Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

The defining feature of this Government is an obsession with spin and political positioning, which means that one can take almost nothing it says at face value. The gap between the words and the substance has never been wider. Behind the spin, the evidence is of a Government that does not grasp the scale or urgency of the problems confronting our country. The Taoiseach and his Ministers are so focused on politics that they are failing to get a grip. Problems are routinely being left to become emergencies before any action is attempted.

It was once the tradition that budget day would involve a focus solely on policy changes, with the reasonable expectation being that there were other opportunities to review ongoing policies. Unfortunately, now nearly every area is shrouded in a cloud of meaningless figures which tells one almost nothing about new or additional policy decisions which have been taken.

It says something about the Government that it put out videos praising the budget before it had agreed what was to be in it. Because of this hyper-political and spin-dominated approach, no one can say that today we have clarity on exactly what is proposed for many areas. On the day after the Budget Statement, key information is still missing.

In the coming days and weeks, each Department will publish its spending plans. Legislation will also be introduced to enact the taxation and social protection elements of the budget. It is only when we see these and when there is an opportunity to examine new initiatives that it will be possible to see what is proposed for next year, and it is only then that we will see if there will be any change to the chronic failure to deliver in area after area.

If one looks at the priority given to funding public relations, the endless streams of expensive videos, the regional promotion of Ministers, the constant relaunching of policies, the scapegoating of others for failures and the hyper-political approach to every issue, it seems obvious this is a Government that prefers to campaign than to govern. According to many journalists, there is a prevailing mood among Ministers that they want to run to the country as quickly as possible because they are scared they will be found out if the Government lasts much longer. The Ministers for health and housing, we are told in media reports, are particularly terrified of having to answer for their performances next January. The Taoiseach himself spent much of this year trying to create an instability, which would allow him to collapse his own Government. Yet again this week, we read stories based on Fine Gael sources focused on when it suits them to force an election and not on getting to grips with the housing and health emergencies or the cost of living crisis. We need to put these games aside and focus on the issues at hand.

This is the third budget under the confidence and supply arrangement which enabled the formation of a Government following the election. It is also the final one before a review process which will determine what happens next. I will outline later what our approach to that review will be. Before doing so, I will address what we know of this budget and our concerns about the delivery deficit which has so comprehensively overtaken Government.

It must also be put on the record that the preparation of this budget was, by some distance, worse than in recent years. Basic figures were not available until Monday night, well after the promotional videos were online. In the case of many areas explicitly within the remit of the confidence and supply arrangement, we must review the departmental Estimates before we are in a position to determine whether agreements have been honoured. If it is the case that information we sought was legitimately not available until hours before the Minister gave his speech, that has to be addressed. If it was available but withheld, that is serious and a matter that deserves explanation. This particularly applies to the health and childcare areas.

Overall, this is a budget which delivers no clarity about major challenges and leaves unanswered the core question of whether the Government understands the need for it to dramatically improve the urgency and effectiveness of vital initiatives. Because of the manner in which the budget has been prepared and the last minute adjustments to both spending and revenue for 2018, there are serious constraints on what it is possible to do. While Fine Gael backbenchers have been sent out over the past week to claim that all other parties want to spend and tax recklessly, the fact is that Fianna Fáil has not only proposed a responsible and restrained policy but has succeeded in getting the rainy day fund established. The rainy day fund is the only current reserve in case of an economic downturn. The position of the public finances rests on the buoyancy of key elements of the private sector and healthy growth in international markets.

If one puts aside the political spin, one finds that the core strengths of the economy in recent years have all come from the foundations built by the people over many years, in particular, their commitment to education and training. One of the remarkable aspects of this Government is how little it has sought to change the core industrial and economic model of the State. It has spent so much time trying to brand itself as modern that it has not noticed how little it has changed.

Industrial development strategies are basically unchanged. Training and education programmes have been expanded rather than altered and the main sources of investment are as they were a decade ago. When the OECD conducted an independent review of the Government's much-hyped Action Plan for Jobs, it concluded that while the plan appeared to be a good idea, it was not possible to identify any clear role it has played in employment growth. This lack of any serious review of industrial and employment policy is a subject which we should return to when there is more time available but, in the context of a period of rapid change and the urgent need for greater diversification, the failure to significantly evolve our core economic strategies is a serious exposure.

