Paul Murphy (Dublin South West, Solidarity) | Oireachtas source

How to describe this budget? "Band-Aid budget" most correctly sums it up. Ten years of crisis and Fianna Fáil, Fine Gael and Labour Party austerity created gaping wounds in our society. Between them, they removed more than €100 billion in terms of cuts to public services and extra, unjust taxes. Those measures created insecurity, homelessness and poverty. Now the Government comes along and tries to apply a tiny plaster that will not cover up the societal wounds or make a real difference to people's lives. At the same time, the budget continues moving the economy and society in the same direction that caused the crisis, namely, a shrinking State, a drive towards privatisation and a normalisation of precarious work and precarious existence, particularly for young people.

A figure hidden in the budget documents illustrates what Fine Gael and Fianna Fáil before it have achieved with their right-wing ideology and the shrinking of the State. According to the most recent available figures, total expenditure is 28.7% of GDP, which is the lowest in the European Union. Fine Gael and the Independent Alliance, supported by Fianna Fáil, continue that in this budget.

The Government likes to talk about a republic of opportunity, but what is the reality of the society that it has constructed, a reality that this budget will go further in constructing? It is a republic that can be summed up by "inequality". It is a society in which the richest 10% of the population controls 54% of the net wealth, leaving just 5% for the bottom 50%. It is a republic of inequality where the Government has driven a transfer of wealth and a shift from wages to profits and from labour to capital. Workers' wages are still lower than they were in 2008, not just in weekly and hourly terms but as a percentage of GDP, with a fall from 53% in 2008 to 40%. On the other hand, the personal wealth of the richest 300 people in our country has doubled from €50 billion in 2010 to €100 billion now. It is a republic of inequality where pre-tax corporate profits doubled from €75 billion in 2011 to €150 billion in 2015. It is a society in which a quarter of Ireland's population - 1.2 million people - are experiencing poverty or social exclusion. That figure increased from 15% in ten years. Some 308,000 of those people are children under the age of 16 years.

After budget day is over, after the debate has died down and a year has passed, what will the real impact of these Government policies have been? Will there be less social exclusion, poverty and homelessness? The Government and everyone else in the House knows these policies will not make the situation any better. The crisis will worsen and the budget will deepen inequality. This is because it is yet another ideologically driven, right-wing, Thatcherite budget. It is almost dripping off every page of the speech, with private funding, tax cuts for developers and a hidden, massive giveaway for the vulture funds. In almost every sector, the Government's orientation is towards the private sector to deliver. This is particularly striking in housing, in education through the public private partnerships and the corporate influence on education courses, as well as in many other aspects. It will reinforce existing inequalities and worsen the cost-of-living crisis. At the same time, it will make some people - those best represented by Fine Gael and Fianna Fáil - much richer.

The right-wing approach that lies behind the budget was summed up by the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, this morning when she defended the cuts made to the one-parent family payment under Fine Gael and, in particular, the Labour Party. She stated that those changes had resulted in fewer people being dependent on welfare. That is what happens if one cuts people off welfare, in that they are no longer dependent on it because they cannot access it. It is an Orwellian use of language. This pushes people into poverty. Due to our low-pay economy, almost 50% of the Irish population would have been living in poverty in 2015 had they not had access to some form of welfare payment but that is the direction in which the right-wing Government and Fianna Fáil would like us to go.

It is a budget of spin. We were told that the Taoiseach's strategic communications unit would not cost us anything but we see from these documents that it will cost us €5 million. This means that people - those on social welfare and low-paid workers - are paying for the Government's spin. They are paying for the Government to spin this budget in the next number of days, to pretend that everyone is getting something out of it while ignoring the reality that what most people will get by the time March comes around will be taken away before they have even received it. James Connolly used the phrase "ruling by fooling" to describe what he called a "British art", but it is an art the Government is trying to take up with a view to spinning anything that happens, particularly budgets.

