Minister for Social Protection Joan Burton was on Brendan O’Connor’s Saturday Night Show to shed light on pensions, cronyism and bondholders.
It was like turning on the Christmas lights. In reverse.
Brendan O’Connor: “Is there anything you can do about say, at the moment, the pensions that people are walking off with. We seem to be told ‘they’re is nothing we can do about it’. But then, on the other end, it’s very easy to cut someone’s social welfare.”
Joan Burton: “Well, can I give you an example? The late Brian Lenihan and I were in the same constituency so we had a lot of discussions and chats and the one thing that I would say, is that in his last budget there was a big issue around bankers’ bonuses and he and I had a lot of conversations about this and one of the things I proposed then was looking at the Universal Social Charge and maybe applying an extra rate of that to the bonuses, because there were bankers getting really obscene levels of bonus that weren’t..”
O’Connor: “So what you’re saying is, not to get into too much technical detail, you’re saying there are ways around getting at the these people without actually stealing their pensions back off them.”
Burton: “I think it’s possible to do that.”
O’Connor: And are you going to do that?
Burton: “Well, I mean, that’s a matter for the whole Government. It obviously starts with the Minister for Finance (Michael Noonan) and it starts with Brendan Howlin, as Minister for Public Expenditure and Reform. But, put it this way, it would be a very strange Budget that, where you have to make savings in Social Protection and you also have to make reforms – to make the system more responsive to helping people to get back into education and work, and so on, and, ultimately, into a job. But if the people, who were on a relatively small amount, if they were taking the cut and the people at the top, including by the way, people like myself, who are serving in Government and serving in politics, because I mean I think that’s an element of political leadership..
O’Connor: “So what you’re saying is, in this Budget, you’re going to be taking a big chunk off the people at the top, is that what I’m understanding?”
Burton: “No, I, I’m saying that I think if you look at the view of how the Budget is built, I think it has to balance. And you have to look at how the Budget affects different people in society. And certainly the principle that I would have is that if you have a lot, you have the capacity to give a little bit more. Now that final decision will be made by the whole of the Government.”
O’Connor: “Now. I’m going to take that to mean that Joan Burton, the Joan Burton we know wants to take a big chunk of those guys and their pensions and everything and I hope you’re successful. Joan, there’s a thing, and I feel that if you weren’t in Government, this is something that you’d be giving out about. Do you worry at all, I suppose over 50 years, we built up, as you said, there’s been huge improvements in the treatment of the more vulnerable in society, we’ve built up a very humane society in Ireland. Are we dismantling it all really quickly for Europe to pay off banking debts and is it going to take us years to build it up again. Did you see those people in Abbeyleix in the nursing home? Those people, like, women in their 90s, saying ‘this is our home’ and they’re being thrown out because of Budget cuts. Do you worry about that at all being the person you are?”
Burton: “I think everybody in the Dail worries about that. And, I mean, I think people in Government worry about it. I think people in the Opposition worry about it. But we do have to try and get the country back to economic recovery and economic recovery consists really for our economy, in getting people back to work and getting business capital from the banks, which they’re not really getting at the moment.
And then we also have a lot of people who have very large mortgage debts. And there is a way of helping those people to see light at the end of the tunnel. So they’re the three big jobs.”
O’Connor: “How would you propose we look after mortgage relief..? Because the Government had promised for one, a simple thing, to give more mortgage interest relief and that, kind of, hasn’t happened, has it? What would you favour to help people with mortgage problems?”
Burton: “Well last Monday, I had Declan Keane, the man who chaired the Keane Report, I had a meeting with all the organisations who work with people in my department, like MABS, the Money Advice Budgeting Service, the Free Legal Aid centres, the Society of St Vincent de Paul, all those voluntary organisations, who really try to help people with debt and we met for about three hours and had a very detailed conversation. One of the key things is that, in Ireland, if you become bankrupt, it’s 12 years.
In most other European countries, including the UK, it’s about three years or less. Now it doesn’t mean that you get carte blanche to walk away from your debts because obviously people who can pay, we want people to keep paying. But if people are hopelessly in debt..So, Alan Shatter, my colleague, who’s the Minister for Justice, he’s basically now, at the moment, taking the Government through a series of legal proposals that will bring bankruptcy in Ireland down to about three years.”
O’Connor: “And would include mortgage debt in it?”
Burton: “Well that’s where the debate is at the moment.”
O’Connor: “But you believe mortgage debt should be included I’d say?”
