Kathryn Reilly (Sinn Fein) | Oireachtas source

I too welcome the Minister of State to the House. We all know there is an election coming; it is inevitable. An election is about choices, but when we were faced with making choices to substantially address income inequality and deprivation, for example, it was not done in this legislation or in the budget. The fact that economic recovery has led to worsening inequality should be of major concern to everyone. Having said that, my party recognises that there are some positive elements in the Bill, and we support them. The extension of the tax credit to self-employed workers is overdue, although my party would have chosen to phase it out. Sinn Féin proposed the removal of people in receipt of the increased minimum wage of €19,572 from the USC net. However, I welcome the removal of some people who earn less than that sum from the USC scheme.

We believe that a high earner will gain €900 and the top 14% of earners will gain €190 million from this budget and the Finance Bill. It is our belief that this Bill is the embodiment of the Government's ideological commitment to tax cuts above the protection of public services. It is some statement that tax cuts for top earners trump all other considerations.

We have been told here this afternoon that everyone can see there has been an economic recovery, particularly when travelling on roads, where one can see that there are a lot of new commercial cars and more builders. What I see in the real world is homelessness, people on hospital trolleys, people sleeping on hospital floors, poverty, deprived children and people struggling to feed and heat themselves, let alone live comfortably. Hard-working families are living on poverty wages, the squeezed middle are struggling to cope day to day, and there are families with children in school and college who are struggling financially. Plus, young people will be less well off than in previous generations. Families have been torn apart by emigration, and elderly people are struggling to meet their basic needs. I am not asking the Minister of State to take my word for what has happened. Dr. Rory Hearne, for example, has carried out an interesting analysis of inequality within the economic recovery that is based on the results of last week's Survey on Income and Living Conditions by the CSO. Based on the survey and his analysis, it would appear that Ireland is deeply unequal and that the level of inequality is worsening. Perhaps the Minister of State could respond to some of his points. Dr. Hearne claims:

The share of income going to the top 20 percent in Ireland has increased each year since 2011 and is now back at pre-crisis levels. In contrast, the share of income going to the bottom 40% of the population has fallen.

As has been said, inequality has increased since 2011. Dr. Hearne continued:

Ireland's Gini co-efficient worsened between 2013 and 2014 as it increased from 31.3% to 31.8%. As the CSO notes, “this indicates an increase in income inequality across the total income distribution."

This is the highest the level of inequality in Ireland since 2006, when the Gini coefficient was 32.4.

As we sit here discussing the Finance Bill this afternoon, discussing its provisions and measures, I want to ask the following: what effects have the past number of budgets had on the economy? What about the significant amount of social scarring that is evident to everyone? We need only look at the reality. There has been an increase in the proportion of the population who suffer deprivation and are at risk of poverty. In 2004, for example, 12% of the population experienced two or more types of deprivation, but in 2014 that figure had almost trebled to 29%. Before coming here this morning I calculated that the 29% figure means there are 765,000 people suffering from deprivation, which is the equivalent of the entire population of Cavan, Monaghan, Meath, Louth, Donegal, Sligo, Leitrim and Roscommon. My calculation may be a few digits over or under. We need to include social and human impact indicators when we discuss the budget and the finance Bills. The historically high rate of deprivation is of major concern to me. Unfortunately, neither economic growth nor Government policies have addressed these unacceptably high rates, and therefore we need to question successive budgets and finance Bills.

CSO statistics have revealed that poverty and deprivation rates for those at work have increased significantly in the past year. The deprivation rate for households with one person at work rose from 33.8% in 2013 to 35% in 2014. The at-risk-of-poverty rate for these households rose from 13.4% to 15.9%. Looking at those figures, I strongly refute the claim made here this afternoon that a rising tide lifts all boats. I ask the Minister of State to comment on this.

I want to briefly mention how the Government's attitude to the budget has worked in reality. For example, local authorities use the housing assistance programme, the rental accommodation scheme and long-term leasing schemes for social housing. They have funding for 2015 to 2017, yet they have signed leases of between five and ten years' duration without knowing for certain how much money will be allocated for the schemes after 2017. Most local authorities have signed up for rate harmonisation for periods of between five and ten years. When central government reduces the allocation for social housing schemes while local authorities are tied into contracts costing €14 million plus a year, where will they make up the shortfall in funds? Let us bear in mind that under fiscal rules, any increase in expenditure by local authorities counts towards expenditure benchmarks. Therefore, even if it is a good year for rates and other local funding, the money cannot be spent. That is just one example of short-term thinking. Regardless of how much corporation tax is brought in this year or next year, we still have a fixed amount of money to spend over the next five years. Local government, health, child care, housing and public services do not seem to be in the plan.

When the Minister for Finance was here this morning, he commenced his speech by talking about the growing economy and having yet more people in work. One can see that having a job is not enough any more. Now one requires a living wage and affordable housing, child care and health care to ensure that low-paid workers can get out of poverty and deprivation. According to Social Justice Ireland, budget 2016 has widened the gap between rich and poor. Also, the Irish Fiscal Advisory Council does not think that the budget is prudent and the European Commission has warned that it has not been built on solid foundations. At the beginning of my contribution I mentioned that my party agrees with some elements of the Bill. However, it is not a Bill to stand over and my party will not support it.