Dáil debates
Tuesday, 30 November 2010
Stability and the Budgetary Process: Motion
5:00 am
Michael Noonan (Limerick East, Fine Gael)
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I move:
"That Dáil Éireann:
— recognises the urgent need for the establishment of economic and political stability;
— believes that an accelerated budgetary process would contribute to economic stability;
— notes that Dáil Éireann is currently scheduled to sit for just eight days during the month of December;
— notwithstanding anything in Standing Order 26 resolves that the Dáil should, if necessary, sit on each working day during December to deal with the budgetary process; and
— agrees that the 2011 Budget, and the legislative measures to give effect to it, should be presented to, and disposed of, by the House before the end of December 2010."
I propose to share time with Deputies Michael Creed, Denis Naughten, Shane McEntee, John O'Mahony and Bernard Durkan. In this motion we express the view that we will facilitate the Government to conclude all the necessary budgetary business before Christmas. We are doing this because if what happened in Ireland happened in a private company, the first move would be to change the management team. The same rules should apply to the country. The people should be consulted and given an opportunity to change the management team by electing a new Government. This should be done in January, as stated by the Green Party. The Fianna Fáil component of the Government should not prevent this by deliberately delaying the legislation underpinning the forthcoming budget. I refer to the social welfare Bill and the finance Bill. I understand the Government intends bringing forward the debate on the social welfare Bill, as it did last year, to the day after the budget and subsequent days. Fine Gael will facilitate the Government to introduce the finance Bill before Christmas also. We will do so by agreeing to sit on whatever days are necessary to enact the finance Bill in its totality before Christmas. We will do so whether the sitting days are in plenary session in this Chamber or Committee Stage is taken in the committee rooms.
There is plenty of time to bring forward the finance Bill between now and Christmas. The debate in negotiations with European Central Bank, the IMF and the European Commission has been so prolonged that the preparatory work for the finance Bill is ready. While there may be some drafting necessary, there is no reason everything cannot be concluded in time for the Christmas recess.
We agree it is necessary to enact the social welfare Bill before 1 January because the measures in the Bill will date from 1 January. However, we do not agree that it is necessary to enact the finance Bill but, seeing as this is the Government's position, we are prepared to facilitate it. In respect of financial resolutions, the website of the Department of Finance states: "If there are Financial Resolutions under the 1927 Provisional Collection of Taxes Act in the Budget, the Second Stage of the Finance Bill must be passed in Dáil Éireann within 84 days of Budget Day and the Bill must be signed by the President within 4 months of Budget Day." Once the financial resolutions are passed on budget day, the Government is not constrained to rush the finance Bill. The finance resolutions are passed on budget day and there is a four-month lifespan before the President must sign the finance Bill into law.
The finance resolutions survive a dissolution of the Dáil. All other items before the Dáil die on the dissolution of the House but not the finance Bill. It is not necessary to enact the Second Stage of the finance Bill for 84 days after budget day. It does not have to be signed into law for 100 days. There are precedents for this. One in which Fine Gael was involved was when the 1982 Government came into power on 14 December. The finance Bill was not taken until the first week in April. If the Government insists on passing the finance Bill, Fine Gael will facilitate it by doing so before Christmas. We do not agree that this is necessary and we do not want the processing of the finance Bill to be used as an excuse by this failed Government to delay an election which is now so necessary.
In view of this and as the Government disintegrates, as Ministers leave the field of battle, and as the Taoiseach looks increasingly like Macbeth in the last act, surrounded by enemies, abandoned by friends but pledged to go down fighting, is it not time to take this Dáil out of its pain and let us have an election early in the new year? Let us give the people an opportunity for a fresh start, an opportunity to elect a new Government, rebuild our shattered confidence, our shattered lives, our shattered hopes and dreams and step forward into 2011 with hope, confidence and optimism with new men and women in charge committed to change, to rebuilding this Republic and to taking our people forward with a restored economy to better times.
The most extraordinary thing that happened today was the interview by the Minister for Justice and Law Reform when he announced his retirement from politics. I wish him well in his retirement. His interview on the "Today with Pat Kenny" show was extraordinary. He described, in effect, how the Government had been mugged by the European institutions, dragged like victims, unknowing what the agenda was, to sign an agreement which was negotiated by civil servants and in which the Government played no part. Was there ever a better reason for sacking this Administration than that apologia presented by the Minister for Justice and Law Reform? If work needs to be done between now and Christmas, we will not support the Government in voting that agenda through but we will support the Government in providing the time for it to do that work. The Government should take that opportunity and let us go at home at Christmas with the intention of the Dáil not coming back in January and for the Taoiseach to call an election in the first week in January because this has to end. It is painful to look at this Administration at present. It is time for change if there was ever time for change.
Michael Creed (Cork North West, Fine Gael)
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I commend Deputy Noonan for tabling the motion before the House and for affording me an opportunity to make a few brief comments on it. The country yearns for stability more than anything else; political stability and economic stability. The only real way that can be delivered is by the people having their say in a general election. Politicians do not like elections at the best of times. I am sure the Minister of State, Deputy Mansergh, is not particularly looking forward to an election either.
Bernard Durkan (Kildare North, Fine Gael)
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A minority of turkeys look forward to Christmas.
Brendan Howlin
Martin Mansergh (Tipperary South, Fianna Fail)
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I do not think it will be before Christmas.
Michael Creed (Cork North West, Fine Gael)
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To delay the inevitable any longer is to stick one's finger in the eye of the public who are seething with anger about where we are and how this Government has led us to this scenario.
As far as I am concerned the blame game is over. The focus now is on how we can progress from here. The fundamental foundation of any progression will be democratic legitimacy. In the context of the enormity of what the Government is contemplating leading the country into, the fact that it does not have the democratic imprimatur of the public means it will never be accepted. It will always be a millstone around the neck of Fianna Fáil but it may well be a millstone around the neck of incoming Governments if it is not given the democratic legitimacy an election affords. Therefore, to deliver political and economic stability we need to clear the decks. We need to know that there will be a general election early in the new year. In order to get to that position we are saying to the Government that we will co-operate in terms of time provision to bring forward the finance Bill, social welfare Bill and the budget. That is eminently sensible and reasonable. I cannot understand why the Government will not accept the motion.
Woodrow Wilson, a former President of the United States, said on the occasion of the passing of the Federal Reserve Act, which I understand is the foundation stone for the American taxation system, that America was a country controlled by its credit system. He went on to say that it was no longer a government by free opinion, conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men. How applicable, regrettably, that is to where we are at as a nation. We are subject to the duress of a small group of dominant players outside of this country. The duress to which we are being subjected has never been debated or approved in a public forum. In the context of the enormity of what is being considered an election is the only way that such legitimacy can be brought about.
