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Financial Resolution No. 5: General (Resumed) (Continued)

Wednesday, 14 October 2015

Dáil Éireann Debate
Vol. 893 No. 1

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(Speaker Continuing)

[Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin] The Government has put political positioning ahead of everything else during its term. It entered office with the objective of claiming credit for the recovery which it knew would come. Selling the fairy tale of a decisive Government coming into office and turning things around quickly, no matter what the impact, was its single guiding obsession. It did not seek to shape a recovery which would benefit all parts of our society. It merely wanted to play politics with recovery.

To the mounting fury of many Government members and backbenchers, the public have been reluctant to shower them with laurels and re-elect them by acclamation. The problem is that everyone knows that the Government did not deliver this recovery. The economy is growing today at roughly the long-term trend rate predicted by all major research bodies. This is growth built on the foundation of skills and enterprise developed by the people over decades. Ireland is recovering because of its core strengths, not because of a politically obsessed Government which has no interest in long-term issues. The Government did not deliver recovery, but it did make it unfair and divisive. It also allowed crisis after crisis to develop because of a refusal to engage in even basic planning on fundamental issues and its addiction to short-term action.

One of the major problems for the Government is that it is trying to claim credit for growth it does not understand and did not predict. For the first half of its term, growth was lower than it had predicted and now it is higher. The majority of measures to fix the structural deficit were in place before the Government took office. That is a fact which cannot be disputed. If it wants to claim that fiscal retrenchment delivered recovery, the Government has an enormous problem of having campaigned and voted against it budget after budget.

Ireland has a great economic story to tell the world of a dedicated and skilled people and solid foundations, but the Government is refusing to tell it because it gets in the way of its political strategy. The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, was absolutely right when he said those who promised to simply throw out tough policies were making promises which were both unrealistic and foolish. It does, however, take some neck for the Government to attack the policies of the far left here and say, "Who speaks of Syriza now?” It was the Labour Party and Fine Gael who were promising the radical alternative in 2011.  It was they who promised “not a red cent” and “Labour’s way or Frankfurt’s way.”  They were the Syriza of 2011-----

Deputy Willie O'Dea: Information on Willie O'Dea Zoom on Willie O'Dea They were.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin -----but with one major difference - the Labour Party and Fine Gael did not even try to implement their promises. Year after year, Deputies who now lecture us, all from the Government benches, were on their feet demanding more tax cuts and more spending.  It is quite striking that in their recent appearances before the banking inquiry the leaders of Fine Gael and the Labour Party could not find anything wrong with their own policies or priorities before the financial crisis. All that the parties on the left are doing today is copying the Kenny-Gilmore model; therefore, a little less of the smug sanctimony would be in order.

As it comes to the end of a five-year term, the Government is distinguished by the fact that it has never produced a long-term statement of economic policy.  It has maintained a fiscal plan it once attacked as unacceptable and has produced a mountain of self-serving economic commentary, but it has never set out a vision for the future of the economy and the society we want it to support. The capital investment programme is a loose collection of projects thrown together with no sense of vision and no clear objectives.

Deputy Colm Keaveney: Information on Colm Keaveney Zoom on Colm Keaveney It is fantasy.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin It sets out no service standards to be achieved and has no sense of what the bigger picture is.  All major projects involve completing plans made by previous Governments. Fine Gael’s decade old commitment to compulsory health insurance is a shambles which the party’s Ministers and backbenchers are now too embarrassed to talk about. The Government is even trying to change the language around it. Other than that, all we have seen is public relations initiatives.  Many publicly funded bodies have been closed down in order to be reopened and renamed by Ministers. Basic everyday activities have been rebranded and public servants put under orders not to allow anything to happen without a Minister present to announce it.  In fact, the entire machinery of government which should be focused on anticipating and addressing real problems has become dominated by ministerial obsessions with public relations. This has shown itself particularly strongly in the enterprise sector, where announcements which used to be seen as run-of-the-mill are now held up until the right branding is produced and half the Cabinet can attend.

