Electoral (Amendment) Bill 2008: Second Stage.

This Bill is narrow in focus. It does not go anywhere near meeting many of the commitments in the programme for Government on electoral and democratic reform. There is already a clear commitment to establish an independent electoral commission and I look forward to that legislation. There is also a commitment to local government reform and democratic reform in general. The Minister will publish a White Paper soon and I hope it will help that process.

Recent court judgments allow individual citizens to participate properly in elections, some of which will be held this year and this is a welcome change. The idea of individual citizens choosing to forsake a political party banner should be a consideration in every democratic system. The Bill proposes a combination of showing a degree of support that would allow a nomination along with a relatively small charge. In the old system as I recollect it, the court judgment decided that the money was used as a barrier to people taking part in elections. The fee for European elections was £5,000 at the time of the judgment.

There is a value in the retention of the current electoral commissions in that they are not set up on a needs basis and therefore the formation of electoral boundaries will happen as a matter of course. However, this work needs to be informed by changing the terms of reference on an ongoing basis.

There is a curious situation with regard to the European elections. Because Ireland has 12 seats in four constituencies of three seats each, my party is at a particular disadvantage even though we have won two seats in European elections in the past in five-seat and four-seat constituencies, when Ireland had 15 MEPs. There is a case to be made that for the following European elections in five years’ time, we should at least debate the notion of a 12-seat Ireland constituency. While PRSTV has served this country well as it is one of the better systems in terms of reflecting in seat numbers how people have voted, Ireland now has one of the least democratic systems for electing MEPs.

I refer to the report of the commission set up a number of years ago and which the Minister, by obligation and by custom and practice, and I am pleased he operates on that basis, is bound to accept. This is the same principle that informs the boundary report on general elections. I know there are ongoing concerns about how particular areas are represented and under-represented. In the first instance there is a constitutional difficulty to overcome in that the Constitution refers to the minimum number of seats required in a constituency. I would not be averse to such a debate or such a constitutional change. Perhaps the Oireachtas Joint Committee on the Constitution could examine this aspect and also whether the time is right for introducing different electoral systems. This would be a useful debate. The Constitution does not specify the upper number of seats per constituency. The Minister has been obliged to accept the report which refers to three-seat, four-seat and five-seat constituencies.

In the early life of this country some constituencies had nine and 11 seats. I would like future boundary commissions to consider not having County Meath divided into two constituencies but rather to have a six-seater constituency——

Senator Dominic Hannigan: A seven-seater.

Senator Dan Boyle: ——and not having two three-seat constituencies in County Donegal. It should be whatever the population demands. I would like to see County Donegal having five or six seats and I would like to see County Kerry having five to six seats. North-east Dublin has three three-seat constituencies and I would like to see two constituencies of five seats and four seats as this would better reflect the votes of the people in this country. The terms of reference given to the commission governed its recommendations and the Minister, by custom and practice, as is right, has accepted those recommendations and we also need to accept them. However, we can seek to change the future terms of reference of the ongoing commissions in order to bring about those democratic changes and we have an obligation to do so.
Other issues have been referred to such as Seanad reform and the participation of young people. The National Youth Council of Ireland has been promoting the idea of lowering the voting age to 16 years. My own party was the first party to suggest this change in the case of local elections. There is one such example in the European Union, where last year young people at age 16 participated in a general election to the national Parliament in Austria. Unfortunately one of the effects of this change to include new voters between the ages of 16 and 18 was a rise in the vote for far-right parties. I am not sure if there is a link.

There should be a mechanism, at least at local elections, by which people between the ages of 16 and 18 could be encouraged to participate. This might help overcome one of the significant difficulties whereby participation by voters between the ages of 18 and 25 is only half that for the general population. We need to concentrate on education and ongoing programmes and we need particular mechanisms to involve young people in electoral life. This Bill deals with the minutiae of electoral boundaries and the procedure for nomination. The wider question of the quality of democracy, about participation in democracy and how we can become a more democratic country, will happen in future debates which will be informed by the White Paper on local government and other democratic reforms such as the reform of this House. We should use that opportunity to try to ensure the best quality democracy possible.

January 28th 2009.

Economic Issues: Motion.

I find my speeches read better in the arguments I make when they are constantly interrupted by Senator Buttimer. I constantly tell my constituents to read the Official Report on foot of that.

In moving the motion the main Opposition party appeared to be saying that a contribution must be made in acknowledging and contributing to the type of decisions that have to be made in the midst of what is the most serious economic crisis we have had in our history. I have stated that previously in this House. The motion does not go particularly far but it does go in the right direction. The sense I got in the opening contribution was that the economic position we find ourselves in is not all the Government’s fault. We need a deeper analysis than that and more proactive approaches.

There are several proposals in the motion as to the changes that could be achieved. They all involve tax expenditures and we are in a position where we are trying to balance books. We have had a huge shortage in tax receipts. We have kept spending at the levels they have been elevated to for the past three years, and difficult decisions must be made as to how we redress that imbalance. I would welcome positive proposals in that regard.

We are also borrowing to a large extent not only to meet that shortfall but to engage in a capital stimulus to the same extent that exists in other countries. We spend more on capital programmes than any other European country.

Senator John Paul Phelan: There is no stimulus. The capital budget was cut.

An Leas-Chathaoirleach: Senator Boyle, without interruption please.

Senator Dan Boyle: We are already engaging in an exercise that is Keynesian in its impact.

Senator Alex White: It is catch up.

Senator Dan Boyle: It will have——

Senator Jerry Buttimer: He cannot cope with being in Government.

An Leas-Chathaoirleach: Please allow Senator Boyle to continue without interruption.

Senator Dan Boyle: The capital stimulus, which is greater than in any other European country, even if it involves catch up in infrastructure, is an economic stimulus in its own right.

Major risks are being taken by other economies. The €800 billion stimulus being taken in the United States is in an economy that is already in debt to the tune of $1 trillion. We must ensure we do not get into a difficulty in terms of current expenditure and the type of burden we will place on our children. A debate on those grounds must take that into account also.

While the debate so far has hung on the difficulties regarding employment and increasing unemployment, we must ask ourselves serious questions as a society as to what that will entail. I am of a generation that grew up in the 1980s. I know the meaning of unemployment. It is about long periods of unemployment and the soullessness of unemployment. The Minister for Finance has been honest enough to admit that in the coming year an additional 100,000 people will be out of work.

Senator John Paul Phelan: They are already out of work.

Senator Dan Boyle: That is an unused resource in our society. We must put in place measures that not only deal with their immediate income needs but ones that will keep such people enthused in terms of seeking further employment and using their genuine abilities to work towards the betterment of society and the economy.

We must examine our social welfare system in terms of education and training opportunities and recognition of voluntary work. That is an area on which we must have a deeper debate as the position has a greater impact on our society. I would like people to abandon partisan politics and address those policies on a more honest basis.

Senator Nicky McFadden: That was my suggestion. The Senator was not listening.

Senator Jerry Buttimer: Ask Chris O’Leary.

Senator Dan Boyle: I will ask people of a certain type in terms of the challenges of Government at this difficult time.

Senator Nicky McFadden: That was my suggestion.

Senator Dan Boyle: One approach is not to walk away. We must face the problems——

Senator Nicky McFadden: We can do that.

Senator Dan Boyle: We must meet the challenges head on and overcome them.

Senator Fidelma Healy Eames: Let us deal with it.

