ECONOMY AND FINANCE
Each speech listed here is an edited speech. If you'd like to see the speech or debate in full, please go to the Oireachtas website and click on "Seanad Eireann" and then "Seanad Debates" and click on the relevant date as listed with each speech on this page.
Protection of Employees (Agency Workers) (No. 2) Bill 2008 (12/03/08)
Company Directors (12/03/08)
National Competitiveness (26/02/08)
Credit Union Savings Protection (03/10/07)
Finance Bill 2007 – Stamp Duty Change and Housing (03/07/07)
Building Societies Bill (06/07/06)
Credit Cards (03/07/06)
National Economic and Social Development Office Bill (04/05/06)
National Pensions Reserve Fund (03/05/06)
Finance Bill 2006 (28/03/06)
Decentralisation (21/03/06)
Social Partnership (07/02/06)
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Protection of Employees (Agency Workers) (No. 2) Bill 2008
12/03/08 - The legislation is very simple. .. This is a one-principle Bill in that all it is calling for is equal pay for equal work. There is no complexity attaching to it.
The practices that are taking place are purely exploitative. Agency workers are being taken on and used. .. I can assure the House that this legislation would help social partnership. Would we be prepared to wait for consensus on social partnership? It is a bit like considering how we dealt with issues in the past. We must determine what we are talking about. We are talking about people in bondage, who are tied in a bond in a country far from home. They are transported, and almost trafficked, to Ireland and put into tied work where they are used and abused. This used to happen in the past and it was called slavery. How long would we have waited if President Abraham Lincoln had been told to hang on for consensus in the south of the USA and they would surely get rid of slavery in a short time? This is not an issue of consensus; this is an issue of right and wrong. I want to hear just one person tell me why it is right for two people doing the same job to be paid different amounts of money.
It is a simple question. People will then state that we will get them to work for nothing or for half nothing so that we can be competitive. They will end up telling me that that is right and that is the basis on which we build our economy.
Members on all sides of the House fought for 40 years to ensure we were fair and protected people in employment. There were 100,000 people on the streets of Ireland less than two years ago when they saw what was happening in Irish Ferries. People did not like it. It did not meet the vision Irish people have of themselves. It was not right that people were recruited into bonded employment on the ships and paid pence to do work which should have attracted greater money.
It is not complex and anyone who tries to introduce complexity into this argument is not examining the reality as we look at it. It is a matter of equal pay for equal work, of protecting, giving dignity to and respecting people.
I do not want to live in a country where we bring people in from abroad, employ them in factories and keep them tied to there, such as we have heard. A Member cited the example of Pakistani workers in a restaurant who were being paid €50 a month. Mushroom pickers in another part of Ireland were found to be spending almost their entire wages on their substandard accommodation. This is not a correct image of modern Ireland. This is not what the Celtic tiger was about. This is not why we tightened our belts in 1987, 1990 and 1995. This is not the vision we had. The vision we should have is of a place where people do their best and are rewarded for it. It is a place where we have allowed market forces to develop.
The other aspect of this is that if an Irish worker cannot get a job because an agency worker has been employed at half the price of the Irish worker, that feeds xenophobia. Irish workers ask whether such people are taking their jobs. These people do not even know whose job has been taken. They have arrived looking for work, have been employed and, suddenly, are objects of hate and the focus of attention, The result is a growth in the level of xenophobia. We cannot allow that to happen.
There is no basis for doing anything other than accepting the principles in this legislation. It cannot be right to do otherwise. The only question we must ask ourselves is what is right in this situation. What is right is either to accept this Bill, introduce something similar or deal with the issues in it. There is no way other than the right one on this matter.
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Company Directors
12/03/08 - The Director of Corporate Enforcement, Paul Appleby, has raised again the difficulty he is having in implementing our legislation requiring that we deal with directors who, for various reasons, have acted recklessly. I refer to people who, for some reason, have been found by the courts not to be fit persons for the office of director. Mr. Appleby feels he has not the authority to implement the legislation. … The easiest way to deal with this matter is to ask the Minister of State at the Department of Enterprise, Trade and Employment, Deputy John McGuinness, who deals with this area and who has recently discussed regulation in the House, to indicate the needs in this area and explain how the legislation works, if it is workable, such that we can be sure that those acting as directors are fit to do so. He should state whether the legislation needs to be changed.
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National Competitiveness
26/02/08 - Will the Leader consider arranging a debate on the annual report of the National Competitiveness Council? I requested on a prior occasion that we debate the report because it brings to light certain issues. At this time of the year, when people are involved in negotiations relating to national wage agreements, there is much discussion regarding labour costs, etc. The report to which I refer is an eye-opener in the context of what really costs in this country. If one examines the areas in which unit costs are highest in international terms, one can see that it is not a matter of labour costs because we can supply labour quite cheaply.
It is interesting but hardly surprising that the report indicates that the two highest unit costs in Ireland are the cost per hour for the services of a lawyer and the cost of mobile telephone calls. When put in the context of all the discussions we have had over the years about rationalising telecoms and selling off Eircom to make it more competitive and allow for cheaper prices, it is a joke that we are now the highest in the world in terms of the costs of mobile calls for people setting up business here. We are also the second highest in international comparisons in terms of the cost of water and waste. It is important that we make known our views on these issues and are aware of items and services that are expensive.
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Credit Union Savings Protection
03/10/07 - In the spring of this year, the Independent Senators introduced a motion on credit union savings to achieve a guarantee of savings protection and a system that would be independent of all representative bodies and others. There was a long debate in the House and at its conclusion the Government Members did not disagree with my proposal that savings in credit unions should have exactly the same level of protection and guarantee as those in a bank. They said Government representatives were in talks with the Irish League of Credit Unions in conjunction with the Financial Regulator and they intended to conclude them by 31 March, after which they would move on the issues.
