Wednesday, 1 October 2008
Seanad Eireann Debate
Senator Donie Cassidy: The Order of Business is No. 1, motion establishing a European judicial network in civil and commercial matters, to be taken at the conclusion of the Order of Business and conclude within 30 minutes, with the contributions of spokespersons not to exceed five minutes; No. 2, Housing (Miscellaneous) Provisions Bill 2008 — Second Stage, to be taken at the conclusion of No. 1 and adjourn not later than 4 p.m., if not previously concluded, with the contributions of spokespersons not to exceed 15 minutes, those of all other Senators not to exceed eight minutes and Senators may share time; and No. 3, Private Members’ Bill, Human Body Organs and Human Tissue Bill 2008, to be taken not later than 4 p.m. and to adjourn not later than 6 p.m. I also advise the House that on receipt of the Credit Institutions (Financial Support) Bill 2008, I intend to amend the Order of Business to enable the House to take all Stages this evening and to take a motion for earlier signature on the completion of the Bill. The business of the House will be interrupted from 1.30 p.m. to 2.30 p.m.
Senator Frances Fitzgerald: Yesterday, legislation was introduced for the biggest economic policy decision taken in this State. As Senators will have seen, this was done in a chaotic manner as the introduction of the Bill was repeatedly subject to delay. While the Fine Gael Party supports the legislation, it is cautious about many of its aspects.
I am concerned by the tone of some of the debate on this issue. For example, I have heard Ministers and others state that the legislation only provides a guarantee. I caution against this type of thinking because providing a guarantee to the banks for such a substantial amount of money is not without risk. My party and some commentators have spoken about this issue. There is a risk that borrowing costs will increase. We also hear the banks may have bad debts of up to €80 billion. The amount effectively being underwritten by the taxpayer has been estimated at between €100,000 and €200,000 per man, woman and child in the State. The sums of money involved are enormous.
If parents decide to act as guarantor for a young adult taking on a mortgage, they consider the matter very carefully. They know their child and weigh up the risks. The State, in taking this decision, is effectively guaranteeing the family home of the economy. The questions Fine Gael has asked relate to what regulation will be introduced and how we can guarantee the banks will not behave in a similar manner again by lending money to property developers to buy land at inflated values. Many people are concerned that we might see this sort of practice in the banks again, which would make it even more difficult for the first-time buyer. We must be very careful about this oversight and need to hear from the Government about the type of regulation that will be put in place because it is clear, as I said yesterday, that the regulations that were in place have not worked.
Some Members, including Senator Ross, have been speaking about this for a long time. Do we know the banks well enough, as well as a parent knows his or her child, to be giving this sort of guarantee and what sort of safety net can we build in for this economy? I welcome the fact that the legislation probably will be before the House later this evening and that we will give it the utmost scrutiny.
On a related point, a story is carried in the newspapers today on an issue we discussed in the House on a number of occasions, namely, the M50. Up to 20,000 people have received fines and notices that they should not have received. This concerns the use of a bridge that has not been managed well. We are now talking about the management of our entire banking system. There are many lessons the Government has to learn about management, as we have seen from the many decisions it has taken in recent years. We have had very poor management and very poor oversight——
Senator Frances Fitzgerald: ——of the spending of the money of this economy during what has been called the Celtic tiger. It is essential that we see better management in the weeks and months to come, especially in the banking sector.
Senator Joe O’Toole: I wish to pick up on the same points touched on yesterday and to which we attempted to get answers yesterday afternoon from the Minister of State, Deputy Mansergh, who was extraordinarily coy and reluctant to share information or views with us. One matter about which we know more now than previously is that the banks found it easier and cheaper to get credit yesterday. The Minister of State made the point yesterday that he was quoting the Taoiseach when he said the banks would be forced to pay a reasonable charge. To me the charge is clear; it is the difference between what the banks were paying for money yesterday and what they were paying for it the previous day or what they are paying for it today. That is the value they have got. That is the value the taxpayer has given them and the value they need to pay back to us for our covering their risk and liability and for allowing them to do their business and to trade in a way they were not able to a week or three days ago. We should be insistent on that approach.