The international situation today is tense and a series of events could quickly reduce growth figures. Equally, it may well be that the impact of Brexit is already hitting not only individual firms but the overall economy. The serious decline in economic sentiment and the wide number of indicators suggesting a concern about the future combine to paint a picture significantly less rosy than the complacency evident in the contributions of the Minister and the Taoiseach. We support the recommendation of the ESRI for a broadly neutral fiscal approach. Were underlying sentiment and established risks less serious, there would be a case for a surplus. The Government's claim to have major buffers against shocks is simply not true.

Within the overall figures for next year, there were still many choices to be made and much more could be achieved within existing allocations. The Government's approach has been highly conservative. The lack of substantive change was indicated yesterday by how often Ministers talked about global allocations to their Departments and presented existing activity as new. We also saw the re-announcement of large numbers of projects, often for the third or fourth time.

The most significant change in Fine Gael's budget policies since 2016 has been a move away from the regressive unfairness of its previous budgets. This change was forced on them by the confidence and supply agreement and all independent studies have confirmed that the worst edges have been knocked off the pre-2016 approach. Those regressive policies had nothing to do with lack of resources. When decisions were being taken, Fine Gael chose every time to make those with less bear a bigger share of the burden. This is a policy so ingrained in Fine Gael ideology that the Taoiseach used a series of regressive tax policies as the core of his leadership campaign.

The confidence and supply arrangement has succeeded in blunting Fine Gael’s regressive ideology. This claim annoys the Taoiseach. If he is not persuaded by independent commentators demonstrating how we secured a move away from Fine Gael priorities, he might listen to another well informed voice. In commenting on the first budget under the confidence and supply arrangement, this expert stated that it was "the first fair and socially just budget" in years. Those were the words of the then Minister for Social Protection, Deputy Varadkar. It is reported that he quickly realised that he had been a bit too candid and stated, "I probably shouldn't have said that." Perhaps the next time the Taoiseach wants to complain about Fianna Fáil getting credit for stopping the worst of Fine Gael's instincts, he should consult Deputy Varadkar.

The social protection package includes modest improvements and we make no apologies for insisting that a minimum increase of €5 be given to everyone who receives a social protection payment. This has happened for the past three years and helps to partially address the increased cost of living. The first step in introducing parental leave, albeit from November next, will be a progressive move for new families. While we also welcome the reversal of some of the Government's past cuts directed against single parents, the effort of Fine Gael Ministers to lay the blame for them on the Labour Party are ridiculous. The Taoiseach and the Minister were both members of the Government that implemented those avoidable cuts and they share full responsibility for them.

One of the principal political claims for this budget is that it supposedly ensures that we can meet and overcome the challenge of Brexit. The Minister described it as the biggest diplomatic and economic challenge of a generation.

4 o’clock

Next week, we will have an opportunity to discuss the overall situation relating to Brexit. It is clear there will be a deal because a failure to reach a deal suits no one. A chaotic Brexit is a lose-lose outcome that is highly unlikely although, of course, we must be ready. The fact that a deal is likely can be seen in the manner in which the Taoiseach has been trying to shift the ground from his claims last December and to broaden the focus beyond the supposedly "rock-solid" Northern Ireland backstop that both he and the Minister for Foreign Affairs and Trade, Deputy Coveney, previously defined as the continuation of the status quoon both customs and regulation.

In recent weeks, the Taoiseach has started talking about having four objectives for the negotiations. Two of these, the common travel area and EU citizenship rights, are not actually up for negotiation, having been agreed between all sides without debate. His staff have actually been out rubbishing the idea that the UK as a whole could be covered by the backstop even though he himself suggested it last December. There remains much to be done on the diplomatic challenge and it is to be earnestly hoped that the Taoiseach and his staff will not revert to type and spend the next few weeks talking to the media rather than the people with whom we need to reach a deal. As for preparing for the economic hit of Brexit, we need to start understanding that the best-case scenario is terrible. The budget documentation assumes no impact for at least two years and then a loss of growth which is based on a departmental estimate that is two years old.

