Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

The only thing we have been missing for the past two hours is the two Michaels crossing the floor and giving each other a big hug so much was the love-in between Fine Gael and Fianna Fáil. We have heard from Fianna Fáil, the only party ever to produce an alternative budget without a costing or a figure for it. To answer the question Deputy Dara Calleary posed, we were the party that was drafting legislation to bring in rent certainty, which his party voted against. We were the party that was developing the motion to end water charges, which his party voted against. We were the party that tabled the motion during that period to set up the committee to deal with the crisis in homelessness and housing, while his party walked in and out of Trinity College Dublin drinking cups of tea and passing the time with their buddies in government.

During the past few decades the Irish people have each year had to live with the consequences of budgets drafted by either Fine Gael or Fianna Fáil. They had one or the other, time after time. Now we get both of them in one budget – the politics of the nod and wink and of short-termism. The cycle of boom, bust, economic collapse, emigration and underinvestment will carry on regardless. In the good years money was squandered by these very same political parties and in the hard times it was our families and friends that were asked to pay the cost. We are told this is an era of new politics and that things are different now. Then why is this Government repeating the same mistakes in this budget as Fianna Fáil Governments did in the past? Why is it shrinking the tax base, introducing property tax incentives that will only push up house prices and relying on vulnerable tax receipts?

The answer might be that many of the same old faces that sat in government or led the Opposition - those same faces that sacrificed our sovereignty - are still around and still selling the same old nonsense. They have no new ideas. They just want to go back to the way it was, but that was the wrong way. This is not new politics: these are the same old political parties and the same old failed economics.

We are at a moment of real opportunity. It is an opportunity, as the economy grows, to chart a new course, build a fair economy, grow employment, reduce the cost of living, invest in public services, deliver tax fairness and invest in our future and that of our children. Today is a missed opportunity. Instead of seizing that opportunity, we have a deal cobbled together not in the interests of the country but in the interests of Fine Gael and Fianna Fáil. We have a backroom budget that is lacking in vision and failing to learn the lessons of the past. Our people deserve better, our economy deserves better and damn sure our country deserves better.

Caitear finscéal amach go raibh muid dúghafa go millteanach leis an bhorradh is leis an chliseadh eacnamaíoch. Deirtear nach bhfuil aon smacht againn ar na cúrsaí sin. De réir Fhianna Fáil agus Fhine Gael, ní raibh siad nó a gcuid gníomhaíochta freagrach as an ghéarchéim. De réir iadsan, ní raibh ann ach mí-ádh. Seo an bhréag atá le feiceáil mar chuid den bhuiséad seo a nochtaíodh inniu. Bhí na beartais dhochracha curtha i bhfeidhm acu - idir Fhianna Fáil agus Fhine Gael agus a gcuid cairde a bhí in éineacht leo i sruth na meala seo - taobh thiar den chliseadh baincéireachta agus geilleagair. Agus arís tá macasamhail de na polasaithe seo á ndíol acu mar chuid den phacáiste úr seo atá curtha os ár gcomhair inniu.

This is the first big test of this new Government. Come the end of this debate when the Dáil backs this budget, the Government and Fianna Fáil will undoubtedly say they have passed the test. However, the test is not about political majorities stitched up in backroom deals.

The real test of the budget is whether it will end the threat of villages in the west being flooded because of a lack of flood defences, whether older people will no longer be left on trolleys for days on end in hospitals and whether the thousands of children who will call a hotel room home tonight will have a home. When the results of this test are looked at, they will clearly show that the budget has been a complete failure.

We have been through a great deal in recent years. The most brutal and unfair things have been done to Irish people in the name of saving banks and satisfying international capital. A generation’s hopes and rights were sacrificed. What happened was wrong. Austerity was and is a brutal concept that prolonged and deepened the recession and made tough times not only tougher but more unfair, too. 

In 2016, a century after a group of men and women with a clear and genuine vision of what the country could be struck for Ireland's rights, we must start rebuilding. We are told the economy grew by 26% last year and that corporation tax receipts are booming, yet 1,000 families are homeless in the capital city. Last week an average of 376 people were on trolleys in hospitals, while there are more than 500,000 people on hospital waiting lists. This is the type of dysfunctional economy Fianna Fáil and Fine Gael have built. The economy should serve the people, not the other way around.

