, to see if agreement is possible. Having an agreement would be beneficial to the national effort, for everybody collectively to get behind what must be done.
I have seen statements regarding Deputy Gilmore's position. We will finalise our arrangements, come to the House and explain the choices we have made and what is behind the strategy we will outline. We will indicate why it must be set out as it will be, because of the scale and magnitude of the problem we face. Unfortunately, nobody in this country can be immune from the impact of what must be done.
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
I thank the Taoiseach for explaining to me and to the House what is the normal procedure by which Government formulates a budget. However, we are not in normal circumstances. This is an emergency budget.
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
This is the Taoiseach's fourth attempt since last summer to try to get the public finances right.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
All of which the Deputy and his party opposed.
Joan Burton (Dublin West, Labour)
Link to this: Individually | In context
The Taoiseach got it wrong. He did not take our advice
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
I ask the Taoiseach to hold on for a second. If he wishes to engage in partisan politics——
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
The Deputy opposed every proposal.
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
I came into the House this morning and I agreed, as leader of my party, to the target announced by the Taoiseach, namely, that we get back to 3% by 2013. I did that in the interests of the country because it is important to communicate to the outside world that there is political agreement in the country and in this House about the overall economic and public finance objectives we must have.
Ruairi QuinnEamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
On behalf of my party, I tell the Taoiseach that we will be positive and co-operative in approaching the budgetary process. We ask him for information but he will not tell us what is the target. He will not tell us what will be the macro-economic projections. He will not tell us the information with regard to the capital programme.
Pádraic McCormack (Galway West, Fine Gael)
Link to this: Individually | In context
He does not know it.
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
He will not provide us with the options papers. He will not tell us what the trend is with regard to the March figures, but he will come into the House to say that he will consider everything and then will return and tell us about it on 7 April. That is not engaging in bipartisan politics and it does not respond appropriately to what there is, namely, an offer from the Opposition side of this House to engage constructively with Government on this issue.
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
What the Taoiseach is engaged in now is a political smokescreen, namely, he has put out the idea and can claim that the Opposition was asked for its ideas. He can ask where were the ideas, but he will end up making all the decisions.
Seán PowerEamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
If the Taoiseach wants co-operation from the Opposition parties, he must behave a bit more constructively than he is doing at the moment.
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
If he wishes his discussions with the Irish Congress of Trade Unions, ICTU, to be meaningful and if he wishes to avoid having strikes, strife and public unrest in this country, he must level with the unions about the figures because in January he agreed a figure of €2 billion with them. That figure is now gone, with the levy and the other measures. On day one, when the Taoiseach goes to talk to the unions, he must tell them this because that is the first question they will ask. They will ask what the current figure is, what the Government is trying to achieve and what are the implications for taxation, jobs and pay — all the issues about which they are concerned. If he intends to tell this to ICTU in discussions in Government Buildings, then he should tell this House what is the target.
David Stanton (Cork East, Fine Gael)
Link to this: Individually | In context
He probably does not know.
Eamon Gilmore (Dún Laoghaire, Labour)
Link to this: Individually | In context
This is neither the Taoiseach's money nor the Government's money. The Government is not running a private business on that side of the House but rather it is running our business, the public's business. This is about taxpayers' money and it is about time that the Taoiseach came into this House, levelled with us and with the people of this country about the scale of our problem and let us all get down to dealing with it collectively.
Charles Flanagan (Laois-Offaly, Fine Gael)
Link to this: Individually | In context
Some of those behind the Taoiseach want a unity Government.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
I wish to answer some of the Deputy's rhetorical flourishes. First, I am as aware as he is that this is the public's money and it is precisely because that is the case that I am leading a Government which is prepared to take the necessary decisions rather than suggest there is some painless alternative available, based on what the Deputy had to say.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
That is the first point. The second point is——
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
I listened to the rhetorical flourishes. My second point is that there has been more information available to the parties and to their spokespersons than would be available even at election time.
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
That is true. That is the situation. If people wish to have discussions, or if spokespersons wish to meet the Minister for Finance who is charged with bringing forward the budget, that facility is available. At the end of the day we all know the responsibility for bringing forward the budget lies with the Government. The House will have a pre-budget debate today and Members can put forward constructive proposals if they wish and we will listen attentively to them.
Joan Burton (Dublin West, Labour)
Link to this: Individually | In context
The Minister for Finance did not show up yesterday.
11:00 am
Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context
However, the idea that my job is to enable others to write the budget is not the position. What we want to see is people putting out what they believe is the way forward. They should put their proposals on the table, just as we will on 7 April. They can either do so beforehand or afterwards. That is the position and any suggestion to the contrary that we are trying to engage in any other arrangement is not true. The Government is trying to deal with a situation which is very significant for the country, which must and will be dealt with. It is our intention to be as fair as possible, recognising that those who take the burden are those who are best able to bear it. However, in saying that, we recognise that nobody will be immune from the burden of adjustment that has to be taken. Everyone will have to share the burden according to his or her ability to carry it. Given that the economy will contract by at least 6.5% this year, in addition to other measures which we have to take in order to achieve budgetary balance to begin the process and which will have a further and adverse impact, we must take all those considerations into account and make careful decisions and this is what the Government intends to do in respect of the targets being outlined.
As regards the social partners, we will outline to them, as we have outlined within the framework, how we can work to help people who need reskilling and those who lose their jobs. A range of areas is outlined in that framework, which we can discuss. However, at the end of the day, the responsibility for bringing forward the budget lies with the Government of the day and that has always been the position. Were Deputy Gilmore in my position, it would be the same for him and I would stand up in the House and give my views as to where I think it should go. Deputy Gilmore said that in some way we are reticent in our duties and he claimed it was our fourth attempt to address the situation. We are making whatever decisions are necessary in the context of a deteriorating situation which is not particular to this country but is hitting every country in the developed world in a way which is unprecedented in our time. Therefore, the suggestion that there is any Minister for Finance or any government that brought forward a budget last September or October who has not had to review and revise the situation is foolish; what country is in a position to do that, given the magnitude of the crisis that is facing us and enveloping the world at the moment? The answer is none. The strongest economies in the world are facing bigger challenges than they did since the Second World War which was nearly 70 years ago. That is the situation. The Deputy can make his rhetorical flourishes and make his little debating points if he wishes but the fact remains and I am entitled to state it as fact that every economy the Government has introduced to bring the public finances under control, to ensure our expenditure came in on line, has been opposed by Deputy Gilmore and his party on every occasion. The people are entitled to know that fact as well.
Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context
The Taoiseach is making it up as he goes along.