Brendan Howlin (Wexford, Labour) | Oireachtas source

I will share time with Deputy Sherlock.

Before I get into the body of my remarks on the budget, as I wished to respond to the invitation offered by the Taoiseach during Leaders' Questions to read the Low Pay Commission report in detail, I went out to see if I could do so, but it has not been published. I, therefore, ask the Taoiseach to facilitate its publication in order that we can continue our conversation and speak on the basis of the same information.

The budget, published yesterday and crafted by Fine Gael and the Independent Alliance with their Fianna Fáil partners, was a depressing document. Brexit is a real and present danger to the economy, but that does not mean that all social progress needs to halt. This is a do-nothing budget from Fine Gael. It will not protect many of the people who are most vulnerable to a no-deal Brexit. It will not protect most people in receipt of social welfare payments, as I outlined in some detail this morning, who have received an effective cut because of the accepted rises in the cost of living next year. It will not protect most people with disabilities because the small amount of extra spending is outweighed by rising costs that have been acknowledged.

Fine Gael is responsible for some of the rising costs. The Labour Party implemented a rent freeze when in government, but Fine Gael now allows annual rent increases of 4% in rent pressure zones and a free-for-all outside them. However, wages are not increasing by 4% and there has been an increase of zero in most social welfare payments from the Government in the budget. The Minister for Finance glossed over the extra €200 million that will be spent this year to cover the massive cost overspend on the national children's hospital and the national broadband plan. Each of these projects will cost an additional €100 million next year, the same amount the following year and the same again in years to come.

The Government's summer economic statement identified €1.9 billion worth of pre-commitments in public spending to cover population growth and national pay agreements. That is done every year. They are normal demographic trends. Yesterday the Minister for Finance slipped in an extra €200 million as another piece of what he called "pre-committed" spending. It was only pre-committed because the Government had lost control of the cost of both major projects. It could have done a lot of good with that €200 million. It could have sheltered people from the effects of a no-deal Brexit. However, there were other opportunities to raise revenue in a socially just way that would not have had any disruptive impact on the economy. The banks are each making hundreds of millions of euro in profits, but as they are still writing off losses from the crash against corporation tax, they effectively pay none. Last night the bank levy was maintained at the figure of €150 million. By raising the levy, the Government could have raised enough additional money to raise social welfare rates to at least the equivalent of inflation to cushion the impact of inflation on these vulnerable persons next year.

We are in a very different economy from the one we faced in 2011. At the time there was a €11 billion hole in the public finances. That was the difference between the State's income and its committed expenses. Today the public finances are in balance, yet Fine Gael, supported by Fianna Fáil, has delivered a depressing budget. It is depressing in every sense and will depress spending in the economy. It has no vision for the future. There will be no cause for celebration among the hundreds of thousands of low paid workers and those who rely on social welfare payments to put food on their tables. In our current economic circumstances there was simply no need to implement such a restrictive budget, even with the prospect of a no-deal Brexit looming. In fact, economic demand suggests we must shelter the most vulnerable from these threats in a counter-cyclical way.

The challenges we face are different from those in 2011. The appropriate solutions are also different. The main threats we face are the loss of trade with the United Kingdom and an increase in prices due to tariffs or currency fluctuations. The solutions are investment in alternative industries and State supports to help to open up new markets and enterprises and preserve jobs during the rough transition period. Unlike in the last crash, we are not facing a sudden drop in the tax take or a collapse in the banking system.

We have the ability to use our national resources in a productive and imaginative way to counteract the economic downturn from Brexit and to build the low-carbon economy of the future to which we all aspire. Fine Gael seems to be stuck in the past. The solutions to the hole in the public finances are not the same as the challenges that require us to restructure the economy to adjust to a new trading relationship with the United Kingdom. What is needed now is for the Government to step forward with a positive vision for our future economy. For example, the State should be building sufficient sustainable homes to solve the housing crisis once and for all. Everybody says that fundamentally it is a supply issue. I am speaking about building not just houses but homes. Near zero emissions houses and apartments can be built for almost the same cost as a conventional home but would be forever cheaper to maintain and keep warm. Instead, Fine Gael has doubled down on its failed housing strategy. Its solution is to continue what it has been doing, which has failed.