This is a Government which, time and again, has sided with landlords over tenants and banks over mortgage holders. It is a Government which has let the insurance industry rip off struggling families while rewarding the wealthy. It has empowered the vultures and begun selling the country to them, brick by brick and tax-free, from beneath our feet.  This could have been the budget in which we started to reduce the cost of living and invest in public services. This should have been the day on which we increased capital investment to an appropriate level to build homes, schools, health facilities and roads and to undertake flood relief works. Budget 2017 should have been the starting point for the development of the all-Ireland economy and investment in long-term economic growth.

Today should also have been about making the taxation system fairer. Tax is not something that should be derided. It is part of the social contract that is supposed to be a core basis for a republic. Taxation can and should be used as a tool to deliver fairness and invest in essential public services and infrastructure. In budget 2017 the Government is beginning to implement its policy of abolishing the universal social charge, USC.  While the Fianna Fáil Party protests, it pursues very similar aims. The policy of abolishing the USC was described by the Department of Finance as regressive and one which would benefit the wealthier and have little or no impact on those on low and middle incomes. The proposed cuts to the USC amount to €330 million, but the process being put in train will hollow out the tax base of the State by €5.6 billion by 2021. That is the context in which the steps being advocated today must be discussed. Not one credible expert, advocacy group or economist believes this is a sensible policy; all of them have argued against it.

The cuts will mean little for an individual struggling on €20,000 per annum who will get back a mere €1.90 per week. They will be of little comfort to those facing a cost of living of crisis, with the average worker on annual pay of €35,000 set to get back a paltry €3.30 per week. I have no doubt that many people will welcome paying a few euro less in USC, particularly those who are struggling to get by, but it will not go far when a person's car insurance quote is suddenly twice what it was last year and the Government does nothing. It will not go far for those whose bank is ripping them off on mortgage payments and when sending a child to college costs the same as taking out another mortgage. A sum of €3.30 a week is of little use to a person who has to wait at a Luas stop for 20 minutes and then squeeze on to a packed tram or to those who pay more in rent for a room in town than their parents paid for a mortgage on a house in the suburbs. Those who are struggling to get by day in and day out would be better served by investing the €5.6 billion in tax cuts the Government is planning in its lifetime in the services we all use and which keep the country running and working. Tackling these issues requires vision, but Fine Gael and Fianna Fáil do not do vision; they do gimmicks, short-termism and tax breaks.

Thankfully, public opinion has not swallowed the lie that the abolition of the USC is possible or even desirable. Make no mistake - despite having to rein in their swagger this year, both Fine Gael and Fianna Fáil are determined to give the wealthy tax breaks at the expense of public services and ordinary workers. This is their short, medium and long-term policy, as they made clear in their manifestos. It is a reckless and dangerous approach and they know it. It is deeply dishonest of any party to continue carving out the tax base, while stating it will make the investment the country needs because doing both is simply not possible. This cynical mé féin approach, of which Fianna Fáil was the master during the 1990s and noughties, served us poorly in the past and serves us poorly now. 

I sat through the banking inquiry which heard of the ever increasing reliance placed on stamp duty in the period preceding the crisis. When construction stalled and eventually crashed, stamp duty receipts disappeared, wreaking havoc on our finances. Nowadays, it is not stamp duty but corporation tax receipts that are vulnerable. In 2015 a total of 40% of corporation tax was paid by ten companies. This illustrates that tax revenue is increasingly vulnerable to the tax affairs of a small number of companies. In 2015 corporation tax payments from the top ten companies amounted to 6% of total Exchequer tax revenue, approximately the same proportion of overall Exchequer tax revenue for which stamp duty accounted just before the bust.  We are going down a dangerous road and it seems no amount of warnings from Sinn Féin or Central Bank, International Monetary Fund and European Commission economists will convince this coalition Government that it is a bad way to go.