The Government has not been as good as its word on this issue and we therefore need to address it. I have a duty to introduce my Bill. I do not mind if the Financial Regulator or Minister for Finance say clearly they disagree with what I propose but I know my proposal is correct. I am getting telephone calls from all sorts of people who are afraid to speak out and do not want to rock the boat. I am afraid we will see a run on credit unions such as we saw in respect of Northern Rock. If there is a lack of confidence, this is what will happen. Will the Leader ask the Minister for Finance to address the issue?
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Finance Bill 2007 – Stamp Duty Change and Housing
03/07/07 - I received a heartfelt letter from a Mr. Ciarán Doyle — I am sure he sent a copy of it to the Minister — which states: “I listened to Minister Brian Cowen in his budget speech and I believed him and I acted on that basis.” I believe the Minister was telling the truth at the time. I am not for one moment suggesting he misled the House. On that basis he and his partner did a deal on a house in January and concluded it in the middle of March, thereby missing out on €25,000 by two weeks. Such things happen.
However, this man and his partner acted on the Minister’s statement. No matter what date is set on any issue, there will always be somebody on the wrong side of the line. This issue is slightly different in that the people in question acted on the basis of what the Minister said and on the basis of the budget. ….. It is an important issue for the Minister. I know he would consider it to be so. The man in question and his partner will be paying the guts of €2,000 per month on their house for the next 30 or 35 years and €25,000 would mean a lot to them. I ask the Minister, therefore, to consider what I propose in the amendment I have tabled for the next Stage, which is also included in some of the other amendments, and to backdate this measure to 1 January, the beginning of the tax year, in line with his, the Minister’s, commitment. It is not unfair to ask this.
I was the only Member who argued some years ago that the first-time buyer’s grant did nothing for first-time buyers. I did not join in the general chorus when the grant was changed.
The Minister claims the buyer will buy to his or her ability. In other words, he or she will examine the overall cost of the house, the purchase price and taxes. He also made the point that the abolition of stamp duty will not necessarily reduce the price of a house as it is factored into it. That is a fair argument. Anyone purchasing a house would factor in the stamp duty when seeking funds.
The Minister compared house prices from last year to this year but did not factor in the differences made with the removal of stamp duty. … Applying the Minister’s argument that people will spend what they can afford, the stamp duty factor must be considered in making a real-time adjustment in house prices between this and last year.
Will the Minister consider the supply and demand and population factor? What is happening in the private rental market is similar to what happened prior to achieving 80,000 housing units being built annually. Before that, rents were higher than they are currently. The price of apartment rentals in Dublin was higher in 2001 than at present. Within the past seven to eight months rentals have again approached that level.
I should like to hear the Minister’s views on this, but I do not believe the housing market will collapse. It cannot collapse. I am looking at an increased population, higher rental costs and a reduction from 80,000 houses per year to what the banks suggest will be around 55,000 or 60,000. I agree with the Minister that the market cannot collapse on that basis.
However, the point made …. about our over-reliance on construction .. is an enormous fear and I should like to hear more from the Minister on how this may be counteracted. As he said, the proportion of GDP or GNP dependent on construction is far in excess of what we would be comfortable. We need to hear about plans beyond that.
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Building Societies Bill
06/07/06 - While this is important legislation, I must say I find it very depressing and discouraging. It is clear that market forces are at work and this is inevitable. The Minister of State had no choice but to move forward and deal with the issues being dealt with in this Bill. I wish it were not so. I am committed to the concept of mutual societies and I regret their demise but the fact is this is happening. That is the way the market is moving and the way we must follow in this respect.
However, it is important to recognise what is involved when we talk about, to use the word used by the Minister of State,“conversion” or demutualisation. In a mutual society, the society and its assets are owned by the members. These are the members who have a loan from the society. Following the conversion to a public limited company, the company is then owned by the shareholders. The shareholders must get their dividend and profit. They get that by squeezing the mortgagees. In other words, they must put pressure on the people who are repaying their mortgages not only to run the company but to create a profit for the shareholders. Therefore, there is an extra tier of costs which is loaded on to the process and which must be paid for by the mortgage holder. That means we are moving away from the concept of people looking after each other in the buying of houses. It is one further step to make life more difficult for people who are trying to cope with paying for the cost of buying a house. In that sense, it is tragic.
I listened recently to comments by the Educational Building Society on this proposal. They were that the society was delighted about this legislation and that it would give it added protection. I have read through the Bill and do not see where there is any such added protection in it. Nothing has changed. It was never the position that people could walk into the AGM of a building society and bring a motion that the society would be demutualised and get it passed.
People should recognise that there is no added support for mutualisation in this legislation. It does not make life any worse for those societies who wish to remain as mutuals and that is a good thing. Neither does it in any way make it less likely that they will demutualise. That is the case.
I have always had a keen interest in it (the EBS) and closely followed its progress. I have admired the way it managed its business and the way it is trying to maintain mutuality, but I do not believe that it will succeed. Market forces will overwhelm building societies eventually and they will move in that direction.
I am disappointed this legislation is before us. I wish we did not need to have it.
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Credit Cards
03/07/06 - It is the view of some commentators throughout Europe that countries should introduce legislation to restrict the number of credit cards a person can hold and to require banks and other financial institutions to check on the number of credit cards held by a person before issuing a new one. In addition, such legislation would stipulate that in order to move beyond the limit and acquire an additional card, a person must cancel an existing card.
Current arrangements regarding credit cards are anti-competitive and run contrary to the rules and tenets of the Treaty of Rome and the European movement. Due to the current anti-competitive franchising arrangements, a person can only acquire a credit card in his or her own country. This state of affairs is ridiculous given the existence of a common European market. These arrangements are both anti-competitive and dangerous.