It might have been a cause for celebration that €2.5 billion is to be spent on housing but yesterday, the Minister, Deputy Donohoe, did not actually say that €2.5 billion would be spent on housing, he said €2.5 billion would be spent on housing supports. More than €750 million, which is one third of the housing budget, will now go to the housing assistance payment and other payments to private landlords next year and every year. This is not a solution. For €750 million we could build well over 3,500 homes on public land. Instead, thousands of families will remain in limbo, in temporary rental arrangements rather than being provided with the permanent solution of a permanent home.

The Government is not thinking at the right level of scale. Before the Celtic tiger economy went horribly wrong under Fianna Fáil's stewardship, our economy was producing 40,000 to 50,000 homes a year. I agree that the peak of 90,000 homes was completely unsustainable but the CSO reported that in 2018 there were only 18,000 new dwelling completions. We are now building 18,000 dwellings rather than the 40,000 to 50,000 sustainable dwellings that could be built in our economy and country.

The economy has recovered but building has not ramped up. The profit-driven private development model is simply not delivering. The solution is for the State to step in, as it has done many times in the past, to build tens of thousands of homes every year. The Labour Party’s vision is a €16 billion fund to build 80,000 homes over five years. We would build on the land that the Labour Party kept in public ownership, which would reduce building costs to about €200,000 or less per home. We would restore the capacity to engage in house-building through regional housing executives as part of local government, to consolidate and reinforce the expertise throughout local authorities to develop land and build or commission housing according to local needs. They could then rent out this housing to anyone who needed it, to provide affordable, secure homes. This is the common model that houses anything from one third to half of the population of all of the major European cities. It provides a social mix inside a single tenancy type. For some, it would provide a home for life and for others it would provide an affordable rent that would allow them to save for a deposit for their own home elsewhere. Fine Gael has no such vision. Instead, it is just putting more money into the hands of private landlords while we wait for private developers to build homes people cannot afford. We cannot continue with this.

We also have an affordability crisis. When the private developers do build homes they are simply unaffordable. Even the Government's own version of affordable housing is out of reach of those who do not have the capacity to build up large deposits, which is a huge number of our people. Quite frankly, the Government's housing policy is disastrous and budget 2020 has done nothing to give hope to those who have been waiting for years for their own home.

I acknowledge that budget 2020 has put more money into healthcare. The Taoiseach was unsure of the exact sum this morning. However, the main problem with the system is not whether we put €650 million or €1.1 billion into health next year. International comparisons show that we spend as much, or in some cases more, than other countries that have far better healthcare. This morning, it was almost as though the Taoiseach was telling us not to mind the outcomes and to look at the spending. That used not be his style.

A big part of the problem in our health service is having public and private systems duplicating services and working in parallel silos. The all-party Sláintecare report recognised this and proposed a single State healthcare system. The Labour Party is committed to this vision. In the worst of times, we brought in free GP care for children aged under six, as the Taoiseach remembers. Fine Gael was reluctant then and its reluctance to deliver a national health service is clear from the long delay before yesterday's announcement of the next phase to extend free GP care to children aged under eight, which will not happen until well into next year. We welcome this slight extension but it would have cost only €80 million to extend free GP care to all those aged under 18. Why is the Taoiseach so reluctant to implement this part of the Sláintecare strategy? It can only be because he is not really committed to it.

The Labour Party acknowledges the scientific evidence on climate change and the expert support for the need to raise carbon taxes. As the Taoiseach pointed out this morning, they need to be part of a much larger and comprehensive parcel of policies to reduce greenhouse gases and make our economy more sustainable. I am very glad the Taoiseach has read the Labour Party’s alternative budget document. He was able to brandish it this morning. It shows that public transport fares could be reduced by 10% and that we could afford to roll out a major programme to begin retrofitting council housing on a massive scale next year.