According to the only independent study commissioned by the Government on the economic impact of Brexit, the current likely outcome of either a deep free trade agreement or continued customs union membership would lead to a permanent loss of 4.3% of national income. Using the conservative GNI* figure, that is equal to over €5 billion per year, or over €5,100 per household. This loss will be felt, in particular, by the nearly 6,900 firms that export to the UK. The bulk of these firms are indigenous SMEs. This is the basis on which we must assess whether the Government's claims to be preparing Ireland for Brexit are true. Is the Government meeting the €5 billion Brexit challenge?

There is another ministerial roadshow under way at which various schemes are being relaunched and re-announced. When one looks at the hard figures, however, one sees a real cause for concern. According to a survey published by the Government last month, levels of preparation for Brexit are appallingly low, which appears linked to the complacency that followed the over-spinning of last December's deal.

According to the Government's own work, only 28% of exporting businesses have a Brexit plan, and only 13% of businesses likely to be impacted by Brexit have taken any mitigating action. In fact, unless there is a dramatic change it will be five to six years before all businesses threatened by Brexit will be ready for Brexit.

It is not hard to find a direct link between this lack of preparedness and the failure of the Government to deliver on its Brexit commitments. Last year, a €300 million Brexit loan scheme was announced. As of last month, 1.3% of companies that export to the UK had received a grant. Enterprise Ireland's Be Prepared grants are being awarded at a rate of six firms per month. InterTrade Ireland's Start to Plan vouchers are also being awarded at a rate of six firms per month. The €25 million announced last year for the farming and fisheries sectors has been untouched and was re-announced yesterday as a new initiative. The long-term loan scheme signalled last year has also been re-announced and may eventually start next year.

The Government has made a lot of noise about a recent decision to hire new Brexit officials. At some point next year, apparently, up to 400 will be hired and begin training. By contrast, the Netherlands, which has a similar level of trade with the UK, has already hired and trained 1,000 officials to deal with Brexit.

We should also remember that, this day last year, the Government announced it was retaining the special low rate of VAT for the hospitality sector as a critical part of its Brexit preparations. It appears the Government now believes the hospitality sector has become Brexit-proof.

In every single area, except marketing spending, there has been a systematic failure to deliver on Brexit preparations. One hundred and seventy days before Brexit takes place, the overwhelming majority of our businesses have not been helped to be Brexit-ready, and their fears of what lies ahead continue to grow apace.

This is a €5 billion threat, yet all we get is the same pattern of over-claim and under-delivery. The scale, ambition and implementation of Brexit measures are nowhere near what are required. We believe there must be an urgent review of what needs to be done to address the massive under-delivery of Brexit preparedness efforts.

The development of critical economic infrastructure is more important than ever. Even though there has been an unprecedented publicity campaign claiming everything is in hand, many critical projects are delayed. It is striking how many of the projects promoted this year will not be prepared or tendered during the full potential life of this Dáil and the next one. The people of Finglas have been bombarded with literature calling on them to celebrate the good news of metro north – a project that will not commence in the next decade, at the earliest.

Businesses throughout the country are suffering because of the abject failure to ensure they have access to a basic requirement, namely, reliable, fast broadband. They are becoming increasingly angry at a Government that claims to be modern but forces them to operate in the dial-up era. Before the Government can begin to address this chronic failure to deliver, it must first acknowledge the problem. The complacent self-congratulation and marketing-driven approach are causing real damage at a critical moment in setting the future economic direction of the Irish economy.

As Deputies Cowen and Michael McGrath stated yesterday, and as we briefed throughout this year, in the limited scope available to us to influence specific measures in this budget we particularly addressed the emergencies in the housing and health sectors.

The almost overwhelming failures of the Government in regard to housing have led to an unprecedented crisis. A combination of indiscriminate cuts to key supports and the ongoing complacency of the Government allowed housing pressures to escalate dramatically. Four Ministers and many more major announcements have come and gone, yet circumstances have continued to get worse. For the first time in our history, we have simultaneous emergencies throughout the sector, which mean that even people in secure, well-paid employment are struggling.

Ministers first denied there was a problem, then said it would not be tackled overnight and then started declaring victory. Twelve months ago the Taoiseach announced that "the plan is working". He even claimed the homelessness figures had turned the corner and were getting better. Despite this, there are today 800 more children homeless than there were on the day the Taoiseach took up office. Despite the ongoing efforts to massage the figures, there are almost 10,000 people homeless. The facts show that had Fine Gael chosen simply to maintain the level of house building in 2010, the worst year of the cutbacks, there would today be 6,000 more families in social housing.

