Recovery Plan is bill for economic failure

November 25, 2010 § Leave a comment

The Four Year Plan released yesterday afternoon will affect every man, woman and child in this country.  It is devastating – the price we must pay for political incompetence.  Within a matter of hours, I gave a speech to the Seanad.  You can read the whole debate by clicking here.

I welcome the opportunity to participate in this debate on the plan published by the Government this afternoon. This plan is in many ways the bill for economic failure. Regrettably, it is a bill that must be paid over a period of some years.

Having listened to Senator Boyle, I have a real sense that he is finding his voice on some issues and that he may be, in terms of some of the things he said, feeling a sense of political liberation. I agree with much of what he had to say. There is a sense that people have been codding politicians, and not perhaps only Government politicians, and that they may have been unwitting participants in the illusion that we can fund and have the type of public services to which we aspire and should have for our citizens and children, and that these can be sustained and managed at a particular level of taxation. A stark statement on page 91 of the plan, with which no one could disagree, states : “We have eroded the income tax base to an unsustainable level”. This is manifestly true. However, I do not believe income tax is the only element we need to examine in the context of from where we raise taxes. I agree with Senator MacSharry and others who said that it is necessary that we not confine ourselves to only looking at income tax. We do not wish to raise taxes for the hell of it but so that we can look towards having a sustainable economy and public service in respect of which there is certainty in terms of funding into the future. We must never again think we can pin everything on the type of transitional taxation we had during the so-called boom.

I recall sitting beside a politician on a radio programme prior to the last general election. She was a supporter of the then Government and is not now a Member of the Houses. I recall her seeking to sustain the argument over many minutes on that radio programme that it was possible to reduce taxes and improve public services. I do not understand how it would have been possible then or since to do this.

The extent to which any of us was party to such an illusion was a mistake but the principal responsibility must lie with the Government regarding these matters. Opposition politicians can from time to time be criticised for calling for this and that. It is sometimes legitimate to engage in such criticism but it is greatly dwarfed by the legitimate criticism that one can level at a government that has failed to carry out the policies it ought to have implemented.

The document, regrettably and sadly, is a bill and it is not particularly detailed. It has detailed aspects and although it purports to contain a growth strategy and a jobs strategy, it does not. There is nothing new in the narrative on these areas. There is a great deal of generalised, aspirational material, with which it would be impossible to disagree, but there is little relating to a jobs strategy. The IMF is constantly being invoked but its officials are in the House and, in an interim report published earlier this week, they rightly identified the urgent necessity for a growth strategy and to put in place serious measures to get people back to work. That is what we need. « Read the rest of this entry »

How can consulting the electorate be a ‘distraction’?

November 23, 2010 § Leave a comment

From today’s Order of Business in the Seanad…

We have a caretaker Government, a significant portion of which has essentially handed in its notice and is operating on the basis that the Dáil and Seanad will be dissolved early in the new year, although how early is not clear. We know the Finance Bill was enacted on 3 April this year. Does the Leader or the Deputy Leader have any view on what was meant by the reference to financial measures? It could take us until April to deal with all of the financial measures.

I reiterate that it is a matter for the Government to introduce and pass the budget. The Constitution is clear on the issue. In circumstances in which we have only a caretaker Government it is not reasonable or appropriate to suggest the Opposition parties should act as some kind of surrogate Government when it comes to the single most important job of a Government, which is to introduce a budget.

There is much talk about whether an election would constitute a distraction. I take offence at the notion that consulting the people would be inappropriate. How could consulting them at this grave time be a distraction?

I believe in parliamentary democracy in which people are given a mandate to make decisions. They do not consult because the system does not allow them to consult at every hand’s turn for everything done in Parliament; it is necessary to repose trust in parliamentarians. However, at a time as grave as this, was it ever more necessary, appropriate and desirable that the people be consulted on what should be done?

I constantly say the Government does not have a mandate to do what it is doing, but the Opposition does not have a mandate anymore than the Government does to introduce proposed budgetary measures. Senator O’Toole says the budget should be put through, but it is not an undifferentiated thing as if we just had a quick vote on it. It will include measures that will affect ordinary citizens, including cuts in welfare and other changes. It is not just a question of getting over the line; it will include a host of measures that will need to be considered and which will affect ordinary citizens. In a sense, they are the ones who should be in the driving seat, not on every individual measure, but at a time as grave as this, what is the problem?

I know people are concerned about delay and I do not underestimate the gravity of the international situation and the implications of a delay, as others mentioned. I do not believe a delay would be particularly desirable, but when everything is balanced and knowing that there will be difficulties for whatever Government is in place in coming weeks and, by extension, the country, it is vital that the people who elect Members to the other House which needs to make a decision on the budget, be consulted at this time.

Time for Government to level with the people

November 18, 2010 § Leave a comment

Last night, the Seanad debated renewing the Bank Guarantee Scheme.  Although the Labour Party voted against it, it passed the house 26-19.  I used the opportunity to raise the events of the past few days in my own speech…

I listened to the debate with some interest. Some of the points made were not without significance, especially one or two points made by Senator Boyle to which I will return. I was most struck by what Senator Quinn said. I understood him to say, essentially, that this debate, unfortunately, can be reduced to the proposition – these are not his words, I am paraphrasing what he said – that the Seanad has no choice but to support the motion.

