Dáil debates

Wednesday, 10 October 2012

Fiscal Responsibility Bill 2012: Second Stage (Resumed)

 

Question again proposed: "That the Bill be now read a Second Time."

12:40 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I wish to share time with Deputies Gerard Nash and Arthur Spring.

I welcome the opportunity to speak on Second Stage of this Bill. I listened with patience and attention to the previous speaker. While I will not agree with all her arguments, I can agree with her remark that it is most important to create the economic climate for the generation of jobs. This Bill will help in this regard. I note that yesterday the stability treaty was debated and passed in the lower house of the French Parliament. The treaty will now be considered in the French senate where it is expected to be passed by the end of the week. It is expected that these rules will be in place across the eurozone from next January. This is another example of how Europe is trying to get its act together to work in unison to get out of the economic mess and to get people back to work.

I was the Labour Party deputy director of elections in the recent referendum on the treaty. I participated in many radio interviews about the financial and fiscal rules to explain what they would mean for Ireland and for the eurozone. I do not wish to rehearse those arguments, many of which I had with the previous speaker on various radio and television programmes. Stability was the key word during the campaign. These rules will bring much needed stability to the eurozone and this in turn will bring growth in the domestic economy. Ireland has an open economy and we need the support of a thriving eurozone. These rules will go some way to fixing the economic mess but social responsibilities must be considered. The level of youth unemployment is far too high at around 30% in this country and the figure is much higher in Spain and Portugal, with 50% of the youth population unemployed in some countries. If we are unable to address this issue it will damage our long-term future. We cannot have young people leaving school with no prospects for training or employment. We cannot allow them to drift into long-term unemployment thus harming their self-confidence and their future employment prospects. The long-term impact of unemployment on communities is very difficult and areas of high unemployment become far too dependent on the State for support.

During the referendum campaign in April and May, I talked to people in County Meath, many of whom told me they would not vote for the treaty nor agree to enshrine those rules into legislation. A total of 40% of the national electorate did not vote for the treaty. They were unsure about voting for the treaty because they could not see how the treaty would create economic growth. Those people who did not vote for the treaty need to know that we are championing economic development and growth at every level in the European Union. We need to communicate this clearly to the people. The current direction of Europe is also causing uncertainty because change will be constant over the next few years and it is important to have the confidence of the people as European reforms are introduced.

I will speak at a conference in Brussels tomorrow on the future of Europe. Diplomats, academics and politicians will be in attendance to discuss the future of Europe. We need to have this conversation in Ireland. The Labour Party is currently engaging with its members to find out their views on issues such as political, fiscal and economic union and their views on European social issues. We must ensure that any changes to our relationship with Europe are widely communicated and discussed with our citizens.

Photo of Gerald NashGerald Nash (Louth, Labour)
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What do we mean by responsibility in the context of this Bill? In particular, what is our own cultural attitude to responsibility? In my view, for too long our default approach to responsibility has been like someone sitting in a restaurant looking at the healthy option on the menu. We know it is the right thing to do, we know it is good for us but we quietly hope that someone else would take that option for us. However, responsibility is not someone else's problem; it is an obligation that falls on all of us.

This country has learned some very hard lessons. The people we represent are taking on a very difficult and heavy burden. The recent strong vote in favour of the fiscal stability treaty demonstrated a number of facts. The country saw the immediate reward for the vote with a dramatic lowering in the rates demanded by lenders on the international money markets. Those lower rates have allowed Ireland to return successfully to the international money markets bringing closer the day when we can wave goodbye to the troika and once again raise all our required funding on the international markets as an economically sovereign nation. Had the electorate heeded the populist and hysterical rants of Sinn Féin and the far Left and voted against the treaty, I have no doubt that we would have been setting up the guest rooms for the troika for a long time to come.

This Bill allows the State to bring in prudent housekeeping measures and an independent system of checks and balances which has been the norm in many other countries and it is nothing unusual. The main instrument of that independent system will be the Irish Fiscal Advisory Council which will be given a statutory basis in this Bill. The council will assess and report on the macro-economic and budgetary forecasts of this Government and all future Governments.

