Pearse Doherty (Sinn Fein)

I thank Senator Norris for sharing time. I thoroughly enjoyed his contribution and agree wholeheartedly with what he said about a renegotiation in respect of our natural resources. I also agree with his comments on the 50 cent charge on medical prescriptions.

We have discussed on many occasions the Government's failure in respect of the bank guarantee and the collapse of the banking sector. Last week we were informed that the final cost of the Government's actions might be anything up to €50 billion. If we add the various costs relating to the banking collapse and the Government's response to it, including NAMA etc., the final bill for taxpayers could be in the region of €100 billion. Leaving that fact aside, we know where we now stand. We also know who got us into this mess, who is robbing the taxpayer and that they have no mandate for doing so. Those to whom I refer are, of course, in government.

I wish to focus on the direction we are to take. The Minister for Finance has repeatedly stated fiscal retrenchment through immediate and deep public spending cuts to reduce the fiscal deficit will help to restore the confidence of financial markets in the economy. He has also stated that if we keep interest rates low, we will secure economic recovery. The Government has declared that this is the only possible credible course of action. The difficulty is that the current Administration dismisses anyone who considers that fiscal deflation on the scale outlined, particularly at this delicate stage, as completely unwise. The political and media consensus dictates that the deficit is the only issue that matters in the context of economic policies, that the measures to be set out in the budget in order to reduce this deficit are unavoidable and that there is no alternative to the budget plan and timetable set out. That is where matters stand.

Sinn Féin offers a different view. It is the only party in the Dáil which has not subscribed to the need to cut spending in order to reduce the deficit. Those in government might try to pigeonhole Sinn Féin, but the reality is that there is an alternative. We are not opposed to deficit reduction but believe the 2014 deadline is unrealistic, particularly when one takes the Government's bank bailout plan into account. We are against spending cuts to reduce the deficit. Our approach to the economic crisis is as follows.

We need to design a realistic deficit reduction strategy based on overhauling the tax system, eliminating wasteful public spending and investing in jobs. That will in turn increase revenue coming into the State and lessen the burden on the social welfare bill. We believe a stimulus will reduce the deficit and the Government's spending cuts plan is not merely unfair but also fails to reduce the deficit in any meaningful way. The public finance facts support us in this and the recent Exchequer figures show that income tax revenues are down by 6% on the same period last year and 4.4% on the Government's estimate for the period.

There is something wrong with the Government strategy, which is dangerous in its prescription for the future. The Government and Minister for Finance believe they can slash public spending, bring low earners into the tax bracket and cut benefits, taking billions of euro from the economy and people's pockets, but that none of it will have any impact on unemployment and growth. It is the stuff of fantasy. Not only have we been thrust into a position where we have massive structural deficits caused by an unchecked property crisis but drastic spending cuts are throttling the domestic economy.

We need a number of set principles which can lead us to economic recovery. There are four of these. Public spending cuts and tax increases on low income earners are not part of the solution but part of the problem. The economy should be grown to shrink the deficit, as repairing the public finances is dependent on repairing the economy and reversing the rise in unemployment. Through investment we can repair the major infrastructural, social and enterprise deficiencies in the economy. Increasing taxation will yield higher Exchequer savings than spending cuts, although these must have an impact primarily on high-income earner groups.

Sinn Féin has put forward proposals and there has been much discussion about how the Seanad should be used, consensus and all the rest. I will take one of our alternatives as an example. I will not speak about a wealth tax that countries in Europe have introduced, with the French version much higher than what we propose. That would take in in the region of €1 billion. Considering the discretionary tax reliefs, we are the first party to come up with standardised discretionary tax reliefs, which makes the system fairer. Everybody would get the same relief, regardless of income. I listened last night to the comments of Senator Marc MacSharry, finance spokesperson for the Government in the Seanad, saying he agreed that the issue was a "no-brainer". The idea was coming from Fr. Healy in that case but if it came from Sinn Féin, it would probably have been dismissed like the rest of the party's ideas.

We need to increase taxation but there is an alternative to the slash and burn policies. Senator Norris spoke about the 50 cent prescription charges on the homeless when we could standardise reliefs for high-income earners and introduce a third rate of tax for those earning above €100,000 per year. We could also introduce a wealth tax for those with assets, excluding the family home and farm, above €1 million. We should take in new money instead of cutting young people's social welfare payments, charging people without homes for medication and slashing and burning right across the economy.

That is the deflationary strategy that has been implemented for the past two years and it is time to be brave and indicate that the Government got it wrong. We cannot borrow any more because the markets do not trust the country. Our Exchequer figures have decreased because we have deflated the economy and if we pursue the course of action that other parties have signed up to of taking at least €3 billion from the economy for the next four years, it will completely deflate the economy. We need a stimulus package.

The debate occurs across the world as to whether stimulus or austerity works. Unfortunately, in this Parliament Sinn Féin is the only party arguing for stimulus. We need to consider other avenues as this is about the future of our country and the hardship people face. The Government should forget that the ideas come from another party in Opposition but take them on merit. Why would any of the proposals put forward by my party and me, which are costed by the Department of Finance, not work? We should have that debate.