Ms Patricia King:

On behalf of the Irish Congress of Trade Unions, ICTU, I thank the Chairman for giving us the opportunity to appear before the select committee.

Congress’ pre-budget submission is being finalised and will be launched in the coming weeks. The short-term outlook for the economy remains positive. The Nevin Economic Research Institute, NERI, which is funded by congress projects that the rate of economic growth this year should be around 5% and 4% next year; that the number in employment should rise by around 100,000 this year and next year; and that average hourly earnings should increase by around 3% this year and next year. We must remember that these wage increases come after years of falling or stagnant wages for many workers. The NERI has also found that the average 18 to 24 year old worker earned one tenth less in real terms in 2016 than in 2008 and that the average 25 to 34 year old worker saw a real increase of just 1.4% in this period.

The public finances are improving, but they are still marginally in deficit a decade after the start of the crisis. Congress concurs with the European Commission's assessment set out in its 2018 Ireland country report that addressing infrastructural bottlenecks is essential for sustainable and balanced growth in the future. Public spending per capitain Ireland is just 85% of the weighted average in similar high income western European countries such as France and Germany, as well as the Benelux and Nordic countries. This amounts to an underspend of €12 billion a year compared with these countries.

Repairing public services, overcoming infrastructural shortcomings, addressing the consequences of a growing and ageing population and responding to the impact of new technologies, Brexit and other emerging risks all require a substantial increase in investment in the coming years over and above what is envisaged in the Ireland 2040 strategy.

Repairing public services, overcoming infrastructural shortcomings, addressing the consequences of a growing and ageing population as well as responding to the impact of new technologies, Brexit and other emerging risks require a substantial increase in investment in the coming years. This increase must be over and above what is envisaged under the Ireland 2040 strategy. In particular, we need to invest more in social and affordable housing, early years services, education, public health, water, rural broadband, clean energy, public transport and motorways as well as research and development and innovation to ensure sustainable, balanced growth over the longer term. Given the many challenges facing Ireland, it is our firm view that tax cuts are simply not affordable, would only prevent Ireland from achieving the sound and stable public finances necessary to meet the needs of 21st century Ireland and pose a risk of overheating the economy.

As advocated in the European Commission draft country-specific recommendations, budget 2019 should limit the scope and number of tax expenditures and broaden the tax base. The reality is that the Government simply does not collect sufficient revenue through general taxation and social insurance to ensure the public services on which people in peer countries can rely. This is mainly due to the lower employer social security contributions levied here than in those countries.

ICTU is proposing a number of measures to raise additional revenue next year. In particular, it is time to end the "temporary" reduction in VAT for hospitality introduced seven years ago. This alone could raise over €500 million, which would be enough to build 2,500 homes or dramatically increase investment in early years services. The congress pre-budget submission for 2019 will set out our priorities to ensure that workers and their families receive a fairer share of the economic growth taking place - it is forecast to continue over the short term, at least - and ensure that people who suffered more than most during the crisis are supported to live a life of dignity.

Budget 2019 should seek to improve the social wage. This is comprised of the non-wage returns to workers in the form of decent early years care and education, health, education, transport and housing services. It should improve the provision of high quality childcare, as advocated in the European Commission draft country-specific recommendations. Government childcare policies must address the problem of poor pay and conditions for workers in the sector. Policies must ensure that adequately qualified workers are attracted to and remain in this key sector.

Hundreds of thousands of people are affected by the housing crisis, as highlighted in the ICTU housing survey issued last week. Budget 2019 should prioritise the increased supply of social and affordable homes, the improvement of services and measures aimed at supporting homeless people, the use of vacant homes and sites and swifter progress towards a cost rental system. Congress is specifically calling for a local government-led social housing programme involving the construction of at least 10,000 units per annum.

Budget 2019 should aim to make progress towards a well-funded, universally accessible, single tier health service, as outlined in the Sláintecare report, especially with regard to the expansion of primary and community care services. The Nevin Economic Research Institute has found that public investment on a per student basis in education is low compared with peer countries, especially in primary and lower secondary education. Public investment in education would have to increase by nearly €2 billion to reach the peer country average. Budget 2019 should prioritise investment in the DEIS programme, further reducing early school leaving rates and the number of young people not in employment, education or training - this figure was 13% of young people in 2016 - as well as in lifelong learning and basic digital skills. Social welfare payments should be increased by at least a higher percentage than forecast inflation next year. In addition, the most regressive cuts imposed during the crisis years should be reversed, especially those affecting young people, lone parents and older people.

The living wage, currently cited as €11.70 per hour, is the minimum that all workers should receive. The minimum wage, however, is four fifths of this amount. Moreover, €400 million will be spent this year supporting low-paid workers with children through the working family payment, formerly the family income support, and €300 million on the housing assistance payment. These and similar payments represent the subsidising in many cases of low-paying employers. The national minimum wage should be brought into line with the living wage.

Brexit poses a considerable threat to the jobs of thousands of workers, especially those in agrifood and traditional manufacturing. These workers are mostly based in rural areas. We are proposing the introduction of a specific measure, a Brexit adjustment assistance fund, aimed at supporting these workers now rather than in a few years when they might lose their jobs. This should be built on the European Globalisation Adjustment Fund, which has helped 11,000 workers in the Republic over the past decade, as well as the US trade adjustment assistance programme, which is similar to the European globalisation fund but with a stronger emphasis on income support.

ICTU wants to see Ireland embark on a path that sees at least 0.7% of output devoted to official overseas development aid by 2025, a target that is already exceeded by a number of peer countries. I am happy to take any questions.