An Leas-Chathaoirleach: Allow Senator Boyle continue.

Senator Dan Boyle: I will briefly address some of the points that were made. I agree we face a challenge in terms of energy costs but it is a challenge that is being met by the Minister for Communications, Energy and Natural Resources.

Senator Fidelma Healy Eames: Not at all. The regulator is not effective.

An Leas-Chathaoirleach: Senator Healy Eames, allow Senator Boyle continue.

Senator Fidelma Healy Eames: He is not effective. Let us call a spade a spade.

An Leas-Chathaoirleach: Senator Healy Eames, please allow Senator Boyle continue.

Senator Fidelma Healy Eames: Let us call a spade a spade. I am sick and tired listening to this rubbish.

An Leas-Chathaoirleach: Senator Healy Eames, please allow Senator Boyle to continue.

Senator John Paul Phelan: She is right.

Senator Fidelma Healy Eames: It is rubbish.

An Leas-Chathaoirleach: Senator Healy Eames cannot ignore the Chair.

Senator Fidelma Healy Eames: I am sorry.

Senator Dan Boyle: I notice the Chair gets an apology. I am not saying the issue is being addressed. It is in the process of being addressed. The position with regard to high energy prices is something that must be tackled——

Senator Fidelma Healy Eames: Precisely.

Senator Dan Boyle: ——but in the medium term energy prices will increase. We must avoid situations where an energy provider like ESB can give a 3.5% wage increase when everyone else in society is not getting that. We must ask questions when average pay in an organisation like that is €76,000 per person. It is worth asking those questions and getting answers to them.

It is clear there has been an increase in the number of people using public transport in the Dublin area, particularly through the successful implementation of Luas and the extension of Luas that will take place in the short term. Dublin Bus has failed to address that. I refute the idea that there have been cuts in public transport. The State subvention to public transport is what it was always allocated to be. The cuts are within Dublin Bus itself because of declining income and a failure to manage effectively.

Senator John Paul Phelan: That is a cut.

Senator Dan Boyle: It does not mean the Government has taken money from the company.

Senator John Paul Phelan: It is a cut. The Senator said there were not cuts.

Senator Dan Boyle: It does not mean the Government is any less committed to public transport. The debate must be conducted on those terms. The Deloitte & Touche report refers to the need for greater investment in public transport. I believe such investment is forthcoming. One of the capital priorities of this Government is to prioritise public transport. That will have an economic and a social protection effect because many people in our society rely on public transport. That is something this Government will give priority to and it will have a successful effect.

Industrial Development Bill 2008: Second Stage (Resumed.

This is a welcome Bill. The need to tidy up the apparatus of industrial development has long been discussed and the legislation is an attempt to reshape that infrastructure. While it has been long necessary in administrative terms, in this period in which we must seek value for money in all aspects of Government, the Bill is doubly important. It also affords the Minister and her Department an opportunity to tidy up other areas. For example, the west and other areas require additional assistance from State industries to promote industrial development.

I especially welcome the changes in research and development grants. We heard from Senator Quinn about the importance of maintaining and encouraging foreign direct investment. It is clear, however, that the next phase of economic development will strongly depend on research and development which delivers a greater indigenous industrial base. I am optimistic we can achieve this objective, especially through green technology. More than 30 years ago we made the major mistake of declining to use our natural resources, specifically wind, for energy generation. Not only did other countries, such as Denmark, generate electricity through wind, they also developed new technology which they were able to export. Ireland is now availing of this technology as we catch up.

Ireland has natural advantages in alternative energies other than wind. We are starting to do things properly, particularly in the area of wave industry. I expect the west to achieve considerable success in research and development in this area. I am aware, for example, of work being done by a company known as Ocean Energy, which is in a third phase of research and development in Galway Bay. It has progressed from a pool size model of a turbine to a quarter size model through to a full size model.

In the new apparatus which exists in industrial development, it does not necessarily need to be legislated for, but perhaps the Minister might give a sense of political direction as to how other State agencies and non-governmental organisations can become involved in the process of economic development and renewal, particularly in the west.

There are State agencies such as the Western Development Commission, which makes regular recommendations on how we can improve both infrastructure and the quality of industrial development in the west of Ireland. We also have agencies such as the Council of the West which is run by the Catholic Church. It produces many interesting papers as to the direction we should go from here on in.

The Government is acutely aware that regarding industrial development, the real need in the west of Ireland and other disadvantaged areas of the country which needs to be met is the infrastructure deficit, particularly in transport and communications. These are difficult fiscal times but I am confident the commitment remains to appropriate capital investment, which has to be done in a widespread way across the country.

We must not repeat the mistakes of the past, where a capital city has 40% of the population and acts as a magnet for a disproportionate amount of development and investment which should be more widely and fairly distributed throughout the country. We also need to recognise the need to develop the less advantaged areas in the country and that this administrative change is necessary and welcome. The change which the Bill allows for research and development is to be especially welcomed and will have a greater effect on areas outside major urban centres than would otherwise be the case.

I welcome this Bill and look forward to its enactment.

Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): I thank Senators for their support for this Bill. It is important it is accepted as quickly as possible in the context of the aggregate amounts I mentioned in the Bill. From a technical perspective, I do not anticipate any significant issues will arise. We will look forward to Committee and Remaining Stages in due course.

It is important to take a flavour of what was discussed this afternoon. I will not get into consensus politics, although on occasion it is appropriate. It is also appropriate to stand up for oneself. I will stick to consensus today. There is a consensus that a number of key issues must be addressed. I agree with Senator Quinn that the role of the Government is to create a situation within the economy whereby entrepreneurs can grow and flourish and we can attract foreign direct investment.

The way we can do that and make this country an attractive economic location, is in a number of key areas where we have a talent pool which we can continue to expand over the next number of years. Foreign direct investment is very important to this country and we must continue to be attractive to FDI.

We can do so by being competitive. It is important to say that we had a considerable number of new foreign direct investments last year and will have a number of new ones this year. I had an opportunity to travel to meet a number of these key companies.

One key message they gave me was that the flexibility and talent of our workforce is very important. Our tax incentives were also attractive, as were the flexibility of employment organisations which were in a position to come together very quickly and provide for the needs of a company. We have a key indication on support for research and development, and have a very significant investment programme over the coming years in this area and in collaborative work. These are the incentives we can use, and they are important and appreciated. On the basis of those incentives we will continue to be a very attractive location.

I met all of the indigenous agencies this morning. The key message concerned the price of energy, which was an issue across the board from both FDI groups and Enterprise Ireland. It is an issue we are grappling with and is one of which the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, is acutely aware. He is working with us to try and address this matter.

Another issue was the cost of local charges. I am sure all Senators are aware of the criticism whereby people find local charges are equal to grant aid given by an agency and, therefore, there is no benefit in investing in an enterprise. I know local elected representatives will deal with that issue, as we have to here. We must also ensure that we sustain employment and continue to have a talent pool.

All these matters are important. In building a smart economy we will find ourselves in a situation where our indigenous industries will provide FDI for other parts of the world, which is something we would all like to see. We will take our own talent pool and use it to expand further. There is no doubt that opportunities lie in the services sector. Manufacturing is still very important, as are all ancillary services.

Yesterday we had discussions with the retail trade, which is a very important part of the economy which employs almost 300,000 people. It is by creating the atmosphere and economic environment whereby we can encourage and support employment that we will move ourselves out of our current position. We must deal with the issue of our public finances and our banks and continue to invest in skills and people, and create support mechanisms for all of our companies.