One of the biggest components of the Government’s economic fairy tale is that it claims to have "delivered" or "created" tens of thousands of jobs.  In the first weeks of his Administration, the Taoiseach signalled his intention in this regard by demanding that salary caps be lifted in order that Fine Gael’s most senior press officer could be placed in the Department of Jobs, Enterprise and Innovation with a special brief to relentlessly sell the Action Plan for Jobs as the source of all new jobs. The fact is that the OECD reviewed the Action Plan for Jobs and stated it was impossible to show that it had created extra employment and that the bulk of employment growth was, undoubtedly, down to other economic fundamentals.  In fact, there are elements of the action plan which actually represent reduced activity and, therefore, lost jobs.  This is, for example, the position in the case of research, where a major exodus of scientists has been under way, although it has not stopped the Action Plan for Jobs road show.

In IDA Ireland’s 66 years, it has never had such a clamour from the Government to make a media event out of every announcement.  Once again, the core long-term strength of a State agency and policy is undermined by the focus of political spin.  Even during the worst years of the crisis, inward investment continued and was resilient.  The export sector performed strongly and led the return to growth to the point where Government policies were suppressing domestic demand.

The action plan also introduced a policy now common in all Government actions of renaming existing activity in order to claim something new.  The most cynical example of this was the closing of the county enterprise boards and their rapid reopening with a new name. Job growth has been and will remain strong in the medium term. However, this is where the real force of the two-tiered recovery is being felt.  A drift towards almost separate labour forces is under way, where one has access to highly paid, secure jobs, while the other is caught in low-paid and insecure jobs. It took three years before the Government even admitted this was happening.  In spite of lots of inflated claims, yesterday there was no indication of a genuine commitment to address it. In addition to the banning of exploitative contracts, we need an all-out effort to stop people from getting caught in low-paid, low-security jobs.

We can talk about talent and having to reduce the marginal tax rate. There is a lot of talent.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny Yet the Deputy wants to keep taxes at more than 50%.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin Young graduates would love to be in a position to find a job with a salary of more than €25,000.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny Yet the Deputy wants to keep the taxes at more than 50%. He has moved away from the policies of Seán Lemass.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin There are thousands of graduates in low-paid employment.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny Fianna Fáil wrecked the country.

Deputy Colm Keaveney: Information on Colm Keaveney Zoom on Colm Keaveney The Government wrecked services.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin I heard the Taoiseach speak for 30 minutes. He should listen to some hard facts to know what the reality is on the ground.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The Deputy wants to keep taxes at more than 50%. There has not been one constructive suggestion made here today - not one.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin Nothing in the budget deals with the two-tiered economy. There are thousands of people with low-hour contracts and on low pay.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The numbers have come down and are moving in the right direction.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin That is a fundamental problem with how the labour force is developing. That is the reality.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The Deputy wants to keep taxes at more than 50%.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin I spoke to the ESRI about this issue and it is very concerned.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The Deputy will vote against these tax cuts.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin The gulf between the upper, middle and lower levels is expanding dramatically. We need to improve provision significantly for apprenticeships, both in terms of numbers and regional spread. We need an initiative to give people access to generous support in upskilling.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny We are doing that.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin We also need comprehensive child care provision, an issue to which I will return.

Deputy Willie O'Dea: Information on Willie O'Dea Zoom on Willie O'Dea The Government is not doing that.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin A number of half-measures were included in the budget to help the SME sector, but they come nowhere near showing a vision to relieve the pressures felt by the sector and set out a model for its development. Every single target to make credit available to SMEs has been missed. They continue to be squeezed by State-owned banks which are being fattened for a rapid sale. If Ireland is to have a long-term balance and sustainability in its economy, it needs to have a vibrant and innovative SME sector.  This work has barely started. In addition, the Government's capital gains tax moves are too little, too late and in no way make us competitive in terms of what is happening to new companies and the CGT treatment they receive in the United Kingdom.

One of the striking things about current industrial and employment policy is how little it has changed.  The core strategies of the main agencies are largely those which were put in place a decade ago.  They target the same general activities and have evolved rather than reinvented supports.  Given just how much has changed in this period, this suggests we need more innovation in policy and less innovation in publicity. A long-term policy which has unequivocally worked for Ireland is the decision to invest heavily in advanced research.  When the last Fine Gael-Labour Party Government left office, the entire dedicated budget for basic research in the education sector was zero.


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