Tuesday, 6 July 2010
Dáil Éireann Debate
Up to ten years ago, Ireland had an economic model that was the envy of the world based on high productivity growth, high export performance and sound public finances. Employment was being created at a rate of 50,000 jobs per year and people rightly looked to Ireland’s economy as a model for other countries to follow. The sad truth is the model was destroyed in a few short years after we joined the eurozone. It was destroyed by Governments that simply did not understand or take seriously their responsibility to protect that model when they were committing the Irish people to behave more like Germany in economic management as members of the eurozone rather than to behave according to the McCreevy approach of, “If I have it, I’ll spend it”.
At a time like this we must examine what has happened to our economy. Within two years our national income has declined by 28%. No other economy has experienced such a decline. Nothing like that has been witnessed anywhere in the world since the 1930s. Investment has fallen by 101%, which is an unprecedented collapse. Up until recently, the Taoiseach was telling us this was due to international factors, that no one could have predicted what was happening and that he was acting on best advice. All that has been blown out of the water by two reports published by independent commentators — the Governor of the Central Bank and two experts from the IMF. We now know this was an entirely home-made crisis and 75% of the decline was due to bad decisions at home. From 2006 onwards it was not possible for Ireland to have, as the Central Bank and the Government wished to believe, a soft landing, yet as recently as May 2010 the Taoiseach was telling the people there would have been a soft landing if it had not been for the international crisis.
The extent to which the Government had become out of touch with the economic realities is truly mind-boggling. The toll of this crisis is to be found in the 300,000 people who have lost their jobs and 150,000 people who have emigrated over the past two years, not in economic statistics. This tsunami on employment is affecting young people most of all with 90% of jobs lost by people under the age of 35 and 60% by people under 25. They have carried the brunt of the employment collapse. We would have looked to them to build our economic fortunes in the future. They are well educated and they were bristling ideas as they left college. If they are lucky now, they will be able to seek work overseas. Many others have been caught in the property trap and they are in negative equity and struggling in the face of increasing threat to their jobs.
Today’s announcement with more information about the Government’s banking policy rubs salt in the wound for people. Many Members on this side of the House are not surprised to find that NAMA in its amended business plan has revised by 80% the projected profit it hoped to make. It was to be €5 billion but now it is down to €1 billion, yet officials have only examined 20% of the loans it will take on. They are saying their hoped-for profits from this operation will be down 80%. What will this be like when the full extent of the loans is made known?
Every month the Government parties come into the House looking for another €2 billion to put into Anglo Irish Bank. They are projecting we may have to put €25 billion into Anglo Irish Bank and Irish Nationwide Building Society, which will never lend again. It is an unfathomable amount. This is being done because the Government has insisted from the outset that the bank guarantee would be spread too wide and now the Governor of the Central Bank has confirmed that the guarantee was drawn up on a foolish basis. It was too broad. He acknowledged a guarantee was needed but, by including all the bondholders — people who were committed to and locked into the banks — the Government has imposed huge losses on the taxpayer. We are seeing those huge losses in Anglo Irish Bank. That is the consequence of what was done.
While all the losses cannot be avoided, many of them could have been. Having put €25 billion into failed banks that will never lend again, what are the Government parties doing about the 250,000 people in negative equity, those who are struggling to repay their mortgage and the 30,000 mortgage holders unable to repay? They have almost nothing to say to all those who are on their knees struggling with this deep financial problem. They are telling the banks they should not abuse the small group on tracker mortgages and they have said nothing about the solution. There is no mention of examining equity swaps or write-downs over time or systems that will genuinely relieve the burden for these people. The IMF is even telling us the banks are in a position to tackle this problem of certain of the most distressed loans but the Government does not recognise that.
According to today’s announcement, the taxpayer will be asked to put money more into the mortgage interest supplement scheme, which will go directly to the banks. The taxpayer, therefore, is the only entity making a contribution to this problem that is not good enough. That is not a response. We will have to wait longer and there may be a response later in the year. We look forward to the thinking that may come out of this process but the Minister of State can surely recognise the dramatic contrast between the Government’s emergency response to the needs of investors in banks such as bondholders and subordinated bondholders to whom we have offered a total guarantee and those at the other end of the spectrum. The same applies to its economic policy, which is all about repeating the two mistakes that got us into the crisis.
One was pampering the banks and jumping to their every need to allow them to expand credit at a crazy pace. The other was, as the text books describe it, procyclical budgets. The Minister and the Department of Finance insisted on pouring fuel on an economy that was already overheating. The solutions the Government tells us we must now follow are exactly the same. There must be more procyclical budgets, although this time it is sucking the life out of an economy that is already on its knees, and we must continue to pander to the needs of the banks, which are themselves on the verge of insolvency in some cases.
Surely Members on the Government side of the House must see that the policies that got us into this hole are not sufficient to get us out of it. There must be a credible employment strategy if we are to confront this problem. The core of our problem is the 300,000 people who are unemployed, most of whom are men. Over 85% of the people who have lost their jobs are men, most of them young men. If we do not respond to their problems, we will see a huge long-term unemployment problem scar our country again. Consider the sectors from which these unemployed come. Of these 200,000 males, 130,000 came from the construction sector while 40,000 come from the manufacturing sector. A total of 170,000 have come from sectors where there is no immediate prospect of re-employment. There must be an adequate response to this. An employment strategy must surely be the core response, but that is not in the Government’s thinking.
There is scepticism about economic planning. In the good times people such as Mr. Charlie McCreevy dismissed economic planning as public servants trying to poke their noses into areas where it would be better if they stayed out. However, consider what that political culture created for us. It created a situation where the Minister was spending money because he had it, encouraging banks to lend at breakneck speeds and the property bubble was being pumped up by tax credits. What was happening in the real economy? It was being destroyed. Our competitiveness ranking fell from fifth to 22nd. The cost of employment in this country, which had been low and was progressively improving, suddenly deteriorated by 25% against Germany and 35% against all our competitors. Almost every indicator from the National Competitiveness Council moved into the amber or red zone. It ranks 130 indicators and 75% are either in amber or red. Why was there not a plan or joined-up thinking in the Government which acknowledged that if we want the type of economy that has been a success, that is, an export-led economy, competitiveness cannot go down the drain on every indicator, including the cost of electricity, waste, transport, rates and waste disposal?
