Tommy Broughan (Dublin Bay North, Independent) | Oireachtas source

I am delighted to have the opportunity to speak on budget 2018. In my own pre-budget submission, which I sent to the Minister, Deputy Donohoe, last week, I highlighted the need for investment, in particular in housing, public infrastructure and necessary public spending. Indeed, recent opinion polls confirmed that the majority of the electorate wanted to see that kind of investment rather than have an extra €4 or €5 in their pockets. While there are a few small improvements in areas like housing, health and education in the Minister's first budget, my overall first impression is one of deep disappointment and a sense of huge missed opportunities by the so-called Government of opportunity.

I also noted the glum faces of the Independent Alliance Deputies and Ministers. It is clear they were shafted by the Minister for Finance and the Taoiseach in this budget. The Minister of State, Deputy Finian McGrath, for example, has let down our citizens with disabilities and their advocates by only securing an additional €15 million in this budget, just a tiny addition on the extra resources secured in budget 2017 and barely keeping pace with inflation. Producing the necessary resources to implement the UN Convention on the Rights of Persons with Disabilities has again been put on the back-burner. While extra provision for the 1,500 18-year old school leavers with intellectual disabilities is welcome, the Minister of State, Deputy McGrath, and his Department have failed to address the increasing lists of hundreds of children assessed to be on the autistic spectrum who are waiting for early intervention supports, including preschool places. Many of us represent parents of those children.

In my personal submission to the Minister last week, I urged him to support major new investment in public transport for Dublin, Cork, Galway, Limerick and Waterford. I also reminded the Minister that cities like New Delhi in India and a host of other Indian, Asian and European cities had began to build out major city metro systems in the past ten years. Despite this, the Minister, Deputy Ross’s Department of Transport, Tourism and Sport budget has received miserly increases in budget 2018. For example, there is just €6.5 million for new tourism and cycling measures and only an additional €15 million in all for additional resources. The Minister, Deputy Donohoe, trumpeted a number of new bypasses and interchanges but there is only €46 million in an increased capital envelope for 2018, barely above capital depreciation levels. The Minister, Deputy Ross, like the Minister of State, Deputy McGrath, has clearly lost all the budget battles and the Minister for Finance has once again totally ignored the Dublin metro north project and light rail systems for other cities. He mentioned Bus Connects but we have Network Direct, which Dublin Bus has been working on for years. The Minister, Deputy Ross, may say he helped to retain the 9% hospitality VAT rate but the €600 million in lost tax expenditure in that now unnecessary tax cut would have greatly enhanced the health, disability and transport budgets. I urged the Minister for Finance to taper the 9% rate to 13% by 2021.

Before looking at other key budget 2018 measures, I would like to acknowledge the work of the Committee on Budgetary Oversight and the new Parliamentary Budget Office, whose staff are led, respectively, by Mr. Ronan Murphy and Ms Annette Connolly. I believe all of us on the Committee on Budgetary Oversight have benefited greatly in our understanding of the budgetary process and key fiscal issues. It is regrettable the Minister did not welcome the final establishment of the Parliamentary Budget Office under its director, Annette Connolly, in his speech earlier today. I believe the creation of the Committee on Budgetary Oversight and the Parliamentary Budget Office, along with the special health and housing committees, will be an enduring achievement of the 32nd Dáil.

Budget 2018, as many citizens are noting, is a lost opportunity from a Taoiseach who spoke about an Ireland of opportunities. The Taoiseach and the Minister for Finance could have done much more to alleviate the great distress of our citizens on housing and hospital waiting lists in particular, but they chose not to do so. The Irish Fiscal Advisory Council advised the Committee on Budgetary Oversight that there was €2.2 billion of gross fiscal space for 2018, with a net fiscal space of only €650 million or less. The Minister told us the water charges refunds and any Christmas bonus would be met from the 2017 Estimates and that the Minister, Deputy Eoghan Murphy's proposed and desperately needed affordable housing scheme would be funded under the 2018 budget. Like Deputy Wallace, I am still looking for that affordable housing scheme. We have been misled by two Ministers. Based on the Irish Fiscal Advisory Council estimate of fiscal space, the Government could have raised at least €1.35 billion of net revenue from new taxes, efficiencies and the closing of unnecessary tax expenditures. I note the Irish Fiscal Advisory Council and other witnesses at the Committee on Budgetary Oversight who called for a prudent and neutral budget did not rule out an expansionary fiscal stance once the net figure for fiscal space was maintained through new taxes and savings. However, the Minister chose to expand current expenditure by only €684 million and capital expenditure by only €214 million, while raising extra revenues of €830 million in a total budget package of €1.2 billion. It is a disappointing effort in this first and possibly last budget from the Minister, Deputy Donohoe.

