Terence Flanagan (Dublin North East, Fine Gael)
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On 31 May people all over Ireland voted in favour of the stability treaty, with a considerable majority of 60.3%. There was support for the treaty across all sectors of society, including retail, agriculture and business, because they recognised its importance to ensuring continued investment, stability, recovery and growth. The treaty is one of a number of measures aimed at helping the economy to recover and avoid future economic crises. The vote was a positive step on our road to recovery because it ensured not only that we could access the European Stability Mechanism but also that future Governments would not have the power to be as reckless with taxpayers' money as they were in the past.

Formal ratification of the treaty will only take place once the Fiscal Responsibility Bill 2012 is enacted. The Bill provides for the implementation in Irish law of Articles 3 and 4 of the fiscal compact treaty to strengthen rules on the management of the public finances. Article 3 sets out the budgetary rules to which future Governments will have to adhere, while Article 4 sets out debt rules. The Bill provides a statutory basis for a range of fiscal policy and expenditure management reforms in Ireland. The fact that the budget rules will be implemented across 25 EU member states will also give Ireland and the eurozone security. The strength of other economies in the eurozone is vital to the survival of the euro and a return to growth in the economy.

The Bill establishes the Irish Fiscal Advisory Council on a statutory basis to monitor Ireland's fiscal policy. I welcome the establishment of the council which will comprise five experts from various backgrounds who will independently review the Government's budgetary targets and objectives. The fact that the council will comment publicly on actions taken by the Government in respect of fiscal policy can only serve to introduce greater transparency to the process. We already know the council's position on the economy from the reports it has issued.

Article 3 of the treaty provides for a number of fiscal rules, including a commitment by governments that the general government budgetary position shall be balanced or in surplus. There is also provision for an automatic correction mechanism which will be triggered in the event that there are significant deviations from budgetary targets or the adjustment paths towards it. Allowance will be made for deviations from objectives in exceptional circumstances. Article 4 provides for a reduction of 5% per annum in the difference between the actual debt-to-GDP ratio and the 60% threshold where a member state's debt is in excess of this threshold figure. It is important that these fiscal rules are implemented in Irish law in order to increase governmental accountability and transparency. Implementation of the budget rules will also increase investor confidence in the economy and have a positive impact on our ability to attract foreign direct investment which has improved greatly since the Government entered office. Foreign investors will be confident that the Government is controlling the country's finances and that we are able to fund the country into the future. This will lead to further investment in job creation and growth measures.

The Government has thus far met its targets and fiscal commitments under the EU-IMF programme. We have strictly adhered to the plans set out by the troika, which is appreciated by all concerned. The Bill will make a valuable contribution to the reform of Ireland's budgetary framework and help us to get our finances back on track.

Peter Mathews (Dublin South, Fine Gael)
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I thank my colleague, Deputy Terence Flanagan, for outlining the technical aspects of the Fiscal Responsibility Bill 2012. Public finances are in meltdown in Ireland, across the eurozone and around the globe. The ballooning of sovereign debt in the last three years is due to the conversion of private banking sector losses which have not yet been fully recognised into national debt. At a conference held in Wyoming in August 2011 it was pointed out that the economies of developing nations with combinations of sovereign, household and non-financial business debt exceeding an aggregate of 300% would be suffocated and become depressed, sometimes for a long period, as has happened in Japan.

Many wise and highly qualified experts in economics and finance have pointed out that it is the debt burden across nations that is causing the problem. It is good that governments address their own fiscal responsibilities and the generation and spending of revenue in a balanced way across the sectors of the economy, including health, pensions, education and social welfare supports for people who become unemployed or who need extra help and assistance. These are the main sectors that governments have become involved in over the last number of years, particularly since the Second World War.

