Archive: 15th October 2008

Budget lacks vision on childcare

15th October 2008

Yesterday’s Budget was yet another disappointing example of the Government’s lack of vision and innovation on childcare.

Proposals by the National Economic and Social Forum, which were supported by my party, set out a universal system of early child care, which would cost less than the combination of funds currently dedicated to child care through the early child care supplement and the subvention scheme.

And yet, yesterday the Minister for Finance put more pressure on parents and childcare providers by reducing by almost a quarter the allocation for the National Investment Programme.

That programme provides grants for childcare providers, helping them set up new businesses and maintaining existing ones. Although providers want to maintain the cost of childcare at a manageable level for the average parent, this cut will only heap more pressure on providers and parents.

The Government is reneging on its own promise to stimulating childcare places and jobs in the sector.

It is yet another example of this Government’s lack of ambition and innovation to help the youngest and most vulnerable in our society.

At these pressing economic times, children should never be first to be targeted.

We could be innovative and adopt a child care system that would require less investment while achieving something real and substantial for our children.

We need to bring such thinking to bear on the budget in the coming days. I hope we will do that and discharge our responsibility as a Parliament in doing so.

At present there is no Irish guarantee

8th October 2008

I support and agree with concerns about the delay in bringing forward the scheme which the Minister for Finance said would come before both Houses. We have seen what happened this morning in the UK. I do not believe it is accurate to say that the UK Government has copied the Irish Government. That is not true. The UK Government has taken preference shares in the banks it has proposed to assist and it has included a requirement that any bank wishing to participate in the scheme must sign up to an agreement on executive pay and dividends. There are many other differences between the UK Government’s proposal and what has been done here.

The Financial Regulator has said there is no difficulty with the capitalisation of the Irish banks. However, we have been asked to accept other statements from and about the banks in recent months which have proven not to be true. I note a nuance in the comments of the Minister for Finance this morning. He says he does not believe there is a difficulty with under-capitalisation. However, the Minister for Finance rather ominously stated that things are changing by the day. Therefore, it is not at all clear that there is not a difficulty with under-capitalisation in the Irish banks. What is the current position in Ireland with respect to the guarantee?

There is no guarantee is the answer.

The Minister for Finance and the Government announced an intention to provide a guarantee, which was a plan for the future, but there is no guarantee for today. This is a serious situation of which I do not make light as a topic for debate. However, the seriousness of the situation is increased with a further delay in the presentation of the scheme.

The delay also raised the question of what we were doing here last week in the overnight session. What was the point of it? We passed enabling legislation which has not been acted upon. Therefore, apart from the amendments to the competition legislation which, although important are marginal, the content of the legislation, the scheme and the guarantee are meaningless because nothing has been carried out. What were we doing here overnight last week? I do not have any difficulty with making myself available, nor do my colleagues. However, the sum total of our efforts add to nothing as nothing has changed. Our job is not to provide an overnight supporters’ rally for the work of the Government or the Minister for Finance. We are legislators and we are constitutionally required to scrutinise proposed legislation. The scheme was supposed to be brought before the Houses. Unless and until this happens there is no Irish guarantee; it simply does not exist yet. This is a reflection of the seriousness of the matter.

The Government’s intentions are becoming less, rather than more, clear with each day. The Minister for Finance has now indicated, perhaps correctly - I do not claim he has no basis for the comments, but it shows how unclear the position is - the possibility of a limit on the amount of deposits banks can take on. The developments in the UK this morning will have implications for foreign owned banks operating in Ireland. That may have implications for our scheme and there is the wider EU context. The situation is sliding by the day. All of the talk and congratulation we indulged in last week for being first into the breech now rings hollow. It looks like we are now one of the last into the breech in completing a proper scheme to put before the Houses and implement a guarantee. At present there is no Irish guarantee.

More :: I raised these issues in the Seanad and they were featured on RTE’s Oireachtas Report. Click here to view the programme (from 6min 10secs onwards).