We are told that what is contemplated in the bailout by the IMF and the European Union cannot be renegotiated. It will be subject to quarterly reviews. We were also told it was an article of faith that the Lisbon treaty could not be renegotiated. Yet, no sooner had it been rejected in the initial referendum in this country but wheels were put in place to take on board the reservations, improve the treaty and offer greater guarantees in respect of the fears that were expressed by the Irish electorate. Ultimately, a better deal was secured. A better deal can be secured in this regard also.
I acknowledge that we must get access to funds given that we cannot do so at market rates because of the mess the Government has led us into. We need access to funds. In many respects we are fortunate that people are prepared to give us funds. It is ironic that having been good Europeans for years, the funds available from Europe come at a premium whereas the funds available from the IMF are at a more favourable rate. That sticks in the craw of many people in this House and around the country who have supported the European ideal and movement.
In respect of where we are at and the deal that has been the subject of debate earlier, last year the Government introduced a national recovery bond at 3.96% over ten years. There were soundings in the four year plan published last week about a national recovery bond. We should be in a position to take maximum advantage of the remaining capital that is held by Irish investors in Irish banks and offer them an equivalent rate to put their funds into a national recovery bond for a shorter term than the ten years originally envisaged. Ten years is too long a period not to have access to one's funds. It should be done on a comparable basis for three, five or seven years in the same way as the various funds that are available to us in the rescue package. We should pay that rate to Irish investors and get Irish capital. That would establish a platform to which ordinary citizens of this Republic can contribute.
I am alarmed at the use of the National Pensions Reserve Fund. In effect, what we are being asked to do with our pensions reserve fund is to bail out pension fund managers across the European Union who put their pensioners' funds into Anglo Irish Bank and other banks in the State. We have a ticking timebomb in respect of the cost of pensions. Now we have this pot plundered to the extent of €20 billion - €10 billion under this deal and €10 billion previously. No consideration has been given to that ticking timebomb, which is arising due to our demographic profile, in terms of future pension provision.
Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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An act of treachery is the only way one could describe what went on over the weekend in terms of the agreement that was signed by the Government on our behalf. This contract of shame will bring real poverty to many homes throughout the country. Every man, woman and child will need to pay €6.50 in interest every day. It will be a millstone around every citizen's neck. It will bring poverty to homes where people worked long and hard during the boom so that they could have better days. They are now looking to their children's piggy banks to pay for Christmas, all for a deal at any cost from a Government of half truths, part truths and blatant untruths. The Taoiseach has told us it is imperative that the budget be passed and that we send a clear signal to the international money markets that we will pass it and the Finance Bill, yet we are being told there will be time enough to pass the Bill next March or April. If it is so important, introduce it in the House and we will debate and pass judgment on it.
Let us go to the people and let them have their say once and for all. This country and its people are crying out for the truth, hope and a future. The people were betrayed by the Government before the last general election. We were told by the then Minister for Finance of soft landings which failed to materialise. We then had the Taoiseach's words of wisdom in May 2009, when he stated: "We are beginning to see some light at the end of the tunnel." That light was the septic bank express coming down the track straight at us to pulverise our country and economy.
Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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We cannot have hope without truth and we cannot have a future without hope. For the people, this situation is like falling down a well. They are falling and falling while the Government tells them to trust it and that they will reach the bottom some time. The more they fall, the darker it gets, yet they are being told that, if they have confidence and believe in the Government, they will hit the bottom, but they are not hitting the bottom. Instead, they are continuing to fall. There is nothing worse than the feeling of never knowing when one will reach the bottom. We need to put in place a floor for this mess once and for all and restore confidence in the economy. If people hit the ground, look up and see even a pinprick of light at the end of the tunnel high above, they will know there is hope. As long as they continue to fall, this will never occur.
We need an election. I urge Green Party Members, who rarely attend the House to hear what is said, to look up at their television monitors and to attend the House tomorrow night. If they want to give the people a say, they should vote for this motion. They should give the people a democratic choice in January by voting the Government out of office and allowing a new Government, one of reform and honesty, to be formed.
Matters are bad, but they can improve. However, we need a Government that is prepared to protect that which is important, namely, jobs, a proper health service, the disabled and the elderly. We do not need a Government that protects those who shout the loudest and believe they are important, such as the banks and Fianna Fáil's donors. Our job as Members of the national Parliament is to provide a future to young people. We need to focus on this future if we are to provide jobs and realistic medium-term plans. We need to ensure the most vulnerable in our communities, namely, the working poor and those who cannot work, for example, children, the disabled and the elderly, are not sacrificed to address budget stabilisation measures. We need a Government that is willing to make a real difference and to help those who want to help themselves.
Our economy has sound fundamentals, so we need to give people the small bit of confidence they need. We must support our small indigenous businesses, including those in our agrifood and tourism sectors. A small, simple step that could be taken tomorrow morning would save money, although I know that a discussion on saving money is alien to this Government. Let us start breaking up public tenders. We could give our small companies the opportunity to tender for Government contracts, which would provide local jobs instead of hiving everything off to multinationals elsewhere in Europe. What about supporting small businesses? We would not need the 70 State agencies and quangos involved in supporting and regulating small businesses. It is time the Government got its act together, but the only way to do so is to get out and give the country the opportunity to hope. Give people an election.
Bernard Durkan (Kildare North, Fine Gael)
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I thank my party colleague, Deputy Noonan, for an opportunity to speak on this crucial issue. Of most concern to me is the degree to which the Opposition was appealed to in recent months to be constructive and to support the Government in its future projections and policies. We were also asked to support the likely conclusions of the negotiations that were held in Brussels in recent weeks. Amazingly, there was no provision for the Opposition to make an input into those negotiations. We were expected to give a carte blanche. We could not make any submission whatsoever to the European institutions or the personalities involved in the arrangement before the House. Worse still, elected Members who were supposed to represent the country had little participation in those deliberations. This concerns me greatly. It appears that a prescription, one which it is deemed will resolve our problems, is about to be administered to the people of this country, but some of us believe it will create even greater problems. It is about to be visited upon a luckless public who did not call for the situation at which we have arrived.
I worry about the far-reaching consequences of the route that has been embarked upon. I respectfully suggest that the Government should re-examine some of the provisions it agreed in recent weeks. It should then revise its opinions, particularly those on growth. I cannot understand how the growth projection figures put out by the Government and discounted by European institutions could sit alongside the punitive fiscal measures that have been proposed.
Another issue must be borne in mind. A theme seems to be running across European opinion to the effect that a number of countries must be severely punished for what has occurred. Perhaps the economic model we pursued in recent years was not as water-tight or correct as it should have been. While Ireland and its Government made several mistakes culminating in the debt now being foisted upon the public, it would appear that there were also flaws in the economic policy pursued at EU level.