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National Economic and Social Development Office Bill
04/05/06 - We need to give a clear guideline as to what goes on in the partnership talks. In every partnership discussion going back to 1987 — I was involved in every one — we would begin with the most recent report from the NESF and NESC and on that would build the partnership process. That is how important these organisations are. They are not prescriptive but they outline the situation. Issues are agreed in principle, then they are fleshed out in negotiation.
We must be competitive. When one hears a discussion on competitiveness, it almost always boils down to how much workers are being paid, which is only one small part of the issue. The job of the trade union side has been to say it is not only that and that it is about profits, etc.
When we create the wealth, we must decide what to do with it, which is the crucial part. We have grown the wealth of the country by 5% this year, so what should we do with it and who should get it? How difficult is that? The longer one spends thinking about it, the more difficult it gets but one can begin with the top-line issues. Some of that money will have to be reinvested in industry or in whatever is creating wealth and in research and development to ensure our industries develop and more wealth is created. If we do not do that, we will have no future. That is crucial for the following reason. We will no longer make widgets or have huge manufacturing industries. Any add-on value we create will come from intelligence — intellectual add-on and investment. That is why we need research and development in new products, new markets, new industry and new services. If that is not done, we will have no future.
The Government uses tax revenue to run the country and look after people, including some of those who have taken a profit because they still send their children to school, avail of the health service, drive on the roads, use the airports, etc. These are real issues and as soon as we bring them together, we recognise that is what social partnership is about.
Social partnership is important because if we did not have it, we would have a comfortable situation where people would not go outside their own tents. The trade unions would never have to eyeball or do face time with those on the other side of the argument. If the social partners did not have to deal with each other, they would never have to hear the arguments of those on the other side. If those on the business side did not have to argue their point or listen to the other side, life would become very easy.
In all of that, we try to raise the boats of all groups. However, we have failed to look after people who need more help because this has become a competitive and survivalist society. Recently I listened to a French person living here whose view was that this is a great country in which to live if one is healthy, doing well and working in a good job but that it is a difficult one in which to live if one needs support or help. That is why we must welcome this legislation.
This legislation copper-fastens much of the basis for the above, which is why I commend it. It is the way forward. Even if there is no partnership agreement, there will always be partnership. If there is no partnership, we would spend our time pulling each other apart. For many years, we have had the best industrial relations record in Europe. No country has had fewer strikes. In fact, public service strikes are almost unheard of in Ireland these days compared with what we have seen in France, Belgium, Italy and Germany in the past year where there have been strikes over pensions, public services, investment and labour law, issues which are dealt with in partnership negotiations here and, as consequence, it is a boost for the economy. This legislation is important as it gives a statutory basis to the various bodies.
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National Pensions Reserve Fund
03/05/06 - On a number of occasions I have supported fundamentally the establishment of the National Pensions Reserve Fund. It is the essence of good politics to take a decision that will not bear fruit for more than 20 years because it means there is nothing in it for the person taking the decision. I also believe that the Government since then has been right to ensure that nobody could get their fingers into the trough of the National Pensions Reserve Fund.
It is worthwhile reminding ourselves what exactly has emerged from the National Pensions Reserve Fund. During the first quarter of this year it showed a return of 5.4%. More importantly, it showed a return last year of 20%, which is great. It is also important to recognise that in 2002-03 when equities fared badly and the fund did not do well that politicians from all sides, including Senator Ross, were the first to say that this was not astute management. I welcome the opportunity of putting on the record that the kind of management that has taken place under the aegis of the National Pensions Reserve Fund has been very good in terms of its objective, which is to have 9% in small cap equities and in private equity over the next four or five years. This is most shrewd.
Senator Ross referred to far higher returns than the National Pensions Reserve Fund has achieved but it would be helpful if he made the comparison with pension fund management as opposed to equity fund management and the kind of approach that must be taken. The fact that the National Pensions Reserve Fund people have managed to get a 6% compound increase over the past four or five years is something on which it should be complimented.
Another point that has not been made is that when this fund was established in the first place there was a concern about the problem of paying for our pensions from the year 2020 onwards and that because there would be so few people working to support those people who would no longer be working this would cause a major problem for the future. One significant thing has happened since then, that is, thankfully, that there has been a huge influx of immigrants to this country in order to ensure the growth of our economy and to pay our pensions in the future. Every time we hear it said in debate that people are coming to this country and supposedly taking Irish people’s jobs, even though they are jobs Irish people do not want to do, we should point out that this is how our pension will be paid. What is happening is that this is securing our future.
The other thing we need to say which is not something the Department of Finance is inclined to say, but it is worth saying, is that even in 2000 or 2001 when we established this fund and when we were worried about our exposure and liability in the future we had a lesser pro rata exposure than, for instance, Italy or Germany and they have not taken anything like these measures. We have been far more astute in dealing with that problem and at the same time our problem has eased so it is fair to say we have made significant progress.
The point the Minister made in his contribution is one which we need to examine and which is not understood by too many people — that people paying their stamps will have their basic social welfare pension and when we talk about having an obligatory pension that it is building on top of that. We should say to people that by paying their PRSI, people will develop an entitlement to the social welfare fund but that will not be enough to look after them. If one wants the level of comfort to which one is used, one must also make a commitment to a private investment. That is the future.
We should put some simple facts to the public when we talk about this matter in future. First, our investment is a good idea and that it is properly and responsibly managed. Second, when we ask people to invest in pensions in future we should stress that it is to give them a level of comfort which they will not otherwise have. They are doing it for themselves. Third, it does not take from the social welfare pension which would still be available. Fourth, that putting all one’s eggs in one basket is what one does if one invests in property instead of in a pension fund. That is exactly what is wrong with it.