The €5 in increase in welfare payments is a classic example of such spin. It is not €5 a week because when taken over the course of a year, it is less than €4 a week. There is a new feature of budgeting which did not exist in the course of the harsh austerity crisis budgets where over €100 billion was taken out of the economy. They did not delay any cuts then; they were implemented from January. When the Government is trying to be seen to be giving something back, there are delayed payments and the so-called recovery is completely delayed for people. The reality is that €5 will be eaten up before people even get it. It will be eaten up by rising rents, increased prices, increased medical insurance, increased car insurance and by cost of living crisis that impacts on people's quality of life on a daily basis. What is €5 worth to someone living in an apartment in Dublin? It is worth two hours of rent a week and that is it. As a result of the Government's policies, its neoliberal commitment to the free market and its unwillingness to take on the landlords, developers and bankers, it will be gone before they even grasp hold of that €5.

The same goes for workers. It will be even worse for low paid workers. A single person on €20,000 a year will gain a sum total of €1 a week while someone on €75,000 will gain €6 a week. It is low in nominal figures but also in percentage figures. Someone on €20,000 a year will get 0.3% of an increase in their net income whereas someone on €75,000 will get a 0.7% increase in their net income. It is the same for someone on €25,000 who will get €1 extra a week and for someone on €30,000 who will get an extra €2 a week. I will give the example of a woman, Katie, who represents the so-called middle Ireland that the Government and Fine Gael like to pitch to. She has an income of €38,000 and is a single parent of one. She works full-time and is in her late 20s. She rents a two-bed house in Dublin for €1,800 a month. She faces child care costs of €600 a month and has to rent out her second bedroom to survive. The budget gives her at best €9 extra a week. How much extra will her rent increase be next year? It will be far more than €9 because we know that over the last year, rent increased in Dublin by €134 a month on average, equalling €34 per week. Anything she gets and that the vast majority of ordinary workers in this country will get will be wiped out before they get it, particularly by housing costs.

There is nothing more revealing about the Government's approach in this budget than the question of housing. I thought when the Minister, Deputy Eoghan Murphy, said a few weeks ago that it was not about resources, money or ideology, he put his finger on it because it is precisely about money, resources and ideology. It is about a neoliberal ideology that means the Government is unwilling to put the resources and money behind the building of social and affordable housing that is needed to resolve the crisis. Instead, there is a neoliberal, Thatcherite ideology that is all about incentivising the private sector to build homes by increasing the amount of profit it can get.

Something that has not been noticed or drawn out so far in the budget debate is the change to the capital gains tax exemption for property acquired from December 2011 to December 2014. Before this budget, one only got that exemption if one held onto the property for seven years. The idea was to stop vulture funds flipping properties quickly - showing up how cheaply they had bought them from NAMA - and turning that public loss into a private profit. The Government now proposes to reduce that to four years with an admission that the Fine Gael policy has contributed to massive land hoarding and the housing crisis. There is also nothing to stop the vultures continuing to hold the property longer than four years as they will still get the exemption even if they hold onto it for ten years. This applies to all kinds of properties, not just vacant sites, so that would not be affected by this. Why should a vulture fund not pay any tax on flipping an apartment block it bought at fire sale prices from NAMA? From next year, they will be able to just do it and will be able to avoid paying huge amounts of corporation tax. In the tax policy changes element of the budget, we have a figure from the Department estimating that the cost of that will be €0 million. Apparently it will be free to give this massive tax benefit to vulture funds. It will cost billions. That is the real cost of this tax change. Just five vulture funds have bought up €25 billion in Irish property debt. Assuming a return of 30%, or €7.5 billion, which is what vulture funds regularly target, we are talking about a capital gains tax exemption of €2.5 billion. That is more than the entire housing budget of €1.83 billion for next year. It is a massive giveaway by the Government from the public purse to vulture funds. The question of commercial stamp duty is being increased, as we called for, from 2% to 6%. We certainly did not call for a rebate for developers who commence development within 30 months, which means they are allowed to hoard the land for two and a half years to allow house prices to rise even further and then they benefit. They are estimating the rebate will cost only €24 million, which seems to me to be a massive underestimation, reducing the amount raised from €400 million to €376 million.

