Budget 2023 falls short. We need an Ireland that works for all.

28 September 2022

As a country, we are unrecognisable from the young, poor and conservative State we were when the tricolour was first raised over Dublin Castle in 1922.

We are now richer than we have ever been in our history. More liberal, open, diverse, welcoming and confident as a society than anyone could have imagined even half a century ago.

Ireland though is unfinished business. The idea of Ireland is a work in progress.

By standard international measurements, Ireland appears to be doing well.

The third most competitive country in the world. 8th in the UN development index. A sophisticated economy. High levels of third-level education. We are healthier than ever. Living much longer than our grandparents did.

Labour is a patriotic Party. We have always tried to put our country first when it might be easier to stand aside.

We are proud of many of our country’s achievements. But a Party that cares about our country has a duty to highlight Ireland’s problems too. And there are many of them. We also have a responsibility to provide solutions. And we do.

Put simply, we are not as well off as we think we are.

For too many citizens, Ireland is falling short. We need an Ireland that works. For all.

Today marks the culmination of the longest run in to a Budget in our history.

This summer we have seen more kites flown by government than you’d find on Bettystown Beach in good July.

Some of the once-off ‘shock and awe’ measures unveiled today flatter to deceive.

A €3billion self-proclaimed bonanza designed to take the bare look off a meagre budget for 2023.

A lot of money spread so thinly that some won’t even notice, while many will still need more by the time this winter is out.

The mantra of this budget was supposed to be ‘targeting’. Targeting, targeting, targeting. On the evidence of this budget, your shooting is seriously wide of the mark.

All that any of today’s pre-Christmas measures can promise is a temporary respite. A few weeks of a break from the permanent cost of living crisis felt by far too many citizens who are always running to just stand still. The people a two-tier Ireland is leaving behind.

Wads of cash thrown about like snuff at a wake, but with little honest reflection from this government as to why it is that this State has to do so much heavy lifting in the first place to keep working people off the breadline?

The naked reality is that when we peel away the €3billion amphetamine hit between now and New Year’s Eve, what we have before us today is a budget package for next year that will in truth do nothing to transform our country.

Nothing to fulfil the modest hopes and dreams of our people who wish for something different;

  • A chance to live securely, to perhaps own their own home.
  • To not have to worry about the cost of having a family
  • The hope that your hard work and long hours might be rewarded with better pay
  • The ambition of an Ireland that works for all.

For far too many, the harsh reality is that Ireland is simply not working.

Our market knows best housing model is smashed. Vital climate targets are being missed. The cost of looking after our youngest is soaring. And the scandal of low pay destroys us, bit by bit, every day.

And now, we are faced with the dire prospect of half of all Irish households in energy poverty.

And yet, just like the Tories you won’t levy a windfall tax on the disgusting profits of energy companies. This demands a detailed explanation.

Every year’s budget gives an insight into a government’s priorities. What it’s made of. What drives it. What keeps its members awake at night (apart from who’s going to be the next President of the Eurogroup, of course).

The tests for this package are clear. They are straightforward.

Will this Budget keep people warm in their own homes this winter and into next year?

Will you properly use taxpayers’ hard-earned money to stop low and middle-income households from going under?

Will people be able to make the rent or the mortgage?

Will you put those who are finding it hardest to cope, first?

And critically, will you and can you as a government keep the lights on this winter?

Because if it’s a case of lights out in Ireland this winter, it’s going to be lights out for this government too. Plain and simple.

This is a crisis like no other.

And it demands a response like no other that meets the scale of the crisis

This isn’t the 1970s. Neither is it the 2000s when FF last left the country in tatters.

Here is the difference. In 2022, thanks to the hard work of the Irish people, Ireland is one of the richest countries in the world.

But that is hard to credit though when I see proud, hardworking people handing back food they can’t afford when they get to the supermarket checkout.

It is these families you need to think about today. Will this Budget work for them?