The economic difficulties are almost like an economic war and that is the attitude we should all take. It is on that basis we can all come together and work together to address the serious economic issues. There will be further discussions on the economy and the policy framework which we are working on within the smart economy programme, and which will address these concerns. I reiterate the role the social partners will have, which will be pivotal in working towards what we would like to achieve, namely, an upturn in employment opportunities and supporting those in employment.

I thank Senators for their views and support on the Second Reading of this Bill. I am sure we will have further discussions on these issues in due course.

January 28th

Residential Tenancies (Amendment) Bill 2009: Second and Subsequent Stages.

It is unfortunate there has been a need to introduce emergency legislation of this type. The circumstances surrounding the Bill’s introduction represent a catalogue of errors in respect of information passed on and knowledge of what can or cannot be done under the existing legislation. This has created considerable confusion and the Bill before us seeks to correct the position in the context of not having any of the decisions made during a short period questioned. I welcome the fact this aspect has been recognised.

As Senator Hannigan stated, perhaps there might be an opportunity to consider the primary legislation in greater detail. We have a job of work to do in the context of passing the Bill before us. Once that is done, however, we could review the legislation relating to residential tenancies because a number of issues arise such as, for example, those relating to management companies, towards which we need to take a more responsive attitude.

I know the people who were selected for appointment to the Private Residential Tenancies Board but who were not allowed to be appointed because they held local government office.

Senator Maurice Cummins: My party will support the Senator if he wishes to change the position.

Senator Dan Boyle: I merely wish to place on record my opinion that one of the individuals concerned is a person of high ability. Not only is he a serving local councillor, he is also a barrister. He would have been appointed to the board on the basis of his expertise in respect of property law, etc., which he practises on a daily basis.

I have argued in the past that legislation of this nature which precludes councillors from serving on bodies such as the PRTB is not welcome. In addition, we should not encourage the introduction of legislation which insists that a set number of councillors should serve on particular bodies. Either a person serving in local government possesses the ability to do a particular job or he or she does not. It could be the case that when appointments are being made to bodies such as the PRTB, there are no suitable candidates in the area of local government to take up the relevant positions. It could also be the case that a body such as the PRTB could comprise a large number of local government representatives.

On where the PRTB should go from here, I hope the procedures that allowed the relevant information to pass through the Department and the decision to be made in the way it was will be corrected. There was certainly no intention to abuse or misuse the legislation. We must avoid a repetition of the circumstances that arose in this case or there will be a need to introduce similar legislation in respect of other areas in future.

Perhaps the best way to proceed is to consider this matter in the context of the all-embracing local government Bill that will be forthcoming in the aftermath of the White Paper on local government. The role of local councillors and other representatives on State bodies, etc., should be properly defined and the circumstances in which these individuals may be involved with these bodies should be placed in the context of a better legal framework. If that is done in the near future, I hope we will be able to avoid a recurrence of the circumstances that arose in this instance.

I welcome Members’ general support for the Bill. I look forward to the House having the opportunity to consider the local government Bill and engage in a better review of the residential tenancies legislation.

January 27th

Economic Situation: Statements.

What do we need to point the economy in the right direction when every economic indicator is heading in the wrong direction and it may not be possible to arrest the problem for a considerable period? We need a Government which is honest with the people about the scale of the problems we face and the decisions required to overcome them. We need an Opposition which takes a responsible approach to the most serious economic crisis in the history of the State and avoids the temptation to engage in naked political point scoring, one which suggests procedures and processes conducive to achieving the necessary recovery. We need media which take a rounded approach to reporting the sad, economic story. Notwithstanding the current economic indicators, a constant diet of doom and gloom becomes a self-fulfilling prophesy which precludes economic recovery in the short term. We need to encourage citizens to use their full potential as economic actors, which requires them to be productive in producing, purchasing and consuming goods and services.
The ingredient most lacking in the economy since the end of the Celtic tiger period, however real or otherwise that era was, is confidence. This confidence is required on a number of levels. Yesterday a prominent director of a major financial institution expressed to me his concern that the lack of confidence in Irish financial services arose from a belief there had been a level of corruption in that sector. As a result, Ireland is not regarded as a good country with which to do business. We need to sort out this problem.

I suggest the establishment of an Oireachtas committee on financial services with powers similar to those enjoyed by the Committee of Public Accounts would be a first step towards achieving public and international confidence in our financial services sector. Such a committee could investigate the practices followed in the financial services sector and, in bringing them to the surface, help to eliminate them. The introduction of the bank guarantee scheme and nationalisation of one of our major financial institutions make the Oireachtas the custodian of these institutions and their future behaviour. If we fail to take this action, we will entrench the bad behaviour which has brought about the current problem. As Senator Ross noted, international confidence is an important factor. The absence of confidence is creating a poor perception among members of the public. It is important, therefore, that we also generate confidence among citizens as economic actors. It will be difficult to reverse the current problems for as long as the belief persists we are in a downward economic spiral.

I concur with Senator Ross that we need to avoid a sense of complacency. The State has entered the most difficult economic period in its history. This requires a degree of national cohesion which is not usually sought in political discourse but which will be necessary if the economy is to regain the international respect and trust it enjoyed just a few short months ago. Decisions are being made and further decisions will be reached in the coming days to reflect the immediate need to curb public expenditure by €2 billion. It is clear a mechanism must be found to cut at least half of this sum from the public sector pay bill.

Public service pay which is necessary to run essential public services costs every man, woman and child €5,000 per annum. If people believe this is sustainable, given current revenue from taxation and the level of public expenditure committed and agreed to by the Houses, they do not have a grasp of basic economics. The expenditure and revenue sides of the equation must add up. While it may be uncomfortable for many Members, we have a responsibility to ensure cuts in the cost of running the political system are greater than those we ask other public services to accept as part of an overall package of expenditure reductions.

This period of national crisis should be a time of solidarity. If there is a perception that the Government and members of the political system wish to avoid reducing the overblown and burgeoning costs of the political system while seeking to impose swingeing cuts on many of those who are least capable of sustaining reductions in services, we will have failed as public representatives. I am confident, however, that the package which will emerge in the coming days will bring about a realisation of the seriousness of the position in which we find ourselves and the nature of the decisions we must take. While this package will emerge from consultations with the social partners, the decision making function remains with the Government, in the first instance, and, ultimately, the Houses of the Oireachtas. While we need solidarity and social partnership, the political system must take responsibility on behalf of the people. If we do not do so, we will delay the inevitable, make matters worse and render our objective more difficult to achieve.

Commission to Inquire into Child Abuse: Motion.
The motion is simple in its nature and I am pleased that all parties are prepared to accept the extension of time being sought. It also offers the House an opportunity to express ongoing concerns about the nature and practice of child abuse in society. There is no doubt that recent events which are being examined by the Health Service Executive have appalled people and brought into question the extent to which society has a handle on this issue. This is not necessarily a criticism of the systems currently in place but as a society we are failing and we need to make changes.

I have made this criticism before but the situation will be helped when there is full implementation of the Children Act. Although I am aware of the political and fiscal realities behind it, I cannot understand why there continues to be a reluctance to implement the remaining sections of this Act. Until this is done, situations such as occurred in Roscommon, will continue to be repeated. Unless the necessary political action is taken, I fear for the immediate future.