It was a combination of Government neglect and bad choices that created this emergency, and a basic lack of urgency and competence has kept it going. We need a decisive change to get all elements of the housing system going, with social and affordable housing as the first priority. In our discussions with the Government, we were clear in our demands for a step change in housing funding, delivery on social housing and a new approach to help people on modest incomes to regain the chance of home ownership. We have insisted that a new era of State intervention must begin.

We also prioritised removing blockages from the system. We secured agreement to reduce the number of stages of planning applications by the local authorities to the Department from four to one. We also removed the ceiling of €2 million that requires authorities to apply for even very small developments. The ceiling is now increased threefold to €6 million. It should be even higher.

This will enable authorities to build up to 30 house projects without getting clearance from the Department. We pressed for extra social and affordable houses to be delivered in 2019. While funding was already announced under the Rebuilding Ireland plan, we secured an extra €210 million for social housing, €60 million to combat homelessness and an extra €310 million over the next three years for affordable homes. This affordable scheme will cover the cost of building homes on State-owned lands up to the value of €50,000. As the average cost of a home varies across the country, this will significantly help people get on the housing ladder. Based on an average price, this will deliver over 6,000 affordable homes.

We also prioritised the need for a mica scheme to address the horrific situation that thousands of Donegal and Sligo families find themselves in due to faulty bricks being used to build their homes, which are now crumbling around them. Deputy Charlie McConalogue and the Leas-Cheann Comhairle, Deputy Pat The Cope Gallagher, were particularly adamant that such a programme would be included. This was announced yesterday and there will be money allocated in the REV in December.

The obvious question now is whether this Government is capable of delivering on its promises.

This issue is central to any discussions on the future of the Government.

The emergency in key areas of the health system has been growing steadily in recent years. There has been a sustained attempt to blame the staff and the structures of the system for problems, but the clear evidence is that the key errors trace directly to the holders of the office of Minister for Health. As part of a wider strategy of trying to persuade people that the health system is the problem, the Taoiseach and his Ministers have acted as if the now endemic and dramatic budget overruns are the fault of a system out of control. This is provably false. These overruns are a political creation and they are undermining the ability of the system to use its resources most effectively.

Thankfully, an IFAC study has shown the truth. In the years before Fine Gael took control of health, the HSE had built a strong record of budget control. Over successive years, the system came in on budget and any variations stemmed largely from overall economic impacts. This changed in 2011, and since then there have been regular and increasing overruns. According to the council, there have been two reasons for the overruns. First, there has been a failure to provide for the true cost of services at the start of the year. This is a political decision by Fine Gael Ministers to build overruns into the system as a feature. Second, there has been a lack of central overall management oversight, something caused by Fine Gael’s decision to abolish the highly effective HSE board. Given the chaos that has been evident in recent weeks over exact figures in health, we do not know yet whether another overrun has been made inevitable by the budget. We will examine this in depth in the weeks ahead.

We welcome the increased funding for health, but there must be more detail about what the core funding will achieve and whether there is any substantial movement on Sláintecare implementation. There is a need for transparency and honesty on this issue. The almost fraudulent budgets of previous years cannot continue in terms of the original Estimates which the Government certainly must know at the beginning of the year from its interactions with the HSE. We do not have the same interaction before the budget. That is an issue we intend to pursue. The dramatic expansion in waiting lists and waiting times since 2011 was a direct outcome of changes made by the Government. The significant increase in the NTPF is solely a result of our initiative, just as its restoration was in 2016. Its success in helping thousands of patients and beginning to reduce waiting times is one of the few bright spots in the sector currently. Proof of this can be seen in the fact that the Taoiseach talks about the fund regularly, in spite of his opposition to its restoration. There were comments earlier criticising the fund. The bottom line is that from 2002, when it was initiated, it brought waiting times down dramatically to three months for children and less than six months for adults, in line with global standards. When the then Minister, Senator James Reilly, got rid of the fund, the lists lengthened. One can see that in the curve.