No more than any kind of insurance policy, a clear excess clause should apply to the banks. It was my understanding that it was the Government’s intention to apply one, but to date that has not been written into the legislation. If one crashes one’s car, one is liable to cover the cost of the first few hundred euro of damage. In this situation, the first drawdown should be from the banks. That is a guarantee we must be given. It is a straightforward matter. It is no more than what would apply to one engaged in any commercial operation.
One issue not mentioned by the Government but raised by Fine Gael is the question of having a State representative on the banks’ risks or credit committees. I agree with that idea, but I also believe other people should be represented on the banks’ boards. The boards should be dissolved and reformed——
Senator Joe O’Toole: ——to deal with this and taxpayers should be represented. That seems an obvious requirement. I am pleased the legislation will give the State the authority to take equity in some of these companies and to examine their subsidiaries.
An issue raised here time and again and by those involved in the regulatory area — we have the Oireachtas Joint Committee on Economic Regulatory Affairs — is that the power of the Financial Regulator needs to be strengthened. I argued in this House nearly ten years ago for authority to be given for the free flow of information between the Office of the Revenue Commissioners, the financial authority and the offices of the other regulators in the State. There was major objection to that proposal in this Chamber and a watered-down version of the legislative measure was eventually passed. We are now talking about why the Financial Regulator is not doing his business.
Another suggestion rejected by this House was that each director of a significant company should be required, in end of year directors’ statements, to state that the company concerned has traded properly and correctly within the law. That was opposed by all the major players in the business section and all the accountancy bodies and a watered-down version of the measure was passed, the effect of which means nothing at the end of the day. It is time we revisited these issues to make sure they are addressed. I ask that we reconsider them.
I wish to raise another point which I ask Members to seriously consider. Some Members of this House are long serving and I have served here for 20 years. I was appalled at the salaries, terms and conditions, etc., of Members of the Oireachtas when I came to this House. I could not believe that any group of workers at any stage in life could be so disorganised and badly represented in terms of dealing with salaries. I was involved in the 1992 negotiations, of which I am proud, which dealt with some of these issues. It was a time when we heard stories of political widows in particular who found themselves with not a shilling of a pension because irresponsible husbands, who were Members of this House, or the other House, had bought out their pensions because they had lost an election and needed the money for good reasons or whatever. Consequently, their widows were left with nothing. People were trying to deal with their cases.
In 1992 we made a comparison between Members and other workers. If other workers lose their jobs, there are provisions such as redundancy, notice and a fair movement into and out of employment. The deal that was done at that time was that in lieu of redundancy and notice — if a Deputy or Senator loses his or her seat, he or she is immediately out of a job with no notice, which was unfair to ask of any group of workers whoever they might be. I would say the same if I were talking about teachers, general operatives, painters or any other group, and Members got paid a month’s salary for every year of service in rough terms. Apart from that they got no more than any other public servant who would have notice and termination provisions built into his or her contract.
There is a responsibility on every Member of this and the other House to defend and explain that to ordinary people, even if it is irresponsibly dealt with in a populist media. We must remember, as is well known to some of us who have spent our lives involved in trade unions, that nobody ever cheers when some groups of workers get anything. We should simply ignore that and not expect it to be a popular view, but it is a reality that should be put forward, defended and protected.
Senator Alex White: It is misleading for anybody to give the impression that the package proposed in the legislation currently before the Dáil does not come at a cost to the State and the Exchequer. The extent to which that was suggested, implied or, I believe, stated by the Taoiseach yesterday was that no money is changing hands. On the face of it, that is true, but it is only half or a very small part of the picture. First, there is the obvious cost associated with a risk, namely, if this guarantee is called upon at some point in the future. The guarantee would not be given or would not count for anything unless there was a prospect or a possibility at least that it might be called upon at some point in the future. That is a cost or at least a contingent cost or liability.