We ourselves set the famous medium-term objective to which the Minister keeps referring, that is, the structural balance of minus 0.5% of GDP - it is we who have set this rod to beat our own backs. It is widely believed that the common agreed methodology, CAM, for the calculation of the output gap which determines our fiscal space is totally unsuitable for Ireland. I note also that if Ireland was already at its own medium-term objective, which we should have been at last year, permitted expenditure would be 4.7% of GDP, not the 2.4% set out in the summer economic statement. This would imply a gross fiscal space of €3.3 billion, which is far more scope than the Minister allowed himself today. I agree with a general balanced budget in 2018 but only in tandem with significant additional investment in public services, especially in housing and health, from a widening of the tax base through new taxes on wealth and very high earners.

At the end of August, 3,048 children were homeless. This figure does not include the children living in temporary domestic violence refuges. The Summary of Social Housing Assessments 2016 showed that 91,600 households had a social housing support need at the end of September 2016. Professor Ronan Lyons estimated recently that Irish demographic history and trends indicate that we have a shortfall of 120,000 houses needed immediately with annual output of 50,000 per annum needed for the foreseeable future.

Everybody understands the necessity for Ireland to emulate countries like Norway and the Gulf states with a sovereign wealth fund. Given that in this city and in this State tonight there are some 3,000 homeless children and 700,000 citizens on hospital waiting lists, it is incredibly disrespectful and uncaring of the Minister, Deputy Donohoe, to talk of creating a rainy day fund with a €1.5 billion donation in 2018 and €500 million annually after that. It is an incredible slap in the face for people who desperately need housing this very evening.

There are a few welcome developments in the budget for housing, planning and local government, but the Minister, Deputy Donohoe, included the capital spend in the overall capital provision of €1.9 billion for social housing in 2017. I welcome the capital funding of €1.14 billion for 5,900 new social homes in 2018, but only 800 of these will be delivered by direct build. The sum of €75 million that has been allocated for the local infrastructure housing activation fund seems very low considering the amount of housing we need. Only €53 million is included for the long waiting lists for adaptation grants. Week in and week out Deputies receive requests from constituents looking for help with support for adaptation extensions to homes. The Minister has simply not provided the necessary funding for this grant for the whole country.

Home Building Finance Ireland, HBFI, seems to be a very poor response to the many calls for the Minister for Housing, Planning and Local Government to establish a State developer of housing or a national housing executive. For example, we heard the proposal from Ireland's Housing Emergency - Time for a Game Changer from the Nevin Economic Research Institute, NERI, advocacy group that asked us to build out the necessary homes on the European cost-rental model. We have had many other proposals along those lines. How will the €750 million from the Ireland Strategic Investment Fund be transferred to the HBFI to achieve a well provided for and affordable housing market? Where is the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy’s new affordable housing scheme? Will Home Building Finance Ireland be a sister company of NAMA under NTMA? What is the link, as has been raised by Deputy Wallace, and how can it be justified?

Fine Gael, Fianna Fáil and the Independent Alliance have not changed their tune at all in their support for private developers and landlords. The dismally slow provision of social and affordable housing will clearly continue in 2018. The €301 million allocated to HAP and €134 million for RAS, not to mention continuing huge amounts for rent supplement, clearly indicates that this is the case. Some €1 billion is being spent per annum on these kinds of supports which would be better spent in building houses in Athlone and in every other town in the State.