When the financial system ran amok due to the lack of regulation of prudential operation and greed in the industry across the globe, the financial infrastructure - savings and pensions - of nations became imperilled and governments were strong-armed and frightened into taking on the huge liabilities and losses of these sectors. We are right to examine fiscal responsibility and to address the current budget controls in Article 3 of the treaty, and it is right for governments to consider the controls on debt-to-GDP ratios under Article 4. However, I lose my confidence in the bureaucrats and the establishment when I see that even in the drafting of Article 4 there is a contradiction. The fiscal advisory council, which is being institutionalised by means of this Bill, got a fright when I pointed this out to it when it came before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. We should read this again so we can think about it. When bureaucrats do not get it right, where does it leave us with regard to getting overall direction and strategy right? Article 4 states:

When the ratio of a Contracting Party's general government debt to gross domestic product exceeds the 60% reference value referred to in Article 1 of the Protocol (No 12) on the excessive deficit procedure, annexed to the European Union Treaties, that Contracting Party shall reduce it at an average rate of one twentieth per year as a benchmark, as provided for in Article 2 of Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure, as amended by Council Regulation (EU) No 1177/2011 of 8 November 2011.

For the next 18 months, we as a Parliament must set aside the partisan petty politics of the past. We must put them aside and spearhead a well focused and well directed effort towards the recovery of this nation. We must examine where we are in terms of debt. Our household debt, our non-financial business or corporate debt and our sovereign debt are the highest in the developed world. However, the penny has not dropped - or rather, the cent has not dropped - in Brussels. We must keep hammering this point home. Hungary, which was damaged due to low interest rates in the EU region, is now struggling under an IMF programme. The Government there is publishing one-page advertisements in the country's newspapers pointing out to the IMF the situation in Hungary and how it will not be pushed around but will talk raw horse to the IMF. We need to do that and to keep doing that.

Our vote in favour of the treaty was 60:40, but we should remember that 60% was because of the fear that we would not have access to the ESM. That was the main driving force behind the 60% vote. The driving force was not what was contained in the fiscal stability algebra of fiscal balance in an annual budget and debt-to-GDP ratios, but whether we would have access or be left hanging out to dry or left in the quicksands of a financial burden. As Deputies, we all know that households are in difficulty. People come to us in tears and distress because they cannot handle the debt. This is the message we must get across.

Basel III had all to do with financial regulation and I commend it, along with the book Guardians of Finance, to the House. It talks about the sentinel and the regulators of the financial world. We need a qualified and articulate sentinel that will be able to assess and monitor the regulators in the financial system. That is where the problem lies.

Simon Harris (Wicklow, Fine Gael)
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I welcome the opportunity to speak on the Fiscal Responsibility Bill 2012. The Bill addresses Articles 3 and 4 of the stability treaty and in doing so it is another piece of the complex jigsaw the Government, the previous Government and all citizens have had to compile and piece together in a difficult and painstaking way in order to get the country back on the road to fiscal sustainability and to restoring economic sovereignty. Just as the stability treaty sends out a message to the wider world and to those we depend on to lend this country money that we are open for business and that we are prepared to take the measures we must take and to learn from the economic mistakes of the past, the passage of this Bill through the Oireachtas is another step.

To bring the issue down to brass tacks, the passage of this Bill will mark the maturing of our nation and, I hope, of our politics. What it means is that the days of auction politics are truly over. In the past, every time we had a general election, there was a little extra children's allowance or a bump up in the pension or whatever, regardless of whether these were sought or assessed or whether analysis had been done as to whether the country could afford it. Those days must now be over. However, yesterday we saw one party in this House continue in a regrettable manner with auction politics, by coming out as opposing a property tax to which it had signed up. This serves nobody well.

Deputy Mathews is correct. We need mature and bipartisan discussion and we as a Government need to embrace ideas from others. We need to forgo auction politics, under which promises are made that if people vote for us we will get rid of some tax or hike up spending. All of us, including members of political parties and Independent Members, are guilty of this. However, this Bill puts manners on us and puts an end to that practice by compelling the Government and the Oireachtas to live within certain parameters. This is important. Clearly, there are issues that need to be addressed and areas of spending that need to be increased when we regain economic sovereignty, but the notion of throwing money around and of whoever promises the most money winning the election is ridiculous. It has brought about much of the pain and suffering that Irish families are experiencing every day.

