Monday, 3 July 2006
Order of Business.
I wish to raise a serious issue that needs to be debated and regulated in proper measure. It relates to the role of the retail banking sector in adding to the general level of indebtedness in the economy. In the 12 months to May, there was a 17% increase in the level of credit card indebtedness. This means that approximately €2.4 billion is owed. Clearly, there is a responsibility on borrowers but there is a particular responsibility on lenders to ensure their policies are ethical.
There is considerable evidence that many banks and credit card companies are pushing credit cards in front of people on modest incomes and that credit card limits are being raised in the absence of any request to do so from card holders. This is a serious issue.
There is evidence in the UK that many people are acquiring new credit cards to pay off debts on old credit cards. Unfortunately, there is also evidence that credit card indebtedness in the UK has led to suicide and personal difficulties for those who are indebted. Both the Financial Regulator and the Irish banking sector have a particular responsibility to get their act together on this issue and ensure that lending practices are fair and that money and credit cards are not thrown at people who will then, understandably, become indebted.
As the Leader is aware, we have received a report from the Judicial Appointments Advisory Board. The Seanad has a particular role to play in examining some of the report's recommendations. Every year between 2002 and 2006, the board recommended to the Government that before it appointed new members of the Judiciary, it should ensure that such prospective members underwent a full and rigorous medical examination to ensure they met a particular standard. I am raising this issue again because there is very little point in a statutory body like the board continuously referring to the need for such a provision if nobody in the Houses takes heed of it. At some point in the future, possibly the autumn, the Government should decide whether or not to act on the board's recommendation that it ensure that new members of the Bench undergo a full medical examination before they are appointed to these very important positions.
I strongly support the argument put forward by Senator Brian Hayes in respect of credit cards. It is the view of some commentators throughout Europe that countries should introduce legislation to restrict the number of credit cards a person can hold and to require banks and other financial institutions to check on the number of credit cards held by a person before issuing a new one. In addition, such legislation would stipulate that in order to move beyond the limit and acquire an additional card, a person must cancel an existing card. This would deal with the issue raised by Senator Brian Hayes.
Current arrangements regarding credit cards are anti-competitive and run contrary to the rules and tenets of the Treaty of Rome and the European movement. Due to the current anti-competitive franchising arrangements, a person can only acquire a credit card in his or her own country. This state of affairs is ridiculous given the existence of a common European market. These arrangements are both anti-competitive and dangerous.
The Minister for Enterprise, Trade and Employment visited China last week. I would like to discuss the outcome of his trip with him. I also wish to ask whether he raised the issue of human and civil rights in China on his trip, particularly the attitude of the Government and the Communist Party of China to the Falun Gong movement, an issue which Senator Norris and I previously raised. The movement's members have been persecuted and thrown into concentration camps and, while it is difficult to believe it still happens in this day and age, are being used for live organ donations against their will, which has been proven beyond doubt.
Democratically-elected politicians in various parts of the world are trying to start a movement in respect of this matter. Members of the Canadian Senate and its other House have tried to start a worldwide independent investigation into the persecution of the Falun Gong movement on mainland China. Will the Minister address this House regarding his trip and discuss this issue so that we could ask him to raise with the Chinese Government, the EU, the UN and any appropriate international group the need to have the attitude of the Communist Party of China and the Chinese Government towards the Falun Gong movement discussed and investigated? If we have reached the stage at which the dollar and euro signs gained by doing business with the 1 billion people in China are more important than the way their country is treated, we are going down a slippery slope.
I welcome the decision by the Minister for Defence, Deputy O'Dea, to reduce the height limit for joining the Army, as this is progress, but why is a height restriction required? Will the Leader arrange a debate on this matter and invite the Minister to attend the House in that respect? According to some figures, 10% of women and 2% of men will still be excluded despite the decision. If one accepts the principle of equality and the need for more women in the Army, having a height limit is contradictory.
It would be interesting to discuss this matter in light of the fact that we are becoming a more diversified population. As time passes, more people from other ethnic groups will join the Army, many of whom will come from countries where the average height might be less than it is here, which is an aspect we should examine.
