Thursday, 22 March 2012
Dáil Éireann Debate
Deputy Niall Collins: Before the general election the Tánaiste promised that the Labour Party in government would not impose cuts to social welfare payments. Following the Government’s first budget, as the detail emerged in the days and weeks after the announcement, we saw that the exact opposite was the case. The disadvantaged were targeted like never before. The social welfare cuts agreed to by the Government were cruel, the proposed disability allowance cuts being particularly cruel, with a more than 50% reduction in some allowances. The Government then paused this budget measure amid opposition and clamour from within this Chamber to add to that from disability groups and campaigners. People with disabilities have been left in limbo, as they do not know for certain where they stand with the Government or whether they receive recognition.
The proposed cuts are deeply unfair. Young people with disabilities look forward to having an income of their own. They look forward to the independence it gives and the certainty and quality of life it brings. Cutting the disability allowance for young people up to the age of 24 years was wrong and should be reversed. The Government admitted the mistake it had made in delivering the equality of opportunity in schools, DEIS, scheme. It is time to do the same with this proposal. The budgets announced in 2008, 2009 and 2010 were tough, but, at least, they were fair and did not target those most in need. This was independently confirmed by the Economic and Social Research Institute which also observed that the 2011 Budget Statement was exceptionally regressive. Does the Tánaiste still stand over the regressive Budget Statement of 2011? Will he confirm that the proposed cuts to disability allowance will not proceed?
The Tánaiste: We honoured that commitment in the budget. The Government is absolutely committed to defending the position of people with disabilities and their families, working with them and supporting them. That work is underpinned by that being carried out by the Minister of State at the Department of Health, Deputy Kathleen Lynch, the Minister for Health, Deputy James Reilly, and the Minister for Social Protection, Deputy Joan Burton. The Government has given a commitment to defend people with disabilities and ensure their needs are fully met.
Deputy Niall Collins: The Tánaiste did not address the question I posed. The Government paused this budget measure. People who suffer from disabilities and are in receipt of disability allowance are entitled to respect and have certainty in the payments they can expect to receive from the State to support them in their day-to-day lives. Their daily lives are full of challenges. The decision to pause this budget measure included charging the chairperson of the Commission on Social Welfare and Taxation to carry out a review. Where stands that review? Are the people concerned not entitled to know exactly where they stand? The uncertainty must end. The Government is trying to rewrite and re-present some of its budget measures. Where do people with disabilities stand and when will they know the position on the budget announcement to cut their disability allowance payments?
The Tánaiste: The change to the disability allowance was, as the Deputy says, paused. That position has not changed. I find it remarkable that on a day the Government has progress to report in regard to the promissory note and when we have just seen the publication of the report of the Mahon tribunal, the only issue Fianna Fáil can find to raise during Leaders’ Questions is one that has——
Last night’s announcement by the Minister for Finance on the promissory note, during the debate on a Sinn Féin Private Members’ motion on the European Stability Mechanism, blackmail clause, begs more questions than it answers.
Deputy Mary Lou McDonald: The Sinn Féin Party has been raising this issue for more than one year and calling for a write-down of this odious debt. If a deal is agreed today with the European Central Bank which will result in a write-down of the debt, Sinn Féin will be the first to welcome it.
Deputy Mary Lou McDonald: Before any of us pass judgment on the deal, there are a number of questions that must be asked. Will this deal reduce the State’s liabilities to Anglo Irish Bank? Will the debt heaped on the shoulders of citizens by Fianna Fáil in 2010 and honoured by the Government to the tune of €3.1 billion last year be reduced? Will the deal announced last night by the Minister for Finance, Deputy Michael Noonan, have any effect on the State’s debt-to-GDP ratio and, in turn, any impact on Ireland’s return to the bond markets next year? Will it have any impact on this year’s deficit or the Government’s plans to suck €3.8 billion from the economy in 2012 and a further €2.25 billion in 2013?
Deputy Mary Lou McDonald: The question concerns whether the Government has actually secured a deal that will reduce the debt which will represent a write-down of the debt to Anglo-Irish Bank and if in so doing, it will reduce the deficit and the extent of the cutbacks and hardship experienced by millions of people across the State.
