Yesterday, the Bill that will introduce NAMA began it’s journey through the Upper House. The Government have insisted that the legislation must be back in the Dail by Thursday, giving the Seanad three days to deal with the Bill. Below is my Second Stage speech. Keep with the site or with the Facebook page for further updates.

It is true there are no certainties in this matter. There can be no certainty on anybody’s part. In particular, the Minister cannot be certain that what he hopes will occur will actually transpire. There can be no certainty associated with the assertion that matters will come right. None of us can be certain with regard to what is going to occur. That is a measure of how momentous and serious is this debate.

We have reached the 11th hour and the Government has signalled that the legislation will return to the Lower House on Thursday, which constitutes a curtailment of the debate in this Chamber. In such circumstances, there is a sense of inevitability regarding Members’ approach to this debate. However, this should not mean we should set aside our serious and genuine objections to what the Minister is proposing.

Like other Senators, I recognise the Minister’s good faith about the way he has approached this matter. I sometimes feel uncomfortable making that point in respect of Government Ministers. I assume good faith on the part of members of the Government, whereas other Senators often use half of the time available to them to inform a Minister that he or she is a great man or woman. I operate on the basis that the Minister for Finance is doing a professional job for the country and believe this is also the basis on which he operates. He does not, therefore, require to be congratulated. In so far as it is important to say so – particularly on a personal level – the Minister’s input has been considerable, if wrong-headed, in recent months. However, that input has been solely motivated by the need to act in the very best interests of the country.

Unfortunately, in the context of what has occurred in the past 15 years, the Minister is dealing with a legacy created by the Government and his party, as a component thereof. It is fine for Senator MacSharry to express his frustration and annoyance that this point continues to be raised. I will not treat him to a few minutes’ worth of material on the Galway tent. Owing to time constraints, I will not refer at all to the history of Fianna Fáil, its associations, etc. but if I had time, I would gladly do so. I am referring to Fianna Fáil as the party of Government; I am not interested in its historic links with the building industry or anything else. Fianna Fáil was in office when our current difficulties emerged. It was in power when my party brought forward proposals to the commission established in the late 1990s to examine the matter of house prices.

At that time my party argued, in trenchant terms, that there was no requirement to amend the Constitution in order to implement the principal recommendations made in the Kenny report which was published 35 years ago. These issues were canvassed and debated during the lifetime of the last two or three Administrations. It is not satisfactory for those opposite to simply state they are not to blame and that everything happened around them and that they had nothing to do with it. That is simply not the case.

Regardless of who is in power, the Government retains principal responsibility for what happens in respect of any matter. It has such responsibility with regard to oversight, regulation and monitoring, particularly in the context of the financial institutions. When I studied economics many years ago, I came to understand that the banking system worked because we had a strong Central Bank and that this was the real legacy in respect of what happened 50 or 60 years ago in countries across the globe. I also came to understand the bank had functions in respect of regulation and monitoring and was in place to ensure the financial institutions and commercial banks did not engage in excesses. If one drove through Rathmines five years ago, one might have seen a billboard outside a particular institution inviting people to take out 100% plus mortgages and that if they did so, they would be given a new car. Members of the Government knew there were these excesses. It is not enough to state we did not think this behaviour would have the impact it appears to have had.

Senator Dan Boyle has stated the notion of long-term economic value is bedevilling the debate. Long-term economic value is the essence of the debate on NAMA. I love the Minister’s references to ideology and his condescending statements to the effect that the Labour Party holds a certain view on nationalisation because it is bedevilled by ideology. The real ideology relating to this matter is that of certain people, including the Minister, who will do anything to avoid nationalisation. These are the very individuals who will proceed to nationalise the banks in six months’ time. That is the problem for the Minister.

I do not want to be excessive by using the word “countless” but I could certainly refer to quite a few comments made by the Minister, particularly during the course of the crisis that occurred 12 months ago in respect of how he perceived the position, what he thought would occur in the future, what was the strength and robustness of the banks, etc. It was also stated the Government would never nationalise any institution because such a policy would be completely wrong-headed. However, Anglo Irish Bank was then nationalised. Is someone from the Minister’s Department already working on the script he will deliver in the House on the night on which he comes here to nationalise one of the other banks?