We have also prioritised mental health services. Over the past two years, we have had a constant battle to try to get the Government to honour its commitments and to spend the agreed allocation. We have secured a significant increase for next year but it is important for people to know that it is not of the scale claimed by the Minister yesterday. For Deputy Catherine Martin's information, in the Budget Statement the Minister claimed that he was giving €84 million extra for mental health services. In fact, €29 million is simply to cover universal changes such as pay increases. A further €20 million is a re-announcement of funding agreed in the past and not delivered. This leaves a genuine new service increase of €35 million. We are pleased to have secured that, but it is important that people are not misled by the Government’s announcement. I believe we need to be honest with people about how the health service is being funded, how much new money is being allocated and where it is being spent. There are too many challenges and difficulties gaining access. With nearly 1 million patients on waiting lists, there will have to be a serious change in the approach to planning and delivering health spending.

Fianna Fáil has always been a party that invests in education. We delivered each of the major expansions in education access over the past 50 years. We have delivered a reversal of some of the worst education policies of this Government. These include access to guidance and counselling, postgraduate grants, core school funding and a reduction in the pupil-teacher ratio. Overall this budget is incoherent and damaging for education, similar to the Government's education policy. There is little else aside from the modest increase in the capitation grant. In fact, education will receive a below average increase next year. The Minister tried to save face by announcing €300 million from the NTF that can be accessed for higher and continuing education between 2020 and 2024 but this has nothing to do with next year’s budget.

The funding crisis in our higher education system is set to continue. While the Government holds ceremonies to honour itself, its higher education policy is a complete shambles. The loss of the highly regarded chief executive of the Higher Education Authority seems to have been the result of frustration at the failure of the Government to understand what is happening. The money announced yesterday is tokenistic and is due to be allocated to maximise political control and minimise autonomy. To say to a sector caught in a financial crisis that there will be a competition for new funding is shameful. The idea that we need more competition for funding, with the Government serving as a jury, is fundamentally ignorant of how world class higher education works. We should seek to recruit excellent staff from overseas, particularly from Britain due to Brexit, and do everything to help students achieve as much as possible. Instead, we get lip service and interference.

The growing lack of transparency in decisions and the refusal to fund science at the international cutting edge are deeply disturbing. The budget includes capital funding for a new research programme which will give Ministers a role in deciding on funding for the first time in 21 years. That should not happen. The funding is welcome, but under no circumstance should it be allocated in this way. Throughout the Government there is an active effort under way to re-politicise grant schemes. The Taoiseach’s belief that politicians should take the credit for all good news is leading to a dangerous reversal of past progress. Ireland’s status as a place which values scientific excellence was built on our decision to make awards solely due to independent and international review. I know what I am talking about as I introduced the programme of research in third level institutions, PRTLI, which brought unprecedented investment into third level education. We brought international peer review into that and we kept politics out of it. That is the way it should continue. The science and research policies of recent years have been deeply damaging in terms of the neglect of core, basic research. If the Government moves ahead with its proposals, the damage will accelerate.

This budget raises many issues. Its true nature will only become clear when we see more details of departmental spending plans. The chronic and near systematic failure of the Government to follow words with action on the deepest challenges we face should concern everyone. As I have said previously, my party fulfilled a duty that others shirked, which was to enable the formation of a Government after the last general election. We have been entirely straight and honest in how we have honoured our agreement. We have done this in spite of many difficulties and what can only be described as provocations, particularly over the past year. I informed the Taoiseach yesterday that we will continue to honour the agreement between our parties and will enter a review of the confidence and supply arrangement. We will do that as we have always done, in good faith and without the spinning and briefing of which there has been far too much in recent months. We have no intention of accepting artificial deadlines or any proposal that would deny the thorough review we envisaged when reaching agreement in 2016.

No party has a divine right to power, no matter how much time it spends praising itself. The chronic deficit in delivery on housing, health, Brexit preparation and in many other areas means that it is impossible for the Government to argue that we should assume all is fine and just carry on regardless. We want a genuine review and a genuine discussion upon which to decide. In case anyone tries to use Brexit as an excuse for claiming there is instability, we have assured Ireland's European partners of the stability of Ireland’s negotiating position and that nothing will be done to interfere with a deal being done and implemented. The Government knows that. The Budget Statement has been delivered, but there is much information yet to be published. The details of the finance and social protection Bills are awaited. We will be constructive in dealing with them and, as we have been so far in this budgetary process, focused on ensuring a more progressive and effective policy for addressing the concerns of the Irish people.

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