Michael D Higgins (Galway West, Labour)
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Question 48: To ask the Minister for Foreign Affairs if, in view of the 25% reduction in overseas development aid spending over the past 12 months and the consequences from this which have flown to the poorest of the poor, he is in a position to confirm that there will be no further cuts and that Ireland will honour its commitment to reach the UN target of 0.7% of GDP by 2012. [42162/09]

Peter Power (Limerick East, Fianna Fail)
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As Deputy Higgins will be aware, last year Ireland spent €920 million on official development assistance, ODA. This represented approximately 0.59% of our gross national product and placed Ireland as one of the most generous donor countries in the world on a per capita basis.

In 2009, the Government was faced with the regrettable, but unavoidable, decision to reduce its allocation to ODA. For the record, ODA is expected to reach €696 million in 2009, which, based on current projections, represents at least 0.48% of gross national product. While this represents a significant reduction in volume, our expectation is that Ireland will still remain one of the most generous donors in the world on a per capita basis. This is a significant achievement in the context of the difficult circumstances which afflict the country.

I have stated on many occasions that the Government very much regrets the necessity to reduce the development assistance budget, and, indeed, any budget. I fully understand Deputy Higgins's strong concern over the reduction and its effect on the aid programme. However, we must recognise that this necessary decision was taken solely in the context of Government's absolute priority to stabilise the public finances. This was the sole motivation behind the Government's decision. This is a fundamental prerequisite for the resumption of economic growth, which is the only sustainable way Ireland can meet its future ODA commitments. We have made a public commitment that we will resume the expansion of the aid programme when economic circumstances permit.

I assure the Deputy that the Government remains strongly committed to maintaining the high standards set out in the OECD report, particularly now given the background of international economic crisis which has disproportionately affected the world's poorest countries.

I should also stress that there was no reduction in the important technical expertise which Irish officials bring to their work with our partners. This is also an important aspect of the programme.

The Government is now engaged in the final stages of preparing the budget for 2010. This will be a difficult budget given the current financial climate. There are many competing demands for scarce resources but the Government is determined to bring stability to the public finances. Savings are being sought across all areas of Government expenditure and no area is considered immune. However, I assure Deputy Higgins that our aim is to protect the aid programme to the maximum extent achievable within that process.

As the Deputy will appreciate, in advance of the budget I am not in a position to provide detailed figures on the development assistance allocation for 2010. This is ultimately a matter for the Minister for Finance and will be announced on budget day.

Michael D Higgins (Galway West, Labour)
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I have heard this presentation before. When Ireland made its international commitment on overseas development aid we had a moral yardstick. We were complimented on our willingness to achieve 0.7% even if the economic circumstances reversed. We basked in that compliment. Now we are comparing ourselves to others who have reduced their commitment. The fickleness of that is not lost on me. With €222 million already taken out, that is a cut of 25%, so there is little more that the programme can take now if it is to retain its integrity and efficacy. The Minister and the Minister of State should be able to tell us that they will hold the ground on this issue. Does the Minister agree that there was a considerable reputational enhancement through the ODA programme? It is one of the great positives for Ireland abroad. People admired us for it and the Pope paid tribute to us, as did several countries. That is in stark contrast to the reputational damage done by the banking sector. If the Minister were to interfere with the commitment in the coming year, he would sacrifice that reputation.

The Joint Committee on Foreign Affairs supports holding the line at this stage and not ceding any more. It is an all-party view reflecting both sides of the House. The Minister stresses that technical expertise is being retained, but the voluntary NGO sector will lose some of its most valuable staff. That affects practically every NGO, so their intellectual memory will be damaged. I want an assurance that the Minister will hold the line against this suggestion of cuts.

Peter Power (Limerick East, Fianna Fail)
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I assure the Deputy that my aim, and that of the Minister, is to protect the aid budget and aid programme to the maximum possible extent in the context of the budgetary process that is under way. I simply cannot give another response to the Deputy, other than to say that we remain committed to reaching 0.7% of GNP on ODA levels. The sum of 0.7% of an economy that is faltering and significantly reducing its GNP is not of much assistance to our development partners in sub-Saharan Africa. I would much prefer to see the percentage, commensurate with our current financial position, of an economy where we are laying down the foundations of a solid platform for future growth. In that case, when we reach our commitment of 0.7% of GNP it will be 0.7% of a robust, thriving economy which can sustain an aid programme in future.

Deputy Higgins said that we experienced a reputational enhancement through the ODA programme and I accept that. It was borne out by the OECD report, which was published earlier this year. However, the reputation of our country would be seriously damaged, perhaps forever, if we did not take control of our public finances and continued to borrow at unsustainable levels to the extent that the IMF would come in. That would be the ultimate damage to our reputation.

Michael D Higgins (Galway West, Labour)
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I can see that the Minister of State is migrating his speeches on finance into the foreign affairs area, which is a great pity. What has damaged us is the year-on-year deficit of the past two years, which was €10.8 billion. Of that sum, €4 billion went into Ango-Irish Bank. If the Minister asked the public to choose between meeting our target for overseas development aid and bailing out Anglo-Irish Bank, which is a zombie bank, he would get a convincing answer. It is not a choice between getting the economy right and meeting our aid targets, because we can do both. The Minister cannot escape the fact, however, that a small clique in the banking sector has done almost irreparable damage to Ireland's reputation abroad that will last for a generation. At the same time, people working effectively in several countries are enhancing Ireland's reputation and have built up a huge legacy. Let those in other Departments who want to go soft on the likes of Anglo-Irish Bank deal with that, but the Minister of State's responsibility is to the poorest of the poor. The senior Minister's responsibility is to explain how a further cut can be made without damaging the structure of the programme, given that €222 million has been allocated already, which represents a 25% cut.

Peter Power (Limerick East, Fianna Fail)
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The fact that Anglo-Irish Bank is being brought into this debate at this stage disappoints me.

Michael D Higgins (Galway West, Labour)
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The Minister of State brought up this question.

Peter Power (Limerick East, Fianna Fail)
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Deputy Higgins introduced it. It disappoints me because if we do not have a thriving banking system we will not have an economy.

Michael D Higgins (Galway West, Labour)
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An acceptable and transparent one.

Peter Power (Limerick East, Fianna Fail)
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We cannot divorce a robust economy from an aid programme. One cannot have one without the other. We cannot have an aid programme without a sustainable economy.

Michael D Higgins (Galway West, Labour)
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I am not suggesting that we can.

Peter Power (Limerick East, Fianna Fail)
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The Deputy said we can have both, but I am suggesting that we cannot.

Michael D Higgins (Galway West, Labour)
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We can have both if we have clean banking and a clean development programme.

Peter Power (Limerick East, Fianna Fail)
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Exactly. The process we are currently undertaking is to clean up our banking system and bring growth back into the economy. We cannot borrow unsustainably for development purposes. Deputy Higgins knows more than anybody else that we preach sustainable development in sub-Saharan African.

Michael D Higgins (Galway West, Labour)
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Yes, we do.

Peter Power (Limerick East, Fianna Fail)
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If we were to practice unsustainable economics in our country we certainly would not do our reputation any good at all.