Brendan Ryan (Dublin Fingal, Labour) | Oireachtas source

In recent days, everyone has struggled to define exactly what to make of this budget. The only consensus seems to be that people do not make much of it. As far as I am concerned, it is a missed opportunity because it showed poor judgment and made bad choices. It was a missed opportunity to use the economic recovery to make bold choices about the future direction for our country.

One of the better choices made by the previous Government was to introduce a VAT rate of 9% for the tourism sector. This measure helped secure jobs at a time of rising unemployment and helped the sector expand and the country to move out of recession. Between the second quarter of 2011 and first quarter of 2016, the number of people working in the accommodation and food services sector nationally increased by 31,000 on a seasonally adjusted basis, taking total employment from 114,900 to 145,900. This increase of 27% compares to an increase of 7.2% in overall employment over the same period. This indicates the measure may have been successful in terms of job creation and has made a significant impact on the competitiveness of the tourism product.

However, as we have returned to stability and growth, it is time to reassess the 9% VAT rate, which was introduced initially as an emergency measure. Any extension of the measure should have been contingent on the hotels sector engaging in sectoral wage and conditions agreements with trade unions. I put this to the Minister for Finance prior to the budget in a parliamentary question. In his response, he stated:

Ireland has a robust suite of employment rights legislation to protect all workers, including minimum wage legislation. These rights apply across all sectors. Other wage setting frameworks include joint labour committees, registered employment agreements and sectoral employment orders which are underpinned by recent legislation. Engagement in these frameworks is voluntary on the part of the stakeholders concerned.

The 9% VAT rate is also voluntary and it is a voluntary decision by the Government to retain and continue with it. What we will continue to ask is that we leverage the benefits the lower VAT rate has delivered to the industry to improve conditions and protections for workers in the tourism and hospitality sector. The Government has made the choice not to make the continuation of the 9% rate contingent on employers engaging with these industrial relations frameworks. I urge the Minister to have a serious discussion on this matter with the hotels sector before the year is out.

The 17% cut in the sports capital payment is an extraordinary move, particularly as it is included in a budget that features an announcement of a future tax on sugar sweetened drinks, purportedly for public health reasons. I will first speak briefly on the proposal to introduce a tax on sugar sweetened drinks, possibly in 2018. Before doing so, I should declare a previous interest in this area as I worked for Coca Cola for many years. My opinions on this matter are informed not by that period of previous employment but my previous occupation as a food scientist.

While the Labour Party included a tax on sugar sweetened drinks in its alternative budget, I am opposed to that proposal. After announcing the introduction of a tax, the Minister for Finance proceeded to declare that "much analysis needs to be undertaken between now and then." One would expect an analysis to be completed before the announcement of such a tax. The Minister also announced that a public consultation had begun and would continue until 3 January next. However, the consultation is on the "form and practical implications of the tax" when it should, in the first instance, be on the advisability of introducing such a tax on its own.

Reducing obesity requires a broad range of interventions. While fiscal measures may be part of the mix, parallel actions are required in the areas of food marketing, educational measures, physical activity, etc. A recent report by Public Health England concluded it was "unlikely that a single action would be effective in reducing sugar intakes." A 2012 report on work carried out by the Institute of Public Health in Ireland on behalf of the Department of Health concluded that the evidence of the relationship between consumption of sugar sweetened drinks and weight gain was suggestive of a positive relationship but it was not conclusive. International evidence suggests that for a tax on sugar sweetened drinks to be effective in reducing consumption, it would have to be set at between 10% and 20%.

Renowned professors in Ireland differ on the matter. Professor Donal O'Shea argues in favour of a tax on sugar sweetened drinks, whereas Professor Mike Gibney argues that while the introduction of such a tax could be a politically popular move, it would not help to reduce obesity levels. What about other sweetened foods such as sweets, chocolate and ice cream? What about jam, fast foods, chips and bakery products? Other than providing a political feel-good factor for some, the proposal to introduce a tax on sugar sweetened drinks on its own will not have the desired effect.

While it is appropriate that we are concerned about growing levels of obesity in Ireland, it is wrong to suggest that a tax on one ingredient in one category of food products is the answer. If it is the case, as indicated by IBEC, that such drinks account for only 3% of total calories consumed here, how could it be the answer? The introduction of a new tax will increase the cost of sugar sweetened products to consumers without having a significant effect on overall obesity levels.

To return to the reduction in funding for sports capital grants, the sports capital grant scheme, while not perfect, is a very good method of providing direct investment in grassroots community infrastructure.

Every euro of sports capital funding is a benefit to voluntary sports clubs and to the men, women and children all over the country who enrich our communities through healthy sporting activity and competition. People need to see tangible evidence of recovery in their pockets, in their services and in their communities. The once-off payment for the sports campus in Abbotstown is worthy but not at the expense of so many communities which will suffer when the sports capital grant scheme is opened in 2017.

While this and other bad choices since he came into office have left me questioning the Minister for Transport, Tourism and Sport's commitment to delivering for the people through his portfolios, I will commend the Minister for the further commitment to metro north. We in Fingal want to see that project begin and to see real progress on it. I welcome the continued support for the project in this budget announcement.

The Government's choices in education seem to pay no heed to its own programme for Government. Although contained in the programme for Government, it chose not to take the opportunity to reduce class sizes further. It made a deliberate choice not to continue the reduction of class sizes begun by the Labour Party in government in our last budget this time 12 months ago. Instead, the spreading of a few bob across most sectors in education will do nothing more than to keep these sectors standing still, rather than moving forward. I look forward to the Labour Party's Private Members' Bill next week which will tackle the poor choices made by the Government in the education budget.

The first-time buyers help-to-buy scheme included in this budget is imbued with good intentions but, unfortunately, there is real frailty and unfairness in the detail of the scheme. The scheme will provide first-time buyers with a rebate of income tax paid over the previous four tax years, up to 5% of the purchase price of a new home up to a value of €600,000. The scheme will push up house prices, of that there is little doubt, and tax credits and rebates have demonstrated this to us on so many occasions. It is why we in the Labour Party have been against a tax credit for child care for so long.

Another fundamental unfairness in this scheme, and something which runs contrary to the Government's own stated objective of attracting back emigrants who left our shores, is the fact that to qualify for the scheme, one must have paid tax in Ireland for the previous four years and the rebate is of taxes paid in this country. This is like a kick in the stomach for any emigrant who, for economic necessity, had to move away due to the crash, but has worked hard, paid their taxes, perhaps in Canada, the UK or Australia, and saved up money to put towards a deposit for when he or she comes home. This is a very real disincentive for many of our young people to ever return home. I believe the Minister needs to rethink this scheme and present a scheme that will work for all of our first-time buyers, as opposed to hiking up prices further.

I want to read the Minister a message from Australia which I received on WhatsApp in recent days. It reads: "Isn't that first time buyers grant a load of crap? Punishing people who had to leave the country due to recession!" It is from my daughter, so I have to apologise for the language contained in it. It is probably her mother's influence rather than mine. Nonetheless, there is a serious matter involved here, and there are many like her.

The annual budget is the best opportunity to bring in transformative change in society. A fiver a week is not transformative but that was the Government's choice. It was its choice to spread the available funds as thinly and as broadly as possible, to such an extent that it really will not impact much for many people. Instead, people will be left wondering what our Government is actually doing and what choices it is going to make on our behalf to improve our quality of life. Hopefully, they will start to think when they will get the choice to elect a new Government which is not afraid to make bold and decisive decisions, as contained in the Labour Party's alternative budget.

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