When the council was established, I took it as a good omen that it had made its home in Whitaker Square, which is named for Ken Whitaker, one of the greatest civil servants this country has ever seen. Mr. Whitaker was educated in my home town of Drogheda and is a person I have the pleasure of knowing. In his role advising successive Governments, he was always the epitome of unassuming wisdom and represented what is best in our public service. Such selfless public service is in stark contrast to the cynical, self-serving populism that masks itself as opposition which we heard from Deputy Mary Lou McDonald and her colleagues today and yesterday. The Sinn Féin Party continues to trade on people's fears and to offer sweet-sounding panaceas, the latest being a wealth tax based on figures that are six years out of date. Not only are these simple and popular solutions unworkable, but the party would not even seek to implement them if it were in power. I need only look 30 miles north from my home town to see what the party does when it is in power. A Government involving Sinn Féin has implemented cuts left, right and centre across the Border and is taking in local property rates of approximately £1,000 per year on ordinary three-bedroom semi-detached homes. Yesterday the Administration in the North announced swingeing cuts in care centres which will see 750 places lost in the next five years. Based on all of this evidence, how can we take any of Sinn Féin's commitments in regard to public services seriously? Its promises ring very hollow indeed.

The reality is that if a simple and popular solution to our problems could be found, it would have been implemented a long time ago. In fact, it was simple and popular policies which got us into this mess. The outcome of 15 years of simple and popular is probably ten years of difficult and unpopular. As a country, we have finally grown up. There was no choice other than to take responsibility and adopt a mature position. On that basis, I am happy to support the Bill.

12:50 pm

Photo of Arthur SpringArthur Spring (Kerry North-West Limerick, Labour)
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In any debate on the eurozone and fiscal responsibility, I am always grateful for the RTE archives which show that I was opposed, for many reasons, to Ireland's joining the euro. I was privileged to study economics in a Scandinavian country where the many pitfalls into which we have fallen were emphasised. Ultimately, we have ended up in a position in which we do not want to be. As a member of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform and having met with representatives of the IMF, the European Commission and the European Central Bank, I have concluded that there are three aspects to our predicament which should be emphasised. First, we have the largest banking problem in Europe. Despite accounting for only 1% of the European banking sector, Ireland receives 10% of ECB funding. Second, the financial model pursued by Fianna Fáil-led Governments over a period of 14 years resulted in this country having the most unsustainable economy in the entirety of Europe. The third issue we must bear in mind is that as well as our unsustainable bank debt, we are dealing with a large fiscal deficit. In fact, ours is the largest per capita deficit in the whole of Europe.


Unfortunately, there is a lack of comprehension of these fundamental realities among many in the commentariat and, in turn, the general public. Instead we get the simple line that austerity is not working. We can all agree that austerity is the opposite of prosperity. It does not take a rocket scientist to deduce that an economy cannot stimulate itself when it is necessary to make expenditure cuts in order to bring spending into line with incoming revenues. That is what the Government is seeking to do, slowly and incrementally. It is sometimes a case of two steps forward and one step back. We got to where we are through reckless government which, as Deputy Gerard Nash observed, looked always to the popular and simple solution and was content to throw money at every problem. Yet anybody who sat down with a ruler and pen could have seen that the path on which we were set was unsustainable. The end result of all its populist antics is a Fianna Fáil Party with fewer than 20 seats in the Dáil. People's memories are not short when it comes to politics and I am convinced that Fianna Fáil will never again achieve an overall majority in my lifetime. When the State was in its time of greatest need since its foundation, neither of the two Opposition parties made so much as a telephone call to seek to form a Government. By not standing up for what they professed to believe, by running for cover, by opting for a very easy time in opposition as opposed to a very difficult period in government, they let the flag down.


The issue of bank debt versus national debt is a major consideration in any discussion of fiscal responsibility. I had to laugh this morning when I heard Deputy Micheál Martin ask about the policy documents relating to the provision of primary care units. We have sought, by way of freedom of information inquests and through every imaginable parliamentary question, to obtain information on the bank guarantee that was rubber-stamped by Fianna Fáil in 2008. There is no information as to how this country ended up in a position where its sovereignty was lost. The national flag should be flying at half mast until that sovereignty is restored. Shame on those who would seek to absolve themselves of that responsibility while we still suffer the consequences. My colleagues and I will not let Sinn Féin off the hook for that and nor will the commentariat and the electorate.


