Joan Burton (Dublin West, Labour) | Oireachtas source

This is a budget with a purpose, not economic and social objectives, it is a budget with a political purpose to keep the show on the road, to maintain the fiction of a Government in command and control and to deny the fact that this Government is a ramshackle bus, the wheels of which are in serious danger of coming off. The motto for this budget is keep the show on the road. It is a tawdry and disappointing show for those people who had expectations for today but find they have been addressed in a very limited and disappointing way, if at all. The budget and the financial plan for the next year should seek to maintain employment and maintain the attractiveness of Ireland as a country for investment. We have to recognise the risks of enormous changes in Europe, not least Brexit, but also the fact that as Ireland remains in the EU and the United Kingdom leaves, it implies enormous potential changes in the Union itself. Our closest trading partner is preparing to leave the Union and one has to ask what will the Union be like without the UK? We need to provide, in this budget, for stimulus that will maintain the economy notwithstanding shocks, particularly by providing for investment in housing, transport, education, health and all the things that improve people's lives. We also have to rectify anomalies and especially, we have to continue to alleviate the impact of the terrible crash and the great recession of 2008.

In his Budget Statement the Minister for Finance made an extraordinary proposal. I am not sure if it had been run past Fianna Fáil because I know its motto for this budget was no surprises. Perhaps Fianna Fáil are in on this. The Minister for Finance's proposal is to squeeze and squeeze this economy for the next ten years. It sets out, to the mid 2020s and beyond, to bring down the debt-to-GDP ratio to 45% of GDP. The very tough German fiscal rules require Ireland to reach a ratio of 60%. Yet, today the Government, Fianna Fáil and the Independents are proposing that we drive that figure down to 45%. This may well be a response by the Minister for Finance to the letter sent by the Governor of the Central Bank to the Committee on Budgetary Oversight on the same day that he sent it to the Minister for Finance in which he suggested that Ireland might go for a target below 60%, but he certainly did not dare even broach a 45% level.

The oddness of this, together with the rainy day fund, is that this is, by common consent of both the Government and the Opposition, a country where one of the consequences of the great recession is that we are suffering from a serious deficit with regard to capital investment. What the Government has put at the heart of a ten year economic strategy is that we should squeeze the economy ever harder in regard to capital investment. I have no idea if this was discussed by the three-partner structure to the budget today - Fine Gael, the various Independents and Fianna Fáil.

If it was not discussed and it is a surprise, I can tell them that it is a seriously wrong policy that will strip the country of the capacity to make a capital investment at the level required in the next ten years to meet population growth and the deficit in infrastructure. It is a poor proposal.

I am pretty sure parents on a net income of €50,000 or less will welcome today's package for children aged under three years. There is an undefined supplementary package for children between the ages of six months and 15 years. The principal package, for which only €32 million has been provided from next September to December, is for children aged between six months and three years, but there is very little information on how the scheme will work. I have no doubt that the devil will truly be in the detail of the proposal, on which the Minister has until next September to work. The question does not seem to have been asked by anybody at this stage. Perhaps Fianna Fáil is privy to all of the details, but certainly we are not and the general body of parents with children in this age group are not privy to the details either. Who will implement it if it is to be implemented by an existing body? It appears to involve heavy means-testing to get to the net income mentioned in the newspapers of €80,000 gross and €50,000 net, presumably on the basis of briefings and leaks. I assume that these figures are correct, but all we have is an overall cost and the indicative age groups in the budget briefing books. Revenue could possibly do it if it had real-time information, but when the Mangan committee examined how to get information on child care structures in real time, Revenue was not in a position to do it. It may be at a future date, but it is not in a position to do it now. Perhaps the Department of Social Protection could do it, based on something such as the family income supplement system. Parents who were sold a big story about a child care package deserve to be dealt with honestly and told what exactly is contained in it.

