Thomas Byrne (Fianna Fail) | Oireachtas source

I apologise to the Cathaoirleach and the Minister of State for my absence for the early part of his speech. I had thought a colleague would be here in my stead. I thank the Minister of State for outlining the Government's position and thank him for coming to the Seanad, as he so frequently does.

The picture the Minister of State and the Government paint of the economy, however, is more rosy than the reality. The gross national product for the second quarter of this year was flat. The economy avoided slipping back into recession by just ¤3 million. This shows the difficult position the country and the Government are in. The overall figures show the familiar story that has been continuing for the past few years. Companies that are selling outside the country are doing well, and in some cases very well, but domestic demand continues to fall. The massive expansion on the export front, which the Minister of State graciously acknowledges goes back to at least 2010, is not making up for the depressed demand in the domestic economy. In the last year, consumer spending was down about 2.5% and investment spending was down 18%. For our economy to recover properly we need more than exports, although we are grateful for them. We also need consumer spending and internal business investment to increase.

Unfortunately, there has been a fall of about 24,000 at work this year and 34,000 fewer people are employed full time than at the end of 2011. The fall in the second quarter of this year was the highest since 2010. Broader measures of unemployment would show that about a quarter of the workforce are not working to the extent they would like. This presents a severe challenge, not just for the Government but for the entire political system. It presents a challenge for us in opposition not just to criticise and castigate, as was the practice for many years, but also to provide some alternatives and constructive suggestions, which the Minister of State invited today.

The Government should scrap the pension levy it imposed on private pensions last year to pay for a spin led jobs initiative which made no impact whatsoever on the jobs numbers. I debated this expenditure of money with the Minister of State at the time.

I suggested to him that there should be a jobs target and that we would actually see where the money was being spent and what the results were. I also suggested I would be the first to congratulate the Government if unemployment was reduced as a result of all that spending, but it did not happen. We took a tax out of people's pensions which, in some cases, resulted in a 10% reduction in their pension payments, in particular those of the Tara Mines workers, although it also had an impact on schemes such as the Aer Lingus one, but there was no direct result except a positive PR spin that the Government was doing something about it. We are not careful enough about how we spend our money. That was a huge problem for many years and it is about time we learned the lesson. Instead of that pension levy, we should mandate pension funds to invest in job creation schemes. There has been a tiny bit of progress on that from the Government but not enough to make a difference.

Since coming into office, the Government has undertaken the jobs initiative, a jobs friendly budget and an action plan for jobs but the number of people at work continues to fall. The burden of rates is becoming intolerable for many small businesses while large multiples pay a much smaller proportion of their turnover on rates. Serious concerns have been brought to the Department's attention in regard to the Valuation (Amendment) Bill and to the dangers for business which it presents. In fact, that Bill is a jobs shedding one and it is time the Government took a serious look at the concerns expressed. Many of the business associations have not been on the case in regard to this Valuation (Amendment) Bill but the few that have hit the nail on the head in regard to certain provisions of the Bill and how it will kill jobs.

We need to reverse the cuts made to home insulation grants. In budget 2012, grants for internal wall insulation were slashed by 64% for apartments and mid-terraced houses and by 46% for semi-detached houses and end of terrace houses. There were cuts of 55% in the grants available for external wall insulation, which is more expensive, and the grants for attic insulation were cut by 20%. That is unfortunate and it is short-sighted, it will cost jobs and it will make it extremely difficult for Ireland to meet its retrofit and energy reduction targets. Not only will it cost those jobs, but people will spend more of their money on utility bills rather than in the productive sector of the economy.

We have to tackle the black economy. One suggestion I ask the Minister to take seriously is that in every commercial transaction, there should be a requirement to give and receive a receipt. As I understand it, there is no such requirement in Ireland while in many continental countries, if one leaves a shop without taking a receipt, one is technically guilty of an offence. It is not a requirement here and the contractors federation is looking for something similar to that. If there was a legal obligation to give and receive a receipt in every commercial transaction, it could help tackle the black economy.

I have a number of concerns about the mortgage situation. It is completely germane to the whole issue of the economy. I was not expecting the Minister to address it relatively comprehensively and I am glad he did, but I have a number of concerns. The mortgage-to-rent scheme is not working. It is simply a pilot scheme. The Minister's former colleague, Olwyn Enright, and I produced a joint report for the former Oireachtas Joint Committee on Social and Family Affairs and we recommended that as one of a number of solutions. I thought one would rent the property from the bank but instead the Government has to give the bank money to pay off the mortgage. It seems that cannot work without significant expenditure by the Government.

The mortgage arrears resolution procedures within the banks are starting to kick in with banks actually dealing with these cases. The result is the banks are now moving to get rid of people. For the past few years, this was not organised and it gave people breathing space but that is now gone and people are getting letters from the banks saying there is nothing more they can do for them. The banks are now judge and jury in regard to individual cases. We will have to look at that because I do not think it will work for the benefit of the individual and we are only starting to get experience of how that system works.