Banking debt must be separated from sovereign debt, and that will only be achieved with the co-operation of allies and friends throughout Europe. Recent comments, however, from the Finns, Dutch and Germans suggest that they have all forgotten their own pasts. I will certainly be reminding my social democrat friends, many of whom do not appreciate the extent to which we are attempting to implement unpopular policies for the sake of keeping the country afloat, of the realities. In recent days we had the sight of a Nazi flag being marched through the streets of Athens. A whole generation - which I refer to as Generation Jinxed - is being left on the periphery throughout Europe. All it will take is a match for the situation to ignite. Some people in this country seem to have forgotten that we were on the very edge of the abyss two years ago, with the very real prospect of being unable to access funding. Sinn Féin's comments on yesterday's IMF report point to either a lack of intelligence, a lack of morality or a lack of the knowledge necessary to call the situation as it is. There is a bluff going on here. The austerity programme is being implemented so that we can borrow money to keep the show on the road. In the absence of that funding, everybody working for the State and everybody in receipt of social welfare benefits of any kind would be immediately facing a 33% reduction.


Deputy Gerry Adams talks of casting out the troika and burning bondholders, but he does not address the reality of the fiscal deficit. In case some people have still not worked it out, I reiterate that it is a separate issue to banking debt. The claim that austerity is the cause of our problems is a blatant lie. The country was run into the rocks and must now be refloated. Those of us in here who are making choices and seeking to influence the Cabinet to do the right thing by the people of Ireland have shown responsibility. To claim that the troika is the problem shows a simple lack of comprehension of what is going on. An end to austerity will not lead to prosperity. We will only see a return to prosperity if we co-operate with allies and friends to achieve that end. Many people might criticise the fact that the Taoiseach and Tánaiste are out there trying to make allies. I welcome it because I am aware of the impact it is having on our capacity to renegotiate our deal. Even a simple issue such as the restoration of the minimum wage, for example, would not have been achieved without that engagement.


Sinn Féin, however, is proposing that we tell the troika to go away and take with it the €50 million per day that is keeping this country afloat. The party has a very soft underbelly when it comes to fiscal responsibility. It is sometimes said that one may judge a person's character by his or her friends. The grouping with which Sinn Féin is aligned in the European Parliament, the European United Left, includes among its number the communist parties of the Czech Republic, Spain and Greece, and Die Linke, or The Left, in Germany, which is the former ruling party of the eastern bloc.

These parties are relics of a dark past and it would be reckless to pursue economic policies similar to the ones they advocate.

We are doing everything possible to return the country to prosperity, stop emigration, create employment, ensure fairness and improve living standards. As a coalition of a centre-right and a centre-left political party, the Government will engage in compromise in every step it takes. The alternatives and simple solutions advanced by others should be scrutinised and shown for what they are, namely, reckless fallacies based on silly finance. The populism of the parties with which opponents of the Bill are associated is dangerous.

This is responsible legislation. While I opposed Ireland's decision to join the euro, we cannot leave the single currency now. If we are to emerge from the current hole, we must climb out of it using the ladder with which we climbed into it. In the years ahead we may decide to have a currency that is more domestically oriented and evenly balanced, focusing on Britain, the United States and Europe.

1:00 pm

Photo of John HalliganJohn Halligan (Waterford, Independent)
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I am sharing time with Deputy Mattie McGrath.

Given the €3.8 billion in budget cuts announced last year, one would expect legislation aimed at achieving a fiscal balance to be superfluous. The Government has already made it clear that it will not stray from the path laid down by the European Union and the International Monetary Fund. Many leading economists share my view that the current approach is steadily eroding all semblance of a caring society. It should also be noted that the IMF receives substantial interest repayments on our loans.

The Bill solidifies rules that are in place, accepted and being fulfilled by the Government. Unlike some members of the Opposition, I acknowledge that our structural primary balances show we have come a long way in making the fiscal adjustments needed to make the budget sustainable in the long run. I do not have a problem with being honest in this regard. I am concerned, however, by the Irish Fiscal Advisory Council's sobering assessment that there is a 40% chance of Irish GDP failing to stabilise by 2015. This is a worrying development because the council which will be a key and permanent player in the reform of our fiscal and budgetary system is held in high regard in financial circles. From speaking to economists, I do not believe its assessment will be far off the mark. This is a dangerous position, one which must be given considerable thought.