At a meeting in Brussels some time ago when confronted with assertions by banking and investment institutions that the old ways did not work and new ways to deal with the situation needed to be found, a senior European administrator was quick to point out that the old and established ways did work and had done so for generations, but were ignored while new ways that no one observed were introduced. Unfortunately, this is what occurred in Ireland. If it also occurred across Europe, which seems to be the case, there is a serious and fundamental problem that cannot be resolved by this country on its own, only by the EU's full recognition that everyone in the bubble was responsible. A great deal of blame has been attached to the global economic downturn, Lehman Brothers and all the other things, and the worldwide recession. It is true that there is a worldwide problem, and it is serious, but this country has its own problem. It was built on the property bubble, when the property market here became a lending and borrowing institution, and the whole thing went crazy and went off the rails.
There have always been economic norms in lending and borrowing, what is prudent and what is not. These have been accepted internationally. Why were they ignored for so long? We are still ignoring them in this House, even today. I raised a question about various legislative proposals in relation to banking, control and regulation, and the situation still has not changed. After September 2008, I would have thought one of the first things that should have taken place is the type of institutional reform and change to which I refer.
I hope the Government fully understands the magnitude of what has happened. I do not get great pleasure in blaming anybody for it, because unfortunately the main Opposition parties now have to carry the responsibility for bringing this country through what it is a very serious problem. I hope the Government when in Opposition will be as helpful as it claims the Opposition now should be, and has been.
Shane McEntee (Meath East, Fine Gael)
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Only when history is written in 40 or 50 years time will we realise how big a week this was for Ireland as regards whether the right decisions were made. It has been 11 months of hell for our people and we only have one month left in 2010. Tomorrow is 1 December, and many people in business have said to me, in effect, "If we get to Christmas, we shall see whether we can struggle on".
Everyone would like to believe they can put this year behind us. Whether it is the IMF that is in control or whoever, we all have a responsibility to get the IMF out as quickly as we can. We have to reclaim our sovereignty back, because by God, it took us so long to get it. I do not know how it may be hurting any other Member of this House, but it is hurting me to think that the Germans, the French and the British are talking about putting money in for the good of Ireland. They are not putting it in for the good of Ireland, but rather for themselves. Whether it is 2.8%, 5.8% or 6.8%, I am not a fool and neither are the people fools.
We cannot pay back those billions. At some stage there must be renegotiation and if the euro is saved, they will have to look to Ireland and write off some of that money, because we simply cannot pay it. I am delighted to hear my colleague saying we will not support the budget. The people who will be asked to pay that will be those on middle and lower incomes. That cannot be done in my constituency. Those are the people I deal with on a daily basis, from morning to night from Ashbourne to Bailieborough. They cannot meet it and any government that tries to force this on them would see us turning against each other.
To think some people are being asked to work for €7.50 an hour when others are earning nearly €200 an hour and will not be touched. That will lead to anarchy. Our young people, after all the education they have received, deserve something. By God, they got some education in the past 11 months. They had a great time for a few years because of their education and everything, but the biggest buck they will get is that there is no jobs for them.
We have to start talking about jobs from 1 January. As some Members from other parties have said, we have a great deal to be proud of. We have a country that is half built. Only half our schools are built. There are 200 girls in Navan, first-year students who have no school to go to next September. Their friends have got their places but there are absolutely no classrooms for them. That has to be addressed. There are people there to build schools, and when we set out to build them, we should not give the work to other than these Irish people.
Agriculture is ready to explode. We have the best farming facilities, the best regulation, the best dairy, beef, sheep, pig farmers in the world. Some 100 million extra people are coming into the world every year, most of them in Asia, and they are eating European foods. We have to start being positive, and promote farming. We need to get people to stay on the land, and persuade our educated people not to go to Australia. Already Australia is full. Three times this week I received phone calls from people who went to Australia. They are roaming the streets there already. That has to stop.
We have to do what India did in the 1970s and 1980s and look after our people. We cannot have people leaving these shores, some of them ending up in jails, without any way to get home, or wandering the streets of Australia, Canada or England. We have a responsibility, and any Member of the Dáil who wants to come back when the new term starts just to serve out his or her time, should stay at home now, because there are many young people here who want to get this country going.
Every day this Government stands still and prevaricates, because it is not being positive in what it is doing. It is causing jobs to be lost and general mayhem. I listened to the Minister, Deputy John Gormley this evening and could not believe what I heard. He is a broken man. If he has sleepless nights, he should quit now. The only one who should have sleepless nights over a business is the bank manager, because it was he or she who gave the money. This Government has a responsibility to its people, not its parties. Do what we are asking. Fine Gael has a plan on how to get people back to work. Give us that chance. Give the people a chance. The parties in government have had a good time at it.
They did much good, too, no question when one looks at the roads and sees what has been done. However, they should take the break and give people who want to run the country the opportunity.
John O'Mahony (Mayo, Fine Gael)
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Every citizen is frightened and apprehensive about the future, whether employed, unemployed, in the public or private sector, parent, grandparent, student or child. I heard a five year old child say to her mother the other day, "Am I going to have to go to America or England when I leave school?", and it brought home to me the amount of apprehension and fear on the ground.
This motion, if it were agreed or passed, would bring a definite time line for these people into the immediate future. I commend Deputy Noonan for once again capturing the mood and the pulse of the people, and for tabling the motion at this time. Members of the public know that the medicine to be doled out will not be easy, and to some extent they have been conditioned for it. They have lost all confidence in the ability of the present regime to plot a path out of it any time soon. This view is reinforced by the events of recent days which have seen our future and those of our children sold out to the EU and the IMF. We saw much of the proposed recovery plan become obsolete before the ink was dry. In the past 24 hours, for instance, the Government's growth projection have been drastically reduced by the EU, from 1.75% to 0.9% in 2011, and from 3.2% to 1.9% for 2012. This means that the budget deficit will grow at a much faster rate than was stated only seven days ago. Talk about shifting sands under our feet. We then come to the weekend when we gave away the last piece of our piggy bank, the €17.5 billion of the pensions reserve fund, which was the one good thing done by this Government in the squander mania of the Celtic tiger era. It was to be the nest egg to provide for social welfare and pension provisions into the future but the vast majority of it is now gone to cover the ineptitude and incompetence of this Government.
The body language of every statement, press conference and one-to-one interview on television over the weekend indicated that this Government is a beaten docket, that these negotiations were not really negotiations at all but were totally and absolutely one-sided. If they were negotiations, I would hate to think what the EU and IMF were looking for in the first instance. The reality of these decisions taken after the weekend is that the main agenda of our European partners was to save the euro rather than Ireland and the Government let them walk all over it. It was said to me today that the only thing not conceded in this past week was the playing of the all-Ireland finals for the next ten years at either Wembley Stadium or the Olympic Stadium in Munich.