This is moving away in a big way from the principle of universal child care support to a means-tested system. Last year, when in government, we provided for the introduction of two weeks of paternity leave, the first time it had been provided for in the State. From what I understand from the budget briefing book, the major scheme is for children aged between six months and three years. The Labour Party has stated it would prefer if the State worked to reach a situation where at least the first nine months to one year of a child's life would be spent at home with either parent but generally the mother. The scheme potentially seems to move a child to crèche and Tusla-registered childminders as early as six months. I wonder about the wisdom of this move. There has been much discussion, particularly among women involved in politics and the many fathers who now take such an interest in their children's upbringing, and I wonder why this conversation has not been had more widely in order that as a society we can discuss what is best for our precious children. Is the subvention exclusively for children in crèches or with registered childminders? Many in Ireland, particularly when a baby is very small, avail of a variety of arrangements and child benefit is a universal payment which allows people choice. It is very important that we maintain the principle of choice because not every parent and child are in the same position. Neither is every family. Very often, as a child gets older and reaches pre-school level, the child care arrangements change. How do we ensure the benefits of the €32 million will be passed to the child's parents and through improvements in wages and conditions for child care workers and those working in crèches, many of whom are on very low pay, despite possessing graduate and other child care qualifications? Many work limited hours and are in receipt of social welfare payments for part of the year because they are not provided with full-time contracts.

The biggest omission in the budget is the failure to provide for an increase in child benefit. In our pre-budget proposal, as was the case last year and the year before, we proposed a €5 increase in child benefit. There is a reason for this. In Ireland we do not recognise in the tax code the cost of raising and bringing up children. We recognise the cost in respect of an adult by giving personal allowances and credits, but I believe it was way back in the 1960s when children last figured in the tax code. Instead, we make a universal child care payment, which now stands at €140 a month. We proposed that this figure be increased by a further €5 per month. The money is paid to all caring parents, usually the mother, regardless of the child care arrangements the family may make. In this way, it allows for maximum choices by families and various arrangements, particularly in the early period of a baby's life.

Nothing is given in enhanced benefits to the more than 600,000 families who between them have 1.1 million or 1.2 million children who benefit from child benefit. It must be asked who in the Government has it in for children over three years of age for whom there is no defined benefit in the budget? I fail to understand this. What about children in middle income families aged three years and over who will not qualify for what is described in the budget book as a means-tested payment? Who in the Government has decided to ignore such families? Everybody in the Chamber knows people with two, three or four children. They are often in negative equity on their mortgages, but, thankfully, they are now beginning to get out of it. Many self-employed tradesmen with a small firm went to the wall. I am speaking about people in my family who are now getting back on their feet. Child benefit is a crucial source of cash flow to the family table in terms of budgeting how they will spend money on their children.

The second set of headlines I saw, particularly today and over the weekend, indicated that this would be a grey budget and that pensioners would benefit, in particular. They must be feeling as though they are sucking on a lemon because the package announced today by the Government is significantly below the package of benefits granted last year when there was an increase of €3. I absolutely acknowledge that I would have liked to have been in a position to give €5, but we did not have the resources to do so. We did, however, reintroduce the Christmas bonus which Fianna Fáil had cancelled in 2009. In the first year the figure was 25% which last year we increased by 50 points to 75%. For a pensioner, the payment was €173 in the month before Christmas, allowing him or her to buy presents and provide a little extra, all of the things people who receive the Christmas bonus do carefully.

Last year's increase was worth €3 a week on average and it applied from 1 January.

In previous years the social welfare Bill has been passed by the House by 31 December to provide for social welfare increases, in so far as is possible, to be paid from 1 January. It is a dereliction of duty to decide that they can be postponed for up to three months. We do not even know at what time of the year the other payments listed, which will be welcomed by those who receive them, will be paid. That is not outlined in the budget briefing books. Last year, we also increased the fuel allowance by €2.50 a week for the less well off among the elderly, lone parents and long-term unemployed, which was important. Last year's package, therefore, for pensioners, particularly the less well off, was worth €7.25 a week. We are not sure about the split in this budget because it is not clear but it seems to be approximately €4 a week compared to €7.25 last year. There was a great deal of spin about how wonderful the budget would be for retired people. By and large, they cannot work and earn additional money in the way those who are, unfortunately, unemployed can get back to work with support. As soon as they return to work, their income increases significantly. That is why we focused on pensioners and carers aged over 66. Whoever designed this did a bad day's work.

