December 19th
Finance (No. 2) Bill 2008 (Certified Money Bill): Second Stage
We live in unprecedented times. There has been a downward trend nationally and internationally in key economic indicators unparalleled in economic history. How we deal with it is a challenge for our generation. In Ireland we are feeling it more markedly than most because it has come on the back of the longest sustained period of economic development in the country’s history.
There is a need to examine critically and appraise how we got to where we now are. The main priority is to decide what can be put in place to achieve stability and sustainability in our society and economy. There is no doubt the Celtic tiger years brought about a degree of superficiality that gave us some false comfort of the actual wealth of the country. I would like to see a movement towards a more sustainable society and economy and a questioning of the value of real wealth.
The Government publication, which has been treated quite cynically by some sources, is an honest attempt to point a way forward, identify action areas and inject an element of specificity on where we need to get to from here. As a society, we need to have a debate on the fact that while there was a growth in confidence and development in entrepreneurial abilities during the Celtic tiger years which had not existed in the State to the same extent previously, negative factors also developed, such as the growth of individualism and the leakage between community and commercial interests. I, and my party, believe that we need to establish a more sustainable society by returning to a debate on values. The news today indicates that one of the factors of the Celtic tiger years was a diminution of many of those values. The increase in greed and individualism are some of the factors which have brought us to where we are today. I sense the Minister is facing those problems, in addition to the direct day-to-day difficulties to which the Government and political system must respond.
We are in a situation where the State has already made policy decisions and indicated that key resources will be made available to sustain the economy into the future. We need to ask who works with the State. I have stated on the record that many of those running our financial institutions are not and cannot be those who work with the State on where we go from here. It is a violent word but there should be a cull of executives in the banking system. Public confidence is needed from now on, and it does not and cannot exist with many of the people running our key institutions. Yesterday’s resignation is the start of a process, and many people involved in financial institutions need to look to themselves to right the wrong.
12 o’clock
We have insufficient regulation. This is not necessarily a flaw of Government policy. The legislation that exists was predicated on existing international regulatory practices which were flawed. They were flawed in the United States, the United Kingdom, Europe and especially in this country. The laws need to be reviewed and strengthened and as part of the public confidence process, the people doing the regulations need to be critically examined and, if necessary, changed. My personal opinion on that has not changed. Today’s news means whatever oversight that has existed has not been to the degree we expect from a regulatory body.
I disagree with Senator O’Toole on some of the powers the Financial Regulator does not have directly but should have been able to apply through a moral authority. The regulator has supervisory and prudential powers but also consumer interest powers. When products such as 110% mortgages were made available, the only person I heard speaking about it was a Minister of State with responsibility for housing. I heard no one in the financial services industry or the Financial Regulator say this was a poor product and would be dangerous for people who used it. That is the ultimate failure of regulation, not only omitting to say whether a product should exist but also not warning the public on the danger of its existence.
I see the Finance Bill as the brighter side of the coin of the budget for 2009. Many difficult decisions were made on 14 October, many of which had to be reassessed in light of justified public concern. The nature of decisions made on budget day are part of a process. If public expenditure is to be controlled, it will require a series of such decisions, but I have not heard that in wider political debate. Not only have difficult decisions been made, there will be more of them and the decisions to be made will be even more difficult and will excite much more public apprehension and reaction. To be honest, anyone who is or aspires to be in Government must make that public declaration because there is no alternative.
The Finance Bill reverses many of the beliefs that existed in the Celtic tiger years, including that we had to incentivise people who were already wealthy. We have learned that, despite giving tax reliefs for many spurious areas, people who wrote off large amounts of tax and did not pay them to the State coffers still paid themselves exorbitantly high salaries and indulged in practices where they loaned shareholders’ money to themselves. There was no system to bring them to account. We should be discussing the culture and lack of values as well as the euro and cent approach to making an economy work.
Despite what I said since beginning my contribution, I remain confident that this may be a period of a number of years where difficult decisions will be made. I have faith in the people’s ability to understand the nature of the difficulties we are in and in their having the resourcefulness to deal with those problems in a society we forgot during the Celtic tiger years. If we are to have a more sustainable society and an economy that is predicated on real wealth and lacks the superficiality of the Celtic tiger years, we must debate society and see the economy as an engine for that society rather than the focus of all our endeavours. When we get to that stage, Ireland will be better for it.
December 19th.
Order of Business
Iagree that there is a need for a debate on the banking sector. Such a debate will take place. I would like to respond to Senator O’Toole’s comments on remarks I made about the Financial Regulator last week. I pointed out that the standard of regulation in this country is in line with the hands-off approach to regulation throughout the world. Internationally, there have been substantial failures in the regulation of financial institutions in the western developed world. I accept that the legislation pertaining to the Financial Regulator needs to be reconsidered by both houses. As an Opposition spokesman on finance when that legislation was originally introduced, I made several of the criticisms Senator O’Toole has made today. The resignation of the chairman of one of the banks represents the start of the process of restoring public confidence in the banking sector. I do not know of anyone in public life who is prepared to support a State programme of recapitalisation of the banks in the absence of strict conditions applying to those who have shown they are incapable of inspiring public confidence. I am confident that such conditions will be set out when a decision on the matter is made in this House. All Members of this House have a role in identifying and applying such conditions, in the interests of the health of our financial services and the recovery of the economy.
