Éamon Ó Cuív: pandemic gaps, CRSS exclusions and modern finance

As a contingency, if he turns up, I'll share my time with Deputy O'Donnell, but if he doesn't, I reserve the right to keep going. We wouldn't like to give. And I have to say that there was a time when a lot of time was given to the Finance Bill, and I was a bit disappointed that I understand it to finish this evening. And I noticed in recent dials... It's to run today. It's not to necessarily finish. The slots aren't being finished. I'm glad to hear that. I'll hold the clock for a moment. It's not down to finish today, Teachta. Thank you. Thank you. Because I noticed every time I get onto the Whips office, I'm told 5 minutes and 10 minutes and whatever. It's a 20-minute slot. It proceeds in 20-minute slots. It does not necessarily finish today, but if the slots aren't finished, it will finish, but if the slots are filled, it will not finish. I can't understand. I asked the Whips office for 20 minutes and they were kind of saying, no, no, we've a limited number of slots. Well, I think you might take that up with a quick question. I will, certainly. I'll talk to you. Okay. I want to get into it. Okay. So let me ask you. I will talk to you. first of all I'd like to deal with some specific issues in the budget and in the second half of what I'm speaking about I'd like to talk about the wizardry of modern finances and how as a simple person I wonder at times how this magic money is always coming about and there used to be certain days matter couldn't be created or destroyed but then it was found if you split the atom you could destroy matter but you could create energy out of it so it became that energy could not be created nor destroyed the use of principles in relation to finance that there was no such thing as a free lunch but the world seems to be having a great free lunch at the moment and I'm wondering if it's so simple why it wasn't done before but I think it is something that it's worth debating but before we come to those issues people have to leave and live in the immediate and in the immediate effects of a pandemic and the first thing I think we have to recognise is that a big slice of society those whose incomes have stayed the same because they haven't had the same spending opportunities either on holidays or on hospitality or whatever actually are probably going to save more money or have more money for paying off their debts than they would have had otherwise because every time there's a lockdown or even a semi-lockdown the opportunities for spending money reduce and then there's the other half of our society who have been absolutely impoverished by what has happened many of them small and medium enterprises who had never depended on the state got on with their business and who now find that the basis of business has disappeared in the main I would have to say I think the government has done a reasonable job trying to help a fair number of people with fairly accessible schemes I don't get a huge number of complaints about accessing the schemes but we do know that there are significant sectors that the schemes keep seeming to miss and it's something I think we have to go back and look at again and go around and see what sectors what types of business are still left out of the loop when the initial pandemic payment came in because it was based on what it earned in January, February, March all of the seasonal industries in the west were left out and that was a huge huge challenge because in the more rural parts of the country depended on seasonal tourism January, February, March actually is holiday time so they get a break from the really hard work of doing 12 and 14 hours a day from Patrick's Day or from Easter back into the back end and up to Christmas sometimes when we look at the CRSS there are two conditions your business has to be closed down by the closed down and the other condition I understand that's there in practice is that you have to have an office office or some place of business now there are many businesses in this country that don't have a specific place of business the place of business is their own homes and there's nothing wrong with that because if we went back 150 years cottage industries were prevalent farming was prevalent things that were done from people's own homes it's only in the more modern world we've insisted everybody having an office and so on and that really actually was a function of telecommunications it's hard to believe that when I went to Curnamona the first shock I found out is it was hard to get a telephone and when we built the co-op first it took us a year to get a telephone and unless you were in the office you couldn't be wrong now for younger people they've never experienced the world without the phone in their pocket so wherever they were that's where their office is so we've progressed into a fantastic situation there's no need for an office so when we look at the crss people like the limousine business all of those businesses to provide services got caught out strangely also when I look at small fishermen and other groups they're not in a good way because of the market collapse not that they were stopped fishing when I go back to for example limousine donors were told that there's all these loans available but they're only if you bought an extra limousine who's gone buying an extra limousine at this date it's hard enough to pay for the one you have what they actually needed was help with the money that they had borrowed I would have to say that on a bigger policy level and welfare and tax and so on we seem to have moved into an as you were situation no policy change there were little bits here or there and the earned relief was brought up to 1650 but that was going there anyway but there was no significant shift how we're doing our taxes or how the burden of taxes lies and these can be done in a cost neutral way I hope that's not a sign of things to come because I think we do need changes in our tax system and as I've often said for the ordinary person doing living their life trying to make tax returns or whatever it is my view that the tax system is inordinately complicated and that we need to look at making life simpler the last 10 years with the introduction of the usc and its multiple rules crinkles and crinkles has added a third payroll tax I believe that we would be better returning to the two-tax system of tax and welfare and the prsi contributions and I think the present one is just ministering to a fetish of the department of finance that's a backdoor way of taxing people on low incomes which I disagree with I also have to say that for the last 10 years the age exemption was reduced and has stayed reduced and the basic tax credits have stayed the same so as for example welfare has gone up I think I counted seven or eight increases in the last 10 years at five or a year it's gone up 35 euro a week more and more people with a small private pension wind up or small self-employment wind up in the tax net I believe