I referred earlier to the health and disability budget and the Minister, Deputy Donohoe, spoke of an additional €685 million, including 2017 carryover expenditure. I welcome the allocation of €55 million to the National Treatment Purchase Fund, the €40 million for primary care and the small reduction in prescription charges. The September figures show, however, that there were still 679,000 people on hospital waiting lists around the country. This was an increase of approximately 19,000 on the August figure, but because some of the lists have seen reductions, it is being hailed as good news. People who live in pain call to Deputies week in and week out, and I am sure the Minister's information clinics also receive people who are looking for a hip operation, a knee operation or ophthalmology services, people with cataracts whose sight is going, and people who have diabetes and who are fearful of losing their sight and so on. We have estimated that at least another €300 million should have been provided for these acute services to bring Ireland's figures up to some kind of OECD norm. All we have is €35 million for the waiting list initiative and €50 for acute hospital services. Again we have a dismally disappointing health budget.

With regard to fully implementing A Vision for Change, and I am aware that the Ceann Comhairle has taken some good initiatives around this during the Dáil recess, addressing the poor level of service provision for mental health should have been an absolute priority. The mental health service still has a shortage of 3,000 skilled staff, such as psychologists who are necessary, at an additional cost of €128 million. All we got in the budget today for this was €35 million.

Along with my colleagues beside me in the Chamber, I have highlighted several times in the House the injustice done to the staffs of section 39 organisations. I held a briefing in Dáil Éireann for other colleagues where the Irish Wheelchair Association and Rehab informed us that the restoration of the salaries of the large section 39 health service providers would cost in the region of €14 million a year. This is €14 million the Minister for Finance is not prepared to provide this year for key essential services performed by people who are, effectively, public servants.

The Minister for Finance seemed delighted that the current and capital education budget had reached the €10 billion mark. Current spending, however, is still just in excess of €9 billion. My office, as with other Deputies, has received strong representations from all three levels of education professionals and trade unions, including preschool and postgraduate level. At primary level, I have had detailed briefings from some school principals calling for a reduction in class size to EU norms. I welcome today's announcement for the reduction by one. Principals have also called for a significant rise in the capitation grant for primary schools, which we did not get today. There has been absolutely no provision in this respect.

I also continue to support the equal pay for equal work campaign for younger teachers. The cut in the staffing ratio to 26:1 is welcome but the 545 extra teachers and 1,000 extra SNAs announced today barely keep pace with demographic trends. The 305 extra teachers that were announced will be necessary to reduce the ratio.

I urged the Minister for Finance, Deputy Donohoe, to increase the national training fund levy from 0.7% to 1% for 2018, and in 2019 and 2020, which would raise €200 million in funding for third level. The Minister started today with 0.7%, with it rising to 0.8% in 2018, 0.9% in 2019 and 1% in 2020. This is welcome but it is only a tiny step. The Minister may remember that Independents 4 Change Deputies and I strongly opposed the introduction of student loans or increases in the student contribution. I was pleased to hear that the Taoiseach, Deputy Varadkar, who often seems to make up his Fine Gael policies while standing in front of microphones, is not convinced by the student loan proposal in the Cassells report. The Minister did not mention, however, whether the proposal has been abandoned. The Minister for Education and Skills, Deputy Bruton, appears to still want student loans.

Turning to the social protection budget, the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, was also supposed to be battling away - like the Minister of State, Deputy Finian McGrath - desperately appearing on the 6 o'clock and 9 o'clock news and seeking huge additional resources for the clients of her Department. In fact, when we consider the budget of €20 billion, it is only a 1% increase on her budget of 2017, which would be €200 million. Even the Department of Agriculture, Food and the Marine received a 4.5% increase. More than half of this budget is the current money in-money out budget of the Social Insurance Fund. As in my submission last year, I believe that constituents would like to have seen a minimum core social protection of at least €430 million to €500 million. The Minister, Deputy Doherty, secured far less than half of that. At least a rise of €7 for all seniors, along with the general rise that has been included here, was provided for in my submission.