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Finance Bill 2006
28/03/06 - I congratulate the Minister on the budget. I particularly welcome the move he made on an issue I raised with him last year, namely, the importance of taking the minimum wage out of the tax net — it was done — and on the issue of child care, which I also raised with him. I recognise the advances that have been made in those two difficult areas. There are many other aspects of the Bill on which I could dwell but it is moving in the right direction. There are areas in which I would like to see more advances. There are aspects with which I am not completely happy and there are suggestions I would like the Minister to take on board.
The proposal the Arts Council made to the Minister to extend the artists’ exemption scheme to other areas like choreography should be done. That is something that might be examined.
I know what the Minister’s officials will say when I talk about VAT exemption on certain issues. They will say we hear this every year in respect of education and so on but the question of VAT exemption on supply of goods or expertise to non-profit making events of an artistic nature, which have been so defined, should also be included and I ask the Minister to examine that.
In my contribution to the debate on last year’s Finance Bill I asked the reason we could not get back to the issue of grants for eco-friendly changes to houses. I refer here to micro-generators, wind and water generators, solar panels, geothermal heating and so on. I express my appreciation for the announcement made this year on that issue, which is a progressive step.
The biggest issues we are facing currently are eco-environmental issues. They are issues of dependency on oil and the problem of waste and wasted energy. I end my contribution with this thought. I did some research on this area and looked at west Kerry as an example. The energy needs of all of west Kerry could be catered for with three 1.5 MW output wind generators. They would cater for everything and put something into the grid. Similarly, west Kerry could deal with all its waste. If any community is prepared to look after all its waste and energy needs and feed more back into the grid, those communities should get some reward in the form of a tax break for doing so. It is an opportunity to do something creative and progressive. All politics is local and every time there is a proposal, whether it is for an incinerator, a wind energy project or whatever, an objection is made but let people buy into this idea. Give them control and responsibility for their own environment and let us look at doing something creative. I ask the Minister to consider that for next year’s budget.
Significant advances in micro-generation have been made. When I was first elected to this House, everyone, including me, thought that we had more or less reached the limit in terms of hydroelectric energy. Now, with the advances in micro-generators, that is no longer the case and smaller rivers and areas can also be developed. However, this would probably require a tax break.
I regard the Minister’s proposals to lift excise duties on various forms of biofuels to be positive and progressive. I have spoken to people involved in the industry to inquire why more people and farmers have not become involved in it. The explanation was simple and pertained to a lack of certainty. People require a fixed timescale and someone must state that it is planned to hold the excise duties in this fashion for the next ten years, in order that people can enter the industry at agricultural, supply and product levels.
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Decentralisation
21/03/06 - I supported the proposals on decentralisation provided they would be done on a voluntary basis. It will undermine the process of decentralisation if we reach a position where a person’s career prospects will grind to a halt by virtue of what is being proposed. It is unfair to say to a person that he or she can be promoted provided the person is prepared to sell his or her house, take his or her children out of school, incur expense in various ways and move to a different location in order to continue his or her career.
That is wrong because people had clear and understandable expectations about how decentralisation would proceed. Any other group of workers, including Members of this House, might react in the same manner if someone was to unnecessarily pull the rug from under them.
This issue should be debated soon. I understand that 13% of the decentralisation programme has been carried out, which is satisfactory progress. From the outset it was ridiculous to think that decentralisation could be implemented in three years. It will take seven or eight years to implement the programme at the best of times. Decentralisation can work and is progressing but will be undermined if people are compelled to decentralise.
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Social Partnership
07/02/06 - The most important aspect of social partnership is that it has delivered. It is worthwhile reminding ourselves, particularly at a time when people criticise society and what we have achieved, of where we were in 1987 before this process began. In 1987, we had a debt to GNP ratio of 150%, emigration was running at 40,000 a year, there were no jobs for people here and approximately 18% were unemployed. People were struggling with mortgage interest rates of between 14% and 15% at a time when inflation figures were astronomical, sometimes in the high single figures, and strikes were running at something like one day per year for every three workers, which is now one day per year for one in every 20 workers. There is no comparison.
Within an economy there must be a beginning and an end. The beginning is the creation of wealth and the end is the sharing of the wealth. How can we do that in a fair way? What is the rule or the formula? How do we move it forward? That is what social partnership is about.
We must look to the common good where the entrepreneur, the banker and the marketeer will get their share, as will the people in our society who are dependent and in poverty and who need support. Finding that balance is what social partnership is about; it is not rocket science. It is a question of looking at people who cannot get houses or jobs and looking at those who have houses and jobs and marrying them together in a fair and equitable fashion. That is what social partnership is about and it is no more than that.
What happens in social partnership is a model people talk about time and again, namely, real consultation. Along one side of it sit the industrialists and the business people. Along another side sit the members of the farming community. The labour and trade union representatives sit along another side and the voluntary and community groups sit on another side. They are the people who work for nothing in many cases and who support those who need help. They do everything from dealing with people with disability or special needs to problems of poverty, housing, unemployment, etc.
All those people sit around the table and the Government representatives listen to them but the crucial point that is always missed is that the others have to listen to each other also. They are forced to listen. It is a civic forum where people are forced to listen and engage in argument with those who have a completely different point of view. That is what we need to do. It is then about fairness and how we move that on.
It is also a process about forcing people to sign in blood on the bottom line and to stick with the agreement. Every time I hear politicians talking about not being involved in the social partnership discussions I reflect on how lucky they are. The day one engages is the day one has to stick with what is agreed and that would not suit too many politicians who would have signed up to defend the downsides as well as the upsides to an agreement. If one has not signed up to something, it is much easier to come into this House to express total opposition to benchmarking. Nonetheless, quite happy to accept it.
