The Taoiseach wants the Opposition parties to reveal their hands long before he reveals his own. It’s like asking Giovanni Trappatoni to show his tactical notes to his French counterpart a full 24 hours before the Paris game starts. Dream on Brian.
The Pre Budget Outlook is a dishonest and deceitful document.
What credence can citizens give to a document that purports to set out income and expenditure for the coming year but does not provide a clue as to the ongoing cost of the banks to the exchequer for 2010?
There was no provision in the April budget for Anglo Irish Bank yet the Minister borrowed €3.8 billion to hand over to that bank, a decision that grossly inflated the exchequer deficit for the year.
Without a clear statement on the provision for banks in 2010, how can we honestly debate how many billions we can afford for health, welfare and pay?
Anglo Irish Bank is a clear and present danger to our national solvency and, if more billions are to be thrown into the Anglo incinerator, we are entitled to be aware of that on Budget day.
Your failure to make any indication of your attitude to further billions for the Anglo bonfire is an act of gross deception.
You said all along that the bank bailout would cost us nothing.
My God, were you wrong.
Now you want to hide the true cost we had to pay in 2009 and you want to maintain that pretence by leaving it out of the budget arithmetic and the national accounts for 2010.
The deficit for 2009 will be €26bn, but nearly €3.8bn of this is down to Anglo.
Coincidentally, this is almost the same figure as your targeted budget correction for next year.
The Minister and Fianna Fail want us to believe that the budget deficit and the bank bailout are entirely unconnected.
But, the inconvenient truth is that if it wasn’t for that Anglo €3.8bn, the deficit would have been far closer to your April target and we might be beginning to see some progress.
To escape from the NAMA hangover, I have been reading the memoirs of Deputy Bertie Ahern.
A glutton for punishment you may well say.
What lessons has the peace process for us as we attempt to deal with our economic woes?
Two features stand out to me.
Nothing is agreed until everything is agreed
We all jump together
Both are of vital importance now. The main gripe people had earlier this year was the sheer unfairness of the cuts and the feeling that some sections of society were exempt.
The Taoiseach tells us ‘we are all in this together’.
It is far from clear that ‘we’ really means what is says on the tin, that everyone has to make a contribution and be seen to make a contribution in a balanced way.
Justice has to be done and Justice has to be seen to be done.
The Labour Party accepts a deficit reduction target of €4 billion as long as the actual measures do not cause even further contraction in the economy.
Leaving Party politics aside, there is both an ethical and an economic dimension to this.
On the ethical side, this is about fairness. On the economic side, it is a question of minimizing the deflationary impact of the budget.
Indeed, I am deeply worried about the deflationary impact of the Minister’s proposals. It seems the principal target of the cuts will be the low paid, social welfare and health.
The impact of cuts on the spending power of the least well off will be far more deflationary than, for instance, effecting €1bn in savings through closing property tax shelters and other tax loopholes principally availed of by the super-rich.
We want to cut the deficit percentage. Spending cuts are part of the mix but cannot be the sole component of the Budget Day package.
The Minister never tires of repeating his Apocalypse Now scenario although he never acknowledges his own and his party’s complicity in creating this situation. How often we hear the refrain ‘we are where we are’.
Oh no Minister.
We are where you, your leader and your party have brought us. Those who feathered their nest as a result of your actions and your policies cannot be allowed to withdraw to the sidelines while everyone else picks up the pieces.
In 2007 Minister O’Keefe boasted that Ireland had 33,000 millionaires. Now those millions are well and truly hidden from public gaze and we are repeatedly told that the poor souls have taken such a hit that they cannot cough up anything extra now.
How different it is elsewhere. I read that in Germany there are moves afoot among the wealthiest to put together a national recovery fund, with as much as € 100 billion to assist that country’s efforts.
Now that is wartime psychology, everyone pulls together to protect the country they love. In the USA, billionaires campaign for additional taxation on wealth to demonstrate social solidarity during the emergency.
Have I heard a single squeak from our home grown millionaires to echo that call? All I hear are special pleas that no pot of gold exists. Ansbacher Man has gone into retirement but his sons and daughters have inherited the same mindset.
When things get tough, the tough pack up and run. Bertie Ahern let the cat out of the bag as he feted his good friend Mr Fitzpatrick of Anglo Irish fame.
I’m sure Seanie has a bit stashed away, said Mr Ahern. Oh I’m sure he has. And so have many like him.
We have the Revenue accounts which tell us what was the effective rate of taxation for the top echelon; it was 9%. Oh yes 9%.
Millionaires they may have been, even billionaires, but Fianna Fail in government faithfully served their interests and tweaked the tax code in a thousand ways to accommodate them and release them from the obligation to contribute their fair share.