Burton: “Absolutely. And the Keane Report and lots of other commentators have pretty much implied and suggested that. Because, you know, there’s no point in dealing with debt if the biggest debt that somebody has is a problem with their house.”
O’Connor: “Well no Joan, I don’t, in fairness, and I don’t need to tell you this, but if everyone else is getting away with their debts and all these guys, who were punting, investing and gambling are getting away with their debts. And people who just tried to buy a house are being, are being crippled for life by…you know that’s not fair.
I want to bring you back to something there you said about creating jobs and getting businesses going and that kind of thing. Another thing I suspect about you, knowing your form and everything else, is that I wonder, like many of us, if you really buy that austerity is the best way for us to get out of this over the next four years. I think that you probably think, as many of us do, that austerity is destroying the country, there’s no job creation coming, businesses, the high street, all destroyed here. The domestic economy is in the toilet. Do you really believe that four more awful budgets like that, sucking billions out of the economy, is the way to go?”
Burton: “Well if I had a magic wand and I was in charge of Europe I would say we should do the kind of things that Roosevelt did in the 1930s to get America out of the Great Depression. But, you know, we’ve inherited a situation where we have this deal with the IMF.”
O’Connor: “We all know it’s not your fault and everything but, do you…”
Burton: “Now. To…”
O’Connor: “Do you believe in it?”
Burton: “Well to get us out of the debt situation that we’re in. We’ve actually already, for instance, renegotiated the interest rate down. That’s worth about €10billion.”
O’Connor: “People would argue that ye got it..the programmes off the table…but we don’t need to argue about that now…
Burton: “Well, no, in fairness to Michael Noonan he went off to try to negotiate…”
O’Connor: “You’re being a very clever politician here. I don’t think that you believe that austerity, four more years of austerity, is the right thing for this country.”
Burton: “No but if you can do reform, I mean as a country, as I said, we’re spending €20billion on Social Protection. If we could save some of that money but also spend some of it to actually free up people in terms of maybe going back into education, getting employment going, getting opportunities going so people start going back to work, there’s no one magic bullet that fixes the Irish economy. But at a European level. If you think of the total resources of Europe. The total resources of Europe are more than enough to see out this crisis and not have a major recession.”
O’Connor: “If there was a willingness in Europe I guess to do it.”
Burton: “That’s a political conversation we have to keep working on.”
O’Connor: “Exactly yeah. And can I ask you Joan, finally, there is a perception out there, and I think it grows every week, and the perception is that your government made certain promises to the Irish people in order to get into power. If we look at specifics, things like, well the burning of the bondholders. Varadkar said it, Michael Noonan said it. I think you might have said it yourself.”
Burton: “No, I never, ever said it.”
O’Connor: “You never get caught on that one? Well done.”
Burton: “No I never said it. I’ll tell you why, Brendan. I’ll tell you why.”
O’Connor: “But Joan do you think…”
Burton: “I’d only use a phrase like that…”
O’Connor: “Yeah…”
Burton: “To be honest, after I’d done it. You know, you don’t say stuff like that.”
O’Connor: “But do you think, do you understand why people think that promises have been broken, that ye did talk a lot about it and then suddenly ye get in and ‘well, we can’t do that’.”
Burton: “Well I…”
O’Connor: “You’re supposed to be cleaning up cronyism and all that…”
Burton: “Yeah.”
O’Connor: “And then we see Fine Gael appointing all those judges and everything. Can you see why people are feeling maybe…?”
Burton: “Let’s just take the bondholders.”
O’Connor: “Briefly.”
Burton: “In the early 1980s I lived in Africa for three years when countries were defaulting. We don’t want a default in this country.”
O’Connor: “OK.”
Burton: “Because you know the kind of austerity where we’ve to use our Budget now. If you default you basically go under the total supervision of the IMF and you have to get rid of your deficit…”
O’Connor: “But sure we’re already under at the moment anyway…”
Burton: “No but you’ve to get rid of the deficit, probably within a year to two years…”
O’Connor: “I suppose it’s a pity Leo Varadkar and Michael Noonan didn’t think of that before they made those unwise promises.”
Burton: “Well maybe they didn’t live in Africa the way I did.
O’Connor: And Eamon Gilmore did mention as well ‘Our way or Frankfurt’s way’ and it turned out Frankfurt’s way.”
Burton: But remember.
O’Connor: We could talk all..but, I’m sorry, I have to wrap it up. It’s been very interesting and thank you so much for coming in.”
Watch full show here
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