With that in mind, what this Bill does with regard to putting the Irish Fiscal Advisory Council on a statutory basis must be seen as a welcome development. It was proactive and beneficial that the Government established the council before the passage of its legislation, but the enhancement of its role and the placing of it on a statutory basis when the Bill passes will be a welcome development. The council will provide independent oversight and will allow the public, the media, those talking heads that like to comment on the economy and taxpayers with greater access to advice, economic opinion, transparency and a greater level of mature engagement on the issues surrounding fiscal probity in this country.

The fact that the council will continue to make public assessments and pronouncements is vital. However, there is one caveat. It is important to make this caveat or we may pack up and go home. The Fiscal Council cannot become the Government. The economy drives society and a successful economy can help bring about a more equal society and address many societal issues. There has been commentary in the media and in this House recently that the fiscal advisory council has said we "must" do something and therefore the Government "must" adopt it in whole.

That defeats the purpose of a participative democracy. That defeats the purpose of a Government. A Government's priority has to go beyond the economy. I welcome the provisions in this Bill that will ensure future Governments have to account for their actions. If they choose not to accept advice, they will have to explain that decision. If they deviate from the parameters that are being set out, they will have to explain why that has happened. It would be wrong of the media or Opposition or Government politicians to presume that the Fiscal Advisory Council will be the be-all and end-all of this country. It will not decide our budgets and everything else. We do not want to go back to the days of unelected representatives meeting in private rooms and having too much influence. I respectfully suggest that the Government needs to strike a balance between the need to account for any decision not to accept the advice of the Fiscal Advisory Council and the need for the Government and this House to uphold their political and societal remit, which is broader than the remit of the council. That is important because government is about more than the running of the economy.

As part of this discussion on fiscal responsibility, I want to share with the House my experiences of some of the difficulties that have been experienced by the Committee of Public Accounts in trying to establish fiscal transparency. In my short time as a member of that committee, I have found there is generally quite a high level of scrutiny of governmental and departmental spending, regardless of whether people like individual decisions. Secretaries General and heads of agencies, etc., are brought before the committee to be scrutinised at a public forum and to have questions put to them. It is clear that there is a lack of transparency with regard to how public money is spent by the HSE and local authorities. Members will be aware that the Committee of Public Accounts had a much-publicised and talked-about meeting with the HSE the other day. Representatives of the HSE were called before the committee to account for a significant budget over-run that is causing concern in every community. They told the committee that the HSE is operating with eight different financial systems that were inherited from the old health board structure. How many years have passed since the establishment of the HSE? It has yet to develop a single co-ordinated system. It receives information that is fed in from 50 other financial systems. Anyone watching this debate who is involved in small business will say it is a recipe for disaster to have to depend on 58 different financial systems. These legacy issues have to be addressed. The rush to establish centralisation, as in the case of the HSE, is a mistake if structures are not put in place to ensure proper financial probity.

The same problem applies to local authorities. We scrutinise public funds to the nth degree until the moment they leave a Department and go to Wicklow County Council or any other local authority. We cannot ask any more questions about money once it reaches local authority level. The Committee of Public Accounts does not have a remit in this area. Council budgets are difficult to read. It is extremely difficult for taxpayers to understand them. It is frustrating for Members of this House who are trying to get to the bottom of them. The Government is attempting to broaden the tax base by asking people to pay the household charge and, presumably, introducing a property tax in a matter of weeks. If we expect people to start contributing to local coffers, there is a greater onus on us to provide for transparency in local government. Perhaps the Committee of Public Accounts could be given a new remit, or an alternate structure could be set up, to address the transparency deficit in terms of how local authorities spend their money. The local audit committees are part of an in-house structure. The public needs to know what is going on. I am most frequently asked about the household charge not by those who do not intend to pay it, or who are in downright opposition to it, but by those who want to know what it is for, where it is going and how they can pay it. If I am honest, I will admit that we have made significant mistakes in this regard. We have to learn from them. We could learn from the British system. I believe the British authorities circulate a document once a year to say where taxpayers' money is going. That is the level of transparency people need. If we are serious when we talk about fiscal responsibility and transparency, we need to go in the same direction.