December 17th
Motor Vehicle (Duties and Licences) (No. 2) Bill 2008: Second Stage
The transfer of taxation arrangements in terms of annual motor tax from an engine capacity to an emissions basis was a Green Party initiative which at the time was greeted with no small degree of cynicism by many in the political system. It has turned out to be an enormous success and the evidence of that success is that 80% of the cars bought since then are in bands A, B and C.
An attempt was made in dishonest political debate to ascribe the lessening of car sales to the introduction of a new taxation system, and that was accompanied by similar changes to vehicle registration tax, but if we consider the position of the three main car companies in the United States, the failure of new car sales is a global phenomenon that has much to do with the type of cars offered to consumers. The old gas guzzling type is a machine that is slowly disappearing from the world stage, something for which we should be grateful. Not only are people being offered alternatives in terms of different fuel types — biodiesel as well as standard petrol — we have also the onset of mass produced electric cars to which Senator O’Toole referred earlier.
The comment about the intentions of the Government in this regard was somewhat unfair. The Government has announced the radical measure that by 2020 10% of all vehicles on the road will be electric vehicles. That means that year on year from now we will have to sell 15,000 new electric cars in a context where currently there are probably fewer than 1,000 electric cars in the country. That is something to which it is worth aspiring. There will be obvious benefits in terms of our collective carbon footprint and transport will be changed.
Senator Norris spoke about the alternative to a tax of this type being a tax directly on petrol and linked to usage. There is no doubt that might seem on the surface to be a fairer tax but it would go against the argument made by Senator Coffey at the start of the debate that this proposed tax, in terms of emissions base, was unfair to people in rural communities. A tax based purely on usage would be very unfair to rural communities because of the distances from many services and large population centres. It was also unfairly stated that the price of petrol here has something to do with the level of taxation on a litre of petrol.
In comparison to other European countries — the United Kingdom, France and Germany — despite the fact that we have VAT and excise duties, taxes on direct uses of petrol are lower in Ireland than in any other European country. We have a capacity in that regard should we need to change it.
The other point regarding dependence on a tax——
Senator Paudie Coffey: Is the Senator saying he intends to raise taxes on petrol?
Senator Dan Boyle: I am saying there are two arguments for it. First, it affects rural communities disproportionately and, second, despite what is being said by Opposition parties——
Senator Dominic Hannigan: Which side of the argument is the Senator on?
Senator Dan Boyle: Does the Senator want me to start again? I will do that. I welcome the introduction of this legislation and the fact that a Green Party initiative that was much criticised at the time has brought about a welcome change in car ownership and usage and a much better improvement on the previous system. Does that make it clear?
Senator Paddy Burke: The Senator’s party has destroyed the car market.
Senator Paudie Coffey: Cars are no longer selling.
Acting Chairman (Senator John Paul Phelan): Senator Boyle, without interruption.
Senator Dan Boyle: If we had made no change in last year’s budget and kept the current system there would have been a collapse in car sales this year.
Senator Paudie Coffey: We have a sub-standard public transport system.
Senator Dan Boyle: That is an argument on which we will both agree.
To return to the point about reliance on taxes of this type for local government funding, there is an ongoing concern that local authority funding should not be dependent on car ownership.
Senator Dominic Hannigan: Hear, hear.
Senator Paudie Coffey: We agree on that too.
Senator Dan Boyle: In terms of the current system, we can also look forward to the report of the Commission on Taxation in 2009. Part of its remit is the way ongoing local government taxation will be reformed. I am confident that among the recommendations of the commission will be the degree to which this type of tax will be a mainstay of local government finance and the better alternatives.
In this year’s budget we have the introduction of a charge on second properties which will help in terms of future local government finance. As that charge, levy or tax is underpinned with a valuation system, I can envisage that being a form of local government taxation as it is in every other European country we are a partner with in the European Union.
In criticising the way we fund local government now we must be clear that in terms of the alternatives that have to be put in place, it is not a question of reinventing the wheel. They already exist. It is about making the system fairer, making the ability to pay and collect easier and making finance available for direct usage in the local authority areas. At this stage this is the best levy available to us. It helps to a large extent in an economic environment where the other forms of funding — direct State funding and funding from the commercial rates base — have been necessarily contracted. On that basis, the rates not charged in the change of system and the additions being proposed in this Bill are fair. They are proposed on the basis that we must fill the hole in local government finance and do so in a way that reflects the fact that most people who are availing of local authority services, which include the non-national roads, contribute to some of the costs of each local authority.
On those grounds I welcome the Bill and look forward to the report of the Commission on Taxation in September in outlining the way local government finance will be more varied and effective following its recommendations.
December 16th
Order of Business
The debate on the economy is ongoing in this House, as is the question of our financial institutions, and I am confident there will be further debates. There is a need for legislation, especially on the National Pension Reserve Fund. I am sure it will come before the House at the earliest opportunity and will again give Members the chance to talk about it.