I refer to the Oireachtas joint committee which is considering the constitutional issue of children’s rights and I wish it well in its work. I hope for an early deliberation on the decision we need to make as to whether such a change should occur. There is widespread acceptance in society that such a change should be recognised in the Constitution and effected by legislation. We also need to deal with the issue of mandatory reporting. The debate on this issue is between those who think that mandatory reporting will somehow create a nanny state but I would argue and it is my party’s policy that the absence of mandatory reporting has the exact opposite effect. A nanny takes care of a child’s needs. The situation reported in the past week proves that a lack of care is evident in the case of too many children. We need to put in place systems to allow people express concerns in a confidential way and which can be acted upon following sufficient investigation.

It may be the case that mandatory reporting will result in people being unfairly accused but I am hopeful that the system of mandatory reporting will be used appropriately and we will have a society in which people will make such concerns known in a responsible way. The alternative is the appalling events in County Roscommon and in too many other locations.

I wish the commission well in completing its work and in using the extension of time wisely. The House depends on its deliberations being a means of informing the wider debate on the issue. I look forward to both Houses of the Oireachtas living up to the responsibility of both implementing the existing legislation and bringing forward further necessary legislation.

January 20th 2009

Anglo Irish Bank Corporation Bill 2009: Second Stage.

We find ourselves here because of the activities of an enterprise which was largely owned and run by individuals who have shown by their behaviour incidents of individual greed that have undermined economic confidence, shown contempt for the law and made matters difficult in terms of the future financial stability of the country. This debate cannot proceed without noting the widespread contempt that many of us in public life feel for such activities. The Bill to nationalise the third largest bank in the country has come about, not because the bank is insolvent but because it has lost credibility due to the activities of such individuals. All other options have been examined in recent months, including whether this enterprise could trade out of its difficulties, whether it could find additional investors to allow it to do so, as well as State involvement through a number of support schemes, including not only the existing deposit guarantee but an enhanced bank guarantee scheme. All such efforts were undermined by the efforts of the individuals in question who saw this enterprise as nothing less than a personal play thing. Those involved in public life cannot stand by and allow such standards in corporate life.

I welcome the Minister’s acceptance that regulation to meet the situation in which we find ourselves needs to be dramatically changed. We have presumed that such persons could not honourably exist in Irish commercial life. The fact that they do and have wreaked such havoc and damage is something with which we in the political system representing the people must deal. Nationalisation must happen because it is the only option available to the State because it involves the lowest cost at a time when we do not have the resources to deal exclusively with such an issue.

We must remember we exist in an international environment. In the United States there have been seven policy approaches to its banking system since last year. Senator O’Toole mentioned the change of policy on the part of the British Government which this week has made a second attempt to directly input funds into many of the country’s major banks, none of which has done anything in releasing money for lending or in bolstering their share prices. We at least have had the opportunity to examine the situation as it has unfolded and to look at every policy approach. I am confident that in taking this decision we are giving ourselves an opportunity to rid ourselves of a cancer in corporate life, to put in place appropriate corporate standards and people to enforce them, and to give ourselves a vehicle with which to inject the necessary degree of urgency.

I agree with other speakers that this nationalised institution that we will bring into being in passing the Bill offers an opportunity, but it is not one that we can use to say it is business as usual. The business model that was lionised, that put so much faith in the property market, is not one that will ensure a viable financial services sector into the next decade and beyond. We need to lend money but need to do it differently. We need to lend to people to allow them to upgrade their homes in terms of energy efficiency measures. We need to lend to small and medium enterprises in the context of the new green deal. These are not arguments being articulated by the Government or my party in government only; this is the accepted approach to economic development that we hear articulated by the new President of the United States.

At the same time there is an international recession, the extent of which no one knows; we are collectively dealing with a problem in the banking and financial services sector that is affecting this country more than most because we have chosen an economic destiny that leaves us open to international pressures more than most. In having a nationalised financial institution we at least offer ourselves the prospect of trying to direct economic activity in a way that we are unable to do through other financial institutions whose priorities have not been in the interests of the overall economy and the citizens of this country. I ask people to be angry about the circumstances that have led us to be here, to be cautious about the risks that face us, but also to be confident that there are opportunities in supporting a measure such as this and making the changes we must make.

Senator Alan Kelly: It is interesting that the previous speaker asked us to be angry. I am sure he knows we have such a history.

Before I address the substance of the Bill, I ask the Minister what is the rush in ramming it through the Oireachtas today. History teaches us that rushed legislation is bad legislation. What difference would it make if the Bill was passed tomorrow and if we had more time to debate it? I do not believe an extra 24 hours will change the status of Anglo Irish Bank. I understand the Minister will state it must be passed before 9 o’clock tomorrow and that, therefore, it must be signed into law tonight. I am not sure why or what difference it would make. Perhaps the Minister will elaborate on that point.

The stakes are the highest ever and we need a proper vehicle to provide for future developments, a matter on which this legislation will have an impact. We do not know whether it is the correct legislation or how much money will need to be invested. The Bill was only published last night, following on from the Government’s prior announcement that it would nationalise Anglo Irish Bank. Despite receiving copies of the Bill only today, we are all expected to contribute in detail. It is impossible to go through the 39 sections in detail. No matter how hard we try as legislators, the Bill will not be stress-tested today. No one on either side of the House will be 100% sure about his or her analysis. I will ask specific questions in this regard later.

Recently, the Taoiseach sent what I would call a patronising letter to party leaders, but he should send to the Ministers and members of his parliamentary party the same letter on being careful about what is said concerning the banking situation. There was no need to send such letters. We in the Labour Party, the Fine Gael Party and others on this side of the House have behaved honourably during this crisis. The Labour Party has been consistent and for a long time has predicted the problems we are now facing, namely, lack of proper regulation, lack of knowledge about complex financial products, risky lending, the inflated property bubble and so on. It will continue to behave responsibly. If anything, the Taoiseach should have muzzled some of his backbenchers who do not seem to be consistent or knowledgeable enough in their statements, particularly in local media.

It is unfortunate that people, including some at the Cabinet table, have no confidence in how the Government is handling the banking crisis. Last year, the Government repeatedly stated that the banking system was sound and that there was no need for panic. We then found out about a lot of panic, as the banking system was far from sound. The Government announced the credit institutions bank bail-out Bill in September and denied that banks needed capitalisation, on which it was assured by the same banks and the financial regulatory system. It then decided that it had been wrong and that banks needed to be recapitalised but not nationalised. Effectively, all they needed was to be guaranteed. Under the radar, Ministers hoped that this would lead to some consolidation in the system and the development of stronger institutions, but they were wrong because they forgot about the egos and the large salaries involved, particularly within some banks.

