Seanad debates

Wednesday, 12 May 2004

12:00 pm

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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I move:

That Seanad Éireann

commends the Government for its prudent handling of the public finances and reaffirms that it is a key objective of An Agreed Programme for Government to sustain a strong economy and "keep the finances of general Government close to balance or in surplus.";

acknowledges, in particular in this regard, the achievement of the Minister for Finance in maintaining a stable and disciplined budgetary policy at a time of global uncertainty, when many of our neighbours in Europe are experiencing deficits, serious economic setbacks and, in some cases, negative economic growth;

accepts that while inevitably there has been public concern given the international downturn and the consequential slowdown in the Irish economy, it has only been by acting sensibly and refusing to take the short-term option of massive borrowing, that the Government has contributed significantly to Ireland's fiscal and economic future;

recognises that our economy is now in a strong position to accelerate rapidly and that, in terms of pursuing higher growth, Ireland is starting from a good base relative to our European or OECD counterparts;

notes also, in terms of growth, employment, income per head and adherence to the Stability and Growth Pact, that Ireland compares very favourably with the rest of the EU;

welcomes especially our continued strong employment performance which is particularly impressive in a situation where, last year, labour force participation averaged over 60% of the adult population — the highest level ever recorded;

congratulates the Minister for Finance for pursuing policies that have helped ensure

the annual rate of inflation fell to 1.3% in March, the lowest for almost five years;

our GNP was 3.3% higher in 2003 compared to the previous year and accelerated to 5.5% in the last quarter;

employment grew by 1.8% last year, despite the difficult global economic environment, while unemployment was kept to a comparatively low rate of 4.7%;

and

the end April Exchequer returns indicate that we are on course to meet our public finance targets for 2004;

urges the Minister for Finance to maintain our low levels of direct taxation which, in accordance with the policies of the parties in Government, have boosted significantly both employment and revenue;

supports the Government's continued opposition to irresponsible fiscal policies predicated on unsustainable borrowing; and

encourages the Government to follow through on its policy of careful and sustained investment, in particular, in our public services and infrastructure which has already done so much to transform our economy.

It is a great pleasure to move this motion. The state of our economy is a source of justifiable pride and satisfaction, notwithstanding that there are many readily identifiable things to be done. Credit is due not just to the Government but also to the social partners who have worked closely with Government for the past 17 years. They can take equal satisfaction from this as they begin to negotiate a further spell of the current agreement.

The French newspaper, Le Figaro, carried an article last Friday reporting the views of a French economics professor on the impracticality of tax harmonisation. It contrasted the French preference for public goods, such as state electricity, railways and post offices, with countries such as Ireland where people are able to keep more of their income and enjoy high growth and full employment. The connection is not accidental. The Irish economic model is admired across the world, as we saw in the applicant states of eastern Europe on the day of enlargement. It is admired in developed countries, large and small. The Chinese Prime Minister is visiting this country at present. Even though China is the largest country in the world, the Chinese have a great interest in what Ireland is doing and, indeed, in the Shannon region in the Minister of State, Deputy de Valera's, constituency. Indeed, there is interest in Ireland's economic experience even in the White House.

The Irish economy has achieved a soft landing, which was a source of concern two or three years ago. Both GDP and GNP growth are reckoned to be in the region of 3.5% this year. The public finances are in first rate order despite attempts last year not just by the Opposition but also by some economists to suggest they were going off the rails. We were told by the Opposition that benchmarking would be the ruination of the nation but it is not even mentioned in the amendment to the motion. It seems to have gone off the radar.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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We did not say it would be our ruination. That is an exaggeration.

4:00 pm

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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That was a complete exaggeration and misreading of the situation. The public finances were far stronger than anticipated and benchmarking is not causing a major problem.

Revenue is needed for improved public services. It is a source of immense satisfaction that since 1996, the last year of the rainbow Government, revenue has been doubled from €16 billion to approximately €33 billion. That has been achieved at the same time as tax rates have been substantially reduced. Economic policy is all about maximising tax revenue, not maximising tax rates. Maximising tax revenue may even, in certain situations, involve cutting tax rates. We have had experience of that.

I do not agree with suggestions that the headline rate of income tax should be raised by 1% or 2% for health services or anything else. We need to maximise revenue for public services and the Government is going the right way about it. On a year to year basis there is flexibility in the tax system for adjustments. In some years it is possible to index the tax rate or over-index it while in other years it is necessary to under-index it. In the last budget, the concentration of the resources available was on the low income groups, the people at the bottom of the pile. This resulted in up to 90% of people on the minimum wage being taken out of the tax net. Everybody benefited. I am sure adjustment of the bands to take account of inflation over the past couple of years will more than likely be a topic of conversation among the social partners. However, I have no worries on that score.

There are concerns about corporation tax in the new member states but our headline rate of corporation tax, at 12.5%, is lower than that of any of the accession countries. Obviously, we must keep a sharp eye on our competitiveness. The Opposition in its amendment lists 27 stealth taxes. The term "stealth taxes" has been misused. It includes the increase of bus fares in line with inflation. That is not a tax, still less a stealth tax. What is stealthy about it? The Opposition has tried to throw every conceivable item into this category but the public perfectly understands——

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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The other 26 are stealth taxes.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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——how the Government has been running the finances.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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The Senator agrees with the other 26.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The public knows that revenue is needed for public services and understands the issues involved, especially since it is now clear that the economy is still doing well.

The way employment has remained stable through the downturn over the last two or three years is fantastic. The number of unemployed, which is not measured by the live register, is still under 100,000 or less than 5%. The Opposition's live register figures are not up to date. The April figures are 164,000, 10,000 below what they were this time last year.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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We tabled our amendment before yesterday.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The figures are not a measure of unemployment. There has also been positive growth in incomes of approximately 4% to 5%, ahead of inflation, which is now down to between 1% and 2%. It is true that redundancies have increased. However, in the main people have been able to find replacement jobs relatively quickly and employment is still rising. It has never ceased to rise throughout this period. Before the economy got going in 1987, employment was below 1.1 million and is now more than 1.8 million, which means that employment has increased by more than 50% and is still on an upward trend.

The community employment scheme was an issue approximately one year ago, but is no longer an issue. I have had no representations about community employment.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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Where does the Senator live?

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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That has been stabilised. When the Opposition talks about impending large cuts in community employment schemes, that is last year's issue.

The national development plan is progressing well. Thanks to, among others, our good Leader, we saw the Luas on the streets last night and it will be in operation within a few months.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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And then every five minutes.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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What about the having a word with your new partners about the Monasterevin bypass?

Mary Henry (Independent)
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The Senator would cause less aggravation if he addressed his remarks through the Chair.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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I get distracted by the Opposition. Our Fine Gael friends might like to have a chat with our Green friends, who on 8 August 2003 said there was no demand for new roads.

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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How did they manage that?

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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I do not know. We are now in tenth position in competitiveness, ahead of——

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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We were in fourth position a couple of years ago.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The Fine Gael amendment mentions us being behind most countries, which is not true.

Mary Henry (Independent)
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The Senator should be addressing the motion at the moment.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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The Senator is addressing the amendment and has not yet addressed the motion yet.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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Finland and Luxembourg are the only EU countries ahead of us in competitiveness. Absolute poverty has been reduced and we had a social welfare package of €630 million in the budget. There were increases of 6% to 8% whereas the policy a few years ago under the rainbow coalition was to barely index. We are well on the way to a pension of €200. In 1997 the pension was the equivalent of €85. Today it is €167.30, which is practically double. Child benefit was £39, or approximately €49.50. Today it is €165.30.

As this is a serious debate I want to discuss three concerns about the economy: a possible hard landing and an unwinding of the housing market; the rise in international energy prices; and the financial problems of the US and Germany, although a firm grip will boost confidence.

In looking at alternative economic policies, I am very interested in the proposal from the Green Party that the top rate of tax should increase to 50%.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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The Senator is very interested in the Greens.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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They will be part of your new Government, with whom you will have to negotiate.

Mary Henry (Independent)
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The Senator should address his comments through the Chair.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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The reality has dawned on the Senator.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The real issue is the effect an alternative Government would have on the confidence that has sustained our economy in the past 20 years, about which I have grave doubts.

Liam Fitzgerald (Fianna Fail)
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I second the motion and am delighted to do so, despite what Senator Brian Hayes said this morning about Fianna Fáil having a brass neck. While we would love to hear an alternative set of economic policies, the amendment indicates Fine Gael members are living in a fairyland. The dustbin would be the best place for it as it contains very little, if any, economic logic. There is no serious attempt to propose an alternative economic policy. We would welcome the presentation of such an alternative economic policy in this debate.

We are proud to stand over what has been an exceptionally spectacular record over seven years. I commend the previous and present Governments for substantial achievements in that period. These achievements span every area of public policy, each of which has a detailed plan for the future. We are not just welcoming past achievements, the fruits of which we are now enjoying. We are also welcoming the planning and foresight and the acknowledgement of the Government's responsibility for the people into the future. We welcome the past and present achievements, and the planning for the future going on now.

