This Budget does not reflect the ambitions, the hopes, or the passions of the Irish people.-Howlin

12 October 2016


Earlier this week, in a newspaper article, I made two predictions.
My first guess was that Minister Donohoe would wear a blue or a purple tie.
My second was that this Budget would not be regarded as fair, progressive, or even sensible.
I take no joy in being right on both fronts.
For the first time in six years, my party is responding to rather than delivering a budget.
And I need to be clear from the outset – we will oppose the overall package announced yesterday.
But that is not to say that the Government got everything wrong.
Take the Department of Justice and Equality:
I warmly welcome the intention to recruit 800 Gardaí next year, as was called for by Labour and others.
I particularly welcome the intention to recruit 200 civilian staff to an Garda Síochána.
And I hope this shows a real willingness to fully implement the recommendations of the Garda Inspectorate.
It’s a smaller matter, but I also want to welcome the commitment to invest €1m next year for a new round of community CCTV schemes.
Overall, I think the Tánaiste has done well to secure the funding needed to strengthen our police force.
I hope during the year that she sees the sense in expanding the number of Gardaí assigned to community policing duties, and I will be following up on that matter over the coming months.
The Justice vote is not the only area of the Budget that includes welcome news.
As noted by Deputy Donnelly on radio this morning, and as called for by Joan Burton for some time, Minister Noonan has moved to clamp-down on tax avoidance by vulture funds.
Such activities undermine public confidence in the equity of our tax system, and must be tackled.
I can assure the Government they will receive the full support of the Labour Party in implementing this commitment.
The review of corporation tax is a welcome, if flawed move towards ensuring that every company pays a fair share.
Seamus Coffey is a highly respected economist, and I wish him well with his work.
We asked the Department of Finance to cost the introduction of minimum effective rates of corporation tax in advance of this budget.
Unfortunately, they refused to do so.
I hope that Mr. Coffey will be able to help the Department of Finance in this area in particular.
But while wishing him well, we still believe this process to be flawed.
Carrying out one-off reviews into corporation tax isn’t good enough anymore.
Every time changes are made to our tax code, an army of lawyers and accountants begin scratching around, finding ways of legally avoiding their moral responsibilities.
Even if this review results in the closing off of every existing loophole, and that would be a good day’s work, it will only take a matter of weeks or months at most until new loopholes have been found and exploited.
That is why the Labour Party has long called for a standing commission on taxation.
Such a commission could make sure that we keep ahead of developments, or at least respond rapidly to them.
Perhaps on the conclusion of Seamus Coffey’s work, the Government will see the sense in this proposal.
There are other welcome aspects of the Budget:
A level of indexation of all social welfare payments is welcome.
A failure to peg social welfare rates to at least the rate of inflation would lead to a real reduction in living standards for our most vulnerable citizens.
The Labour Party called for this in our alternative Budget, and we are glad to see the Government act upon it.
That said, the entire Budget is called into question if the Government cannot confirm the date increases will take effect.
This means that the Government doesn’t know what it will cost.
And makes it hard to take any of the Budget at face value.
Leaving that issue to one side for a moment, increases to tobacco taxes are sensible, and will deliver improved health outcomes as well as improved revenues for the state.
An increase to the Earned Income Tax Credit, while less than the self-employed were expecting, is another welcome step towards equal treatment for the self-employed.
Last year, with Labour in Government, we improved the Christmas bonus by 50%, increased the pension by €3 a week, and increased the fuel allowance.
In total, this delivered an extra €336 to the average older person.
It was castigated by members of Fianna Fáil, who described it as an insult in this chamber, and on doorsteps across the country.
This year, the headline weekly rate increase is slightly larger, but significantly delayed. And there is no increase to the fuel allowance and only a 10% increase to the Christmas bonus.
It will deliver much less to older people – about €245 for the average person.
I note that Fianna Fáil don’t consider this an insult.
That said, any increase to the incomes of older people is welcome.
The moves towards a universal childcare scheme are also welcome, if woefully underfunded.
We’ve heard much over recent weeks about an increasing investment of €100-€150m to deliver universal childcare.
That would have made sense.
Last year, this year, we spent €82m to introduce a second free pre-school year.
That shows the scale of what it costs to make an impact in this area.
What was announced yesterday was very different.