Clare Daly (Dublin North, Socialist Party)
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I wish to share time with Deputy Mick Wallace.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Is that agreed? Agreed.

Clare Daly (Dublin North, Socialist Party)
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The political approach referred to by Deputy Harris as "the days of auction politics" actually involves democratically elected Governments introducing policies that meet the needs of people and being accountable to the electorate. This Bill, which represents a move away from that approach, proposes to enshrine neoliberal policies in law forever and in perpetuity. If it is passed, we could face the spectacle of a Government that wants to implement different economic policies finding that its mandate, as an expression of the will of the people, is in contravention of our law. This legislation will put the interests of bankers, etc., ahead of the interests of the population.

I agree with much of what Deputy Mathews had to say. Many of the points that were made during the referendum debate have been rehashed in this House in recent days. The outcome of the referendum was largely based on fear, rather than an understanding of the content of the legislation itself. We were told we had to vote "Yes" to avoid a severe budget in the winter. The dogs on the street know that the budget we are facing will probably be one of the most severe we have ever had. We were told to vote "Yes" for a working Europe and to deliver jobs. As soon as the referendum was over, we saw an exodus of jobs. The job creation announcements of recent days have been offset by job losses. The Government made a key announcement when it said that a further 8,000 jobs are to be lost in the public sector. That is the direction in which this is going.

When one weighs the policies that have been pursued over recent years and the strategy outlined in this legislation against the IMF's admission that it got its austerity sums wrong and the fact that we are continuing merrily along the way of austerity, one has to ask whether the lunatics have taken over this asylum. The IMF has made it clear that its calculations were wrong. We did not need the IMF to say that the impact of austerity has been a multiple of what it thought it would be. We know it from our direct experience of the hardship that people in this country are having to cope with every day. The IMF has accepted that it made a mistake and that the pain being inflicted on the patient will kill him rather than make him better. The IMF intends to carry on anyway, however, because that is what it said it would do. That is the logic that underpins the legislation we are passing here today. We have consistently got the growth figures wrong in this country - we have always overstated the predicted level of growth - and they have had to be revised downwards repeatedly. Given that there is no international recovery and domestic demand is being slashed and devastated for the seventh successive year, it is time to call a halt. It is not a good idea to continue with austerity by enshrining it in law. It is a very bad idea. These policies are not part of the solution - they are actually adding to the problem. Those points have to be taken on board.

I wish to make it clear that this legislation is about putting the needs of bankers and bondholders ahead of the interests of ordinary people. In effect, it is about legitimising and normalising the socialisation of private debt. It does nothing to deal with the real issues that are being faced by ordinary people. In recent days, the point has been made that we are being asked to give legislative effect to Articles 3 and 4 of the treaty, which were the most controversial aspects of it, and thereby bring them into Irish law. During the referendum campaign, it was argued that this does not matter because these provisions exist anyway. That is absolutely and patently false. The balanced budget provision in Article 3 is a new one. The idea of confining the structural deficit to 0.5% of GDP is new. That is a fact. That is what we are bringing into law here today.

