Mr. Liam Berney:

I thank the Chairman and the committee for inviting us here today. While the statement we submitted to the committee touches on the issues we were asked to address, members will notice that it contains no reference to the Lansdowne Road agreement or the proposal for a new public sector pay agreement. There is a very good reason for that. As politicians, the committee members will appreciate that the trade union movement is a democratic organisation and the process of approving the public sector pay agreement only concluded earlier this week. It would have been premature for us to include comments on the agreement in our submission prior to it having been accepted by our affiliate organisations. It was accepted by a large majority of the public services committee on Monday. In accepting the agreement, the public services committee of ICTU notes that there are still some issues that are hangovers from the crisis era and that there are matters to be addressed around the issue of public pay.

Most notable in this regard is the question of new entrant pay and pay equalisation. The headlines have focused on teachers, but there are new entrant pay scales in all parts of the public service and there is still pay inequality in many parts of the public service. We should focus on trying to eliminate this over the coming period. There is also, of course, the question of retention and recruitment in critical areas of the public service which need to be addressed as part of the public service pay agreement. However, the agreement has been accepted by a large majority of the public services committee and we are looking forward now to implementing the agreement and making sure that the issues to which I have just referred are addressed within that context because they are very important issues.

My remaining remarks are really in the context of the pre-budget submission that Congress has produced. I understand that all Members of Dáil Éireann and Senators, as well as councillors, have received a copy of our pre-budget submission, so my comments are made within that context. From our perspective, people deserve to see an inclusive, equality-proofed budget that places the welfare and betterment of the majority at its very core. We have a responsibility to make sure budget 2018 is the first in a series of transformative budgets that will prioritise higher living standards and quality of life underpinned by a programme of investment in infrastructure and improvement to services. For budget 2018, Congress has three key priorities. We must begin the process of tackling the housing and homelessness crisis. That must be our absolute priority. We must end the reduced VAT rate for the tourism sector, which has cost some €2.2 billion in lost revenue to date, and invest in public services such as education, health and child care in order to lower living costs. I will come back in a moment to the question Deputy Ryan asked earlier about the cost of privately provided child care as opposed to pay for teachers and so on.

On the question of housing and homelessness, failure to tackle the housing crisis properly in budget 2018 would see Ireland pay a high price in terms of future social cohesion, damage to future growth prospects and increased living costs for working people. Although housing and homelessness are acute problems in themselves, they are very much labour market problems as well because they inhibit people's participation rates in the labour force if they do not have access to affordable housing. Congress proposes that local authorities across the country take the lead in the provision of social housing as the only long-term sustainable response to the crisis. Unfortunately, we abandoned the housing market to private developers and let profit become the key driver of housing provision. However, the market has failed and, as classical economics tells us that government must step in in the case of market failure, the Government must now step in and declare a national housing emergency and act accordingly. Local authorities, as we said, should take the lead in a major house-building programme with funding of at least €1 billion from Government, providing at least 10,000 social housing units a year by late 2018. Given this is an emergency, compulsory purchase orders must be utilised as a matter of urgency - there has been conjecture around the constitutionality of that, but we do not believe the Constitution is an impediment - to ensure available serviced land is put to good use, while the introduction of the vacant site levy should be brought forward from January 2019. We simply cannot afford a return to the developer-led and developer-shaped policies of previous years, despite recent attempts from the private sector to extract more tax breaks and subsidies in order to build houses. I notice Deputy Ryan said that IBEC was here yesterday. There is a subgroup of IBEC that represents property developers. If the committee reads its pre-budget submission, it will be shocked to see what it is seeking. Essentially, it wants a tax-free environment. If that were to be the approach to incentivising developers, it would make the situation far worse. We question the value of the help-to-buy scheme and think that money would be far better used by giving the funding to local authorities for housing construction. In the short and medium term, thousands of lives and life chances are being damaged beyond repair by the housing crisis. This itself is cause enough to act. However, the crisis will also discourage inward investment, drive up living costs for working people and have an adverse impact on the labour market. Budget 2018 is an opportunity to deliver a game-changer on this critical issue.