The other key element in terms of housing is the ideology of incentivising the private sector to build. Instead of using the money that comes from the National Pensions Reserve Fund, money that comes from workers and which is currently sitting in the Ireland Strategic Investment Fund, ISIF, to invest in and build social and affordable homes, it is proposed that it will be loaned out to private developers again. It will be used for commercial investment in housing finance at commercial interest rates in a new vehicle called Home Building Finance Ireland. It is the same policy all over again of public funds being used to assist private developers to make massive profits. They say it will support commercial delivery of 6,000 homes to 2021 on top of the 30,000 homes NAMA and ISIF is already funding. These are expensive homes that ordinary people cannot afford. They are not the affordable or social housing that people need. That is the essential issue. There is no extra funding, not a single extra euro of extra funding compared with what has already been announced to build or acquire social or affordable houses. Despite the scale of the housing and homelessness crisis, there will not be any further increase until 2019. That is because of the prison of the fiscal space and the refusal to increase taxes significantly on big business and the wealthy. The reality is the number of homeless adults increased from just over 4,000 at the end of August 2016 to just over 5,000 at the end of August 2017. The number of homeless children increased from 2,300 to 3,000 in that period, which is a 29% increase. The total number of homeless people increased from 6,600 to 8,200, which is a 25% increase. Without a radical change of policy, this will continue because the budget does nothing to solve the housing crisis. Projecting forward, by this time next year, there will be 6,500 homeless adults and 4,000 homeless children, which is over 10,000 homeless people in total. That is where the Government policy is directed.

The other major element in this budget is that again, as last year, it is an anti-young person budget. That runs all the way through it. There is nothing specifically outlined that will benefit young people. Instead the discriminatory under-26 rates of social welfare payment, such as jobseeker's allowance, are kept. Close to half a million young adults are living in their family homes because they cannot afford to get out. The Government insists on continuing those discriminatory rates of dole and forcing people to go to meaningless and degrading JobPath courses run by private companies such as Seetec. Young people and women are disproportionately in the extremely low paid bracket of workers, therefore getting €1 extra a week, and the Government has nothing whatsoever to offer them. It has nothing to allow young people to get out of their family homes because it is not doing anything in terms of real rent controls or resolving the housing crisis.

As well as being world homelessness day, today is also world mental health day and the Government's proposal is completely inadequate. A Vision for Change could be implemented fully next year for €200 million but instead the Government is proposing a completely inadequate €35 million when 75% of mental health disorders first manifest between the ages of 15 and 25.

In education there is no notion of ending the horrific fees faced by people who go to third level education; instead it is a privatisation charter. The Minister made reference to €200 million being given in public private partnership for so-called regional development, bringing the private sector into education and then in a very clear way, he increased the national training fund levy for employers, going from 0.9% in 2019 to 1% in 2020. He then said it "will ensure that employers have a central role in determining priorities for [these sectors] in 2018 and beyond". He is openly saying that corporate entities will get to dictate what happens in our educational institutes. He is not talking about education as a public good for society as a whole, but about bringing the corporate sector even further into our education. Instead he is leaving people with the €3,000 student contribution charge. The Cassells report, which outlines student loans as an option, is looming. In reality there is a process of privatisation and corporatisation of third level education.

That runs right through education. There is an increase in the number of special needs assistants, SNAs, to more than 15,000. While that may be trumpeted, it largely just keeps up with demographic changes with an extra 8,000 primary schoolchildren in 2018. It is keeping up with demographic changes and a Band-Aid partial restoration of cuts that have already been implemented. The extra funding for third level is almost non-existent.