In announcing the bank guarantee scheme in October, the Minister for Finance was clear that recapitalisation may be possible. That is now even more clear as the Government has announced that a fund will be made available should banks avail of it. However, this should not be taken as a negotiating process. If the State is to get involved in the business of recapitalisation, it must be done on stringent conditions, the first of which is that the money has to be made available for direct lending. We must learn from the mistakes of other jurisdictions, when billions of euro, dollars and sterling were put into other financial institutions with no net effect. I hope that any future debates we have on the issue will outline that. The issue of governance must be also addressed. The people who got us into this mess cannot be trusted to get us out of it. The political system will collectively relay that message when we need to make these decisions.
I have already stated my unhappiness with the decision of the Equality Authority. Some Members are confusing the contribution I made on the absence of human rights recognition in the Charities Bill 2007 with my position on the Equality Authority. I do not believe there are outside influences affecting this, but rather unelected influences within the Government that are having a disproportionate effect. There are personal agendas and biases that are informing policy in this area. The Equality Authority was prepared to take a 33% cut in its budget, and this could still have proceeded as long as the utterly stupid proposal to relocate to Roscrea did not go ahead.
Senator Shane Ross: Hear, hear.
Senator Dan Boyle: If the authority is to have a shared secretariat with the Irish Human Rights Commission, it can operate only when both agencies are in the same location. This is one of the reasons for the resignation of the chief executive of the Equality Authority, and it is a reason for the need to examine how policy is made in this area and how it can be consistent with simple economics. If we are cutting down on Government agencies and on departmental expenditure, we cannot proceed with something that involves the additional use of public expenditure to move public servants from one part of the country to the other.
Senator David Norris: Hear, hear.
Senator Dan Boyle: The only way we can solve this problem is by making sure the shared secretariat between the Irish Human Rights Commission and the Equality Authority is a physically shared secretariat in Dublin.
Senator Paschal Donohoe: I am somewhat shocked by what Senator Boyle said in reference to unelected people within this Government having an influence on policy and major decisions. I do not need to point out to Senator Boyle that he is in the Government. The people to whom these unelected officials report are politicians who head up the Government in the first place. It seems the issue is not so much about the excessive influence of officials who report to the Government of which Senator Boyle is a member, but rather the lack of influence of the Green Party to stop or reverse decisions it opposes. It is a terrible precedent for this House to stand up here and assign responsibility for political decisions to officials within Departments, rather than to the Ministers who head up those Departments in the first place.
Senator Dan Boyle: Did I say that?
Senator Paschal Donohoe: Yes.
Senator Dan Boyle: Did I mention a particular official in a particular Department?
An Cathaoirleach: We will stick to the Order of Business. We will not go down that road.
Senator Paschal Donohoe: I will give the Senator the opportunity to correct me, but the person responsible for this is the Minister for Justice, Equality and Law Reform and not his officials. The Senator should address his comments to the people with him in the Government, rather than to the people who report to the Minister in the first place.
December 11th
Charities Bill 2007: Report Stage.
Yesterday I attended an event hosted by Amnesty International to mark the 60th anniversary of the publication of the agreement of the Universal Declaration of Human Rights. I spoke candidly at that event, probably too candidly, but I would like to use the opportunity of Report Stage to repeat much of what I said there because I stand by it.
I cannot understand why the original reference to human rights in the scheme of the Bill has been removed. I do not agree with that, although I am involved in a Government process that obliges me to accept it because it has gone through Government procedures. I already stated in my speech on Second Stage that I believe this is good legislation which is flawed as a result of that omission. This has not come about through the Department of Community, Rural and Gaeltacht Affairs. As a result of general Government processes, concerns have been raised, not specifically political concerns, in other Departments.
There is a view that human rights in their widest aspect are not considered with unanimity as they should be. Human rights exist in different contexts as there are civic and political human rights, on which there is a broad degree of consensus. These include democratic principles and the involvement of people in civic life. There are other human rights, such as social and economic, which engender ongoing political debate.
As far as I and my party are concerned, these are also inalienable human rights, and seeking to afford those rights is part of the democratic role of any citizen. No political process should stand aside, whether informed by administrators or elective political representatives, from seeking that such rights be attained.
If the Minister is not prepared to address the issue, the existing operations under a human rights banner could find themselves with spurious and political challenges for existing or being seen to affect charitable operations in their status. One of the major bodies in the form of Amnesty International has special tax status only because of a particular Irish solution to the Irish problem of failing to recognise human rights in the widest sense. A former Minister for Finance, Richie Ryan, chose to grant the body that status in a Finance Bill. We should no longer have such machinations.
Senator David Norris: Yes.
Senator Dan Boyle: We should not have the validity of well recognised organisations being questioned and uncertainty over their future because of a Bill that is 90% excellent in what it proposes to achieve. The Bill aimed to achieve that at its inception, when it was presented as a scheme by the Department of Community, Rural and Gaeltacht Affairs. The fact that it cannot do so now means that either spurious challenges will be made against these organisations or bodies will be formed that will have their validity questioned in future. There will be a need for future legislation to amend this prior to the review mentioned in this legislation. I am stating that while acknowledging that I will be voting for the Government and against the amendments. The least the Minister can do is bring out regulations, at the earliest opportunity, to define and protect the role of organisations that currently find themselves in this position. The regulations should also define how other organisations, that may come into being under similar circumstances, can be afforded similar protection. If our legislation is not complete, we could find ourselves in difficulties in future because the valuable work of well recognised and publicly accepted organisations is being challenged by someone who disagrees with them politically. The political system should not adopt that approach.