There was a need for coherent thinking but that was discarded by the political culture of that time. It is not hard to understand how the Central Bank and the Financial Regulator proved unequal to confronting the arrogant swagger of these bankers, who thought they knew how to run the world and that they could walk on water. The culture of the time was that these were the Titans. They were the people one wanted to be close to so one could invite them to one’s fund-raising functions; they were people to admire, as if they were creators of something worthwhile. These were not great entrepreneurs creating enterprises that built business but people who dealt in speculative investments. However, they became the titans of this country. They were cosy in their relationship with the Government, and that filtered through to the Central Bank, whose Governor was always appointed from within the Government circle, the Secretary General of the Department of Finance. It was an internal, cosy arrangement.
At the root of that was a political culture that was simply flawed. We have a political culture that must be broken down. It is one which claims that the Dáil should not scrutinise budgets and that the Government knows best. The Government will not set targets, will not accept scrutiny and will not offer alternatives. It puts hacks on boards and will not let the Dáil scrutinise them or question whether they are competent.
The scale of the employment crisis in this country demands a huge strategic response, which makes jobs the top priority. We have a strategy to do that. It is an innovative strategy which involves investing in the arteries of economic success, that is, electricity, broadband, water and other areas that will make us distinctive. It means investing in those young people who will otherwise end up in Frankfurt, Sydney, London or New York and ensure we do not lose them. It involves making bold strides in reforming our public service so we can deliver more with less. That is the demand at present.
What we are getting from the Government is a slow bicycle race that will not confront our problems. It pretends everything can be solved by just shrinking our fiscal problems and solving the problems of the banks. That alone will not work. This debate is about acknowledging that we need a much broader strategy if we are to confront the scale of the crisis, and calling on the Government, at this late stage, to embrace that.
Deputy John Perry: This Fine Gael motion calls on the Government to put jobs at the centre of its economic strategy. The reason the motion makes this call is that this Fianna Fáil Government has ignored the issue of job protection and new job creation. In the past few years job losses have hit the small business and small manufacturing sectors particularly hard. Local jobs have been lost in every town and village throughout the country. Small business is the lifeblood of local communities and this Government has ignored the plight of small, local, community based business.
Last week’s news from Insolvency Ireland made particularly difficult reading. The report states that four Irish companies a day have gone out of business between January and June of this year. The total came to 800 for the period. The rate of failure was 27% higher than in 2009. The report also identified that there has been a 174% increase in companies going into receivership. Many of the companies listed in that report are small businesses, typically local community based building, services, hospitality and retail businesses. The report shows that the number of companies unable to honour their debts has increased by 27% between January and June.
Fine Gael strongly supports small business. Small and medium enterprises, SMEs, are the biggest employer in Ireland and are the backbone of local economies. Much more must be done to create a business-friendly environment in terms of less regulation and access to funding. While these businesses are started locally we must examine ways, for example, through the use of information technology, IT, to help SMEs to access new markets. Research and development is also very important. We must support the traditional industries that still employ large numbers of people. The agriculture and agri-food sectors can still offer much in terms of exports, rural development and the development of local economies. The innovation principle should also be applied to these sectors.
All the indicators are that the small business sector is still in decline and the forecasts are that things will get even worse before they get better. This is catastrophic for small community-based companies. The Government has failed. The immediate concern for many companies that are struggling to stay in business until the economy clearly turns the corner is the availability of credit. There is an old saying in business, “cash is king”. This is especially true for a small business in the depths of a recession when cash income becomes scarce. At present, there is no confidence and no credit in the economy. One cannot do business when there is no confidence and no credit.
The small business sector can do its part in bringing this country out of the present crisis through the creation of jobs at local level, but it can only do this if it gets the full and enthusiastic support of the Government. The sector has been neglected by the Government for the past ten years. Every household in Ireland depends on the sector in some shape or form, be it for goods, services or a job. The Government can and must do something about this crisis. I call on it to put real pressure on the banks to release credit to the small business sector. The banks are sitting on piles of cash. They are in receipt of millions of euro of taxpayers’ money. As Deputy Bruton said, billions have been put into a bankrupt bank, which is unbelievable. The banks also have millions of euro from the lucky people who can save money. All this money is sitting idle in bank accounts, doing nothing for the recovery of the economy and the creation of jobs.
With the economic crash, consumer confidence has crashed as well. Given the insecurity in the economy, those consumers who still have disposable income are now putting it all into savings. However, they must ask themselves if it is wise to do this, where it earns a tiny interest, and if it is the best and most civic minded thing they can do. We need to re-ignite the economy and consumers can play their part in economic recovery. Consumer cash spending is the only significant way to get the cash back into local small businesses. The first and immediate step to restoring the national economy must be to rebuild consumer confidence so domestic demand can lead off the recovery. I am calling on the Government to initiate a simple, direct and immediate action by launching a campaign to encourage people to create jobs locally, to spend locally.
I refer to the role of county enterprise boards and the opportunity for job creation in the retail sector. There is a lack of confidence and cash. People are completely dismayed to see €24 billion being put into a bankrupt bank, a bank which is literally closed for business. I have yet to meet anyone who was given a loan by Anglo Irish Bank. All it is doing is managing its accounts. That bank is literally closed, bar putting a bolt on the door. There is no cash, no job creation, no incentives. Business people are given ten reasons not to create a job. There is no encouragement for the creation of enterprise in the real economy.
Opportunities for small companies are the backbone of this economy. I refer to research and development, the business innovation units in the institutes of technology such as Sligo Institute of Technology and universities. We must give a new sense of direction to entrepreneurs. These are people with ideas. We must encourage recent and young graduates to develop their entrepreneurial ideas. The big companies are very important. I believe that small acorns grow into great oaks. We have to encourage enterprise at the beginning level. It is regrettable that thousands of people are now leaving this country only because they have no job. Parents are dismayed to see their well educated sons and daughters, educated at great expense, having no opportunities.
A lot more should be done with regard to research and development in the innovation units at the institutes, colleges and universities to help business in the real economy. The lack of cash is a serious problem. One hears of 100 loans a day being approved by a bank but there are so many caveats and people are unable to draw down that money. The banks are not doing their business. We were told there would be a wall of cash for investment. There is no wall of cash and no money. The banks are shoring up their balance sheets and they are investing little or nothing in the economy. I can assure the House that if Fine Gael gets the opportunity we will support small enterprise in every village and town because it is the backbone of this economy. This Government has failed miserably in that area.