The Bill also provides that if Government debt exceeds 60% of GDP, the country will be compelled to reduce it by one twentieth the following year under Article 4. I will give a flavour of what that means in reality, setting aside all the statistics, etc. It will present new difficulties for the Irish economy and Irish economic policy. Over the past five years, in excess of €20 billion has been taken out of the Irish economy, with devastating effects. We know that the stated aim of the Government is to take a further €8 billion or more out of the economy in order to meet the 3% targets. This new provision means we are facing the spectacle of just under €6 billion in additional cutbacks. The Government has to say where that money will come from. It did not answer that question during the treaty debate. Will the money come from the cuts in disability payments to those between the ages of 16 and 18 that have been flagged? Will it be found by attacking elderly citizens, for example by taking away their electricity or reducing their rates? Will universal payments like child benefit be taken away? Will 500,000 home help hours be withdrawn? Will the pay of public sector workers be butchered? Will employment levels in the public service be slashed further?

What we are talking about is curtailing public expenditure to deal with a problem that is essentially one of private debt. However, it does not work. The policies we are bringing in are outlawing investment. The only way in which we could actually deal with the crisis is being outlawed by this provision.

We know also that as and from 1 January, when the treaty comes into effect, it is expected that our debt-to-GDP ratio will be just short of 120%, or €200 billion, which will mean a repayment of approximately €4.8 billion a year under the new criteria of the 1/20th debt reduction rule. We have to deal with this. We also have to deal with another feature of the treaty - the ability of one country to bring another to the European Court of Justice for failing to meet the criteria laid down for the structural deficit. This is a new provision which could result in the imposition of penalties of up to 0.1% of GDP on the country in question, which, in the case of Ireland, would be the equivalent of €1.6 billion. Just what this country needs is penalties of billions of euro for not meeting these targets. It is, therefore, extremely regressive legislation.

The establishment of the Irish Fiscal Advisory Council, far from being a blow for democracy, actually amounts to the opposite in that it takes powers away from the elected representatives. It basically states, "You can vote for any Government you like, but, once it comes into power, it is going to be bound by these decisions; therefore, take the pain and get on with it because austerity is here to stay." That seems to be the impression that is being given. We have to add the fact that no economy ever recovered through austerity measures. What we need is not more of the same, as it has been proved that this has had disastrous consequences. Continuing on in the same way is not just foolish, it is also dangerous and damaging to the population of the country. We need something radically different, not this Bill. What is needed has to centre on reducing the debt burden which will not go away. Unless it is addressed, there is no future for the country.

The second thing which has to be done but is not being done is to put people to work. We have a scenario where there was €32 billion in uninvested profits in 2010 alone. Why is the Government not taking measures such as introducing taxation measures and so on to encourage job creation, to ensure jobs are created with the billions of euro in profits being earned on the backs of the people? We have the spectacle of the ECB loaning over €100 billion to banks at a rate of 1% to pay off debts to bondholders. Meanwhile, jobs are being created in wind and wave energy projects in a sector in which we are to the forefront because of geographical conditions, yet what do we hear? The private sector, frothing at the mouth and with its eyes open, is looking at the scale of the benefits to be gained. Why is the State not investing in these jobs, developing the wind turbine energy sector and leading from the front? If we bring in these policies under the fiscal treaty, in effect, we will be outlawing the idea of a State-led programme of public works to put people to work. Instead, we have the ludicrous measures aired by the likes of the Minister, Deputy Phil Hogan, last week, whereby we would have people working for their dole payment by cutting hedges and doing the work of council workers, at a time when the number of council jobs is being diminished. That is not the way forward, which we can say with certainty because these are the policies that have already failed.

I take great heart from the struggles throughout Europe and the developing momentum in Portugal, Spain, Greece and elsewhere, with ordinary people taking to the streets. We see the spectacle of general strikes and Portuguese workers forcing the government to withdraw from a brutal attack which would have resulted in workers losing a month's pay a year. It would actually be pro-European and a gesture of solidarity for us in Ireland to align ourselves with the people concerned and say to them that we are on their side and that their fight is our fight. Part of our reason for doing this should be pursuing a rejection of the treaty and a refusal to provide for it in law. It should mark the beginning of a debate to find an alternative strategy.