Are they still free of that obligation in Mr Lenihan’s mindset? Or do those people have to jump together with the rest of us?
I can say without equivocation in this House that my party will face the obligation to meet the deficit target. In our last spell in government we produced the first balanced budget in a generation so we have form on this and we have total commitment to financial stability.
But we will agree nothing until everything is agreed and that everything has to be a balanced mix that can command the confidence of the whole society.
So don’t come along to me to ask do I agree with this or that cut.
I agree to nothing unless it is part of a fair mix.
I will agree to an awful lot if it is.
You bite the bullet (or the garlic) on fair taxes at the top and I will bite some others.
Minister, you spoke of wartime. Was that just your usual rhetoric? If we are genuinely in a wartime scenario and I personally think we are, then the obligation for national effort and sacrifice falls on everyone.
Can there be tax exiles in a wartime economy? If you live here, do business here, then you pay your share, no ifs, no buts, no special pleas.
Our tax system is hugely unbalanced and the mild reform measures of recent years have only scratched the surface of tax justice. I have been talking in this House about the iniquity of property tax reliefs till I was blue in the face. Look at the damage they caused.
Read Dr Peter Bacon’s account of the situation in the hotel sector and gasp that any responsible Minister could have skewed the tax code in such a catastrophic way.
If we are to jump together then tax reform and tax justice is a core part of the equation.
I am not a supporter of high marginal rates. I never have been. The high marginal rates of yesteryear are a nightmare scenario.
But low tax rates have to go side by side with the principle that everyone pays their share. There are people in this country who talk of low taxes when they really mean ‘NO TAXES.’
That has to end and end now.
I am convinced that the wealthiest sector in Ireland who own a wholly disproportionate share of our nation’s wealth can readily stump up at least a billion of the €4 billion sought in 2010.
The McCarthy Report came out on July 16th. In each chapter there are suggestions about agencies, about administrative cuts, about savings which individually are of no great consequence but collectively add up to a great deal.
Some were so obvious that I am amazed that we did not have announcements to implement them on July 17th.
Why the procrastination?
Is it that Ministers got cold feet about their own sections?
Did Minister O’ Cuiv refuse point blank to walk the plank as suggested?
How could you have sanctioned a huge ad in this weekend’s papers for a new Secretary General of a Department that may be abolished?
Is there joined up government at all?
Yes there are big spend Departments but there are also 10 other Departments where efficiencies could deliver a good slice of savings, as much as €500 million in total.
I want to have a clear undertaking from the Taoiseach that party politics has no place in this effort. McCarthy made some proposals that may raise the hackles of particular TDs who are part of the Government voting majority . Do these deputies have a veto on McCarthy proposals they don’t like? If we are all in this together then there can be no special cases or vested interest just to keep individual TDs on board.
Curiously the Minister has baulked at publishing the report on Higher Pay Grades. Some of these salary levels have grown excessively in recent years and are no longer justified.
That is why we advocate a cap. That applies to the Taoiseach, the President, to Ministers, to senior grades in the public service generally. The combined savings is worth the effort in itself.
No less important is the signal it sends that the Government means business. Percentage cuts, 10 % here, 5 % there are not the way to go at the top. A cap is a serious indicator of intention. Let us see where we get with this suggestion as a start. Then we can work down the scale.
It is just impossible to ask for cuts in pay generally until it is accepted that those at the top show serious intent in reducing salary levels that have been allowed to drift up through the tyranny of percentage increases that gave most to those already at the highest levels.
I repeat that we accept the case to reduce the headline deficit by € 4 billion. That will involve uncomfortable cuts and I don’t shirk from those in any way as long as you accept the basic principles I mentioned… that we all jump together and nothing is agreed till everything is agreed.
I am told that scientists use an especially strong conditional expression called IFF. It means if and only if.
So in conclusion I offer support for this €4bn budget target:
1. If and only if the burden of sacrifices is shared and seen to be shared by measures that require a major contribution from those who own the lion’s share of our nation’s wealth.
2. If and only if salary reductions oblige those on the highest incomes to sacrifice most and those on the lowest are protected.
3. If and only if the spending cuts are spread across the board in each Department and are focused on the elimination of duplication and other sources of waste and inefficiency.
4. If and only if there is compelling evidence of deep cuts in the cost of maintaining this bloated Government with all the perks and luxuries accumulated for far too long.
There are 3 weeks left to Budget Day. In those 3 weeks Ministers have an opportunity to build a sense of national unity that would help us to deal with the crisis. Just now only some are in the firing line to make sacrifices while others, who can easily afford to take a hit, are assured that their pot of gold is safe.
That is no way to build a national spirit.