I referred to Brexit earlier and I would like to make a recommendation to the Government parties. If they want the country to be dealt with more seriously, particularly by senior bureaucrats and eurocrats in the EU and the different political figures in the UK, they would do well to invest in the arts and, in particular, to continue with the 1916 investment, which we were party to in government, in our national cultural institutions and the arts generally around the country, including the proposal by my colleague, the former Minister for Public Expenditure and Reform, Deputy Howlin, to provide a restoration fund for the various arts centres and theatres which had been built when President Michael D. Higgins was Minister with responsibility for culture. I am ashamed to refer to the sneaky line in the contribution by the Minister for Public Expenditure and Reform, which suggests that funding for the Department of the Arts, Heritage, Regional, Rural and Gaeltacht Affairs will increase. On the contrary, it is being reduced from €188 million to €158 million, a decrease of 16%, at a time people have to lobby like they have not had to do since the crash to present Ireland in the most positive way and to make what they can in the most positive way of the difficulties and challenges thrown up by Brexit. This is penny wise and pound foolish. The capital allocation for the arts will also reduce by €17 million or 13%. That is what the Government parties think of the arts. The arts allocation within the Department's budget is being cannibalised to provide for regional development. I have no issue with regional development but why cannibalise the arts when it is our most important international calling card and when it is so important to the general well-being of our society?

I refer to a number of other issues. What has the Government got against the Irish language? Funding has been reduced by 9%. The Government would not agree to a sugar tax. We are coming down with expert reports highlighting that obesity among children is a serious health risk and, in addition, warning that there will be a serious economic cost associated with obesity for a health system that is struggling. We do not want children to end up in a lifetime of a diabetic treatment because of sugar consumption. Is it true that funding for sports and recreation has been reduced by 17%? We can all try do to a bit more but we should ensure our children are encouraged to be as fit and healthy as possible. That is a deplorable decision. I did not notice much happening with transport but my colleague, Deputy Sherlock, will deal with that.

The national minimum wage will increase by 10 cent an hour. Can the Government not do the decent thing? During the lifetime of the previous Government, we increased it by €1.65 an hour. Many people at the time said that was not enough but an increase of 10 cent an hour means someone working 40 hours a week will take home only €4 extra.

Some weeks ago, I heard a compelling presentation by the leader of Fianna Fáil who said there should be Oireachtas all-party resolution on Syria and, presumably, in respect of the awful events in Aleppo. One would think that would be reflected in the budget but there is no change in the provision for overseas development aid, ODA. As Tánaiste, I secured an agreement with the Taoiseach and leader of Fine Gael that we would accept 4,000 refugees over a period of years. I said that we should focus, in particular, on families with children, on children who were on their own in different parts of Europe and on the vast numbers of people in camps near Syria who badly need support. I am astonished and disappointed that not one extra cent has been provided in ODA in the context of the wonderful work done by the Navy in the Mediterranean Sea and by the various aid agencies.

No reduction in class sizes has been provided for in the education budget, which is a missed opportunity. While the additional teachers are welcome, they will only address demographic needs. With regard to the capital budget, as the Minister for Education and Skills has acknowledged, five projects have been delayed because they do not have sufficient funding. There is no evidence in the budget briefing books that additional funding has been secured. I acknowledge it is early days in the budget discussion but I hope it is provided.

Fianna Fáil, through its leader, sought an additional €100 million in third level funding. I can only see approximately €35 million. What happened to that conversation and what is the €35 million for?