Vol. 199 No. 7 Order of Business. Tuesday, 15 December 2009

Senator Dan Boyle: It is a privilege to welcome and to have introduced my friend and colleague, Niall Ó Brolcháin, to Seanad Éireann today. It is an historic day not only for Niall and his family but for the Green Party-Comhaontas Glas, which has increased representation in this Chamber from no representation prior to the 23rd Seanad. I am very confident and certain that Niall’s contribution will further the role we have sought to achieve as a party of Government and in interacting with all parties in this Chamber.
He enters the House at a time of great political, economic and social uncertainty. I know his life experience and his experience as a public representative will be to the advantage of this House and our deliberations in the time we have left in the 23rd Seanad.
I go some way down the road to agreeing with Senator O’Toole in that we need a major debate not only in this House but in this country on the question of pensions in general, including State pensions, the level of State support we give by way of tax incentives to private pensions and the different types of public sector pensions. It should be remembered that when the national pension fund was established for 25 years, putting in 1.5% of GDP for those 25 years, the best it would have achieved, even after appreciated market value over that time, would be to provide enough money to pay for public service pensions alone. There would be nothing for the State pension or the needs of other pensioners. We need to discuss how pensions can be organised differently and how a benefit can be secured for all citizens in an equal and proportionate way. Ireland has not had such a debate and we very much need to have it in the next decade, in particular.
Senator Joe O’Toole: Because there should be a pensions fund.
Senator Dan Boyle: Some believe they are entitled to better pension terms and conditions, which is part of the problem we have without having a debate. I am open to the House having such a debate because we have avoided the issue for too long.
With regard to work commencing at the Poolbeg incinerator site, I look forward to Senator Bacik supporting the Minister for the Environment, Heritage and Local Government when local government legislation is introduced in the House to ensure city and county managers have recourse to Government policy and the wishes of the Minister of the day in outlining Government policy.
Senator Ivana Bacik: On whose side will the Minister be?
An Cathaoirleach: Senator Boyle to continue, without interruption.
Senator Dan Boyle: The difficulty with local government is we have more than 30 local authorities which operate as independent republics and do not pay attention to Government policy.
Senator Dominic Hannigan: That is not true.
Senator Ivana Bacik: There is also an independent republic of the Minister for the Environment, Heritage and Local Government.
Senator Jerry Buttimer: That is unfair.
Chairman: No interruptions, please. I will ask whoever interrupts to leave.
Senator Dan Boyle: I would like a debate on the issue raised by Senator Bacik because the commencement of building work has a presumptuousness about it that needs clarity.
Senator Ivana Bacik: Is the Senator opposed to it also?
Senator Dan Boyle: I am.
Vol. 199 No. 7 Social Welfare and Pensions (No. 2) Bill 2009: Second Stage. Tuesday, 15 December 2009

Senator Dan Boyle: It a bit late for the Senator to call for someone’s resignation after the Bill has gone through the other House. I will respond to some of the points made by previous speakers. This is difficult legislation. There is no joy or satisfaction for any Government in proposing a reduction in a number of categories of social welfare payments, but this is being done in the context of the state of our finances and it being done in a deflationary environment. People might debate the headline figure of inflation, they might talk about the harmonised index, but for the material things that matter in people’s lives such as food, clothing and heat, there is no doubt that the rate of deflation has been 4% and beyond.
Senator Nicky McFadden: There was a 2 cent increase in a pound of butter today.
An Cathaoirleach: No interruptions, please.
Senator Dan Boyle: This is the reality. In making the difficult decisions that have had to be made, the Government has had to be conscious of the fact that to continue the level of public expenditure in which it was engaged would mean increased levels of borrowing, which would send signals to those from whom we are borrowing that due to the repayments on those borrowings and the increasing cost of interest we would have less money to provide for social protection in the future. In terms of morality and conscience, people need to talk about sustainability, because if the immediate future is one in which less resources are available, then we are talking about not a 4% decrease but a manifold decrease in the money available for social protection in this country. That is what we need to debate. If we keep going down the road we have been going down, there will not be resources to provide what the State should provide. That is where my conscience lies, and where the conscience and morality of my party and my party colleagues lie on those issues.
Every effort has been made to avoid many of the difficult decisions. Pensioners have been exempted. Pensioners who are in receipt of carer’s payment have been exempted. The respite care grant payments and half-rate payments have been protected.
Senator Jerry Buttimer: They have been cut.
An Cathaoirleach: The Senator will get an opportunity to speak.
Senator Dan Boyle: If we are to save in terms of direct payments, the difficult decision is how such savings can be made. One could get into a league hierarchy as to whether people who are blind are more important than people with another disability or whether lone parents are more important than people who are unemployed. However, I do not wish to play that game.
Senator Nicky McFadden: The Government cut everyone.
An Cathaoirleach: No interruptions please.
Senator Dan Boyle: The reality is that we have so much to provide and we will provide it to the same extent that the payments that had been determined would be paid to those people.
The real problem is not direct payments. In the context of welfare traps the real problem is in terms of secondary benefits. Let us focus on people in a certain category of social welfare. Individuals with an adult dependant and a number of children find themselves relying on social welfare and secondary benefits. They are not able to go into paid employment because of the loss of income that would result. That is not the purpose of social protection or a social welfare payment. We need to ask ourselves hard questions about that.
6 o’clock
I raised an issue on the Order of Business today with Senator O’Toole about the avoidance of debate on pensions and their future in this country. I was shocked when medical cards for people over 70 was raised in the budget of October 2008. While the intention of that was to get around the overpayment to doctors for people over 70, there were obvious victims in what was originally proposed because of the lack of specific information on people over 70 benefiting from medical cards. What shocked me was the revelation in the statistics that the average income of people over 70 was €270 a week, little more than the State pension. That is the context in which we are dealing with large sections of society. The Government was dependent on making a decision and protecting pensioners in the first instance. It is a growing sector of society and one that needs most protection.
The other elements of the Bill that are causing controversy relate to young people and the payment of jobseeker’s allowance. Again, that is a debate we are avoiding. My preference would be not to have age restrictions for such payments. We should not allocate payments for 18 year olds to 19 year olds or for 21 year olds to 24 year olds. We should say it is a first-time jobseeker’s payment that applies to people who enter the job market after the junior certificate, the leaving certificate, post-leaving certificate college, or university. The idea that someone’s first income when he or she makes himself or herself available for the job market is a full-scale welfare payment is a wrong approach. There should be a scaling up of those payments. Younger people do not have the same outgoings as older people with dependants.
Senator Nicky McFadden: The Government reduced it by half.
An Cathaoirleach: No interruptions please.
Senator Dan Boyle: That is why such decisions have to be made. It is easy to make cheap political points. In the past we have given out those kinds of signals. Senator Buttimer might be aware of the system that applied previously as we are of a generation that lived through the recession of the 1980s. At least then there was the option of getting onto a job scheme to allow oneself to put something on one’s CV that could help to give one an opportunity of a job in the future. When I was given that opportunity in the early 1980s from the then national Manpower scheme, before FÁS came into existence, that job placement scheme paid £30 a week when the dole payment for someone of my age was £40. Our social welfare system and our job training schemes are riddled with such inconsistencies. What we need to offer people are educational and training opportunities and the ability to reach their potential through the many billions of euro the State provides in the form of education.
What is particularly mealy-mouthed of the Opposition is that no consideration has been given to recent Government agreements, especially the review of the programme for Government in terms of the protection that has been given to education. I refer, for example, to the protection of the pupil-teacher ratio and the provision of additional teachers.
Senators: It has gone up.
An Cathaoirleach: All Senators will have an opportunity to speak.
Senator Dan Boyle: I do not hear that.
An Cathaoirleach: No interruptions. All Senators will have an opportunity to speak.
Senator Jerry Buttimer: Do not worry, a Chathaoirligh. I will give it to him when I get an opportunity.
Senator Dan Boyle: Additional psychologists have been provided for the national educational psychological service. If one wants to work one’s way out of a recession, the ability to access education and reach one’s potential is a key component for each citizen. It is the responsibility of Government to give that potential. The recent decisions are helping in that regard.
Certain difficult decisions will be revisited in the context of future budgets. I hear a great deal of cant and hypocrisy about high income earners. Measures were introduced in the budget that affect high income earners. The minimum tax rate increase was from 20% to 30% on incomes over €125,000. The Minister put down a marker on additional taxation measures that will be introduced in next year’s budget. One cannot do everything in one budget.
Senator Jerry Buttimer: The Minister hit the public sector twice in a row.
An Cathaoirleach: Please, Members. No interruption.
Senator Dan Boyle: A total of 25% of expenditure was on social welfare and that is increasing despite the controls we are introducing in the Bill. We are spending more on social welfare next year than we did in the previous year, despite reducing payments. A total of 30% of all Government expenditure goes on public sector wages. The two areas in which we have tried to control public expenditure in the budget account for 55% of public expenditure. If we did not send out that signal then those from whom we borrow money would be less inclined to lend to us. Not only that, but if they were inclined to lend to us at all they would do so at higher rates of interest. If we continued to match the levels of public expenditure in which we engaged we would not have been able to borrow or we would pay exorbitant fees for doing so.
An interesting statistic was released in recent EUROSTAT figures. In the past ten years Irish households spent twice as much as the European average household. That is a sure sign of an economy gone out of control. What we had, we spent, and what we did not have, we borrowed. We are now paying a price for that.
Senator Nicky McFadden: We were encouraged to do so.
Senator Dan Boyle: How we distribute that price is a measure of society; whether we distribute it across the board or proportionately is the challenge for the Government. The Bill is an honest attempt to do that. Appropriate balances will be made in the context of last year’s budget and next year’s budget. It will be a difficult time for the country but if we take the right decisions for the right reasons we will be a better country and a stronger economy as a result.
Vol. 199 No. 8 Order of Business. Wednesday, 16 December 2009