I reluctantly accept that because unelected influences may have had an effect on the Bill and they have been given a weight that is disproportionate to what their individual concerns should be, it will result in a Bill that is missing an important element. How does the Minister of State intend to allay the concerns that will remain until the legislation is eventually completed under the five-year review or, hopefully, though amending legislation? We may feel obliged to propose such amendments because others have been successful in arguing against the issue.
Coalition Government is about give and take, and winning and losing arguments. The most important argument that has been won concerning this Bill, given what was absent from the original draft legislation, is the issue of advocacy. Advocacy is essential in civic society, including all voluntary and charitable organisations, in order to hold a mirror up to the type of society in which we live. The fact that advocacy is now very much part of the Bill will allay some of the ongoing concerns about human rights organisations. It is more important to have a Bill that recognises the charitable intent and purpose of organisations, whatever their historical background. In that way we can hold up a mirror to reflect society and force Governments and the political system generally to account for that. The inclusion of advocacy in the Bill makes it somewhat easier for me to support it, but it will not totally allay my unhappiness that there is a lacuna in the legislation that will eventually have to be filled.
December 10th
Criminal Law (Admissibility of Evidence) Bill 2008: Second Stage.
I compliment Senator Regan on producing this Bill. As someone who has introduced Bills in both Houses, I recognise that legislation should come from Members on all sides. It is regrettable that the majority of legislation we pass comes from the Government. In drafting this Bill, the Senator has made the case for investigating this area. The Minister indicated the issues arising are being considered on an ongoing basis and he hopes to test the current legislation in this regard. He is prepared also to introduce amending legislation if it becomes necessary to do so.
I would diverge from Senator Regan on the text of the Bill, however. It appears to come from the perspective that if only everyone was on our side, we would get everything right. We took a similar approach with the Lisbon treaty by believing that if we had changed the rules on how the people should have been informed, we would have got the right answer.
Crime is obviously a cause of concern for the public. It is important to address the issue of jurisprudence to ensure society and the rights of the accused are protected. One of the central problems of the Bill is the impression it gives that evidence is proof. Evidence can become proof if it is accepted by a judge and jury, but it is only part of the background story and extenuating circumstances that may be used to prove a point. If a conviction ensues, the evidence is genuine but if the evidence is flawed in terms of how it is obtained or its constitutionality, it undermines the process. There is a need to be careful in how we proceed down this road. We must ensure public concerns are addressed and that the justice system is fair to all our citizens. One of the possible consequences of rushing into legislation like this — although not necessarily this Bill — is to condone sloppy practices in judicial and legal enforcement. That point has been already made by Senator Norris in this debate. On those grounds we must move very slowly.
The idea of common and constitutional law is that it is not created in an instant; it is not reactive. The examples cited relating to our last Minister for Justice, Equality and Law Reform show that we should not legislate on such a basis. I was a Member of a Dáil that saw significant pieces of legislation being presented in draft form which were dissimilar in form and content from what was eventually agreed by both Houses of the Oireachtas. It was legislation on the hoof that we could be coming back to time and again.
Senator Liam Twomey: The legislation was guillotined.
Senator Dan Boyle: It was more like a machete taken to legislation going through the House. That is another argument. This is the reason we must be slow, careful and cautious about legislation of this type. Public concern about serious crime must be addressed and we should have confidence in our system of law enforcement and judicial behaviour.
Unfortunately, there have been incidents where there has been a propensity to take shortcuts, although they have been small in scale and have been responded to by the formation of bodies such as the Office of the Garda Ombudsman. There has been a willingness to create what is being presented as evidence to secure particular convictions that have not been evidenced and are certainly not in proof. They have been unfortunate in compromising people in being convicted for crimes with which they probably were not involved.
It is not enough to have a suspicion or vague hope in that regard. In a democratic system we need both a constitutional and legal basis which allows people to go through our legal system and be sure they are being judged on the basis of properly obtained proof that would secure a sound conviction.
That is not what Senator Regan is trying to achieve in his Bill. He speaks of technicalities, different interpretation and looking at some of the more obvious issues coming through the system such as wrong dates or addresses. There may be some classes of case, such as drink-driving, that are relevant because of badly drafted legislation. That last instance is one of the reasons we should move very slowly in this area.
The Bill has been produced with the best intentions but I am most concerned about having the Bill challenged by the President through the Council of State to test its constitutionality. To even suggest this in a debate in the Houses of the Oireachtas is constitutionally unsound in itself. It is a decision for the President to convene the Council of State and such a call would be made as appropriate. To suggest an issue might be open to a debate on constitutionality is not for any debate in this House or any piece of legislation presented to the House.
I welcome the tabling of the Bill and accept its good intentions. I accept much of what it is trying to achieve will be addressed in future legislation. This Bill, as it is framed, is not the vehicle to do so and the contribution made by the Minister this evening gave us sufficient grounds for us not to allow the Bill proceed to Committee Stage.
December 10th
Recall of Irish Pork and Bacon Products: Statements.
