Seanad debates

Thursday, 26 March 2009

Forthcoming Budget: Statements

 

3:00 pm

Photo of Paddy BurkePaddy Burke (Fine Gael)

I welcome the Minister of State, Deputy Mansergh. Senator Norris said he would keep this type of debate on the agenda every month. I agree the House should have more of these debates.

In my time, I played football and know that one cannot catch the ball without keeping one's eye on it. The Government took its eye off the economic ball over the past several years. The housing bubble is the main factor why we are in these economic straits. New migrant workers and returning immigrants seeking accommodation gave a boost to the housing market but prices soon went too high. That was, however, going to come to an end at some point.

While the economy was successful in the technology sector, it was also a disadvantage. Costs got out of hand and our manufacturing base and cottage industries disappeared. We are not competitive any more. Senator Jim Walsh claimed wages are too high in Ireland when compared to other economies. However, that depends for which economy one is pitching. Several Ministers have said Ireland needed to go for the high-end and high-skilled economic model. Doing so, they took their eye off the ball when it came to the manufacturing sector when we should have achieved a balance between it and the high-end sector. As a result, the economy is not in a good state.

No Minister has yet informed us how bad the economy really is. The Taoiseach and the Minister for Finance have moved from 9% of borrowing limits to 10% to 11%. It should be remembered every 1% equals €1.5 billion, a lot of money for an economy this size.

On this morning's Order of Business I raised the issue of public private partnerships. The Government took a fancy to these when providing infrastructure and championed them over the past several years. They have been used in the construction of water and sewerage schemes, schools and roads. For several years, I have called for debates on how efficient and expensive these partnerships are. Most of these partnerships have 25-year terms with an annual built-in inflation rate of 6%. These rising costs in, say, five years will be too expensive for small businesses using water schemes or schools. As the economy is now in a deflationary cycle, what is the position on public private partnerships? I have not been able to get any Minister to explain if these contracts will allow for deflation. It is an area that should be seriously examined.

Senator Butler raised an important issue, how charges have got out of hand. It is outrageous, and the Senator was right to raise it. It is a direct result of the Competition Authority. Fees cannot be negotiated on a broad basis. The Government must examine this issue. I spoke to a person today who bought bulk gas recently. He was quoted a price of 60 cent per litre, or whatever is the unit of measurement for gas. He eventually bought it from another company for 36 cent. That is outrageous; it is an almost 100% difference in price.

My family has a small business — a restaurant. When one examines the difficulties small businesses must deal with, one can understand why they are closing down. In many cases they are paying no rent to landlords. Until the Government grasps the issues and the current situation levels off, nobody will know where they stand. The quicker it levels out, the better. This budget should have been introduced long ago. Action should have been taken. It will not be a mini-budget, as it has been described, but a vicious budget. It probably must be.

The costs of our small business include wages, rates, insurance, bank charges, bank repayments, water charges, sewerage charges, refuse charges, IMRO charges, ESB, VAT, charges for sanitary services, doormats, window cleaners and sanitary disposal. The Minister can smile at the list but it does not include general maintenance and repairs and that is before one purchases the food or equipment for a small, family-run restaurant. One pays 13.5% VAT on every euro one takes in so one is left with only approximately €8.65 out of every €10 taken in. The Minister of State must see the difficulties small businesses have, and that is only in that sector. I am sure the difficulties are equally tough in other areas of business. On top of that, consider the treatment they are getting from some bank managers. The behaviour of some banks should be examined.

Another issue should be raised. The Minister of State was formerly a long-term civil servant. I consider the Civil Service and public servants in the local authorities, health boards and so forth as the same. Some of the brightest people in this country are in the Civil Service; that was always the case and always will be. However, the situation has gone wrong over the past few years. Better local government was introduced for local authorities but it divided the workforce. Some workers got promotion at the behest of county managers, and I believe this has made the local authorities inefficient and has divided the loyalties of staff.

Look at what happened in various Departments. Ms O'Neill in the Department of Transport took the blame for not telling the Minister for Transport about the Shannon issue. Before that, a person in the Department of Health and Children when Deputy Micheál Martin was Minister was promoted to the Higher Education Authority. In the good times, the people in the Department of Finance could not tell us how much the country's surpluses would be each year and now they cannot give us figures in the downturn. I do not blame the civil servants for this. There is no leadership and the Government must take the blame in this regard. The Minister of State was a senior civil servant for many years and I am sure he knows what I mean.

I also blame this and previous Governments, of all hues, for bringing in a great deal of outside expertise or advice at the cost and to the detriment of the Civil Service. I believe the civil and public servants could solve many of the problems in Departments, local authorities and the HSE if they were given the opportunity to do so.

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