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Seanad debates are available in full on the Oireachtas Website
Each speech listed here is an edited speech. If you'd like to see the speech or debate in full, please go to the Oireachtas website and click on "Seanad Eireann" and then "Seanad Debates" and click on the relevant date as listed with each speech on this page.
Protection of Employees (Agency Workers) (No. 2) Bill 2008 (12/03/08)
Company Directors (12/03/08)
National Competitiveness (26/02/08)
Credit Union Savings Protection (03/10/07)
Finance Bill 2007 – Stamp Duty Change and Housing (03/07/07)
Building Societies Bill (06/07/06)
Credit Cards (03/07/06)
National Economic and Social Development Office Bill (04/05/06)
National Pensions Reserve Fund (03/05/06)
Finance Bill 2006 (28/03/06)
Decentralisation (21/03/06)
Social Partnership (07/02/06)
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Protection of Employees (Agency Workers) (No. 2) Bill 2008
12/03/08 - The legislation is very simple. .. This is a one-principle Bill in that all it is calling for is equal pay for equal work. There is no complexity attaching to it.
The practices that are taking place are purely exploitative. Agency workers are being taken on and used. .. I can assure the House that this legislation would help social partnership. Would we be prepared to wait for consensus on social partnership? It is a bit like considering how we dealt with issues in the past. We must determine what we are talking about. We are talking about people in bondage, who are tied in a bond in a country far from home. They are transported, and almost trafficked, to Ireland and put into tied work where they are used and abused. This used to happen in the past and it was called slavery. How long would we have waited if President Abraham Lincoln had been told to hang on for consensus in the south of the USA and they would surely get rid of slavery in a short time? This is not an issue of consensus; this is an issue of right and wrong. I want to hear just one person tell me why it is right for two people doing the same job to be paid different amounts of money.
It is a simple question. People will then state that we will get them to work for nothing or for half nothing so that we can be competitive. They will end up telling me that that is right and that is the basis on which we build our economy.
Members on all sides of the House fought for 40 years to ensure we were fair and protected people in employment. There were 100,000 people on the streets of Ireland less than two years ago when they saw what was happening in Irish Ferries. People did not like it. It did not meet the vision Irish people have of themselves. It was not right that people were recruited into bonded employment on the ships and paid pence to do work which should have attracted greater money.
It is not complex and anyone who tries to introduce complexity into this argument is not examining the reality as we look at it. It is a matter of equal pay for equal work, of protecting, giving dignity to and respecting people.
I do not want to live in a country where we bring people in from abroad, employ them in factories and keep them tied to there, such as we have heard. A Member cited the example of Pakistani workers in a restaurant who were being paid €50 a month. Mushroom pickers in another part of Ireland were found to be spending almost their entire wages on their substandard accommodation. This is not a correct image of modern Ireland. This is not what the Celtic tiger was about. This is not why we tightened our belts in 1987, 1990 and 1995. This is not the vision we had. The vision we should have is of a place where people do their best and are rewarded for it. It is a place where we have allowed market forces to develop.
The other aspect of this is that if an Irish worker cannot get a job because an agency worker has been employed at half the price of the Irish worker, that feeds xenophobia. Irish workers ask whether such people are taking their jobs. These people do not even know whose job has been taken. They have arrived looking for work, have been employed and, suddenly, are objects of hate and the focus of attention, The result is a growth in the level of xenophobia. We cannot allow that to happen.
There is no basis for doing anything other than accepting the principles in this legislation. It cannot be right to do otherwise. The only question we must ask ourselves is what is right in this situation. What is right is either to accept this Bill, introduce something similar or deal with the issues in it. There is no way other than the right one on this matter.
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Company Directors
12/03/08 - The Director of Corporate Enforcement, Paul Appleby, has raised again the difficulty he is having in implementing our legislation requiring that we deal with directors who, for various reasons, have acted recklessly. I refer to people who, for some reason, have been found by the courts not to be fit persons for the office of director. Mr. Appleby feels he has not the authority to implement the legislation. … The easiest way to deal with this matter is to ask the Minister of State at the Department of Enterprise, Trade and Employment, Deputy John McGuinness, who deals with this area and who has recently discussed regulation in the House, to indicate the needs in this area and explain how the legislation works, if it is workable, such that we can be sure that those acting as directors are fit to do so. He should state whether the legislation needs to be changed.
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National Competitiveness
26/02/08 - Will the Leader consider arranging a debate on the annual report of the National Competitiveness Council? I requested on a prior occasion that we debate the report because it brings to light certain issues. At this time of the year, when people are involved in negotiations relating to national wage agreements, there is much discussion regarding labour costs, etc. The report to which I refer is an eye-opener in the context of what really costs in this country. If one examines the areas in which unit costs are highest in international terms, one can see that it is not a matter of labour costs because we can supply labour quite cheaply.
It is interesting but hardly surprising that the report indicates that the two highest unit costs in Ireland are the cost per hour for the services of a lawyer and the cost of mobile telephone calls. When put in the context of all the discussions we have had over the years about rationalising telecoms and selling off Eircom to make it more competitive and allow for cheaper prices, it is a joke that we are now the highest in the world in terms of the costs of mobile calls for people setting up business here. We are also the second highest in international comparisons in terms of the cost of water and waste. It is important that we make known our views on these issues and are aware of items and services that are expensive.
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Credit Union Savings Protection
03/10/07 - In the spring of this year, the Independent Senators introduced a motion on credit union savings to achieve a guarantee of savings protection and a system that would be independent of all representative bodies and others. There was a long debate in the House and at its conclusion the Government Members did not disagree with my proposal that savings in credit unions should have exactly the same level of protection and guarantee as those in a bank. They said Government representatives were in talks with the Irish League of Credit Unions in conjunction with the Financial Regulator and they intended to conclude them by 31 March, after which they would move on the issues.
