Tuesday, 8 October 2019
Financial Resolutions - Budget Statement 2020
Barry Cowen (Offaly, Fianna Fail)
All this parliament dodging and party splitting is a timely reminder that, without the stability provided by Fianna Fáil, we would drown in the alphabet soup of left-wing groups that have little interest in policy and absolutely no interest in government.
Abstaining in the vote on the budget is an act of national necessity. It is definitely not an endorsement of the years of Fine Gael mismanagement. As Deputy Michael McGrath stated, the measures taken today come at a late hour in the process. The clock was close to midnight before the Government realised the lights were going out on Brexit.
The past several years of budgetary management by Fine Gael have been characterised by overspends and missed deadlines. The need to put on the brakes, faced with a disorderly Brexit, is a result of fiscal imprudence over numerous budgets. Like a stressed-out student staying up late the night before the leaving certificate exam, Fine Gael is desperate to make up for lost time. Pushing overspend into next year is a belated effort to address the mismanagement this year. It is like a gambler getting an advance on his wages to try to pay off his debts before the next bet, but like every gambler, the scale of the losses keep mounting. We have witnessed more than €6.3 billion in overspends since Fine Gael came into power. We have experienced a series of fictional health budgets where what is promised far outstrips what is given and falls far behind what is needed. The overruns have been papered over by surplus corporate tax receipts. The Government is financing its fiscal ineptitude on the back of these unexpected taxes. Our party does recognise that mistakes were made previously in using unsustainable property taxes to fund spending. Fine Gael is intent on repeating the mistakes of the past. If the definition of insanity is doing the same thing over and over and expecting different results, then Fine Gael's financial plans are fit to be tied. These types of spending plans are sandcastles that will be washed away with the economic tide.
The situation is worse in capital spending. Flagship projects of the over-hyped Project Ireland 2040 plan have exposed that Fine Gael is committed to building nothing more than a republic of photo opportunities. Spin always comes before substance with the Government. The national children's hospital fiasco illustrates the scale of the fiscal malaise that is at the heart of the Government. Fine Gael has dug a money pit that will swallow up some €2 billion, and still counting. The sale of the national lottery was supposed to fund the children's hospital. At the rate at which the Government overspend is going, the Minister, Deputy Harris, and his colleagues in Cabinet will have to form a very successful EuroMillions syndicate tonight to make up the deficit.
I notice the Taoiseach got a dose of "Saturday Night Fever" in the Burlington last week when he had many paragraphs on the national broadband plan and its delivery, and how quickly it would paper over what is needed in the country, but there was not a mention of it in today's speech. The national broadband plan has exploded to some €3 billion and is already mired in challenges. The digital divide is becoming a digital wall and, unfortunately, rural Ireland is on the wrong side of it. All we have to show for years of promises and escalating costs is an unused pen on an unsigned contract.
The Fine Gael record of fiscal management is clear: massive overspends, missed deadlines and an over-reliance on unsustainable tax receipts. Fine Gael is approaching the national finances with a recklessness that makes Donald Trump's phone calls look reasonable. The stinging criticism by the independent Irish Fiscal Advisory Council of departmental overspends and capital cost overruns are another testament to Fine Gael's legacy. On its watch, health budgets have become works of political fiction. On its watch, the national broadband plan has slipped into a costly legal abyss. On its watch, the national children's hospital has become a byword for financial mismanagement. All of that, while ignoring the €4 billion promise to abolish the universal social charge, USC. Obsessed with tax cuts, Fine Gael has taken its eye off the books. It is a damning indictment of a party that was once committed to fiscal rectitude. After almost a decade in power, the party that once based itself on safely managing the public purse has lost its way. Its reputation is shot through with overspends and overruns. It is more interested in electioneering than governing. Today's budget does little to arrest that nine-year record of decline. Having failed to mend the roof while the sun was shining, the budget simply pulls down the shutters in the face of the Brexit storm.