The crisis that followed the recall of Irish pork and bacon products relates as much to the economy as to food safety. We need to consider the impact on the turnover of pork producers during the worst possible time of the year. Already we are seeing a short-term impact in terms of staff being laid off. Further down the production chain, the impact will be even more strongly felt on individual farms. As well as dealing with the short-term revenue losses, we will have to restore sales of Irish pork nationally and internationally to their previous levels. We will also have to consider compensatory measures, either from our much depleted national purse or, it is hoped, with the appropriate assistance of the EU. Although as yet difficult to measure, the economic impact will be significant.
As Senator Quinn noted, the Government’s response to the crisis was immediate and appropriate in terms of inspiring public confidence. Lessons were learned from the experience of other countries, such as the toxins in Belgian meat, the recent mozzarella scare in Italy and the powdered milk scandal in China. If any question arises in regard to contaminants in food, the only responsible reaction is a prompt and comprehensive response. The Government and the State agencies have acted appropriately in this regard. The presence in the House of my party colleague, the Minister of State, gives me the opportunity to commend him on his reassuring statements which have helped to restore public confidence in Irish pork.
The impact of a total recall of these products is diminished by the fact that people need to be exposed to them for 40 years before they develop symptoms. If the quantities of dioxin build up in a person’s system they may not feel the impact, either immediately or in the long term, on their own personal health. That is not the issue. A product was found that is a known contaminant and it should not have been in the food. It affects the quality of our branded products and our reputation in the world. We must immediately put in place systems that eliminate this risk and ensure the risk cannot happen in future. Government actions and the actions of State agencies are dedicated to that and the crisis has been handled well to date.
There is a job to be done. There are banner headlines on the 24-hour news stations and foreign newspapers that are now stating toxins have been found in Irish pork products. There will not be similar headlines in a week or ten days that will state Irish pork products are clear of toxins. Senator Quinn is correct in stating there is a big selling job to be done by Bord Bia to restore that international reputation.
The fact we have acted in the way we have and with speed is the best card we can play in restoring that confidence. As a country committed to agricultural exports of the highest quality, we can say that we acted appropriately in trying to ensure any contamination which existed is eliminated from our food chain. We can point to the example of other competing countries in the food market which have not acted similarly. It may take some time but I am sure the way in which Irish food products have been viewed in the past can be restored.
Not only is it the worst possible time for pork producers because of the Christmas market but it is not the best possible time at all for the Irish economy, as we are seeking to restore our competitive advantage, increase our exports and get more added value from our economy. The fact we have acted in the way we have should be taken as a mark of confidence. There is a danger that given the cycle of news events we have received in the past nine months in particular, we could retreat into a shell, look at the dark side and be despondent and pessimistic. We should take pride in the fact that we are capable of producing goods of the highest quality. That is what we are good at, and we must get back into the international market. If and when occurrences of this type happen, we should take appropriate measures.
We have to isolate this issue but there are lessons that can be learned in bringing a level of traceability to pork products that currently exists in regard to beef. We must ensure the risk of dioxins is minimised to the largest possible extent, and that will have ramifications for other areas of local, national or international policy. For example, should we be encouraging the creation of incinerators that produce dioxins that may end up in the food chain? These questions must be asked and I am sure they will be considered in the wider context of a review of Government policy.
The common view of all within the Chamber is that what can be done is being done. Our common hope is that Irish pork products can be restored to shop shelves in the quickest possible time. The Minister of State will get a great deal of support for the actions he has taken in this regard.
December 9th
Social Welfare (Miscellaneous Provisions) Bill 2008: Second Stage.
In the midst of a very despondent economic position, the Social Welfare Bill should be recognised as a significant treat in trying to meet the needs of the most impoverished in our society. This Bill proposes increases in social welfare payments that are significantly higher than the likely inflation rate next year. It gives further increases over and above the standard rate increase to identified categories, such as pensioners and carers.
There are special increases in the fuel allowance, which, in light of current crude oil prices, are more generous than was thought in the first instance. Given that we are to borrow just to meet our budget requirement in current expenditure — €4.7 billion — the ability of the Minister to secure increases for broad categories of our society is to be welcomed and this Bill is the means that helps to bring that about.
In the coming year there will be other issues that I am sure will take up the Minister’s time but that will need to be resolved. These include the position of lone parents and pensions. I look forward to further debates and other legislation that will consider these issues. As a statement of intent as to where the Government is while faced with the current global economic position, the increases achieved through the Social Welfare Bill are the best possible. There should be some acknowledgement of this. Although the increases are not ideal and do not lift people completely out of the poverty in which many people find themselves, nevertheless, they represent steps in the right direction and indicate a Government approach to this issue that recognises we are in a new reality and that those who need to be protected first and most are those affected by this legislation.
I will comment on Senator Norris’s contribution. I have gone on record in expressing my disappointment on the decision made on the Combat Poverty Agency, but I accept it is a Government decision that is given effect by this legislation. I would not put my concerns in the same way as Senator Norris, but the Minister, in taking this Bill through the other House and the other Stages to be faced here, might consider some of the issues being mentioned so that the new body that will operate within her Department takes on the best aspects of what the Combat Poverty Agency has represented.
