Financial Emergency Measures in the Public Interest Bill 2009 - Second Stage Debate - 26th February 2009

Financial Emergency Measures in the Public Interest Bill 2009 - Second Stage Debate - 26th February 2009

Senator David Norris: I propose to share time with the Senator Quinn. I welcome the Minister of State but with lukewarm enthusiasm. I listened with interest to Senator Ross, who has led this debate in this House and on the back page of his newspaper, this morning when he said it would be an indication of the Government’s seriousness if the Minister for Finance, Deputy Lenihan, came to the House. He did not intend disrespect to the Minister of State. He appealed to the Minister for Finance to do so and hoped the Minister of State would not take the debate because that would be an indication the Government was rushing this legislation through. There are other indications, both in the structure of the speech and in its delivery, that suggest this is the case.
I have just come from Trinity College, where I was speaking on a motion about the attitude of the Roman Catholic church to sexuality. In one curious way this seems to fit into that debate. If one makes an acronym of the Bill, the Financial Emergency Measures in the Public Interest Bill, it becomes FEMITPIB, which almost sounds like the female condom. One could see this as the tax or revenue equivalent of such an instrument because its workings are completely uncertain. There are various views on whether it is an income levy or a tax; it seems to straddle both. One of the problems is that it is very unfair. People would accept legislation if it was fair but this patently is not and the language of the Minister of State makes it clear it is a matter of indifference to the Government whether it is fair. 9 o’clock
Money is being extracted from people who simply cannot afford to pay it. There is plenty of anecdotal evidence. I am prepared to pay and many people who can afford it are prepared to pay. A woman who was recently separated, left with three children, is a civil servant and approached MABS for advice. She is living on that advice and does not have enough money to go to the cinema once a month or to buy a packet of cigarettes once a week. What is she to do? She will have to borrow the money and she is in a trap. That is madness, in my humble opinion. All Members have received e-mails. I received one from a man who says he will emigrate, such is the impact on him. He would be prepared to pay an increase in taxation. Why do we not have that? He suggests there will be unrest if tax is imposed on top of a levy. That is one of the problems, it is a piecemeal approach. The Government was not sure about the most basic elements. Two Cabinet Ministers contradicted each other as to whether this applied to gross or net income. At least the Minister of State has spelled out that it applies to gross income. At least we have that degree of certainty but it is not much to rely on in this kind of crisis. The Minister of State indicated the kind of crisis in the language used, which is quite apocalyptic. He refers to exceptional circumstances. There is certainly an awareness of that critical situation.
One of my correspondents has stated that a tax increase would be preferred. There is a suggestion of a 4% increase in 2009, which would yield €1.48 billion, 3% in 2010 yielding €1.01 billion and 4% in 2011 yielding €1.53 billion. That would produce the €4 billion from the PAYE system. There is a suggestion for a draconian 95% on anybody getting over €400,000. That is what happened in Britain in the 1970s and we may have to squeeze the fat cats.
The Minister of State’s speech was fatally dull and the figures were anaesthetising when they were separated from the apocalyptic language. His speech referred to an exponential increase in the budget deficit. If it is a budgetary problem, let us have a budget. We need a comprehensive approach to the matter.

Senator Paul Coghlan: Hear, hear.

Senator David Norris: The Minister of State spoke about using figures from the Department of Finance, but when did the Department of Finance last get any figures right? I cannot remember, as the Department seems to be permanently wrong. Where were those people for the past seven years?

Senator Paul Coghlan: They were playing catch-up.

Senator David Norris: As we are firing people from the banks, how about firing a few people from the Department of Finance? There is also the matter of the social partners. It is obscene that people are taking 3% or 6% pay increases and saying they got them under the agreement. Nobody should be taking an increase of any kind, private or public. That should be made clear before we start taking anything from people. We can do that afterwards. I do not know how anybody would have the brass neck, in these circumstances, to take any pay increase. Although they are legally entitled to it, they are not morally entitled to it.
The Minister of State indicated:

For example, taking account of all taxes and other mandatory stoppages such as income tax, PRSI, standard pension contribution, the health and income levies and the new pension-related deduction, an unmarried public servant earning €20,000 a year — and no full-time employee earns less — will pay 11% of his gross income in total deductions when the new deduction is introduced. An equivalent public servant earning €100,000 a year will pay total deductions of 43%.
These are all percentages and there is no understanding of the impact on somebody living on the barest margins of a 1% increase. Issues are being compared mathematically, arithmetically and in a Dickensian way that shows no comprehension of the human reality underneath. I find that distressing.
Considering the language in the speech, we have the same phrase time and again along the lines, “It has been said that someone earning €30,000 will pay a higher percentage of their salary than somebody earning €45,000.” It is as if by stating, “It has been said” the Government is excused from a proper explanation. The explanation we get is that it must be understood that this is due to the operation of tax relief. Big bloody deal, as it still pinches the people. Stating the mechanism by which it is done does not prove that it is fair, just, appropriate or acceptable from the people’s perspective. I do not believe for one minute that it will be accepted.
I made a very restrained intervention when the Minister of State stated:

Against that background, the Government those in secure pensionable employment and with Government-guaranteed pensions to make their contribution towards addressing both today’s difficulties, and the longer-term sustainability challenges facing public service pensions. . . .
That does not mean anything. It is completely absurd and total nonsense. Although he probably did not hear me, I asked the Minister of State if we could have a verb. I am rather partial to verbs and an occasional verb here and there does tend to help make sense of a sentence.

Deputy Martin Mansergh: I inserted the verb at the end.

An Leas-Chathaoirleach: The Senator, without interruption.

Deputy Martin Mansergh: There is occasionally a misprint in a speech.

An Leas-Chathaoirleach: Senator Norris, without interruption.

Deputy Martin Mansergh: I believe I am allowed a point of order.

An Leas-Chathaoirleach: I do not believe that is a point of order.

Senator David Norris: I like to hear the Minister of State speaking but I do not believe he actually put in a verb. He put one in later but not at that point.

Deputy Martin Mansergh: It was not in the script and so I placed one in the sentence.

Senator Eoghan Harris: What page is the Senator on?

An Leas-Chathaoirleach: Senator Norris, without interruption.

Senator Fiona O’Malley: The Senator thinks he is giving a lecture in college.

Senator David Norris: The Minister of State is a formidable opponent.

An Leas-Chathaoirleach: I understand the Senator is sharing his time. He has 30 seconds left.

Senator David Norris: I will take another minute if Senator Quinn agrees.

Senator Eoghan Harris: What page is the Senator on?

An Leas-Chathaoirleach: I do not know.

Senator David Norris: I am referring to page ten of the Minister of State’s script, in which he deals with section 1. He spoke about the definitions of public service bodies as “the Civil Service, the Garda Síochána, the Permanent Defence Force, local authorities, the Health Service Executive, the Central Bank”. In this regard I draw the Minister of State’s attention to a case from the Supreme Court, the Central Bank of Ireland v. Martin Leo Gildea from 14 March 1997. In the judgment, the Supreme Court found as follows concerning the status of the defendant:

He is not a member of the staff of any of the organs of State created by the Constitution and accorded a role in the constitutional order separate and distinct from the three organs of Government, Legislative, Executive and Judicial, such as the Attorney General. He is not a civil servant in any of the Departments responsible to the individual Ministers who constitute the Government and hence is not a “civil servant of the Government” and thus a person “employed [...] under the State.” He is employed by a body which has been created by statute, the powers of which, however essential they may be to the functioning of the State, can be removed from them at any stage by the Oireachtas. He is thus in no different position from those employed in a vast range of what have come to be called “semi-State bodies”, the employees of which may, by specific legislative provision, be deemed to be civil servants but who, in the absence of any such provision, are not to be so regarded.
It seems from this that the Central Bank and Financial Services Authority of Ireland should not be mentioned in the body but put in the Schedule, where one finds all the other semi-State bodies to which the court refers. It seems this mis-classification is a result of a desire to fine the employees of the Central Bank. I have put down an amendment to remedy this difficulty. I look forward to hearing what the Minister of State has to say about this and many other matters.
The Minister of State should address a real financial issue, the fact that rents in central Dublin are skyrocketing under the reviews. We have an absurd position in that rents can only be reviewed upwards. People like Pia Bang are going bust and getting out. The city is full of shuttered shops and we must consider the issue.