The supposed centrepiece of last year's budget was the child care scheme. It was heralded then and was to be rolled out fully later on. It made a small difference to a small number of parents. The €120 million allocated last year was completely inadequate. There is only an extra €20 million this year, which is even more inadequate. It is rooted in this neoliberal privatisation approach of outsourcing and subsidising private child care - outsourcing the State's responsibility to provide for children and in reality swelling the profits of the big providers of child care, which are made off the backs of a low-paid, 99% female workforce with an average hourly wage of approximately €10. The alternative was very simple and was outlined in our budget submission, namely, a socialist policy of developing a State-run, publicly owned, national child care system free at the point of use. We outlined how €2.5 billion spent on capital and current expenditure could build such a system next year.

On health care, the Irish Medical Organisation, IMO, summed it up best in its response to the budget when it stated that "hospitals will continue to operate in the overcrowded death zone they are stuck in". An extra €650 million has been provided, just a 5% increase. There was a 7% increase last year, meaning a reduction in the level of increase, despite an absolute crisis in the health service. Some 680,000 people are waiting for hospital treatment. By the end of August, 65,000 had been left waiting on trolleys. In addition 3,400 surgeries a month are being cancelled due to staffing shortages and the trolley crisis. Children are waiting 18 months to see a cardiologist. An extra 50,000 people have been added to outpatient waiting lists since January. There is no substantial increase in investment. There is a paltry increase in mental health expenditure, as we outlined, and there is only an extra €471 million between 2018 and 2021 for capital investment.

What about the massive expansion in primary care that is needed? Perhaps Paschal the privatiser plans to fund it all through more of these public private partnerships, PPPs, which work out more expensive in the long term and further privatise our health service. What about the new National Maternity Hospital, for which the HSE has already stated it does not have enough funding? What about the need for modernisation of IT, record keeping etc.? There is no funding for any of those things.

Another scandal in the budget is in the disability area. The Independent Alliance Minister of State, Deputy Finian McGrath, had a big fight to get €3 million for an office to implement the UN Convention on the Rights of Persons with Disabilities. Ten years after the State signed up to it, it has refused to ratify that convention. It is one of the most disgusting acts of this Government, which continues the acts of its predecessor. Let us remember that it has already spent €3.6 million on the Apple tax case and then people had to fight to get €3 million, which simply will not be enough to treat people appropriately and give them their human rights.

The question of the environment is key. The Government has decided to pay a little lip-service to climate change. The world is heading towards a disaster in terms of climate and Ireland is contributing to that. Ireland is also hurtling towards fines from 2020. Ireland could face €5.5 billion in cumulative climate fines by 2030. Let us remember how the threat of fines was held over us when the Government introduced water charges. However, in this area the Government's response is to do effectively nothing. The budgetary document makes no mention of the number one sector in our economy affecting greenhouse gases, namely, agriculture. There is nothing about moving away from a greenhouse gas-intensive agriculture and stopping that contribution. Instead, the Government has a renewable heat initiative, which one must hope is not modelled on the scheme in the North, and an emphasis on individual electric vehicles.

In order to deal with the number two sector of the economy responsible for carbon emissions, transport, we need to invest in public transport. The answer is not individual electric cars; the answer is public transport. However, we have a Minister for Transport, Tourism and Sport who is ideologically opposed to public transport and is driving an agenda of privatisation, which will be a disaster for workers and for users of public transport and a disaster for our environment. We need a massive public investment in transport. Our budget submission outlined how that could be done with a halving of fares. We need a radical transformation to cheap, accessible quality public transport if we want to transform the way people move across this city and across the country.

Why is the whole budget debate so limited and so pathetic? Why is there nothing between Fine Gael and Fianna Fáil? It is because of the acceptance of the fiscal rules and the rules of capitalism. No real change is being talked about and it is summed up by the elephant in the room, that is, the €13.7 billion plus interest owed by Apple to the public and the fact that the Government is fighting to defend Apple's rights to hang on to it.