We must consider rationalisation and fewer organisations. We must ensure the work done is carried out more effectively in future. I would like to see this unit within the Minister’s Department having a life somewhat different from a section of the Department and a semi-State agency. It could be a new type of life form in administrative terms. It would be within her Department’s budget but would have some identity that people would know the work is being done on behalf of the Minister and the Department, but that there is also other input, particularly from the social partnership process. I would like to see this unit interact with the social partners and investigate certain areas. The reports, after being made available to the Minister and the Department, could be made public.
Some indication of the name of the unit could also be helpful. There is an assumption that the office of social inclusion is taking over the Combat Poverty Agency. A new name which takes account of the Combat Poverty Agency’s past would help make the transition a bit easier; a possibility would be the poverty and social inclusion unit. The ability to initiate reports through the social partnership process and make them publicly available within a set time should be given by way of ministerial indication as a possible policy direction if it is not included in the Bill.
I am not sure if the following issues form part of the Bill or the process we should be discussing here. The Minister and her officials have been discussing the idea of the transition involving people who work with the Combat Poverty Agency. I have become aware of concerns about issues such as transfer of undertakings and people being maintained in the work they were engaged in. Indications on this will help the transition go well also. It will not be possible to achieve a complete fit and some savings will be made with certain grades where work is already being done within the Department. The expertise that has developed in the Combat Poverty Agency, particularly with regard to research, should be used to its full extent by the new unit.
I look forward to the other aspects of social welfare legislation that will come forward in the new year. Sadly, there are growing numbers of unemployed, although the Government has made some allowances for those additional numbers. The Minister is also providing for staffing needs within her Department to cope with these numbers. We need a medium-term plan that will recognise the sad reality that unemployment will increase to a level that we have not seen for several years and we need the means for dealing with that.
In another recent debate I floated the idea that we should perhaps look beyond the standard and straightforward social welfare payment of the jobseeker’s benefit or allowance. Perhaps there should be optional and top-up payments. Many of us who grew up in the 1980s realise the soullessness that accompanied unemployment and these extra payments could deal with meeting education and training needs or recognise work being done in the community. An optional top-up could be provided for people engaged in other work while unemployed.
We must think outside the box and more creatively about the sad reality that is ongoing employment. We must, first, offer people hope that there are paths to employment and, second, recognise their potential from their experience and ability in contributing to society and the economy in general. In supporting the Bill, I ask the Minister to consider how the policy direction of the Department might need to be moulded in the year ahead to face the current economic position, which many of us had not expected, at least not in the severity of its depth. I am confident that, given the Department’s ingenuity and the goodwill that exists for its ability to shape humane policies, we will see new and radical approaches.
December 9th
Regional Fisheries Boards: Motion.
I agree with most speakers who contributed to the debate on the motion that it is regrettable there will be a further postponement of the elections to these boards. This might be the third year for which the reorganisation process has lingered. There is an understanding that reorganisation of the sector is necessary, that it is happening and that it is progressing towards finality.
Reorganisation of the sector is needed on several grounds. There is a plethora of regional based bodies in all areas of activity, which are part of the public sector reform programme. Very few of the boundaries correspond with each other. In County Cork there are two regional fisheries boards, the southern fisheries board covering the northern part of the county and the south-western fisheries board covering the rest of the county. Having regard to how health care is administered and how the Garda Síochána functions, there is a series of overlapping regional boundaries for several areas of State activities. That is one of the main reasons we should examine how the fisheries boards, as only one of those areas of activity, should be organised.
In finalising the reorganisation process, it is necessary to ensure there is a degree of consistency. In dealing with the fisheries boards in County Cork, which cover three major rivers, the Blackwater, the Bandon and the Lee, different positions are often taken regarding fish conversation and capital works associated with those rivers. It is important that whoever is responsible for administering inland fisheries does so consistently to allow them to operate effectively. Everyone would agree that this has been an ongoing problem in the manner in which we administer inland fisheries.
However, the concept of democracy is important at regional fisheries level. The postponement of elections to the boards has resulted in many vacancies remaining unfilled for a long period. I am particularly mindful of angling representatives on some of the fisheries boards, who are among the most important members in terms of how these boards function because they allow for the consumer’s view on how our inland fisheries should be organised. While there is impatience and even intolerance about the process, there is a growing understanding that we are reaching the end of it.
However, I share the sentiments expressed by other speakers that a similar motion cannot come before the House next year. I am confident that such a motion will not come before us. I would not go as far as other speakers in saying that a deadline of three or six months should be set. It should be enough that we recognise that we are coming towards the end of the process on the reorganisation of inland fisheries and we should push that process along. To be arbitrary and set a date would not help the process.
It is important that all of us, in contributing to this motion, recognise that there is need for reorganisation, accept that it is happening and welcome it when it is finalised. I am confident this is — it must be — the last of such debates before either House of Oireachtas.
December 5th
The Economy: Statements.
Given the amount of briefing material they have to work through from the Department of Finance, I am not too sure whether the Minister for Finance or the Minister of State have had an opportunity to read The Economist world review of 2009.
Deputy Martin Mansergh: Yes.
