Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

I am sharing time with Deputies Eamon Ryan and Seamus Healy.

This Government does a lot of talking about opportunities. Today was an opportunity for bold and brave vision, and an opportunity to take Ireland on new path. However, today the Government decided to let those opportunities go to waste, choosing instead to try to please as many groups as possible in some small way rather than focusing on targeted measures which could achieve real and substantial change. Let us be clear that there are elements of this budget which are to be welcomed, but it is very much a budget that is focused on the next general election rather than the next generation. It is a skin-saving budget for Fine Gael, designed to pacify its natural voter base and its Government partners, including Fianna Fáil, rather than to show ambition for the future.

Before I get into any of the specifics, it is incumbent on me to once again raise the issue of our debt burden. It is the fourth largest debt burden in the OECD and the cost of servicing it runs into billions every year. We are hamstrung by it because it forces us to operate within a limited fiscal space. While we agree that we should balance the books on the current side, we very much feel that the capital side needs to be severely challenged.

Once again, we were regaled with tales of the rainy day fund, this thing that has been mooted for the past number of years as if it actually exists. The reality is that even after today's budget, the so-called rainy day fund will not see its first penny until 2019. I remind the House that we originally had the National Pensions Reserve Fund, which was really our rainy day fund. It was emptied to fund the banking crisis, leaving us struggling to fund pensions into the future. What constitutes a rainy day anyway? I look around at the scale of the housing crisis and I see 3,000 children in emergency accommodation. I do not see a rainy day but a tsunami that is here now, and not coming in the future.

The same can be said of many of our other public services. The Minister flamboyantly spoke about what he called "the continued delivery of sustainable and high-quality public services". I am curious to know what high-quality public services the Minister was actually referring to because so many of our public services are threadbare. We see it every week with people coming into our constituency offices and showing us the failures in the system. One could describe many of our public services as delivering mediocrity at best. We have a health system that is creaking with waiting lists for basic procedures that would make one's eyes water. We have a public transport system that is disjointed and grossly underfunded. While I welcome the projects that were specifically mentioned today, the truth is that they are not new announcements. Many of them have been announced previously. The Luas cross-city project is about to go live. Some of the announcements we need are about putting vision into our capital funding. The real game changer in the greater Dublin area, for example, would be the DART underground project but that piece is missing.

It is about spending now to save later. I asked Department of Finance officials at the Committee of Public Accounts recently how much it would cost us in hard cash for missing our climate targets. The reply I got was €600 million annually from 2021. We need to spend now to save later. We need to invest in the kind of initiatives that are about having a vision that will save later on.

There are many things to be lauded in our education system, but we need to continue to invest in it. There is much talk about free education but families in late August and early September will tell the Government exactly what free education means. This affects poorer families and for them it is almost embarrassing because they may be trying to stretch out getting things that are needed. A provision of €100 million a year would provide totally free primary education. That is the kind of investment that would put money back into people's pockets in a different way from tax cuts, and would be very targeted.

The political hot potato is obviously the housing system, although listening to the Minister's speech today one would be forgiven for thinking that housing does not actually count as a public service.

Affordable housing is a public good and must be seen as one. The focus has got to shift because, essentially, it is now seen as almost a private sector endeavour. We were told earlier today that housing remains a priority for the Government. Saying that is one matter but we are not seeing delivery or investment in social housing. Some of us raised these issues in 2013, the same year the then Minister for Finance, Deputy Noonan, introduced a capital gains tax advantage for a particular sector in encouraging land use. It was evident even at that stage that we were going to have a problem. Now this has been reversed.

Most of the measures listed in the Budget Statement refer to plans for 2019, 2020 and 2021. Where is the urgency or the sense of priority for the 3,000 children in emergency accommodation? We must parse out the measures announced and juxtapose them with what they really mean. There is a promise of 3,800 new social homes for 2019. It must be remembered that there are 90,000 individual applications on the housing waiting lists, which probably comes to 230,000 people. When one drills down into the extra €500 million provided for direct builds and the promise of 3,800 social homes, it effectively means direct builds would cost €131,000 per unit. That means it is only a small number of direct builds and it is mainly for housing assistance payment, HAP. This has increased by €149 million, which the Minister claims will support an additional 17,000 homes and households. All this does is recognise the significant rent increases in recent years, however. That is costing all of us because the lack of investment has created this problem.

It also poses a significant difficulty for people who are just above the thresholds where they qualify for HAP and it puts another group in peril. It is an expensive short-term measure for the State, yet it has become the main key response to the crisis.