Senator Dan Boyle: The time of the House would be well served by discussing the views and comments of the new Governor of the Central Bank, Professor Patrick Honohan. The manner in which he spoke to an Oireachtas committee yesterday and his undoubted expertise show that his appointment was an excellent one. Having such a person running the Central Bank in the critical years ahead will be a source of comfort to many citizens. There was little new in what he had to say. Further capitalisation of the banks will occur and involve further consultation with both Houses. Members will have an opportunity to discuss how capitalisation should proceed and they should fully utilise it.
On the question of whether an inquiry should be held into developments in the banking system, I am on record as calling for such an inquiry, as did Mr. Colm McCarthy who produced a recent report on behalf of the Government. Now that the Governor of the Central Bank has called for such an inquiry, there is no reason to resist the proposal. We need to get as many facts as possible into the public domain to enable us to move forward and, I hope, deal with a new reality for the financial institutions and what they can achieve in the future.

Vol. 199 No. 8 Social Welfare and Pensions (No. 2) Bill 2009: Committee Stage (Resumed). Wednesday, 16 December 2009

Senator Dan Boyle: If every penny of the social welfare budget was saved six times over, we would just about cover the level of debt of this country. The adjustment being applied in the Bill is 0.4% of the total debt of the country.
Senator Maurice Cummins: How you did it.
An Cathaoirleach: No interruptions, please.
Senator Dan Boyle: When people talk about who pays the price, they must remember-----
(Interruptions).
Senator Dan Boyle: -----that the social welfare budget is being adjusted by 0.4% of the total national debt.
Senator Jerry Buttimer: Why do it so?
An Cathaoirleach: No interruptions, please.
Senator Dan Boyle: We find ourselves in a deflationary climate-----
(Interruptions).
Senator Dan Boyle: The one group of individuals who will find themselves better off in terms of their living standards when we next go to the polls-----
Senator Jerry Buttimer: Is the Senator happy with the changes?
Senator Dan Boyle: -----and no matter what Government is returned subsequently, are those dependent on social welfare payments who will find that their living standards have been protected.
Senator Jerry Buttimer: The Senator has sold his soul.
Question put and declared carried.
SCHEDULE 2.
Question proposed: “That Schedule 2 be Schedule 2 to the Bill.”
Senator Jerry Buttimer: I have one question for the Minister that deserves to be answered. The Minister said yesterday and tonight that the Government, in the context of a very tough budgetary environment, has done its utmost to protect the most vulnerable people in society. Can she explain the reason we have protected the most vulnerable by imposing cuts on them?
Deputy Mary Hanafin: As I indicated, we have protected pensioners; there has been no change in respect of them. We have protected children in families dependent on social welfare who are in receipt of family income supplement. Those families will not experience any drop in income as a result of the cut in child benefit. We have also tried to ensure, despite the difficult decisions that were made, that we kept the cuts at a minimum for all other groups, bearing in mind the increases that have been given in previous years, particularly the increase given this year. That increase was given in anticipation of an inflation of 2.5%. As we know, however, we did not get inflation; we got deflation and whereas undoubtedly there are people who benefited more from the drop in prices than others, for example, people with mortgages benefited hugely but the price of food, clothing and energy has come down as well. People on social welfare payments and people who are unemployed-----
Senator Jerry Buttimer: Energy prices have increased.
Senator Pearse Doherty: Energy prices have gone through the roof.
An Cathaoirleach: The Senator will have an opportunity to speak later if he wishes.
Senator Maurice Cummins: People will have to switch off the lights.
Deputy Mary Hanafin: -----have also benefited from the decline in prices. Real purchasing power has also been protected for those people.
Nobody is saying this is easy but it is interesting that the very people who recommended cutting jobseeker’s allowance, widow’s pension and lone parents allowance, which is the Fine Gael Party, are now the ones who are objecting to that policy being introduced.
Senator Maurice Cummins: We are objecting to the cuts being imposed on carers and on blind people. The Minister should not misinterpret our policy.
An Cathaoirleach: No interruptions, please. Members should have respect for the Minister who is speaking.
Senator Maurice Cummins: The Minister is not telling the truth about this.
An Cathaoirleach: The Senator should have respect for the Minister. He will have an opportunity to speak later if he wishes.
Deputy Mary Hanafin: To get the same savings, it would have meant putting an increased burden on some of those other sectors.
Senator Maurice Cummins: What about the cap on PRSI?
Deputy Mary Hanafin: If we were to take the groups that the Fine Gael Party identified as the ones who should be cut-----
Senator Dan Boyle: That will happen next year.

