I dtús báire, ba mhaith liom buíochas a ghabháil leis an dTeach as an am atá curtha ar fáil don díospóireacht inniu. Tá sé an-thabhachtach go bhfuil an deis againnn inniú na gnéithe éagsúla de Chlár an Rialtais a phlé go géar agus go hoscailte.
First of all I would like to thank the government for agreeing to our proposal to start this Dáil with a debate on the Programme for Government. The original proposal to debate committees is best left until there is something more concrete to discuss.
When the programme was published it received almost no detailed examination. The Labour Party’s members were only able to give it the most basic of reviews before voting on it. The Fine Gael Parliamentary Party also nodded it through without detailed debate. Commentary then quickly turned to the issue of who would get which jobs. Given the importance of the programme to our work over the coming years it deserves a much more detailed scrutiny than it has received so far.
There are many ways in which debate could be approached, and the least constructive of these would be to try to carry the rhetoric of the election into yet another week. The government which the people wanted is now in office. This said, it in no way automatically follows that the government’s programme is what the people voted for. The programme was not before the people. Each party is entitled to some flexibility in relation to its election promises and neither party’s voters can be expected to be fully happy with what has emerged.
However, even in light of this the programme contains an unusually large number of abandoned election pledges. The need for compromise is accepted, but it cannot be used as the all-purpose excuse for breaking promises. A particularly striking example of this is on the issue of how many ministers of state there should be. Fine Gael not only promised to limit them to 12, they even published a bill to give effect to this. When 15 were appointed last Thursday they briefed that this was a condition they had to meet in negotiations. Unfortunately for them the Labour Party confirmed that they had not asked for the higher number. Unless it was a negotiation between Fine Gael and some as yet unidentified partner, the simple fact is that the promise was unilaterally abandoned.
We could go through every part of both parties’ manifestos and draw up a long list of priority policies which disappeared in recent days. Equally we could waste a lot of time here showing how the core of the 5 Point Plan has been hollowed-out. This might make a more lively debate, but it would serve no positive purpose.
For my part, I intend to be constructive. Just as importantly, I would say to government ministers and deputies that they should try to adapt their speeches to the reality of what’s in the programme rather than the rhetoric of the campaign. The combination of aggressive attack and warm self-praise which has characterised speeches about the programme should be put aside and a more credible approach followed.
The better way to use this debate is to look at the programme in terms of what it says about the type of government we will have in the next few years and the policies it is likely to prioritise.
I would encourage people to take the time to read the programme in detail a few times in order to understand it fully. Overall, it would be better described as an agreement to share office rather than a genuine 5-year programme for proper government. On issues both large and small the document maintains a deliberate vagueness about what the exact policies and timescales are. A large part of this involves putting off many hard but vital decisions.
A very striking part of the programme is the number of areas where the last government’s policies have been adopted– on occasion with an almost comic attempt to cover this up with new titles for old initiatives. At the same time, exactly the opposite approach – of keeping the title but losing the substance – can be seen in relation to the attempt to present election promises as being retained in the programme.
The programme is long on rhetoric but short on vital substance. Before it can be seen as a genuine basis for governing Ireland in the next few years a significant number of questions will need to be answered.
The rush in preparing the programme shows itself in many small errors in the document which are of no great importance. What is, however, very important is where the parties do not appear to have noticed direct contradictions between different parts of the document.
What the programme is good on is identifying the broad areas which should be prioritised – with the achievement of economic recovery being by far the most important. This is to be welcomed. Our economy can and will recover. It retains key strengths and enormous potential which can be released in the years ahead.
The programme mentions the specific areas of fiscal, financial and employment policies and I would like to deal with each in turn.
The achievement of a stable and sustainable budget balance is an absolute precondition for recovery. It is essential for both investor and consumer confidence as well as for reaching a stage where investment in public services can again grow. As independent commentators and government members away from microphones confirm, the majority of the budget changes required to achieve this have been implemented. The failure of the programme to include a single significant change to any budgetary measure introduced by the last government is surprising but welcome. The programme even goes as far as the retention of measures which were called savage and opposed little more than a few weeks ago. Cynical though this change of heart may be, it is to be welcomed because it leaves in place a foundation for recovery.
Also welcome is the decision to adopt the budget aggregate we published for this year and next. Something which does not appear to have been noticed is that the decision to announce new spending on a range of areas both in a ‘jobs budget’ and for smaller initiatives will therefore require equal tax increases or spending cuts. Hopefully, there will be no attempt to fudge this when the extra spending is announced in the coming weeks.
What is of genuine concern is the failure of the programme to adopt any concrete fiscal rules for 3 out of the 5 years the government could last. In the campaign both parties stated that certainty in fiscal planning is crucial. In the programme itself they state at length that we must have 3-year budgeting if we are to use public money better and plan properly – yet the most we have is an agreement to follow the last government’s plan for two years and then talk about what to do some time down the road. So in two years we might have a three year plan which the programme describes as urgently needed.