Many initiatives have already been taken by the Minister for Finance and his fellow Cabinet members, which will be of huge benefit to the next generation. Examples include the establishment of the National Pensions Board, the substantial reduction in the national debt and the record investment in addressing infrastructural deficit. These are just a few examples of the forward planning of the present Government and its predecessor, in which the Leader of the Seanad served, notwithstanding all the difficulties they encountered, some of which I will mention later. These measures aimed at the future will significantly reduce the burden to be carried by the next generation of taxpayers.

One of the hallmarks of the Government's approach is the achievement by the Minister of Finance of a stable and disciplined budgetary policy at a time of global uncertainty. While that may sound like lovely language, there is considerable meaning to it. We have one of the lowest unemployment rates and one of the strongest public finances in Europe. We have just emerged from the most serious global recession since the mid-1980s. At the moment many of our neighbours are experiencing difficulties with deficits, negative growth etc., as the motion has acknowledged. We have lower taxes, higher social welfare benefits and an expanded public service. We are the envy of Europe and most of the industrialised world.

At the same time the Exchequer results for the first four months to the end of April indicate the Government is still on track to meet its budgetary targets for 2004. The prudent and responsible management style of the Minister in keeping the finances close to balance or in surplus is probably best described as a "hands-off approach". He has repeatedly refused to take the soft but irresponsible option in the short term of borrowing his way out of recession and this has been the strategy of successive Governments. He knows such borrowing would have led to the classic boom and bust scenario that brought the country to the brink of bankruptcy in the mid-1980s. We will not go back to that.

The Government is convinced that more spending will mean more taxes, more borrowing, longer dole queues and more hardship for ordinary people. Responsible budgeting is the key to sustained growth and the generation of revenue for our public services.

This year's strategy of a 5% increase in overall spending leaves the Irish economy well placed to take advantage of the world recovery, which is already occurring. At the same time we are protecting the tremendous gains made since 1997. Another aspect of the hands-off approach of the Minister for Finance, which is interesting and effective, is to give each Minister responsibility for his Department and budget. They are fully accountable and everything is fully transparent. The use of the term "stealth taxes" is a total misnomer and is misleading. There is very little, if any, stealth now. Everything is upfront, transparent and there is accountability and openness in the whole approach.

This hands-off approach extends to the individual taxpayer. The bottom rate of tax for PAYE workers is probably at its lowest level in the history of the State. This approach provides people with real freedom, choice, independence and openness rather than having the Minister placing his large ministerial hand into their pockets to take money to put into various services.

We talk about equality, fairness and inclusion. Among the guiding principles underpinning the Minister's approach is the need to generate resources before they can be spent. That was adverted to by Senator Mansergh. The Minister's approach has encouraged and facilitated prosperity in every sector of the economy. It has created and maintained employment. Since 1997, unemployment has been reduced from over 10% to historically low levels. April's live register shows the unemployment rate is down to 4.4%. Over 300,000 new jobs have been created and long-term unemployment has been cut by 80%. During the dark days of forced emigration we all experienced the pain of having immediate family, other relatives, neighbours and constituents leave. Those days are over. Modern Ireland is seeing the return of thousands of emigrants to a country which is a far better place in which to live and work than the one they left.

We have a thriving enterprise culture while our rate of inflation fell to 1.3% in March, which was the lowest level in five years. Despite the global economic slow down, these achievements have enabled the promotion of social equality and inclusion. Levels of consistent poverty have fallen dramatically in recent years and the ability of people to participate in society has improved. The poverty targets set out by the rainbow coalition Government in 1996 have been achieved a couple of years in advance. The prudent, competent management of our economic activity over the last seven years has facilitated massive investment in the social policy area. Were it not for prudent management, we would have had to resort to borrowing to fund this level of investment. Thankfully, that has not had to happen. I commend the Government and applaud the ongoing development of its programmes.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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I move amendment No. 1:

"That Seanad Éireann, bearing in mind the 2002 programme for Government promise to 'keep down personal and business taxes' and the undertaking by the Minister for Finance prior to the last general election that no cutbacks were being planned 'secretly or otherwise', notes that

—the Government has implanted 27 taxes by stealth over the last two years,

—170,000 people are now on the live register,

—30,000 industrial jobs have been lost since 2001,

—27,000 redundancy notices were served last year,

—the community employment scheme faces the largest cuts in its history,

—16 savage social welfare cuts were passed in budget 2004 alone,

—the Irish economy continues to be one of the least competitive in the European Union due to the high cost base facing Irish businesses,

—Irish workers endured an income tax increase because of the refusal of the Government to increase tax bands in line with inflation, thus artificially boosting income tax receipts for this year,

—young homebuyers now pay 45% of the value of their home in taxation,

—Ireland has been described by the United Nations as one of the most unequal countries in the western world,

—over 70,000 households remain in consistent poverty,

—300,000 children are now living in households whose income is below €175 per week,

and

—the national development plan continues to run behind time and grossly over budget and calls on the Government and the Minister for Finance to refocus their fiscal and economic policies to ensure value for taxpayers' money, an easing of the tax burden on middle and low-income earners, a tackling of poverty and an improvement in competitiveness."

I was struck that Senator Mansergh spent nearly 12 minutes speaking about the Fine Gael amendment while scarcely mentioning the Government motion.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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I did not.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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In his contribution he seemed to be concerned with Fine Gael and the Green Party. I am glad he is coming around to the belief that his party will be booted out of office at the next general election when there will be an alternative. I am pleased to hear the Senator discussing that alternative as we have certainly been discussing it over the past few months. I was very disappointed that Senator Mansergh could not bring himself to address anything within the Government motion.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The Senator cannot have been listening very hard.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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Senator Mansergh's contribution consisted entirely of an attack on what Fine Gael contends in its amendment. Senator Fitzgerald carried on in the same vein.

It is extraordinary to have this debate given the recent fiasco with electronic voting which involved the most scandalous waste of public money which we have seen in a long time. It is extraordinary to have a two-hour debate during which Members opposite pat themselves on the back about how good the Government is at managing the public finances when we know what has happened with electronic voting. It is a significant own goal.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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It puts things in perspective.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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Machines which will never be used are sitting in warehouses up and down the country at a cost of thousands of euro to store. Despite that, we are holding a debate on how well the Government is managing public finances.

I noted Senator Fitzgerald's comment that each Minister is being held to account for the money he or she spends. Why has no one been held to account for the money which was spent at Punchestown? The buck has been passed left, right and centre and the spending has been blamed on every civil servant in the relevant Departments. Certainly, no Minister has been held to account by the Taoiseach or anybody else on the Government benches in either House. They seem to be washing their hands of the matter completely.

The hypocrisy expressed in the contributions of Senators Mansergh and Fitzgerald was astounding. They should have thought about what they were about to say before they stood up. Clearly, they did not. I am delighted to move the Fine Gael amendment tonight. Senator Mansergh spoke about what has been written in French newspapers, but he should read more often what is written in Irish newspapers about public finances and the scandalous wasting of resources which we see regularly. The Senator spoke of the public finances being in order.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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First rate order.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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The primary reason we have a surplus this year is that the tax bands were not increased in line with inflation by the Minister last year though he promised they would be. We have a surplus this year because another promise was broken by the Government in the last budget. Members opposite should not pat themselves on the back and contend that they are great fellows for having €500 million extra when that money came out of taxpayers' pockets.

Photo of Shane RossShane Ross (Independent)
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Hear, hear.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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It is money taxpayers were promised would remain in their pockets, but it did not when the Minister reneged on a promise he made during the last general election campaign.

I was very interested to hear Senator Mansergh mention the 27 stealth taxes. As he disagreed on only one, I presume he agrees with us on the other 26.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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I just took a representative example.

Mary Henry (Independent)
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Please, Senator Mansergh.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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That the vast majority of these cuts were made cannot be gainsaid. Over the past few years, we have seen substantial increases in motor taxation.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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What was stealthy about that?

Mary Henry (Independent)
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Please.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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The drug refund scheme was increased in 2002 by 31%, VHI charges by 18% and bank card charges by 108%. Does Senator Mansergh remember the Minister more than doubling bank card charges?

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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It was a very small amount.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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It was a significant amount. The cost of a television licence has increased by 40%.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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That is not a tax.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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It may not be a tax, but it is a stealth charge.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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It is not. It is open and transparent.

Mary Henry (Independent)
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Senator Mansergh, please allow Senator Phelan to speak without interruption.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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Senator Mansergh also mentioned bus fares. The Government is certainly responsible for the provision of public transport. Over the last few years, we have seen public transport charges increased significantly by over 12% but we have seen very little improvement in the services.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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I disagree.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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ESB bills continue to rise.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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That is not a tax and they are not subsidised by the Government.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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They are 12% or 13% greater than they were a couple of years ago. It is a stealth charge.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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It is not.

Mary Henry (Independent)
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Senator Mansergh, you have spoken already.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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Senator Mansergh spoke about the increase for pensioners. It is obvious that none of the Government Senators has been on the doorsteps yet. They will get a rude awakening when they get out to canvass for the local elections.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The Senator is kidding himself.