A second cost, to which Senator Fitzgerald briefly referred, is that there is a real risk that the ability of the Irish State to borrow and the interest rates that will be charged on foot of those borrowings will be affected by this. There is a real risk that will occur. That takes the matter into the political arena. It was always a political question but it makes it a highly political question for us and a huge issue in terms of the democratic dimension for these Houses because it affects the ability of the State and the Exchequer to expend money on public services, including health. The Minister for Health and Children said yesterday that the likelihood of increases in expenditure on health would be negligible in the coming period. There is a not even a potential but a very real and likely cost to the State.
This brings me back to the point I raised yesterday, which relates to these Houses and the effect or involvement we should have in this regard into the future. Other speakers have rightly asked for more detail from the Minister for Finance on how he will exercise the powers he will take on and the extent of the scrutiny that will be brought to bear on the banks, but what about the scrutiny in which the Houses of the Oireachtas should be involved in regard to these matters? I mentioned the issue yesterday in regard to the Joint Committee on Finance and the Public Service and said that perhaps we should consider having a more dedicated committee or facility for the Houses to examine the question of the banks. The Joint Committee on Finance and the Public Service dealt with this issue in July last and I took the opportunity last night to read the debate of that meeting. I suggest that colleagues examine the transcript of that meeting because, on any reading of it, one would not describe what occurred as a debate. It appeared, from what was stated, that there was no problem at all. The representatives of the various banks stated that there were no issues arising, that there were few loans at 100% and that there were no concerns. That was the tenor and level of the debate that took place in July.
What happened in the interim? We are aware of what occurred in the United States but what gave rise to the so-called catastrophe into which we were facing? The Houses should be involved in considering what took place during the past three months. Senator Ross is correct to state that the role of the Financial Regulator should be examined. What about the role of the Central Bank and Financial Services Authority of Ireland? There are already suggestions in the United States that there should be criminal investigations in respect of what occurred on Wall Street. I am not stating that something similar should happen here but there should be a role for the Houses in scrutinising what took place during the past three months that led us to the position that obtained from Monday night into early Tuesday morning.
For the past six to 12 months, people in pubs and restaurants throughout the city have been discussing the possibility of a major bank collapsing. We were informed yesterday that this almost happened. There is a complete disconnect between these Houses, the Members of which are the democratic representatives of the people, and what is happening in the real world.
This matter is relevant to the Order of Business and to the general business of this and the Lower House. In that context, I reiterate that we should put in place a mechanism that would allow the Members of both Houses to scrutinise what is happening in the banks, examine the extent to which the new facility being afforded to them will be applied and consider the sensible proposals put forward by Opposition spokespersons in respect of what will be the payback to the taxpayer in light of the real cost that arises on foot of this proposal.
Senator Dan Boyle: It is important that we should not prejudge the debate that will take place later today. However, it is also important that the concerns raised by Members be placed on record and form the basis of the wider debate that is likely to occur this evening. To date, I have not heard anyone state that there is no risk in what is being proposed. There is an undoubted risk. However, what the Government must consider is whether that risk is acceptable and whether the policy being proposed would give rise to a lesser risk than that attaching to other policy options.
In other jurisdictions, failing financial institutions have been directly purchased or given state support. Such interventions have resulted in a direct cost to the governments involved. The taxpayers in the jurisdictions to which I refer have already incurred a liability. The Government of the United States is offering to buy up the toxic debts incurred by banks in that country. This is a debt which is probably irredeemable. Once it is paid by US taxpayers, there will be no comeback.
The approach that will be adopted, and later debated by this House, is one where the risk has been measured and the likely cost to taxpayers will be reduced as a result. There is no doubt that the situation in which we find ourselves came about as a result of both a need for more appropriate regulation and large-scale irresponsible banking practices. Members should work together to ensure that these matters be dealt with in the context of encouraging better ethics through the introduction of legislation. The debate in which we will engage later will be the first of many that will examine existing legislation, particularly that which relates to financial regulation. I look forward to the Leader being able to make time available for such debates.