The domestic economy is on its knees and unemployment continues to rise. I accept Deputy Arthur Spring's argument that the Government bears little responsibility for many of our current problems. It was dealt a bad hand as a result of the terrible economic policies pursued by previous Fianna Fáil-led Governments. Without a solid deal on our debt sustainability, we face many more years of austerity. We must ask how long people will be able to tolerate further austerity. Irrespective of whether Government Deputies believe they are taking the correct approach to dealing with the economy, if the vast majority of the population come to believe their circumstances are intolerable, we will have a serious problem.

I acknowledge that fiscal responsibility legislation could have certain positive effects on fiscal conduct, for example, in providing for enhanced transparency and guidance in the budget process and ensuring lower risk premia. Unlike several other speakers, I do not have a problem with guidance being provided in the budgetary process. However, numerous international studies, including in the United States and China, have shown that legislation and fiscal watchdogs do not have much effect on deficits. It is also widely acknowledged that improving economic performance has little connection with fiscal responsibility laws. This has been demonstrated across Europe and in North, South and Central America. A 2010 research paper by the IMF, the body which is pressing us to adopt this law, found that fiscal responsibility laws had had little direct impact on fiscal performance in any country. We should study this interesting conclusion very carefully.

The Bill will make the road to recovery long and painful. The noose of banking debt hangs around our necks and will drag down generations of young people. Without increased participation in the labour force, the productive capacity of the economy cannot increase. It is unsustainable for any economy to have one eighth of its workforce unemployed as billions must be spent on unemployment benefits. History has shown that economies with an unemployment rate in excess of 8% and especially above 12% remain in economic trouble for many years.

It has been argued that the so-called golden rule setting out a maximum structural deficit does not correspond with the principle of good fiscal policy. Leading macro-economists such as Professor Karl Whelan have argued that the policies being pursued in Ireland will, over time, lead to debt ratios well above those considered sustainable or moderate. People should read what this top-class economist has written on the issue. He is non-political and I do not know if he is from the left, right or centre, but he is well regarded by economists across Europe.

Put simply, we must avoid a scenario in which we are so busy chasing and meeting targets that we drive the country into even deeper recession. The economy will not return to sustainable economic growth if we do not invest in maintaining and creating jobs. Unwavering support for austerity policies is making matters worse and will continue to do so for many budgets to come. One cannot prosper if one is buried under austerity or unable to buy or sell. The problem in the economy is that external investment and internal spending are much reduced. Any owner of a small shop or business will-----

Photo of Arthur SpringArthur Spring (Kerry North-West Limerick, Labour)
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The issue is access to credit.

Photo of John HalliganJohn Halligan (Waterford, Independent)
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That is also a problem. Small businesses employ the vast majority of the workforce. While a small number of large companies employ 800 or 1,000 people, many tens of thousands of small businesses each employ five, six or ten people. The owners of these businesses will tell us that people no longer have any spending power. They are unable to survive because of overheads, high rates and so forth. People are not coming to their shops to spend and not sourcing goods in the large volumes they used to purchase but are choosing instead to try to survive from month to month. If we cannot induce spending in the domestic economy and its many small and medium-sized businesses, we will be in serious trouble. This matter must be addressed.

I do not view my role in opposition as one of attacking every measure the Government introduces. As I stated, it was dealt a bad hand of cards. It galls me to hear Deputies from the Fianna Fáil Party advocate solutions to our economic problems. I also have some difficulties with what Sinn Féin is doing in government in Northern Ireland.

Job creation and protection are everything and the route we must take.

In the lead-up to the budget I remind the Government of the commitments given in the programme for Government on how the budget would be prepared. Leaking decisions and options is causing enormous untold anxiety to thousands of households. Fianna Fáil did it for years. I plead with Ministers, many of whom I know are decent, to stop this practice which only frightens different groups about cuts. All it does is forces people to save the few miserable bob they have. We save more in Ireland than in most other European countries, but it is no good to the economy because we are not spending it. Even those on small incomes are trying to put a few bob away every month just in case something bad happens. Ministers do a disservice to ordinary people by leaking budget details.