The most unfair tax break the Government has proposed in the budget - one which is being celebrated by the Fianna Fáil Party - is the increase in the threshold for capital acquisitions tax. This tax change will benefit only 2,000 people each year, all of whom will have inherited €280,000 tax free and will now be allowed to inherit an additional €30,000 tax free. The measure will cost the taxpayer nearly €20 million. Let me put the Minister's political choices in context. Last week the Government side, supported by the Fianna Fáil Party, voted against a Sinn Féin motion to roll out 24/7 care for those in need of treatment for mental health issues. The provision of this service would cost €20 million. Why do Fine Gael and Fianna Fáil believe 2,000 individuals who have already received a tax-free windfall of €280,000 deserve an additional tax write-off of €20 million when people suffering mental health illnesses and experiencing suicidal tendencies do not have access to the services to which they want to reach out at night or at weekends? Why do they prioritise a tax break for 2,000 people over services for people suffering mental health problems? Fine Gael and Fianna Fáil must answer that question. We hear platitudes and the right words when we discuss this issue. When it comes down to brass tacks and making political choices, however, these parties fail. In rejecting the Sinn Féin motion on mental health services last week the Chief Whip stated, "We do not have the magic calculator that Sinn Féin obviously possesses." It is not the Government's calculator that is broken but its sense of right and wrong.

While I do not know if the Minister reads his Department's strategy papers, I doubt it because otherwise he would know that the previous reduction in capital gains tax did not result in a dramatic increase in the tax yield or economic activity. Despite this, he proposes to further reduce capital gains tax. According to a departmental paper, "tax yield and economic activity are not increased overall but simply moved in time" as a result of a reduced rate of capital gains tax. Many assets were cashed in only after the reduction was introduced in full knowledge that less tax would be paid.

Again, Fine Gael returns to its norm, which is to cut taxes at the expense of taking the harder options to make our country more competitive.

The move to increase the self-employed tax credit is a measure we welcome, although my party would have gone further by increasing it to €1,300. This is a fairness issue and I am deeply disappointed by the Minister's announcement that he is dragging his feet. The tax credit, like many others, should be tapered off, so there is no open-ended gain for the high earners in society. There are other issues that arise from this budget that are also to be found in Sinn Féin’s alternative budget. Where the Government has done the right thing, we will support those measures and make sure they are actually implemented.

I want to turn to what the Minister calls the help-to-buy scheme or the first-time buyer's grant. There is no help to buy or help for first-time buyers in this budget, although there is a help-the-banks scheme and a help-the-builders scheme. A version of this was first proposed by Fianna Fáil at its 2015 Ard-Fheis and it is taken directly from the Fianna Fáil guide on how to wreck the economy. Anybody who has looked at the idea has slammed it. It failed miserably when the Tories introduced it across the water. We all know what will happen as a result of this move, namely, it will lump further debt onto young families. It sums up this budget, which is about old failed ideas dressed up as bad new ideas.

What part of the supply and demand rule does the Government not get? The Minister again says this will increase demand and, therefore, supply will increase. The demand is out there. While the Minister may not recognise it, we have a housing crisis. All the Minister is doing is putting fuel on the fire in regard to that demand, which will do nothing but increase prices. Of course, I could see the attraction of this if I were buying a home but, overall, this scheme is ill thought-out. House prices will follow the credit available, as we know. I urge the Minister to drop this reckless proposal. I put it to Fianna Fáil that if it is not in support of this, it is not going to fly. It is not going to happen because it requires legislation to be introduced. It is a reckless proposal and if Fianna Fáil belatedly accepts that, it is to be welcomed.

There has been much talk of Brexit in the budget. We need to recognise that while there are many issues outside our control, there are areas where we can influence the effects of Brexit, and they go far beyond taxation policy. That is why Sinn Féin many months ago proposed an all-Ireland forum and that we get all the partners in to discuss the way forward. We have known Brexit is happening for four months now, yet that forum has yet to be convened.