The Minister stated that 5% of Army personnel are women. He is considering measures other than reducing the height restriction to try to encourage more women to join the Army. An autumn debate on this matter would be interesting.
I support the call by Senator Brian Hayes for a debate on the banking industry's issuing of credit cards. It is a well known fact that the information provided is not transparent. There is a great deal of room for more clarity concerning how credit cards are issued. I call on the banks to provide more education and knowledge about one's possible credit limit in any given situation. The Senator's call is a worthy one.
Regarding the matters of the financial institutions and levels of indebtedness raised by Senator Brian Hayes, there are different anomalies. I wish to ask the Leader about a significant problem in respect of section 35 of the Credit Union Act 1997. As Members are aware, there is no level playing pitch because credit unions are only allowed to make available 20% of their loan books and they are overly liquid, that is, they have 50% excess liquidity. Will the Minister for Finance introduce the necessary ministerial order? He could examine the review of the matters raised by Senator Brian Hayes in time, but he should at least make available 40% of credit unions' loan books over five years and increase from 10% to 20% the amount that could be made available over ten years.
Credit unions are overly restricted and the Minister is allowed to make an order under the provisions of the Act. Similar restrictions are not placed on other financial institutions. Given the service provided by credit unions to their members in many villages and towns, the last eventuality we would like to see occurring would be many of the unions' members being forced into the hands of moneylenders by the current restrictions. I am sure the Minister and many Members received letters from those in authority that made them aware of the problem. I urge the Leader to use her good offices with the Minister for Finance to arrange for the immediate introduction of the necessary ministerial order.
I support Senator O'Toole's call for a debate on human rights in China following the summer recess. I referred previously to the issue of organ donations involving those executed in China, a state in which capital punishment is widespread.
I would like us to address another issue when we return. I still have not managed to obtain a copy of the health report in which Ireland scored so badly.
I accept that the Leader has done so. I am particularly concerned that we seem to have scored badly on our care of neonates.
The report recommending the fortification of bread with folic acid to attempt to reduce the number of children born with neural tube defects in this country was to be published at the end of last year. Apparently, it is due to be published shortly. Would it be possible to make time available for a debate on the care of the new born when we return? There are no hearing tests for the new born in Ireland.
While Ireland is set to become the first country in Europe to develop a test covering many of the common cystic fibrosis mutations, screening will remain patchy due to a severe lack of funding. We have a very high incidence of cystic fibrosis. In Northern Ireland, where they have screened for approximately 15 years, children live, on average, a considerable number of years longer than their counterparts here or in Scotland, where there is also a lack of screening. I call for a broad debate on how we can better care for the new born in this country. What happens shortly after a baby is born is very important for his or her health both as a child and as an adult.
I agree with Senator Brian Hayes about the level of indebtedness in this country and the fact that many financial institutions, such as the commercial banks, are forcing money on people. I raised the issue a couple of months ago and would like any such debate to encompass personal loans. I received several letters, as I am sure have other Senators, from my bank telling me that a personal loan of a certain amount was available if I wanted one. If I want a loan, I will go into the bank and ask my bank manager for it. That is not a proper manner for a financial institution to operate, particularly when difficulties exist regarding people's level of indebtedness. I also echo the sentiments expressed about credit card debt.
Senator Coghlan made a good point. I am sure other Senators have been lobbied in the past week or two by the credit union movement, which is a hugely important element of our financial services industry. The credit unions have a legitimate problem with section 35 of the Credit Union Act 1997. The Minister should review the position as a matter of urgency to try to level the playing field between the credit unions and the commercial banks. The credit union movement provides an alternative to the commercial banks and we should do everything in our power to promote it.
I wish to raise a matter that came to my attention through media reports in recent days. It relates to our angling and coarse fishing industry. I was listening to the radio as I was stuck in traffic on the way to the House today. There was a report on the "News at One" about chub fish, which were introduced into this country two or three years ago. They attack trout and bream, in particular, and have the potential to cause very serious damage to our angling industry. In my part of the country and others, the fishing industry is a valuable tourist asset and I call on the Leader to ask the relevant Minister if his Department will make efforts to counteract the problem that exists or ensure that it is contained in the midlands, to where it seems to be limited at present. I do not know how that matter might be addressed. Something should be done, however, because the fish required for angling and coarse fishing cannot traverse the weir at Kilkenny. Action should be taken to avoid serious damage to that sector of the economy.