The Government has not been as good as its word on this issue and we therefore need to address it. I have a duty to introduce my Bill. I do not mind if the Financial Regulator or Minister for Finance say clearly they disagree with what I propose but I know my proposal is correct. I am getting telephone calls from all sorts of people who are afraid to speak out and do not want to rock the boat. I am afraid we will see a run on credit unions such as we saw in respect of Northern Rock. If there is a lack of confidence, this is what will happen. Will the Leader ask the Minister for Finance to address the issue?
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Finance Bill 2007 – Stamp Duty Change and Housing
03/07/07 - I received a heartfelt letter from a Mr. Ciarán Doyle — I am sure he sent a copy of it to the Minister — which states: “I listened to Minister Brian Cowen in his budget speech and I believed him and I acted on that basis.” I believe the Minister was telling the truth at the time. I am not for one moment suggesting he misled the House. On that basis he and his partner did a deal on a house in January and concluded it in the middle of March, thereby missing out on €25,000 by two weeks. Such things happen.
However, this man and his partner acted on the Minister’s statement. No matter what date is set on any issue, there will always be somebody on the wrong side of the line. This issue is slightly different in that the people in question acted on the basis of what the Minister said and on the basis of the budget. ….. It is an important issue for the Minister. I know he would consider it to be so. The man in question and his partner will be paying the guts of €2,000 per month on their house for the next 30 or 35 years and €25,000 would mean a lot to them. I ask the Minister, therefore, to consider what I propose in the amendment I have tabled for the next Stage, which is also included in some of the other amendments, and to backdate this measure to 1 January, the beginning of the tax year, in line with his, the Minister’s, commitment. It is not unfair to ask this.
I was the only Member who argued some years ago that the first-time buyer’s grant did nothing for first-time buyers. I did not join in the general chorus when the grant was changed.
The Minister claims the buyer will buy to his or her ability. In other words, he or she will examine the overall cost of the house, the purchase price and taxes. He also made the point that the abolition of stamp duty will not necessarily reduce the price of a house as it is factored into it. That is a fair argument. Anyone purchasing a house would factor in the stamp duty when seeking funds.
The Minister compared house prices from last year to this year but did not factor in the differences made with the removal of stamp duty. … Applying the Minister’s argument that people will spend what they can afford, the stamp duty factor must be considered in making a real-time adjustment in house prices between this and last year.
Will the Minister consider the supply and demand and population factor? What is happening in the private rental market is similar to what happened prior to achieving 80,000 housing units being built annually. Before that, rents were higher than they are currently. The price of apartment rentals in Dublin was higher in 2001 than at present. Within the past seven to eight months rentals have again approached that level.
I should like to hear the Minister’s views on this, but I do not believe the housing market will collapse. It cannot collapse. I am looking at an increased population, higher rental costs and a reduction from 80,000 houses per year to what the banks suggest will be around 55,000 or 60,000. I agree with the Minister that the market cannot collapse on that basis.
However, the point made …. about our over-reliance on construction .. is an enormous fear and I should like to hear more from the Minister on how this may be counteracted. As he said, the proportion of GDP or GNP dependent on construction is far in excess of what we would be comfortable. We need to hear about plans beyond that.
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Building Societies Bill
06/07/06 - While this is important legislation, I must say I find it very depressing and discouraging. It is clear that market forces are at work and this is inevitable. The Minister of State had no choice but to move forward and deal with the issues being dealt with in this Bill. I wish it were not so. I am committed to the concept of mutual societies and I regret their demise but the fact is this is happening. That is the way the market is moving and the way we must follow in this respect.
However, it is important to recognise what is involved when we talk about, to use the word used by the Minister of State,“conversion” or demutualisation. In a mutual society, the society and its assets are owned by the members. These are the members who have a loan from the society. Following the conversion to a public limited company, the company is then owned by the shareholders. The shareholders must get their dividend and profit. They get that by squeezing the mortgagees. In other words, they must put pressure on the people who are repaying their mortgages not only to run the company but to create a profit for the shareholders. Therefore, there is an extra tier of costs which is loaded on to the process and which must be paid for by the mortgage holder. That means we are moving away from the concept of people looking after each other in the buying of houses. It is one further step to make life more difficult for people who are trying to cope with paying for the cost of buying a house. In that sense, it is tragic.
I listened recently to comments by the Educational Building Society on this proposal. They were that the society was delighted about this legislation and that it would give it added protection. I have read through the Bill and do not see where there is any such added protection in it. Nothing has changed. It was never the position that people could walk into the AGM of a building society and bring a motion that the society would be demutualised and get it passed.
People should recognise that there is no added support for mutualisation in this legislation. It does not make life any worse for those societies who wish to remain as mutuals and that is a good thing. Neither does it in any way make it less likely that they will demutualise. That is the case.
I have always had a keen interest in it (the EBS) and closely followed its progress. I have admired the way it managed its business and the way it is trying to maintain mutuality, but I do not believe that it will succeed. Market forces will overwhelm building societies eventually and they will move in that direction.
I am disappointed this legislation is before us. I wish we did not need to have it.
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Credit Cards
03/07/06 - It is the view of some commentators throughout Europe that countries should introduce legislation to restrict the number of credit cards a person can hold and to require banks and other financial institutions to check on the number of credit cards held by a person before issuing a new one. In addition, such legislation would stipulate that in order to move beyond the limit and acquire an additional card, a person must cancel an existing card.
Current arrangements regarding credit cards are anti-competitive and run contrary to the rules and tenets of the Treaty of Rome and the European movement. Due to the current anti-competitive franchising arrangements, a person can only acquire a credit card in his or her own country. This state of affairs is ridiculous given the existence of a common European market. These arrangements are both anti-competitive and dangerous.
