Thomas Pringle (Donegal, Independent) | Oireachtas source

It has been very interesting in the past week or ten days to look at the fight that has gone on between the three pillars of the Government over the changes in the budget. We have Fianna Fáil fighting hard for the pension increases, which is probably more about positioning and trying to capitalise on the so-called grey vote, whenever it can bring itself to collapse the Government and go back to the country again. We then see that Fine Gael has suddenly realised and discovered this advantage. In order to try to counteract Fianna Fáil's fight on behalf of the grey vote, Fine Gael has brought in an across the board increase of €5 for all social welfare recipients, which is put back until March next year in order that it can fit into this famous fiscal space around which this whole debate has been framed.

The Independent Alliance is also trying to put its stamp on it, stating it is it which is really capitalising and championing on behalf of the grey vote. Much of this amounts to positioning for an upcoming election. In reality, nobody really knows when it will be held. It is about capitalising and looking at the people likely to vote and who can gain the most from them.

The problem with the debate in the past while is that it has moved the focus away from many of the other issues which could have been tackled by a Government really interested in looking at income inequality and resolving inequality issues throughout the country. In the run-up to the budget we had no discussion on the provision of tax relief on pension scheme payments. More than €2.6 billion a year is forgone in order that we can subsidise the pension pots of very wealthy individuals. A total of 56% of the tax relief on private pensions goes to the top 10% of earners. We give a subsidy of more than €1.3 billion to the top 10% of earners through tax relief. If we had just taken the measure of reducing the marginal rate of tax relief on private pension contributions to the standard rate of 20%, it would have brought in €560 million. We could have used this money to increase welfare payments for pensioners across the board and done so from 1 January. We could have then used the social welfare budget to benefit all other social welfare recipients and started to go down the road of making some real changes for them.

While the €5 a week increase is welcome, it must be taken in context. When we look at it over the period of time since austerity budgets have come into being, in real terms, it means an increase of €1.70 per week when we factor in inflationary costs since 2008 and 2009 when social welfare payments were originally slashed. These are the types of issue we could have debated and examined.

Does anybody in government believe it is essential to our society and economy to provide €1.3 billion in tax relief for the top 10% of earners? This is not to mention the fact that those on higher incomes will benefit more from this budget than those on lower incomes. When the changes in the USC and everything else come into play, people earning more than €70,000 a year will benefit by between approximately €500 and €800, whereas those on the minimum wage will benefit to the tune of approximately €230. In this context, we could have had a debate and discussion about making tax credits refundable. This would have a direct and immediate beneficial impact on those on low wages. Low income earners do not use their tax credits because they do not earn enough to pay tax which would allow them to benefit from the credits. Credits could be made refundable, which would benefit them directly and immediately and go some way towards removing income inequality.

We could have had a discussion on the €500 million given every year to subsidise the private health insurance market, but we know we cannot do this. A number of weeks ago the Minister for Health opened a private clinic in Donegal. It was established privately to provide diagnostic services in the county, where the local public hospital cannot fully utilise its diagnostic services because of how the health service is run. This is the type of discussion we could have had in the run-up to the budget, which would have made a real and meaningful difference to people's lives. We give a total of €3.1 billion in subsidies to largely better off individuals every year. We could have spoken about and discussed these issues.

We could also have had a discussion on corporation tax, not about increasing the rate, although Ireland has one of the lowest in Europe, but on introducing an effective corporation tax rate in order that corporations would pay a reasonable amount. It might not be too onerous to ask them to pay 9% or 10% of the 12.5% rate, which would bring in quite a number of billions of euro which could be used to redress income inequality throughout the State.

These are the discussions we could have had, but we did not because Fianna Fáil is focused on the next general election, Fine Gael is reacting to Fianna Fáil and the Independent Alliance is reacting to Fianna Fáil and Fine Gael. Everybody is jockeying for position to see who can most benefit the people who, in their minds, go out and vote and can make a difference in an election. That is what it comes down to.