Deputy Deirdre Clune: Prior to last December’s budget, the Fine Gael Party set out how we would approach the situation. We acknowledged there would have to be some cuts in public expenditure and we acknowledged there would have to be some form of additional taxation but the targets and focus of our budgetary policy was fairer and more equitable and certainly did not take additional tax revenue from lower-paid workers, those earning less than €30,000 a year. We certainly did not plan cuts in social welfare to the blind and to other vulnerable groups. The key difference was that Fine Gael recognised the need to balance the cuts with the focus on job creation and jobs stimulus. However, this has not happened. We hear much talk of the need to get Ireland back working but where are the practical moves to ensure that this happens? We all know that we are in a recession and that we have a deficit created by this Government and which is seriously out of control. Approximately 25% to 50% of this deficit is related to employment or to unemployment. The rate of unemployment is 13.5%, over 400,000 people. This is the second highest rate in the EU. It is a stark reminder of where we have come from. When this Government came to power, the rate of unemployment was 4% and we had full employment. However, things went rapidly downhill. These figures should be referred to in tandem with the 100,000 or more who have emigrated in the past number of years, the many thousands now on upskilling training courses to ensure they improve their employment prospects. Where are the jobs for the thousands of graduates, postgraduates, leaving certificate students, who have completed their studies last month?
The Government will probably wave its smart economy plans, supplemented by the innovation task force report earlier this year. This report has now been hived off to another review group to look at its recommendations and to analyse whether these can be implemented. This kind of action is typical of the Government; endless reports but very little real action. I refer to one of the key recommendations of the task force report which was to deliver on the investment framework set out in the strategy for science, technology and innovation 2006 to 2013 and achieve the goal in the renewed programme for Government of investing 3% of GDP in research and development. That key recommendation seems already to have slipped, if we are to believe what is reported in today’s newspapers that up to 600 research posts deemed to be key to the development of the smart economy, are to be lost this year. These figures have been prepared for the Government by Science Foundation Ireland, the body charged with implementing the strategy. We need to recognise that it is only by encouraging research to focus on the needs of industry and developing innovative ideas and ways of doing business and research that we can produce new products and processes. Research will create employment and in turn, wealth, for this economy.
The message from the Government is that the task force is just a case of another report which can be used as cover if the Government is asked about a plan. I remind the House that it is not just this country asking questions because the EU has asked all member states about their expenditure in this area and how states intend to commit to their target spends. The record will show a reduction in the spend in this area. The wheels have come off the strategy for the science, technology and innovation wagon.
Much needs to be done with regard to the education system which is not delivering the maths and science students needed for research and for financial institutions and to work in the financial services sector. The task force report is littered with recommendations that need to be implemented. We are not doing any favours to the students of today if we do not change our education system, if we do not teach students to be entrepreneurs, as mentioned by Deputy Perry. We need to address the languages deficit in order to encourage call centres to set up here. We are not providing the language graduates to work in those call centres. We need to make changes to the education system. We do not need another debate about whether Irish should be a requirement for the leaving certificate. We need to have a debate about the quality of our education system and the way in which it needs to change in order to match the needs of industry in the future, which is the industry targeted by the Government in its strategy.
I refer to an OECD report on innovation strategy. It states that the global economy is to recover and move towards a sustainable growth path. The traditional sources of growth are declining. The current crisis has only served as a reminder of the need for innovation as a way to provide new solutions. While expenditure cuts are needed and will be needed in the future, governments must continue to invest in future sources of growth such as education, infrastructure and research. This Government has appointed a Minister for Enterprise, Trade and Innovation and a junior Minister with responsibility for innovation. Yet, there is a slipping in the expenditure in this area.
It is essential the Government sends a clear, strong message that it is committed to the future of this economy and committed to future job creation and committed to delivering on the smart economy. Mixed messages are being given out which will further undermine confidence in an already demoralised community. We do not see a clear message from this Government. I would like to touch on other areas but I state my complete support for the motion, which points out a better alternative. The track the Government is following does not spell out confidence to me and the citizens of the country.
Deputy Tom Sheahan: Many homemakers in this country would have made a better Minister for Finance than the current or the former Minister because they would have dealt with the issues of the day. They would not have spent as Charlie McCreevy we did, where we have it we will spend it. They would have put some aside. Some 450,000 people are unemployed and 250,000 people are in negative equity. Thousands of people are applying for the family income supplement. Some €4 billion was taken from last year’s budget and we believe €3 billion will be taken from this year’s budget. We will pay €1 billion in interest on NAMA and next year we will repay €1 billion to NAMA, costing the State €1 billion. In 2012, NAMA will cost us €7 billion. I put it to the Minister of State that the Minister for Finance is merely putting out fires as they flare up around him on a day-to-day basis. In September 2008, the banks went into the office of the Minister for Finance and browbeat him into providing the cover they needed. I believe they would not leave the room until they received assurances on the bank guarantee. Banks have been doing likewise since. The Taoiseach alluded to this today when it was made clear to him that all information that came from banks from that day to this has not been the whole truth or nothing but the truth.
Earlier this week, Deputy Mattie McGrath said he believes the IMF will be in here before Christmas. The Minister for Finance is reacting to the IMF. The Minister for Finance and the Taoiseach regularly come in here and tell us how well we have done and how we have been complimented by our European counterparts.
Deputy James Bannon: Yesterday, The Irish Times summed up the ignorance of the Government on what we are facing and will continue to face under their mismanagement. The article states: “Saying the recession is over runs the risk of fostering a cruel illusion that the economy is undergoing ‘a little technical adjustment’.” Some technical hitch. This is not a gentle breeze that will blow over in the morning; this is a fully fledged hurricane that will sweep away our homes and destroy businesses. The means to cope with the emergency were not put in place and the repercussions that have ensued will not be ended lightly. Lest we forget, given the speed at which events are moving, a recent report into the banking crisis states the Irish banking debacle was, in a cruel way, a home-made crisis. This brings us to whose hand was involved in the home baking. It was undoubtedly stirred by the former Minister for Finance, now Taoiseach, with some help from the current Minister. What the Minister is misinterpreting, in his innocence, as an end to the recession is the natural recovery of a small part that follows the rapid fall of the economy. It is in no way indicative of an improvement for those unemployed, facing unemployment or facing the prospect of losing their homes. Unemployment has risen to 13.4%, which is a 16 year high and translates into 450,000 people unemployed. A shocking statistic shows that four companies went out of business every day in the first six months of this year. The human suffering associated with that figure is almost too much to take in.