Will what you announce today mean they can take their shopping and their human dignity home with them intact, this year and next?

You see the rude health of the national finances means next to nothing if the family finances are about to give way.

To borrow a phrase from the great John Hume – you can’t eat good GDP figures.

Impressive exchequer returns and massive tax revenues alone won’t heat our homes.

But the cash available to government will – but ONLY if the right choices are made.

And this year’s surplus of €4.5 billion and the bulging revenues forecast for next year gives us options.

Choices we could only have dreamt of during our painful recovery from the last crash.

It would be churlish not to recognise that the €3 billion in once off measures is not significant.

It is a substantial deployment of resources – in anyone’s language.

But once-off payments now, and a €12 increase in social welfare rates won’t help next February and March when the weekly cost of living has risen by so much.

In truth, many of the measures you have announced today could have been brought in weeks, if not months ago.

If anything your delays, your determination to do a ‘big bang’ announcement for the cameras all in one day has left too many hanging on for too long. This is as uncaring as it is irresponsible. It is revealing of a government more concerned about its own future than the future of hard-pressed families.

A summer social welfare bonus could have been paid in July. Money off crippling college fees in August, easing the anxiety for hard pressed students and worried parents.

Free school books for primary school kids could have been delivered this year (an achievement that owes more to Deputy Aodhan O’Riordain than a Minister for Education who is back of the class when it comes to real reform) rather than next. Why should the less well-off have to wait until next year? It is absolutely unconscionable. But that’s the choice that has been made.

You were indifferent in last year’s budget to the real needs of ordinary people for whom a cost of living crisis is nothing new. You have all been asleep at the wheel for months.

Since this time last year, wage rises have not kept pace with rising costs. Real incomes have fallen well back. We have seen real cuts to the value of pensions, and it’s a case of families having to earn €2,000 more before tax than they did just a year ago so they can buy the same basics in their weekly shop.

But what’s keeping people from their sleep this autumn is the fear of a succession of eye-watering energy  bills hitting the mat. The single biggest reason why inflation is so high is the record cost of energy. And what has been your response? The confetti-like throwing around of a few bob here and there.

A €600 energy credit for every household – irrespective of family size or wealth, BER rating or energy use. You’ve had half a year to come up with a better model but you are betting the farm on flat payments that still benefit those with multiple properties.

At the start of 2021, the average household energy bill was €1,900. It’s now around €4,000 and still rising this winter by up to 25% or more. Closer to €5,000. A €600 credit covers less than 20% of the rise in energy prices.

We are constantly told we have a sophisticated tax and welfare system. Yet you are incapable, or more correctly unwilling to use our system to target the support to where it is needed the most. This is a political decision, end of story.

I get why you favour a rinse and repeat of the electricity credit approach. It’s popular, for a start and it is needed by many. However, the principle of equity and fairness would demand that you claw some of this back from the better off by way of a tapering off of tax credits for those with incomes of over €100,000.

The worst, most abject and most miserly in the EU bloc. At a time of real national need as families and businesses are driven to the wall, this should be a source of national shame and embarrassment.

If energy is the main driver of growing costs for homes and businesses, what has government done in this budget to actually control input costs? Absolutely nothing on the evidence of this budget.

When what we need is intervention in the market to bring costs down, we get a re-run of the one for everyone in the audience wheeze.

When progressive governments across Europe, like in Spain, Portugal, Denmark and many others are capping the wholesale cost of energy, Ireland stands apart.

Under this government, Ireland really is exceptional, and not in a good way.

The capping of prices is now the mainstream European response. This is the direction of travel and we are not on the bus.

We have heard every excuse under the sun as to why Ireland is different.

The single most effective way to bring down the inflation that is crippling families and businesses is to control the price.

Controlling the price of energy helps control the price of everything else. It’s as simple as that.

