Thursday 11 October 2012
The Government is charged not only with governing this State but with ensuring we have a country to hand on to the younger generation, including the young students in the Visitors Gallery today. This Bill is about fiscal responsibility, about the obligation to manage the public purse in a prudent manner on behalf of the people.
It is interesting to consider that some of the loudest protests to Government policy come from Members opposite whose colleagues are in government in the North. The latter must manage a block grant from the British Government, which involves making difficult choices regarding expenditure, decisions which their party colleagues in this Parliament condemn the Government for taking. I welcome Deputy Finian McGrath’s proposals on taxation. I am pleased to hear that he has paid the household charge and that he is committed to supporting the Government in its endeavours to reconstruct our country. When I read in this morning’s newspapers, however, that Fianna Fáil is opposed to a property tax, I could only laugh with incredulity. This is the party which signed us up to the agreement with the troika and committed to the introduction of this very tax in its revised programme for Government and in the national recovery plan. Its hypocrisy knows no bounds.
This Bill is about responsibility – responsibility in how the Government manages budgets and delivers public services for citizens, as well as its responsibility as a member of the eurozone. Deputy Peter Mathews is absolutely correct in that it is also, by definition, about financial regulation. We do not have to cast our minds back far to see that a lack of regulation in the financial services sector and the irresponsible activity it enabled played a large part in getting us to where we are today. The Minister for Finance, Deputy Michael Noonan, has described the rules set out in the legislation as sensible and prudent and as representing a reasonable and responsible approach to budgeting. That is what we must instil in young people and in all our citizens. One cannot spend money one does not have. One cannot live on tick, on the never-never, ad infinitum. The forthcoming budgetary process will be difficult. The requirement to take €3.5 billion out of our economy deserves thoughtful and constructive debate in this House. The overriding principles must be fairness in the provision of services and the obligation to instil growth and promote employment. Some of the Members opposite baffle me with their voodoo economics. Instead of constructive proposals, they simply want to throw money everywhere. We spend €13.8 billion on the health service annually. The tactic of simply throwing money at a problem has not worked in the past and is not an option now.
The electorate endorsed the provisions contained in this Bill in the referendum at the beginning of the summer. This Government was given a mandate to govern, make decisions, create employment, manage our economy, reform the institutions of the State and get people back to work. No other Government since the foundation of the State has faced a challenge of this scale. Apart from managing the economic crisis, we must restore confidence in the country and market it to the world as a super place to invest, with young, bright and educated workers who deserve the opportunity in make their living here. That requires action and leadership from the Government. The Taoiseach has repeatedly referred to his aim of making Ireland the best small country in which to do business by 2016. That is no small challenge. It will require a collaborative approach and a commitment from parties on both sides of the House. If we are to rebuild our country, we must move away from the politics of protest and condemnation which are in themselves a potentially effective political weapon.
What is required instead are manageable, deliverable and tangible solutions. Perhaps Joe Duffy will consider hosting a solution day on his radio programme which would give ordinary people an opportunity to offer constructive suggestions and solutions. Ireland is a small, open economy. We have had great news on the jobs front this week but also, regrettably, job losses. I agree with the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, that we should avoid kite-flying in the run-up to the budget. As well as seeking to instil confidence, we should also be careful not to frighten people. We must all be careful of the language we use, whether from the Opposition or Government benches. Likewise, members of the fourth estate must be conscious of the impact of their commentary. People throughout the country are under pressure – tá siad faoi bhrú.
A great deal of debate is focused on the need for a deal on our bank debt. The Bill before us is one of many pan-European measures being taken to deal with the financial difficulties facing Governments across Europe.
It provides a framework for the prudent management of the economies of the eurozone. Deputy Shane Ross who has just joined us will be aware that some European countries abandoned prudent and responsible fiscal management. We must all live up to our responsibilities in this regard. The Government, in particular the Taoiseach and the Minister for Finance, has been working closely with its European partners to secure outcomes that will benefit the people. The onus is on the European Union to ensure these outcomes are achieved. EU Finance Ministers and the President of the European Central Bank, Mr. Mario Draghi, are working to secure a deal on Irish banking debt. Mr. Draghi should note that Ireland, the poster boy for reconstructing an economy and the best student in the class, must be offered a stimulus by way of a successful renegotiation of our banking debt. The issues involved are complex, however, and negotiations are proceeding slowly. Discussions must continue until the negotiations bear dividends.
The same people who argued that the Government would not secure a deal on the interest rate applied to our debts have criticised the current efforts to secure a deal on bank debt. As the negotiations proceed, we must not lose sight of the bigger picture and the efforts being made behind the scenes to secure a deal. People have co-operated in the reconstruction of the country. For this reason, we need to create confidence and share the burden. As the budget approaches, we must debate all the issues in the House, but we must also highlight improvements in investor sentiment, the reduction in bond yields and the successful return of the National Treasury Management Agency to the debt market.
The most important reason for securing a deal on bank debt is to deliver for families. President Obama and his challenger, Governor Mitt Romney, constantly refer to the middle class in the US election campaign. Never before has the term “middle Ireland” been so apt. This section of the population is being squeezed, targeted and asked to pay, as I observe daily when I meet people in my clinics, while canvassing, in the GAA club and restaurants and shops as I walk around my constituency and other parts of Cork city. Whereas incomes have declined, costs have not decreased in many areas. Last week Allied Irish Banks announced an increase in its variable interest rate on mortgages. The announcement followed a previous increase in the bank’s mortgage rate and similar increases by Bank of Ireland. It is mind-boggling that Bank of Ireland requires current account holders who wish to avoid paying bank charges to maintain €3,000 in their accounts. Do bank chief executives know people who have €3,000 in their current account on certain days of the month? This daft requirement is morally wrong and should be changed.
The issue of energy prices must also be tackled. I listened recently to a radio interview with the Commissioner for Energy Regulation in which he provided an articulate justification for allowing Bord Gáis and Electric Ireland to impose prices increases. This year gas and electricity prices have increased by 8.5% and 4.8%, respectively, while the public service obligation charge has increased by €9.67 for all users. These increases have a major effect on the financial circumstances of households. Deputies can make a stand on this issue.
I support the action being taken on the issue of private health insurance by the Minister for Health, Deputy James Reilly. Insurance premiums have increased repeatedly in recent years, with some providers having increased prices three times in the past two years. Middle Ireland has been hit again and we see the fallout in terms of increased pressure on public health services as people opt out of private health insurance or change their insurance cover or plan. A regular health insurance plan which cost €665 in 2008 now costs €1,240, an increase of 86% in a five year period during which incomes declined. We are penalising again those who are responsible and compliant. Families face many day-to-day pressures. In terms of the impact on ordinary families, it is crucial that the efforts being made by the Taoiseach and the Minister for Finance to secure a deal on bank debt are successful.
This is an important Bill. The Government is being prudent in the measures it is adopting to rebuild the economy and look after the national interest. It must also recognise the role being played by middle Ireland and the need to provide further assistance as part of our efforts to manage the economy. It is important that the budget is fair and balanced and pro-jobs and pro-growth. This week different growth projections have been provided by the IMF, the ESRI, the Department of Finance and IBEC. Which of these projections is correct? How is it possible to plan for growth when there are so many competing figures?