Sean Barrett (Independent)

I welcome the Minister and assure him of my support in the vital task he is undertaking. It is essential that we restore the country's finances to order. Senator O'Keeffe referred to the Minister, Deputy Noonan, and his colleagues, the Minister for Public Expenditure and Reform, Deputy Howlin, and the Minister of State at the Department of Finance, Deputy Brian Hayes, as the Celtic troika. We wish them every success as they engage with the Ministers of the spending Departments. I am pleased it is a troika as the contest was unequal in the past with one Minister for Finance being hounded by 12 spending Ministers at the Cabinet table.

The Minister referred in his contribution to four themes. The last of these is non-controversial and I commend him on his achievement in reducing the cost of borrowing. There are signs the economy is expanding, but they are extremely tentative. The EU report on Ireland's economic adjustment predicts that it will be 2015 before we get back to the nominal GDP value we attained in 2008. Despite all our efforts in the area, the numbers working in industry have declined by 53,000 since before the recession. The McCarthy report on the disposal of State assets indicated that our real GDP should be 42% higher in 2013 than it is likely to be. The Minister is attempting an incredible degree of adjustment.

I am particularly interested in measures to prevent a recurrence of the disasters which began with the wholesale guarantee of financial institutions three years ago last Friday and culminated in our rescue by the EU and IMF on 1 December last year. I accept what Senator O'Donnell said about all of that. In terms of enhanced governance, I hope this House will play a substantial role in ensuring greater scrutiny of Government decision-making. It is strange to reflect that on the night of the guarantee one Minister was in Sandymount and another, a constituency colleague of the Minister, Deputy Noonan, was in Limerick, when they received a knock on the door asking them to sign off on the Cabinet decision. It is not clear how many Ministers attended the Cabinet meeting. We in the Oireachtas Committee on Finance, Public Expenditure and Reform have found it difficult even to obtain the records of what happened that night. The decision that was made was subsequently criticised by Christine Lagarde and Alistair Darling as excessive. Moreover, it is my understanding that a memorandum of understanding from 1 June 2008 indicates that at that time, the various Central Banks and Finance Ministers in Europe were agreed that this was a European problem. I hope the Minister will reactivate that memorandum of 1 June 2008 in the Department's archive. The bottom line is that we mistakenly nationalised what was a Europe-wide problem.

Moral hazard is an important issue in all of this. If the bankers, builders, lawyers, auctioneers and senior public servants who caused this problem are all exempted from the consequences and they are borne by ordinary taxpayers, have we any guarantee they will not do it again? NAMA is appalling, as it has brought in the same developers and employed the same legal firms and auctioneers. That sends all the wrong signals. I would like the two zombie banks to be sold immediately and NAMA shut down. We must build a new economy and the people who caused all the problems cannot be allowed to get away and they cannot be rewarded for their inefficiency.

I am a member of the Joint Committee on Finance, Public Expenditure and Reform and representatives of the banks have appeared before us. They do not get it; they do not realise the damage they have done to this country. AIB is looking for a salary of €690,000 for its new chief executive officer and I will support the Minister right down the line regarding his position on that. This is outrageous. We want so-called Captain Mainwaring banks or utility banks and not casino banks and I do not see why anyone running one of them would need to earn more than the Taoiseach or Ministers. I acknowledge what the Minister has done in this regard.

I am still waiting, as is the Minister, for the chartered accountants regulatory body to report. Accountants prepared accounts for these zombie banks. There have been cases of people acquiring companies that had dud accounts who successfully sued the accountants. That should not be ruled out on behalf of the taxpayer. The fact that the accountants still cannot tell us three years later through the regulatory body whether there was impropriety in the preparation of those accounts is appalling. Most independent analysis says there was.

I note the IMF reference to the comprehensive review of expenditure. There are concerns that the spending Departments have slowed it down and that it might not be published. We need it to be published and if the Minister is under pressure not to publish, I ask him to resist those requests because we must have a full discussion as to how a country had to borrow 32% of GDP last year because of its banks. I acknowledge that was exceptional but we cannot keep borrowing at this level. Expenditure must be analysed and subject to scrutiny.

According to the an bord snip nua report, the number of senior civil servants increased by 82% between 1997 and 2009 and number of civil servants overall by 27%. The growth of senior bureaucracy at the expense of front-line services in the education and health systems has been notorious. This part of the report should be investigated. The Wright report highlighted the lack of economic competence in the Civil Service. It found only 7% of civil servants in the Department of Finance had such competence as opposed to 60% in the corresponding department in Canada. We badly need to upgrade in this regard given the size of the task faced by the Minister.

The Minister for Public Expenditure and Reform referred to people being captured by lobbying. The banks had inordinate influence over economic policy on that dreadful night three years ago. The construction industry had such influence prior to that and the Galway tent was the embodiment of that. Tax lawyers and accountants also have influence. It is estimated that they have successfully chiselled €12.8 billion out of recent budgets in tax expenditures. This was done secretly and the proposals were not debated openly. When members of the tax commission raised this, the representatives of tax lawyers and accountants on the commission said these loopholes could not be abolished because they made their living out of them. It is unproductive for them to be this powerful as they are depriving the Exchequer of money it needs. Will the Minister examine this?

Yesterday the metro north project was given final approval but it has been hopelessly analysed in economic terms. The pressure being put on the Minister is based on the belief that because so much money has been spent, we cannot stop now. We need a central project evaluation office. Such projects should not be analysed by the promoters or by the Departments seeking to secure them, as happens now; this should be done independently. The analysis should be available for a year and everyone could examine it to ascertain whether it represents value for money. The current way of deciding on large projects, including compensating the partners in roads schemes because the volumes of traffic were incorrectly predicted, should fall under the Minister's scrutiny. Public private partnerships combine the worst of both worlds with dud projects getting through. They are similar to hire purchases where the projects eventually cost much more than they would have if the State had undertaken them with proper project appraisal.

We must address why we were rescued by the IMF across a wide range of fronts and I commend the Minister on that. A great deal of work remains to be done on the public finances and he has to be hard - and public opinion wishes him to be harder - on banks, accountants, property developers and their lawyers. Yesterday the issue of the jailing of the lady from Tullamore, County Offaly, was raised, yet the people who brought the country to its knees are still walking around. The Minister would have support if he adopted a much tougher regime for those people. That is part of what everyone wants - measures to prevent a recurrence. What happened between September 2008 and December 2010 must never be allowed to happen again. We need new institutions to cope with such eventualities. I wish the Minister every success and I will support him in that.