Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

What level of demographic adjustment has been made to the fiscal space? Why is the fiscal space not laid out in the document? Does the underlying fiscal space include projected overruns of €500 million? How is the projected overrun broken down? What percentage of inflation assumption has been applied to the expenditure ceiling for this year? Last year, the assumption was incorrect.

In the time I have left for what is essentially a meaningless debate, I contend it is good news that we hear from the Ministers that the fiscal space is potentially €900 million. If we have expenditure overruns – the SPU says we could have them to the tune of €500 million but I believe they will amount to much more – the figure will come down. However, it is imperative that whatever fiscal space is available be used for investment.

Part of the debate defining the election campaign concerned whether the universal social charge should be abolished. The Social Democrats took a position contending that we need to maintain the existing tax base, and the Government said we should cut taxes further. We found out yesterday that the rolling out of the broadband programme will be delayed by up to two years. We found out yesterday that patients in the public health system are awaiting up to 25 times longer than patients in the private system for important oncology scans. We know from the Association of Garda Sergeants and Inspectors that the Garda needs to hire and train approximately 800 additional gardaí and that the force is under-resourced to the tune of 20%. We know that one in nine children in the country is living in consistent poverty. We know that the capital expenditure programme set out in this stability programme update is one of the lowest in the EU, which opens us up to very significant social and economic risks and challenges.

The argument given by the outgoing Government to reduce the tax base further was that we need to “make work pay”. I believe that is the phrase that was used. Last week, the OECD released the latest analysis of the so-called tax wedge for 34 OECD countries. This is a combination of tax on work and tax on employers related to work. It shows that for a married couple with one earner and two children, Ireland has the lowest tax wedge in the OECD. Of the four examples given, Ireland was among the lowest seven countries in terms of tax on work in the OECD.

We do not need to erode the tax base further. We need to maintain a stable tax base and invest. I request, as did Deputy Doherty, that detailed briefings, although they are too late for the stability programme update, be provided by the Department of Finance. We need to start preparing for the budgetary cycle now. We will need access to finance officials to go through a lot of this in detail.

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