I was pleased that Senators Brian Hayes and O'Toole referred to credit cards. On Friday last, I raised the same matter in connection with SSIAs. My concern was that we should advise people whose SSIAs are maturing to reduce their credit card debts because of the very high rates of interest charged. After I had spoken, I consulted the Financial Times and discovered that the EU had put a number of questions to MasterCard that must be answered within three or six months. The questions to which I refer were similar to those put to Visa a few months ago. In other words, the suggestion of a cartel to which Senator O'Toole referred is very high on the agenda of the European Union.
I was particularly impressed recently by advertisements relating to saving water, some of which are very bright and attractive. They remind us of the benefits of water conservation. I visited France recently, however, and I discovered that, under the system that is in place there, every time one turns on a hot tap, hot water is immediately forthcoming. When one turns on a hot tap here, one must wait two or three minutes before the water becomes hot. I am sure there is an easy, technical solution. Perhaps the French water system is different to that which obtains here. I suggest that we draw the attention of those involved in water conservation at the Department of the Environment, Heritage and Local Government and wherever else to remind ourselves that we can use technology to reduce the very heavy costs of lost water and energy transmission.
I support Senators Brian Hayes, O'Toole and others who referred to credit cards. It is important that there be discussion to highlight the problems that exist. I recently made an appointment with the money advice and budgeting service for a man who is in difficulty. Two weeks later, he returned with a lovely letter from his bank extending his credit limit, despite the fact that I had arranged a meeting to try to tackle the overdraft on his card. It makes one wonder why, for no reason, he received a letter from the bank extending his credit limit. We must highlight that problem before it gets out of hand.
In recent days, we have heard about the concerns of those who took out equity-based SSIAs. The return they will receive on those investments will not be quite as good as they first expected. I wish to use that example in the context of the old chestnut of pensions. It is a very good example to examine when we discuss making mandatory the payment of contributions to pension schemes. One in five people opted for equity-based SSIAs and took the risks attaching thereto. They knew that they were gambling, but four in five were very cautious and contributed to the fixed-rate scheme.
My argument regarding pension schemes is that people will invest in them if they know the return. If we wish to make contributions mandatory, we must give people a fixed rate so that they know the nature of that into which they are paying. We cannot compel them to gamble with their money for 40 years of their working lives. The 10% figure is the equivalent of someone giving up four years' salary for the sake of a scheme that may never pay out what they expect. It has always been my argument that it is not good enough and equity-based SSIAs provide a very good example in that regard. The Government should consider what people will pay into, namely, something that ultimately guarantees a return. We must not compel them to gamble if they do not want to do so. When the Oxegen concert takes place this weekend the Pensions Board will be there trying to encourage young people to take out pensions. This is a waste of money. I wish they would do something about providing decent pensions that would give people a return. I would be interested in that development.
I am glad Senator O'Toole raised the question of human rights in China. Like America, China is an empire that denies being an empire. It invaded, annexed and colonised Tibet in 1959. Now it has brought the railway that will complete the cultural genocide. For the reason Senator O'Toole mentioned, because we have dollar signs in our eyes, nobody utters a squeak. I raised the question of the Falun Gong. There is no doubt that prisoners are kept on death row as a living organ bank. An order is placed in Japan or the US and organs are harvested while the prisoners are alive. I am glad the Canadian Senate has taken up this matter and we should do so too.
As other Senators have remarked, there is a problem with our health service. From the continuous but gentle and reasonable interventions of Senator Henry we realised we were not getting reports. The lives of cystic fibrosis patients, which could be extended, are not being extended. None of us has seen the European survey, except perhaps the Leader, although we have read about it in the newspapers. It is astonishing that they would send an e-mail and not repeat the dose. I am not sure who is in the wrong, the Department or the people looking for the information. I was concerned to hear a spokesperson for the IMO yesterday saying she is not surprised because it is impossible to extract information, that since the reorganisation under the HSE nobody knows who is responsible for what, there is no directory and one can never find what person is dealing with a situation.