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National Economic and Social Development Office Bill
04/05/06 - We need to give a clear guideline as to what goes on in the partnership talks. In every partnership discussion going back to 1987 — I was involved in every one — we would begin with the most recent report from the NESF and NESC and on that would build the partnership process. That is how important these organisations are. They are not prescriptive but they outline the situation. Issues are agreed in principle, then they are fleshed out in negotiation.
We must be competitive. When one hears a discussion on competitiveness, it almost always boils down to how much workers are being paid, which is only one small part of the issue. The job of the trade union side has been to say it is not only that and that it is about profits, etc.
When we create the wealth, we must decide what to do with it, which is the crucial part. We have grown the wealth of the country by 5% this year, so what should we do with it and who should get it? How difficult is that? The longer one spends thinking about it, the more difficult it gets but one can begin with the top-line issues. Some of that money will have to be reinvested in industry or in whatever is creating wealth and in research and development to ensure our industries develop and more wealth is created. If we do not do that, we will have no future. That is crucial for the following reason. We will no longer make widgets or have huge manufacturing industries. Any add-on value we create will come from intelligence — intellectual add-on and investment. That is why we need research and development in new products, new markets, new industry and new services. If that is not done, we will have no future.
The Government uses tax revenue to run the country and look after people, including some of those who have taken a profit because they still send their children to school, avail of the health service, drive on the roads, use the airports, etc. These are real issues and as soon as we bring them together, we recognise that is what social partnership is about.
Social partnership is important because if we did not have it, we would have a comfortable situation where people would not go outside their own tents. The trade unions would never have to eyeball or do face time with those on the other side of the argument. If the social partners did not have to deal with each other, they would never have to hear the arguments of those on the other side. If those on the business side did not have to argue their point or listen to the other side, life would become very easy.
In all of that, we try to raise the boats of all groups. However, we have failed to look after people who need more help because this has become a competitive and survivalist society. Recently I listened to a French person living here whose view was that this is a great country in which to live if one is healthy, doing well and working in a good job but that it is a difficult one in which to live if one needs support or help. That is why we must welcome this legislation.
This legislation copper-fastens much of the basis for the above, which is why I commend it. It is the way forward. Even if there is no partnership agreement, there will always be partnership. If there is no partnership, we would spend our time pulling each other apart. For many years, we have had the best industrial relations record in Europe. No country has had fewer strikes. In fact, public service strikes are almost unheard of in Ireland these days compared with what we have seen in France, Belgium, Italy and Germany in the past year where there have been strikes over pensions, public services, investment and labour law, issues which are dealt with in partnership negotiations here and, as consequence, it is a boost for the economy. This legislation is important as it gives a statutory basis to the various bodies.
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National Pensions Reserve Fund
03/05/06 - On a number of occasions I have supported fundamentally the establishment of the National Pensions Reserve Fund. It is the essence of good politics to take a decision that will not bear fruit for more than 20 years because it means there is nothing in it for the person taking the decision. I also believe that the Government since then has been right to ensure that nobody could get their fingers into the trough of the National Pensions Reserve Fund.
It is worthwhile reminding ourselves what exactly has emerged from the National Pensions Reserve Fund. During the first quarter of this year it showed a return of 5.4%. More importantly, it showed a return last year of 20%, which is great. It is also important to recognise that in 2002-03 when equities fared badly and the fund did not do well that politicians from all sides, including Senator Ross, were the first to say that this was not astute management. I welcome the opportunity of putting on the record that the kind of management that has taken place under the aegis of the National Pensions Reserve Fund has been very good in terms of its objective, which is to have 9% in small cap equities and in private equity over the next four or five years. This is most shrewd.
Senator Ross referred to far higher returns than the National Pensions Reserve Fund has achieved but it would be helpful if he made the comparison with pension fund management as opposed to equity fund management and the kind of approach that must be taken. The fact that the National Pensions Reserve Fund people have managed to get a 6% compound increase over the past four or five years is something on which it should be complimented.
Another point that has not been made is that when this fund was established in the first place there was a concern about the problem of paying for our pensions from the year 2020 onwards and that because there would be so few people working to support those people who would no longer be working this would cause a major problem for the future. One significant thing has happened since then, that is, thankfully, that there has been a huge influx of immigrants to this country in order to ensure the growth of our economy and to pay our pensions in the future. Every time we hear it said in debate that people are coming to this country and supposedly taking Irish people’s jobs, even though they are jobs Irish people do not want to do, we should point out that this is how our pension will be paid. What is happening is that this is securing our future.
The other thing we need to say which is not something the Department of Finance is inclined to say, but it is worth saying, is that even in 2000 or 2001 when we established this fund and when we were worried about our exposure and liability in the future we had a lesser pro rata exposure than, for instance, Italy or Germany and they have not taken anything like these measures. We have been far more astute in dealing with that problem and at the same time our problem has eased so it is fair to say we have made significant progress.
The point the Minister made in his contribution is one which we need to examine and which is not understood by too many people — that people paying their stamps will have their basic social welfare pension and when we talk about having an obligatory pension that it is building on top of that. We should say to people that by paying their PRSI, people will develop an entitlement to the social welfare fund but that will not be enough to look after them. If one wants the level of comfort to which one is used, one must also make a commitment to a private investment. That is the future.
We should put some simple facts to the public when we talk about this matter in future. First, our investment is a good idea and that it is properly and responsibly managed. Second, when we ask people to invest in pensions in future we should stress that it is to give them a level of comfort which they will not otherwise have. They are doing it for themselves. Third, it does not take from the social welfare pension which would still be available. Fourth, that putting all one’s eggs in one basket is what one does if one invests in property instead of in a pension fund. That is exactly what is wrong with it.