People are crying out for some sense of certainty and stability, economic and political. This motion, if passed, would give them that. People want to get on with it and to then have a general election as soon as possible after the budget. To bring this about the finance and social welfare Bills would need to come before this House before Christmas. As it is, we will sit for only eight more days this session. These Bills could be dealt with if we sat each working day. This would give people the opportunity to give their verdict early in the New Year on the unfairness, incompetence and arrogance of this Government during the past 15 years.
I note the amendment proposed by Government proposes the usual budgetary practice. It is the usual budgetary practice for the past two decades that has us bankrupt. It is the usual budgetary practice that could have us voting on a finance Bill next March. This country and its people do not have the time or the patience to wait until then.
I commend the motion to the House.
Martin Mansergh (Tipperary South, Fianna Fail)
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I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
- commends the Government for bringing forward the National Recovery Plan which provides the blueprint to achieve budgetary stability over the next four years;
- notes that the Plan provides a credible path towards budgetary consolidation and a return to sustainable economic growth;
- notes that the measures in Budget 2011 will give effect to the first phase of adjustment committed to in the Plan to be put into effect in 2011;
- agrees that the national interest is best served by all parties in the House facilitating the passage of these measures in the present uniquely serious circumstances; and
- endorses a timetable which will see the presentation of the 2011 Budget on 7 December 2010, the introduction of the necessary Resolutions in accordance with usual Budgetary practice and the enactment in the New Year of the necessary legislation to give definitive effect to the Budget measures.
I wish to share time with the Minister for Defence, Deputy Killeen.
While one can agree with Fine Gael that there is an urgent need to establish economic stability, almost all Members of the House also recognise this need. The Taoiseach on 22 November stated that the vital national interests of this country require that financial stability be achieved.He went on to say that with the national recovery plan and the joint ECB-IMF-EU Commission programme for support, adopting the budget with its €6 billion adjustment in 2011 and taking the necessary legislative and other measures to give effect to the terms of the budgetwere how this stability is to be achieved.
Since then, the Government has published its National Recovery Plan 2011-14, which sets out a wide-ranging blueprint for recovery and a return to sustainable economic growth. It has also concluded negotiations on a programme for international financial support for Ireland from the European Union, the ECB, the IMF, as well as bilateral support from the United Kingdom, Sweden and Denmark. Eurogroup and ECOFIN Ministers have also given their unanimous support to this programme. Having published the national recovery plan and reached agreement on the international support programme, the Government can, to the extent that the business of the House allows, resume work on finalising budget 2011, which will be presented to the Dáil in one week's time on Tuesday, 7 December.
Next week's budget will be one of the most important budgets in the history of this State. When passed, it will mark a crucial step towards stabilising the public finances, the financial sector and the economy and will place us decisively on the way to recovery. If this House does not support what needs to be done and if, as a result, these aims are not achieved, those responsible will have to bear responsibility for the consequences.
The terms of Fine Gael's motion seem to imply that the Government does not want budget 2011 and all of its associated legislative measures to be debated fully in the Oireachtas. As matters stand, if the Dáil does not rise as planned on 16 December, this would result in six additional days being available to the end of the year, namely, 21, 22, 23 and 28, 29, 30 DecemberThese extra days would not be enough to enable the House deal with all of the legislation normally associated with a budget, in particular the finance Bill. Furthermore, it would be impossible to bring forward budget day, in particular in circumstances where the Department of Finance has been so deeply involved in preparing the national recovery plan and in dealing with the negotiations related to the financial support programme for Ireland. The Minister for Finance has been in the past accused of ramming measures through this House and so it is rather ironic that the main Opposition party wants him to rush through the full budgetary process in the short period before the end of the year. This is not what the Minister or any of his Government colleagues want.
The importance of this budget makes it imperative that all sides of this House be given the opportunity to debate as fully as needs be the budget and its associated legislative measures. This debate by Members of this House should enable voters who elected them to be presented with the basis for assessing in a balanced way the details of the measures presented in the budget and their implications for them and their families not just for next year but also for the years to come. Although there is nothing precluding the commencement of the finance Bill process immediately after the budget if the House decides to do so, it is traditional to leave time gaps between Stages, mainly in the Dáil. This is a good tradition which allows Deputies and Senators to examine the Bill and to submit amendments or recommendations to change it. The normal timescale also allows for the drafting of amendments by the Department of Finance, Revenue Commissioners and the Office of Parliamentary Counsel, as well as for printing of the Bill and amendments. Were an accelerated timescale to be adopted, this would also rule out Committee and Report Stage amendments unless they could be done in a short time, namely, within hours. This would not be advisable given the degree of complexity of tax legislation and the consequent risks involved.
Whatever about the length of the process in disposing of budget 2011, there is no escaping the fact that the programme of international financial support for Ireland and the framework set out in the National Recovery Plan 2011-2014, which is now embedded in this programme, will have to be implemented. This means that budget 2011 must give effect to the first stages of the programme and the plan. The scale of the proposed expenditure and taxation measures in the national recovery plan as outlined by the Government last Wednesday were such that, understandably, most of the contributions in the House in the ensuing debate and in the media have focused on these and not on the recovery dimension. While stabilising the public finances is essential and imperative, we cannot limit our actions to these areas. I have already referred to the fact that the plan contains a blueprint for recovery and a return to sustainable economic growth.
The plan identifies the areas of economic activity that will provide growth and employment in the recovery and specifies the reforms that the Government will implement to accelerate growth in these key areas. We have to help our economy grow by building on our strong export performance and this means that we have to improve our competitiveness. By this, I do not mean just the usual approach of cutting costs, primarily pay. While this is necessary the plan goes much further by identifying a large number of directions and setting out a wide range of proposals for making the economy, public and private sector, perform better in the future and therefore underpin dynamic growth across the board.
The Government will support the private sector through sectoral policies to deliver reforms, which will remove structural barriers to competitiveness, employment creation, and to securing the conditions for growth. These reforms will help support job growth in key domestically trading sectors, such as retail and hospitality, as well as supporting sustained growth in the key knowledge-intensive sectors. The plan will continue to develop Building Ireland's Smart Economy, under which the Government has taken action in each of the key areas identified in it. The Government has acted in all these areas to tackle short-term difficulties while laying the basis for future recovery. The new plan contains a large number of action points, on which the Government will deliver to secure reforms in the private and public sectors over the next four years.
