Dáil debates

Wednesday, 16 June 2010

10:30 am

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Last week saw the publication of the two preliminary reports into banking by Professor Patrick Honohan and by Mr. Klaus Regling and Mr. Max Watson. Both of these preliminary reports were always intended simply to point the way to a more detailed commission of investigation into what happened. Given the central findings of the reports that the decisions made by the Minister for Finance were a central feature leading to the crisis, why is it that the draft terms of reference for the commission of inquiry merely relate to the failures of bank managers, directors, auditors and regulators, and do not include the policy decisions of the Government? Why are those policy decisions excluded from the draft terms of reference for the commission of inquiry?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The draft terms of reference that have been put forward by the Government are in line with the recommendations as set out in the reports. The Regling and Watson report referred to those issues that can be amenable to fact finding and those issues of a policy and political nature which can be dealt with through the means of the committees that we have in the House. We have indicated our preparedness to do that.

The comprehensive nature of the reports has been welcomed by everybody and we are all grateful for the work that has been done and the professionalism with which the authors have gone about their business. They set it out as they see it. The draft proposals refer to the recommendations in the areas to which the reports refer.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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The Taoiseach has always cited official advice given to him in respect of the policy decisions that were made. The draft terms of reference exclude the motivation behind those policy decisions and the official advice that was given. The preliminary reports make sharp criticisms of some Government policies, such as the dramatic growth in spending between 2004 and 2007, which was the current Taoiseach's decision. The extension of tax reliefs at the height of the property bubble in 2006 was also his decision. He also exercised influence, as Minister for Finance, on the Financial Regulator in 2006 so that the proposed tightening of the quality of governance of bank directors was never actually implemented.

In view of the fact that the Taoiseach has always accepted responsibility for his decisions as Minister in whatever Department, and that he claimed to have relied on official advice for these policy decisions, would it not be important for him that we ascertain that through the commission of inquiry? The terms of reference for the commission of inquiry should cover this period and should cover these matters, so that we can rectify any deficiencies. Was the Taoiseach, acting then as Minister for Finance, given faulty or inadequate information and advice by these officials on whose advice he claimed to have relied? If that is not the case, the nightmare scenario is to have the Taoiseach of the day giving evidence about his decisions as Minister for Finance which will be publicly contradicted by officials in the Department from whom he took his advice in the first place.

This is an important matter. Either there is a distinction here that is right or wrong. The officials either gave him advice or they did not. Is the Taoiseach prepared to extend the terms of reference of the commission of inquiry so that we can ascertain whether official advice was responsible for these reckless policy positions, or whether the official advice was not to take those positions, yet he still went ahead with them?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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All political heads of Departments take full responsibility for their own decisions. Advice is given by people and we make our own decisions and our own judgments. These are political judgments and decisions that were made. I have sought to explain the rationale for the decisions, as I am entitled to do, given the position in which we found ourselves at the time. I have said that those decisions were based on advice that has subsequently been proven to be wrong, but that does not take away from the responsibility that I take for the decisions that I make. I have always made that clear, so any suggestions by the Deputy or anybody else that I do not take responsibility for decisions made is not correct. I have always accepted responsibility. That is the political and constitutional position.

The Deputy misrepresented the position on property tax incentives. I terminated 11 of those schemes after a full review.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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After seven years.

Photo of James ReillyJames Reilly (Dublin North, Fine Gael)
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After the damage was done.

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I know the Deputy may be under a bit of pressure at the moment-----

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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The Taoiseach has the country under pressure, I can assure him.

Photo of Noel CoonanNoel Coonan (Tipperary North, Fine Gael)
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The Taoiseach should look behind him.

(Interruptions).

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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At least I am sure we can keep things civil inside the House.

(Interruptions).

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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Can Deputies allow the Taoiseach to conclude?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I terminated those property tax reliefs, which was the most radical arrangement by anybody in modern times, as far as I know. There were projects in the pipeline for which transitional arrangements were made and a reduction in eligibility was enforced to make sure that we did not have a surge of activity when we were getting rid of those reliefs, so that we would not be increasing property prices again. There is a valid macro-economic argument for those transitional arrangements. I want to emphasise no new projects were allowed after that.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Yes there were. You did the mid-Shannon one.

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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Deputy Burton, could we have the Taoiseach without interruption?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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If I may, a cost benefit analysis was done on that matter and it has to be renewed or looked at every three years, which is not the case with previous tax reliefs.

Photo of Terence FlanaganTerence Flanagan (Dublin North East, Fine Gael)
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And all the zombie hotels.

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I am sure Ruairí will be able to explain the cost benefit analysis of the holiday home and other tax reliefs he introduced, particularly for the towns that were not on the seaside.

Photo of Pádraic McCormackPádraic McCormack (Galway West, Fine Gael)
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The Taoiseach is in great form this morning.

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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If we could revert to the question at hand, I have explained to the Deputy that the draft terms we set out are on the basis of the recommendations in the report itself. Policy decisions have been taken, which we are quite prepared to deal with in committee or in any other way they can be dealt with consistent with making sure we deal with these matters comprehensively and in a proper way.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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We spent all day yesterday on a motion proposed by the Taoiseach that he should keep his job and that his Ministers should keep theirs. This morning I want to ask him about the concerns of people who have already lost their jobs and people who are concerned about losing their jobs. Earlier this month, the live register figures were published and they tell us that for the 12th successive month the number of people on the live register is more than 400,000, with the most recent figure at 438,000. Another set of figures was published yesterday by the Central Statistics Office, which tell us more about the bad situation in the country with job losses and unemployment. A total of 41% of those now out of work are classified as long-term unemployed; in other words, they have been out of work for more than 12 months. The figures published yesterday tell us that 33% of young men in the workforce aged between 20 and 24 are out of work; one in three young men is on the dole. The CSO tells us that the number of people in employment fell by 108,000 in the past 12 months and the rate of unemployment in Ireland is now 3.1% higher than the EU average.