I will not support it because there is a choice. This harks back to what happened in September 2008. On the question as to whether there was no choice on the fateful night in question, the Governor of the Central Bank, Professor Honohan, has never stated the Government was faced with only one option or that it could have taken only one course of action, namely, that of providing a blanket guarantee. Neither the Honohan report nor any of the other reports bears out the proposition that only one course of action was available. The central consequence of what took place on the night in question and subsequently when the Houses endorsed the Government’s approach was that options were closed off. The introduction to the heart of the Government’s banking policy of a guarantee of the nature and extent of the bank guarantee closed off all other options.

There has been much debate about burning bondholders and so forth. The Fine Gael Party took the perfectly legitimate view that the bondholders should have been required to share some of the pain. It was not possible, however, to achieve this outcome once the guarantee was in place. A number of the policies advocated, including the Labour Party policy of taking the banks into public ownership for a period and the policy of sharing the pain, as it were, the position taken by the Fine Gael Party, were recognised by Professor Honohan and others as legitimate options. However, it was not possible to achieve any of them once the guarantee was introduced.

Senators have argued that it is time to forget the banking crisis because it is not connected to the deficit of €19 billion and instead look to the future by focusing the debate on how we deal with the deficit. It is absurd to suggest the legacy of the banking crisis can somehow be divorced from what we need to do to address the budget deficit. The budgetary and banking crises may be different issues, but they are intimately bound up with one another.

Last night’s television and radio coverage featured a great deal of commentary. Stephanie Flanders of the BBC nailed the issue very well when she noted that bondholders who had looked at the Irish deficit of €19 billion and were advised that the Government planned to introduce a budget and four-year plan to slash the deficit only had to look a little deeper to see that the legacy of the banking crisis lay right beside the deficit problem that needed to be addressed. They do not only see that the current deficit must be reduced to below 10% next year, by a further margin in the subsequent year and to 3% by 2014, the reason being they do not see the issue in a mechanical way. While the Senator may want the House to debate the deficit and forget about the banks, the legacy of the banking crisis spooks the whole crisis, both in its economic and budgetary aspects. It forms part of the crisis and cannot be divorced from it. If anything, the events of recent days and the insistence by eurozone and ECOFIN Ministers that there cannot be a direct feed of aid to the banks, as Senator Boyle described it, indicate that the Government is on the line. The Irish sovereign has been infected by the banking crisis. The position of the sovereign and the financial position of the Government, as perceived internationally, are undershot by our banking problems. There is no point in wishing these problems away because they are at the heart of the crisis. « Read the rest of this entry »

Can we trust the government anymore?

November 17, 2010 § Leave a comment

From today’s Order of Business…

I respectfully disagree with the suggestion that criticism of what the Government has done in the past is an entirely separate matter from what we have to deal with now. The two are intimately bound up for two reasons. First, the Minister for Finance and others on the Government side have spent a number of weeks trying to persuade us that the budgetary crisis and the banking crisis are entirely separate. This effort has been made repeatedly in this debate in the past two to three weeks. We have been asked to stop talking about the banks and just talk about the budget when we know that the banking crisis and the central policy failures in regard to banking, and at the top of which failures I would put the blanket guarantee given more than two years ago, are inextricably and intimately bound up with where we are at the moment in regard to the crisis the country is in. We cannot see our way to analysing and debating this issue in any kind of credible way without having regard to these central policy failures, the legacy of which we are facing day in, day out.

The second reason we cannot separate the two things is the issue of trust. Can we trust the Government? We can disagree with those in government and that is fine. We all know that we disagree with them but can we trust them or believe what they say? The problem is that trust and legitimacy immediately flow out of any government, leaving aside whether one agrees or disagrees with those in government, if one cannot believe what that government says. One cannot possibly have any trust in that government. The people cannot have trust in a government, some of whose members at the weekend described as fiction that there were ongoing discussions on bailouts or related matters.

Another Minister, Deputy Dempsey, who was standing beside the Minister in question shook his head and indicated he did not know anything. Either the Ministers knew what the position was and misrepresented it or they did not know what it was, in which case what are they doing in the Government? What is going on in the Government in relation to policy?

My brothers who live in the United States are as well informed about what appears to be taking place as are the people here who are being informed by the Government. This morning’s interview by the Minister for Finance hit rock bottom in that respect. There is no frankness or honesty, without which one cannot have trust and-or legitimacy.

Getting budget over the line is primarily the job of government

November 9, 2010 § Leave a comment

In seeking consensus on a particular course of action one would have to know the proposed course of action before answering the question as to whether one agreed with it. That is a first principle.

For example, if consensus is being sought on a four-year plan, we will have to see the plan before we can decide whether we agree with it. Is that not straightforward? Anyone can see that that is agreeable.