I am confident the private enterprise sector will respond well to these reforms, in terms of increases in investment, job creation and growth. However, the public sector must also deliver reforms for private enterprise to prosper. We have to lower the costs of delivering public services, and these services have to be delivered more effectively. This requires transformation in the public service, which requires delivery on the Croke Park agreement. I acknowledge that the costs of adjusting to the present crisis have been greater for public servants than for most of the great majority of workers in the private sector, who have been lucky enough to keep their jobs, though many in the private sector have not kept their jobs and, therefore, that affects the comparison. Nevertheless, more is needed from public servants, if the cost of public services is to be brought to an affordable level, and if the level of these services is to be maintained with reduced resources. Adjusting to this new environment may be difficult for some in the short term. On the positive side, however, the result of these reforms will be that it will be easier in the future for public servants to do a better job and to gain recognition from their colleagues and from the public for doing so.
The set of reforms outlined in the plan is ambitious but these measures will work. The adjustments made to improve competitiveness through reducing pay and increasing productivity are having a positive impact. Our export growth will be strong this year and will remain so over the period of the plan. Over the past two months or so, there have been welcome indications that the labour market, in terms of employment and unemployment, is stabilising. Economic output, measured in terms of gross domestic product, will show a small increase this year. Given the fall of more than 7.5 % in GDP in 2009, this is a heartening demonstration of the resilience of Ireland's economy and of the potential for recovery over the next four years. Even today, the KBC-ESRI consumer sentiment index showed an increase in November after three months of sharp falls.
The indications of stabilisation are also evident in the retail sales index where the rate of decline in core sales has slowed in recent months. Although we should be cautious about these data, they are pointing in the right direction. Uncertainty is still playing a major role in economic developments, but the combination of the budget 2011, the EU-IMF programme and the national recovery plan will remove most of this uncertainty and allow for more informed and positive consumption decisions.
The amendment states, "the national interest is best served by all parties in the House facilitating the passage of these measures in the present uniquely serious circumstances". Fine Gael accepts the Government's overall objective for stabilising the public finances. While elements of its budgetary menu differ from those of the Government's, much of it is the same because we all have little room for manoeuvre. I, therefore, call on Fine Gael, Labour, Sinn Féin and other Members of the House, who have the national interest at heart, to facilitate the passage of budget 2011 in what are uniquely serious circumstances.
The budget will be hard but necessary. The world is watching what we do more closely than it has ever done. The House is expected to do the right thing by facilitating the passage of the measures that are needed now to extract us from the crises in the financial sector and in the public finances as fast as possible. If we do this, the underlying dynamism of our economy will provide a sustained upsurge in growth, which will create jobs and enable our young people to make their living in their own country. If, however, we are not decisive in our commitment to these measures, what is at stake is not just Ireland's future but also the welfare of the citizens of our fellow members of the EU. I am confident the House will know to do the right thing.
I always have a wry smile when literary and historical references are made by Opposition Members. Deputy Noonan conjured up the brave Macbeth who was a strong leader but I was thinking of the Forest of Dunsinane to describe the Fine Gael benches. Credit problems have been an issue for governments throughout the ages. Emperor Charles V was dependent on his banker, Fugger. The collapse of credit led to the French Revolution while British financial difficulties following the First World War, particularly loans from America, were a substantial motive for them to conclude the truce because of the effect this would have on American opinion.
Opposition Members are less concerned about the grave situation of the country and more eager for an immediate election. They will not have to wait long and, therefore, they might curb their impatience.
Deputy Naughten touched on the issue of procurement. He should note what the national procurement service has done in breaking up contracts and trying to make the system as friendly as possible to SMEs but, at the same time, one cannot ignore that Ireland is a member of the Single Market. One cannot apply to procurement the economic self-sufficiency model that existed in Ireland prior to the mid-1950s, as we have to conquer markets. We cannot simply reply on the home market.
Border issues were raised regarding the IMF and the EU. When the British Labour Government sought help from the IMF in 1969 and 1976, nobody argued for long that it had lost its national independence and sovereignty and it is quite clear that we have not. I refer to three areas in which it is clear we maintain control of our affairs. The purpose of the loan is to maintain the services we have, need and want. The 12.5% corporation tax rate is an important dimension of sovereignty and that was not touched. Much to the rage of some of our friends in the Sunday Independent, the Croke Park agreement continues to exist.
Deputy Durkan referred to countries being punished. I presume this was an oblique reference to the hard line attitude of the German Government to bailouts but I remind Fine Gael Members that they are part of the Christian Democrat grouping in the European Parliament and they are political allies of Chancellor Merkel. If they find themselves in power they will be able to exercise more influence than we have done but I have my doubts.
Tom Hayes (Tipperary South, Fine Gael)
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I thank the Minister of State for his confidence.
Martin Mansergh (Tipperary South, Fianna Fail)
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Reference was made to the property boom. We had a high stamp duty rate, particularly at the higher levels, which was again complained about by our friends in the Sunday Independent. People wanted to lower or abolish them but that would not have been a cure for the property boom.
Deputy McEntee correctly mentioned the more upbeat mood in the agriculture industry. This has been a better year for farmers. I met a veterinarian recently who said that, for the first time in three years, his bills are being paid. Deputy O'Mahony spoke about a five year old worrying about whether he would have to emigrate. I have a daughter who spoke in her teenage years of emigrating, but she is working in Ireland. These things go around in cycles. The Deputy claims to have no faith in this Government, but I am not sure there is much faith in the alternatives either. To some extent, we are all in the same boat and we have to recapture the faith of the electorate.
Language like "sold out to the EU and the IMF" is very irresponsible and emotive. These are not our enemies. We will need the help of our friends and partners in Europe and the IMF. The director general of the IMF is not a hard right neoliberal, but a French socialist who is rumoured to be a possible candidate for the next presidential elections. Deputy O'Mahony referred to "squandermania", but putting aside €25 billion in the National Pensions Reserve Fund is not "squandermania" by my standards.
Tony Killeen (Clare, Fianna Fail)
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The Minister of State has just made a very compelling case for the Government amendment on the timescale involved in preparing and passing the Finance Bill. It is important to bear this in mind because this important work needs to be done in a considered fashion. We need to accept on all sides of the House that people who are elected to the national Parliament come in here with the best interests of the country at heart and take the action which they believe is best to address the difficulties of the moment. The situation for the Government is different because the Government is in a position where it must make decisions and the role of the Opposition is to address those points and argue against them. However, there have been a number of occasions over the past two years, and especially over the past couple of weeks, when the interests of the country have been significantly damaged when points made by Opposition Deputies and commentators in the media have gone much further than is warranted. These comments have grievously undermined the confidence in the country and, as a result, have damaged its interests.