Mick Wallace (Wexford, Independent)
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A big argument is raging in Europe as to what is actually best for the peoples of Europe. Mr. Barroso has argued that in the age of globalisation pooled sovereignty means greater power for individual members. This does not wash, however, with the peoples of Europe and many claim political virtue and economic interest demand a halt to integration and a reassertion of the powers of national legislatures. There is no doubt that enhanced co-operation on an economic level is desirable in some ways. Unfortunately, however, politically, the likely outcome is a further shift in power away from the elected representatives to unelected technocrats and a further weakening of democracy in Europe. It will lead to greater powers for the bankers at the European Central Bank and lawyers at the European Court of Justice, with the civil servants in Brussels who interpret their judgments.

It is amazing how people can sit on either side of the fence, yet both are convinced that their arguments are right. Many in Europe actually believe the real villain of the crisis is the concept of financial capitalism and how it has operated. It is said the crisis did not start in Europe but in America, where the manner in which financial transactions were allowed to be deregulated completely undermined the system worldwide. That is the all the more reason to have tighter financial regulation. The proposed transactions tax is one step in the right direction. Ireland is saying "No" to it because Britain is saying "No" and there is a fear jobs will be lost in the financial centre and relocated to London. It is very important, therefore, that Ireland and Britain buy into this idea because we will end up in the same place again, unless we increase regulation in the financial sector. When the crisis began in 2008, there was much talk about doing things differently. The neoliberal idea was undermined, but four years on it is gathering pace again and there is huge pressure on governments not to be too severe in the manner in which they regulate financial institutions. I find this frightening and short-sighted. The world will not solve its problems until it tackles this issue.

We have talked over and over about so many ideas. I recently read an extract by Ha-Joon Chang who has written several very good works, one of which I find very definite and clear. Referring to the problems of the 1980s and 1990s, he states:

Throughout the 1980s and 90s, when many developing countries were in crisis and borrowing money from the International Monetary Fund, waves of protests in those countries became known as the "IMF riots". They were so called because they were sparked by the fund's structural adjustment programmes, which imposed austerity, privatisation and deregulation...


The IMF programme, in other words, met such resistance because its designers had forgotten that behind the numbers they were crunching were real people. These criticisms, as well as the ineffectiveness of its economic programme, became so damaging that the IMF has made a lot of changes in the past decade or so. It has become more cautious in pushing for financial deregulation and austerity programmes...


Given these recent changes in the IMF, it is ironic to see the European governments inflicting an old-IMF-style programme on their own populations. It is one thing to tell the citizens of some faraway country to go to hell but it is another to do the same to your own citizens, who are supposedly your ultimate sovereigns. Indeed, the European governments are out-IMF-ing the IMF in its austerity drive so much that now the fund itself frequently issues the warning that Europe is going too far... [This is scary.]


What has been happening in Europe – and indeed the US in a more muted and dispersed form – is nothing short of a complete rewriting of the implicit social contracts that have existed since the end of the second world war. In these contracts, renewed legitimacy was bestowed on the capitalist system, once totally discredited following the great depression. In return it provided a welfare state that guarantees minimum provision for all those burdens that most citizens have to contend with throughout their lives – childcare, education, health, unemployment, disability and old age.

...Instead of it being explicitly cast as a rewriting of the social contract, changing people's entitlements and changing the way the society establishes its legitimacy, the dismembering of the welfare state is presented as a technocratic exercise of "balancing the books". Democracy is neutered in the process and the protests against the cuts are dismissed. The description of the externally imposed Greek and Italian governments as "technocratic" is the ultimate proof of the attempt to make the radical rewriting of the social contract more acceptable by pretending that it isn't really a political change.