I return to the issue of certainties. I accept that there are no certainties associated with the argument relating to nationalisation. In view of Senator Ross’s support for nationalisation, the ideology relating to the latter could hardly be left-wing in nature. I do not claim, either on behalf of my party or anyone else, that there are certainties associated with the proposal that the banks ought to be nationalised on a temporary basis. However, I am aware that this has happened elsewhere.

Senator Boyle referred to confidence. The only confidence in which I am interested is that which has some basis to it. I am not interested in confidence based on hope or wishing that matters will come right. As legislators, we are supposed to seek some evidence of this confidence. The approach of nationalisation has been employed in other countries and proven to be successful, albeit at a cost. The one thing of which we are all aware is that what we are doing is going to cost us an enormous amount of money. Taxpayers, my children and everyone else’s and perhaps our grandchildren will all be saddled with the bill. The question is: how can we minimise the cost? I genuinely accept that the Minister is interested in minimising the cost to the taxpayer. I do not, however, accept the notion that NAMA should deliberately and knowingly overpay for assets.

On long-term economic value, Senator Boyle does not appear to understand the prospect of a property either rising or falling in price is already included in what we understand to be market value. If I purchase a house, I am aware that there is a prospect, possibility or even hope it will increase in value or that there is also a risk that it will decrease in value. That knowledge is incorporated in one of the laws of capitalism – the Senator probably does not need a lecture from me on the latter – namely, that of supply and demand. In the context of the laws of capitalism, long-term economic value is a fiction. It is a direct intervention in the dynamic relating to prices being determined by the law of supply and demand.

I have read most of the material in respect of this debate and would like someone to draw my attention to how and on what basis the uplift amount of 15% – as opposed to any other figure – was arrived at. On a number of occasions the Minister has indicated that it was part of the best advice he had received. He stated Professor Honohan and his predecessor, Mr. Hurley, thought it to be reasonable. He consulted both men and others in the matter. However, I would like an evidence-based argument to be made as to why this figure, as opposed to any other, is deemed appropriate. Was it simply plucked from the ether? I do not intend to criticise the Minister but he was not in a position to supply a figure until the Second Stage debate in the Dáil. What mechanism was used to arrive at that figure and how may we rest assured that it is accurate?

Many terms have been used during the course of the debate on this matter. There was a stage when the Minister used to become extremely annoyed with regard to the use of the term “bailout”. He has, however, become somewhat more relaxed in that regard.

We will have the argument on another day as to whether NAMA constitutes a bailout for developers. A good argument can be made to the effect that it does constitute such a bailout, even if only in the context of the delay of which developers will be able to avail.

Whereas the Minister certainly would not be prepared to accept that this measure constituted a bailout for developers – a debate we can have another day – he is less concerned, annoyed or irritated with the suggestion made by Senator Ross that it clearly constituted a bailout for the banks. Senator Boyle referred to it as a rescue, a word the Minister preferred. I will not quibble as to which it is. However, we should be clear for ourselves and the public that what we are doing constitutes a bailout for and a rescue of the banks which are in such difficulty.

I want to touch on some issues that have already been raised and ask the Minister to comment on them. He introduced an amendment in the Dáil to what is now section 210 of the Bill which deals with guidelines on lending practices. I presume this was a response to legitimate concerns that, although the NAMA project is stated to be one that will bring about a change in the lending practices of the financial institutions and lead to a resumption of lending by the financial institutions, there is no guarantee this will occur. Very often the language used in ministerial speeches, as on this Bill, hedges on that question. For example, the word that appears most often in speeches – I think it appears in the Bill also – is “facilitate”. It is suggested the measures will “facilitate” the financial institutions in returning to the job we all thought they were in place to do. I noted in an earlier speech in which the Minister was justifying the proposals made in the NAMA legislation that he said they would “thereby” bring about a resumption of lending practices. There is no guarantee this will occur and the Minister has, belatedly, responded by introducing the provision in the Bill, whereby he can introduce guidelines. However, we need more clarity on the issue and the public must be given far more by way of reassurance that a resumption will occur. There is a need to hear more than that the Bill “facilitates” a resumption of lending, “allows” the banks to resume lending or will bring about a scenario “whereby” the banks will be able to do so. That language does not deal with the question of whether it will happen. If greater certainty does not emerge from the Government on the matter, why should we accept its faith and hope this will occur, particularly given we are spending so much of this and future generation’s taxes on this expensive and uncertain project?