This is an administrative problem and a scandal in a situation where, as we have discovered, a large number of administrators were windfall beneficiaries of increases that will raise their salaries over €100,000. In view of the reorganisation there is much duplication. That is not satisfactory and we could have a rolling debate on the health services, as we have had on Iraq. Although we have had a number of debates and the Leader and Tánaiste have been helpful, it is important we examine this situation.
I raised the question of the children's hospital when it first emerged and the call by specialists for an international peer review, which would have taken only three weeks, and this was denied. Senator Ross raised the special position of the Adelaide Hospital last week, and that is a significant issue because guarantees were given there when the charter was incorporated some ten years ago, and they have not been lived up to. The hospital has been underfunded and the cast-iron guarantees that were given on a children's unit being continued have been abrogated unilaterally. It is important that we bring these matters before the House for a full discussion.
Early in the year I raised the question of identity cards for 18-year-olds and the delays in processing these by the Garda authorities in Dublin. Delays can take three to six months and it means young people must bring their passports as identification to gain access to nightclubs. This is unacceptable. We were told the delays were because of a shortage in the relevant Garda department. What is the position and has it changed? I understand that the situation is as bad as it ever was.
I support Senator Coghlan's request that the restrictions on the credit unions be lifted. It is a reasonable request from the credit union movement and I am sure most Members have been lobbied by their local credit unions on the issue. It is time we had a level playing field.
I would like a debate on the abuse of alcohol. In recent years people have been drinking large quantities of wine. According to reports this has become a significant problem to the extent that a bottle of wine is not regarded as a considerable amount, which it is. To drink that much in a day is an abuse of alcohol. We must study the new paradigm of people consuming significant quantities of wine.
I endorse the call for a debate on financial institutions. It is important to realise that we are in a position of dangerous overlending. This is not exclusive to credit cards. Banks are lending people money which they will not be able to pay back, giving them a short-term injection for a long-term burden. That will be serious if the economy takes any sort of downturn.
Banks lend at between 16% and 18% on some credit cards, which is outrageous and exorbitant but if one places money with them one earns less than 0.01%. In other words, if one borrows €1,000 one pays approximately €190 a year but if one places that sum with them one earns approximately ten cents. That is an extraordinary statistic. Banks also lend too much in the housing market, especially in an era when interest rates are going up and people will be badly caught.
It is time the Seanad called a halt to this activity. I do not know our rules but I do not see why we should not call in some bankers and ask them a few questions.
I am making a serious point. I see no reason people of that stature and power in our society should not be answerable to parliamentary committees. There is no reason the Seanad should not call them in. While they lend so much money which will cause so much misery, some bankers draw sums of up to €2.8 million in salary per annum. That is the figure revealed for at least one banker. It would be nice to have him here to justify his salary too.
I support the call by Senator Coghlan and others for the Minister for Finance to review the restriction placed on credit unions. The credit union movement met many Members at the weekend and stressed that this restriction causes grave difficulty for several of its members who have loans but who lost their jobs recently and may need some flexibility in the repayment of their loans. Unfortunately, section 35 sets a tight limit on the number of people who can have a loan for over a five or ten-year period.
This can be changed by ministerial order. I have put the matter down for consideration on the Adjournment. In the interim I hope the Leader will speak to the Minister for Finance on this matter.
The Joint Committee on Finance and the Public Service regularly has sessions with representatives of the various banks. It would be a very suitable forum for the type of questions Senator Ross has in mind.
I have some sympathy with the point made by Senator Cummins. It is unsatisfactory that passports must be used and produced in all sorts of situations for which they are not intended. They are being used as substitute identity cards, with the result that they get lost or are stolen and this gives rise to all sorts of problems. I am not necessarily in favour of the introduction of some form of State identity card, but it would be useful if there could be a standard system of mutual recognition regarding the plethora of identity cards of one kind or another that are issued by various bodies. Ryanair should take note in that regard.