We are facing that suffering in Longford. The potential closure of B3 Cable Solutions with, 100 jobs on the line, is a massive body blow to Longford. It certainly gives lie to the Government’s talk of the end of the recession. Is the Minister for Enterprise, Trade and Innovation aware of the alarming information I have been given that, despite the situation in Longford, B3 Cable Solutions has invested €4 million in Spain and purchased plants in Sweden, Germany and Manchester in our neighbouring country?
I am extremely worried about the inactivity of the Minister for Enterprise, Trade and Innovation in response to the closure of this company. I ask him to outline the steps he is taking to avert the closure in light of the company going into receivership with a mere six days remaining to sell it and prevent the loss of these jobs, which would be to the detriment of the socio-economic recovery of the region and to the future industrial and commercial profile of Longford town and the surrounding areas. The Minister must put in place an urgently needed industrial strategy for Longford-Westmeath and the country. The socio-economic implications for the recovery of the midlands necessitate urgent action on such a long-term plan.
Fianna Fáil has allowed Longford to become an unemployment blackspot. Deputies Kelly and O’Rourke have pulled down the shutters on the Longford-Westmeath constituency. Longford-Westmeath currently has 16,000 people unemployed and Longford has got less than its fair share of State jobs. This amounts to less than 2%. The other bar to economic recovery is the high level of stealth taxes that deter investment and lead to existing companies relocating to China and the Middle East. Taxes, insurance and energy charges are a major deterrent to investment and must be addressed by the Government. The Minister and the local Government representative, Deputy Peter Kelly, must clarify the situation regarding the status of jobs at B3 Cable Solutions. B3 Cables is a great company that has provided quality jobs in Longford all my lifetime and the current situation is a huge tragedy for the workforce.
Deputy James Bannon: There is a great deal of uncertainty at present and a clear statement from the Minister would be helpful. People have a right to know whether the Government has done everything possible to work with the company to prevent job losses.
I am pleased to have the opportunity to speak in this evening’s debate in support of the Government’s counter-motion regarding management of the economic crisis. At this time, an informed discussion regarding the Government’s management of the economy is indeed relevant to dispel some of the myths put forward by those on the Opposition benches. In my remarks this evening, I will outline how the policies adopted by the Government are beginning to bear fruit and in so doing I hope to dispel the negative sentiment contained in the Fine Gael motion.
Last week, the Central Statistics Office, CSO, published first quarter national accounts figures. These data show that economic activity in Ireland, as measured by the internationally-accepted benchmark of gross domestic product, GDP, rose by 2.7% between the final quarter of last year and the first quarter of this year. This is the strongest rate of expansion of any country in the euro area. The data do show gross national product contracting slightly, and this reflects the type of growth, but the figures nevertheless are welcome signs of growth returning to the economy. Some commentators are now forecasting positive GDP growth for this year. Moreover, the Department of Finance is considering its own forecast and is likely to issue a revised set of macroeconomic projections for this year shortly, as is customary in the month of July. Consequently, the policies being implemented by this Government to improve competitiveness, maintain our public finances on a sustainable path and repair our banking system are having the desired effect.
However, I wish to stress that the Government is not complacent and recognises fully the pain and suffering of many in our society who have been negatively affected by the economic difficulties experienced in the last three years. While it is welcome that the economy has emerged from recession, let me be categorically clear when I state this is just the first step on the road to recovery. Nevertheless, economic growth is an important first step as this is a crucial prerequisite for jobs growth and an improvement in living standards. The Government will continue to address the economic, fiscal and banking issues over the coming years in the decisive and responsible manner that has characterised its management of the economy over the past couple of years in the face of an unprecedented crisis.
Before discussing recent domestic developments, I wish to outline briefly some relevant international economic developments. Of course, it is convenient for those on the Opposition benches and part of the media to view Ireland in isolation and to suggest that we are the only country that has experienced economic, fiscal and banking difficulties. The reality could not be more different. Almost all of the world’s advanced economies have experienced very sharp falls in activity, giving rise to severe public finance problems and, in some cases, financial sector difficulties. That said, I recognise fully that Ireland’s problems are more severe than elsewhere.
As a small and highly open economy, our prospects are inextricably linked to developments in the wider global economy and in this regard, the signs are reasonably good. Most of our trading partners have emerged from recession and this will underpin an improvement in our exports, as well as support inward investment. However, on a more cautionary note, it also is fair to state that the recovery in some of our key markets, such as the euro area and the United Kingdom, is likely to be modest, at least in the short term.
The confidence of global capital markets is another important feature of the international economy. In April and May of this year, we all witnessed the fall-out from a loss of confidence by the international investment community in the ability of one European Union member state to implement sufficient fiscal consolidation policies. These developments demonstrate, if demonstration was needed, the importance of continuing to pursue the necessary budgetary consolidation policies in Ireland. In this regard, the Government’s fiscal consolidation strategy has received widespread recognition and approval internationally. As everyone in this House will be aware, between July 2008 and December 2009, five sets of consolidation measures already have been implemented. Broadly speaking, two thirds of the adjustments have been on the expenditure side with the remainder on the revenue side and this approach is in line with best practice.
The measures are paying off. This year the Government expects to stabilise the deficit and the figures published by the Department of Finance last week are consistent with this. Aggregate tax receipts for the first half of the year are broadly on target, although income tax revenue is softer than planned and will be watched closely in the coming month. Spending figures for the same period point to ongoing prudent control by Government and the expectation is that expenditure this year will be in line with and within previously set-out plans. It also is worthwhile to note that, notwithstanding volatility on foreign sovereign debt markets, the NTMA has, at the mid-year point, raised more than 80% of the funding requirements for 2010, with the result that Ireland is in a comfortable position with regard to funding this year. Moreover, even if we carried out no further borrowing this year, existing cash reserves would cover our borrowing requirements for the remainder of the year. For next year, the Minister for Finance has stated that measures amounting to €3 billion will be implemented, with further measures being required in later years so that our deficit will be below Stability and Growth Pact requirements by 2014. This approach has been endorsed by the European Commission and has been commended by other international bodies such as the IMF and the ECB.
An improvement in global economic conditions, while undoubtedly welcome, is generally not sufficient for recovery in Ireland. This is because we need to be in a position to be able to exploit the global improvement or in other words, we need to be competitive. In this regard, there are grounds for optimism. Consumer prices continue to decline, while those in our main export markets are now increasing. This is helping to restore our price competitiveness. In addition, I stress that falling prices are helping to support disposable incomes at a time when wages have come under pressure and when social welfare rates have declined. In terms of cost competitiveness, data from the European Commission show that unit labour costs in Ireland are falling, in contrast to the increases being recorded in the rest of the euro area. Recent exchange rate movements are also beneficial from a competitiveness perspective as the euro has depreciated against both the dollar and sterling.