Liam Fitzgerald (Fianna Fail)
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We have been out all year.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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I was out last night in Mullinavat and I spoke to a pensioner who has voted Fianna Fáil all her life. While she will probably continue to vote for that party, I will work for her to the best of my ability. She spoke to me last night about the great fanfare in the last budget to the effect that pensioners were to receive €10 extra and of the withdrawal at the same time of the €9 fuel allowance. The real increase was €1 but Senator Mansergh did not mention that fact during his remarks on the large increases for pensioners. While pensioners are better off in terms of the sums they receive, the capacity of the money to purchase the services they require has dwindled dramatically over the course of the last few years.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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That is not the message I am hearing from pensioners.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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Purchasing power is the issue.

As is typical of Government speakers, Senator Mansergh referred at length to 1997 as though it was the beginning of a bright new age. When the current Administration took office in 1997, the annual growth rate was 10%.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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It was not. The 10% peak was in 2000.

Mary Henry (Independent)
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Senator Mansergh, please.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
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Over 1,000 jobs were being created every week in the economy when the Government came to power. While that rate of increase could not continue forever, it has already slowed.

It is disgusting that the Government motion should be moved in the context of the scandalous waste of money which we saw, for example, with electronic voting. Despite the serious issues people face daily, we have provided two hours of the time of this House to allow the Government to pat itself on the back and tell itself what a great job it has done. To borrow a phrase, while it might have done a great deal, there is a hell of a lot more to do.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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I second the amendment.

Photo of Shane RossShane Ross (Independent)
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I should preface my remarks by stating that this is not a unique debate in this House nor is it a motion which will inspire a great deal of original thought or enthusiasm. What we are hearing is a Government indulging itself in a certain amount of self-praise and an Opposition, for reasons of its own, not reciprocating that particular sentiment.

I have noted one or two things in the motion before us. There is no great ideological difference amidst all the mumbo-jumbo between the motion and amendment. Whereas the motion is somewhat absurd in its detail and should simply state that the Government congratulates itself on running the economy well, the Opposition ought simply to oppose it and forget about it.

It is easy for an Opposition to be selective in its criticism of Government economic policy by picking out various bits of it. We could all do that. Behind all this, however, I sense enormous agreement across the fold in terms of how the economy ought to be run. What I do not note in the Government motion or the Opposition amendment is any great commitment to ideology and I suspect that is because their ideologies are similar. There are noticeable absences in today's debate, one being the lack of debate on direct taxation because everybody favours low tax. Many people are frightened of criticising the Government's low taxation policy because virtually everybody in the country approves of it. The debate is held in a vacuum because there is no ideological difference between Fianna Fáil, the Progressive Democrats and Fine Gael on the economy. There may be a difference between them and the Labour Party but that, too, is becoming blurred.

It is difficult to take on a Government which has had, I suspect, a pretty easy ride running the economy because it has been doing so during prosperous times. The question we need to ask is whether it has done the job well, whether it has been lucky and whether it has steered the economy well through good and bad times with a certain amount of wisdom, discretion and courage. It is my view that since 1997 — I hope it is an objective view — the steering of the economy, mostly by the Minister for Finance, Deputy McCreevy, and others has been extremely prudent. Though we can all point to serious mistakes, the great test for the Minister for Finance was whether he could steer the economy well in difficult times. It is self-evident that task is easy in more prosperous times. I believe he did so. When times were rough and other countries were getting into difficulties, what happened in Ireland was minor in terms of a blip. That, I suggest, is due to the fact that we are not as tied to the type of sluggish European economies as are other countries and because the Minister for Finance was extremely prudent in his management of the public finances and did not take the easy choice of borrowing too much money as other parties might have done. Also, he had the backing of sturdy, courageous, committed people in both parties to take that stance.

An objective person must, in this debate, look not at the detail of the motions, because the Government and Opposition wording and itemisation are totally and utterly selective and understandably so, but at whether overall the economy has come through a difficult period well and whether we are now out-performing what we might have done had another government been elected. I understand and sympathise with Fine Gael's position on this matter. I believe Fine Gael approves of what the Government is doing. Ideologically, it is at one with the Government but it is stuck with a political problem in that it cannot form a Government — Senator Mansergh is right to point this out — without getting into bed with the Green Party and the Labour Party. In that regard, it has to pretend it is in some way deeply opposed to what the Government has been doing, when it is not. Fine Gael must approve of the Government's low taxation policy because it tried, when in Government, to lower tax. We all know what happened: the Labour Party prevented it doing so. I cannot remember the details and am open to correction on this but I think Fine Gael tried to reduce income tax from 47% or 48% to 45%.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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They wanted to introduce a 1% cut in the standard rate.

5:00 pm

Photo of Shane RossShane Ross (Independent)
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That is correct. However, Fine Gael was prevented by the Labour Party from doing so. That is the quandary in which Fine Gael now finds itself. It now has to flirt with the Green Party and the Labour Party and pretend it disapproves of what the Government is doing when, in effect, that is what it was prevented from doing. That is the quandary in which many of us would find ourselves if in government. The Government is lucky in that it has an overall majority, a great deal of self confidence and the backing of people of courage in various key Ministries. The Government has steered the economy well.

Why is it that the Irish economy, despite the statistics as pointed out by the Opposition — all of them correct but not terribly important — is so outstanding in a European context? There is no disputing that inflation is low at, as Senator Fitzgerald pointed out, 1.3%. Growth is also outstanding at 4% and unemployment is low as is capital gains tax and income tax. We have managed to do the double because public spending is high. I suggest there are two reasons that is so. First, the structural situation in which the economy finds itself — our transatlantic dependency in terms of our huge dependence on America. We have the United States to thank for the boom, the Celtic tiger, which Europe does not have. Second, a Government with a different philosophy and ideology could have easily squandered our wealth and would have done so. When in Government, Fine Gael had a major problem in terms of the Labour Party's high spending policies. Fine Gael could not resist the extraordinary demands — I am not referring to the Eircom shareholders, we can forgive them for that — of the high spending Labour Party that wanted public spending to increase come hell or high water.

If we had followed that path, we would not be enjoying the prosperity we now have. There are problems and there will always be problems with an economy like ours but overall if we had to make a judgment, we would say we are in a pretty good situation and that the economy has been pretty well taken care of to the satisfaction and prosperity of the Irish people during the past seven years.

Photo of Mary WhiteMary White (Fianna Fail)
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I welcome the Minister of State. I would like to make a number of points and to show the House a map which illustrates the new entrants on 1 May 2004 to the European Union.

Photo of Shane RossShane Ross (Independent)
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May I raise a point of order? To whom is Senator White showing the map?

Photo of Mary WhiteMary White (Fianna Fail)
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To people here.

Photo of Shane RossShane Ross (Independent)
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Is she showing it to Senators or to the Acting Chairman?

Mary Henry (Independent)
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Senator White appears to be looking at the map herself.

Photo of Shane RossShane Ross (Independent)
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Senator White said she would like to show it to the Chair.

Mary Henry (Independent)
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I do not think Senator White is using the map as a prop——

Photo of Mary WhiteMary White (Fianna Fail)
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What is meant by a prop?

Mary Henry (Independent)
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She is refreshing her memory.

Photo of Shane RossShane Ross (Independent)
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She said she would like to show it to us.

Mary Henry (Independent)
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She is not showing it to me. I have not seen it.

Senator White, you are aware that you may not show things to the House. You may look at the map yourself.

Photo of Mary WhiteMary White (Fianna Fail)
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A map which was published in The Irish Times during the week shows that Ireland's per capita purchasing power is €25,000. This is higher than that of any of the other 25 EU countries apart from Luxembourg, which is a cash cow economy. This contrasts with our economy when we joined the EEC in 1973. The new member states, particularly the Baltic countries of Estonia, Latvia and Lithuania which have a per capita purchasing power of approximately €9,000, look to us as a role model.

These countries will challenge us in the future. No matter how good our economy is we are faced with two major challenges. The Forfás annual report for 2003 warns of the level of foreign direct investment into China and the countries of central and eastern Europe. These countries are no longer poor in education and skills and will give us mega-competition. We face even greater competition for foreign direct investment than in the past.

The second challenge arises from the lack of competitiveness in our economy. We need foresight, consistent economy philosophy and creativity to bring our economic institutions on board to attain the necessary level of competitiveness. Without them the economy will slip back. We need a sustained commitment to policies which deliver a rate of inflation below that of our main trading partners. In my own business I experienced a competition cushion when the euro was weak but now that the euro has strengthened against sterling I find it harder to do business. If trade unions, IBEC, other employers' organisations, chambers of commerce, workers and management do not work together the economy will suffer.

Over the last four years, Intel made a $2 billion investment in Fab 24, the latest and most powerful microchip available in the world. Last weekend, the employees of the Intel plant in Leixlip, under Mr. Jim O'Hara, produced the first run of Fab 24 and achieved the highest first run yield of any Intel facility in the world. The Intel plant in Leixlip employs more than 3,000 people. This achievement consolidates the Irish Intel plant in the international Intel corporation.