It must be stressed that what is being attempted will not be without difficulty. However, even in the short term and before the passage of the legislation through both Houses of the Oireachtas, it has already had a positive effect. In such circumstances, we can be confident that we are putting in place a framework that will allow us to deal with the current difficulties, which are partly local but mostly global in nature. I look forward to an open debate on the legislation.
I thank the Members of both Houses for engaging in the general debate on this matter in a way that has not been evident in the United States — the source of most of the problems that have arisen. The debate in the Houses of Congress has been nakedly political and those involved in it have not considered the wider interests of the global economy or their country’s political system. I am satisfied that our debate on the legislation will not be conducted on such terms.
Senator Paul Coghlan: Will the Leader provide an assurance that all banks licensed and regulated in this country will be brought within the scope of the legislation that is due to come before the House later? Members are concerned that Irish taxpayers who are dealing with the institutions which, at present, are definitely not covered by the terms of the Bill should benefit from the protection it is intended to offer, otherwise the Government risks creating the very conditions the legislation is supposedly designed to protect against. The level of risk will increase and there could be a run on one of the institutions to which I refer. God only knows the sort of enormous knock-on effect to which this could give rise and no one wants to contemplate the untold damage that could be done to the economy.
The institutions which, it appears, are not included under the provisions of the Bill would, if they were so included, be obliged to pay for the beneficial cover that would be provided by way of this insurance measure. We must ensure that the legislation we are due to pass later today will create a level playing pitch, otherwise the results could be disastrous.
I agree with Senator O’Toole on the need to urgently strengthen the powers of the Financial Regulator. There will be a need to reform and restructure some of the financial institutions in the near future. In light of the steps being taken by the Government, there will also be a need for State representation on the boards of those institutions when they have been reformed and restructured.
Senator Ivana Bacik: I am also concerned with regard to the Bill we are being asked to debate tonight. There is a real lack of clarity regarding what the taxpayer is taking on in respect of the legislation. Anyone who watched “Prime Time” last night would have been left even more confused with regard to whether the banks are exposed to toxic debts — one commentator was strongly of the view that they are so exposed — and whether there is a strong risk for the taxpayer as a result of the acceptance of this measure. If the banks are so secure, why do we need to bail them out? From listening to the stockbrokers and others in the banking sector who are defending and lauding the Bill, one might come to the conclusion, “They would say that, would they not?” They are, after all, the ones who are getting the good deal. It is difficult for any of us to decide whether the Bill deserves our support, which is a matter on which we will be obliged to engage in a detailed debate later today.
There appears to be cross-party agreement on the need for increased regulation in the financial services sector. There should also be increased regulation in respect of our greenhouse gas emissions and the targets relating thereto. A number of extremely worrying reports were published recently — they were eclipsed by the financial crisis — which show that Ireland is nowhere near meeting its Kyoto targets. In that context, I renew my call to the Leader and Deputy Leader for the Second Stage debate on my Climate Protection Bill to resume. I wrote to Deputy Barrett, Chairman of the Joint Committee on Climate Change and Energy Security, yesterday and requested that I be allowed to make a presentation on the Bill to his committee, which might then support it. I also request a resumption of the Second Stage debate on the Bill in this House. It is important that this should happen, particularly when we are considering the need for increased regulation across various sectors society.
Senator Eugene Regan: We are in a time of crisis and the Government has sought, and is getting, co-operation from Opposition parties. There is a lesson in this for the future, namely, that the Taoiseach and the Government should not be so dismissive of proposals put forward by the Opposition to improve the state of the economy. The tendency has been to ignore the Oireachtas and to dismiss Opposition proposals and many of the announcements relating to initiatives relating to the economy are made outside the Houses of the Oireachtas. Co-operation works both ways. There is an onus on all Members of the Oireachtas to co-operate in times of crisis such as this. That co-operation has been forthcoming but it works both ways.
