Mark Dearey (Green Party)

I cannot recall a time when the permeability that always exists between the political process and the state of the economy has been greater. They are causing each other to flux in a way that none of us can recall and have created a level of instability that needs to be addressed and remedied. On one level, it is futile to spend too much time looking back, but it is necessary to acknowledge that behind the economic collapse that we have suffered lay a series of political decisions and a political process that just was not up to the task.

My colleague, Deputy Eamon Ryan, has stated a few times that this was the first time Ireland ever got rich. Maybe there was always going to be an inevitable splurge. Most of us remember when we got our first year's full employment or our first pay packets when we were much younger than we are today. There is some truth to what Deputy Ryan said. Joining the euro and the unprecedented access that gave us to money beyond measure, as far as some of our banks were concerned, and as far as some of the banks that lent to us were concerned, meant that without the proper regulation and oversight in place, there was always the danger that something like this could happen, and indeed it has. It is a dreadful shame that this was the case. Instead of realising that with great opportunity comes great danger, we only saw the opportunity and completely ignored the dangers.

One of the reasons I am in the Green Party is due to the analysis we produced in that period. We could see quite clearly that the planning process was completely unable to deal with the amount of cheap credit that was available in the country. This in turn triggered much unneeded development, under the weight of which the planning process simply collapsed and left us with inappropriate, unneeded and in some cases, useless development on the edge of many of our villages and towns and large parts of the inner urban area of Dublin.

Senator Donohoe's earlier contribution was stirring. It certainly touched a deep chord in me when he spoke about the value and the place of moderation in politics. I am sometimes accused by those who support me from the left of being a raving capitalist because I run a business, and I sometimes get accused by those on the right who look at our position on issues such as section 23 of being a "lefty". This leads me to the conclusion that I am probably somewhere in between, and that is a space I am happy to occupy. If cherry picking the best of the ideas from both sides is what the Green Party does, marrying it to the notion of trying to develop an economy within the limits of the planet's ability to sustain us all, then that is an important function to develop analysis and politics in that space on behalf of the country and in a way that influences the wider political process.

I was struck by some of the comments made today about the easy sloganeering accompanying some parties' political analysis. I would identify Sinn Féin, in particular, as being guilty of this. At times it is comic book stuff. We are aware of the impact of such doctrinaire thinking in my part of the world during the Troubles and the vacuum left when rational economic thinking did not take place and instead people came to rely on the block grant from the United Kingdom which insulated people from political reality and the fact that Ireland had to survive as a small, open economy in a fiercely competitive world, that we could not spend money we did not have and that we could not continue to tax less and spend more. That is not possible in a country that must rely on its own resources to generate wealth. Unless Mr. Adams, in particular, is aware of an oil well in Ireland of which I am not aware, none of what he is saying makes sense and must be consigned to the bin.

The Bill, effectively, constitutes our attempt to meet the demands of year one of the four year recovery plan. That demand is to reduce by €6 billion the deficit which is currently running at approximately €18 billion. We must eliminate the deficit in diminishing numbers this year, next year and the following two years.

The EU-IMF document states:

The National Recovery Plan lays out our strategy for staying the course of needed reform in a way that is socially fair ... Recognising that Ireland already has put in place a business friendly environment, our plan also lays out a range of structural reforms that will be implemented to underpin economic stability and enhanced growth and job creation.

The question is: how fair is it?

Senator Hannigan talked at length about the reason we had to protect spending on social welfare, in particular, and the way cuts were affecting his constituents, as they are mine. Like him, I am getting it on the doorstep on a daily basis, but he and the Labour Party generally must recognise that its proposals would require higher levels of taxation. I am not necessarily saying that would be a bad thing, but it would have to be done with extreme caution, particularly because of the dampening effect it could have on wealth creation. There is a balance to be struck in that regard.

We have one idea to which Senator Boyle referred. I understand the Minister, Deputy Lenihan, saw merit in it, but the Department of Finance did not, which is most regrettable and says a great deal about the relationship between the public service and elected representatives and Ministers, in particular. It is that tax credits to which all of us are entitled be refundable if we cannot avail of them on earned income. Such a measure would have immediately generated a strong signal of equity to which people could have related in their suffering. It is a measure I would dearly love to see in the Bill and I regret it has not been included. Having a refundable tax credit, even if it was only worth, say, €100 in the first year, would cost between €40 million and €50 million. Bearing in mind that it was possible to achieve a switch yesterday at a cost of €80 million, such a strong signal could have set us on course towards a properly integrated tax and welfare system, whereby all income, including welfare payments, would be taken into account. It would get rid of the barriers between work and unemployment and also mean the low paid, the working poor, as they are often described, would be able to cash in unused tax credits. That would have been a tremendous signal to send and I regret it did not happen.

Other amendments I would like to see made to the Bill which I understand are not possible, in part because of our decision last Sunday not to continue in government, to address some of the enterprise issues raised include the following recommendations in the innovation task force report. It states we need to re-evaluate whether our tax offering to mobile, intellectual property, IP, intensive businesses is attractive enough and develop what it calls an innovation box that the rest of the world can see clearly makes Ireland a home for high value IP activity.

There are a number of opportunities I would like to see taken at the level of small and medium businesses, if the debate on the Bill could allow for it, encompassing the alignment of accounting and taxation treatment of deductible expenses; the allowing of the same capital allowances for corporations, sole traders and partnerships; and the bringing of the current system of capital asset depreciation into line with the actual lifetime of these assets. These would be small but significant measures that would affect businesses at the margins which I hope will be considered in the Finance (No. 2) Bill later in the year and regarded as being practical and implementable by the new Government.