What is the Fine Gael and Fianna Fáil answer to Brexit? From today's announcement, it seems the answer is tax cuts. That is simply not good enough and it is a lazy and cynical approach. The far more fundamental point the Government misses time and again is that Brexit is so damaging because it compounds partition. "Partition" is a word that had to be deleted from the budgetary committee report on the suggestion of Fianna Fáil because we are not supposed to mention partition in these Houses. For this country, partition is the problem. A Brexit of Britain without the North of our country would be a far less daunting prospect. That is why policies that tackle the damage of partition and undermine partition itself must be supported in response to Brexit and why we need to increase the funding for North-South bodies and capital projects. The best defence we, as a country, can have to a downturn, whether triggered by Brexit or anything else, is to have made the investment in our infrastructure. That is why Sinn Féin has proposed front-loading €1.2 billion of capital spending, using the flexibility allowed within the fiscal rules. Once again, the Government has come up short.

As the Minister will know from previous years, every budget throws up a new issue or something unprecedented. This year, the Minister for Finance is ignoring the Revenue Commissioners, the same Revenue Commissioners he defended so vigorously when it came to deals with multinationals, when he said we cannot under any circumstances take the €13 billion we are due from Apple because that would be a slight on the Revenue Commissioners. He asked what would he be worth as Minister for Finance if he did not defend his Revenue Commissioners. Today, he tells us that increasing excise duty on a pack of cigarettes by 50 cent will bring in €65 million, and we will have to vote this through before midnight. However, in information available on their website, through replies to numerous parliamentary questions and through costings provided to us, the Revenue Commissioners actually say that this move could cost up to €44 million. If that transpires, there is a gap in the budget of €109 million. Why does the Minister not believe Revenue on this issue? His Department refers opposition parties to the Revenue reckoner, yet the Minister can ignore it when it seems convenient. The Minister is so determined to cobble together things to raise money to cover his USC fixation that he will simply ignore what the people who collect the tax say. It is pulling a fast one, in view of the evidence we have.

The Minister brought in a range of poorly thought-out tax breaks, which echo the days of Charlie McCreevy. I fear the make-up of the tax the Minister envisages is wishful thinking. As I mentioned in regard to the Revenue Commissioners and excise duty on cigarettes, these are dodgy figures. The Minister claimed that an additional 50 Revenue staff and some new equipment will bring in €50 million in extra revenue. I have long called for this issue to be dealt with. We were the first to raise it and we have proposed it year after year. However, to think that this type of investment will yield that type of return is very optimistic. The Minister claims that clamping down on section 110 companies and abuse of funds will bring in another €50 million. Yet, just a couple of months ago, the Minister did not even know this was happening, or so he claimed. It was only after we brought it to his attention that funds were buying up Ireland tax free and section 110 was being used to buy distressed debt tax free, that he moved on this issue. When I asked his Department how much these changes would bring in, it told us it had no idea, so where does the €50 million come from? The Minister says clamping down on offshore tax evasion will bring in €30 million. Again, I welcome the principle and it is something we have long advocated but one can only wonder why it has taken so long. I believe this figure is also wishful thinking, if not just a wild guess. Is the Minister telling us there is no crossover between these three measures? The principles here are solid, of that there is no doubt, and long overdue but the figures seem a bit fluffy. Perhaps the Minister's commitment to slash taxes means he had to use a little imagination on the other side of the balance sheet.

This is a budget where the Government parties and Fianna Fáil have finally admitted they are simply giving up on the public health service. It is to be run down and health care is to be something for the better off. The measly increases of today will not sustain the hospitals and clinics of the State. We heard a lot about the €1 billion from the Minister, Deputy Donohoe, and then it became €500 million additional. However, when we go into the bowels of the document, we see it is actually €260 million additional and when we look at the individual measures to deal with the crisis we have in emergency departments and the fact 530,000 people are on waiting lists, we find out the winter initiative gets €40 million additional and the waiting lists get €15 million additional. This is a total of €55 million to deal with the crisis in accident and emergency departments and hospital waiting lists. To take the issue of hospital waiting lists, it is €15 million for 530,000 people in pain who are waiting month after month for treatment, some for years, yet the Minister gives more in a tax break to 2,000 people than he will invest in those 530,000 people who want access to our public system.