The motion in regard to the European judicial network in civil and commercial matters will be taken without debate. I have no difficulty with that but point out that Ireland opted into this network in 2001.
Senator Michael McCarthy: BreastCheck wrote to a lady in the Cork region last week to arrange an appointment for a mammogram. Sadly for the family concerned, that lady has been dead for 20 years. This was brought to the attention of BreastCheck which said it was using records from the Department of Social and Family Affairs. However, that same Department has been paying a widower’s contributory pension to the deceased lady’s husband for the past 20 years, so it calls into question the manner in which BreastCheck is using information made available to it by the Department. It also calls into question the sections within the Department which are releasing information to BreastCheck stating that a deceased person is living in the Cork region but which are giving the husband of the deceased person a widower’s pension at the same time.
This has caused undue hardship and distress to the family. One could understand this happening within a three to five year period but this is 20 years later. BreastCheck has issued an apology which has been accepted in the spirit in which it was extended. However, there has been no word from the Department of Health and Children. It so happens that the husband of the deceased woman is a former Deputy. He contacted the Department of Health and Children and spoke directly to the Minister’s adviser but there has still been no word from the Minister on this issue. I am not saying the Minister is not compassionate and that it is deliberate, but it is a disgrace and shameful that any family should have to go through that hardship, distress and trauma. We need to ensure this does not happen again.
I wonder if something similar has happened to other families who would not have the wherewithal to raise this issue in political channels as has this former Deputy. Will the Leader ensure this does not happen again and that there is some political accountability because we have all become immune to apologies from the Department of Health and Children in regard to cock-ups in terms of diagnoses and services? This cannot be allowed to continue.
Senator Marc MacSharry: I join others in welcoming the opportunity to debate the Credit Institutions (Financial Support) Bill 2008 tonight. Not wishing to pre-empt what we might say on it, may we all share the wish for improved regulation and to minimise the risk and ensure we are most diligent in carrying out what we all hope will be a positive contribution to the economy? I look forward to a robust debate later in order that we can all contribute to improving that legislation and ensuring it is sound.
Following on from what Senator Michael McCarthy said about BreastCheck, it would be beneficial if we had a debate on the roll-out of BreastCheck. I fully sympathise with the poor family in Cork where a deceased woman was called for a mammogram. Indeed, there are many people in the north west who have not yet had the opportunity to have a mammogram because BreastCheck has not been rolled out there. I recall having a robust debate on radio with a member of the Opposition and saying it would be rolled out in our area in 2006. However, I very much regret the fact it has not been rolled out. It would be prudent to have a debate at this point and to ask the Minister for Health and Children when it can be rolled out.
It is appropriate that we are preoccupied with the economy at this time but it is also the time of year when many local authorities begin to prepare their budgets for the coming year. As our electoral base comprises predominantly local authority members, it would be appropriate to debate local government funding on an ongoing basis because it is a very important issue.
Senator Jerry Buttimer: I join with Senator Michael McCarthy in raising the issue of BreastCheck and I call for an urgent debate on it. I have a copy of a letter from BreastCheck which was received by the family of a lady in my area of Bishopstown who died two years ago. It is not good enough that a family suffering the trauma of a death received this letter in the post. We are being very unfair to people. Senator Michael McCarthy is right that we need an urgent debate on this issue. As the Deputy Leader, Senator Boyle, will know, the South Infirmary-Victoria Hospital has been amalgamated with Cork University Hospital. We need an urgent debate on centres of excellence and on how our health service can provide a decent and proper service to the people.
Senator Déirdre de Búrca: I look forward to the debate on the Credit Institutions (Financial Support) Bill 2008 later this evening. As my colleague, Senator Ó Murchú, said yesterday, we have a choice in this regard. We have seen the political response to this issue in the United State in terms of the bail-out proposed there. It would appear that a certain party responded more in a highly populist and political way than in the interests of the US economy. I hope that when we debate this issue later, we keep the interests of the economy, the taxpayer and the people at the heart of the debate.