Vol. 199 No. 9 Order of Business. Thursday, 17 December 2009

Senator Dan Boyle: No. 1 on the Order of Business is a motion on the reappointment of Ms Emily Logan as Ombudsman for Children. The motion is being taken without debate. The House has a considerable amount of pressing business to complete as we approach the end of the session. There is unanimity that the Office of the Ombudsman for Children is doing a good job. It would be worthwhile to hold a debate on the role of the office, given the issues surrounding child welfare. I ask the Leader to consider arranging such a debate.
While it appears discussions in Copenhagen may not reach a conclusion this week, we all hope some progress will be made. It would be in the interests of the House to review any agreement reached in the Danish capital in a debate early next year.
I share the concern raised by the leader of the Opposition, Senator Fitzgerald, about reports on a court case in County Kerry. On a day when we finally see individuals take responsibility for actions in the Catholic Church, we can no longer tolerate double standards and the mixed signals being sent about how we deal with the crimes of sexual abuse and rape. The House should record its concern about this matter. Legislative changes are needed to ensure the behaviour to which Senator Fitzgerald referred is not permitted or accepted.
Senator Maurice Cummins: I raise the delay in opening a section of the M9 from Carlow to Kilcullen. Those of us who use this road, as I do regularly, are held up for half an hour as we travel through Castledermot. The Minister for Transport has instructed the National Roads Authority not to open this new section of road. While local business people who want a spur provided from the motorway into the locality have a case, that is a separate matter. The issue is the volume of traffic travelling through Castledermot and the fact that the NRA has stated the bypass is ready. When Members make representations to the Minister on roads and motorways, they are informed he has no responsibility for the matter which is the responsibility of the NRA. The Minister’s instruction to the NRA not to open the bypass until January flies in the face of his refusal to respond to Members’ inquiries. We are fobbed off with the excuse that matters pertaining to roads are not his responsibility. He must come before the House to explain his actions in delaying the opening of this bypass. The delay could put lives at risk. As the House will sit today and tomorrow, I expect the Leader to ensure the Minister will come before us to explain his actions. On the one hand, the Minister responds to awkward questions by stating the relevant issue is a matter for the NRA, while, on the other, he issues an instruction to the authority not to open a road. This matter must be dealt with at the earliest opportunity. A second section of the motorway to Knocktopher has also been delayed until February and people in the south east will suffer as a result. The Minister must inform the House of the exact position.
The House frequently hears about the victims of crime. That a person in County Kerry could be treated in the manner described makes it imperative for the Minister for Justice, Equality and Law Reform to take action to address the issue.
Senator John Hanafin: I ask the Leader to outline the changes proposed to the running of the House in the new year in the light of the new responsibilities of the Seanad under the Lisbon treaty which has been accepted in all its parts and enjoys the full protection of our law and the Constitution. With that in mind, will the Leader also indicate that it is impossible for a unicameral parliament to undertake the work necessary to oversee European Union and all domestic legislation? In other words, two Chambers of Parliament are necessary, given the responsibilities of the House. If the proposal to abolish the Seanad had been made by my party, I would have made the same statement. We have a responsibility to ensure members of the public are made aware that the Seanad must discharge a new responsibility over and above its usual responsibilities.
Senator David Norris: I agree with my colleagues about the extraordinary situation concerning the opening of a section of road and political interference in the matter. I raised the question of political gimcrackery a couple of weeks ago. This matter gives rise to issues of safety and cost. The decision seems absurd.
I refer to a matter I raised some time ago on the Adjournment and at the Joint Committee on Foreign Affairs, namely, the involvement of the United Nations in a camp at Osterode near Mitrovica in Kosovo. A decade or more ago the United Nations dumped Roma refugees on the most heavily polluted site in the world. High concentrations of metals such as lead and mercury have been discovered in the children living on the campsite. There is a serious danger to pregnant women, children have died and the United Nations has been told that unless the camp is immediately evacuated, more people will die. This tragedy is unfolding before our eyes. I have raised the matter with the UN Secretary General, Ban Ki-moon, and the United Nations Commission for Human Rights, but nothing has been done. I ask that Seanad Éireann urgently protest about the matter to the United Nations.
As parliamentarians, we should all be concerned that in the past week the Turkish Government, using the constitutional court, has closed down an important democratic political party representing the country’s Kurdish minority. Turkey is still negotiating entry into the European Union. It is extraordinary behaviour on its part that it should use the constitutional court to limit the main party representing the democratic interests of the largest minority in the county. A protest should be made to the Turkish ambassador about the matter.
Senator Ann Ormonde: I concur with Senator Cummins on the opening of the M9 at the Castledermot junction. I, too, travel the road and at this time of year it takes an hour to pass through the town. If the Minister is unable to come before the House today or tomorrow, he should issue a statement on the matter. I do not understand how the National Roads Authority works. On several occasions, at local authority level, the authority has interfered on issues and taken a pass the buck approach.
Senator Maurice Cummins: The Minister, not the NRA, interfered.
Senator Ann Ormonde: Given that the House has a full agenda for today and tomorrow, perhaps the Minister will issue a statement on the reason the bypass cannot be opened, even temporarily, over the Christmas break.
I support Senator Hanafin’s view on the reform of the Seanad to deal with European business. Despite passing the Lisbon treaty several months ago, the House has had few opportunities to discuss EU directives and the workings of the institutions, including the European Parliament. With a new Commission set to commence work in February, the House should use the opportunity to have a full debate on decisions, directives and developments in the European Union. While information was available to members of the public during the debate on the Lisbon treaty, this is no longer the case because the Oireachtas no longer discusses European Union issues. The House should have regular debates in the new year on the activities of the European Parliament and the role and functions of the Commission.
11 o’clock
Senator Jerry Buttimer: I join other speakers in demanding that the Minister for Transport come before the House. To clarify the matter for Senator Ormonde, the Minister has made a statement. His decision to defer the opening of the stretch of road in question must be addressed because it constitutes naked political interference in the work of the National Roads Authority. As Senator Cummins said, when one seeks a debate on the Adjournment one is told the NRA is not the responsibility of the Minister. Who is in charge of the NRA and who is accountable for the roads of this country? This is political interference of the worst kind. I challenge the Leader and the Deputy Leader to stand up and to condone what has happened.
Senator Dan Boyle: Condemn.
Vol. 199 No. 9 Appropriation Bill 2009: Second Stage. Thursday, 17 December 2009