Good intentions on hunger need to produce clear results

8th October 2008

I welcome the publication of the Hunger Task Force’s excellent report. It contains not just an account of the problem but also contains quite a few compelling and clear pointers as to what might be done by countries, including Ireland, to attack this problem. I noted in particular the reference in the report to hunger being a failure of governance. If anything this is an understatement. The distinguished authors of the report state, “This amounts to a governance failure at many levels.” Perhaps the most devastating statement in the entire report is a self-evident statement but which bears repeating. “Despite numerous commitments, there appears to be a willingness amongst both the international community and national governments, to live with the current extent of global hunger.” It is unfortunate but this appears to be true. Whereas practical steps have been taken and many more can be taken, this is not a problem that we can say, with hand on heart, has in any sense been genuinely or substantively tackled by the international community with any kind of clear results in recent years, despite a considerable amount of good intentions at international level.

The Minister of State for Overseas Aid used the term, “war on hunger”. I agree with his use of such a phrase. However, it may seem a strange view but in the context of the war on terror, the notion of an international war on something has been devalued in many ways because of the manner in which that rhetoric has been used in the past six or seven years by some world leaders. The idea of a war on terror has been reduced to a rhetorical notion. When the Minister of State refers to a war on hunger I know he does not intend that to be a rhetorical statement but one that has real meaning. His reference to the question of political will is well taken because it is a question of political will. We can outline and describe the problem and give examples and recall the historical significance of hunger and famine in our own country. I do not mean to devalue the contributions but it is more difficult to ensure that the fundamental problem is dealt with.

I congratulate the authors of this report and I congratulate the Government for publishing it. We have had in recent days a good deal of political debate and argument about a certain other matter, described by a Minister as “the current position” regarding the banking and economic crisis. There will be political disagreement on that issue but there will never be political disagreement with the Government on the part of my party in so far as the Government is dealing with this issue. There will not be one moment of disagreement nor a moment of opposition from my party.

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Some humility is called for from the banking community

7th October 2008

Today’s Order of Business focused on the continuing story of the financial situation and the news that came from Aer Lingus last night. Here’s an edited transcript of what I said:

Some humility is called for from the banking community and especially its leaders. We have all suffered from sleep deprivation in recent days given the onerous task which was before us. However, I had to rub my eyes when I heard that one of the individuals concerned made a series of demands regarding what the Government should do with universal child benefits, which he believed should be attacked, State pensions, and that medical cards for the over 70s should be abolished. This proposal comes from one of the people who were saved and whose bank was in some difficulty last week. If this person has trouble with his day job, which appeared to be the case last week, perhaps he could have a future in the entertainment industry as a comedian of some sort?

For this person to suggest to the Government that it should consider such cuts when he has been the beneficiary of such largesse, the extent of which we do not yet know, seems extraordinary.

Today the Irish Congress of Trade Unions sponsors a very important event, called the world day for decent work, which I wish to comment on briefly. Such days come and go and frequently they do not mean much, but this is important. The notion and principle of regulation have been dirty words for two decades. However, they are suddenly back in vogue in certain quarters because of the banking crisis. Aer Lingus announced today its intention to chop off whole sections of its operation, replacing reasonably well paid jobs with what inevitably will be lower paid jobs.

In those circumstances, it is timely that we should draw attention to the fact that approximately 200,000 people in this country earn less than €10 an hour. That is the reality of what an army of low paid and low skilled employees are facing. I call for a debate on unemployment but we must look to see what we are talking about in that regard. It is not just a notional issue. These are real people who face real challenges in terms of living their lives on low pay and without much hope being offered to them by the Government. We should have that debate.

Everybody is now coming around to the view held by those on these benches that regulation is something that should be examined again.

Time for the Oireachtas to scrutinise the financial mechanisms

1st October 2008

It is completely 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 would be called upon at some point in the future. That is a cost or at least a contingent cost or liability.

A second cost is that there is a real risk that the ability of the Irish State to borrow and the interest rates that would be charged to the State 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. We want more detail from the Minister for Finance as to how he will exercise the powers he will take and the extent of the scrutiny that will be brought to bear on the banks, but what about the scrutiny that 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 Public Service and 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 Public Service dealt with this issue and I took the opportunity last night to check back on the debate on the matter in July.

I suggest that people examine the transcript 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 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. 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.

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.

More :: Click here to read the Credit Institutions (Financial Support) Bill 2008

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