I raise an issue on which I touched yesterday concerning the protection the Government is offering to six financial institutions. Other financial institutions operate in this country in which Irish people have savings and so on, but these institutions will not be offered the same protection. I reiterate the point I made yesterday that we need to start to look at an EU-wide approach to regulating our financial institutions.
A Belgian company operating in Belgium, France and another EU member state raised the issue of difficulties where it is necessary for a state to intervene and offer protection to an institution or bail it out. If a financial institution operates in a number of member states, it can be very difficult to do that. In the future, we will see financial institutions operating in many member states. When these difficulties with our financial systems arise in the future, we will need a regulator or a regulatory system capable of transcending borders.
While I welcome what the Government is doing at this time, we need to look ahead. I encourage the Minister for Finance and other Ministers, in their discussions in the Council of Ministers, to raise this issue and to be proactive in trying to ensure that an EU-wide system of financial regulation of markets is designed and planned in the coming months.
Senator Fidelma Healy Eames: Overnight serious concerns have been expressed to me about the lack of clarity in regard to the various risks to the taxpayer as a result of the Credit Institutions (Financial Support) Bill 2008. Before we agree to this legislation, we need to ensure it is good and sound. For example, if I deposit my money in Ulster Bank and Senator Cassidy deposits his money in Allied Irish Banks——
Senator Fidelma Healy Eames: I appreciate that but it is very important we raise these questions in order that Members have time to think about them before the debate. There must be a level playing field.
Farmers have contacted me to say that in the past week, millions of euro have been deposited in the single farm premium in some of these banks which will not have the State guarantee. Is the Government taking responsibility for this? We must have a level playing field. There are questions in regard to breaches of constitutionality and of EU competition law.
Most worrying is the lack of specifics in the legislation. Are we giving too much power to the Minister for Finance? It is like open cheque book season. We are not only selling the family silverware but we may be selling the family home and farm as well. I implore Members to think carefully about amendments. We are all together on this but we need to ensure strong and sound legislation is adopted.
Senator David Norris: I am a little surprised to come back to the House and hear what seem to be echoes of the American Congress debate, which I thought was disgraceful, particularly the behaviour of the Republicans. George Bush was a rotten President and has now shown he cannot even deliver his own maggoty troops and Mr. Mc Cain is a person who has fought for the past 20 years against any regulation in the financial industry. If the Americans put Mr. McCain in as President, they will deserve every financial calamity that occurs and every foreign policy result. This crisis all came about through greed and started with people like Thatcher and Bush.
I have not yet had an opportunity to look at the Bill, but I hope there will be something in it to protect the homes of the people. A number of people here — mine was not the only voice — spoke about the dangers of giving excessive mortgages of 100% or 110% and the danger of negative equity. Now people are caught and there have been repossessions. Some 126 orders were granted in the past year for the repossession of homes by financial institutions and 104 went to the Circuit Court. This must stop. If taxpayers are bailing out the financial institutions, ordinary, decent, working people, who were squeezed by them when they did not give a damn about their customers, must be protected.
Senator David Norris: There is a question mark about that. President Bush should be impeached and is guilty of war crimes. There are many people in this House who would agree with that. The sooner he is gone the better.
Senator David Norris: I indicated I have a question about foreign affairs for the Leader. This concerns the Middle East, in particular the situation in Iraq, where Mr. Bush has also stuck his jammy little fingers in to disastrous effect and has installed a puppet regime there.
Senator David Norris: A member of the Iraqi Parliament who visited Israel in order to understand the people so opposed to him has had his immunity lifted. On his previous visit to Israel, his two sons were assassinated in a bomb attack aimed at him. We need a debate on this issue. I would welcome if we could send a protest to the Iraqi Parliament. People need to meet on these sensitive issues to discuss them. The man in question is Mithal Alusi and I heard him on the BBC World Service. The rights of parliamentarians must be maintained in the interest of proper diplomacy.