I will look at some of the specific areas in the budget such as carbon tax and the just transition. Climate change is the pressing challenge of our age. Each generation has a moral obligation to pass on the world to the next generation. A just transition means ensuring all citizens and regions are brought along in this transformation. We cannot leave anyone behind or we risk unravelling all the progress in the face of a backlash. Fully utilising the carbon tax is pivotal to a just transition. Critics of the carbon tax declare they want to address climate change, but have not put forward any viable alternatives. Carbon tax opponents want to hop onboard Greta Thunberg's boat, but the first thing they want to do is to tear down the sails. They do not seem to accept that virtue signalling is not a policy. The Government's record, however, has been abysmal in this area. I have seen that all too clearly in my home county of Offaly. The midlands has a proud tradition of work in the peat industry and in energy generation. A strategic transition from this sector, while protecting the livelihoods of workers and the vibrancy of their communities, is the clearest path forward. However, the rejection of the ESB's plans for the power station at Shannonbridge, which the Government failed to appeal to the courts, highlights a serious lack of commitment. The failure to back up workers underlines a broader challenge across the country. We cannot leave a generation of workers behind or throw the burden of climate change on the shoulders of a few. A just transition needs to reach across every part of the country and into every household. If the same attitude taken to workers in Offaly is taken to people affected by fuel poverty or changing industries the just transition will be a failure.
It is important that the just transition fund delivers, as people's livelihoods and the economy of the midlands and other areas like it depend on its success. Our agreement on a just transition forum for the midlands is crucial to the success of the process. It should be led by an independent chair based on the model of the Dublin inner city forum. This will ensure a buy-in from the communities involved. The chair should be from the community and have a deep understanding and knowledge of the needs of the various counties that are involved. The independent chair should ensure that moneys available from the just transition fund will be co-ordinated, cohesive and utilised to the full in the midlands counties worst affected. I refer also to the situation in Moneypoint in County Clare and the transition that needs to happen from coal. That area too should be recognised in any transition forum and funds made available in the future. The forum's main aim will be to plan, invest and implement a transition to alternative and sustainable jobs in the various sectors that will protect and enhance the economy of the regions involved. The just transition fund is a litmus test for how Ireland converts from a country that is highly dependent on fossil fuels to meet our carbon targets for 2030. The success of the fund and the forum should be expanded in other counties, as required in the coming years.
On a broader level, progress on electric vehicle supports, retrofitting and sustainable transport supports are crucial to starting down the long road of climate change transition. However, the hypothecated or ring-fenced fund must be backed up with real and sustained political will and commitment.
Our housing crisis remains a national scandal. With rent levels at a historic high, a whole generation cannot save enough to own a home while vulnerable households are at risk of homelessness. Home ownership is slipping away from an entire generation, as house prices have increased by 84%, while wages have only gone up by 10% since 2012 and Central Bank rules rightly restrict lending. Our 68% homeownership rate is the lowest in half a century and is now behind the EU average. Countries such as Germany and Austria, often cited as rental models for Ireland to follow, have seen significant increases in ownership rates while ours has fallen. We can see the change in front of our eyes. The age at which home ownership became the majority tenure category was 35 years in 2016. Clearly, home ownership is moving further and further away from young people. The Government's response has been completely ineffective. Groucho Marx said: "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." That should be the tag line for the Minister, Deputy Eoghan Murphy's, Rebuilding Ireland programme to date. Sluggish home building remains tens of thousands behind where its needs to be. The flagship Rebuilding Ireland home loan scheme ran out of money leaving hundreds of applicants in a financial no-man's land. Fianna Fáil fought for a new affordability scheme after Fine Gael abolished it in 2011. We need real progress in the roll-out of the affordable housing scheme launched last year to keep the aspiration of home ownership alive. Retaining the help-to-buy scheme is only one step in the right direction to achieving that.
Social housing development has been marked by missed targets and a heavy over-reliance on the private sector. The Government's praise of the number of homes secured though the housing assistance payment, HAP, ignores the fact that it is a only a sticking plaster to cover up a lack of direct social housing builds.
In reality, red tape continues to strangle local authorities. To get to grips with the housing crisis we need to slice through unnecessary rules and regulations. The failure to uphold last year’s agreement to raise the discretionary spending by councils is delaying getting bricks and mortar in the ground.