that that is a clear policy of finance because it seems to me they actually want to take more tax off the low page I'd like to come to an issue that puzzles me and then I wonder how it is that there's no comeback on it and that is that every country in the world has had a bad economic year well the government have had a bad economic year well the government have had a bad economic year there are sectors of economies for example high tech that all the companies that work online and so on and who sell all the the the the programs that we all get into every day anybody whose business is to sell services internet service I don't mean service selling services on the internet but internet services they've had a great year but most governments have wound up spending a lot more money than they're taking in and creating huge deficits and we're told and with justification that there's no harm in borrowing 20 billion 30 billion name the figures keep writing the checks because we can get long-term money for free that monopoly money is now the way the world is now remember we're borrowing say 30 billion in this country but when you take that across all the countries of Europe and all the countries of the world there's a massive amount of borrowing coming on now in the old days of conventional banking if you are borrowing a huge heap of money somebody had had to save that money and put in the bank and give it out to you but we've gone way beyond that in the sophistication of our systems so this is not money that was saved and made and invested and therefore borrowing this is as far as i can see and i'm very open to the minister of stage here who's an erudite man explaining to me where is all the money coming from why is it being given out for free and what effect is it going to have long term because somebody who's going to tell me this is going to have no effect long term that free money can be written every year it defies every rule of convention in economics that would have been here until the last two years and if you had suggested doing this that Europe would do this just keep printing money all the time if you had suggested doing this 10 years ago when the other crisis is there they say no you have to borrow the money on the market the money has to be real and you just can't keep writing blank checks now i much prefer this way of solving the problem than the last way of solving the problem where we're paying 10 and more percent for money eight or nine percent for money at some stage some stages but i still query that it is this handy that you can keep doing this and that there isn't going to be a kickback somewhere a sting in the tail now the logic of what we're doing would seem to me that what we would have been told is that if you keep writing creating money out of nothing if banks central banks all over the world keep creating all this money out of nowhere that you would create rampant inflation now everyone's going to tell me that's not happening it's sure not happening at the moment but maybe that's because there's a constraint on people spending but i see very little commentary on this i see very little questioning as to how we suddenly wound up in this utopia that you can just keep writing and writing and writing money that has no effect on inflation there's no effect on the value of money and that the answer to all the world's problems in terms of finance was really there handy all the time now i'm sure it's not that simple nothing ever is if we look at all the downturns before and of course we do realize that what happened in the 30s in europe was hyperinflation sometimes in ireland debate at the higher level is very much focused on today on orthodoxy and not rocking the boat and not question the basic logic of the situations in which we find ourselves i said at the beginning when i spoke that we've created two sections of society one that's when it's lucky defending on subsidies in the state when it's unlucky it's just told to suck it up even though they're facing dire financial personal problems and the only thing they've been offered are new loans for new equipment but they're not being offered any help with the debts they have and on the other hand there are a lot of people if the truth is told who are better off and some in certain types of business who are a lot better off now my worry is of course though when things settle down and when covet disappears which no doubt it will that we will get rapid inflation that when you create an over generous money supply that that will happen that you get price inflation and that what we're actually going to do is hit in the second whammy all the people who've been hit on the first whammy and the people who weren't hitting the first family will be relatively better off because they will have much less borrowings no borrowings please god and they no doubt have invested before the chickens come home to ruse in long-term savings at very very low interest rate and if the interest rates go up go up their money will go up that's what happens and therefore they go up on the other hand the people who have to borrow to survive will find that the interest rates and new borrowing for them will go up and that they won't be immune now some people might say the economists assure us i'm sure they will ensure all the european economists and the people writing all this money are going to assure us that everything's under control there's a saying that one's bitten twice shy i said in government when report after report to oecd and all the rest came in the 2-8 period and there's no point in people denying it there were a few outlier economists there were a few people who questioned but the vast majority of reputable economists at the time told us that would be a soft landing and so on and so on i remember when fannie mae and freddie mac broke in america putting a phone call through to the the issues department at the time to an official a senior advisor saying has this implications for ireland and i was blithely assured that no we didn't have subprime lending in ireland and that this was of no issue and that everything was under control i don't think i need to emphasize or go into any detail about what the real truth was that on that sunny day when the news broke of freddie mac and fannie mae in the united states of america we saw at the beginning of a huge international financial turmoil which scars many people and hurt many people so minister i hope when you're summing up you will be able to explain to me in simple english how suddenly the world has changed so much because of covert that we could start writing all this money right across the world and there's literally no downside to it there's going to be no day of reckoning and if it's as simple as that will you tell me why didn't the economist think this one up a long long time ago because we could have provided a lot of services that a lot of people need it and we needn't have worried about the cost good market good market let's go go go go go go go go go go