The Tánaiste: That is the reason we are in this fix and the reason the Government is trying to fix it. It was landed with the highly expensive method of financing Anglo Irish Bank and the Irish Nationwide Building Society via promissory notes as a result of the disastrous banking policies of the previous Government.
The Tánaiste: The Government has committed itself to informing the Dáil about any significant development in the payment of the promissory note at the end of the month. The Minister for Finance brought the Dáil up to date on the issue last night.
The Tánaiste: In recent months the Government has been involved in technical discussions to reduce the burden of debt associated with the recapitalisation of the banks. In particular, its focus has been on the promissory note arrangement made to fund the Irish Bank Resolution Corporation, IBRC, formerly Anglo Irish Bank and the Irish Nationwide Building Society. This is an arrangement that requires the State to make cash payments of €3.06 billion each year to the IBRC.
There have been some developments on this issue in recent days. While the discussions with the European authorities on the general issue continue, the Government is negotiating with the European Union authorities on the basis that the €3.06 billion cash instalment due from the Minister to the IBRC on 31 March under the terms of the IBRC promissory note could be settled by way of the delivery of a long-term Irish Government bond. The details of this arrangement must still be worked out and I reiterate the Minister’s statement last night that discussions are ongoing. However, the obvious use of a Government bond would have a positive cash flow benefit for the State, as it would free up the €3.06 billion required to pay the promissory note.
Deputy Mary Lou McDonald: It appears from the Tánaiste’s response that, uniquely, he has been consistent on this matter. The Taoiseach repeatedly told Members that the Government would not seek a write-down of the debt.
Deputy Mary Lou McDonald: The Government has been as good as its word. I find this highly disappointing but not all that surprising. Will the Tánaiste, at least, clarify that the State now has €3.1 billion or €3.06 billion in additional resources to ease the burden on citizens and row back on the cutbacks and some of the tax hikes? Will he answer this question for the people? Furthermore, in the Government’s presentation of this matter, will it move from spin and rhetoric to being straight with the people?
Deputy Mary Lou McDonald: The Tánaiste has stated we will have an additional €3 billion available. Where will it be invested? On which of the cutbacks will the Government row back? What relief will citizens obtain as a result of this deal?
The Tánaiste: Deputy Mary Lou McDonald is correct: I have been consistent on this issue, as have the Taoiseach and the Government. Since its formation, it stated it would proceed to renegotiate the terms of the bailout arrangements which it considers to be too onerous on the taxpayer. It has been consistent in this regard. The Minister for Finance has brought the House up to date on the progress made on the issue. The Deputy has also been consistent, but she has been consistently wrong.
The Tánaiste: Deputy Mary Lou McDonald was wrong when she assumed the Government would not secure a reduction in the interest rate. Moreover, as I recall it, she was wrong when she assumed the Government would not secure agreement, for example, to reverse the change to the minimum wage. Her problem is that——
The Tánaiste: The Government is succeeding. I repeat the point that if we succeed — the discussions have not yet been concluded — in getting agreement to the replacement of the promissory note with a long-term Government bond, this will have enormous benefits for the taxpayer and the country.
Deputy Joe Higgins: I bring the Tánaiste back to what he stated in the Chamber yesterday on the household charge when he asserted that people wished to pay. Members of the Government have been stating all week that the reason 83% of householders have not registered and paid as of last night is they all are waiting until the last minute. I suggest to the Tánaiste that he is delusional about what is happening in this regard. I put it to him that this is on the Marie Antoinette scale of delusion and that he is completely out of touch. I also put it to him that the herd of elephants stampeding from Malin Head to Mizen Head completely unseen by the Government is evidence that there is a massive revolt under way among the ordinary, decent, compliant tax-paying majority in society against a new tier of taxation that they understand will quickly rise to a figure of €1,000 and above.
Deputy Joe Higgins: I suggest this constitutes a massive revolt against the disastrous policy of austerity pursued by the Government and its predecessor. That policy is creating havoc in our society because ordinary people are being fleeced in order that the speculators might be bailed out.
I put it to the Tánaiste that in a major article on the household tax yesterday, The New York Times was much more correct in its analysis than has been the case with the Government and many in the Irish media by identifying the wellspring of anger relating to this issue which is driving a massive national boycott. Will the Tánaiste read the article to which I refer?