Hence, our competitiveness is improving and, combined with the improvement in the global economy, this bodes well for exports. Indeed, the latest data show that exports performed well in the first quarter of the year and monthly data also point to a reasonable performance in the second quarter. If we continue to make competitiveness adjustments, then we can expect export-led growth to gain momentum from now on. I also point to the improvement in domestic confidence in recent months. Consumers have become more confident and confidence in June reached its highest level since the end of 2007. The decisive action taken by the Government to address the deterioration in the public finances has helped to create certainty and has generated more optimism. As a result, consumers have started spending once again, especially on big-ticket items such as cars, assisted in part by targeted Government measures for this industry.
The Opposition has sought political gain by criticising the Government for reductions in capital spending. However, this is wide of the mark. The allocation for this year is for capital spending of approximately 5% of national income. By international standards, this level of investment is one of the highest in the developed world. Moreover, it is clear that tender prices have fallen significantly in recent years and by 30% this year, according to some estimates. I am highly conscious of this trend in the Office of Public Works. This has enabled the taxpayer to gain greater value for money. Thus, the Government, by keeping capital spending at relatively high levels, is providing a stimulus to the economy on the one hand, while ensuring better value for taxpayers’ money on the other.
There of course are those who believe that more should be spent on capital projects. However, I stress that pursuing capital spending for its own sake is not appropriate budgetary planning. Projects must be assessed on their own merits, having regard to both costs and benefits and the capital programme covering the period 2010 to 2016 is appropriate and involves spending €5.5 billion each year from 2011. This programme will assist our future growth potential.
I now turn to the issue of the labour market. The Government is acutely aware that the greatest fall-out from our economic difficulties is in the labour market. After adjustment for seasonal factors there were 445,000 people on the live register in June, a figure which is far too high. However, we will not be able to reduce unemployment until we can secure robust economic growth and that is what the Government is doing through our competitiveness, fiscal and banking sector policies. Contrary to the Opposition view, jobs are the key focus of this Government. However, in the real world where policies are formulated and implemented, it is clear to all, except apparently the Opposition, that employment growth cannot be achieved without economic growth and that economic growth cannot be achieved without improvements in competitiveness, a sustainable public finance position and a functioning banking sector capable of providing funding to viable projects.
The Government’s entire economic strategy is about sustaining and creating jobs, as set out in its framework for economic renewal, Building Ireland’s Smart Economy. It is repositioning Ireland as a global innovation hub, that is, the best place for both multinational and Irish companies to start, grow and transform. That will lay the foundations for future employment growth. We are developing opportunities in the green economy, renewable energy and clean technology.
Finally, I wish to turn to the banking system which has also absorbed much of our time and energy in recent years. A healthy, fully operational banking system is a cornerstone of any modern economy so it is clear that restoring confidence and repairing the system is a prerequisite for economic recovery. That is why the Government, like governments and central banks across the globe, has provided substantial support to the financial sector. The main policy initiatives have been the bank guarantee in order to secure the liquidity of the banking system, the establishment of NAMA in order to clear up the balance sheets of banks, the recapitalisation of banks and restructuring of the banking system and reform of the regulatory system.
The Government is determined to put in place the necessary mechanisms to ensure that viable firms and enterprises have access to credit. In this regard, the Government has required AIB and Bank of Ireland to submit SME lending plans to the Department of Finance detailing how they propose making the €3 billion available to SMEs. These plans have been reviewed by Mr. Trethowan, the credit reviewer, and he considers that both are credible programmes to achieve the lending targets.
In addition, the Credit Review Office was established by statutory instrument under the NAMA legislation to ensure that banks continue lending to viable businesses. The office reviews refusals by banks to grant credit, including reductions and withdrawals of credit. The borrower must first invoke the internal appeals procedure in the bank. Mr. Trethowan, the credit reviewer, has worked with the banks to ensure that their internal appeals systems are placed on a more formal footing. Although the number of reviews is quite low as yet, it is expected to increase as people become more aware of the existence of the Credit Review Office and their right to review. In this context, I would encourage any SME or farm enterprise which is refused credit to contact the office to get advice on how to proceed.
As the economy starts to improve, there will be increased demand for working capital as business activity and stock levels rise. The Government expects the banks to play their part by supplying credit to viable businesses to allow them to participate in and contribute to the improvements in the economy. The Government has ensured that the banks have the necessary capital to be in a position to meet the increased demand for credit. It is up to the banks now to make this credit available to viable businesses and their performance will be monitored by the Credit Review Office to ensure that they do so.
In terms of regulatory reform, the Central Bank Reform Bill 2010, which is being debated in the Seanad this evening, is a crucial step in a comprehensive programme to put in place a domestic regulatory framework for financial services that meets the Government’s objective of maintaining the stability of the financial system. It provides for the effective and efficient supervision of financial institutions and markets and safeguards the interests of consumers and investors.
This is the first of a three-stage legislative process to create a new fully integrated structure for financial regulation. It provides a statutory basis for the new structure, which will replace the existing Central Bank and Financial Services Authority of Ireland.
The Government has reacted decisively and in a timely manner to address the rapid change in our economic fortunes. That is widely recognised internationally by those who objectively assess our performance. Hard decisions have been taken and these have helped to reposition the economy on a more sustainable, export-led growth path. Those hard decisions are now beginning to bear fruit, as evidenced by the return to growth in the first quarter. While that has not yet had a positive impact on the labour market, as the recovery gains momentum we can expect further dividends, including in the labour market.
In the couple of minutes remaining to me I wish to reply to a couple of points made by Deputy Sheahan. It is often quoted and I must admit I do not approve of the remark myself — we have it so we will spend it — but that did not describe Deputy McCreevy’s actual policy as opposed to perhaps his rhetoric. He reduced the national debt and put a great deal of money into the NTMA, which has been indispensable in the recent past, and introduced measures to encourage personal savings. That needs to be borne in mind.
Deputy Sheahan quoted a New Jersey newspaper. We all know that US economic policy is to encourage other countries to continue with stimulatory packages, presumably because that will help the US economy, but one cannot simply equate what might be appropriate for the US economy, which is the world’s largest economy, with the Irish economy and to assume that what fits the one will fit the other. I have often expressed the view that we do not have the funds to have a net stimulus which would increase borrowing. I am interested that the new Fine Gael spokesperson for finance, Deputy Noonan, whom I wish well, and who has a considerable reputation, is going to look again at party policy in that regard. I do not think a policy which requires an early increase in indebtedness is viable in the current context.