I have never accepted that NAMA is the only game in town or represents the only legitimate approach to the problem. I accept that there is no basis for doing nothing and nobody has argued that we should wash our hands of the problem and hope everything will come right. Everybody accepts some action must be taken. However, I do not believe that throughout the long months of the summer and autumn the Minister investigated all avenues – certainly not to my satisfaction – in order that he could assure us this proposal was the only way to proceed. It does not seem to have the international or academic support often invoked by the Minister on its behalf. Some professional economists have come out in favour of it, but they seem to be largely individuals – good as they may be – who work for the existing financial institutions. While I do not suggest they have their comments written for them, we must take what they say in the context in which they find themselves.

We have seen the newspaper interventions by the 46 economists. The IMF is often invoked in support of NAMA, but what the IMF stated was that these asset management strategies were acceptable and legitimate, but that it was preferable they should happen alongside nationalisation. The OECD has also stated nationalisation should not be ruled out. Many of the bodies which have been invoked in support of this proposition are far less enthusiastic than has been suggested. One main belief among all of them is that it is good the Government is doing something. A measure of their relief is that, at least, it is seen to be doing something in the international context. That is what the European Union and international financial markets want to see.

More :: To watch the proceedings of the Seanad live, click here

More :: To see details of the Bill, click here

I am afraid it is not credible to say that by his statement at the weekend the Taoiseach has got himself into the driving seat. The Taoiseach has been in the driving seat for 18 months in this country.

Prior to that, he was in the seat beside the driver as he was in the Department of Finance for an extended period. I am not prepared to go along with the notion that the Taoiseach now has credibility on public sector reform. He just does not have that credibility. There is a cabinet sub-committee that is supposed to be meeting on this issue for the last year and a half, but the Taoiseach could not even answer the question yesterday on whether that committee had met. I understood from his response that it has not met. It is no use saying the Taoiseach has now put himself into the driving seat. The Taoiseach has had every opportunity for 18 months and more to address these issues, but he has failed to do so, along with his Government.

It is perfectly legitimate for people to criticise the public service and to call for reform, as I have. The problem is that the debate has become suffused with anecdote, prejudice and worse. Everybody has their story about the public service and what should happen. However, the Government gets to do more than what we get to do, which is to come in here and call for things to happen. It is ludicrous for RTE to report the Taoiseach as “calling” for public service reform. That is what we do in here. We call for things but unfortunately we have little or no power to deliver them. The Taoiseach does not get to call for things. He gets to do things. That is why he is the Taoiseach.

We should forget about calling for things and expressing wishes. Let us have a balanced review of the problems that exist and of the issues in the public service that require reform. That can be done in a relatively short period. Let us then have some action on the issue. People who are marching on the streets are being told they are the problem, but they are not the problem. Cuts do not amount to reform. If people are serious about reform, let us have a balanced assessment on what needs to be done and then let us have some action.

More :: Cowen calls for ‘fundamental reform’: RTE

I featured as a guest on Today FM’s Sunday Supplement with Sam Smyth yesterday. The other panellists were Mary O’Rourke TD and Senator Shane Ross.

You can listen to the show in full by clicking here.

The revelation that the leading children’s Special Care Unit in Ireland must close is yet another example of the State failing children, according to Labour’s Spokesperson on Children, Senator Alex White.