Some of the measures included in the budget are welcome. Any increase in social welfare payments is welcome because even a very small amount benefits some people. I welcome the introduction of the fisherman's tax credit. It is a useful innovation which will go some way towards helping fishermen and making this employment viable for them. We should have looked at helping self-employed fishermen to avail of social welfare benefits during the very long periods in which they cannot go to sea and cannot avail of benefits either. We have a crazy situation where self-employed fishermen who pay a voluntary contribution to claim benefits must have paid 120 PAYE contributions at some stage in their working lives to be able to avail of it. We could have done away with this requirement and while it would not have had a huge impact on the social welfare budget, it would have made a big difference to the people concerned and given them some income support in the times when they could not go to sea to fish.

We could have reversed some of the cuts made during the years to benefit seasonal workers such as increasing the availability of jobseekers' benefit from six and nine months to nine and 12 months, which would cost €25 million but have on a huge impact for seasonal workers throughout the country.

There is an announcement in the budget book on farm assist, but we have not seen any of the detail. We will have to wait for the press conference outside the House with the Minister for Agriculture, Food and the Marine to hear the detail. I hope it will go some way towards redressing the wrongs done under farm assist and restoring some of the income disregards done away with during the years of austerity which have not ended. This is a budget of continued austerity when we look at the fact that the social welfare increases have only taken a very small baby step along the road towards restoring lost income. Those on the basic social welfare rate are €22 a week below the poverty line. With the €5 increase, they will still be €17 a week below the poverty line. This is the burden with which they must still live. Austerity continues for them and will continue for many years to come, given how budgets are worked out by Fianna Fáil, Fine Gael and the Independent Alliance.

The help-to-buy scheme means that we have effectively increased the price of houses. I would love to know if there has been any analysis of the actual impact a €20,000 tax credit for first-time buyers who buy a new house will have on new house prices. In the backs of their minds, all developers will be thinking the person coming to buy a house could be availing of a €20,000 tax credit and they will certainly want to get some of it for themselves. We will, therefore, see an increase in the price of houses. What we are doing will only increase the price and we are not doing anything to deal with the lack of supply in the market. We could have had a discussion on ensuring land would be used and made available, with incentives and penalties for those who sat on it. That is where we could have made a real impact in the budget.

On education, we see no mention of capitation grants or reducing class sizes. While there is an increase in the number of teachers, most of it will be taken up by the natural increase in the number of children going to school during the years and the increase in the number of resource teachers being provided. In rural Ireland we talk about cuts in Gaeltacht and language funding. This is mind boggling. It is very hard to understand the mentality that would even allow this to happen. We see in the budget book a supposed increase for Údarás na Gaeltachta, but we cannot see it being provided for anywhere in the costings. There is a reduction in support for the Irish language. Does this counteract the increase in funding for Údarás na Gaeltachta? It is very hard to see how it is being provided.

There was much talk about Brexit in the run-up to the budget and the impact of exchange rate fluctuations on the agrifood sector, but I do not see anything in the budget book about the matter.

Despite it being mentioned by both Ministers in their contributions, I do not see anything to help businesses that are suffering because of the exchange rate variations since the Brexit vote. The Government parties have taken a wait-and-see approach and are probably hoping that the exchange rate will rebound and take the pressure of them in order that they will not have to deal with any of these issues.

Overall, while I have to welcome the increase in social welfare funding, the budget has missed more opportunities than it has dealt with. We could have had a proper debate in the House and in society around the different tax expenditures, how wealthy people are subsidised in respect of their private pensions, and how private insurance companies are subsidised to provide private health care. Perhaps the reason we do not discuss that is the Government wants to develop the privatisation agenda. Fianna Fáil is happy to play along with this because that was its agenda, despite its newfound concern for equality and a fairer society. When people sit back and look at the budget, they will not feel any better off and there will be no goodwill factor in respect of it. They are right. They will look more on the opportunities that have been lost.

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