Senator Liam Twomey: I ask the Leader to ensure that during the debate on the banking issue we are provided with good information on what is happening. Yesterday’s debate on the economy and the debate on shoring up the banks were bereft of good quality information. I ask the Leader to ensure that whichever Minister comes to the House stops treating us like children and imbeciles and gives us proper information about what is going on.
Senator Liam Twomey: Ministers must stop telling us we are not clever, smart or intelligent enough to digest the information and to leave it to them — the bright guys — to sort it out. They must provide us with the relevant information to ask questions so that whatever questions are not asked in the Dáil can be asked here. There are two to three days of discussion on this issue, at Government level, with the banks, with the regulator and in these Chambers and we should be able to debate the issues freely.
When the legislation has been sorted out, will the Leader ensure we have a second debate on the question of how we got to this position? We need that debate because of issues regarding the regulator, the banks and the serious concerns with regard to the Government response to the problem. As is well known, the Minister for Finance was talking up the construction industry and the banks up to the 11th hour, before the crisis blew up in his face and the stock market collapsed by 13% on Monday. If we do not have that debate, it will happen on the streets, which will not be good for either Fianna Fáil or its Government partners.
Senator Alan Kelly: It is not my normal habit to tell the House about my bedtime reading. Last night I printed out the debate that took place at the Joint Committee on Finance and the Public Service when the banks attended and thought I was reading something from a different age.
Senator Alan Kelly: We need to state the facts bluntly. When the people from the banks were before the committee, they were either not telling the truth or were so incompetent they did not see what was coming down the tracks. Whichever it was, it fills me with fear. I ask the Leader to urge the Government to ensure the same individuals are brought before an emergency sitting of the committee, or some other one, to be asked the difficult questions. When they come before committees they must answer the questions honestly. Legislation passing through the House must be based on their truthful responses, but when they were before the House at that time they were not truthful. Therefore, they must be brought before another committee and asked hard questions. There is also serious concern with regard to the role of the regulator. The boards of the banks should also be replaced and the Government must insist on having somebody on them for at least the next two years.
In 1992 a couple on lower executive salaries were able to borrow X amount of money from financial institutions. In 2007 they were able to borrow five times a correlated amount as in 1992. If that is not evidence of banking gone mad or enough to show regulation does not work or demonstrate greed has got into the system, nothing will show us.
On the issue of health, the Teamwork reports have been promised a long time. We heard about them in January, February, April and June, etc., but have not seen them. The HSE and the Minister for Health and Children are implementing the reports without publishing them. Will the Leader find out if they will be published and, if so, when?
Senator Paschal Donohoe: I support the calls for a debate on local authority funding. At the end of last week Dublin City Council was told it would need to cut back dramatically on its social housing programme for the coming year. I represent many of those people and frequently deal with people who have been on waiting lists for between five and ten years. Those people have seen the Government galvanise itself to put in place a guarantee of at least €500 billion, yet the money cannot be found to put in place housing programmes for the people who need them most. This raises serious questions that should be debated and answered in the House. I support the call for debate on the issue.
I wish to make a brief number of points on the debate we will have this evening. There have been a number of calls this morning for the setting up of cross-European institutions to deal with the issue. Before we consider doing that, we should have a discussion on the European institutions we already have, particularly the European Central Bank. There is little doubt that its monetary policy and the decisions it has made on interest rates have contributed to the mess in which we now find ourselves. That should be discussed in national parliaments.
The issue of compensation packages has been mentioned. Stock options have been a major driver of reckless and irresponsible behaviour on the part of banks. We will now find that, because of the decisions made by this Government, the stock options of executives in these companies have gone through the roof. Regardless of the decisions we make or the content of the legislation which comes before us this evening, we have to address that issue.
I will conclude by referring to the way we have discussed the economy. Whenever commentators from the Opposition or the media raised concerns about the way our economy and banking and financial services sector operated, they were called unpatriotic and accused of talking down the economy. Debate on the subject was thereby curtailed or prevented. We are now seeing the consequences of that lack of serious debate.