Will the Government meet and engage with groups such as Social Justice Ireland and pay close attention to the frank, honest and upfront suggestions they make? While the Government may believe it is on a path from which it cannot deviate, sometimes there is no harm in a little humility to listen to what others have to say. I have been involved with Social Justice Ireland for many years. Last night I attended its briefing on the budget at which some of the recommendations made sounded good. It is not too late for the Government to take some of them on board. If it can try different options without making the usual suspects pay, there will be some decency in this.

1:10 pm

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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I am delighted to be able to speak on the Fiscal Responsibility Bill 2012. I was delighted there was a referendum on the fiscal treaty which I supported, albeit belatedly, but I was annoyed that we did not look for a better deal on it. However, the Government accepted it. This Bill is as a result of the fiscal treaty referendum being accepted.


I have met the troika representatives twice in the past 12 months and I am delighted I will be meeting them again next Wednesday. I am also delighted the International Monetary Fund, IMF, in its recent analysis, has discovered, hey presto, that austerity is not working. On its own it will never work. One cannot bleed an economy dry because nothing would be left to charge the batteries to stimulate growth. At the last meeting with the troika representatives we were informed they expected Ireland to have a 2% economic growth rate last year. This was at a time when those involved in business and the unemployed, even the dogs on the street, knew there would be no growth. When I challenged them to explain where this growth may occur, I was informed it would be in the private sector. While I did not ask them what planet they were on, I asked where they had obtained these figures. They said, reluctantly, that they were getting them from the Government and officials in the Department of Finance. Many of these same officials are the ones who got us into the mess in the first place. I acknowledge what Deputy Arthur Spring said. These are the same officials who advised the Government at the time to go for the bank guarantee and their legacy is still there. I compliment Deputy Shane Ross and his colleague Nick Webb on putting pen to paper about these untouchables. These are the people around whom the system has been built and it is one we cannot crack.


What person - I would hate to call him a lunatic - told the IMF we would have a 2% growth rate this year. When the troika delegates informed me this growth would be in the private sector, I pressed them further, asking if they had sent any agent to see how no one in any shopping arcade in this city or any other rural town or village was spending money. Austerity is not allowing people to spend, while those who have some money are afraid to spend it.


Members have spoken about the unfortunate practice of flying kites before the budget. I know the Minister of State, Deputy Brian Hayes, has done much in his area. I apologise for not being with him in Clonmel last week for the meeting with the Chamber of Commerce. It was unfortunate that it had organised it on a Dáil sitting day and one on which the Technical Group had tabled a Private Members’ motion. I know, however, the questions the Minister of State was asked because I am asked them every day by businesspeople who are desperate and whose businesses are just hanging on by their fingernails. They were hanging on in the same way under the previous Government, but they were promised so much by the Government. They should not have been promised anything because everyone knew the former Government was going to be put out. Many of the then Ministers ran with their tails between their legs and would not face the people. Now these former Ministers are on savage pensions. I do not understand why the IMF does not deal with the cost base of senior public servants and politicians and, above all, the disgraceful pensions with which those who got us into this mess have gone off. Why will the Fiscal Responsibility Bill not deal with this issue? It will not because the very same people are drafting Bills. We must tackle the elephant in the room, public sector costs, while businesspeople who are paying taxes, PRSI and rates cannot continue.


Every Member who listens to the people knows this is the position. There is no footfall in shops and rates are too high because we are paying too many senior executives in councils. We can blame the former Taoiseach, Bertie Ahern, all we like, as he was the architect, but he received willing co-operation from the trade unions and senior public servants with a silent Cabinet that felt times were great and would never get bad. They granted incremental pay increases and gave different pay deals, but at what cost? Now we do not have a hope in hell of getting out of this situation with the bank debt we are asking ordinary taxpayers to pay. It is just not possible. As a very small businessman for 30 years, I know this. Let us take the Health Service Executive, HSE, as an example. Up to 70% of its budget goes on wages. That is lunacy. Any business, small or big, knows that if it gives nearly 40% of its turnover in wages, the game will be over soon. It was embarrassing to see the Taoiseach, like his predecessor, Brian Cowen, having to answer questions in the House every morning on the legacy and mess of the HSE. Some great work has been done in the executive, but there is a legacy of being overstaffed with too many officers. It has too many chiefs and not enough Indians.


