Restoring fiscal stability means restoring trust
Issued : Friday 16 April, 2010
Statement by Joan Burton TD
Minister for Social Protection
There is nothing to be gained by denying the woeful state of the public finances and the present and serious danger it creates for our country.
Yes, it is the legacy of reckless government.
Yes, it is not the first time that Fianna Fail has left such a legacy.
Yes, it is exacerbated by the cost of the bank crisis.
We have to realise that this cost will weigh down on every budget for the next decade or longer no matter who occupies the office of Minister for Finance.
Socialist governments in the past had to deal with similar legacies but they still managed to delver great changes.
Atlee had great social ambitions when he became Prime Minister in 1945 and he delivered the National Health Service and universal free education which have lasted to this day.
He had to face a very inconvenient truth when money had to be borrowed at great cost to pay the bills of war. Great as his achievements were, he still had to trim his programmes, abandon some cherished aims and delay others.
On the second day of each month I have to examine the public exchequer returns and I can tell you honestly, delegates, they don't make for inspiring reading. The jury is still out on the question of when the recession will end here but I do know that the policies of this Government has stripped the cupboard bare and that everything it has done to turn the situation round has actually made a bad situation worse.
The December Budget ostensibly aimed to cut the deficit by € 4 billion. Every cent of that went to Anglo Irish and we are left this year, despite all the painful measures, with no improvement at all in the deficit.
In fact the likely outcome is worse than last year, less revenue raised, more jobs lost and therefore higher spending on dole payments.
Can we break away from that death spiral? Yes we can. Indeed I go further and say this. Yes we must.
We can't impose a crushing burden of debt service costs on our people by an ever increasing recourse to more and more borrowing to meet the day to day costs of running the State.
Neither can we solve the situation by casually deflating the economy, ruining business, closing shops, industries, services and creating ever longer dole queues.
There is one basic truth. We are all in this together. Now that has to mean something tangible. It has already meant a lot to those who have endured pay cuts, child benefit cuts, increased taxes and levies on their income.
I'm less convinced it has meant very much at all to those who insist on the right to be tax exiles at a time when their country is facing so great a crisis.
I have spent much time as your Finance Spokesperson exposing the convoluted measures used by businesses and wealthy individuals to reduce their taxes.
To get a sense of how persistent the problem is, just check out the long list of tax dodges and shelters that remain embedded in the system.
There is nothing illegal about these, but they has no place at a time when sacrifices are sought from everyone. The Minister has been vocal in his reform promises but he has barely scratched the surface so far.
Ansbacher Man has gone into retirement but his sons and daughters are alive and well and have inherited the same mindset. When things get tough, the tough pack up and run. Bertie Ahern let the cat out of the bag this time last year as he feted his good friend Mr Fitzpatrick of Anglo Irish fame. I'm sure Seanie has a bit stashed away, said Professor Bertie.
Oh I'm sure he has. And so have many like him.
Millionaires they may have been, even billionaires but Fianna Fail in government faithfully served their interests and tweaked the tax code in a thousand ways to accommodate them and release them from the obligation to contribute.
Are they still free of that obligation in Mr Lenihan's mindset?
Or do those people have to jump together with the rest of us?
If we are to jump together then tax reform and tax justice has to be part of the equation. I am not a supporter of high marginal rates. I never have been. But low tax rates have to go side by side with the principle that everyone pays their fair share. There are people in this country who talk of low taxes when they really mean no taxes.
That has to end and end now.
I am convinced that the wealthiest sector in Ireland who own a wholly disproportionate share of our nation's wealth can readily stump up a sizeable share to meet the same obligations that the rest of us have to face.
In conclusion I repeat the two unifying themes that were so successful in the Northern peace process. Nothing is agreed till everything is agreed. We all jump together. It is a sound strategy and it promotes national unity at a time of national emergency.