A point is frequently made in the House and in the media about the mandate of the Government. It is incumbent on all of us who have been elected to this House as representatives of the people to defend the mandate, as set out in the Constitution and in subsequent legislation, that is given to the Taoiseach on the formation of the Government and at frequent intervals when motions of confidence are debated in the House. There can be absolutely no doubt about the mandate of the Government. It may well be that, at some time in the future, other combinations of parties form a Government here. In view of the fact that this is a possibility, and a probability according to opinion polls, it is incumbent on people who are currently on the Opposition benches to take account of the fact that the mandate of the Government is constitutionally based on the will of the people expressed in a general election, and not in those opinion polls. We need to differentiate very clearly between our duty to uphold the constitutional provisions and the will of the people as expressed exclusively in the ballot box.
Newspaper owners benefited enormously from the financial windfall of their property supplements and they might now be peddling books with plagiarised remedies on the economic and political situation. We must differentiate ourselves from such people. When we hear a remedy put forward that calls for a number of experts from outside the political system be put in charge so that they run the country and de facto undermine the very existence of democracy, then it is time for all of us to address that and say "No". There is a constitutional provision under which a Taoiseach is elected, who then nominates a Government and goes to the President for ratification, and that this is the lawful Government of this country until beaten in a vote or defeated in an election. It would be an important step towards restoring confidence not just in the country, but also in the political system, were we to point out this fact. We can have plenty of arguments on ancillary matters, but we need to differentiate between ourselves as elected parliamentarians and those who invested unwisely and lost large amounts of money on property portfolios in Ireland or abroad and have an agenda arising from that. That is a particularly important consideration.
Reference has been made to a statement made by one of my colleagues about the experience of being in Government. I have been in the Government for a short period, but while it has been challenging, it has been fulfilling and I have found the Taoiseach and my colleagues able to face up to the challenges of the day, weighing up the options, taking advice from the Governor of the Central and the CEO of the NTMA, Mr. John Corrigan, and others, examining the options and then making decisions about the EU and IMF funding. This is very important because my experience has been positive. It has been difficult and difficult decisions have been made, but if one wants to serve the people in Government, then one would have to be prepared to face up to the difficult decisions and to face the fact that the options are not always exclusively attractive or acceptable. The decisions made in my view are taken from the best options available at this particular time.
We often forget that there are very positive indicators in the economy. There was an acknowledgment by Deputy McEntee of Fine Gael that considerable work had been done on the infrastructure of the country, and that is a testament to good investment in times when we had plenty. We also had huge investment in human resources, education and health and in other areas. We had an extraordinary level of investment in areas like pensions, social welfare payments and right across the economy, and not just in the public sector. Having faced difficult challenges over the last two years, we continue to have 1.8 million people in employment, which is twice the figure of the late 1980s. We continue have an extraordinary level of productivity, huge success in our export sector, and a move from a 10% drop in GNP in 2009 to a slight increase this year, which is de facto an 11% improvement. The 2009 drop followed from a 4% drop in 2008. There are some highly positive trends and facts to be dealt with in the real economy, as opposed to the difficulties created by the banks and the difference between funding from all sources of taxation and the expenditure of the State. These are the challenges that continue but can be addressed.
That the four year plan has been outlined allows Ireland de facto to deal with that deficit over a four-year period, rather than what we otherwise would be obliged to do, which is to make a reduction of €18.5 billion immediately. This is a positive element to which people do not normally advert. People speak as though the choice was between continuing with the status quo with an €18 billion deficit or moving into an intermediate phase. However, the status quo simply is not an option. To be fair, this is accepted by parties on all sides of the House. The position of Fine Gael in respect of the €6 billion adjustment is the same as that of the Government, although the proportion between taxation and expenditure cuts is somewhat different. There also are various differences between the parties in the House but there is general agreement on reaching the 3% target. While it was to have been reached by 2014, and I believe will be so reached comfortably, there is a year of grace now available, should that be necessary. The other point people tend to forget is that the amount of borrowing that will be required from the European Union institutions and the IMF is precisely the same as would be required in any event to deal with the services of the country and to provide them over the same timescale. This point frequently is overlooked in this respect.
Another area in which we have been extremely slow to face up to reality pertains to the consequences of a default. The consequences of a default were set out clearly by Professor Honohan in particular, as well as by Messrs Regling and Watson, in their respective reports. It would be instructive for everyone, and I intend to so do myself, to read back over these reports to ascertain exactly what they stated were the difficulties that led to the shortfall in funding, which pertained to the taxation model, and then in respect of the difficulties in employment and the banking sector. The latter are set out clearly in respect of the behaviour of senior personnel in a number of banks in the first instance, as well as the failure of the regulatory system, which Opposition parties often lay at the door of the Government. This ignores the point that, were the Government to directly control a regulatory system, this at the least inevitably would lead to charges of political interference in the financial running of what de facto are private institutions. This would completely undermine the capacity of this country or any small country which trades internationally in the manner that does Ireland, to do its business. We are obliged to export more than 90% of our goods and services and are happy to so do. Ireland is more than happy to reach the standards that are required in international markets and to sell its goods highly successfully. Moreover, it continues to do so to an extraordinary extent, even under these difficult circumstances.
Joan Burton (Dublin West, Labour)
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With the permission of the House, I wish to share time with the new Member, Deputy Doherty, to congratulate him on his election and to welcome him to the House.
Jan O'Sullivan (Limerick East, Labour)
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Is that agreed? Agreed.
Joan Burton (Dublin West, Labour)
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When I worked as an accountant, there were a number of simple rules in respect of accounting and the concept of whether a firm, company or perhaps a country is a going concern, that is, can expect to continue in ordinary business for the foreseeable future. The test of being a going concern in accounting is whether one can meet one's debts as they fall due for payment. The difficulty for Ireland in the current situation is that were we simply facing the issue of the fiscal deficit, although we would be obliged to effect reforms and probably some cutbacks, we undoubtedly could meet our debts as they fell due, on foot of understanding arrangements with our creditors and supports from appropriate support sources.
I will outline what has sunk Ireland in respect of being solvent because in business, unless one is able to meet one's debts as they fall due one is insolvent. If one has access to funding from other sources, such as a friendly bank, one's great-aunt or someone who will lend one money for the business, one is only technically insolvent. However, what has sunk Ireland is that in addition to Irish obligations arising from the fiscal deficit, on the night of the blanket bank guarantee the State decided to take on all the debts of the banks unilaterally and unconditionally. This was not limited simply to depositors, as recommended by the Labour Party to the Minister for Finance two or three weeks before the blanket guarantee. I am sure what I wrote to the Minister resides somewhere within the archives of the Department of Finance. Consequently, the banking debt is joined to the State debt. When people consider Ireland, they see a small country with an open economy and a relatively small population when compared with the United Kingdom or many other European countries. They ask, as they might of a firm, whether this small country can meet this extraordinary level of debt comprising both the ordinary fiscal State debt and the debts the country has taken on in respect of the bank guarantee. Unfortunately, the answer consistently is that although they like Ireland, which has done some great things, they do not consider it can meet those extraordinary levels of debt because of the banks.