Deputy Joe Higgins: Those consequences are only going to intensify the boycott against the household tax. At least the Minister for the Environment, Community and Local Government appeared to be coming to terms with reality yesterday when he was challenged on RTE’s “Drivetime” programme——
Deputy Joe Higgins: ——in respect of the fact that nobody knew about the household charge. He responded by stating that posters protesting about the household tax have been put up in every town in Ireland and that, therefore, everyone knows about it.
Deputy Joe Higgins: In view of the position in this regard and in light of what the Tánaiste just stated to the effect that the arrangement in respect of the promissory note will bring tremendous benefits to taxpayers——
The Tánaiste: Just prior to entering the Chamber I received a copy of the report of the Mahon tribunal. Obviously, I have not had the opportunity to read it yet. We will all have the chance to read and consider that report during the course of the day and over the weekend. I hope that it will be possible to make arrangements, through the Whips, for the House to engage in a comprehensive debate on the Mahon tribunal’s report during next week.
Deputy Higgins is correct in stating that the matters the tribunal was asked to investigate are not unrelated to the difficulties this country faces today. The issue with which the Government is dealing at present involves renegotiating the terms of the bail-out relating to the former Anglo Irish Bank. In a sense, this involves tackling the mess that was created as a result of the need to deal with a financial institution which was the piggy bank for the property bubble that brought the country’s economy to its knees. As we know from some of the evidence presented to the Mahon tribunal, certain aspects of the property bubble were, unfortunately, connected to corrupt acts performed by particular individuals. What is at issue here is related to the difficulties the Government has in the context of managing its way out of the mess it inherited from the previous Administration. The latter includes dealing with the issue of the promissory note and the requirement whereby Irish taxpayers will be obliged to pay more than €3 billion in cash every year for ten years in order to bail out the former Anglo Irish Bank.
The Tánaiste: We have made progress on that matter and the Minister for Finance made an announcement in this regard yesterday. I would like the Whips to reach an arrangement whereby, when Members have had an opportunity to consider it, the Dáil will have the opportunity to engage in a comprehensive debate next week on the findings contained in the Mahon tribunal report.
Deputy Joe Higgins: I acknowledge that the Tánaiste has just stated there is a link between the corruption and reckless speculation that undoubtedly will be outlined in the Mahon tribunal’s report, the crash experienced by our society and the austerity the Government continues to impose. However, the Government should have broken the link in this regard. It should not have placed the massive burden relating to this corruption, profiteering and speculation on the backs of ordinary people.
Deputy Joe Higgins: Those people are rejecting what is being done to them and that is why there is a huge revolt throughout the country against the household tax, which is the symbol of people’s opposition. It is amazing that Fine Gael and Labour backbenchers — I refer, in particular, to the Labour elves in this regard — have not done their job in making the Tánaiste and his colleagues aware of the extent of the anger that exists. That is the reality.
Deputy Joe Higgins: By the end of the month — namely, in nine day’s time — a majority of the people will be in revolt against the austerity and household tax policies of the Government. Will the Government recognise reality, withdraw the burden of this tax from our people and, perhaps, start again?
Deputy Joe Higgins: Will the Tánaiste come to the National Stadium in Dublin on Saturday next to see the thousands of people who are going to come together at a major national protest rally against the Government’s regressive tax? If he does come, perhaps he might bring some of the Labour backbenchers with him in order that they might obtain a dose of reality by listening to ordinary people for a change.
The Tánaiste: That is not an idle comment. The only occasion on which the Deputy’s people ran anything was in the 1980s when they ran the city of Liverpool. That city ran out of money. One Friday afternoon, when there was no money to pay the wages of the grave-diggers, the road workers and the other employees of the city of Liverpool, the Deputy’s people were obliged to hire taxis to deliver P45s to those individuals.
The Tánaiste: The only way the Government will get this country out of the mess inherited from Fianna Fáil will be through the prudent management of our economy and continuing with the approach it is currently taking.
The Tánaiste: Many of those on the Opposition benches said it was not possible. We took an approach on the interest rate and successfully renegotiated the terms of the programme. Getting out of the economic hole that this country found itself in is not easy for the Government or the people of this country. It is not helped by the kind of facile, instant, abracadabra-type solutions that Deputy Higgins believes will work.
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