Senator Dan Boyle: It is a publication that has a particular political bend but it is also one that is recognised as getting the fundamentals of economic indicators right. It is framed in a number of sections, part of which is an overview of the global economy. It is a fairly gloomy assessment. It states that for the next few years, the elements that have brought about the worst economic global shock in 80 years will persist but that there is light at the end of the tunnel. Another section details from where part of that recovery will come. There is an extensive section on green technology and promoting a green economy as one of the weapons that will be used to bring about economic recovery. I am fairly confident this is a message the Government has already taken to heart and that future policy announcements will reflect this. If one thing is sure in terms of both a national and international global recovery, business as usual and the old approach to economics is not what will be successful. We need to do things differently and we need to do different things.
The Economist world review, which is contained in each of their annual publications, is an overview of the world economies on a paragraph by paragraph basis. If one reads the European and American sections, it indicates the scale of the problem we have to overcome as an open economy that exports the vast bulk of its goods and services. It also points out that the majority of the economies of Europe, the countries that collectively make up the euro zone, are now in recession, as was confirmed yesterday and was one of the reasons the European Central Bank brought about its largest ever cut in its lending rate of three quarters of a base point. This is a point Opposition parties need to ponder in particular. It is an issue that affects all other countries, particularly our trading partners. The policies we need to have in place, which I believe the Government is putting in place, need to reflect this reality.
If one considers our largest trading partners such as the UK and the United States, they are listed among those countries that will have either zero or negative growth in the coming year. It is a similar story with other large economies in Europe such as France, Germany and Italy, as well as countries such as Estonia, the Baltic nation which was described as one of the success stories of the modern economy. Ironically, one of the few countries that will be experiencing economic growth in the next year is Hungary, a country that has just had to be rescued by the International Monetary Fund. I suspect it is because of that infusion of funds that it will experience some level of growth.
The question we need to ask ourselves in general terms is what are the strengths we can build on. Unlike the 1980s, we are a stronger and more diverse economy in terms of the goods and services we provide and those with which we trade. We have gained in terms of potential and levels of confidence. I agree with Senator O’Toole that one of the biggest factors towards maintaining economic strength and building on economic potential is to use the confidence we built, which we never really had in the national economy until the last ten years but which was one of the biggest successes of the Celtic tiger. There is a danger that in talking down the economy, we are bringing about a degree of wish fulfilment, which could be the biggest loss of all. It is not the indicators of economic growth such as inflation, interest rates or unemployment that will be the key factors. It will be the loss of confidence, either individually or collectively, that will slow down and stunt our ability to bring about economic recovery.
There is a responsibility on all of us in political life to make sure the path ahead is built on that confidence in particular. I would be a glass half full person and I would be confident we can get through this. On the other hand, there is a need for a degree of honesty as regards where we are economically in both national and international terms. This is a situation that has not been experienced for 80 years and it is one that has come suddenly in terms of the severity of the shock. As a result, the policy initiatives that have had to be put in place have been severe in their action as well as in terms of their hopeful ramifications. From here on, once the difficult decisions are made, we can recover. However, we must be honest that there are more difficult decisions ahead , particularly in regard to the public sector. I agree with other speakers, particularly Senator MacSharry, that that way ahead must be based on what has been successful in the past during periods of economic prosperity, particularly in regard to the use of the social partnership model.
The most honest we can be with the people and those who are in charge of operating within the Irish economy is by explaining that this is a process that will be prolonged, particularly in terms of what was experienced in the past number of years. We are talking about a two to three year period of adjustment both nationally and internationally. This will require patience, policies that are predicated on social justice to ensure those who have least in our society are most protected and, on the other side of the social justice coin, that those who have achieved most in an era of economic prosperity are those who contribute most in terms of maintaining public services, which is all we are discussing at present.
This is the most important point we must get across in the public debate on our immediate future. Every additional cent we spend in terms of trying to add on and improve public services in the coming years will be borrowed money. The scale of borrowing we have put in place for the next three years is €35 billion, most of which will go on necessary capital and infrastructure spending, but quite a large proportion of which — necessarily large due to the situation in which we find ourselves — will go to fund current expenditure and public services. Until we get the balance right in terms of taxes and control of public expenditure, it is an imbalance that could lead us down a road that many of us wanted to leave behind 20 to 25 years ago. It is important we are aware of that danger and that we try to avert it as far as possible.
The calls that have been made with regard to patriotism may have been misunderstood and perhaps overplayed but the reality is we are in a situation that requires a collective effort in terms of pointing a way ahead to bring about recovery in the soonest possible time. It requires the willingness to take a level of economic pain among those who have the ability to do so. I am confident the Government can frame policies that will allow those who have least in our societies not to feel that effect but there is also a responsibility that we have ongoing debate to make sure those promises are lived up to and that the potential that exists in this economy can once again be realised in the short term.
Senator Alex White: I welcome the Minister of State, Deputy Mansergh, to the House. In doing so, I recognise it is a pity the Minister for Finance has other commitments, which we all understand. I presume he had a commitment at 11.30 a.m., which may be the real reason we started this debate at 10.30 a.m. rather than 11.30 a.m. Perhaps if we had been told this earlier in the week by the Leader, everybody would have understood and accepted that commitment rather than having that ridiculous skirmish the other day in regard to the Order of Business this morning.
December 3rd
Shoppers Task Force: Motion.