Yesterday’s announcement amounts to a new scheme with total funding in 2017 of €32 million.
We support the Minister’s overall approach. But to imagine that a sum of €32m will deliver anything like universal coverage is misguided.
And it certainly does nothing for the quality of the care and education our youngest children receive.
There is nothing to improve pay in the sector.
And nothing to improve the qualifications of those in the sector.
But notwithstanding these points, yesterday was at least a start.
I have deliberately spoken at some length on the positives of this Budget.
We in the Labour Party are more than happy to give credit to the Government when you implement measures that are progressive.
But I made clear at the outset that the Labour Party will not support this Budget in the round.
And that is because in the round this Budget cannot be regarded as achieving the improvements to public services and living standards for our people that could have been delivered.
Notwithstanding the supplementary budgets which the Government denied would happen this year, but which we got confirmation of yesterday, the fiscal space was limited this year – we all knew that.
But even within the fiscal rules, choices were possible.
We in the Labour Party argue that the wrong choices were made.
In the first instance, that is because of Fine Gael’s insistence on abolition of the USC.
The tax cuts announced yesterday amount to less than €2 a week for someone on €20,000, and €3.25 a week for someone earning median income.
It’s hardly a surprise that people aren’t dancing in the streets.
But the opportunity cost of that decision is the real tragedy of this Budget.
By deciding to press ahead with USC cuts even when funding was so limited, the Government was unable to fund other areas.
One area where this Budget is particularly lacking, is in meaningful supports to those in low-paid work.
I was astonished to hear the Tánaiste on the radio this morning, declaring that the Budget published yesterday is “making work worthwhile”.
The reality is a little different.
For those on the minimum wage, yesterday saw a miserly increase of 10c per hour.
If estimated inflation of 1.5% or so during 2017 comes to pass, an increase of 15 cent would have been required just to keep pace with inflation.
So in real terms, those on the lowest wages can expect a pay cut to materialise over the next year.
To make matters worse, Minister Varadkar didn’t include any increase to the thresholds for Family Income Supplement.
And so a low income household will see a reduction in state support.
To give a concrete example, take a one parent household, where the parent is in full-time, minimum wage employment and has one child.
Before yesterday, that person had an income of €366 per week. They received a further €87 a week from the Family Income Supplement. In total, they were taking home €453 a week.
Yesterday’s pittance of an increase to the minimum wage would see their weekly income rise to €370 per week. But their Family Income Supplement will now fall to €84.60 a week. In total, that person can expect to take home €454.60 a week.
This person has just been told that they will now make an extra €1.60 a week, which will be more than wiped out by inflation.
It’s hard to imagine they will agree that this Budget is “making work worthwhile”.
What’s maddening about this is that it wouldn’t have cost very much to make it very different.
A simple change to the terms of reference of the low pay commission could have mandated them to work towards delivering a living wage for all.
That would have led to a larger increase to the minimum wage.
And a small amount of funding to increase the Family Income Supplement could have raised the income thresholds accordingly.
But that’s not a choice this Government thought to make.
So, this Government has shown scant regard for the low paid. What of other vulnerable groups in our society?
Arguably, children are the group most poorly served by this Budget.
I’ve already mentioned our broad support for the work being done by Minister Zappone, while noting some of our concerns about the weaknesses in what was announced yesterday.
But to essentially propose that childcare is the only investment worth making for children is bizarre.
Where in this Budget was any action on the commitment contained in the Programme for Government to reduce class sizes in primary schools?
We know that smaller class sizes matter – particularly to young children, those with special needs, and those from disadvantaged backgrounds.
Last year, we made a start, and expected class sizes to continue to fall over the coming years.
Yesterday saw that expected progress come to a shuddering halt.
Where was the action in this Budget to increase funding to schools to reduce their reliance on voluntary contributions?
Where in this Budget was any action to tackle the appalling waiting lists for access to early intervention teams for children with disabilities?
The extension of medical cards to children who qualify for the domiciliary care allowance is welcome.
But children with disabilities need more than access to a doctor.
They need, at an early age, to get access to occupational therapy, physiotherapy, or speech and language therapy.
They need to be supported to reach their potential.
Now this doesn’t come cheap.
To fully staff all early intervention teams would cost about €270m according to the Department of Public Expenditure.