The danger is not only that these austerity measures are killing the European economies but also that they threaten the very legitimacy of European democracies – not just directly by threatening the livelihoods of so many people and pushing the economy into a downward spiral, but also indirectly by undermining the legitimacy of the political system through this backdoor rewriting of the social contract.

We must look at the bigger picture. In the same way that business now works too much on a short-term level in order to achieve short-term gain, the political process is behaving in a similar manner.

Noel Harrington (Cork South West, Fine Gael)
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I support the Bill because more than 60% of the people and 66% of those in Cork South-West voted in favour of the referendum on 31 May. That cannot be ignored by those who speak about there being a democratic deficit.

The Bill deals with the core issue of the functions of this House, namely, to raise taxes from citizens and provide that these moneys are spent for the benefit and in the best interests of all citizens properly and effectively. The reason the Bill is before us is that we have seen gross examples of fiscal irresponsibility in recent decades, mainly on the part of the main Opposition party, whose members are not present. During the period between 1997 and 2011, the Fianna Fáil-led Government expanded total Government expenditure from €23 billion to €76 billion. It more than trebled Government expenditure in 14 years or, to put it another way, in 1997 the then Government was spending approximately 40% of gross national product. When it left office last year the then Government was spending approximately 60% of gross national product. How one can call that responsible defies explanation. The result of the trebling of the national Exchequer debt from €39 billion in 1997 to a crippling €119 billion in 2011, or 94% of gross national product, has been catastrophic for the country.

One could ask where the money was spent and whether it was managed well for taxpayers or, as we suspect, if the then Government had bought the electorate with its own money or if it had borrowed the money and spent it on mismanaged projects with major cost overruns. Let us remind ourselves and commentators of approximately 20 examples of projects around the country initiated by Fianna Fáil-led Administrations between 1997 and 2011 which represented extremely bad value for taxpayers. Marina projects were railroaded through by Ministers in counties Kerry, Galway and Sligo, on which a total of €5.72 million was wasted. I will start with the smaller projects. A new passport system went over budget by €8 million. Overruns in the renovation of Farmleigh House came to €9 million. The Punchestown Centre - a huge white elephant - cost more than €14.8 million in mismanaged funds. A total of €18.9 million was wasted on the purchase of five properties that were never used in the provision of accommodation for asylum seekers. The refurbishment of Cork courthouse cost €25.35 million above and beyond what had been projected. We spent €26.5 million on the Thornton Hall prison site, yet not one sod has been turned. Who remembers MediaLab Europe? The sum of €35.5 million was wasted on it. There was a cost overrun of €37 million on the Kilkenny flood relief project. The cost of e-voting machines is put, conservatively, at €60 million which went down the Swanee. The cost of the extension of the medical card system to all persons over 70 years of age was underestimated by €60 million. Stadium Campus Ireland, otherwise known as the "Bertie Bowl", cost the State €100 million. The PPARS payroll system cost the State €160 million. Cost overruns and the under-estimation of pre-1953 pension entitlements are estimated at €201 million and counting. The cost overrun on the East Link and West Link toll bridge projects was €407 million. Cost overruns in the mismanagement of the Luas project amounted to €471 million. The cost underestimation for the Dublin Port tunnel amounted to €350 million. The cost of the decentralisation programme is €900 million and counting. The residential institutions redress scheme deal with the religious orders cost the State above and beyond what it should have by an estimated €1.2 billion. The construction costs of five major inter-urban dual carriageway or motorway routes reached €3.25 billion owing to cost overruns and mismanagement.

That is a small sample list of 20 projects I examined involving gross mismanagement and waste by Governments between 1997 and the previous election. It comes to a grand total of €7.331 billion. We could do with that capital investment now. I am reminded of the advertisement about insurance fraud which warned about someone “putting their hand in your pocket”. These projects which were mismanaged essentially cost €1,600 for every man, woman and child in the country. To put it another way, it was €10 million wasted for every Fianna Fáil Deputy who sat on the benches of this House in the ten years between 1997 and 2007. We now see the consequences.