Deputy Charlie O’Connor: That is totally confusing because I do not know whether I should pace myself for 15 minutes or go straight to the point. I thank the Minister of State, Deputy Mansergh, for being kind enough to give me some time. This is an important debate. It is traditional when I speak on Private Members’ motions, which I often do, to compliment the movers of the motion. I am totally confused because I see Deputy Noonan’s name to the fore but I am delighted to welcome the comeback of Deputy Bruton.
Deputy Charlie O’Connor: I wish Deputy Bruton well in his new portfolio. I was also pleased to hear the news about Deputy Perry. He is another man whose work I admire. I wish him well with his new responsibilities.
As Bill Clinton often said, “It’s the economy, stupid.” This debate focuses on that. Even though we were told a week ago that the recession is over, which I hope is the case, it is clear as we go around communities that people need to see evidence of that. The Leas-Cheann Comhairle is aware that there was bad news for my constituency tonight with the announcement that the Citywest complex has gone into receivership. It is not in my constituency of Dublin South-West, it is adjacent to it in Saggart, but nevertheless, the announcement in that regard will shock the constituency. I note a receiver has been appointed. I hope he will focus on preserving and protecting the jobs at the complex. Even though the complex is not physically in my constituency it is an issue about which I feel strongly. We are all aware that it is one of the biggest hotels in Europe. Hundreds of people are employed in the complex, many of whom are from my base in Tallaght. I am very concerned about them. From speaking to a number of them this evening I know they are shocked.
It is important that the receiver understands the challenge the situation presents for him. I hope he keeps to his word. I understand he has made a statement to the effect that the hotel complex will be open for business as a growing concern, which is very important. I took the opportunity to discuss the matter with the Taoiseach, as busy as he was. I am pleased to say he was not so distracted that he did not listen to my concerns. I had a conversation with the Minister for Enterprise, Trade and Innovation, Deputy Batt O’Keeffe, who is on important business with other colleagues in Limerick tonight. I mentioned my deep concern about the situation. I was pleased to hear assurances from him that he will liaise with the receiver and hotel management and do what he can to preserve those jobs. It is important to make that point during the debate.
There has been much media coverage in the past 48 hours and especially today about events going on in the Fianna Fáil Party rooms as we speak. My two colleagues across the Chamber will understand that these things do happen in party rooms. Someone asked me today whether I had learned anything from the recent events in the Fine Gael Party rooms. I said I did not know what went on so I did not learn anything. However, it did give me an opportunity to say to media contacts who contacted me today that my focus is not on personalities, it is on the issues that are of concern.
As I go about my business in my constituency and in the Dublin region, people talk to me of the issues of deep concern to them. They talk about the economy, jobs, the need to protect funding for community projects, education and the need to protect the vulnerable, as Fianna Fáil has always done. Political points can be made on this but it is important that we continue to speak up.
I am sometimes taunted, albeit not seriously, by those on the Opposition benches about the role of Government backbenchers. However, I believe very strongly my role is to stay on the ground in my constituency, come to the House, talk to Ministers and get my point across regarding what should be done. I have very clear views on what should be done. It is a question of jobs. Any discussion on the economy in this recession must focus on jobs. I have told all Members, and always without fear, that I am able to bring to my politics my life experiences. These include having been made redundant three times and having to struggle with this. It is “about the economy, stupid” and about getting the message across. I will certainly continue to do that.
There have been various reactions to the Government’s press conference today on the report on mortgage arrears. It was attended by the Taoiseach, the Minister for Finance, Deputy Brian Lenihan, the Minister for Communications, Energy and Natural Resources, Deputy Ryan, and the Minister for Social Protection, Deputy Ó Cuív. I am sure colleagues from the Labour and Fine Gael benches will take the opportunity during this debate, as they did during Question Time, to voice their views on mortgage arrears. The recommendations in the report comprise good work and are certainly a start.
My colleague Deputy Thomas Byrne, who is to speak on this debate, was a cosignatory, along with me and Deputies Tom Kitt, Chris Andrews and Cyprian Brady, to a motion tabled for our parliamentary party asking the Government to do something about this issue. We framed it some weeks ago. As I mentioned in the House recently, I took the opportunity to bring the Minister for Social Protection, Deputy Ó Cuív, to Fettercairn in Tallaght to hear 60 community leaders express their views on Government policy on all the issues that have arisen in this debate. I am glad they took the opportunity to do so and that the Minister listened.
The subject of today’s report arose at recent meetings of the Joint Committee on Social and Family Affairs, chaired by Deputy Healy-Rae and which has included Opposition spokespersons Deputies Shortall and Enright. I do not want to patronise again but Deputy Michael Ring will not mind my saying he will do a great job and that Deputy Enright has done a superb job as Opposition spokesperson. The members of the committee have been very responsible and have worked well together. It considered the issue of the new poor, who include those suffering over mortgage repayments and who, a year or six months ago, were comfortable and had jobs. I hope the report today will result in some respite for these people and help them through difficulties.
I fully support the recommendations in the report. The time has long since come for all the banks, which are being supported by the taxpayer, to show compassion for those in difficulties. I was glad to hear that the chairman of the Irish expert group on mortgage arrears and personal debt, Mr. Hugh Cooney, has made it clear he wants improved communications and consistent policies applied by lenders to borrowers. He is encouraging all lenders to take immediate steps to implement the recommendations that relate to them. I hope they do so without delay.
As with other colleagues, I have been receiving calls throughout the week from people concerned about their jobs. They include those working in Allied Irish Banks and Bank of Ireland, not only in the Tallaght branches but also in those throughout my constituency and the Dublin region. I am quite sure all Members have been contacted in this regard. It is important that we echo what Deputy Batt O’Keeffe stated on the record, namely, that this matter is of great concern. At a time of serious unemployment in the State, I will put up my hand in the Fianna Fáil benches and say my constituency has suffered as much as any. There are more than 10,500 people unemployed in the Tallaght region, signing off at its social welfare office. This concerns me greatly. I know what redundancy is like and what it is like for the families affected. I understand what it is like to have to go home to tell one’s family that circumstances will be even more difficult than they are.
It is important to express these views to the Government. I hope the Minister of State, Deputy John Moloney, will convey to the Ministers that these issues are of concern to us all. The concern and upset is not confined to those on the Fine Gael or Labour benches, although they take the opportunity regularly to articulate it very strongly. It is important that one understands that those of us working on the ground listening to people want to express the view I am expressing. I am not afraid to express it.
