Seanad debates

Wednesday, 14 December 2011

Fiscal Responsibility (Statement) Bill 2011: Second Stage

 

4:00 am

Photo of Jim WalshJim Walsh (Fianna Fail)

I have listened to quite an amount of the debate on the monitor and it has been good, constructive and positive. This is needed because the difficulties we are in, some of which are domestic and others of which are global, have their genesis in a failure of regulation and a failure to have in place effective medium to long-term good, intuitive fiscal policies. Countries right across Europe, as well as the United States, are displaying serious issues from which it will take considerable ingenuity to extricate themselves. I have been concerned for some time that our political systems are not up to the challenges we now face internationally. I recently spoke to a diplomat from the German Embassy on the question of whether anyone in the last decade, until about two or three years ago, could have envisaged a scenario in which one contemplated the possible abolition or collapse of the euro, which in turn might trigger a collapse in the European Union. I went a step further and wondered aloud what it might do for democracy. Democracy itself is in the spotlight and is being tested by what has happened. When one considers some of the centrally managed economies, China in particular, but others such as Indonesia and the BRIC economies, there has been a shift in the relative global economic status that has obtained for the past century or thereabouts. Someone once told me that China was the leading economy in the world at the end of the 18th century and into the 19th century. It was only with the emergence of the United States subsequently and the Communist revolution in China that it declined.

As for our political system, I will reiterate a point I made in this Chamber previously. This is not a partisan point but 15 people out of 226 Oireachtas Members control all the decisions made. When I sat on the Government benches, effectively I only bucked the whip once. One goes with the whip and the Members opposite have been doing so since they went into government. Moreover, Members on this side do so in opposition and the same practice operates in the Dáil. I consider this to be a corruption of the checks and balances that should exist in this system. Rather than looking at piecemeal populist measures, root-and-branch analysis of the entire democratic system must be undertaken in Ireland and in other countries to establish what can be done. I have come to the conclusion that there must be a complete separation of the Executive from these Houses to enable the Houses to function independently and to be more strenuous in holding the Executive to account. This would be good for the Executive and it is akin to the position in sport whereby coming up against a good player or team brings out the best in one. It is the same in politics and my concern is that this has not been happening. Moreover, this is not limited to Ireland. I recently met a parliamentarian from Greece who holds an international position and we discussed the direction taken by the European Commission and European Union and how all the focus has been on Germany and France and in particular, on the leaders of those countries. He said they wanted to lead but to be able to do so, they must be able to tell people to where they are leading them and they do not know. The same thing is happening in the United States and Members should consider the present levels of partisanship in Congress. I refer to the difficulties experienced, which had an international knock-on effect at the time, when trying to come to some form of agreement between the two parties on coping with that country's serious debt issues.

I will reiterate to the Leader a point I made in this Chamber previously. This House is at its best in debates such as this debate, today and on other days and that is its function. I have suggested to the Leader and the Cathaoirleach that Members should invite to the House people of the calibre of Nouriel Roubini, an internationally-recognised economist, or Roberto Newell, who as a director of Smurfit Kappa would be accessible and who was involved in the banking crises in three South American countries of which I am aware. By so doing, Members would open their minds to a range of things they must do. In this regard, I compliment Senator Barrett on introducing this Bill because one measure that must be taken in Ireland is the introduction of absolute transparency. I would go further than transparency but the Bill under discussion refers to transparency and perhaps that is as far as the House can go under the Constitution.

On the introduction of a deficit budget and in particular, once a structural deficit as mentioned here today many times has been identified, it should be accompanied by an analysis as to how it is to be corrected. I recently attended the Georgian parliament in Tbilisi while its Minister of Finance was before the House. He was explaining to the Parliament, in respect of some of the measures he was taking and deficits he was introducing, how he intended to eradicate them over the following 12 months. Moreover, he was asked strong and incisive questions as to how he would do that and we need to do the same. However, the political establishment here does not have the expertise. Obviously it was lacking in the Department of Finance and certainly it did not exist in the Central Bank or the office of the Financial Regulator. It is only by exposing ourselves to such international expertise and then putting in place the requisite disciplines that we will ensure this does not happen again. I acknowledge that this does not deal with the issue of how we can extricate ourselves from our present position, which will be a major challenge.

I followed with interest what went on in Brussels last week. It was interesting to read of the penalties that emerged that would apply to countries that would contravene the regulations in place and will be and should be put in place in future. Missing from those regulations was one stipulation I would love to see. As a long-time politician at local level and in this House, I acknowledge the need to place disciplines on them. In this context, I would welcome a condition whereby the introduction of a deficit budget in excess of a certain percentage of GDP must lead, within 120 days, to a general election. Nothing focuses the minds of politicians like facing a general election. However, politicians need disciplines.

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