One of the issues we were asked to talk about is the tourism sector's VAT subsidy. Congress continues to argue for an end to the special reduced rate of VAT enjoyed by the hospitality and tourism sector. This is a de factosubsidy that has already cost the State €2.2 billion in taxes forgone.

There is no justification for this ongoing subsidy to a highly profitable and predominantly low wage sector. This is a sector that refuses to participate in the joint labour committee system the Government has established for wage setting in sectors. It refuses to participate in the process.

There is no evidence of any significant new job creation or that the consumer has benefited in any way. ICTU regards the subsidy as being used simply to take profits. There is no other use for it that we can see. In fact all the evidence suggests that the reduced rate operates as a subsidy to very profitable corporations, which is a waste of valuable resources when set against areas of obvious need such as homelessness. Ending this unjustified and wasteful subsidy will create additional fiscal space which can then be used for much more urgent priorities in education, child care and infrastructure.

A question was asked earlier about where we can get new taxes. In the last table of our pre-budget submission, congress has set out where new taxes can be raised. This is one of the places where a significant amount of money could be raised without any real risk.

We want to emphasise the importance of investment. Workers deserve a much improved social wage paid for through general taxation or social insurance. Congress is calling for additional investment in public services, including education, health and child care, in a bid to lower living costs and to boost a social wage for working people. We know that Brexit carries huge risks for the Irish economy. The best way to respond to Brexit and other threats to our collective prosperity is to invest in the things we need. We need to invest in skills to retrain and upskill workers especially in sectors most vulnerable to Brexit and to climate change. Deputy Ryan and others are aware of the need to invest in adjustment transition for workers who are affected by vulnerable industries with regard to Ireland's climate change obligations. We need to invest in infrastructure such as public and other transport hubs to meet the challenge of diversifying trade flows. Investment is also needed in the areas of research, innovation, marketing and organisational capacity to develop new products and services and locate new markets and alliances. We also need to invest in core economic and social infrastructure to help make Ireland a country with high levels of well-being, equality and economic efficiency.

Plans for tax cuts in the budget should be abandoned. Ireland has massive infrastructure deficits in housing, transport, broadband, renewable energy and water treatment that require immediate attention. Such investments must take priority over tax cuts.

Public capital investment should be doubled over the next three years and the rainy day fund should be used now rather than later to address vital areas of infrastructure deficit. Ireland has a young and growing population, and bottlenecks will only get worse if we fail to invest now.

The trade union movement stands in solidarity with the most vulnerable people in society, including pensioners, young people and others who are dependent on social welfare, income support and social transfers. Social welfare payments should be restored by more than the expected cost of living increases in 2018. I am happy to take any questions from members on the congress pre-budget submission and I have brought spare copies with me if the committee needs them.

Deputy Ryan asked about the wages of child care workers in the private sector and those of a primary teacher. I cannot be absolutely certain as I do not have exact figures, but I will find them for the Deputy. Congress published a paper on this issue not too long ago. From memory, child care workers in the private sector earn, on average, between €12 and €15 per hour. A primary school teacher would earn somewhere between €25 and €30 per hour, as far as I am aware. The question is that the policy direction has decided to subsidise private child care provision. Money is given to private child care providers, yet there has been no examination of the possibility of providing child care services within the State sector. In Scandinavian countries, for instance, children go to primary school much earlier than children in Ireland. They go into a different setting than a classroom where child care is provided and there is an educational dimension within that setting. There is no reason at all why, with a small infrastructural spend, Ireland could not produce child care settings in the public sector in primary schools. This would not be for the purpose of sending children to school. Obviously their early developmental education would be much different from that which they would encounter when they attend primary school. Directly intervening in the sector with public sector child care provision is one way of dealing with a problem that has been completely ignored and not given proper consideration in this State, as far as I can see.