Similarly, the vacant site levy will not actually kick in until 2019. The amount of the levy is way below the level of land inflation and, accordingly, it represents a carrot but not much of a stick. The legislation on this issue is full of loopholes that allow land hoarders to avoid the levy. Unless those loopholes are closed, the levy in itself will not be enough. The Social Democrats recently introduced the Urban Regeneration and Housing (Amendment) Bill 2017 which will address those legislative anomalies and ensure land hoarding is not financially beneficial to landowners.

I welcome the increases in stamp duty on commercial property transactions. However, how much tax will be realised? Critically, if it is not realised, what services are at risk? Crucially, there has been no announcement of an affordable housing scheme, despite the fact the lack of housing affordability is the number one issue driving the ever-growing housing emergency. Instead, the focus is on the private sector and, therefore, it is hoping rather than planning for affordability. That is a really critical point because it will impact on those who require housing in the short to medium term. It drives up wage demands and limits our ability to grow the workforce. It has a major impact on our country and economy. Affordability is left to the private sector to deliver on.

I am genuinely disappointed that the measures announced today will not even scrape the edge of the housing emergency. Rebuilding Ireland has many good points to it and is a good plan. There is a real problem, however, with the Government making that plan a reality, even with the modest number of houses announced, relative to the housing waiting lists.

What of the proud statements on the corporate tax rate? The Minister stated our corporate tax system is recognised as one of the most transparent internationally. However, last month's Government-commissioned Coffey report still managed to find 18 areas in which the code could be brought more into line with OECD norms. The Minister also boasted of the tax regime's stability and competitiveness, words at odds with those of the Comptroller and Auditor General, who concluded in his 2016 annual report that "Corporation tax receipts are subject to dramatic changes year-on-year, and have been difficult to forecast". There is too much of an over-reliance on a fragile and volatile tax base. Up to 37% of corporation tax receipts came from ten corporate firms. As it stands, 13 companies pay an effective tax rate of less than 1%, significantly lower than that of the 12.5% headline rate. This no doubt reflects the significant tax credits and reliefs, in particular double taxation relief and research and development tax credits.

There were great announcements to abolish the universal social charge during the general election. This was a big lie and one of the most dishonest statements presented during the general election. The Government knew full well it was simply not possible to deliver on that due to the cost. We are constantly preached at about how Fine Gael is financially prudent and is the only one which can run the economy. The fact Fine Gael is talking about amalgamating PRSI and the universal social charge is one hell of a major U-turn. That is far from what was promised during the election. It was a dishonest way to enter into the general election.

I will not forget the so-called "game changer", which never features anywhere, namely, the Anglo Irish Bank and Irish Nationwide debts and promissory notes. We were told there would be retroactive recapitalisation of our banks. We are carrying that debt and we have extinguished €8.5 billion of debt which is not owed to anyone. To give up on that is an absolute shame. It is a shame that our children, grandchildren and other generations will pay for it, not us.

There is the issue of spending now to save later. We are on the hook for €600 million in fines for not complying with our climate change targets. What is wrong with a good scheme for retrofitting our housing stock? What is wrong with investing relatively modest amounts for the return one gets in cycling and public transport infrastructure? These require us to spend money now because we are going to have to pay later if we do not spend it. Considering this is the first budget in which there is some scope, the absence of any kind of ambition in this regard is outrageous.

The most significant point of today's budget is the small print measure which shows €5 million will be allocated to the strategic communications unit for the Department of the Taoiseach. It is significant because today we witnessed the results of some of that expenditure through the exercise of competent presentation, plenty of spin and bluster, all designed to hide the fact that when one scratches the surface, one will find little evidence that these loud pronouncements will actually make much real difference to the fabric of Ireland.

There was a real opportunity to do things differently. Instead of looking at short term, year-by-year budgeting, the Minister should have considered what the outcome would be in five, ten or 20 years if we really invested now in primary education, social housing, public transport or retrofitting our housing stock. Those are the kind of questions that need to be focussed on in advance of a budget, not the little bits that have been spread all over the place. They will be welcome in quarters where people are strapped, but the focus of this has been very much to relieve the top earners. There is very little in the budget for low to average income earners. The focus was very much on providing for the Fine Gael electoral base but it is hugely disappointing for society in general. The big issue is investing in public services and putting money back into people's pockets by collectively providing services such as child care or investing in Sláintecare or education. This budget is a missed opportunity. It will be looked back on as the year the tide could have turned and there could have been a different focus but the Government failed miserably in that regard.

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