My own company faces a new challenge. We heard two days ago that we may sell our Baileys chocolates outside of Ireland. We must be competitive. One can do so much within one's own company but one faces many indirect cost increases. These must be challenged by the Government.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The first sentence of this evening's motion commends the Government for its prudent handling of the public finances. Senators on the Government side have a cheek to suggest this after the Punchestown debacle when €15 million was spent in the Minister for Finance's constituency and proper regulations and procedures were abandoned. Where was the Progressive Democrats, the so-called guardians of the public purse, in this regard? Where was openness and transparency on this matter? The Progressive Democrats sat like church mice and we did not hear a word from them. Perhaps we will hear from them during the course of this debate.

A Government should be judged on how it treats the poor and the weakest sections of society. In this regard, the Government has failed miserably. While conferring tax breaks on the rich and influential friends of the Government, it attacks the poor through the savage 16 social welfare cuts. The Government has also hit people on the margins and the middle classes with more than 27 extra stealth taxes. Senator Mansergh may not want to hear about stealth taxes. He does not believe they are stealth taxes.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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Some of them are not taxes at all.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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However, the people who are paying the taxes know all about them. While they may be small increases to Senator Mansergh and his friends, they hit the poor and middle classes. Whatever they are called, they are extra taxes on the public.

In 2002, An Agreed Programme for Government stated: "We will keep the public finances in a healthy condition and we will keep down personal and business taxes".

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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We have done that.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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Senator Mansergh will not like to hear of some of the taxes but they exist. In 2002, motor tax increased by 12% and hospital charges by 26%.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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Hospital charges are not a tax.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The cost of the drug refund scheme rose by 31%, VHI charges by 18% and the cost of cigarettes and alcohol by 15%. Bank and car charges rose by a staggering 108%, bin charges by 29% and ESB charges by 13%.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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ESB charges are not a tax.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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College fees rose by 9%.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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They are not a tax.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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Parking fees rose by 25% and bus fares by 9%.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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They are not taxes.

Mary Henry (Independent)
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Allow Senator Cummins to speak without interruption.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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They are all stealth taxes and extra charges which the public must pay.

Charlie McCreevy (Kildare North, Fianna Fail)
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Should they go free on the buses?

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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They do not need a 9% price increase. The Minister could find the money for the debacle at the mad cow roundabout.

In the December 2003 budget, the Government introduced further charges and taxes. The drugs refund scheme threshold was raised by €8 to €78 per month, accident and emergency charges increased from €40 to €45 and there was a 15% increase in the cost of a private bed in a public hospital. The Government imposed a €5 increase in the cost of an overnight hospital stay, third level student registration fees increased by €80 and the fee for the junior and leaving certificates increased by €10. In addition, development levies increased by between €6,000 and €30,000, depending on which local authority was involved. This hit first-time house buyers in particular, from whom the Minister had taken the first-time house buyers' grant not long before.

The Government is hitting vulnerable ordinary people with major charges. The House should consider the increase in passport charges. The fee for a standard ten year passport increased by a third, from €57 to €75.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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It is once every ten years.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The cost of a three year passport for infants up to three years of age rose from €12 to €15 while the five year passport for those between the ages of three and 18 years rose by over 100%, and the emergency fee for passports increased by €37. Motor tax increased again in 2003 by a further 5%. The House knows of the increases in commercial rates, which have soared way beyond inflation. This is what the Government calls keeping down personal and business taxes. The Minister should talk to the owners of small businesses who will tell him they are being taxed out of existence.

Ireland is now the most expensive country in Europe in which to live. Fine Gael has set up a website, ripoff.ie, which has received thousands of hits and hundreds of e-mails from all over the country. We have led campaigns on stealth taxes, the price of insurance and soft drinks and the ripping off of Irish customers by British chain stores. Ireland has gone from fourth in 2000 to 30th this year in the World Economic Forum's global competitiveness report.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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We are tenth.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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This is due mainly to the Government's failure to control prices. With regard to jobs, industry and small business, there are 170,000 people on the live register according to the Central Statistics Office.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The figure is 164,000.

Photo of David NorrisDavid Norris (Independent)
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Senator Mansergh should not interrupt.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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Some 11,000 industrial jobs were lost in 2003. Industrial employment is at its lowest level since 1998 and almost 30,000 jobs have been lost since 2001. ISME warned that 35,000 small firm jobs are in danger. According to a survey carried out by that group, one quarter of companies stated they expected to employ fewer people this year. The same survey showed that most small business owners perceived the Government as regulators rather than facilitators. Yet the Government wants to be congratulated on its policies.

The Government shows its true colours in regard to poverty and the wealth gap. An Agreed Programme for Government in 2002 stated the Government would support the positive role of community employment schemes. Members know what has happened to them — they are gone.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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No, they are not.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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We have witnessed the impact of the 16 social welfare cuts. One disgraceful cut was reversed, that hitting at poor widows, on which the Government was forced to row back. It is a pity the surplus in the finances is not used to reverse the other 15 cuts. It is clear that Government priorities are not in line with those of hard-working, honest people.

Charlie McCreevy (Kildare North, Fianna Fail)
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I am grateful to the Senators who put down this motion as it affords me an opportunity to discuss and evaluate the current and future prospects for our economy. The record will show that in my period of office a thriving economic climate has been created in Ireland. We have recorded one of the best economic performances in the world. Economic growth has averaged nearly 10% per annum, unemployment has reduced from over 10% to historically low levels, over 300,000 new jobs have been created, and long-term unemployment has been cut by 80%. These achievements are recognised and applauded by responsible commentators everywhere in the developed world. For instance, in August 2003, no less a body than the IMF commended the Irish authorities for our "exemplary track record of sound economic policies".

The new member states which have just joined the EU also recognise this and their common desire is to be like Ireland. They are anxious to learn how we did it. Clearly, the Government has established a climate which has allowed our economy to flourish. Despite the international economic downturn of the past number of years, our economic record far outshines that of our main EU partners and our budgetary position remains sound. I am confident that if we ensure we regain competitiveness, we can improve our economic growth to reach 4% to 5% in GDP terms going forward.

The motion, therefore, rightly and accurately summarises the economy's achievements, namely strong growth, full employment and low inflation. Who in the House as little as 20 years ago could have imagined any Minister for Finance being able to give such a synopsis of the economy? It would have seemed a pipe-dream then, yet it is now a reality and the credit goes to the effort, enterprise, diligence and creativity of our people. It is due also to the relentless pursuit of the right economic and fiscal policies to help the dream become reality.

It is on certain aspects of that reality that I want to dwell in my contribution. We have in the past seven years changed the face of this country and made it a better place in which to live and work. We have restored pride and encouraged the return of tens of thousands of our young people.

The object of Government policy in every Administration has been the creation of jobs. In that, we have been remarkably successful. What has been all the more remarkable is that despite the recent economic shock, the level of employment has held up well. The unemployment rate now stands at just 4.4%, the lowest since December 2002, and in the last year an additional 31,000 not just part-time but also full-time jobs have been created. As satisfying as these figures are as an endorsement of the low-tax policies which the Government has pursued in the interests of job creation and maintenance, they must be galling for an Opposition which, if the amendment to today's motion is any measure, is increasingly bereft of any constructive ideas.

The Government claimed that we had a flexible job market and we have seen the proof of that. However, it has been no accident. The Government's tax policy has been a large contributing factor. Some 35% of income earners are now outside the tax net, that is 669,000 earners compared to 380,000 in 1997. The result is that, as recently acknowledged by the OECD, we have the lowest tax wedge on the average single worker in the EU. The Government has increased the entry point to the tax system from €98 per week in 1997 to €246 per week now. Since the Government came into office, it has reduced the average tax rate by 10% for a single worker on the average industrial wage. This means the average PAYE worker pays far less tax than before and gets to keep much more of any extra income in his or her pay packet.

The Government's tax policy has encouraged and sustained the jobs market in both good and bad times. Together we must secure our competitive edge by moderation in future pay increases. The Government's record on tax reform is one of solid achievement of unparalleled success when compared with any period in Irish history during which the parties opposite were in Government. Ireland is truly now a country of opportunity.

The Administration's second notable achievement has been the reduction in inflation to less than 2% per annum. In little over a year, the CPI has declined dramatically from 5.1% to its current level of 1.3%. The inflation we suffered owed much to the fortunes of the euro, the very high level of demand for labour in our economy and the price effect of the process of catching up with our wealthier EU neighbours. The last of which is the so-called Balassa-Samuelson effect, which the new member states are all looking forward to.

If one were to listen to the Opposition, one would think the Government was the real cause of inflation. This must be examined in so far as indirect taxes are concerned. Taxes on alcohol have been left largely unchanged since 1994. VAT rates were cut during this period on one occasion and excises on petrol and diesel were reduced in one budget. Tobacco excises were raised substantially, but primarily in pursuit of health policy objectives as well as for Revenue reasons. I have been constantly implored by the health lobby to ignore CPI effects when it comes to policy decisions on tobacco taxes and to persuade the CSO to drop tobacco from the CPI altogether.

It seems that any tax changes one does not like are now characterised as "stealth taxes".

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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That is true.

Charlie McCreevy (Kildare North, Fianna Fail)
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The word "stealth" means unseen or underhand. As I stated in my budget speech, the real stealth tax is borrowing because it is the unseen thief whose services those in Government in the mid 1980s were only too ready to employ. Moreover, the progress made in debt reduction has released an additional €1 billion or so per annum for investment in public services which would otherwise have been spent on servicing the debt.