“The Minister for Children must explain how conditions at the Special Care Unit in Ballydowd became so unacceptable that there was no option but to close. I would question why it took the HIQA inspection report to recommend ‘urgent action’, before this issue was raised with the Minister responsible.

“The report highlights the ‘serious difficulties of trust’ between management and staff. This was taking place at what was meant to be the leading care unit in the State. It appears that the failure began when the €13 million facility opened only nine years ago.

“There must be immediate assurances that the children currently in the care unit are transferred in a dignified and safe manner.

“It is another addition to the catalogue of this government’s failures on children. Following the publication of the Ryan Report, the Minister promised that ‘the State must now and in the future, deliver care services that nurture and support children.’ The closure of this facility is another striking example of the government’s lamentable failure to deliver such care services.”

More :: Click here to read the HIQA Inspection Report (PDF)

In respect of the day of protest scheduled for this Friday and the general issues pertaining to the trade union response to events, members of trade unions are perfectly entitled to take a day of action and to protest on the streets of their capital city. Not only are they so entitled but they are perfectly justified in so doing. Every time one makes a point about, for example, NAMA or some other issue pertaining to the economy, Members on the Government side ask, perhaps justifiably, what is one’s alternative. Practically five minutes into a discussion on the subject, the refrain from Members on the other side is what is one’s alternative.

I ask those who criticise trade union members who are taking to the streets and considering industrial action what alternative do they propose. What alternative do they propose to people who can see their living standards have dropped and who can see no real stake in the future? The problem people have is there is no clarity and they can see absolutely no stake into the future regarding how these issues should be dealt with in budgetary terms. What alternative is proposed by those people who fill the airwaves with criticisms of trade unions being lunatics and everything else?

I refer to next week’s business dealing with the NAMA legislation. The Government has already made it clear publicly that it intends to curtail debate in this House. It announced the legislation would return to the Dáil on Thursday week, 12 November. It has already made it very clear that the debate will finish here on Wednesday night. That will amount to the guts of three days’ debate in the House. We know that decision has already been made. It is intended to finish the debate on Wednesday night or Thursday morning next week.

It is odd to read in the newspapers today that the Minister for Finance intends to introduce further amendments, amendments that are so complex – I understand this is the way in which it has been reported in the newspapers today – that he is not in a position to introduce them this week. He requires more time and will not be able to introduce them until next week and he will do so in the Seanad. If he must take a further week to devise and deal with the amendments, how are we expected to deal with such complex matters in a period of one day or one day and a half? We will do our best to do so but it is extraordinary, since there have been months of preparations for this legislation.

However, the Government seems to take the view that when legislation goes to the Dáil and to Seanad in particular, this constitutes the end rather than the beginning of the debate, and that the real work is done by the Executive, not by the Parliament. The Government has taken this position and if I am wrong in this regard, I ask the Leader of the Seanad to disprove my point. The Deputy Leader also might agree to my proposal, which is to publish the amendments at the end of this week. The Leader should not wait until Tuesday morning to publish them but should enable Members to see them. This at least would give Members a couple of days to consider these complex amendments and an opportunity to deal with them when they come before this House. The Government should consider this not unreasonable request.

Today, the Seanad got an opportunity to speak on the business plan for NAMA in advance on the Bill coming before the House late next week. Minister Martin Mansergh was in the chamber to listen to the contributions from Senators on all sides. Above is my own contribution.

Last night in the Seanad, Senator Shane Ross put forward his Appointments to Public Bodies Bill 2009 for discussion. The Bill is the same Bill that was introduced by Senator Dan Boyle in the Dail in 2007, when the Green Party were in Opposition but Senator Boyle said that he could not vote for the Bill without the support of Fianna Fáil – something he failed to get. I spoke on the issue and below is my contribution:

As I listened to Senator Dan Boyle speaking on this topic, it occurred to me that greater love for, or adherence to, a Government hath no man than to vote against a Bill he authored. That is the position the Senator finds himself in this evening. I have previously heard him try to spread the blame for this problem by saying that everybody has engaged in these practices since time immemorial. While I do not accept that is true, for the sake of argument I will accept for the moment that abuses of this nature have been perpetrated by parties other than the Fianna Fáil Party. Even if that were the case, Senator Boyle must admit he is in a position to address it. He has told us this evening, in a roundabout sort of way, that he cannot get the Fianna Fáil Party to agree to support the Bill proposed by Senator Shane Ross. That is manifest. Senator Boyle has told us that he continues to agree with the contents of the legislation, but cannot persuade his colleagues to agree to it. That is precisely what has occurred. The Senator has pointed to the marginal references to this issue in the programme for Government, but unfortunately that does not meet the point he made when he correctly advocated this legislation some years ago. Senator Ross and others have quoted liberally from what Senator Boyle said on that occasion.

I agree with and welcome this Bill. I congratulate Senator Ross on pursuing this important initiative. He is right when he says there needs to be far greater accountability at the heart of our system. I distinguish to some extent between accountability and transparency. We certainly need much more of the former. It would probably be more difficult for us to achieve accountability although we should strive for it, but transparency can be achieved much more quickly and very easily. Even if there is no measure requiring an appointee to a public body to account for himself to an Oireachtas committee, although this should be an objective, there should at least be some transparency so as to find out who are the candidates. We should find out their qualifications and the basis on which they are appointed to any given public body.

I do not believe political participation or involvement in a political party, irrespective of which party, should operate as a bar to selfless and honourable service on a public body in the public interest. It clearly does not do so. The problem, suspicion and, in many cases, the reality is that people are appointed to public bodies not because of their merit, which may exist, but because of their political connections. That is the difficulty that arises. If Members on the opposite side of the House believe this is more a perception than a reality, they are incorrect because there are so many examples of patronage in public appointments. I have witnessed many cases personally, as have colleagues.

Even if patronage were more a perception than a reality, why could we not achieve the transparency the Bill seeks? If the Members opposite believe it is all exaggerated – Senator Ivor Callely is upset about people talking about patronage and believes there is none, apparently – we should ascertain whether they are correct. Let us have basic transparency of the kind advocated by Senator Ross and others. They advocated that individuals should appear before responsible committees of the Oireachtas to answer questions. What is wrong with a question-and-answer session? While the committee would not make the appointment, it would serve as a public forum allowing us to see who the candidates are and determine their views, merit, background and thinking on the issues germane to the appointment to be made. That can do no harm whatever and can only open public debate and do a service to the public.

In the legal profession and across the system, one hears certain phrases all the time. Members can say or pretend in the House that patronage does not occur but we know how the spoils of war are divided in this country. By “spoils of war”, I mean the spoils of political war. People get appointed to bodies because of their political background and Senator Phelan should note that people get appointed to the Employment Appeals Tribunal because of their political connections. This is absolutely the case and the dogs on the street know it. I am not saying people of merit do not get appointed to the tribunal. I practised before the tribunal. People of very considerable merit get appointed to it but one must ask whether they are being appointed because of their merit or their political background. We need a system whereby this can be addressed and in which there is public confidence.

Implementing such a system does not mean people will be excluded because they have particular politics. People are entitled to have politics and should not be excluded because of having a trade union background. Reference was made to trade union fat cats and employer fat cats in the debate on FÁS and it was implied they should not be appointed to boards. I found much of this argumentation to be quite excessive and, in many cases, not justified by the reality that many appointees, including trade union representatives, with whom I am familiar, and employer representatives are very fine, honourable people who have performed extremely well on public bodies. However, the honourable ones among them – I would say they are all honourable – would and should welcome an opportunity to have a public forum at which they could be questioned by Members of the Oireachtas on their involvement and expertise in the area in question, and their views on major topical political issues germane to the body to which they are appointed.

It is time this sort of legislation was introduced. There is a need to eradicate any element of patronage, as implied in the explanatory memorandum to the Bill. This is absolutely true and I do not know why any Senator should be so upset by this being at the heart of the legislation. I am glad Senator Boyle still aspires to introducing such legislation and it is a pity he cannot, on this occasion, persuade his colleagues in Fianna Fáil to agree.