The fundamental role of the EU/IMF Support Programme, is to enable us to fund public services up to the point where we have restored the budget. The specific programme contains measures which are required anyway. What should, and I believe will, be changed is the cost of the EU portion of the Programme. As we discussed earlier, there is a now a consensus in Europe that the terms must change. The programme for government also confirms that the three largest parties in this house accept here that this is a cross-Union matter. We will get to discuss this at greater length next week before the Council meeting. For now, there is one issue which should be clarified without delay.
On page 16 of the programme the Government states that the benefit of any reduced interest rate will be “offset against the aggregate adjustment required over the term of the programme.” No one has explained exactly what this means. If it means that it will be used to enable greater spending, this would defeat the entire purpose of seeking the reduction – which is to make sure that our debt levels are sustainable. The lower interest rate should be used to lower borrowing and, therefore, also help to lower long-term borrowing costs. It would be helpful if government members were to use this debate as an opportunity to explain their intention on this issue.
At the heart of the credibility of the government’s fiscal policy remains the issue of how it actually will be run. The division of the Department of Finance is not mentioned in the programme for government at all. It bears all the hallmarks of being cobbled together. Following questions which I raised last week, a consultant who advised Fine Gael and a number of ministers were sent out to the media to claim that this division is quite common and the same as the roles of the Chancellor of the Exchequer and Chief Secretary to the Treasury. But how can this be true if we are to believe the claim that these are equal members of government. The Chief Secretary is legislatively and administratively subject to the Chancellor. He is in effect a ‘super junior’.
It is time for the government to publicly outline, in detail, exactly how this division is going to work. What will be the staffing reporting to each minister and, where they will used the same staff, how accountability will be attended to? What will be the respective budgetary roles of each department? Simply pointing to the fact that they will both sit on a committee does not answer these questions.
Restoring a banking system which meets the needs of the Irish economy is also rightly identified as a priority in the programme. What is not identified is exactly what the government proposes to do about this. There is nothing new in committing to a smaller banking system – this is both happening and inevitable. The restructuring and recapitalisation to be enabled by NAMA has been thrown into considerable doubt, with the nature of which, if any, assets are to be transferred being unclear. The objective concerning medium-term financing is something which is shared by everyone who wants greater security in the financial system. This is something we can return to in proper detail next week.
Oddly, given the commitment to a smaller banking system, the programme also includes a promise to establish another bank – a Strategic Investment Bank, but provides exactly zero detail about what this is supposed to mean. If it is intended to be the Labour Party’s election proposal then its implementation would cause immense damage to an already fragile system. Earlier this year the Tánaiste explained that his proposal would involve €20 billion in financing. This would come directly from the market funding available for the other banks. This is a huge potential source for instability in the system at a time when it can least be afforded. The government should deal with this immediately by explaining what exactly it is proposing and why on earth this country’s taxpayers need to own yet another bank.
The most important thing which can be achieved through restoring the economy is the creation of jobs for those who are unemployed and those who will be coming into the labour force. Many of the indicators show that Ireland could be poised for a significant return to employment growth. The core of the long-term jobs strategy in the programme is the ‘Smart-Economy’ approach and the Innovation measures which are already underway. They are also working. As the Tánaiste himself said last Friday in a press release welcoming a major investment in his constituency, Ireland is both attractive for investment and is securing significant new projects. The enterprise agencies also confirmed at the weekend that there are many very significant investment projects which are at an advanced stage. FÁS is already being replaced and tens of thousands of extra training places are being funded.
In these and many other specific actions on employment, policies referenced in the programme are being implemented and the funding is already provided in the 2011 budget. In one of the most shameless examples of rebranding the last government’s work the programme proposes to establish Technology Research Centres with a specific commercialisation remit, but fails to mention that they are already in place under the name Technology Competence Centres with funding from the IDA and Enterprise Ireland. The programme makes great play of saying that a centre will be established in high value manufacturing – failing to mention that a proposal is already before the agencies for funding this centre involving a partnership between 10 major manufacturers and 6 universities.
In the Taoiseach’s speech on the nomination of government he stated that he wanted honesty to be the hallmark of everything his government does. I hope that this will extend to being honest about the origins of many of the policies his government has put in its programme.
The NewERA title has survived the campaign and is sitting happily in the programme and with Minister O’Dowd looking after its interests, albeit not at Cabinet. However, just like the Strategic Investment Bank, the electoral NewERA bears no resemblance to the programme for government NewERA. The claims for impact remain but the job targets and secured funding are gone. In fact there is a major New Issue with NewERA because the programme says on page 15 that its funding will come within the framework of the National Development Plan. Therefore, rather than being a major new economic stimulus, it will be funded by taking money from other public capital projects.
I welcome the clear statement in the programme that the government believes that export-oriented activity will be the diver of wider economic recovery. The dynamism of this sector is stronger than ever, with enormous potential for both direct and indirect employment support.
I think the programme is wrong to imply that nothing is coming from investment in advanced training and research when the evidence is quite the contrary. The “Innovation Union” strategy referenced in the programme has recently published an EU Innovation Scorecard which suggests that Ireland’s investment in education and basic research is delivering real results. It places Ireland 3rd out of 27 for the quality of training, 6th for research systems and 2nd for turning this into concrete economic effects.
