Brendan Howlin (Wexford, Labour) | Oireachtas source

Earlier this week in a newspaper article I wrote I made two predictions about the budget. My first guess was that the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, would wear a blue or a purple tie. My second was that the budget would not be regarded as fair, progressive or even sensible. I take no joy in being right on both fronts. For the first time in six years, I am responding to rather than delivering a budget and need to be clear from the outset. My party will oppose the overall package announced by the two Ministers yesterday. That is not to say, however, that the Government got everything wrong. Take the Department of Justice and Equality, for example. I warmly welcome the stated intention to recruit 800 new gardaí next year which was called for by us and others. I particularly welcome the intention to recruit 200 civilian staff into An Garda Síochána. I hope this shows a real willingness to fully implement the very extensive recommendations of the Garda Inspectorate made in 11 reports and in excess of 1,000 recommendations to modernise An Garda Síochána to make it a 21st century force. On a smaller matter, I welcome the commitment to invest €1 million next year in a new round of community CCTV schemes. These are really important issues in giving comfort to communities that feel under threat. Overall, the Tánaiste has done well in securing the funding needed to strengthen An Garda Síochána. I hope during the year she will see the sense in expanding the number of gardaí assigned to community policing roles. I will follow up on this matter in the coming months and years.

The justice Vote is not the only area of the budget that I welcome. As noted by Deputy Stephen Donnelly on radio this morning and called for by Deputy Joan Burton for some time, the Minister for Finance, Deputy Michael Noonan, has moved to clamp down on tax avoidance by vulture funds. Such activities undermine public confidence in the equity of the tax system and must be eradicated. I can assure the Taoiseach that the Government will receive the full support of the Labour Party if it speedily seeks to implement that commitment.

The review of the corporation tax regime announced is welcome. However, it is a flawed move because the objective must be to ensure every company pays its fair share of tax. Mr. Seamus Coffey is a highly respected economist and, like everybody in the House, I wish him well in the task he is being set. In our pre-budget preparations we asked the Department of Finance to cost the introduction of a minimum effective rate of corporation tax, but, unfortunately, it refused to do it. I hope Mr. Coffey will be able to help the Department in that really important area. While we wish him well, we still believe this actual process - like so many other things that need to be tackled - is a mechanism to long-finger rather than do something that is concrete. Carrying out once-off reviews of corporation tax is no longer good enough. We all know this when we look at what is happening internationally. Every time changes are made to the tax code on foot of the findings of a new investigation, an army of lawyers and accountants immediately begins to scratch around to find ways for companies to legally avoid their moral responsibility to pay their taxes. Even if this review results in the closing off of existing loopholes, while that will be an important day's work in and of itself, it will only be a matter of weeks or, at most, months before new loopholes are found and exploited. That is why the Labour Party has long been calling for the establishment of a standing commission on taxation. Such a commission would make sure we kept ahead of the clever accountants or would at least leave be in a position to respond rapidly to them. Perhaps at the conclusion of Mr. Coffey's work, the Government will see the common sense in that proposal.

There are welcome aspects to the budget. A level of indexation of all social welfare payments is welcome. A failure to peg social welfare rates to at least the rate of inflation leads to a real reduction in living standards for the most vulnerable people living in the country. The Labour Party called for this in its alternative budget proposals and I am glad to see the Government acted on it in some shape or form. That said, the entire budget will be called into question if the Government cannot confirm the precise date on which the promised increases will take effect. It means that it does not know what the cost truly is of the social welfare measures announced yesterday Therefore, it makes it hard to take any of the budget at face value. I will leave that issue aside and come back to it.

The increases in tobacco taxes are sensible and I think the House agreed to them unanimously last night. They will deliver improved health outcomes, as well as improved revenues for the State.

An increase in the earned income tax credit is another welcome step towards equal treatment for the self-employed. However, I must say it is disappointing because the Taoiseach will recall that we agreed last year that we would have full equalisation in three equal steps. We took the first step last year, but the Government has not taken the same equal step this year and I do not know why.

Last year, with the Labour Party in government, we improved the Christmas bonus by 50% and increased the State pension by €3 a week. We also increased the fuel allowance.

In total, those measures delivered an extra €336 per annum to the average older person. It not a huge sum, but a modest sum. We were castigated by members of Fianna Fáil at the time, which described it as an insult in this Chamber and on doorsteps throughout the country later on. This year, the headline weekly rate increase is slightly higher, but significantly delayed. There is no increase in the fuel allowance and only a 10% increase to the Christmas bonus. The package will deliver to the average older person approximately €245. The Fianna Fáil-Fine Gael contribution to the elderly in 2017 is €245, having derided our €336 last year. I note that Fianna Fáil does not consider its collaboration in a much lesser figure to be an insult. That said, any increase in the support for older people is welcome.

The move towards a universal child care scheme is also welcome but, as already pointed out by Deputies, it is wholly underfunded. We have heard much in recent weeks about the increased investment required of between €100 million and €150 million to deliver universal child care. There was much talk and it would have made sense. If the House recalls, at the last two summer debates - the economic dialogues in Dublin Castle - child care was the overarching issue. It is the block in our society that prevents people, particularly women, getting involved in the workplace and an enormous burden for young families. Last year, we spent €82 million to introduce a second free pre-school year. That shows the scale of what it would cost to make a real impact in this area. What was announced yesterday was different by a quantum. Yesterday's announcement amounts to a new scheme to be funded with a miserable €32 million.

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