I never received an answer to my question to the Leader of the Seanad some weeks ago as to when and why the decision was made to move from a policy of securing savings of €4 billion in public spending through a combination of €2.5 billion in spending cuts and €1.5 billion in taxation measures to a position where the entire €4 billion is apparently to be achieved by way of cuts alone. Reports in today’s newspapers say the Taoiseach has put forward another version of his “my way or the highway” approach to the debate on the forthcoming budget with an indication that what he envisages will occur come hell or high water.

Will the Leader facilitate a debate on the fundamental issues associated with the desirability and advisability of instituting such radical spending cuts? The question is whether our economy will be able to withstand such deep cuts in public services and the associated impact for the entire economy. No other country in the OECD is engaging in these types of radical cuts as a matter of policy in the midst of a severe recession. The conventional wisdom has always been that governments should wait until the economy shows some signs of improvement before engaging in such draconian reductions in public spending. The Government apparently shared this view earlier in the year but it seems there has been a change of mind in the interim. No explanation has been given in this House or elsewhere as to whether such a decision was made and, if so, why or when it was taken. When I put this question to the Leader on a previous occasion he replied that we must wait to see what is done in the budget.

There must be a debate on how increases in taxation can contribute to making up the required saving of €4 billion in public expenditure. Why was the Commission on Taxation tasked with setting out the various options in this regard if its findings were to be jettisoned?

I am not saying that anybody in the Labour Party or elsewhere would feel particularly comfortable standing up and advocating tax increases. Nobody likes to do that, but it is part of the picture and we have to deal with the balance between cuts and taxation measures. It is simply not good enough to spend money and effort on these reports during a serious recession and do nothing. There is a need for serious public debate in places like this House. I second the proposal on the Order of Business that we have a debate here in advance of the budget on what ought to occur.

Yesterday, the Seanad met for the first time since Fine Gael Leader Enda Kenny proposed the abolition of the Upper House. Unfortunately, due to a prior commitment, I only got to put forward my view at this morning’s Order of Business. Below is a transcript of my contribution:

Senator Alex White: I wish to comment briefly on the issues which exercised Members yesterday. I listened to the proceedings on the radio in my car and what I heard was quite bleak. It pains me to say it.

Senator David Norris: We missed the Senator.

Senator Alex White: Over and over again, Members were exploding with indignation. I include in that the Senator who has just—–

Senator Paschal Donohoe: Exploded.

Senator Alex White: Yes.

Senator David Norris: If that was an explosion—–

An Cathaoirleach: Members should cease interrupting. There should not be a repeat of what occurred yesterday.

Senator Alex White: There is a serious point to be made in respect of this matter. It was stated on the radio a few moments ago that in the eyes of many members of the public, the show was over for the Seanad.
It may seem I am adopting a holier-than-thou attitude. However, I accept that I am sometimes not behind the door in interrupting other Members.

Senator Terry Leyden: Why was the Senator not present yesterday?

Senator Alex White: Members of Parliament should have a better sense of what—–

Senator Terry Leyden: The Senator should have been here.

Senator Alex White: This is another example of that to which I am referring.

An Cathaoirleach: Senator Leyden should not interrupt. This type of behaviour marked yesterday’s proceedings.

Senator Alex White: People who have been Members of Parliament for 20 years or more do not appear to be able to act with a basic level of decorum.

Senator Paschal Donohoe: At least we were here.

Senator Frances Fitzgerald: Yes, we were.

A Senator: Please allow the Senator to finish.

Senator Alex White: During yesterday’s proceedings Senator Regan took the opportunity to misquote me. I never stated this House served no useful purpose. I am not a supporter or member of the Fine Gael Party. However, for Senator O’Toole to describe what seems to be a genuine proposal that we consider the concept of institutional reform – including as it relates to this House – as harking back to the 1930s is so absurd as to draw the level of debate so far down that said debate is almost not worth having.

More :: Read the full transcript of yesterday’s Order of Business by clicking here
More :: See RTE’s report on the proceedings