I make no bones about raising indirect taxes when they are needed to pay for better public services. My policy is to keep direct tax low to encourage enterprise and effort to produce the goods and services in the first place. Even on direct taxes, allegations of stealth taxes are thrown around without any proper analysis of the facts. The recent superior performance of tax revenue has been ascribed to the non-indexation of the tax bands. This is simply not the case. Tax revenue at the end of April was some €500 million ahead of profile. Half of this is due to a better CGT performance. Some €170 million of it was due to more income tax, of which €135 million is schedule D tax and Revenue investigations and €35 million was due to additional revenue from PAYE. Stamp duties provided an extra €60 million and other tax heads are more or less on target.

Most of the excess of €500 million is from capital gains, self employed and property taxes. Less than one tenth is PAYE which tax bands would affect. Despite my reputation, I seem to be soaking the rich. I can eagerly look forward therefore to middle-aged 1970s socialists coming over to my side. Despite my reputation, it was I who enhanced Revenue powers in the Finance Act 1999, resulting in the greatest crackdown on tax evasion by any Minister for Finance and an extra €1 billion in revenue for the State coffers.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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Senator Norris is here — he has joined our side.

Charlie McCreevy (Kildare North, Fianna Fail)
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I thank Senator Norris. I appreciate it greatly.

We need to keep the sound position and good shape of the public finances if we wish to provide properly for the next generation. The achievements of this Government in successfully managing the public finances are evident. We have the second lowest debt level in the euro area, at under 33%. We have a sound budgetary position with a general Government deficit target this year of 1.1% of GDP. Many of our EU partners find that they have to make painful budgetary changes to ensure they respect the Stability and Growth Pact. Through prudent budgetary planning we have ensured that our position is consistent with the Stability and Growth Pact and we have avoided that difficult experience.

It is to be expected that the ordinary knockabout of politics always focuses on the near term. However, the Government must be more forward looking. This is less about vote winning than spending our largesse now as some would have us do. The Celtic tiger has left us with a lasting legacy which we are determined not to squander. The Government has taken decisions that will ensure the legacy of the Celtic tiger will still be with us in a generation. Part of that forward-looking policy has been maintaining a high level of capital spending, which is twice the EU average in terms of GNP, in providing for substantial capital envelopes amounting to nearly €34 billion for the next five years and in reforming the tendering and purchasing rules for capital spending to ensure better value for money.

The Government has also begun to tackle the pensions issue both by saving at Government level through the National Pensions Reserve Fund and at individual level through SSIAs, giving savers better control over their pension nest egg and the institution of PRSAs. A recent pensions seminar put the potential pensions savings gap at €6 billion per annum. This is consistent with what I have said on previous occasions, namely, that the annual contribution of €1 billion per annum to the National Pensions Reserve Fund will meet only one third of future pension costs of the public service.

Against this background, maintaining a balance in the public finances is a basic requirement to provide us with the means to cope with the future costs of health and pensions for a rapidly ageing population. I intend to continue to follow this course and to use such windfall gains as may arise to add to our pension nest egg.

The Government has continued to accord priority to investment in the key areas of social and economic development. In particular, it has accorded top priority to the areas of social welfare, health and education. Since 1997, health expenditure has increased from €3.6 billion to €10 billion; education has increased from €3.2 billion to €6.6 billion; and social welfare spending has increased from €5.7 billion to €11.3 billion. Overall, spending on health, education and social welfare has increased from €12.5 billion to nearly €28 billion, an extraordinary increase in resources. Health, education and social welfare spending will account for 68% of total voted spending this year.

The exceptional economic growth in the years from 1997 to 2000 enabled annual gross spending to be increased very substantially to a high point of 21% in 2001. As economic growth has moderated, the Government has, in the interests of prudent management, followed a course of bringing spending increases more into line with increases in revenue. This has seen annual increases moderating from around 21% in 2001 to an estimated 7% this year, which is still a substantial rate of increase by any standard.

This Government's record on its management of the economy is one of substantial achievement. The motion before the House accurately summarises that record. Since 1997, the Government has consolidated the capacity of our economy to grow and create jobs; cut taxes on labour and on the lower paid; brought inflation under control to secure our competitiveness; managed our public finance soundly; and kept its eye on the future through spending on capital and prudent pension provision. Such policies will yield rewards both in the short and the longer term and will show the wisdom of a prudent approach to the public finances.

I commend the Government motion to the House.

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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Hear, hear.

(Interruptions).

Rory Kiely (Fianna Fail)
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There should be no applause.

Photo of David NorrisDavid Norris (Independent)
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I have no objection to applause, although the Minister might.

Rory Kiely (Fianna Fail)
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Applause is not in order in the House.

Photo of David NorrisDavid Norris (Independent)
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I welcome the Minister. I accept he is an extremely able Minister for Finance and that he has given considerable service. However, I am not voting with the Government on this occasion and I will explain why. I met the Minister in the corridors earlier and I explained to him that it is a waste of Seanad time to have these slavering Government motions reciting their own wonderful deeds. Self praise is no praise. There is a ritual dance and then the Opposition, of which I am not a member, as I am an Independent Senator, says everything is in a chaotic, ghastly state. Neither statement is completely realistic and they do not advance anything.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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They do here.

Photo of David NorrisDavid Norris (Independent)
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They do not advance anything. If the Government is so bankrupt of ideas that are appropriate to this part of the parliamentary day then it should yield to groups like the Independents. The House should compare the record of Independents in Private Members' time with the abuse of that slot by the two principal sections of the House. People will note that many of the motions we put down have been agreed and we do not have this nonsense of a vote. It is a farce and a futile political exercise.

One does not have to be a mathematical genius like the Minister for Finance to know the Government is going to win the vote. What is the point of putting the House through an endless charade——

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The economy is an appropriate issue.

Photo of David NorrisDavid Norris (Independent)
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Yes, the economy is a very important issue. I agree with Senator "Mandarin" on this——

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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Politics is adversarial by nature.

Photo of David NorrisDavid Norris (Independent)
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——but there is an appropriate place for it. If one looks at the way the Independents use——

Rory Kiely (Fianna Fail)
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Senator Norris without interruption.

Photo of David NorrisDavid Norris (Independent)
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It is interesting to hear that the Seanad is adversarial.

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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I did not say that. I said politics is adversarial.

Rory Kiely (Fianna Fail)
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Senator Norris without interruption.

Photo of David NorrisDavid Norris (Independent)
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The House is not adversarial. It is not supposed to be. Senators need not laugh.

One of the values of the House is that we advance issues by reasonable debate, not this charade. Although I accept many of the arguments of the Government side I will not vote with them because this is a waste of time. It is also chaotic; I have been in the House for nearly 20 years and only in the last year have we begun to have Private Members' time at 5 p.m. and at 4 p.m. on other occasions. For almost 20 years it was between 6 p.m. and 8 p.m. I know the House can order its own business——

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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The Committee on Procedure and Privileges did that.

Rory Kiely (Fianna Fail)
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That is not relevant to what we are discussing.

Photo of David NorrisDavid Norris (Independent)
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It is very relevant.

Rory Kiely (Fianna Fail)
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The Chair says it is not.

Photo of David NorrisDavid Norris (Independent)
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There is the question of the economy of time.

Rory Kiely (Fianna Fail)
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The Committee on Procedure and Privileges decided to change the time, so it is not relevant.

Photo of David NorrisDavid Norris (Independent)
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I am entitled to comment on it. I will not be muzzled, even during this farcical debate.

Rory Kiely (Fianna Fail)
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The Senator is represented on that committee.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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This is a debate on the economy, not the economy of time.

Photo of David NorrisDavid Norris (Independent)
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The economy is vital and I will turn to that.

Rory Kiely (Fianna Fail)
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The Senator should speak to the motion.

Photo of David NorrisDavid Norris (Independent)
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I am speaking to the motion without interruption.

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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The Senator is interrupting himself.

Photo of David NorrisDavid Norris (Independent)
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That is a tautology.

Photo of Joe McHughJoe McHugh (Fine Gael)
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On a point of order, will the Senator consider sharing his time if he finds this debate a complete waste of time?

Photo of David NorrisDavid Norris (Independent)
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No, I will not.

Rory Kiely (Fianna Fail)
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That is not a point of order.

Photo of David NorrisDavid Norris (Independent)
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Senator Cummins mentioned the widows being handbagged by the Minister for Social and Family Affairs, Deputy Coghlan. She was put in that situation, unfortunately, and she had to withdraw from that position. I am glad she did.

Rory Kiely (Fianna Fail)
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The Senator has only one minute left.

Photo of David NorrisDavid Norris (Independent)
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I am expecting some injury time. I was interrupted all over the place.

Rory Kiely (Fianna Fail)
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There is no injury time.

Photo of David NorrisDavid Norris (Independent)
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I was proud to hear representatives of the applicant countries talking of their ambitions of following the Irish economic model. We can be happy with that and I compliment the Minister on making provision for pensions. It is unusual to find a Minister who is altruistic and who is thinking of the long term rather than short-term benefit. That is excellent and I support it.