The Independent Members in this House cannot even agree on whether one should pay the household tax. They are encouraging non-payment of a sustainable taxation measure that is being lauded by socialist groups across the globe. That defies logic. It is a great luxury that they can rant and rave across the floor and oppose every move to increase sustainable Exchequer income or reduce Exchequer expenditure.

Finian McGrath (Dublin North Central, Independent)
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That is not true.

Noel Harrington (Cork South West, Fine Gael)
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However, they must remember that the people voted for the Government by a considerable majority to remedy the situation and that they confirmed that decision by voting in favour of the fiscal compact in the referendum.

In simple terms, we cannot borrow money if we cannot pay it back and, to paraphrase a former Taoiseach, we are living way beyond our means. How well he knew it. According to the 2012 Estimates, as a Parliament, on behalf of the people, we will spend €55.75 billion or €12,192 for every man, woman and child in the country. That is fine, but the real problem is that we are only raising €38.08 billion or €8,312 for every man, woman and child in taxes and other income. We are overspending by €3,879 for every single person.

Members opposite will oppose every effort to increase revenue by one euro or one cent or to cut expenditure. They do not want to pay back one red cent. Regrettably, such policies and ideology are as bankrupt and defunct as the country. We need a plan to reform the country’s financial affairs. I look forward to other Deputies accepting the reality in order that they can reform their ideology and policies to bring them more into line with those of their European and global colleagues. There is something uniquely Irish about the way the parties on the left are carrying on. I call for fiscal responsibility to be shown by Members on the other side of the House because if we all work together, we will have a better result for the people. I have no problem with anyone pointing to weaknesses or faults in the proposals to remedy the economic climate. We would welcome counter-proposals. In opposing everything, however, they are following the same path followed by Fianna Fáil and the Progressive Democrats in the past decade and a half, but in the opposite direction, in that Fianna Fáil never knew how to stop spending, while the Progressive Democrats never knew how to stop cutting taxes. These two irreconcilable policies could never work together and we all have to live with the results. It is time we all played our part in rebuilding the country. We must all put our shoulders to the wheel a little more forcefully.

We cannot oppose everything. We have voted by a large majority to be more fiscally responsible. With that in mind I want to see those who oppose a cut in expenditure or a rise in tax propose a realistic alternative. If ever we needed a fiscal responsibility Bill we need one now so that this can never happen again. That is the present situation but I want to see a better way of planning our nation's finance so that my children and grandchildren and everybody else's children do not have to face this situation again in another 20 years. This is cyclical; it happens and will happen again as it happened before. By joining this pact we will ensure stability for all our citizens.

Our Ministers have to make hard choices every day of the week. We have inherited the Croke Park agreement, which is a delicate balance between the interests of those working for our State, and reducing our deficit. I encourage those in the public service to make a contribution to rebuilding our economy. I hope the new fiscal council created by this legislation will have a positive effect on our economy and that people will never be told, for example, to go off and commit suicide as they were before. It might make better law if the Government was able to publish its reaction to the council's reports and give reasons for possibly not accepting all its recommendations so that we can all judge for ourselves whether the best road has been taken. We are not all experts but we can be self-critical - as we should be. As part of our path to fiscal responsibility we need to examine our laws and regulations on development land, the building industry, our banks and other financial institutions, the handling and management - or mismanagement - of investors' money, the handling and previous mishandling of taxpayers' money. All need to come under scrutiny.

I encourage the Minister for Finance to examine the possibility of promoting a savings scheme to kick-start a saving habit among our young people who are often offered often less than 1% interest although the Government pays much higher interest rates to borrow. I am sure an incentive package could be devised by the National Treasury Management Agency which would be of benefit to the State and its citizens.

I am proud to support this legislation which has the support of the people. I wish the Minister and the Government well in the very hard decisions they will have to take on behalf of the Irish nation in the coming eight weeks.