Given all of this information, why is unemployment such a low priority for the Government? What can the Taoiseach say to the people who are out of work about when they are likely to get a job again? What specific steps are being taken by the Government to get people back to work?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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Those who are out of work are not a low priority for this or any other Government. With regard to the specific steps taken, compared to some years ago we have considerably increased training and other placements for people who are unemployed. A consistent effort is being made to assist those who are unemployed. With regard to the prospects for renewed employment growth, jobs are not created in a vacuum, they are created on the basis of making our economy more competitive and being able to sell more goods and services in what has been a depressed marketplace. As the world pulls out of recession this open economy must position itself to deal with it.

It is true that we have seen from the adjustment for unemployment, based on the quarterly national household survey, that there are 270,000 on the live register and a further 75,000 people in part-time employment who also receive benefits. Unfortunately, unemployment rates have risen and 5% of our population is regarded as long-term unemployed. We have to continue to work and come forward with whatever initiatives we can, in addition to what we already do, to assist them. The best way in which jobs can be created in this country will be to pursue the strategy we are pursuing. It is estimated that there will be net employment creation here next year on the basis of the strategy we are providing at present.

There is an idea that it is possible to deal with the situation and return to the very low unemployment we saw before this crisis began, but it is not possible. It is also clear that were we to have taken some of the strategies suggested by the Labour Party in the midst of the crisis we would be speaking about a far worse situation. The important point for us to make is that we are committed to making sure that we find a greater degree of job creation in our economy based on making it more competitive, getting our public finances back in order and supporting enterprise to the greatest extent we possible can.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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That is hopelessly depressing for people who are out of work. Effectively what the Taoiseach stated is that when everything else is fixed people might get back into work. The Government keeps telling us that we have turned the corner. From the Taoiseach's reply, it seems that as far as people who are out of work are concerned the only turning the Government has done is turning its back on them.

The Taoiseach mentioned the Labour Party's proposals. We have been advocating several proposals to the Taoiseach on actively getting people back to work. We proposed a strategic investment bank which would get our economy moving again but he has not done anything about that. We proposed a jobs fund to actively get people back into employment.

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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It is easy to propose from over there.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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The document Just the Job contained a set of proposals to reactivate the labour market. We have produced a number of sectoral proposals. The Taoiseach stated the Government has more people in training now than before. It has taken up a couple of the ideas we put forward but the numbers of places in those training measures have been increased by only a very small amount, a couple of hundred, when 250,000 people have lost their jobs over the course of the past two years.

The Taoiseach keeps speaking about the various economic measures the Government is taking. The one area which it is not dealing with-----

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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A question please.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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-----is the problem of people who are out of work. The figures are creeping up to half the people out of work being out of work on a long-term basis. We do not want to repeat the mistakes of the past when people were out of work for a long period of time and found it harder to get back into the workforce and the labour market. In particular, I want to ask the Taoiseach what he will do about the number of young people out of work. It is not socially sustainable to have that number of young men on the dole; one in three of the labour force between the ages of 20 and 24 is on the dole. We cannot have that. The Taoiseach has been stating that when everything else is fixed in the economy from somewhere around the corner the Government has turned it will be able to drag people back into employment, but that does not work. The Taoiseach needs to give priority to this but he is not doing so. It is the last thing on the list. The Taoiseach is pursuing a residual theory of employment, that when everything else happens employment will follow. He needs to actively pursue policies that will get people back into employment.

We are coming towards the end of this Dáil session. At the very least before we come back in the autumn, will the Government produce a specific strategy aimed at getting people back to work, in particular addressing the needs of the growing number of people who are long-term employed and the huge number of young people who are out of work?

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I do not accept the characterisation by the Deputy of what is the Government's strategy or policy. We have many activation programmes in place. In recent weeks, €40 million was announced in respect of the Leader fund which is to be devoted to creating more jobs in rural communities. Last week, a €20 million activation fund was announced, which is about trying to find ways and means in which we can further assist the young unemployed. We have significant funding for FÁS, which provides many training and other job placement schemes. Some 144,000 people will this year benefit from those schemes.

There is also, as the Deputy will be aware, much greater effort being made in regard to supporting employment and part-time employment. Whether it is the social welfare budget; the training budget of FÁS, the State training agency; the activation fund, which is an effort to involve the private sector; the €40 million for the Leader programme for providing jobs for young communities; the increased numbers we have on back to school and education schemes and the changes we have had there; in every facet of our activities we have sought to arrange for a greater degree of flexibility to accommodate a greater cohort of people who are currently inactive in the labour market and are not part of the workforce. We are also seeking, as would any Government, despite the very tight financial situation, to apply, to the greatest extent possible, all of the resources we can to this area. We have to continue to look at it. I will look at all areas to see in what way we can ensure that this happens.

In respect of those who are now in viable but vulnerable employment, those who require further training and reskilling, those who are being encouraged to stay in education, those who are applying for FÁS programmes and all of the other areas of activities, it is not correct to say that there is a laissez-faire approach. On the contrary. We have learnt, from the various social partnership programmes down the years, about how we have been able to model and adapt our programmes to best effect. We saw during the better times that long-term unemployment was reduced considerably. We will work on these activation programmes to see it what way we can assist. No one is more conscious of the fact, as we all are as public representatives, of people in our communities who want to find a way forward and a way of contributing who are currently not in full employment. I can assure the Deputy that we will continue to see, in whatever way we can, how we can deal with that matter which I recognise as a problem in our society at the current time.