The energy crisis is turning into a jobs crisis. Good manufacturing jobs in places like my hometown of Drogheda are being lost this very week. And all because viable companies are being put out of business or are down to short-time because they cannot take the rising price of gas and electricity. These workers are the canaries in the coalmine. So many more jobs are in the firing line. We note the business supports package but there is no specific wage support scheme as proposed by Labour to halt lay-offs. This is a must. There is no point keeping the doors open to only make sure that the energy companies are paid.

Jobs must be kept alive and your business package must be conditional on no lay-offs, no bonuses and no dividends to shareholders at a minimum. We have said cap energy prices to address input costs and use the funds we have to support jobs. We all know businesses need to be supported but will this be allied with a demand not to cull jobs? We need to learn the lessons of the Covid schemes.

The energy companies must absolutely love Ireland. It’s heaven for free market profiteers. We have a regulator who is nothing but an enabler for the big companies. An agency with a consumer mandate that is powerless to act for consumers on crazy, unjustifiable standing charges even when homes are set to freeze.

And before anyone mentions our reliance on gas from overseas, think about the Corrib field for a minute? The field off the coast of Mayo gives us over 30% of our gas. Their owners including Vermillion have boasted extraordinary pre-tax profits of $1.4 billion in 2021. Imagine what their profits will be for this year! Yet still they carry on, untouched.

In contrast Labour would have clawed back up to €1.2billion with a 30% extra levy on the windfall gains of these outfits. Ceann Comhairle, there really is a special place in hell for those who profit off the back of war and human misery. Government is letting them away scot-free.

Energy is a public good. Especially now. Labour has proposed using the same laws we used in the 1970s during the oil crisis to take the Corrib Field under control for the emergency period.

We have options. Options government continues to ignore. Options that are too radical for some but are in the European mainstream now. Germany nationalised three oil companies last week to secure its supply and help to manage cost.

Four short years ago few would have envisaged the over-night nationalisation of private hospitals to help fight a pandemic. Today we need the same fresh thinking to keep people warm and away from the breadline.

I’d say this to government. Take off the ideological blinkers and let’s decide instead to do what works for our people.

These massive profits are particularly hard to take when workers are now having to endure real cuts to pay and to their living standards with no let up into next year.

Inflation is now running at three times the rate of incomes. Those on lower incomes are feeling it the worst.

We know who the hardest hit are, but you wouldn’t know it from Budget 2023?

Mark my words when I say that this Budget will see more citizens slip into a spiral of poverty that, once it traps you, it is hard to get out from its grasp. Those who are poor today will still be poor next year. This Budget will not change this and we will be back here again next Spring having the same arguments.

  • A government that is serious about supporting those with the most need would bring weekly payments for pensioners, carers and the disabled above the rate of inflation to €20. And they would bring in their proposed rate increases now – not next year.
  • A government that wanted to assist 165,000 low paid workers make ends meet would not wait until January for a minimum wage increase of 80 cent an hour.

The tried and tested way to help working families is to cut their costs, not taxes.

The State must help control the things the government can manage. That’s the job of government – especially this year and next.

We acknowledge steps taken on the fuel allowance but Labour would have gone further and faster.

That’s why on energy and fuel Labour wants to bring tens of thousands more at risk households into the fuel allowance system and add a tenner on to the Household Benefits package.

  • It’s why Labour says we must cap childcare costs at €200 a month, costing €275 million in 2023.

It’s why Labour says we should have a monthly €9 public transport climate ticket costing €300m over the next six months, as a cost-saving and climate positive intervention.

It’s why for a cost of €100m every child and young person under 18 should have free access to their GP on our way to a health service free at the point of entry for all.

It’s why we have argued for wholesale government intervention in the energy market, not merely for a cushioning of the blow.

And there is nobody more at risk of energy poverty than those who depend on their social welfare payments, and those who work but are on low or modest incomes.

You will present the social welfare package as one of the largest outside of the pandemic budgets.

In the round, it is. But a look under the bonnet is revealing and here is the central point.

