Oireachtas Joint and Select Committees

Wednesday, 20 September 2017

Committee on Budgetary Oversight

Ex-ante Scrutiny of Budget 2018: Nevin Economic Research Institute, Irish Congress of Trade Unions, Irish Tax Institute and Chambers Ireland

9:00 am

Photo of Lisa ChambersLisa Chambers (Mayo, Fianna Fail) | Oireachtas source

I thank Dr. Tom McDonnell and Mr. Liam Berney. I wish to address a number of questions to Mr. Berney.

In regard to VAT in the hospitality sector, I note that ICTU really seemed to focus on the fact that the lower rate of VAT did not give anything back to workers. Mr. Berney feels that his members have not benefited and are still being paid low wages when the sector is making profits. That seems like quite a hostile approach. It does not appear that ICTU has factored in the impact of Brexit on the hospitality sector, which is unknown. It seems premature to revert to the prior rate and increase it without properly considering the impact of Brexit. We could potentially lose jobs in the hospitality sector if the VAT rate were to go back up. Has ICTU considered that?

In terms of the rainy day fund, Mr. Berney says that we should spend it now and not save, but obviously this is a committee that has oversight of the budget and every household should put aside, if they can, savings in their budget. It seems a prudent thing for a country to put aside some funds to protect itself in the event that the unforeseen happens. I have to disagree with Mr. Berney on that point.

In regard to the housing help to buy scheme, Mr. Berney makes the point that the allocation of money to that scheme should be taken from it and reallocated to the local authorities. The Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, has stated that money is no object in terms of building homes and that the local authorities have access to as much money as they need. In that vein, the help to buy scheme was not referred to in terms of reducing it, or eliminating it. What are his views on the Minister's suggestion that money for local authority housing is no object?

I will now address questions to Dr. McDonnell on the growth of GDP. Obviously Government and politicians are fixated on the GDP growth rate, but my question is whether the welfare of the country is improving. In the past number of years, we have seen an increasing number of people commuting longer distances to work, having to spend longer times on the train or in the car, resulting in increased stress levels and mental health issues. The number of jobs has increased, but many are low paid or part-time jobs with zero contract hours offering no stability or security. Now we are discussing the reintroduction of bed-sits to deal with our housing crisis. We are very focused on GDP, GNP, GNI* and the measures of how the economy is doing, but there is little focus on the welfare of our people and our country. I would like to hear Dr. McDonnell's views on that point.

Dr. McDonnell stated that we rank 25th in the OECD in terms of public expenditure on research and development. We put money into tax relief for expenditure on research and development in the private sector. Is it Dr. McDonnell's view or the view of the Nevin Economic Research Institute, NERI, that we should redirect that money to public research and development? Would the country and the people be better served if we did that? Does that policy warrant a review?

I am glad that Dr. McDonnell referred to child care. Many child care workers in the country are on the minimum wage and do not earn €12 to €15 an hour. It has to be the only job where one can do a four year higher level degree and then earn the minimum wage. We have major problems. It is not a coincidence that it is a sector and a job that is predominantly done by women. The country needs to get to grips with the fact that women are not treated equally. In the year 2017, we are still moving around the subject of inequality, pay inequality, women's access to the workplace, and the low level of labour force participation predominantly among women, who have to take time out from work.

I am very glad that Dr. McDonnell states that we should invest in child care. I agree wholeheartedly. It should have happened years ago. We are so far behind, and we need to get moving on that. I would like to hear the views of both Dr. McDonnell and Mr. Berney on shared parental leave. We have maternity leave, but only the woman can take that leave. It often makes financial sense for the household to do that, but it can mean six months and more out of the workplace. The woman goes back to work but is very often been passed over by a colleagues who has been at work. That is not to say anything against the person who has stayed at work, but we do not attribute enough value to the work in the home and we do not give the family the choice as to who can take time out. It is my strong view that shared parental leave, where the parents make the choice as to who takes the time and when he or she will take it, would go a long way towards addressing the inequality that women face in the workplace today.

When we are talking about housing and homelessness, we very much focus on the acute issues of homelessness, people on the streets or in emergency accommodation. I have a different experience as a person in my 30s. Many of my friends cannot get on the property ladder and have no prospect of getting on the property ladder. First, they cannot save the deposit, particularly if they are living in Dublin, and that is a problem for many people, but also because they are on contracts of six or 12 month duration and have no job security, the banks will not look at their applications. What can we do? The banking sector is operating on archaic and old regulations and old risk models. They have not come up to speed with the way that work is now organised. A job is not as secure as it once was.

Not everybody has a permanent, pensionable job and the days of such jobs are numbered. What can we do for people in their 30s and 40s who are struggling to get access to finance? On the USC, I take Dr. McDonnell's point that we should increase taxes but people want a break.

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