Deputy Charlie O’Connor: I do not want to take up Deputy Byrne’s time because I am sure he would want to make very eloquent remarks about life in the new commuter belt in Meath. I am sorry he is not doing so but I am sure he is on even more important Government business.
Deputy Charlie O’Connor: And Limerick also. The point is that the Government must serve the communities all over the country. I hope that, in time but not this month, the Deputies opposite will get the opportunity to do so. I have no difficulty in supporting the Deputies in this regard.
It is important to acknowledge that the Government amendment accounts for all the points made. Differences will be expressed but that is fair enough. The amendment makes it very clear that the Government feels very strongly about employment and the restoration of confidence in the economy. I hope that will continue to be the case.
Confidence has increased. The Government amendment makes the point that we are all spending money again, including on cars. As one travels around Dublin, one notices quite a bit of activity in this regard, not least because of the scrappage scheme introduced in the Dáil last year, which was supported across the floor. My colleague the Minister of State at the Department of Agriculture, Deputy Seán Connick, had strong views on it. I hope my singling him out does not upset anybody else from Wexford. I know it will not upset the Leas-Cheann Comhairle. From contact with garages in my constituencies, I know they were very pleased about the scrappage scheme. It has led to increased sales and is very important.
Private Members’ business is very important because it gives us all an opportunity to make a contribution on current issues. It is sometimes unfortunate that we must divide on it. I am sure the Fine Gael spokespersons will be very clear tomorrow night that their views differ from those of the Government. A very positive message must be sent out from the Oireachtas that this motion is a question of the economy, restoring confidence in communities, creating jobs, getting people back to work and encouraging investment. I hope we will all continue to contribute to achieving these goals.
Deputy Joan Burton: I thank the Leas-Cheann Comhairle. This afternoon saw the formal publication in the Dáil of the revised NAMA business plan. In the context of this Fine Gael motion on the economy, the NAMA business plan is appalling news for taxpayers. It shows that, in the nine months since the draft business plan was published, the people in NAMA have revised their estimate of it making a profit of €4.8 billion over its life to a worst case scenario of losses of €800 million, a turnaround in nine months of more than €5 billion in extra losses. Clearly, the first NAMA draft plan was a fantasy. It is difficult to believe the revised plan except in so far as it means more pain and no gain for taxpayers.
While NAMA has transferred large bad assets from banks to the taxpayer, the banks, which have been the recipients of this largesse, are still effectively closed for credit. We have a credit famine for small and medium-sized enterprises, SMEs, and indigenous businesses that rely on the guaranteed banks. This alone is continuing to cost tens of thousands of jobs as small businesses yield to the inevitable and close up shop or reduce their employee numbers. Other SMEs never get off the starting blocks.
Today’s business plan again confirms that Fianna Fáil in Government remains mesmerised by the banks and the developers and simply cannot turn its gaze or attention to the real economy, employment, job retention and job growth. Even in the best case scenario where NAMA recovers the long-term economic value of the assets plus 10%, the revised profit figure would be €3.9 billion, a drop of €1 billion. This scenario B, as set out in the plan, requires NAMA’s assets to rise in value from their takeover values to 21%, representing 11% of an uplift plus 10% over the so-called long-term economic value. This is a highly unlikely scenario.
The business plan makes it clear that NAMA is definitely an asset management company and not a bad bank. Assets with a value of €81 billion are being acquired from the eligible institutions, those being, AIB, Bank of Ireland, Anglo Irish Bank and Irish Nationwide. Nine months ago, we were going to acquire assets worth only €77 billion. The House must bear in mind that we are taking no assets valued at less than €5 million, which will stay with the banks.  Every scenario that this wretched Government comes up with regarding our economy is much worse than even it could have forecast. One might call it bad luck for the Taoiseach, but such a deterioration in a nine-month period is unbelievable.
According to a note on the first page of the new draft business plan, the State is to acquire derivate transactions with a nominal value of more than €14 billion. When I asked about these during the debate on NAMA, I was told not to worry my little head about them and that everything would be fine. We are now being told that a substantial number of these derivatives are non-performing and underwater. We are also told that NAMA will pay nil consideration for them. We will get non-performing derivatives for nothing, but what we do not know is what cost implications they and other acquired derivatives will have for taxpayers. That information does not even figure in the plan.
Almost everything about this plan is worse than was forecast. Far from NAMA loans “washing their face”, as claimed by the Minister and his economic adviser in the debate, taxpayers will be left wiping egg off their faces from this rotten deal, which aims to bail out bankers and developers. We were told over and over that the good assets being transferred into NAMA would yield significant returns. When the bundle went to NAMA, there were to be good and bad assets. Some would be underwater, but others would be earning their keep. Today’s report confirms that, at most, only 24% of loans are generating any income, that is, repayments or interest payments. In this climate, loans that are generating neither capital repayments nor interest payments are goners. This is reflected in the fact that some of the NAMA good assets were, for example, shopping centres. Retailers cannot pay the fantasy rents — based on upward-only rent reviews — that the developers want to charge for the banks in order to keep the property value of their non-performing shopping centres up for the purposes of NAMA. This is an exercise in smoke and mirrors and the only people being taken to the cleaners are ordinary citizens and taxpayers.
It is not clear what the floating rate on the NAMA bonds will be. One of the key assumptions used was that this would be at a low level, which was always likely to prove to be a fantasy in the long run. The European Central Bank, ECB, has set interest rates at an historically low level in order to pump money into real economies. We are pumping money into NAMA, the exact purpose for which the ECB’s low interest stimulus package is not meant.
NAMA is coming in with expected administration costs, slightly behind those outlined in the draft business plan. This is about the only positive in what is a deeply depressing business plan. As a consequence of the plan and the extra €5 billion in losses to be loaded onto the taxpayer, the Government is redrawing the national development plan. Key road and rail projects are to be axed as the money for them runs out because we are transferring that money to NAMA. Technically, NAMA’s debt burden is off the balance sheet, but it is on all of our shoulders. As a consequence, an extensive list of more than 30 road projects, not to mention Luas and metro projects, will not proceed. In September, little children starting school will pass through school gates. Although they will be skipping along, their parents might not be skipping behind them. If parents have problems repaying their mortgages, there will be no NAMA for them. There is not even an extension from one year to two years in the work-out period for mortgages in difficulty. Doing this would not be difficult, as it is only a framework to give people two years to try to recover their jobs and family incomes. However, it was not even mentioned in today’s report.