Too much health expenditure goes on administration, which needs to be overseen clearly.

Rory Kiely (Fianna Fail)
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I miscalculated. The Senator has three minutes.

Photo of David NorrisDavid Norris (Independent)
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The Minister spoke about investment in infrastructure and I applaud him for that. He is a practical man but he also has vision. We are stuck with Luas regrettably. I spoke against it because I knew it was not possible to transport sufficient numbers of people at the correct intervals of time and so on. I spoke instead for a metro system and those arguments were made here. We had the excellent support of our current Leader, who was also excellent as Minister with responsibility for transport. She was realistic on this issue, unlike her predecessors. However, we need some vision and imagination in this area. I need not cite the facts and figures as I am sure the Minister has those to hand. He will know how positive the various consultants' reports were, including the present report, on the financial benefits. There is an inarguable case here and we need someone to show some courage. The Minister is the man to do it.

I have a habit of bumping into the Minister in the corridors every few months and when I do I whisper in his ear. One issue in which I have a personal interest involves my car. It is a beautiful old car which cost me €5,000 but it costs almost as much to tax and insure it. That tax is a mistake because it discourages people from keeping these excellent vehicles on the road. They are scrapped and thrown out to pollute the environment.

Why not do what the French did and abolish car tax altogether? Imagine how popular that would be in an election.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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They did that before.

Photo of David NorrisDavid Norris (Independent)
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If one cent were added to the price of petrol there would be a refocusing on those who use old, gas-guzzling cars. Their payments would be relative to their use of the roads and consumption of petrol, so it would be environmentally friendly as well as politically advantageous. I know I should include that in a budget speech but we are only allowed to make moltaí. When former Deputy Albert Reynolds was Minister for Finance I put down two or three pages of moltaí and he kindly incorporated them in his budget and referred to the fact. I missed that glorious moment because I was guzzling in the restaurant, as usual. This is something the Minister could consider. It would be politically popular, environmentally positive and would keep old classic cars on the road. I see no negative side to this at all.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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I welcome the Minister for Finance. We were the class of 1977 and a great class it was.

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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Which cut car tax.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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We will not go back to Senator Norris's proposal, attractive though it may be. It was attractive at the time and the economy was shattered after the dreadful Government of Liam Cosgrave.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The 1977 budget was the cause of it.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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Doom and gloom.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The Minister was one of those who opposed it.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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It was the easiest election I ever fought. It was a marvellous manifesto. I did not read it all but it sounded very good. I was too busy canvassing. We will not go back to those issues.

This motion is not about the Minister. It is about the work of the Government but the Minister for Finance has been tremendously innovative and I will give an example of that. The tax incentive scheme for Longford, Roscommon, Leitrim and south Sligo has revolutionised the town of Carrick-on-Shannon and areas in Roscommon like Kilteevan and Portrun. People are now moving into those areas and this innovative scheme has created a huge amount of building activity.

I disagree with Senator Norris about this debate. It is an opportunity for Members to put their ideas to the Minister, which can then be considered along with issues arising from the tax incentive scheme. That was a pilot scheme. All of Roscommon is not included in the tax incentive scheme. Only one part of the electoral area I serve as a county councillor is included, the Kilteevan-Portrun area, which has created so much activity. In Kilteevan a pub and lounge is being built.

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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What is wrong with that?

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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It is marvellous.

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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Good.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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It is drawing activity into an area that never had a pub. The last pub was a shebeen in the 1800s. Where else would one see that activity?

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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The Senator had better not drive.

Rory Kiely (Fianna Fail)
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Order, please.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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It is also happening along the Shannon basin. There are housing developments and builders were never busier. The Minister was responsible for the development of Carrick-on-Shannon and the towns of north Roscommon, Leitrim and Longford. That is one of the greatest schemes ever introduced as far as rural Ireland is concerned. Along with the CLÁR programme, that scheme has made a great difference. While the Minister may have difficulties with the EU, I suggest the scheme be extended to the remainder of County Roscommon and some other areas. The Minister's decision to reduce capital gains tax to 20% has made a great difference.

Charlie McCreevy (Kildare North, Fianna Fail)
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Yes.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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It has created more tax income. As the Minister has all the figures I shall not dwell on them. He reduced capital gains tax from 40%. At one stage capital gains tax was 60%. The difference now is that people are prepared to buy and sell so that there is development and innovation. That is the difference. Fianna Fáil and the Progressive Democrats are pro-development, pro-progress and pro-jobs. The Minister has made all this possible by making it worthwhile to sell property——

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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What about the first-time buyers?

Rory Kiely (Fianna Fail)
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Senator Leyden without interruption.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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——and to pay 20% tax. People are delighted to pay only 20% tax. The Minister has got more funds in the Exchequer and there is more money for schools and the health service.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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First-time house buyers have to pay more.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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The Minister introduced the special savings investment account which was revolutionary. Members of my family who would not usually have saved are now saving. For the first time young people are saving and are looking forward to the day when the money will be available to allow them to start building a house, build an extension or buy a car. It is a tremendous scheme. I strongly recommend a roll-over scheme, a national development plan scheme with attractive interest rates, where people would be prepared to reinvest the money saved at the end of the scheme in a national saving bond, organised by the National Treasury Management Agency. Some 50% of those investors would be prepared to reinvest in the interests of the State to borrow for infrastructural development. Compare that scheme to the scheme proposed by the leader of the Labour Party, former Workers Party, former Democratic Left, former loony left——

Photo of Joe McHughJoe McHugh (Fine Gael)
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Sinn Féin the Workers Party.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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——regarding the €1,000 baby bond. Did one ever come across anything as daft?

Photo of Mary O'RourkeMary O'Rourke (Fianna Fail)
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It is a good idea.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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It was devised by Fergus Finlay and a few other gurus as something innovative at the Ard-Fheis.

Rory Kiely (Fianna Fail)
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The Senator should not mention people outside the House.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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Fergus Finlay is close——

Rory Kiely (Fianna Fail)
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The Senator heard what I said.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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I will not mention them again. The €1,000 baby bond scheme came from a party that was led by Proinsias De Rossa, former president of the Labour Party, former leader of the Workers Party and former leader of Sinn Féin the Workers Party. When he was the Minister for Social Welfare, he gave the smallest increase ever for babies in Ireland. Yet the Minister for Finance, Deputy McCreevy, is giving €1,000 every few months to people. I am aware of a case recently involving a couple who had twins and the Minister gave them €2,500 for a few months as well as an incentive for the twins. The leader of the Labour Party has suggesting giving €1,000 for 18 years. Is he mad? The poor fellow has run out of ideas. The scheme must have been devised by some of the accountants in Enron. It reminds me of the £9.70 that the former Taoiseach, Garret FitzGerald, promised to women who stayed at home. The Cathaoirleach is smiling — he would remember it. Fianna Fáil created jobs for people at home who wanted jobs. There are jobs for everyone. He even reneged on the £9.70.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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Remember the flawed budget in 1977 which that Minister would not stand over.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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I do not know why I prepare scripts when I do not need them.

Rory Kiely (Fianna Fail)
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Senator Cummins has made his contribution.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The Senator is inviting comment.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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Does the House recall the last general election and the compensation for the Eircom shareholders?

Photo of Joe McHughJoe McHugh (Fine Gael)
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This is flawed history from Senator Leyden.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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It is well known that if one invests in shares — I invested — one may lose or win. He was also going to compensate those who lost in the derby. What kind of a party is that? It is gone to hell.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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What kind of rubbish is this?

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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Now it is joining up with Green Party and recommending that people give their number two vote to that party, which is opposed to the live export of cattle and to farming. I predict a day when we will bring Fine Gael under our wings, a day when there are six or seven Fine Gael Deputies and we need them to form a Government.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The rules are greatly exaggerated and the elections will prove it.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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In fairness, the Fine Gael Party has a fine and proud history and it has made a contribution to the country.

Photo of Mary WhiteMary White (Fianna Fail)
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It was very small.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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At this stage, it has lost its way.

Rory Kiely (Fianna Fail)
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The Senator has exceeded the time allowed.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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We have the best talents in the Government.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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A clap in the back for the Senator.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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We have the best Taoiseach and the best leader of the party. The Progressive Democrats is working with us. We have tremendous ability to carry on in the interests of the country.

Rory Kiely (Fianna Fail)
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The Senator has exceeded the time allowed.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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I could say a good deal more. We have a lot done, more to do, and we are getting on with it.

Photo of Joe McHughJoe McHugh (Fine Gael)
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I will not respond to the items raised by Senator Leyden because they are not appropriate to the motion. However, I shall refer to something Senator Ross said about the economy and all the debates that have taken place on it. Senator Ross's viewpoint is simplistic. Every time he speaks about the economy, he speaks about the Government and what it will say and what the Opposition will say. All he mentions is income tax. I accept that the Minister, Deputy McCreevy, and the Government have contributed to lowering the income tax band but there is more to the economy. I am glad the Minister is present. This is the first time I have had the opportunity to speak to him and I shall be selective in terms of the two issues I wish to raise.