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Finance Bill 2006
28/03/06 - I congratulate the Minister on the budget. I particularly welcome the move he made on an issue I raised with him last year, namely, the importance of taking the minimum wage out of the tax net — it was done — and on the issue of child care, which I also raised with him. I recognise the advances that have been made in those two difficult areas. There are many other aspects of the Bill on which I could dwell but it is moving in the right direction. There are areas in which I would like to see more advances. There are aspects with which I am not completely happy and there are suggestions I would like the Minister to take on board.
The proposal the Arts Council made to the Minister to extend the artists’ exemption scheme to other areas like choreography should be done. That is something that might be examined.
I know what the Minister’s officials will say when I talk about VAT exemption on certain issues. They will say we hear this every year in respect of education and so on but the question of VAT exemption on supply of goods or expertise to non-profit making events of an artistic nature, which have been so defined, should also be included and I ask the Minister to examine that.
In my contribution to the debate on last year’s Finance Bill I asked the reason we could not get back to the issue of grants for eco-friendly changes to houses. I refer here to micro-generators, wind and water generators, solar panels, geothermal heating and so on. I express my appreciation for the announcement made this year on that issue, which is a progressive step.
The biggest issues we are facing currently are eco-environmental issues. They are issues of dependency on oil and the problem of waste and wasted energy. I end my contribution with this thought. I did some research on this area and looked at west Kerry as an example. The energy needs of all of west Kerry could be catered for with three 1.5 MW output wind generators. They would cater for everything and put something into the grid. Similarly, west Kerry could deal with all its waste. If any community is prepared to look after all its waste and energy needs and feed more back into the grid, those communities should get some reward in the form of a tax break for doing so. It is an opportunity to do something creative and progressive. All politics is local and every time there is a proposal, whether it is for an incinerator, a wind energy project or whatever, an objection is made but let people buy into this idea. Give them control and responsibility for their own environment and let us look at doing something creative. I ask the Minister to consider that for next year’s budget.
Significant advances in micro-generation have been made. When I was first elected to this House, everyone, including me, thought that we had more or less reached the limit in terms of hydroelectric energy. Now, with the advances in micro-generators, that is no longer the case and smaller rivers and areas can also be developed. However, this would probably require a tax break.
I regard the Minister’s proposals to lift excise duties on various forms of biofuels to be positive and progressive. I have spoken to people involved in the industry to inquire why more people and farmers have not become involved in it. The explanation was simple and pertained to a lack of certainty. People require a fixed timescale and someone must state that it is planned to hold the excise duties in this fashion for the next ten years, in order that people can enter the industry at agricultural, supply and product levels.
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Decentralisation
21/03/06 - I supported the proposals on decentralisation provided they would be done on a voluntary basis. It will undermine the process of decentralisation if we reach a position where a person’s career prospects will grind to a halt by virtue of what is being proposed. It is unfair to say to a person that he or she can be promoted provided the person is prepared to sell his or her house, take his or her children out of school, incur expense in various ways and move to a different location in order to continue his or her career.
That is wrong because people had clear and understandable expectations about how decentralisation would proceed. Any other group of workers, including Members of this House, might react in the same manner if someone was to unnecessarily pull the rug from under them.
This issue should be debated soon. I understand that 13% of the decentralisation programme has been carried out, which is satisfactory progress. From the outset it was ridiculous to think that decentralisation could be implemented in three years. It will take seven or eight years to implement the programme at the best of times. Decentralisation can work and is progressing but will be undermined if people are compelled to decentralise.
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Social Partnership
07/02/06 - The most important aspect of social partnership is that it has delivered. It is worthwhile reminding ourselves, particularly at a time when people criticise society and what we have achieved, of where we were in 1987 before this process began. In 1987, we had a debt to GNP ratio of 150%, emigration was running at 40,000 a year, there were no jobs for people here and approximately 18% were unemployed. People were struggling with mortgage interest rates of between 14% and 15% at a time when inflation figures were astronomical, sometimes in the high single figures, and strikes were running at something like one day per year for every three workers, which is now one day per year for one in every 20 workers. There is no comparison.
Within an economy there must be a beginning and an end. The beginning is the creation of wealth and the end is the sharing of the wealth. How can we do that in a fair way? What is the rule or the formula? How do we move it forward? That is what social partnership is about.
We must look to the common good where the entrepreneur, the banker and the marketeer will get their share, as will the people in our society who are dependent and in poverty and who need support. Finding that balance is what social partnership is about; it is not rocket science. It is a question of looking at people who cannot get houses or jobs and looking at those who have houses and jobs and marrying them together in a fair and equitable fashion. That is what social partnership is about and it is no more than that.
What happens in social partnership is a model people talk about time and again, namely, real consultation. Along one side of it sit the industrialists and the business people. Along another side sit the members of the farming community. The labour and trade union representatives sit along another side and the voluntary and community groups sit on another side. They are the people who work for nothing in many cases and who support those who need help. They do everything from dealing with people with disability or special needs to problems of poverty, housing, unemployment, etc.
All those people sit around the table and the Government representatives listen to them but the crucial point that is always missed is that the others have to listen to each other also. They are forced to listen. It is a civic forum where people are forced to listen and engage in argument with those who have a completely different point of view. That is what we need to do. It is then about fairness and how we move that on.
It is also a process about forcing people to sign in blood on the bottom line and to stick with the agreement. Every time I hear politicians talking about not being involved in the social partnership discussions I reflect on how lucky they are. The day one engages is the day one has to stick with what is agreed and that would not suit too many politicians who would have signed up to defend the downsides as well as the upsides to an agreement. If one has not signed up to something, it is much easier to come into this House to express total opposition to benchmarking. Nonetheless, quite happy to accept it.
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