Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I have listened to quite a bit of the debate so far on budget 2020. I also spent three hours in the other House listening to the debate there. Some of the conversation about it is very unfair. In the year that is in it, with Brexit looming large over us, I would describe it as an as-you-are budget. Many more people are talking about what is not in the budget than are talking about what is in it.

Average earners are not getting not tax reductions as they did in previous budgets. As Deputies Haughey and Fleming mentioned, social welfare recipients will not get a €5 increase. However, it is important to put the numbers front and centre for people to understand them. A €5 increase for people on social protection payments across the board would cost €360 million, which was more than half of the additional expenditure available for 2020. I disagree with Deputy Haughey's suggestion that we should have given half of the entire pot of what was available to just one group. I would like to give that fiver to pensioners and others in receipt of social protection payments, but this year is not the year to do so.

I presume the Deputy knows the social protection budget for 2020 is €21.095 billion. That is more than one third of all expenditure. We will spend €61.9 billion and the social protection pot accounts for €21 billion of it. It is a very large amount of money. It is wealth redistribution that we have copper-fastened since we came into government after the disaster of the 2010 budget and the 2010 deficit which was 32% of GDP. The Deputy will remember that because he was here when it happened. It was a catastrophe. Those were the circumstances in which we had to start. I also remind the Deputy that in 2011, at the very bottom of the recession, we brought in €11 billion and in that same year we gave out over €20 billion in social protection payments. I entirely disagree with the assertion that we are not doing right by pensioners.

I entirely disagree with Deputy Fleming, who is Chairman of the Committee of Public Accounts, about Fine Gael DNA, because the numbers do not support what he is saying. It is a nice easy cheap line from Deputy Fleming about Fine Gael's DNA, but it is wrong. Page 85 of the budget book, the expenditure report, states that the State will spend €8.5 billion on pensions. It is the largest single line item of expenditure. It is nearly as much as the education budget and 2.5 times the justice budget. The Deputy needs to look at the facts, which refute everything he said about pensions and what Fine Gael is doing for pensioners.

Deputy Fleming also highlighted the pieces that Fianna Fáil did. I acknowledge the support of Fianna Fáil. Fianna Fáil has been good and has done the right thing by the country through the confidence and supply agreement. I dispute the statements of the Sinn Féin Members who engage in easy, cheap politics by criticising Fianna Fáil for supporting the Fine Gael-led Government to try to maintain political stability. I have always highlighted and acknowledged that.

I want to call out Deputy Fleming when he spoke about the good stuff Fianna Fáil put in the budget.

There certainly was but everything else in the budget is not wrong. We have put in place a lot of very good initiatives in this and previous budgets. I want to call this out. I absolutely support the 1 million extra home help hours. It is a very good thing, as is the National Treatment Purchase Fund, NTPF. Many people would say the NTPF is not money well spent but I am sure the people getting operations and treatments do not say this. They have benefitted from it through the support of Fianna Fáil by abstaining on the budget. It is very easy for Sinn Féin to hurl from the ditch. There is nothing easier.

I want to touch upon some of Sinn Féin's narrative. In particular, Deputy Cullinane has said that Fine Gael is the party of business and that there is a golden circle. Fine Gael is intent upon creating jobs. The only way to create jobs is with business. The work we have done in recent years shows we have been successful in this aspect. A total of 2.3 million people are at work in this country, which is the highest number of people at work ever. This leads to improved income taxes. The quantum take for income tax has almost doubled from the low point of 2011. This means we have more money to do the things we want to do to put people into circumstances whereby they are not claiming social protection payments and ensure we can add the €5 at some point in the future for people on social protection payments, whether old age pensions or working age income supports. This is absolutely what is required. Sinn Féin has a go at programmes such as the special assignee relief programme, SARP. SARP is a very good programme for people from other jurisdictions who can come here and be charged lower rates of income tax because they have specific types of expertise and skills that potentially we do not have here. Most of these people come here for a short period. They work here, pass on those skillsets and bring business lines to the country that bring other employment opportunities for other people. There is nothing easier for Sinn Féin than to have a go in the manner it does. What was not easy was the creation of jobs. The success of this and the previous Government in creating jobs and getting people back to work has led to going from a high unemployment rate of almost 16% to the current low rate of 5.3%. This is pretty close to full employment but no credit is coming from the other side. It just throws negative mud hoping it sticks and that it causes damage. This is the cheap political banter we see in other jurisdictions and it will not be successful.

I want to touch on the social protection budget because there is an attempt to create the impression that we do not support people. Working age income supports amount to €3.2 billion and on top of this is another €650 million for employment supports. Illness, disability and carers receive almost €4.7 billion. Carers are very important people who do a superb job on behalf of the State. A figure that sometimes gets overlooked is children's allowance payments, which amount to almost €2.7 billion. This is a huge quantity of money that is almost equivalent to the budget for the Department of Justice and Equality. The perception that there is no income transfer in the jurisdiction is absolutely, completely and totally wrong.

The current and capital health budgets amount to more than €18 billion. I stand to be corrected but this is the largest amount ever. We have an issue with our health sector. Everything in the health sector is not wrong and it is wrong of politicians to state everything is wrong. This is not the case. Many people get a very good service from the health sector but some people do not. We know there are pinch points and areas where we are challenged with regard to not just money. We have money for staff but we struggle to hire staff and employ them at the particular wage rates we have agreed. Overall, we have a good health sector but there are difficulties in some areas. The biggest challenge I see is that in the areas where there are difficulties part of the problem is the body politic. Nobody gives an inch to reform the sector and put it on a better standing and put it where it should be. We see the pathway for Sláintecare but we will see how beneficial it will be when it comes to reforming and restructuring services to larger centres throughout the country. We are moving from smaller centres to areas with better outcomes and superior outcomes. This is something we have to do.