Labour’s alternative budget suggested this could be done over five years, with an additional 780 staff coming on stream each year.
Yesterday’s Budget, in contrast, appears to have done nothing – absolutely nothing – to begin clearing this backlog.
Child benefit is a universal payment that helps parents meet the day to day expenses of raising a child.
For some reason, the Government has decided that is the only social welfare payment that doesn’t deserve an increase in 2017.
Area after area, it is clear that apart from Minister Zappone, there isn’t a Minister that has chosen to prioritise investment in children.
This Government could have made a choice.
After a year of reflecting on our past, we could have stepped into the next century with a determination to make Ireland the best country in the world in which to raise children.
But that’s not a choice the Government thought to make.
As a people, despite what some commentators may suggest, we value much more than a few bob in our pockets.
We have a rich culture that is a deep source of national pride.
We punch above our weight in sporting arenas all across the globe.
And we are generous, and recognise that as a country we are much better off than many others.
As a people, we recognise these things.
Our Government failed to do likewise yesterday.
The easiest thing in the world for the Government to do was to deliver a real increase to the funding of arts and culture yesterday.
We had already funded a commemorative programme we could all be proud of.
All you needed to do was leave that money ring-fenced for arts and culture.
But that you couldn’t, or wouldn’t do.
You had an easy option – use the funding provided to commemorate 1916, and bequeath a legacy to future generations by permanently expanding funding to the arts.
But that’s not the choice you made.
Minister Ross must surely now rank as the one of the least effective Ministers our state has seen.
From arch-critic of Government spending, to internal Government commentator, he has certainly moved from one role to another.
But yesterday proved he has a long way to go to complete the transition to become a competent Minister.
He proposed nothing – not one new initiative – in the transport area.
And worse, he is overseeing a massive reduction in sport spending.
I’ve mentioned before the example of how the UK responded to the Atlanta Olympics.
Having secured just one gold medal, they decided this wasn’t good enough.
They invested heavily in sports – from grassroots clubs right up to high performance athletes.
This year, they took home 27 gold medals.
After Rio, surely we could have done the same.
Surely we could have said yes – we can be more ambitious.
And in doing so, we can inspire a generation into leading physically active, healthy lives.
But that’s not the choice the Government made.
And the Irish Aid budget sees no increase next year, with a total overall increase to ODA spending of just €10m.
Next year, our spending on overseas aid will drop to just 0.3% of gross national income.
In other words, we will slip further away from our target of 0.7% instead of making any progress towards it.
And the tragedy of this is that the Government makes such a choice while we all continue to watch the unfolding events in Syria with horror.
When Ruadhán Mac Cormaic reports that the city of Aleppo is dying while the world watches, we all feel a reaction.
When we see the bodies of children and adults lying in rubble, it strikes a deep chord within us.
The statistics are even more harrowing than the pictures.
There are now 8 million displaced people inside Syria.
4.5 million people are under siege or cannot be reached.
There are 4.5 million refugees beyond Syrian borders.
And worst of all, 1.5 million people have been injured and 250,000 people killed.
This is the gravest humanitarian crisis since the second world war.
And Ireland is doing a little bit. But of course we could do more.
Sadly, that’s not the choice our Government made.
We in the Labour Party believe this Budget contains some welcome developments.
But we also believe it is littered with poor choices.
And we don’t believe it reflects the ambitions, the hopes, or the passions of the Irish people.
We will oppose it for that reason.
Before I conclude, I want to return to an issue I mentioned at the beginning of my contribution, and which I raised on Leaders’ Questions this morning.
It is astonishing that the Minister for Social Protection doesn’t know when increases to social welfare payments will take effect.
Paschal Donohoe didn’t know the answer when interviewed on the Sean O’Rourke show this morning.
And most disturbingly, the Taoiseach couldn’t answer a straightforward question on the matter in the house this morning.
We need to be clear on this – the date that a measure takes effect isn’t just an administrative change, as the Government and Fianna Fáil would like us to believe.
Every additional week will come with an additional cost.
If the Government cannot confirm the start date, then they cannot confirm the cost.
And if they cannot confirm the cost, then they cannot stand over the Budget documents published yesterday.
This would be funny if it wasn’t so serious.
We shouldn’t be asked to continue debating a document that it is now clear has not been finalised.

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