To what do the boys and the girls walking into school together, aged four and a half or five and a half years, have to look forward? Their new schools will not be built. The roads from the motorway to their houses will not be improved. Most of all they will grow up burdened by the extraordinary level of debt the Government has placed not just on this generation, but on their one as they head to school next September. It is high time that this Administration left office and handed over to a new Government.
Deputy Arthur Morgan: I thank Deputy Burton and the Labour Party for sharing time with me. I welcome the opportunity to speak to this Fine Gael motion. When I started to read the document, I thought it was very good stuff and wondered whether a coalition might be possible, since I would not have thought so previously. A special delegate conference of our people would have been completely hostile to it. However, on reading the first seven or eight bullet points, I believed the motion was going exceptionally well. “Ireland has suffered the longest and deepest recession of any eurozone country because of reckless domestic management of the economy” was 100% right and all of the bullet points were flagging valid issues, such as the Government “failing to recognise that its economic plan is failing to undo the loss of international financial market confidence in Ireland”. Of course that is correct, but then the very last one tripped me, referring to “restructure and re-capitalise the semi-State utilities in order to raise the necessary commercial funding to accelerate investments in water, high speed broadband and clean energy”.
I totally support the concept of raising funds for improving clean water and ensuring that it is available for our people, that there is high speed broadband and, of course, clean energy. Where I disagree with Fine Gael is that I do not agree we should be selling off the State agencies, which it proposes revamping for this purpose, in order to fund that critical infrastructure. There are other ways, which we set out most recently in our pre-budget submission in December 2009 in preparation for budget 2010. We believe it is fundamentally important that the State maintains its critical infrastructure and its State services, such as, for example, the ESB. It makes an annual return to the Exchequer which is very healthy and it is likely to continue to do so for the foreseeable future. Why on earth would one consider privatising the ESB? Another example is the social service role of An Post, aside altogether from the public service it provides. The Minister of State is a rural Deputy, as are Deputy Perry and I, and we really value the service An Post delivers. Privatising it would be an enormous additional burden on the people not just in financial, but also in social terms. Whatever short-term economic gain might be achieved through selling services such as this would be very short-sighted indeed.
Take the CIE group of companies. I have no problem with private enterprise standing toe to toe with CIE in relation to public transport and transport generally. However, we cannot have fair weather operators. If we want to provide sustainable public transport, it needs to be what it says on the tin, sustainable, public transport offering a service to our people. Sometimes that means elements of that transport operating at cost. Hopefully, the elements which are particularly profitable will sustain that but I have no problem with toe to toe stuff or competition in that regard. We have been through this before in relation to the whole banking crisis.
If we had in place a properly run State bank, it would not have got involved in the whacky race to the bottom which occurred in the commercial sector. I am not saying we should in any way diminish the commercial sector. All we should do is govern it in such a way that it is practical and functions, so that it cannot get away with the carry-on in which it was engaged. I am talking about loans circulating to the golden circle, without any guarantees whatsoever, and loans washing in and out of various banks as their AGMs approached. It beggars belief that such carry-on could have happened in this State. Then, of course, there was the whole issue of the auditors. Where were the auditors in these companies because, after all, they are corporate entities? They were obliged to submit audit reports and they did. Those auditors were totally blind in relation to activities in the banks. Some of them ended up working for NAMA. Rather than being turfed out and never getting work with anything to do with the State again, they have been rewarded and are helping NAMA to value loans. Is this something we should be tolerating? We are a very passive society.
However, I shall return to the economy because that is the essence of this motion. I was amused by the Minister of State earlier when he said the policies being implemented by the Government were “having the desired effect”. The desired effect is, obviously, to squeeze every last cent out of the economy to ensure that the people who spend money are being hammered, such those on low incomes and the welfare dependent, who spend all their money on groceries and bits and pieces — this goes directly into the economy, creating the necessary dynamism. The joke of it all this week is the Government claiming we are out of recession. I thought the Minister for Finance would have been quiet on this “the recession is over” bit. I accept it is a technical manifestation as to how recession is measured or otherwise but just talk to any single one of the 450,000 on the live register and ask them if the recession is over. Ask the thousands of small business people who struggle from day to day to try to keep their businesses going because they have lost their customer base. With that has gone their cash flow.
A small business will try to organise an overdraft to keep going and keep as many people employed as possible. The banks, however, respond with their shutters down, “no deal”, and will not lend money. The Irish Banking Federation representatives came before the Joint Committee on Enterprise, Trade and Employment this afternoon. They were telling us that loans were flying and they were looking after small and medium-sized enterprises, SMEs, indigenous business, etc. I had to remind them fairly forcefully that the people I meet on a daily basis, the small businesses who are keeping the economy going, have no trust or belief whatsoever in the banking sector, yet the Government is allowing them to get away with it. If the Government had nationalised the two big associated banks, in particular, Allied Irish Banks and Bank of Ireland, rather than telling lies to the Department of Finance, and various Oireachtas committees such as the enterprise committee, the Joint Committee on Economic and Regulatory Affairs and others, we could have cut to the chase. The Government could have got its hands on the levers of these banks and made sure there was a proper funding stream going to small and medium-sized enterprises, so they were not depending on the lackeys in the banks.
NAMA admitted to the finance committee just three weeks ago that the banks were still not coming clean, even at this late stage in the game. NAMA has told us it is going to get quite cross with the banks because it is fed up with how they are behaving. In terms of whether the country is “out of recession”, talk to people in any of the constituencies involved in this House and ask them. I do not know whether that is meant to be humorous or if it is just encouraging people to be scornful of the whole setup of politics here. Certainly, I believe politics has got a bad name, particularly on foot of what the Government policies have been, to bail out the bankers and speculators. We are letting down all those unfortunate people who cannot meet their mortgage repayments through no fault of their own, because they have been made unemployed. Just this afternoon we learn that the Minister for Social Protection is increasing the mortgage interest relief to banks. That will not gain one red cent for their poor unfortunates in their homes, but it will put extra taxpayers’ money into the coffers of the banks, and that is scandalous.
Government policy on having multinational companies as almost its entire centre of focus has been totally misguided. It is time that the State recognised the role of the small business person, the entrepreneur, and turned this around to give some type of credence to job retention and job creation in that sector, which affords the vast amount of employment in the State. It is time it was offered some type of additionality in terms of support for the services it is offering. Those small businesses are the backbone of the economy, and will continue to be, but only if the Government gives them adequate support.
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