Fr. Sean Healy said this in Saturday’s Irish Times; “The budget will turn on whether the increases are at €20 or not”. Well, they’re not and that is to your shame. That’s the real story of this Budget.

Will FF backbenchers really give this their backing? Is it any wonder they have an identity crisis? Well, they won’t even recognise themselves if they let a €12 a week go through.

There should be no excuses whatsoever for a less than €20 increases to social welfare. And I say that to SF too.

Anything less is a real cut to incomes and to the living standards. That is an undeniable fact.

We know who the worst hit are, yet you turn their backs on them and on all the expert advice. That’s shameful.

You will of course point to increases in the living alone allowance, some adjustments to the working family payment, to qualified child payments and other supports and you will claim, in the round, that you are ‘targeting’ money to those who need it most.

But you won’t pull the wool over the eyes of a pensioner who knows that last year’s fiver was really only worth €4.60 when you take inflation into account.

In fact analysis by the likes of Age Action shows that spending power is likely to be down over €20 a week, which makes the €12 you put on the pension and other social welfare payments especially miserable. Let that sink in.

That you are also, as a result, taking nearly €2billion out of the economy as a consequence at this uncertain time is hare-brained and economically illiterate.

We note the decision to change personal income tax bands and credits as part of a wider indexation plan and Labour acknowledges why this was done.

We do need a wider conversation on tax in this country. It’s a conversation the Tanaiste has decided he wants to close down. He doesn’t like the answer the Tax & Welfare Commission gave him so he took his ball home with him.

Budget 2023 has left the government little space to fund new measures across health, education and other areas requiring addiotinal State investment. Close to half of the €6.7billion available is to meet standstill demands. In reality, as prices rise, spending earmarked for public services will deliver less and less, regardless of the spin you put out today.

It’s why we have argued that almost €3billion could be raised from additional taxes on non-productive assets and wealth – just like the direction of travel in the Tax and Welfare Commission’s analysis and recommendations which were so petulantly trashed by the leader of FG and his backbenchers as soon as the report was printed.

Labour wants to see an Ireland that works for all. We are honest enough to know that the things we want, the things our country needs – affordable childcare, our transformation to a carbon-free economy, a health service we can all be proud of need to be paid for. The same honesty should be demanded of government and of SF too who has yet to respond to the Commission’s report for fear they might discommode anyone.

The Tanaiste’s denunciation of the Tax and Welfare Commission reminds me of Michael Gove and his “we have had enough of experts” swipe when he didn’t like the warnings he heard about the impact of Brexit. This is dangerous territory.

The Tanaiste has at least done us a favour. We now know without any doubt whose side he is on. The mask has slipped.

Climate is our existential crisis but this budget is weak on measures that grasp the urgency of the moment. Where are the radical measures to tackle our growing emissions? Its jaw dropping how little this budget does to tackle emissions. Labour called for a €9 a month climate ticket, massive increases in retrofitting and huge additional investment in solar to add more generating capacity and reduce bills.

But the day to day crisis that is crippling Irish families is housing. We have a chronic underinvestment in social and affordable housing. We need a winter ban on evictions to stop the flows into emergency accommodation. The targets for new social builds next year is 9,100. We know this year’s housing targets won’t be met.

And without an increase in the existing capital budget housing completions next year also won’t be met. Construction inflation is running at 14% or more. That means without more resources the State will build fewer homes with the same money.

This budget isn’t climate-proofed, poverty-proofed or housing-proofed.

It is only politically proofed, designed to get this government to the other side of the game of musical chairs in government buildings.

It fails to address the crises our country faces. By committing over a billion to tax cuts instead of building more homes, reducing emissions and eliminating poverty. Don’t get too distracted by the once-off spending frenzy – the clear message is this – once we get to the New Year, it’s back to business as usual.

This government is intent on an Ireland that works for the few and that’s what your budget today confirms. When the dust settles, that will be clear to everyone.

In contrast, Labour wants an Ireland that works for all.

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