From the brief reports I have heard on the meetings which took place with the Commissioner this morning, I do not know whether matters have changed specifically. However, there appears to be less certainty about the figure of €15 billion in the four-year adjustment period. The three main parties are agreed on the need to make an adjustment in order that we can get to the figure of 3% by 2014. There should be no question about that target, but what will it actually mean? We know that up to three weeks ago the Government believed the adjustment figure would be €7.5 billion which quickly became €15 billion. Three scenarios were presented by the Government for the budget to be announced in December. On 22 October The Irish Times reported Government sources as saying the Department of Finance was seeking an adjustment of €4.5 billion. Only two and a half weeks ago the figure was €4.5 billion, it is now €6 billion. Anyone may look to the Opposition for consensus or certainty, but we must look to the Government in the first place for a sense of what is going to happen. I agree and accept that the situation is fluid. The Government must examine the growth predictions for next year and where we will be this time next year with the unemployment figures and so on. I accept that matters are in a state of flux, but Senators on the other side of the House should not demand certainty from the Opposition, a demand they do not make of the Government. This is simply not logical.

It is the principal objective of the Government to prepare a budget, present and have it passed by the Dáil. There is a lot of talk about whether the Opposition parties will help to get the Government over the line. The Government must get the budget over the line. If it cannot do so, it will lose not just the confidence of the people, it will also lose the confidence of Parliament and have to go. That is the way our democratic system works. It does not mean, however, that we are against adopting a co-operative approach. We will do everything we can, for example, concerning the adjustment to be made in the budget. The Labour Party will come forward not just with a clear and specific set of objectives, it will also show how they can be achieved. When we talk about consensus, let us be clear about what we mean. Let it be understood that, in the first instance, this is the job of the Government.

Alex on the Radio

November 8, 2010 § Leave a comment

Over the weekend, I was on both RTE Radio1 and Today FM.  On Saturday, I was on the Saturday View panel with Rachael English.  My fellow contributors were Minister Pat Carey, Fionnan Sheehan of the Irish Independent, UCD Lecturer Karl Whelan and barrister Suzanne Kelly.  The budget cuts and impending byelections were the main topics of conversation.  To listen again, click here.

On Sunday, I joined Sam Smyth on Today FM along with Minister of State Mary White and Cathal Lee of the Construction Industry Federation. Click here for the show in full again.

Future of Seanad Éireann on the line

November 4, 2010 § Leave a comment

Last night, a motion was put down on Seanad Reform by the Independent Senators.  You can view the motion here.  Following the debate, the motion was put to a vote where the government was defeated 28-27. Below, you’ll find my speech from the night.

There is an element of this debate that is profoundly depressing because it is shot through with a terrible feeling of déjà vu. This is at least the third time in my short time in this Chamber when I have stood up to make pretty much the same contribution I am about to make. That is not acceptable, and it is not acceptable that the Minister, Deputy Gormley, would finish his speech to the House in January 2010 with the following conclusion:

We seem to be some way off cross-party consensus on reform of the Seanad and I will be reporting this conclusion to the Government. I intend to submit a report for discussion with my colleagues in government shortly. We will have regard to the views expressed by all parties and the commitments given in the programme for Government. We will then consider the next steps to be taken in the process. While consensus remains elusive, I have previously informed the House that the absence of consensus cannot be allowed to lead to paralysis. It is my ambition that the Government will press ahead with reforms from which successive Governments have shied away.

He is correct about successive Governments having shied away. I will take that criticism in so far as it involves parties on this side of the House. However, that is now almost one year ago. The Minister had said the same thing in the House some months earlier and the Minister of State, Deputy Áine Brady, said the same thing again today. Senator Fitzgerald was right to ask whether this proposal has been brought to Government.

We cannot fly everything on the electoral commission. Either the Government has serious proposals to bring forward or it does not. Perhaps it should just say it does not see Seanad reform as being a priority at this time. That is what I gathered from listening to the Minister of State and, although it is not what she in fact said, it was what any reasonable person would have concluded. She tipped us off when she asked what we were doing about it. I wonder what the Leader , Senator Cassidy thinks about the very thinly veiled criticism of some of the procedures and practices in the House. For example, the Minister of State was unhappy today that we had two debates about the Seanad and wanted to know what reforms we were bringing forward ourselves. In so far as it goes, that is not an unreasonable point for her to make but it does not constitute a response to this debate.

I and others have raised this issue repeatedly. On the Order of Business last week, I asked the Leader to name one reform, however minimal, he had brought forward in the lifetime of this Seanad. Out of respect, I tried to maintain my practice of not interrupting when he replies to the House and although sometimes I fail, on that occasion I did not. He announced in his reply that he had brought about a change, namely, a practice had been introduced whereby Ministers who made statements in the House would take questions. That is not a reform that has been introduced since 2007 because it has been in Standing Orders for many years. Therefore, the sum total of the reform that has been introduced since we all were elected to the House in 2007 is exactly zero. « Read the rest of this entry »

Where Am I?

You are currently viewing the archives for November, 2010 at The White Board | Alex White TD.