I had hoped that budget 2018 would include a well-documented and costed gender equality analysis. I am not sure if the Ceann Comhairle has seen any kind of gender equality analysis in all of the documents in front of us. I have not noticed it. I asked for an increase in the income disregard for one parent families from €110 to €146.50 per week. We received a small rise in this regard. I requested the same increase for the jobseeker's transitional payment, which would have cost approximately €4.2 million in a full year. I also raised the huge issue of the pre-2012 payments for the cohort of women workers who were on home caring duties before 1994, especially those women from the 1950s and 1960s who were gravely disadvantaged in the brutal budget of 2012. As they retire, they are now down by some €30 or €40 per week, but the Minister for Finance chose to completely ignore this area.

We asked for an increase in the back-to-school clothing and footwear allowance and generally in further supports for children. A critical age equality issue is the discrimination against young men and women under the age of 26 with regard to jobseeker's allowance rates. Once again, the Minister refused to do anything about that issue. In the interests of social and generational solidarity, I believe we should have had a package of at least €500 million this year. It is far less than that. The Minister, Deputy Doherty, did not put up much of a fight for the many hundreds of thousands of people who are dependent on State pensions and allowances and who are the constituents she represents.

Any citizen who has read the Coffey report on corporation tax and followed the recent speeches of Commission President Jean-Claude Juncker and French President Macron knows that widening the tax net and achieving a long-term sustainable tax base is a key responsibility of Ministers and legislators here. I proposed to the Budgetary Oversight Committee that we should at least consider a third higher rate of income tax on higher incomes, for example the 180,000 tax units who earn over €100,000. A new rate of 43% - I have proposed 48% in the past - on higher incomes over €100,000 would yield nearly an additional €344 million. Of course, we need much more transparency and information on wealth and high incomes in Ireland which is why I brought forward in the last Dáil a Bill to establish a high-pay and wealth commission. However, the last austerity Government decided in its wisdom to ignore that call and defeat the Bill.

I welcome the move to defer a revaluation of local property tax from 2019 and believe that should still consider a site-value tax. The economist David McWilliams has proposed the very interesting idea of a land tax. In my submission to the Minister, I asked that the vacant site levy of 3% be at least doubled. In that regard, I note the comments of my colleague, Deputy Mick Wallace, who is expert in this area. While it is welcome that the levy will increase from 3% in 2018 to 7% in 2019, the Government has taken every conceivable step to avoid forcing land hoarders to build. Other tax widening, sustainable measures which are welcome include the sugar tax and additional taxes for health reasons on tobacco. However, there were many other measures the Minister could have taken to widen the tax net. For example, an increase in betting duty to 3% would have yielded €150 million in a full year. I have been asking for several years for an aggregates levy, such as exists in the UK and Northern Ireland, of €2.50 per tonne to improve the recycling of building materials. That would have yielded almost €80 million annually. If the Minister had abolished the special assignee relief programme, or SARP, it would have yielded approximately €10 million in 2018. I also asked the Minister this year and last year to increase the duty on shares from 1% to 1.5%, which would have yielded an additional €220 million. As Deputy Wallace said, there is a lot of money out there and, as such, the capacity existed to have had a much more innovative fiscal expansion this year. However, we have not had it.

The continuation of the 9% rate of VAT in the hospitality sector is not justified, especially in the Dublin region. We must start to equalise duty on diesel with that on petrol. Even though I drive a diesel car, I consider that we could have started this year and implemented the change over a number of years. It could bring in up to €160 million in additional funding. I remember that when Deputy Eamon Ryan and others, including me, were on Dublin City Council years ago, we all knew that the PM10 emissions from diesel made it unsustainable for health reasons in the long term. While I have always favoured higher taxes on citizens and households with very high incomes and great wealth, I agree that there is indeed a squeezed middle. As such I welcome the increase in the standard rate band for those citizens.

In conclusion, the budget is very disappointing. It is a missed opportunity and could have made much greater resources available for housing and health. It is a particularly sad day for the Independent Alliance which has been well and truly shafted by Fine Gael and Fianna Fáil and ignored by the Taoiseach and the Minister for Finance. In sectors like disability and transport, we could have done much better.

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