Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

The budgetary process is important to long-term thinking about where we are going as a country. It starts with recognising that to have a secure long-term future and develop and progress as a country, we need a secure economy. We need to avoid what we saw happen in the 1980s and mid-2000s, a budget or financial crash which hinders our ability to do anything. As such, the first consideration in the budget is the macroeconomic picture. In that regard, it has been very useful to be a member of the Committee on Budgetary Oversight. We have been well served by the Parliamentary Budget Office and frequent presentations from the likes of the Irish Fiscal Advisory Council. It is a difficult dilemma for any Government to determine the correct macroeconomic strategy for an economy that is nearly overheating, has seen a significant increase in employment and in which significant blockages are appearing in the provision of housing, public transport, water and other services. There is a real question about the best approach. We must certainly be very wary of further stoking an economy that, relative to that of any other European country, has been growing at full steam. At the same time, we face a potential no-deal Brexit, gathering clouds in the global economy owing to trade wars and the natural economic cycle, which suggests we are facing a downturn. This assessment is a difficult balancing act.

We must reiterate that our choices in that regard have been very much hindered, as the Irish Fiscal Advisory Council states, by the lack of management of the public accounts in the last three years. That body has been scathing about the failure of the system, including both the Government and the Department, to properly estimate and account for what actual spending would be from year to year. The Government started the budgetary process in recent years by stating it would spend €72 billion, only to announce a year later that it had spent €82 billion. That €10 billion fillip came from an unexpected rise of €5 billion in corporation tax receipts and the public purse saving €5 billion owing to a cut in interest rates. It was mostly frittered away in cost overruns that had never been properly predicted or even included in the budgetary process. Last year saw Supplementary Estimates after the budgetary process which completely threw any analysis of the overall economic position into the bin. This year will see the same.

It is important to take into account the current advice of the Irish Fiscal Advisory Council. It states we should not have done what we did during the last three years. We should have allowed ourselves greater room for a counter-cyclical economic position. Although no one is certain, the Irish Fiscal Advisory Council's best assessment is that even with a no-deal Brexit, we will not face an actual recession. There may be a severe dampening down of the economic growth we have seen in recent years, but the council does not predict a recession. However, it could be wrong in that regard. The Minister of Finance has made a political assessment that the political damage caused by a no-deal Brexit will be such that it is best to ignore the advice of the Irish Fiscal Advisory Council. Let us be honest. That is what is happening. We set up this body up to learn the lessons of the past, but we are now ignoring the advice of the institutions we set up to protect us. The Minister is doing this for political reasons. He fears that the effects of a no-deal Brexit will be so disastrous for the country that even if the Irish Fiscal Advisory Council is right and it does not lead to an outright recession, this is still the right political response.

It is a fine judgment call and we will have to wait and see whether he or the Irish Fiscal Advisory Council will be proved right. It would help in this regard if the Department or the Minister came out with much greater clarity on what exactly is being spoken about. Is it a €1.2 billion or €1.5 billion increase in spending beyond what was expected because of the Minister's fears of the effects of a no-deal crash-out Brexit? I would like to know exactly by how much he intends to increase borrowing to cover that additional expenditure. When exactly does he intend to crack into the money that would have gone into the rainy day fund, the €500 million that he has intimated will not go into the fund? I believe it will be in the latter part of this year.

I believe some elements in Fine Gael have been critical of the Opposition for not being clear on our position on how to manage a no-deal Brexit. To be honest, that is a bit rich because even after the Minister's Budget Statement it is not clear exactly where the money is coming from and at what point or what time we will react with a supplementary budget. It might be more honest and more economically prudent to say we will have a supplementary budget rather than trying to predict it all here and now. If we are going to have such a supplementary budget and if a no-deal Brexit occurs and the economic consequences are so immediately devastating that it pushes us into recession, we should then press the borrowing button and we should go for a countercyclical economic strategy. We should do this at scale and in a way that meets some of our other objectives. We should do it and use it as an opportunity for a massive expansion in what is called internationally a green new deal. Our countercyclical or stimulus package in response to a downturn recession should invest in infrastructure and services that help us deliver one of the other key challenges the budget sought to deal with, which is to shape and position ourselves to tackle climate change.