Senator Brian Hayes referred to the retail banks. He referred in particular to the level of indebtedness in this country. He alleged that the banks are apparently increasing their customers' credit limits — the amount of money they can aspire to borrow — without informing them. Given the way the world is nowadays, if one knows one can go further — in banking terms — one will go further. One would think this is a matter that the Financial Regulator should examine. I suggest that would be a very good move.
Senator Brian Hayes also referred to the Judicial Appointments Advisory Board, or JAAB as it is unaffectionately known. The board has recommended that each person who is appointed or is deemed to be appointed to the Judiciary should undergo a medical test so that he or she can be deemed to be sound in wind and limb. When one considers the precariousness of health and various matters, I suppose a person could be deemed to be sound in wind and limb today and then pass away tomorrow. The Senator asked me to discover whether the Government will adopt that recommendation as a policy. I will make an inquiry in that regard.
Senator O'Toole argued that the problem to which Senator Brian Hayes referred could be addressed by limiting the number of credit cards that are issued because such a limit would impose its own strictures. It might not be quite fair for us to think that such a limit would be acceptable as long as we continue to have our credit cards. The problem is that debts can be allowed to reach quite high levels without being called in. I have always been amazed that banks which are happy to give so freely become so punitive when they are trying to get their money back. Senator O'Toole also said that credit cards are anti-competitive.
Senator O'Toole also said he hopes that the Minister for Enterprise, Trade and Employment raised the issue of human rights in China on his visit to that country. If anybody would raise that issue, it would be the Minister, Deputy Martin. The Senator argued that we should distance ourselves from the use of members of the Falun Gong movement for live organ donations and experimentation.
Senator Tuffy suggested that we should reconsider the need for a height restriction when women and men are joining the Army, particularly if we are to attract people from diverse backgrounds. It is possible that the average height of such people might be less than the average height of people here because they do not have similarly nutritious lifestyles.
Senator Ormonde supported the call for a debate on the freedom of banks to give credit so quickly and easily. Senator Coghlan raised the issue of section 35 of the Credit Union Act 1997 which restricts credit unions' operations. He asked for the Financial Regulator to examine the provision which he claims can be changed by ministerial order. Nearly everyone has an account with a credit union, so there would be much interest in such a debate.
Senator Henry raised the issue of human rights in China. She also pointed out how beneficial it is for women who intend to become pregnant to take folic acid. She asked for a debate on care of the new born, particularly as Ireland has a high percentage of cystic fibrosis compared with other countries.
Senator John Paul Phelan raised the issue of personal levels of borrowing on credit cards. He also said that the midlands could keep its stocks of chub fish as the south west does not want them. We in the midlands do not want the chub fish either. It preys on other coarse fish, causing immense damage to their stocks.
If I may be so bold again, a Chathaoirligh, but I wish to congratulate Senator Quinn on his recent election as chairman of EuroCommerce.
Senator Quinn referred to credit card debt and also to conserving water. He pointed out that in France hot water comes straight from the tap, but in Ireland one has to run it for a while. Such a system would be useful in water conservation.
Senator Moylan pointed out how easy it was to receive a credit limit extension on a credit card. Senator Terry raised the point about the concerns of those who chose equity-based SSIAs and who may now find themselves losing out. She also has her beef with pensions. However, pension funds could opt for a more balanced approach and invest in property and various stocks. The Senator always raises this point about pensions and is right to do so.
Senator Norris also raised the issue of human rights in China. He also claimed it was impossible to get information and reports from the HSE. He wants a rolling debate on the health system to include the charter of the Adelaide Hospital.
Senator Cummins raised an issue he often highlights, namely, the provision of identity cards for young people. He asked if there was some way to expedite the production of ID cards for young people, rather than them having to produce their passports at every call.
Senator Hanafin called for a debate on alcohol abuse which would be very useful. Senator Ross asked for a debate on the banks. He wants the head honchos of banks to be present in the Chamber during such a debate to leave themselves open to questions from the floor.
As Senator Mansergh pointed out, they may be so questioned at the Oireachtas Committee on Finance and the Public Service.
Senator Bradford also raised the issue of section 35 of the Credit Union Act 1997. Senator Mansergh raised the issue of the identity cards and passports.