The most sickening thing last week was to see the Taoiseach on the front page of Playboy magazine. I wish him well, as I voted for him as Taoiseach. However, I had expected a lot more from him.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
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For the record, he was on the cover of Time magazine.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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The Deputy must read the other magazine.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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I am sorry. I meant to say he was like a playboy on the front page of Time magazine. The people suffering from austerity and the kites being flown are traumatised. The Taoiseach is doing his best at home, but he is not at his best abroad. He came back with a deal from the European Council in June which, again, was supported by the President of the European Parliament last week. However, it has been watered down and attacked by the French, German and Dutch finance Ministers. How dare they? If we had a deal, we had a deal. If we had a promise, we had a promise. It is time to assert ourselves, particularly when we take up the EU Presidency shortly. We must tell Ministers that we made a mistake when we voted for the bank guarantee but that it can be corrected.


Where are the people from the smoke-filled rooms who advised us to vote for the guarantee? Most of them have retired on big pensions or in other jobs, cushioned from its effects. Look at Mr. Cardiff - he was promoted to greener pastures in spite of opposition to his appointment and the fact that he was not fit for the job. It is a mess which has been allowed to develop by democratic governments. The system must be untangled, dismantled and brought back to basics. The people concerned need to realise they are not a special preserve, like the hare which must be preserved from being hunted down; they must be accountable.

That is all I have to say and all I want to say. It was the same with the pension levy. When the then Minister, the late Brian Lenihan, God rest him, brought in the pension levy, who escaped it? It was the senior public servants. I challenged him on it and he thanked me after I put down a motion in our party, because he was told there were only 112 or 113 affected but it turned out that 860 were affected. Why should they have got away with the pension levy when everyone else had to pay it? Why should this cohort of people with their hands around power and access to the Minister escape?

1:20 pm

Photo of Brian HayesBrian Hayes (Dublin South West, Fine Gael)
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They pay the pension levy.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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They do not pay the pension levy. There were 860 of them. There was a list of them throughout the public service, including county managers and directors of services. They did not pay the pension levy. They were exempted from the special levy. Everyone else had to pay it. The Minister of State need not shake his head. He can go back and check it. There was a change, but it was a disgraceful message to send out to everyone else who had to take the austerity and put their shoulders to the wheel to try to pay their way and support the Government in balancing the budget. That cohort of people was allowed out.

There were cuts of €3.8 billion last year and there will probably be something similar this year. We simply cannot do it. It is not doable and we should tell the troika, the speculators and the bondholders as much. They took crazy, greedy decisions to make vast investments and they are laughing all the way to the bank. They are punch drunk with laughter because they know that they have conned us all and we are all paying for their gambling. They expected to be burned. According to the Tánaiste, Deputy Gilmore, they would be burned and hell's fire would not be as hot. This is why the people are so disgusted and annoyed. The public want the country to thrive. Parents have no wish to see their young people emigrating and their businesses disappearing in front of them. The have no wish to see the disgraceful behaviour of Allied Irish Banks and other banks which are increasing mortgages, not lending to people and trying to con the people. I am pleased that John Trethowan has finally come around and has secured some honesty from all sides. People have told him stories of the banks not lending. He is getting a little tough with them and rattling their cages somewhat. It is time the banks were exposed as well.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
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I call Deputy Mary Mitchell O'Connor. I understand you are sharing with Deputies Brendan Griffin and Joe O'Reilly. Is that agreed? Agreed.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I listened carefully to Deputy Mattie McGrath. Perhaps he should get his economic advice from Time magazine rather than Playboy magazine.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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I corrected my mistake. Deputy Mitchell O'Connor should not be silly.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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It may have been a slip of the tongue.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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The Chair corrected my mistake and I was happy to have the record corrected.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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When I was ten years old I started earning pocket money. I earned it by doing odd jobs around the house. I was conscientious but I did not have much choice. If I did not do my jobs I did not get paid; it was that simple. I became good at budgeting and I appreciated the value of money. I appreciated the cost of commodities and I appreciated my financiers, my mother and father. There was no sense of entitlement in our house. If one wanted something, one worked for it. More important, I appreciated that I could not simply get what I wanted and that I had to work hard for it.