As a Dáil, we have to discuss taxation generally. As Deputy Calleary said, the budgetary oversight committee was a good exercise in at least starting a conversation in detail about the budget. Taxation is changing globally and we have to develop a critical plan for a fair and equitable corporation tax structure while maintaining, as we are entitled to, our 12.5% rate

We need a minimum effective corporation tax rate because we cannot have a headline rate of 12.5% which, through various devices, is whittled away to almost nothing. In light of the current debate on international tax developments we will not be able to do this any more so we need a conversation about it. Structures need to be in place which will, while encouraging foreign direct investment into Ireland, provide that a minimum effective rate is paid. This is something we did for income tax some years ago and it has worked quite well. Very large tax losses have built up in the Irish tax system and this is something we need to look at and to which I will return at a later stage.

There is to be an embryonic rainy day fund in a couple of years' time. It is very difficult to see what that will achieve in the context of the underinvestment we are experiencing and given the investment the taxpayer made in our banks when they collapsed, which at some stage will certainly yield us a return. I have no idea what the strategy of the Minister for Finance is about when the country is crying out for investment in transport. The biggest threats from Brexit are to the agricultural economy and how producers get their goods to market, particularly our biggest market, namely, the UK. We need serious additional investment in public transport and in the maintenance and improvement of our road system.

The dogs on the street know that the first-time buyers' tax refund is a direct subsidy to builders and it should not be called anything else. At the height of the boom times the benefit of such schemes was soon transformed from extra money in buyers' pockets to extra money in builders' pockets. It is difficult to know why the Minister has focused on that. We should be just as keen for people to buy second-hand homes and I am glad the VAT relief scheme is being expanded for a further two years, because when younger people buy a second-hand home major renovations have to be carried out and these provide excellent employment for small and medium-sized builders.

In the past few years the Revenue Commissioners have carried out successful studies into the question of tax compliance among medical practitioners, consultants and contractors. This shows a small but consistent number of people who either underpay their taxes or seriously fail to be tax compliant. We have said that we need to expand that work and I am glad the Minister has increased the resources available to Revenue, particularly for the areas of big data and data analytics but also for inspections and audits. He should go further, however.

Our proposal for inheritance tax has been that it should be linked to the consumer price index and phased in over a longer period. It is difficult to justify the €20 million devoted to the issue today in the context of other pressures. Taking care of the thresholds by linking it to inflation would be a much fairer and more appropriate way of doing it. There is a series of capital gains tax reductions and we will have an opportunity to discuss them in the debate on the finance Bill.

There is an old saying that, "A camel is a horse designed by a committee". This budget has at least three humps. One is light blue for Fine Gael; one is slightly green for Fianna Fáil; and the other is multicoloured for all the Independents. A social media response to the budget was "meh" and that sums it up. For parents with children it is an unknown quantity. What is the child care improvement going to be? Will it really drive down the cost of child care or will it be absorbed by the providers? We do not know the answer yet. Elderly people have got an unfair deal from this budget and I am surprised that it has escaped Fianna Fáil's attention, given the extent of the budget proofing there was supposed to have been from that party. It certainly will not escape the attention of older people, who expected better from this budget.

The budget should be about opportunity and building up confidence, of the country and the people. Last year, people who worked on community employment schemes and Tús schemes, and gave 19 or 20 hours a week to their local community, received an additional €2.50 a week to recognise the contribution they made. This might be small but there is no evidence that anything like that has continued this year. This is a pity because we still have just under 300,000 unemployed, many of them in rural Ireland and many of them aged over 50 who, once they are let go from a job, find it extremely difficult to get another job. I am sorry that there is no focus on how the budget is impacting on different people in different areas of the country.

We have enormous challenges with Brexit and the budget comes in at well under the expenditure limits. The Christmas bonus is paid out of the current year's resources and always has been. I am glad it is going up from 75% to 85% of its full value but, for an extra €30 million or €40 million from this year's ample resources, we could have brought it to 100%. Given how badly older people and those on long-term social welfare have fared in the budget that would have been the decent thing to do.

See this speech in context