These are examples of real action on climate to lower the cost of home heating and transport and make it possible for people to make lifestyle changes to mitigate climate harm. The Government has suggested that it did all it could in difficult circumstances but the Minister, Deputy Donohoe, still managed to find €150 a year for the self-employed, which is an increase of €3 a week, and he found €5,000 for those who inherit expensive family homes.

Following on from the Taoiseach’s repeated public pledges about cutting taxes for the better off, budget 2020 had several delicate and quiet steps to lower tax for the wealthiest. For this reason, I do not accept that Fine Gael has done all that it could to protect the most vulnerable from a no-deal Brexit. Fine Gael, the Independent Alliance and Fianna Fáil are using Brexit to hide their lack of consideration for the most vulnerable in Irish society. Budget 2020 showed, once again, that the Government has no vision or long-term plan. The Labour Party wants an equal society, and our alternative budget shows how much progress could have been made on implementing the first major steps in implementing that vision for workers and on climate, housing, healthcare and to ensure a fair start for every child in our country.

I will give an example of the Labour Party's vision for our future as a low-carbon dynamic economy. Bord na Móna is a State enterprise, of which we are all very proud. It is owned by the people through the shares held by the Government on their behalf. In the past, Bord na Móna employed thousands of people in good jobs in areas of the country that were the least developed economically. As we all know, burning peat is a sunset industry. In recent decades, we have learned that burning fossil fuels causes climate change but that does not mean that Bord na Móna has to die.

We have a tremendous opportunity to give that innovative company a new lease of life, but Fine Gael has no vision for that. The Minister, Deputy Donohoe, announced a just transition commissioner focused on the midlands, which will support "over 400 environmentally sustainable jobs, with up to 100 more jobs through expanded peatlands rehabilitation." Are 500 jobs the height of the Government's ambition? With more than 2 million people employed in our economy, Fine Gael's answer to regional disadvantage with more than 6% unemployment in the midlands is to talk about the potential to create 500 jobs. I welcome every new job, especially in those disadvantaged areas with greatest need for them, but how much will these 500 jobs transform our economy? We could do so much more.

I will read onto the record Bord na Móna's new mission statement:

Bord na Móna has a new national mission to:- Support national energy security by fast-tracking renewable energy development across our land bank

- Build a circular economy aiming for higher value recycling and eliminating waste

- Develop new sustainable businesses across our land bank

- Continue to support significant employment across the Midlands of Ireland

Underneath this statement, Bord na Móna has engaged in a range of pilot initiatives, including wind energy, recycling, rehabilitation of bogs and even fish farming. We now need a full review of what has been learned from these initiatives, including the potential for scaling up. That is the ambition that is missing from the Government. We own Bord na Móna and a range of other State companies. There is no reason we should fail to prepare a large-scale programme of investment in our State enterprises to fulfil the mission of sustainability that Bord na Móna has so clearly adopted.

EU rules pose no barrier to a state investing in its own enterprises. There is no barrier to us investing in companies owned by the State no more than there is for any other investors investing in their own companies. We have billions of euro in the Ireland Strategic Investment Fund. What is that money doing now? Why is the Government not planning to make a strategic investment in our future with our own money? We should have a national vision of creating thousands of sustainable jobs through State enterprises. The private sector also has a major role to play, but there is no reason we cannot accelerate the transition to a low-carbon economy by major investment through our own enterprises that have a proven track record.

This is the kind of vision our country needs for what Ireland could be as a dynamic, low-carbon economy in the foreseeable future. Countries such as Denmark and the Netherlands are well on the way to implementing similar visions, with cities such as Copenhagen on track to be carbon neutral. We are far behind, for no reason other than a lack of vision and a lack of strategic investment.

Labour wants an equal society, closer to what has been achieved in the Nordic countries and the Netherlands, where social democratic economics have been followed, and where the economic guidance given benefits people and the environment. That is the vision we need for the country.

See this speech in context