Seanad debates

Thursday, 2 December 2010

EU-IMF Programme for Ireland: Statements

 

2:00 pm

Photo of Paul BradfordPaul Bradford (Fine Gael)

We are in a crisis, as is much of Europe, and we must work our way out of it. The word "work" is one we need to concentrate on because the areas of job creation, growth and stimulus must be very much at the centre of any recovery plan.

The Minister of State, Deputy Mansergh, with his previous hat as an expert on Northern Ireland, will recall that when the British army came to the streets of Northern Ireland in 1971, they were initially welcomed with open arms as people bringing help, support and succour to the under pressure minority community. When news broke some weeks ago about the possible intervention of the IMF in our economy, there was a certain degree of comment along the lines that we, through our Government, had made such a mess of the economy that outside forces could do no worse. In fact, some people welcomed that assistance would be sought and obtained from outside sources. Now that the reality has dawned and we realise fully what an IMF-EU bailout plan means, in the same way the mood turned against the British army in Northern Ireland, the mood of the Irish public is one of anger, distaste and distrust in regard to the package before us. To use an awful cliché, we are where we are, and we must now see how we can move forward.

When we reflect on the language of the various items of correspondence from the Minister and the Central Bank Governor in regard to Ireland facing an economic crisis without parallel and the root of our problem being in the domestic banking system, which at its peak was five times the size of the economy, this shows the scale of the problem. We must all live in the reality that we are in an enormously difficult financial, economic and political place. This House and, more importantly, the other House await the next instalment, which is next week's budget. In a sense, a reading of the document gives us, more or less, a total picture of what will be in the budget next week.

The Government is subject to a very strict agreement with the European Union and the IMF, and economic and financial flexibility have been removed from our hands.

We must ensure the measures required to bring the public finances under control will be introduced. We must ensure this will be done fairly but we cannot escape the need to have a genuine job stimulus plan to address the jobs crisis. The mantra about such a plan can sound glib and unrealistic but, as a society, we cannot continue with 450,000 people out of work. With every single job lost, taxes are forgone. Social welfare payments cost the taxpayer approximately €20,000. We must, therefore, try to put employment creation at the very top of our agenda.

If there is to be a positive development in this time of despair, despondency and rampant pessimism, we must make certain commitments to our people. We must commit to applying the fiscal and financial measures as fairly as possible. We must ensure our word will be our bond in claiming employment creation measures will be pursued vigorously. We must reflect on the fact that our political system, which is very much at the core of the problem, will be transformed. A much more experienced politician than me, of whose identity I am unsure, said, "Never waste a good crisis." We should apply this in respect of our current political system. I hope that, over the course of the coming years, we will have the maturity in this House and throughout the parliamentary system to recognise that massive changes will have to be made at national and local government levels if we are to have a political system that is responsive and fully accountable for decisions that need to be taken.

The Minister of State has expressed views from time to time on our current political system, which is characterised by considerable inter-party constituency rivalry and multi-seat constituencies. These phenomena allow the electorate to have what in betting parlance would be called a pound each way. This does not provide us with the possibility of electing a government with a sufficient policy foundation and electoral strength to adopt the measures often required and which are now certainly required.

It is clear we will have a general election soon and that a Government, almost certainly a coalition Government, will be formed thereafter. It will start out with a reasonably comfortable majority. If we are to look not only three months ahead but up to ten years ahead, we will note politics urgently needs to be reformed. The political system needs to be reformed if we are to have a Parliament that is able to debate and make the tough choices that will be required. This may seem a long way removed from the EU-IMF document. Notwithstanding what the Minister of State says about our domestic banking system being the root of our problem, the real root of our problem was a political system that responded to every interest group during the so-called good years and did not have the maturity or political flexibility to consider the bigger picture and plan for the future. Bankers are to be blamed for many of our difficulties but we, the politicians, must take more than our fair share of blame.

We have often debated social partnership agreements, which were so effective in 1987, 1988 and 1989. Social partnership almost took over as the alternative form of government. Policy debates and political debates did not really take place in this Chamber or the other House but within the confines of the partnership process. Much of the current problem stems from incorrect political choices, which in turn stemmed from a lack of political debate. The generation of the partnership and consensus approach caused difficult decisions to be postponed at first and then suspended totally.

The actions required over the coming years are clearly outlined in regard to the quarterly reviews. The hands of whoever is in government, no matter what the combination of parties, will be fairly tightly bound. There will be some degree of flexibility but, from taxation and budgetary perspectives, I presume the very precise figures that have been agreed will have to be adhered to. All the political parties, especially those about to enter government, will face a major challenge in meeting the targets reasonably and fairly.

The structural reforms are quite interesting and necessary. I note the reforms in respect of the legal and medical professions. Such reforms should have been achieved many years ago but, because of our archaic way of doing business and willingness to seal off certain sectors of business and society from reform, they were not. I welcome the fact that those areas will now be looked at.

Facilitating adjustments in the labour market and reducing the minimum wage are referred to in the document. It is stated that measures are to be introduced by May 2011. If it were as easy as reducing the minimum wage, I am sure the problem would have been resolved a long time ago. We know from the number on the minimum wage that savings in this regard will be minimal. The cuts will be painful for those on the minimum wage. "Facilitating adjustments in the labour market" is an economic phrase. We need to proceed in a much more humane manner. We must do everything we possibly can.

It was stated in the House that, Department by Department, we would consider job creation measures, initiatives and approaches. I am not an expert on the announcement by FÁS during the week of a new programme involving schools. It may not be perfect but we require that sort of flexibility across all Departments if we are to provide the public with some hope in respect of this overwhelmingly depressing document.

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