Senator Dan Boyle: It is one of the features of the budget debate every year that the Seanad debates the Appropriation Bill, whereas the other House tends to take an attitude that it takes it as read. It is an important part of the budgetary process because it itemises Government spending by Department and the specific amounts intended to be spent. It is a useful exercise for Opposition Members, in particular, to ask questions about whether the money is being appropriately allocated and wisely spent. We have heard Senator McCarthy inquire about unspent moneys, how that was allowed to occur and the mechanisms in place to properly account for it. An issue has arisen because of a difficulty with capital spending on the schools building programme, whereby a significant amount of money has not been spent this year. I am pleased to see there is a significant roll-over of much of that unspent money to allow for delays in the planning process and ensure important pieces of infrastructure are put in place.
The Appropriation Bill contains a number of elements, one of which is the itemising of expenditure in each Department. The other is the formalising of the financial provisions voted on in Dáil Éireann but not in this House. The four provisions on which a vote was taken on 9 December are itemised.
I wish to ask one question that could perhaps be addressed in the course of the wider debate we will have in the House on how the Government’s budgetary projections are being met or otherwise. Would the two Opposition parties care to explain why, in regard to one important element of budget 2010, namely, the agreement to introduce a carbon tax and the related financial provision to bring forward the transport fuel element from 10 December onwards, was treated differently by both parties in Dáil Éireann? In terms of where they stand on policy, we need to hear whether they agree with the concept of a carbon tax and why they took such a different approach in Dáil Éireann to it.
Senator Michael McCarthy: Senator Boyle should consult the Labour Party website where he will find the appropriate answer.
Senator Joe O’Toole: On a point of order, the one thing I learned on my first day in the House 22 years was that one could talk about every single aspect of the economy, except taxation, in the debate on the Appropriation Bill. Senator Boyle is out of order in referring to the carbon tax.
Senator Michael McCarthy: That is my view also.
An Leas-Chathaoirleach: I call Senator Boyle.
Senator Liam Twomey: I disagree. I will break with precedent and urge Senator Boyle to continue.
Senator Joe O’Toole: I think the Senator will find I am correct.
An Leas-Chathaoirleach: Senator Boyle should be allowed to speak, without interruption.
Senator Dan Boyle: I would like to defer to my learned colleague, but the Appropriation Bill contains the four financial provisions from budget day.
Senator Joe O’Toole: It does not deal with taxation.
Senator Dan Boyle: It mentions them specifically. The whole point of a Second Stage debate is to address the generalities of the issues raised in the Bill.
An Leas-Chathaoirleach: I thought Senator Boyle was speaking on policy.
Senator Dan Boyle: I am happy to raise that point. I am seeking a general explanation as to why the Fine Gael Party chose to vote against that provision and the Labour Party has chosen not to vote on it. I say to Senator O’Toole that is important in terms of providing clarity in this policy area because it goes beyond taxation.
Senator Joe O’Toole: It is not an unreasonable question, but it is the wrong time to ask it.
Senator Michael McCarthy: Surely it is out of order.
An Leas-Chathaoirleach: Senator Boyle should be allowed to speak without interruption, please.
Senator Dan Boyle: I did not hear the Chair rule on it.
An Leas-Chathaoirleach: Senator Boyle should be allowed to speak without interruption.
Senator Liam Twomey: What is the Chair’s opinion?
Senator Dan Boyle: I am not seeking extra-constitutional power for this House, nor am I asking that we reverse the financial provisions decided on in the other House. I have made the point that the Bill contains these provisions and commented on how they have been responded to by other parties represented in this House.
I welcome the overall expenditure provided for in the Bill. In the middle of very difficult financial times where we are still borrowing significant sums of money, in excess of €20 billion, we are allocating approximately €53 billion to meet the cost of running the State. When we take into account the €4 billion adjustment we have had to make in budget 2010, the reality is we are raising approximately €32 billion by taxation and borrowing approximately €20 billion.
The political debate we have been having has been on the smallest scale of the moneys we are currently spending in the State. What is important about the Appropriation Bill which we have the opportunity to discuss in the House and which perhaps the other House does not take as seriously as it should is what is happening with the vast bulk of money being allocated and how is it being spent. I would like to see this House develop that competence even more, even though we are restricted in our constitutional role from doing so to a greater extent.
Vol. 199 No. 9 Financial Emergency Measures in the Public Interest (No. 2) Bill 2009: Second Stage. Thursday, 17 December 2009

Senator Dan Boyle: This Bill is one of a series of measures that is difficult to deliver but it is necessary in the current budgetary context. The public reaction to the 2010 budget has been grounded in a sense of realism and perhaps resignation that shows that we as a country are beginning to deal with the fiscal situation in which we find ourselves. Obviously reducing the income of any group of workers would be strenuously avoided in most circumstances and it would be a decision that would be avoided to the greatest extent possible, but the two areas where public expenditure has been curbed in the 2010 budget, those of public sector pay and social welfare payments, represent more than 50% of public expenditure every year. If we have to make savings in public expenditure, those are areas where savings cannot be avoided. The remainder of public expenditure funds the provision of public services. The choice facing the Government in curbing public expenditure was either to reduce the level of public services or to reduce the cost of the provision of public services. The former option would have involved closing hospitals, schools, Garda stations etc., an option that was chosen far too readily in the past. Fortunately, in the past ten years we have been able to reward and acknowledge public service in a way that was not done in the past. Some of that was done in a quite controversial manner. When the economic history of this country is written, the act and practice of benchmarking and the fact that it was shrouded in such mystery will be looked upon by economic historians with mild surprise at the least and perhaps they might even be aghast if they were honest. Even at this remove we do not know what was being bechnmarked against what and under what circumstances. The State was forced to invest a large amount of resources to make that exercise work.
We must acknowledge that with part of the narrative about the public sector that is talking place now we are in danger, philosophically, of going down a cul-de-sac. The question of whether we pay the public sector enough is a side issue from some of the comments that were made which run the risk of having the impact of demeaning and undervaluing the sector. We must get an appropriate balance with a renewed public sector in the future. There is no doubt that reform of the sector is needed. Whether the climate exists to do it with the way these measures need to be introduced by the Government is difficult to know in the short term, but it must be acknowledged across the political spectrum that such reform must take place as well as the implementation of cost-saving measures in this Bill.
One of the dangers with the introduction of new legislation or a new policy is that anomalies may be created. A sincere attempt has been made to graduate the cuts in public sector pay from the very highest incomes to the very lowest incomes, especially at the lower end. There are some difficulties we need to address to examine if they can be finessed in the medium term in particular.
I do not support the argument proposed by Fine Gael that there should have been a cut-off point at which these cuts should not have applied. In the context that social welfare payments had to be cut, the introduction of such a cut-off point would have created an even worse anomaly. The difference between the gross cut applied to people on higher incomes and the net cost for people on lower incomes creates a difficulty for those on higher incomes. If people are not in the tax net and other people are paying income tax at 20% and all the levies do not apply to them, the net effect proportionately for people on lower incomes in the public sector is higher. We need to remedy that in the short term.
There is also a difficulty as to how we define the public sector and the public service, and I will deal with the semi-State sector in a moment. There was also the difficulty as to whether workers in non-governmental organisations which received block grants from Departments and who had their pay pegged with public service rates should be treated the same as those in the public sector. That difficulty has been addressed by way of amendments made in the other House. I argue that they should not be treated the same because they lack job security and do not qualify for the type of pension arrangements that apply in the public sector. Amendments have been accepted in that respect. That question also arises about bodies such as county enterprise boards and whether the staff in those bodies should be treated the same as those in the private sector. A huge dichotomy arises in that respect in the case of a body such as Anglo Irish Bank which has been nationalised but is not seen to be part of the public sector because it has a commercial remit. The principle that applies seems to be that because semi-State bodies are independent and most of them do not receive any direct input from the State in terms of additional funding, this Bill should not apply to them. That is obviously not the case with Anglo Irish Bank, given the level of recapitalisation to which we have already committed and which we might need to do again. In terms of how we approach the further rescue of financial institutions, if they are nationalised or largely nationalised institutions we should define them as very much part of the public sector.
One has different types of bodies in the semi-State sector depending on the competitive environment in which they exist. One has semi-State agencies that get a State subvention, such as CIE for public transport, but other semi-State bodies operate in a semi-competitive environment where they have a monopoly. If we wish to bring about competitiveness in the economy in general, there is not a role for Government to direct what should be the wage levels in each of the semi-State bodies. It is in order for the Government to suggest that controlling wages in semi-State bodies is something for which we should strive, because if we can get competitive costs down, especially in the utility companies then the economy will improve more quickly. I echo Senator Hanafin’s welcome for the fact that we have had a 0.3% of 1% increase in GDP, although GNP has decreased by a further 1.4% in the most recent quarter. That is a positive sign.
The indications of where we are in terms of the private sector, the public sector and semi-State bodies could be explained by a set of figures I wish to place on record before concluding. The average industrial wage is €36,000. The average rate of pay in the public sector is €48,000. The average level of pay in one particular semi-State body, the ESB, is €68,000. When we have those types of divergence in terms of how we go forward as a country, as awkward and difficult as legislation like this can be, I do not think we can avoid making decisions of this type at times such as this to achieve the benefit we need as a country and economy.