This is the difficulty and is the reason for a decision made by the European Commission, perhaps two or three weeks ago but probably as early as the end of August when the Governor of the Central Bank was writing increasing numbers of cheques for Irish banks that no longer had collateral. Someone within the European Central Bank, which already was into the Irish banks for €90 billion in advances at a rate of approximately 1.5%, said stop. Since then, the Government has been struggling to escape the fate into which it delivered Ireland on the night of the blanket bank guarantee. One can put all the fine and fancy words or reports that one wishes on the blanket bank guarantee. There of course were advantages to Fianna Fáil in the manner in which the bank guarantee was implemented. It was a surprise move and the Government had first-mover advantage, as no one had ever done this before within the European Union. Many other countries were angry, perplexed and enraged, as were the Germans in particular. Members should recall this was after the episode involving DEPFA Bank and Hypo Bank, which were located in and linked to the IFSC, even though we managed to avoid taking responsibility for them.
Ireland used up a great deal of credit by stating this was the cheapest bank bailout in the world and that it had stolen a move on everyone else within the European Union. For instance, the Hungarians were distraught because they faced their own problems. Similarly, the Brits were distraught because they had their own issues, as were many other member states. Consequently, while the Government now states that Europe went along with the blanket bank guarantee, perhaps it did but people did so because it was a first mover and they were left with very little option. Moreover, I refer to the pressure from Fianna Fáil within the Dáil and the bullying with regard to the national interest. Fine Gael buckled under the bullying and Sinn Féin buckled under the demands of Fianna Fáil. Sinn Féin, Fianna Fáil and Fine Gael all voted for the guarantee. That was not a good judgment call for two reasons. Not only did the blanket bank guarantee include subordinated debt, which was extraordinary, but it also included a lot of senior debt.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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That was not in the proposal on the first night in September 2008.
Joan Burton (Dublin West, Labour)
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It emerged in subsequent days.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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We voted against it.
Joan Burton (Dublin West, Labour)
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I am trying to recall what happened. If it happens again, we will need to think about how we approach it.
Arthur MorganJoan Burton (Dublin West, Labour)
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In the blanket bank guarantee, we essentially drew the losses of the banks onto the shoulders of the citizens. We had privatised bank profits up to that point, in effect, and from then on we socialised all bank losses onto the citizens of the country. To date, no one has been able to work out how to unravel what was created that night.
There is a great deal of conversation about defaulting at the moment. When people talk about defaulting, they are basically talking about two separate things. It might be important for people to think about which of them they mean. The first type of default requires bondholders to share in the losses that the citizens are taking on in respect of the banks. The remarks made by Mrs. Merkel a couple of weeks ago caused a huge amount of fluttering, to Ireland's disadvantage in the international markets. She was basically saying that if a situation like this arises in future, bondholders should bear some of the liabilities. Of course, bondholders do not like to be told anything like that in advance. To be perfectly honest, if one successfully negotiates with bondholders, one should really announce it the day after one has achieved the settlement.
The second type of default that people are talking about is a sovereign country default. I am not aware of any developed European country that has technically defaulted since Germany did so in 1948. While no one has a road map for such a default, we know the borrowing capacity of a country that defaults stops dead and it immediately goes to a zero-based budget. People talk about countries like Argentina, Zimbabwe and Liberia that have defaulted in recent decades. One needs to contrast a commodities-producing country like Argentina, which endured five or six horrible years before successfully returning to the markets, with a small open economy with a small population like Ireland. I do not understand the road plan for a sovereign default by a country like Ireland.
We need to find a mechanism for dealing with the banks. If our construction people borrowed recklessly, it should be stated that some bondholders, particularly the German and French banks, loaned recklessly. They should bear some share of that. It is deeply disappointing that this was not recognised in Ireland's recent negotiations or entreatments. When we talk about Ireland being insolvent, this is the context. Some parts of the Irish economy are profitable. This country's responsibility for the debt of the banks remains a massive problem for Ireland. I do not think the arrangements that have been entered into are fair. They will not enable Ireland to get out of that dilemma.
Jan O'Sullivan (Limerick East, Labour)
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I congratulate Deputy Doherty on the occasion of his maiden speech in the Chamber.
Pearse Doherty (Donegal South West, Sinn Fein)
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Ní bheidh Sinn Féin ag tabhairt tacaíocht don rún atá os comhair an Tí anocht. In áit sin, cuirfimid ár leasú féin - go scorfar an Dáil agus go gcuirfear an buiséad ar athló - chun tosaigh. Is mian liom an leasú a mholadh anois.
Tá mé iontach bróduil go bhfuil mé anseo mar Teachta Dála i gcuideachta mo chomhghleacaithe, na Teachtaí amháin atá ina bhfíor Freasúra pholaitiúla i dTeach Laighean. Ba mhaith liom mo mhíle buíochas ó chroí a chur in iúl do mhuintir Dhún na nGall Thiar-Theas, a chuir muinín ionam ionadaíocht a dhéanamh dóibh sa Dáil. Is mór an onóir í dom, do mo theaghlach agus do mo phairtí. Tá sainordú iontach soiléir tugtha dom cur in éadan an bhuiséad atá pleanáilte ag an Rialtas, a bheidh frith-dhaoine agus a ghearrfaidh seirbhíisí poiblí agus iocaíochtaí leasa shóisialaigh. Tugadh sainordú dom freisin cur in éadan an IMF agus iarraidh orthu a shoc a choinneáil amach as gnaithí na tíre. Tá mise anseo mar go bhfuil clár oibre agam agus ag Sinn Féin chun Éire níos fearr agus níos córa a thabhairt chun cinn.
Tá sé soiléir ón rún atá curtha chun tosaigh ag Fine Gael sa Dáil anocht go bhfuil siad díreach cosúil leis an Rialtas. Ná bíodh dabht ar bith ag éinne faoi sin. Dá mbeadh Fine Gael ina bhfíor-pháirtí Freasúrach, beidís ag iarraidh an bhuiséad seo a chaitheamh sa bhruscar agus bheadh clár oibre radacach á bhrú chun tosaigh acu. Bheadh Teachtaí Fhine Gael ag lorg buiséad nach bhfuil dírithe orthu siúd atá ar an ngannchuid ag an bpointe seo agus ag iarraidh ar na sabhair sciar chothrom a íoc. Tá Fine Gael ina shuí anseo anocht ag gearán, seachas an bhuiséad a chur ar athló agus toghchán a reáchtáil. Tá siad ag iarraidh an bhuiséad a thabhairt isteach chomh gasta agus is féidir sa dóigh is go mbeidh siad réidh leis roimh an Nollag. Is masla é do na ghnáthdaoine a chaithfidh ualach an bhuiséid uafásach seo a iompar.