The €11.2 billion current and capital budget for education is the largest amount ever. It is a huge amount but we must ensure we have the right people in the right place at the right time with the right skillsets to fill the positions required for indigenous companies and companies from outside of the State. We need staff to fill those positions. Our competitors throughout the world state the main reason companies come here is because of our corporate tax rate. This is not right. I meet executives who are established here. The single biggest reason they come here is staff. It is because of our standard of staff, the capability of the staff and their adaptability and willingness to be flexible in the workplace. We cannot be complacent about this. We cannot accept that if we stand still we will go ahead because we will not. We must make sure we have the right staff with the right education and skillsets for the future. There are new technologies coming and we must ensure we fill those positions, which we are doing in the main.

An extra €81 million has been provided for the justice budget on top of what was spent in previous years for an extra 700 trainee gardaí. This takes us to almost 14,500 gardaí, which is the number we want. I support the Commissioner's new strategy, which is to get gardaí out of stations and policing. This is something that is very important. I am delighted to see the success of Operation Coatee, through which the Garda National Economic Crime Bureau is chasing criminal fraud in the insurance sector. The success of the operation with this funding is very important.

I want to touch on another aspect of my brief, which is insurance. Last summer, the Judicial Council Act was passed. Many people thought we would not get it through the Houses but with the support of both Houses, for which I am very grateful, we did. The big work will happen next, which is the establishment of the personal injury committee within the Judicial Council. I hope the seven judges will be in place very soon, by which I mean days and not weeks. The seven judges can then get on with the work of reducing the guideline amounts. It is very important to show business that the era of awarding a lot of money for damage that has a very small impact on somebody is ending. The insurance companies have given commitments to the finance committee in public, which is good, that if the awards reduce so will premia. They have given me the same commitments in private. I have been to London to meet the underwriters, who have left the market in particular sectors. If the awards reduce so will the premia. This is something that is crucial for business.

With regard to Brexit, the figures we are deploying to put in place if it is required are huge. We do not know whether the finance will be required, whether or not there will be a deal or whether there will be a crash out with a deal done afterwards. We do not know but we will find out very soon. It will be concluded in a matter of weeks.

I am sure there will be a few twists and turns arising from whatever happens today, what happens at the summit tomorrow and on Friday and, potentially, what happens in the next week or ten days. We will see. We have to make sure that structures will be in place, if required. We must have the firepower to deal with what could potentially be a very bad outcome. A sum of €1.2 billion, in addition to the €2.9 billion that has been committed since budget day, will be borrowed in 2020, if required, to deal with a bad outcome. The details of this are already on the record of the House. We will also borrow additional money beyond that, if it is required. We have not put a ceiling on that figure because we do not know the extent of the damage or negative consequences that might flow from a very bad Brexit. We could also potentially make use of the rainy day fund. If borrowing costs increase too greatly, we can use that additional €1.5 billion.

We have to prepare for the worst-case scenario. It is my personal view that a deal will be done. It would be a complete failure of politics if a deal was not done. I do not know when it will be done. Will it be done before or after the UK crashes out? That is a difficult question to answer. It is the moveable part that none of us has our head around. Circumstances can sometimes flow, change and evolve over a period of negotiation. We really do not know.

To return to the budget, there will not be an increase in the threshold at which people pay the higher rate of income tax. Our jurisdiction is highly unusual with regard to income tax. In very few jurisdictions do people who earn the average wage pay income tax at the higher rate. The Taoiseach has been very clear on his view in this regard. He wants people to be able to earn more money while paying less tax. He wants people to be better off working than not working. He has been criticised as though he is some form of crazy right-wing politician for wanting this. His goal is to try to allow the average earner to take home more of his or her salary. There is nothing crazy or right-wing about that policy. In fact, the left should be out the door supporting that. When we came into office, the threshold was closer to €30,000; when the next election is held it will be €35,400. That figure must grow closer to €40,000. In the UK, people can earn up to £50,000 while paying tax at the lower rate rather than the higher. There is an enormous difference between the UK and Ireland.

With regard to the increase in stamp duty, the stamp duty figures are very buoyant. Last year, we increased this duty to 6%, which is closer to the rate at which it had been levied. We are now increasing it by a further 1.5% to 7.5%. The rate used to be 9%. I remind Members that was the standard rate of stamp duty on commercial property.

There is also a change with regard to Irish real estate funds, IREFs, and real estate investment trusts, REITs. We have had a pretty in-depth look at this area. There are three or four REITs in the country. We are satisfied that they are operating quite well and in the manner in which we expect them to operate. There are a few issues to be dealt with. The IREFs are operating less well. Revenue has highlighted a number of matters to us. There are approximately 148 IREFs in the country and a number may be involved in tax avoidance. We are dealing with those issues in the finance Bill. They have to be dealt with pretty soon.

There are a number of other areas on which I want to touch. These include climate change and the carbon tax. Deputy Fleming asked about the sum of more than €500 million that has been raised from the carbon tax introduced in budget 2010. This tax was brought in at €20 a tonne. It was not ring-fenced. It was a measure to raise tax revenue and the funds go into the general pot, which pays the €8.6 billion for the old age pension in respect of which Deputy Haughey was critical of the Government. The extra €6 per tonne introduced in budget 2020 will raise approximately €90 million, which will be ring-fenced for green actions and lessening the impact of the tax on those in fuel poverty. We have a method to do this through the social protection budget.

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