I have heard from many people within the system who are concerned that the programme for government seems to imply a false division between applied and basic research in terms of their economic importance. Look at the thousands of jobs here in world-leading companies and you will see at the core of their activities people trained to the very highest level in basic research teams.
There are people who like to dismiss this, but the people we should really listen to are the job-creating companies. Every single major employer in Ireland is now partnered with some significant basic research programme in our third-level institutions. A majority of all IDA new projects are being attracted on the basis of the research capacity of our country. It would be reckless in the extreme to ignore this evidence and to do anything other than to maintain and increase the priority to be given to funding research in the next few years. Any move to switch funding from successful programmes to more direct commercialisation might give a very short-term boost, but very quickly the entire pipeline will dry-up and we will be left with not having the people or programmes required to support industry.
The science & technology area is listed as a priority for NDP investment on page 16, but it is missing from the same list on page 14. This should be clarified as soon as possible and the Minister for Enterprise, Jobs & Innovation should seek an opportunity to outline his approach to this area.
My colleagues will address a number of other important economic issues touched on in the programme. In the short time remaining to me I would like to just address a few of the other main areas in the programme; specifically health, the public sector and political reform.
Many parts of the programme will find a high level of support in all parts of this house. There will be differences in terms of executional details, but the thrust of policy will not be controversial. This is absolutely not the case in relation to the health policy in the programme.
It is ten years since the Labour Party proposed a Universal Health Insurance model as the cure for all our ills. Launched with a great fanfare a promise was made to publish costings and implementation legislation so that people could evaluate it for themselves. Nothing ever appeared. Fine Gael’s Compulsory Private Health Insurance model brought far more details and the claim that the Dutch system is the answer to everything. I think I read reports at one stage of Fine Gael presenting Dutch canvassers on the doorstep to try to explain the proposals! In fact, claims were made for the Dutch model which even they don’t make. More coverage for everyone and at zero cost to the Exchequer was the promise.
But, what has emerged in the programme is a hybrid system. There is to be both funding through insurers and funding through a Hospital Insurance Fund. Hospital services will be both planned by a state body and by insurers. Services are to be both integrated and stand-alone. This is to happen with almost no increased resources and a major cut in staffing.
Also, in a quite incredible example of taking extra power into political hands the programme explicitly and without qualification states that the Minister for Health will decide which hospitals will be kept open.
What is promised is at best a dangerous experiment. It threatens progress in the many areas where treatment numbers and outcomes have improved. It is based on wildly unrealistic financial assumptions. It is a policy which stems from wanting a neatly contained election idea rather than a real strategy for improving health services.
The programme does propose the publication of more details on implementation, but it also implies that action will progress immediately before there has been a chance for a meaningful debate. I ask, in the strongest possible terms, that the government allow its health policies to be subject to full scrutiny before pushing them ahead. Not a single citizen of this state voted for the hybrid proposal contained in this document.
In relation to the public sector, the failure of the parties to provide any justification for the figure of 25,000 posts to be removed has been widely noted. It is set at a level where the Labour Party stated there would be inevitable damage to public services. I believe that the Labour Party was right in this and that it was a mistake to agree to Fine Gael’s demand for more cuts.
One thing which concerns me is the failure to include within the programme a commitment to the last government’s plan to raise the number of posts in the education sector by 2,500. The ministers involved should clarify this without delay in order to address the rising concerns within the system about this.
Overall, the public service reform proposals in the programme are welcome and non-controversial. I would caution Minister Howlin that if he goes too far down the target-setting route we will end up with the British situation where Treasury targets actually undermined rather than enhanced many services. The proposal to centralise more power in ministerial hands through widely abolishing boards would mark a serious step-backwards in corporate governance and accountability if implemented.
I welcome many of the political reform proposals contained in the programme but feel that they are unnecessarily conservative in many parts. I hope that there will be an early meeting between the parties to agree a formal process for moving forward on Oireachtas reform. With good-will on all sides it should be possible to amend standing orders quickly and to establish the new committee. The idea that the Fiscal Council can be established in a meaningful way on a resource-neutral basis stretches credibility. If it is to have an impact on our work it will have to be more than a token office sitting somewhere in Leinster House.
The issue of political reform through constitutional change has a welcome place in the programme. The Constitutional Convention appears to be Fine Gael’s Citizen’s Assembly but with Labour’s preferred title. If this Convention is to play an important role it must be allowed to consider more radical reform than is outlined in the programme. In particular it must be allowed to consider and make recommendations on the separation of the executive and parliament. No one who witnessed the process of appointing ministers last week could claim that it is a rational or credible way to do such important business.
I look forward to an early debate and additional clarity on the political reform elements of the programme for government and the rest of the programme. I hope that the government will keep to its commitment to engage constructively with the opposition. For our part, Fianna Fáil expects to support sensible measures in the programme. We will keep pushing for clarity on areas where we have concern and we will oppose on areas where we think the programme’s proposals would be damaging.