Sinn Féin will not support the motion before the House tonight. Instead, we are proposing an amendment that calls on the Government to postpone the 2011 budget, seek a dissolution of this Dáil and call a general election. I am proud to be joining my fellow Sinn Féin Deputies today, as part of the only real political opposition in Leinster House. I extend my sincere thanks to the people of Donegal South-West for putting their faith in me to represent them in the Dáil. It is a huge honour for me, my family and my party. I have been given a clear mandate to oppose the savage anti-people budget this Government is planning, to oppose cuts to public services and social welfare and to oppose IMF interference in our country. The platform on which I stood advocated a better and fairer way for Ireland. Sinn Féin is the only party putting forward a constructive alternative in the Dáil.
As part of the consensus for cuts, Fine Gael has firmly nailed its colours to the mast in terms of where it stands on this budget. Any real Opposition party worth its salt would push for this budget to be scrapped. It would pursue a radical agenda that does not target the least well off and makes the wealthy pay their fair share. Instead, Fine Gael has proposed a motion that does not call on the Government to scrap the budget and call an election, but demands that the budget be brought forward so it can be done and dusted before Christmas. It is an insult to ordinary working people, those without work and those who rely on public services. It is inevitable that such people will bear the brunt of this unfair and unjust budget. The people are sick to the back teeth of this type of stale elitist politics. It is exactly the type of politics that has brought us to where we are today.
The measures to be contained in the budget amount to little more than a full-on attack on the least well off and on working people. Anyone who thinks implementing deflationary and draconian measures will fix the economy is delusional. If cuts worked, we would not need the IMF and the ECB to arrive on the scene to run our fiscal affairs.
The four year plan which acts as a template for the budget is, in the main, a list of deflationary actions which will deepen and lengthen the recession. The impact of these measures will contract the economy and not a single cent of this will be used to reduce the deficit. Instead, it will all end up being once again pumped into the banks. We are about to embark on an insane course of borrowing to fund a failed banking policy. We cannot afford this plan and we cannot afford this Government. We need real negotiators now to deal with the banks and to burn the bondholders. If the Fine Gael Party were serious about changing the direction and getting rid of this redundant Government, its members would not be sitting here tonight calling for a rush to be put on this lunacy.
Slashing the minimum wage and social welfare payments, reducing tax bands, sacking 25,000 public sector workers, implementing property taxes, water charges, increasing student charges, are not a recipe for recovery. This is a recipe for economic destruction. We need to take this Government down and we need to end these cuts now.
There is a better and fairer way which does not target the most vulnerable and which ensures that those who have most, pay the most. We in Sinn Féin have shown this way in our pre-budget submission. We are the only party to have done so to date.
During the course of the Donegal South-West by-election, I met with many people who were struggling to make ends meet, people who were trying to cope with the rising costs and with Government cuts. I met people like the mother of the autistic child whose special needs preschool is in danger of being shut down, the father of four who is living on a shoestring and who is close to losing his job, people like the elderly man who lives on his own and who has lost his home help service. I also met people like the elderly woman who is caring for her husband with a heart condition and who cannot afford health costs, the young family desperately hoping to be allocated a local authority house in time for Christmas or the first-year student who has to drop out of college, to drop out of education, because she could not get a grant. These are the people whom the political classes want to make pay for their sins and that of the corrupt bankers. These are the same people who time and again are being ignored by those in political power. These people and hundreds of thousands more like them, deserve better than to be treated as mere statistics. They do not deserve the lies, the greed or the cronyism that has got us into this mess. They need and deserve real leadership and real change.
Across the country, young people from my generation and younger, are packing their bags and leaving. They have given up on Ireland because those in political power have long ago given up on them. I come from a family forced to emigrate in the 1960s in search of work. I look around and the same thing is happening all over again. We are losing a generation of talent, energy and enthusiasm. Many of those who leave our shores will never return home again. This Government has not only broken our economy, it has also broken up our families. Emigration has been a part of our past and we cannot allow it become a part of our future. We can stop it now by looking at alternatives which are credible, which work and which are fair.
The Sinn Féin pre-budget submission is credible and it is fair. It is credible if it is introduced with measures such as a wealth tax, which would raise €1 billion by introducing a 1% income-linked tax on all assets in excess of €1 million, excluding the working farmland. We propose a third rate of income tax of 48% on individual incomes in excess of €100,000. We would end the culture of extravagant salaries for those at the high end of the public sector by placing a cap of €100,000 on wages in that sector. The days of chief executive officers of public bodies earning hundreds of thousand euro must end and it must end now. Our proposals would see Ministers taking 40% pay cuts, Deputies taking 20% pay cuts, a reductions in salaries for Senators and an end to the exorbitant expenses scandal. Savings in public expenditure can be made by dismantling the two-tier public health system and eliminating wasteful expenditure such as the rental of prefabs in schools.
The measures in our pre-budget submission would reduce the deficit this year by €4.6 billion. However, we would implement and introduce a job creation and retention strategy by transferring €7 billion from the National Pensions Reserve Fund, generating much-needed employment and building necessary infrastructure. It is through these measures that the Government can introduce a budget which truly protects the most vulnerable and weakest in society, which does not take from low and middle income earners and which ensures that our public services are fit for purpose for those dependent on them. It is through these measures that we can get our country back to work, harnessing the skills, the talents and the drive of the Irish people.
In the next week, this Government will introduce a budget which is about to cripple the Irish people. Sinn Féin stands here ready to fight this Government tooth and nail to ensure this budget does not happen. Fine Gael tonight shows that it is trying to rush this budget through, ignoring the fact that it will hurt families who are already hurting. All Fine Gael wants is to bring on the election and try to get into power while forgetting about the misery, the pain and the anger and how the ordinary people will be affected.
I am proud to be standing in this Chamber today as a Sinn Féin Deputy for Donegal South-West. I am proud to be standing here with the core republican values deep in my heart and it is these values that will steer me in the times ahead. I know that when Government Deputies walked into this Chamber on their first day, none of them came here with the intention of inflicting pain and suffering on their communities, that none of them wanted to sell out their country to the IMF but that is exactly what they have done.
The time is up for this Government. It is time for the Members opposite to pack their bags. It is time for them to clear out and it is time for real leadership, a real alternative, a party with real vision, such as Sinn Féin is offering, to give the Irish people a chance to get back on track and back on their feet again.