The Dyslexia Association of Ireland has 37 workshops and employs tutors to carry out essential services for those with dyslexia. On average, each of these workshops raise €30,000 per annum which is completely voluntary. It is raised locally and from the parents of children with dyslexia and from different fund raising activities. That is a direct failure of the Department of Education and Science. While it is not an issue for the Minister's Department, it is an issue for another day. In September 2004, there will be a call on the tutors to pay income tax on their earnings. That is fair enough. Anybody who earns income has to pay income tax. I asking the Minister to provide some form of subsidy or support for these workshops. They are charity organisations and the volunteers are fulfilling a service that should be provided by the Department of Education and Science.

Senator Ross accused us of being selective for one reason. If Senator Leyden and his colleagues are confident that the economy is in a good state of health, there is no reason we cannot subsidise these workshops because these volunteers are being hammered and are faced with brick wall after brick wall. I met with a group from Letterkenny last night which is crying out for some form of support or acknowledgement of their work.

The second item I wish to raise is non-residents accounts. I am not talking about tax evasion. I do not condone tax evasion and never will do so. I am referring to elderly people who have accounts in Northern Ireland and the UK, containing €5,000 or €6,000.

A tax amnesty was introduced which was a good scheme to recover money from people who were laundering money or earning income illegally without paying tax. I ask the Minister and his Department to examine why the Revenue is looking for 230% on top of the penalties and the sums that must be repaid.

I know of an elderly gentleman with €6,000 in an account in Northern Ireland and he must pay back the guts of €8,500 in penalties and interest. That is wrong and is an injustice to the elderly. This is a group of people who were not involved in tax evasion. They may have lodged a few pounds every year. Prior to 1987 and 1988 when the interest rates were high, they were the ones being crucified. The banks are charging these people €35 per hour to access information and that is wrong. Some accounts hold only €1,000, €1,500 or €2,000 and were set up to help put students through college. They are not bogus accounts. These people have not been involved in fraud or tax evasion. If Senator Leyden feels fully confident that the economy is in such a healthy state, why are these people being crucified? They are vulnerable people at the margins of society. Senator Ross spoke about income tax. This generation cannot further penalise those people because we owe them a debt.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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The Senator should table a motion.

Photo of Joe McHughJoe McHugh (Fine Gael)
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I ask the Minister to consider some way in which his Department and the Government can intervene in this situation.

I know of one man in Donegal who was hospitalised as a result of the pressure and stress of this serious situation. I am calling the Government's bluff regarding the good state of the State's finances. I ask the Minister to take this vulnerable section into consideration.

If people are to be penalised for alleged wrongdoing in the period pre-1989, for simply opening an account in the North——

Charlie McCreevy (Kildare North, Fianna Fail)
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It is not an offence to have an account outside the State nor is it an offence not to have declared it. It is the source of the money in the account, whether that was taxed and whether the tax and the interest that arose thereon was returned that is at issue. The holding of an account outside the State is not and never has been an offence.

Photo of Joe McHughJoe McHugh (Fine Gael)
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The holders are still liable for these penalties.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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If it has not been declared.

Photo of Joe McHughJoe McHugh (Fine Gael)
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If it is not declared in previous tax amnesties.

Charlie McCreevy (Kildare North, Fianna Fail)
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If the income in the account has been taxed and we will assume that is not a problem, the question arises as to the source of the income and whether tax was paid on it before it arrived in the account.

Photo of Joe McHughJoe McHugh (Fine Gael)
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These people are forced to employ bank staff and pay €35 an hour to access information to prove they have not been involved in tax evasion. This is a very strong issue on the canvass. People are very irate. The Government can intervene; the banks should not be the facilitators in this matter.

If people are to be penalised for something as simple as having €3,000 or €4,000 in an account, who will be penalised regarding the handling of the €15 million Punchestown affair? I am not raising this matter because it is in the Minister's constituency. Who will be penalised for the mishandling of Punchestown and who will be penalised for the mishandling of e-voting and the €55 million incurred? The vulnerable have been punished consistently since 1997.

Photo of Mary WhiteMary White (Fianna Fail)
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The Senator should join Fianna Fáil.

Rory Kiely (Fianna Fail)
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Order, please.

Photo of Eamon ScanlonEamon Scanlon (Fianna Fail)
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I concur with Senator Leyden's statements about the rural renewal scheme in certain areas of Roscommon, Leitrim and south Sligo. This scheme has benefited the people of the area in which I live. It has been an excellent scheme which has rejuvenated the area. In my home town of Ballymote, a house had not been built for 20 years but nearly 150 houses have been built in the last three and a half years. I do not know where the people are coming from. Houses are being sold and that is good for the area. The same applies in Collooney and Tubercurry and Leitrim has also benefited very substantially from the rural renewal scheme.

The Minister has extended the scheme to June 2006, which is very welcome. Persons wishing to qualify for the scheme must obtain planning permission by 31 December 2004. I ask the Minister to keep an open mind on that regulation——

Charlie McCreevy (Kildare North, Fianna Fail)
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Planning permission must be applied for by that date.

Photo of Eamon ScanlonEamon Scanlon (Fianna Fail)
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That is good. There was some confusion. People were under the impression that planning permission should be obtained by 31 December 2004. I am delighted to know that once a person has applied for planning permission in this year, he or she can still claim the benefits from the scheme.

With regard to Senator McHugh's contribution, there are victims in the matter of the accounts which may have been held in the North. I am aware of a situation where a widow discovered her husband had an account in the North containing £4,000. I understand there are serious penalties attaching to that account and the funds therein. That woman is completely innocent. She was not even aware that her husband had the account until after his death. I am aware of similar cases. I ask the Minister to consider those hardship cases and be a little lenient as there was no intent to defraud the State on the part of the beneficiaries of the accounts. I thank the Minister for his work for the country.

Photo of Joe O'TooleJoe O'Toole (Independent)
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I welcome the Minister to the House and I am pleased to contribute to the debate. This is an appalling motion and desperate to the world. The Leader this morning said the Government was entitled to blow its own trumpet but the problem is that trumpets get confused with foghorns now and again and frighten off the horses. If the motion had read that Seanad Éireann acknowledges the policies of the Minister for Finance in pursuing policies that have helped to ensure all those increases listed in the motion, I would have voted for it. The Minister has done things that I have disagreed with and I have disagreed with him in the House. Some two and a half years ago there was a time when my colleagues, Senators Ross and Quinn, raised the issue of inflation time and again in debates in this House. When the social partners and others got together with Government and decided that the reduction of inflation was an objective for all partners in the social partnership they were laughed at. I admit the Minister held the line. He can claim due credit for these improvements and for the growth in the economy.

The Minister is entitled to examine competitiveness and growth. I will deal specifically with the former, an interesting issue about which I am more entitled than most Senators to speak. Competitiveness decreased marginally last year and increased this year. One of the reasons for the decline was the benchmarking payment. As had been predicted, we had a big bang when a number of factors combined.

The Minister stood by his side of the bargain and paid the benchmarking increases against considerable opposition from many quarters. I appreciate it when somebody sticks to his or her word through hard times and good times. Many Senators on this side were not in favour of paying the benchmarking increase. It is important to place on record that the Minister looked after public servants and I have no difficulty doing so.

We have emerged from a period in which competitiveness declined and inflation and growth increased. The other important issue is employment. Much of the Fine Gael Party amendment is factually correct, whereas other aspects send out an erroneous message. This is a developing, changing and flexible economy. The fact that P45s are being handed out is not the issue; the real issue is the net figure in terms of the difference between jobs created and lost and the sectors in which jobs are being created and lost. Everybody knows that certain forms of traditional industry cannot continue. During my years in the trade union movement I have repeatedly asked that we be honest and inform our members that we cannot produce certain items as cheaply as other countries without diving to the bottom of the pile in terms of pay and reward. It is necessary to recognise this trend.

We need to examine how we spend our revenue. The most crucial feature of the past three years was that for the first time we entered and emerged from a recession within a short period. In the past, we were never economically prepared to come through a recession without first suffering badly for a decade. It is important that we came out of the previous recession and have reached a stage where the spikes and surges in economic activity have been levelled out to an extent and no longer have the same impact.

We had double digit growth in the economy for many years. As I have stated repeatedly, however, we really need consistent growth rates of between 4% and 5%, which are about as high as an economy can sustain without overheating, creating major demands on services or increasing inflation to an unmanageable level. We are moving towards this position.

I disagree with the Minister as regards the manner in which we spend. While I agree with some of the comments expressed by Senators on this side, contrary to the sentiment expressed in the Fine Gael Party amendment, I was happy that income tax was not reduced further last year.

The Minister has €500 million available to him which he had not expected. This money should be used to give the national development plan a boost. A railway link to Navan should be opened and the line between Sligo, Limerick and Rosslare upgraded or reopened as necessary. I spoke recently to the station master in Ennis where a new commuter service to Limerick opened in December. People wondered whether the new route would be viable, yet despite minimal advertising, the number of people using the line has already doubled.

The Shannon stopover and plans to break up Aer Rianta have caused a major row. The Minister should give the Minister for Transport a cheque at the next Cabinet meeting and ask him to build a railway into Shannon Airport. This would make it the only international airport with a rail head and give new impetus to the west. This, combined with a rail line from Cork to Sligo, would open up the west.