Senator Dan Boyle: There is a famous quote, although I cannot remember who said it, “Patriotism is the last refuge of a scoundrel.” There are individuals who promote themselves and their love of country as being superior to that of other individuals, whereas real patriotism is about collective action in the face of adversity. There has been much misunderstanding and misreporting in how that term has been used in recent times. I would not blame some of our political figures who have used that word in certain contexts in the recent past, but it has had a certain unfortunate ring regarding the price differentials between the North and the Republic of Ireland. We have reached a sorry pass when somebody such as Mr. Jeffrey Donaldson of the Democratic Unionist Party, DUP, can sound more patriotic about the existence of the Border than anybody in the Republic of Ireland’s political system.
This is not only a case of the current situation between price differentials between Northern Ireland and the Republic, which is cyclical and applies the other way around, particularly with products such as petrol. It is a constant problem we have had regarding denuded economic communities throughout this island and how people are led towards other economic centres. The problem we are experiencing with Northern Ireland could equally be said at any time of our history about counties such as Mayo, Longford or Offaly vis-à-vis Dublin, as our capital city.
Senator Jerry Buttimer: Senator Boyle should not forget Cork.
Senator Dan Boyle: I rarely forget Cork.
Senator Fiona O’Malley: It is an independent republic.
Senator Jerry Buttimer: He often forgets Cork in Government.
Senator John Carty: He thinks he is in the real republic.
Senator Dan Boyle: I am glad to tell Senator Buttimer that Cork is utterly self-sustainable.
Deputy John McGuinness: Except in hurling.
Senator Dan Boyle: If we are discussing sustainable economies as a rule, it is not just the nation State but sustainable communities and community economics. Encouraging people at every opportunity to spend their money in their immediate vicinity strengthens local and, ultimately, national economies. We have lost sight of this in recent years in trying to meet consumer desire to find what, on the surface, seems to be the cheapest possible cost at the earliest possible time.
In identifying the nature of the problem there is much to recommend in the Labour Party motion. I disagree, however, with many of its suggested solutions. The idea of establishing a task force in an era when we are questioning the existence of many superfluous public bodies must be rejected.
Senator Brendan Ryan: Did we mention a public body?
Senator Dan Boyle: In terms of the way Government is already structured, there are bodies that can do this job equally well.
Senator Brendan Ryan: We did not call for the establishment of a public body.
Senator Dan Boyle: I am just making a mild criticism, Senator. Making that minor point does not undermine anyone’s political credibility.
Senator Jerry Buttimer: The Green Party no longer has any credibility.
Senator Dan Boyle: The current price differential is predicated on the differences in VAT. The reality is that Irish VAT rates do not apply to food or children’s clothing. The VAT increase in the recent budget applies largely to white goods, and even luxury goods and services, and is unchanged for most goods and services in this country. The real price differential comes about as a result of the strength of sterling. Sterling is 86p or 87p to the euro currently, which is way above the value at which the Irish punt entered the euro mechanism. Short of trying to encourage the United Kingdom to become part of the eurozone, that is not a problem we will solve in the immediate future.
My party colleague, a local representative in the Border region, Councillor Mark Deery, made a suggestion on “Morning Ireland” which reflects the reality of many people who are trading and consuming in the Border region. The suggestion has some merit but will be difficult to implement. As part of an overall co-ordinated plan, however, particularly in the short term, it may work. This is a crucial time of the year for retailers. It is when maximum turnover occurs and, as a result, maximum profit is achieved in enterprises. Councillor Deery, without consulting me, his party spokesperson on finance, made a suggestion that a VAT rate of 15% should be introduced for three months. That cannot be applied in a regional context; it would have to be applied nationally.
I would go further and say that any measure of that type would also have to be encouraged with a unified purpose on the part of everyone involved in economic activity in this country. Retailers would have to ensure that the goods and services they were selling were at minimum profit margin. There would have to be co-ordinated activity to ensure that consumers spent the maximum amount of money in their local communities. We are a long way from doing that but that is the road we must travel.
I was listening to a woman who was tempted by the experience of shopping in Newry in the past week. She described the traffic jams on the main Dublin to Belfast road, which was grid-locked for hours on end. She eventually made her way into one of the major shopping centres, The Quays in Newry, only to find that all the parking spaces were full. She drove around that particular shopping centre six times before driving back to where she came from without purchasing anything. An imbalance can be created in terms of what appears to be a gilded opportunity. I suspect that woman spent untold amounts in petrol in trying to achieve savings that were not apparent.
The petrol price differential is significant. The price per litre is 20 cent more here than that in Northern Ireland and the United Kingdom in general. People referred to our retail petrol prices but despite the recent increase in the budget, people would be surprised to learn that our excise duties on petrol are among the lowest in Europe, although the retail prices appear to be higher than those in other countries. That is the reason we have these price differentials.
While I understand the spirit of the Labour Party motion, there is a lack of practicality in dealing with the immediate problem. I accept there is a need for a co-ordinated, cohesive approach from all in the political system to come up with responses to what is a very serious problem. There is also a need to support those who find themselves in regional economies affected by circumstances beyond their control. I hope that there are voices being listened to at Government level that will determine differences of approach that need to be undertaken now. Otherwise, there are communities whose existence economically will be threatened by the lack of appropriate action.