I appreciate the Minister's attempt at humour towards the end of his speech when he said, "We have a stable and competitive corporation tax [system] which is internationally recognised as one of the most transparent in the world." It is brilliant; just by saying it he believes that somehow it makes it true. Professor Philip Alston, the UN special rapporteur on extreme poverty and human rights, has said that nobody believes Ireland is not a tax haven. Ireland is recognised as one of the most transparent in the world in the same way that Panama is recognised as one of the most transparent in the world and a model for corporate tax governance. What is fully transparent is that Ireland is a tax haven and the Government and Fianna Fáil are determined to keep it that way. They will wrap themselves in a tricolour becoming very patriotic to defend the corporation tax rate - or the absence of the corporation tax rate - against the European Commission.

With President Trump's policies, Brexit and the moves of the European Commission on Apple's tax and other issues, the reality is that time is ticking on the Government's whole tax haven strategy. As we have shown in our budget submission, the actual corporation tax take is about 4%, not even the 12.5%. This is also unsustainable if the economy is to move forward in a sustainable way.

It is vital to emphasise to people that there was and is an alternative to this budget. Thatcher coined the phrase, "There is no alternative". That is not just a slogan; it sums up the entire method of operation of the European Union and of right-wing parties across Europe. It is to remove discussion on economic policy and fiscal policy out of the sphere of political debate and any question of democracy. It is to say that these are just rules, technocratic things that we simply have to do. It is to say that there is no alternative and that we all have to accept the fiscal rules and therefore we all have to accept these policies.

There is an alternative, and this alternative requires breaking out of those rules. It requires breaking the fiscal rules and breaking the rules of neoliberal capitalism. In our budget statement, we in Solidarity-People Before Profit outlined how the wealth and capacity exists in our economy to completely transform people's lives through investment in public services, precisely by breaking out of that straitjacket of capitalism. We outlined how the housing crisis could be solved and how 40,000 social and affordable homes could be provided in one year, paving the way to eliminate housing waiting lists and end the housing crisis within five years. We outlined how a national health service could be built and developed in three years and how in one year all GP charges and drug charges could be eliminated. This would mean free GP care for all. We also outlined a new focus on mental health provision which would involve the hiring of thousands of staff including doctors, nurses, psychotherapists and psychiatrists.

We outlined how education could be invested in and how all fees could be scrapped from pre-primary to third level education. The pupil-teacher ratio could be drastically reduced and education could be made fully free for everyone who wants to avail of it. As I outlined, we said that we could massively increase investment in public transport and halve fares to help us meet a target of zero net carbon emissions by 2035. We outlined how free public child care could be provided for all and how abolishing the USC for ordinary workers could be the basis for tax justice in our economy. It would be replaced with a high-income social charge which would apply only to those who earn incomes of more than €90,000 a year. We outlined a millionaire's tax, which would tax net assets in excess of €1 million and would raise €3.2 billion. We outlined how corporation tax could be doubled next year, which would raise €6.3 billion. A financial transactions tax could raise €610 million. Increasing employer's PRSI, which is the lowest in the EU, would raise €1.44 billion.

That is just a tiny glimpse of the resources which exist in our economy and how people's lives and their quality of life could be utterly transformed. It points to the need for a broader and more fundamental shift away from the notion that being a corporate tax haven is an industrial policy, which is of course complete nonsense. It points to the need to move away from the notion that we must engage in this race to the bottom in terms of tax, wages and data regulation in order to attract multinationals. There is a need, instead, to build a socialist green economy in which there is massive public investment in the things which we need and democratic public ownership of the key sectors of our economy including banking, construction, transport, communications and so on. There is also a need for a strategy to repudiate the odious debt which still hangs around us. One euro in every €10 which is raised by the Government in the taxation of ordinary people still goes to pay a debt which is simply not ours. In that way we could plan to have sustainable economic growth. It would be both sustainable economically, which would mean resilience in the context of Brexit and so on, and sustainable environmentally.

See this speech in context