I ask the Minister to address one issue as regards the rural renewal initiative. A couple of years ago, to widespread approval, he cut back on tax reliefs for hotels in certain circumstances because the scheme was being abused through partnership deals and so forth. Fine towns, including Kilrush, Ballinrobe, Tuam and a long list of others, do not have a hotel which is inhibiting investment. I ask the Minister to examine the matter.

I hope that when I raise my final concern in more detail in the House in the coming weeks the Minister will come before us to address it. It is clear that interest rates will increase in the coming years, creating problems for people making repayments on their houses. I have examined the policy of other countries on this matter. In certain states, legislation has been introduced to require that in the event that interest rates increase, repayments may only increase by an amount not greater than inflation. Lenders may then raise repayments in line with inflation the following year as a means of catching up, as it were. If they find they cannot catch up, they may extend the repayment period. With people worried about the possibility of interest rates increasing in three or four years, similar legislation here would protect those with mortgages without depriving lenders of their money, although payments could be delayed. This approach has worked in other countries. I will address the matter in greater detail at a later date.

The economic indicators are solid and the Minister can take credit for this. My argument with him concerns the areas in which he spends. I have many ideas in this regard and Senator Cummins also made some valid points about areas in which we should invest. There is no point having money if we do not spend it.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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I welcome the Minister and thank Senators for their contributions to the debate. As is frequently the case, the Independent Senators, particularly Senators Ross and O'Toole, made very good speeches. Discussing the economy at regular intervals is important and not a waste of time. Economic success is not only good news for the Government but also for the country. We have a right to be proud of what we have achieved, even as we accept the many things we must still do.

I pay tribute to the trade union movement's approach in the recent past. In the negotiation of the first half of the current partnership programme, it helped the Government reduce the rate of inflation, which had peaked at approximately 7% in one month, to its current level of about 1.5%. I am somewhat worried, however, that the increase in international oil prices may have a negative impact on inflation. I hope the second half of the partnership negotiations, which are, I presume, under way and progressing, will come to a satisfactory conclusion because I have always been a strong believer that social partnership has a vital role to play.

Senator O'Toole called for the reopening of the Limerick to Rosslare railway line. CIE is spending €2.6 million on the railway bridge in Cahir which is nearly ready and will result in a better service. I agree with the Deputy's comments on rail. I am not convinced of the need to spend vast sums on an elaborate Dublin metro, but small investments in public transport outside Dublin could have a major impact on provincial areas.

The Minister made the point that the current buoyancy in tax revenue is not due to non-indexation in last year's budget but to revenue from a range of other taxes. Cutting capital gains tax from 40% to 20% was a major strategic decision which is resulted in a flow of revenue ever since.

It was pointed out that jobs are being lost but as Senator O'Toole pointed out the net figure is what matters. If people become redundant but are able to find reasonably good jobs again relatively quickly, they are not nearly in as serious a position as they would have been 20 years ago when people lost jobs without any prospect of being re-employed.

One point that is perhaps not reflected in public print to date is that large parts of the countryside outside Dublin have really taken off in the past 12 months or so in a way that they were not all doing even at the height of the Celtic tiger. It would be wrong to attribute this entirely to the decentralisation announcement, but there is no doubt that it has boosted confidence enormously. Private investment is taking place without even waiting for the public service jobs to arrive.

The decentralisation scheme is excellent. There is inevitably a certain amount of politicking on this issue at present but I hope the public service unions will adopt a constructive attitude to it when the local elections are over. Despite what anyone may say, decentralisation was written explicitly into the Fianna Fáil manifesto in 1997. Moreover, the terms on which it is being carried out are such that substantial, well-connected towns that were not necessarily good at attracting industry will benefit.

Photo of Joe O'TooleJoe O'Toole (Independent)
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It cannot be done in three years. That is the problem.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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The Senator should have a word with Mr. Phil Flynn. There is no clearer democratic mandate to carry this out. As a former civil servant, I note that a duty of civil servants, who obviously have to point out all the difficulties and ramifications, is to implement Government policy for which there is a clear mandate. On the basis of conversations I have had, I am sure they will do so, despite what one is reading.

Rory Kiely (Fianna Fail)
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Is the amendment agreed to?

Senators:

Agreed.

Rory Kiely (Fianna Fail)
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Is the motion, as amended, agreed to?

Senators:

Agreed.

Rory Kiely (Fianna Fail)
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When is it proposed to sit again?

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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It is the original motion that is agreed rather than the amended one.

Rory Kiely (Fianna Fail)
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Did Senator Mansergh not hear what I said? I asked if the motion, as amended, was agreed to.

Photo of Joe O'TooleJoe O'Toole (Independent)
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The motion, as amended, is agreed to.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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Yes, okay.

Rory Kiely (Fianna Fail)
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When is it proposed to sit again?

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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On a point of order, it is the original motion tabled by the Government, not the motion as amended, that is agreed to.

Photo of Joe O'TooleJoe O'Toole (Independent)
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The amendment was put.

Rory Kiely (Fianna Fail)
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I will put the question again. Is the amendment agreed to?

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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No.

Photo of Joe O'TooleJoe O'Toole (Independent)
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It was agreed to.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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It was agreed by the House and the Cathaoirleach accepted it.

Photo of Joe O'TooleJoe O'Toole (Independent)
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The motion, as amended, was agreed to.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The Chair put the amendment——

Rory Kiely (Fianna Fail)
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I will put the question now. There might be a misunderstanding. The question is: "That the amendment be made."

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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On a point of order, the Cathaoirleach put the amendment and it was agreed to. One can look back——

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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We assumed the Cathaoirleach would be putting it to a vote.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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Excuse me, the Cathaoirleach put the amendment.

Rory Kiely (Fianna Fail)
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There is a little ambiguity and I will put the question again.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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There is no ambiguity. The only ambiguity is that the Government side was caught——

Rory Kiely (Fianna Fail)
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The Chair decides on this matter.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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That is not in order.

Rory Kiely (Fianna Fail)
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I am ruling it in order.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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We intend to take this matter further. The Chair put the amendment to the floor.

Rory Kiely (Fianna Fail)
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I am putting it again.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The Cathaoirleach is reversing the decision taken by the House.

Rory Kiely (Fianna Fail)
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No, I am not reversing the decision.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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What about the spirit of the motion?

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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It was the House that made the decision.

Rory Kiely (Fianna Fail)
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I am formally putting the question.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The House made a decision and the Cathaoirleach is overruling it.

Rory Kiely (Fianna Fail)
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I am formally putting the question: "That the amendment be made." Is that agreed?

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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That is completely out of order.

Amendment put and declared lost.

Motion put and agreed to.

Rory Kiely (Fianna Fail)
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Will the Acting Leader state when it is proposed to sit again?

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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Is it next Tuesday at 2.30 p.m.? I do not know.

Rory Kiely (Fianna Fail)
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Is it not next Wednesday at 10.30 a.m.?

Photo of Mary WhiteMary White (Fianna Fail)
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We do not know yet. I asked an hour ago.

Rory Kiely (Fianna Fail)
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Is the Acting Leader proposing to sit again at 10.30 a.m. next Wednesday?

Photo of Mary WhiteMary White (Fianna Fail)
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We do not know yet. I asked an hour ago.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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Can it be altered to 2.30 p.m. next Tuesday?

Rory Kiely (Fianna Fail)
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No. We must fix a date.

Photo of Martin ManserghMartin Mansergh (Fianna Fail)
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Next Wednesday at 10.30 a.m.

Photo of David NorrisDavid Norris (Independent)
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I would like to raise a point of order.

Rory Kiely (Fianna Fail)
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The House is adjourned.

Photo of David NorrisDavid Norris (Independent)
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If it is adjourned, why is the Cathaoirleach still accepting a speaker?

Rory Kiely (Fianna Fail)
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I am asking when it is proposed to sit again.

Photo of David NorrisDavid Norris (Independent)
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I am objecting to the adjournment of the House and I will speak on it and call a vote. A precedent was created when the Government was defeated when I called a vote in exactly the same circumstances. It may be an error but the precedent exists and it must be observed. I heard exactly what was said and there is no doubt that the Government lost this motion.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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The Senator is correct.

Photo of Eamon ScanlonEamon Scanlon (Fianna Fail)
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Next Wednesday at 10.30 a.m.

Rory Kiely (Fianna Fail)
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The House is adjourned until next Wednesday morning.

Photo of David NorrisDavid Norris (Independent)
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The Cathaoirleach can adjourn what he likes but I will raise this matter when we meet again because it is——

Rory Kiely (Fianna Fail)
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The House is adjourned until 10.30 a.m. on Wednesday, 19 May 2004.

Photo of David NorrisDavid Norris (Independent)
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I object to the adjournment of the House and want to vote on it.

Rory Kiely (Fianna Fail)
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The House stands adjourned.

Photo of David NorrisDavid Norris (Independent)
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The Cathaoirleach should act within the rules of the House and he has not done so. I am serving warning that I will raise this matter next week.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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We will raise it as well.

Photo of David NorrisDavid Norris (Independent)
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Good.