Senator Shane Ross: I wish to ask the Leader a question about a matter that puzzles me. What is the rush with this legislation? I understood from yesterday’s proceedings that it was being introduced as emergency legislation, presumably because of the danger that a bank might be in trouble or that people on the markets might act on price sensitive information. Our knowledge since yesterday that legislation was forthcoming has lifted stock prices, which may or may not be a positive outcome. Given that today there is no problem for the markets or anywhere else with a delay, what is the rush? Why can we not take more time with this legislation rather than rushing it through tonight? Some of the suggestions made this morning, particularly on this side of the House, were constructive and well-thought out. They cannot be accurately targeted because nobody has had sufficient time to examine the legislation but the more I study it, the less happy I am with it.
My reaction to yesterday’s events was the same as every other Senator on this side of the House, namely, that we have to back a rescue operation of this sort because the alternative would be disastrous. A myth about this legislation already exists in the public arena which suggests that it is merely a guarantee. A reading of the Bill, however, reveals that a guarantee is only one element of its provisions. It makes broad reference to financial support, which it specifically describes as “a loan, a guarantee, an exchange of assets and any other kind of financial accommodation or support.”
Senator Shane Ross: This is not a doomsday situation; it is a case of the Government being able at any time to give a loan to a bank that is in trouble. I did not even realise that yesterday. It is important that we are given time to study this Bill before we rush it through. I ask the Leader again why our deliberations have to be finished by midnight. Why can we not at least be given an additional day to consider it?
Senator Donie Cassidy: Senators Fitzgerald, O’Toole, Alex White, Boyle, Coghlan, Bacik, Regan, MacSharry, de Búrca, Healy Eames, Norris, Twomey, Kelly, Donohoe and Ross expressed their views on the legislation we will consider this evening. As Senator Ross correctly noted, the Bill will seek our approval for a two year term to recover from the global economic crisis that faces every country. It is not an indefinite period. The legislation gives confidence to many of the people I know who are creating jobs and providing employment. Over the weekend, these people were very concerned.
I advise Senator Healy Eames that the banks in which she has deposited her money are fully guaranteed because she does not have €100,000 on deposit, just as I do not. Both of us are adequately covered in that regard.
Senator Donie Cassidy: We would all wish there was no need for this legislation but, on behalf of the Government, I express appreciation for the support offered by all sides of the Houses of the Oireachtas in the national interest. We are an example to our country, to Europe and to the world and I hope the rest of the world takes heed of this initiative by Government to assist families who have for generations created employment. This is the template on which the recovery of the global economy can be built.
It is my intention to propose on next Wednesday’s Order of Business that we devote part or most of that day to a debate on banking. I also propose that the Seanad should act as the watchdog for activities pertaining to banks in this country for as long as is required.
In 1992, I worked closely with Senator O’Toole and the former Senator, Dr. Maurice Manning, to address the appalling circumstances in which families of former Members found themselves. One Member who had served for eight and a half months had a good managerial job but found himself on the dole queue. These circumstances would not be acceptable in any other walk of life, so why should they be accepted in the Oireachtas? We are fortunate to have someone with the experience of Senator O’Toole who can assist the Oireachtas in getting fair play for the families we represent. These families do not work 40 hours per week in serving their communities, they work 100 hours or more. In particular, our wives and partners spend 18 hours per day on the telephone on behalf of the people of Ireland. Their commitment is difficult to find in any other industry and I assure the House that our goal will be to bring Senators who served in 1960 to parity with the standards of pay and remuneration of those who will serve in 2010.
Senators MacSharry and Donohoe made a timely call for a debate on local government funding. Given that budget day is approaching, I will discuss the matter with party leaders with a view to finding time for a debate.
Senator Norris called for an urgent debate on the Middle East. I can arrange time for that. Senator Kelly requested that I inquire into the Teamwork report on the HSE. I will make inquiries on the matter this afternoon.
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