There are two stories in the budget. One is Brexit, as with everything, and the other is the approach to climate change. In this regard, I very much regret the Government has not proceeded with what the Taoiseach clearly indicated was his preferred position, which was to use the revenue from any carbon tax to provide a per capitadividend back to our citizens. I am all the more convinced that should have been, and may in the future be, the right approach to further increases in carbon tax. We are busy with committees and very good evidence has been presented to the Joint Committee on Climate Action by the ESRI and the Society of St. Vincent de Paul to show that using a dividend approach, through a fee and dividend, that is, a cashback or a direct payment through the social welfare system and through the tax system, is absolutely the best way of achieving the objective Deputy Shortall set out, which is to make sure we get a just transition. We would meet all the sustainable development goals, we would decarbonise and we would tackle social justice at the one time.

The Society of St. Vincent de Paul and the ESRI were absolutely clear this is the best way to protect all of our people. The benefit is that everyone would get it and in particular, those in the lower-income deciles would be net beneficiaries. There may be individuals with slightly different characteristics but by and large, the Society of St. Vincent de Paul and the ESRI were convinced from the detailed analysis that this would be the best way to do it. No alternate analysis has been done to show how the approach the Government is taking, through an increase in the fuel allowance, works in a real detailed way. We know it will not provide full cover for those suffering fuel poverty. We know it will not deal with those families or individuals who are what is called the working poor and who are not able to avail of the fuel allowance or with many people in the social welfare system who are not long-term unemployed and who would not be able to avail of the fuel allowance system.

For the past six months, we have all known this was coming. The Oireachtas Joint Committee on Climate Action asked for specific analysis to be done. The Department of Finance failed to produce the fuel poverty analysis we sought. The public consultation process to assess the two options we were looking at, one being the option roughly set out in the budget today and the other being the dividend, was one of the worst I have ever seen. We asked it to look at two options and it asked people to look at nine. There was no analysis or sharing of the ESRI evidence that was readily available to the Department of Finance. It was as if it just wanted to get the money and get over this mad idea of returning the money to the people. I very much regret this.

The budget is not all bad with regard to the carbon elements. I welcome the agreement to set up a just transition commissioner. I ask the Government to think again about the legislation we presented three weeks ago, which set out in a very good detailed legislative framework how to set up how to set up such a mediation advisory service. It is perfectly fit-to-go legislation to make it happen.

It is welcome that we will invest in social housing retrofits in the midlands. We have always said that is where we should start to build up scale and expertise for the job of retrofitting 1.5 million Irish houses. The just transition commission has a €6 million budget. My main criticism on the climate side of the budget is not with regard to some of the individual elements, it is the lack of scale, urgency and understanding that what we are talking about is system change. A €6 million just transition fund is welcome but compare it to a social welfare budget of €21 billion. If we are serious about this and really want to bring people with us, we must think bigger and act bigger and really go with our convictions as to the initiatives and measures we need to take.

If we look at the money, one third is going on fuel allowance, one third is going to the midlands, which is absolutely appropriate to make sure it is well spent, and one third is going on a mix of smaller measures, all of which on their own are welcome but their scale is not up to the task of the scale of change we need. There is a promise of a new agri-environmental pilot scheme with a €3 million budget. The Department of Agriculture, Food and the Marine will spend more on office equipment next year than it will on this new scheme. If we are serious about it, this is a perfect opportunity to match the response to our climate ambition with our response to Brexit. We should put huge amounts of money into initiatives to help Irish farming as the beef and dairy markets disappear if the UK market goes. This is an opportunity to do the two at the same time and to do it at scale. Sometimes we are right to do pilot schemes to test them, but if it was ten times the size it is, it would be a proper scale of response even in a pilot scheme.

I do not know how many times I have heard the Government announce great transport measures. It will spend €9 million on cycling measures. That amount might get us one urban cycleway but it is €9 million out of a €2.7 billion transport budget. One of the problems with our budgeting process, and this needs to change, is that even if we go into the real details of individual Department allocations, there is no proper transparent analysis of where the money is spent. We lump all of the transport spending into land use transport, which is a very clever and useful way of hiding the fact we do not have a single major public transport project in planning, let alone in construction. There is not one. If the Minister of State could name one I would welcome hearing about it. We are doing a few little bits of bus lanes and cycle lanes but nothing of any scale. We do not have a single public transport project ready to go.

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