Unfortunately, many of us have failed to teach our children these tools. During the so-called Celtic tiger era, money was easy and pocket money became a thing of the past. Children received an allowance and we became posh. Many people ran away with themselves. Many people borrowed money recklessly and many banks lent money recklessly. In many families children got more than €50 or €60 to keep going. If they ran out, there was an unwritten rule that they could tap their parents for more. During the Celtic tiger era we were too busy accumulating, socialising and consuming. We were too busy to be concerned with budgets or to teach our children life skills. We were too busy to be concerned about putting the skills embedded in us into practice. William Feather said that a budget tells us what we cannot afford but it does not keep us from buying it. That was our philosophy in a nutshell at an individual level, at county level and at national level.

Where do I place the blame? It lies with the Government, Deputies, banks and the regulator. We were all appointed to lead by example but we did a poor job. Like careless parents, they gave us everything but they did not call a halt and only fuelled the party. George W. Bush said "It's clearly a budget. It's got lots of numbers in it". That was the Government's approach. We were flying high on a property bubble and we were encouraged to spend, spend, spend. That was the level of thinking about the sustainability of our budgets. It was only a matter of time before it all collapsed.

Unfortunately, we all got bruised by the landing, including the most innocent among us. In many ways, these people got hurt the most. Not one day goes by in my office when I do not receive e-mails and telephone calls from persons in serious negative equity struggling to put food on the table and to send their children to school. People who have lost their jobs ring me, as do older persons who have lost their pensions for which they spent 40 years saving. Other people contact me who had invested their money in bank shares, which were supposedly as safe as houses. This must never happen again.

I support the Bill just as I supported the fiscal stability treaty referendum. Now that I am a Deputy, I aim to provide leadership and to instill the values my parents instilled in me, values associated with money, commodities and finance. This is to ensure that our country is never again brought to its knees because of reckless budgeting and the banks. It will not be easy to bring Government spending within sustainable limits and to balance the budget. It is not a small task but we are getting there, taking our medicine and making the hard decisions. We are not treating Irish citizens like overindulged children because that would not benefit Irish citizens in the long run. If those in the previous Government learned anything, I hope they learned that much.

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
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I welcome the opportunity to speak on the Bill. The people made their voices heard clearly on 31 May with regard to the stability treaty. The majority of people to whom I listen in my constituency in Kerry and throughout the country tell me that we must eliminate our budget deficit, do so as quickly as possible and prevent future budgetary deficits from arising. Thus far, this has proved to be stubbornly difficult but it is a necessary remedy for our country and the economy. The move to balance the budget as quickly as possible is crucial to our long-term economic recovery prospects. The burden of budgetary deficits and the years of future negative budgetary adjustments represent a shackle around the legs of the economy, something we must cast off. It is affecting confidence in our domestic economy. As long as the level of confidence in the domestic economy remains low we will be faced with vast problems such as unemployment and emigration.

I welcome that the Bill provides for the establishment of the Irish Fiscal Advisory Council on a statutory footing. The advisory council has a significant role to play in our recovery, but only if it is listened to. Previous speakers have criticised the advisory council. It is unhelpful to hear criticism based on people not agreeing with what they hear. The country must face up to the reality rather than giving soundbites countering what we have no wish to hear. The country must accept that we are spending too much and we cannot afford it. Every cent we spend in excess of what we take in will have to be paid back by future generations and this is something I am uneasy about.

There are two main accepted ways of adjusting a budget: one is to cut spending and the other is to increase taxes. It is four years since the explosion of the current crisis but I believe we still have significant scope to do both. We must ensure that any cuts implemented will not hurt the sick, poor and disadvantaged and that any tax increases do not cost jobs. This is not easy to do but with some imagination it can be done. It has been said many times that the low-lying fruit has already been picked but I disagree. There is still plenty of low-lying fruit left but we must take our hands out of our pockets and reach up high.

Debate adjourned.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.