There is not enough money in this budget to keep our health system operating in 2017, even at its critically overloaded state. The reliance on the National Treatment Purchase Fund shows up in bright lights that there is no vision and that the idea of a universal health service from Fine Gael or, indeed, Fianna Fáil is dead and gone. Sinn Féin has shown how this budget could have been the start of building a health service fit for the 21st century and accessible to all. We would have real, additional combined capital and current investment of €600 million. That would reopen 500 hospital beds, provide for the nurses and doctors to look after citizens who need them, begin to build a world class mental health care system and reform and resource our suicide prevention strategy. From maternity care and empowering people with disabilities to dental care provision, a universal health system could have started today but the vision to start that work does not exist on the other side of the House.

Today, the Minister announced €150 million extra for capital investment in housing.

Once again, the Government has failed to recognise the extent of the crisis and the resources required to address it. In Sinn Féin's alternative budget, it has called for an additional investment of €491 million in the delivery of more social housing units. That is more than three times what is in the Government's plan.

When are the resources going to match the rhetoric we often hear from the Taoiseach? In 2011, he pledged to end homelessness by 2016, which is this year. In December 2014, after the tragic death of Jonathan Corrie only metres from here, the Taoiseach said, "I believe we best honour Mr. Corrie by acting once and for all on the issue of homelessness". Last year, when I said his budget would not solve the homelessness crisis and that it would make it worse, he heckled me. Yesterday, the State had 4,000 adults and more than 2,300 children living in emergency accommodation. This is the Taoiseach's failure and legacy. He has shown today that he is not willing to put in the resources required to address that crisis. The action plan for housing, while better than its predecessor, lacks ambition and the urgency necessary to put a stop to homelessness. Sinn Féin has shown how the Government could invest an additional €491 million in building houses but it refuses to listen.

One of the biggest cost-of-living expenses is rent. In Dublin, rents are increasing by about €40 per week. We have fought hard in Sinn Féin for rent certainty. We have produced legislation on this. Unfortunately, Fine Gael, supported by Fianna Fáil voted, for whatever reason, against Sinn Féin's rent certainty Bill in June. What has this meant? It has cost families thousands of euro in rent, with rents increasing in certain parts of Dublin by up to €2,000 per year. The legislation the Government voted against would have reduced the cost of living for thousands of renters while providing certainty to landlords. It would have prevented many families from becoming homeless.

We have heard a long debate on older people in the lead-up to this budget. It does a great disservice to older people to lump them together and tell them they will be looked after at some time in the future. For those pensioners most in need, Sinn Féin would have arranged for an increase of €5.70. We would have made it available from 1 January 2017, with no ifs or buts. Practical, targeted measures are needed.

We would also have reinstated the transitional State pension payment, we would have increased the fuel allowance period by three weeks, we would have introduced a bereavement grant of €600, we would have extended the warmer homes scheme, we would have increased home help provision by 1 million hours, and we would have increased home care packages by 10%. A total funding package for older citizens of €410 million would have been available from the first day of January 2017. That is what a well-thought-out, properly resourced package for older people looks like. Instead, the Government thinks it can buy off pensioners with €5 per week. To add insult to injury, it says they will have to wait for it.

At Cabinet table earlier today, did the Government members collectively blush when they decided pensioners and others would have to wait until March, although Deputies and Ministers will not have to wait to see an increase in their pay next year? Each Deputy will see his or her pay rise by €2,700 by April 2017, and he or she will see the same again the following January. That is small beer, as the Taoiseach well knows, considering what he will get. He will get a whopping €14,650 over the next three years, and the Ministers beside him, Deputies Paschal Donohoe and Michael Noonan, who signed off on the deferment of the social welfare payments, will both get an increase of €11,735. Despite this, pensioners have to wait, and we are told somehow that we should celebrate this.

There is an alternative to the bad habits. The alternative involves reducing the cost of living and investing in public services. It is about resourcing an adequate capital plan to build homes, schools, health facilities, flood defences and the roads the country needs. The answer to Brexit is the creation of an all-Ireland economy through long-term investment. The alternative is fair taxation. That means abolishing the water charges and the local property tax.

On that subject, let us note that not one penny is provided in the budget to abolish water charges beyond 31 March 2017. Not one cent of the €58 million that is required has been provided in this budget, yet Fianna Fáil has signed up and agreed to it. It is very difficult for us to figure out which way Fianna Fáil is going on this issue day in, day out.

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