Dáil debates

Tuesday, 13 October 2020

Financial Resolutions 2020 - Budget Statement 2021

 

4:20 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats) | Oireachtas source

This is a budget like no other. It is being introduced in the context of events that are largely beyond our control. Certainly, no one would have chosen the circumstances in which we find ourselves. Covid-19 and Brexit are the twin challenges of budget 2021. How we respond to those challenges is critical.

People who face insecurity, Covid-related and non-Covid health concerns, loss of income and worries about schools and all kinds of services will look to this budget to see what certainty the Government can provide. I think they will be disappointed. There is a need for the Government to focus relentlessly on the public interest and the public good. This means very clear and determined action to drive down the incidence of Covid-19. It means income protection for those who have lost their jobs. It means targeted supports for those sectors most impacted by Covid. It means substantial investment in universal public services. Most of all, it means a budget that offers hope. We entered this pandemic as a country that was ill-equipped to deal with the consequences. This budget is about surviving the ongoing impacts of the pandemic, while also reviving our economy and society to take us through this exceptionally difficult time and on to better times.

We are approaching this task with a radically changed attitude and approach by the European Central Bank, ECB, and the European Commission. It would seem that lessons have been learned at a European level from the last recession. On that occasion, there was an obsession with deficit reduction and responding with austerity, which caused devastation for many people. In this instance, the message is to spend extensively in order to invest and grow our way out of the crisis. That has been hugely enabled by the decision of the ECB to facilitate very cheap borrowing. The spending available in that regard must be done wisely and productively to meet the two objectives of survival and revival.

The consequences of decades of underinvestment in public services and an often cavalier approach to public provision have been laid bare as a result of this pandemic. It was patently clear that leaving key public services to the market - a privatised way of doing things, as practised by this and previous Governments - left us exposed and very vulnerable. The Government parties have come late to the acceptance that we must build up our public services and that we can afford to invest in the future of our society. In the early months of the pandemic, it became very clear just how underfunded and underdeveloped most of our services were. The Government was forced to urgently ramp up those services to enable us to respond to the virus. However, those changes, including the expansion of services, additional funding and the extended involvement of the State, need to be embedded in how we make post-Covid plans for the development of public services. There can be no going back to the kinds of policies which left many people exposed to insecurity. The clear priority and focus must be to provide adequate investment in the public provision of key services, as well as addressing the ongoing deficiencies in how we respond to Covid.

The presence of Covid, the escalation in the rate of infections, the implications and fears associated with the virus and the response to it are things that dominate our lives and are likely to do so for some time to come. Responding adequately, breaking the chains of transmission and driving down the virus while, at the same time, protecting the most vulnerable must be a key priority. Most people are working very hard to comply with the public health advice and the severe restrictions that have been imposed on everyone. Increasingly, however, there is a sense that the Government is not adequately playing its part. Why is it that, seven months in, we still do not have a properly functioning test and trace system? Why did proper staff recruitment start so late? When will we see the rapid turnaround times necessary for the testing system? Why is long tracing not being done to establish the modes of transmission? It is very hard to understand why we have not addressed the issue of travel. Why are we not ready to join the EU's traffic light system with a proper testing or quarantining arrangement? There was no mention of that in today's budget or of the huge difficulties faced by the aviation industry.

Why are we not seeing clear messages tailored to different cohorts to ensure the public health advice is getting through to people? Why, after ten years, is the recommended number of critical care beds not in place? It is very disappointing to see in today's budget that funding has been provided for only 66 additional critical care beds when we know, and have known for the past ten years, that there is a shortage of at least 250. The gross neglect of public health services and the severe inadequacies in the system have resulted, as we all know, in unacceptably long waiting lists and denial of access to timely care for very large numbers of people in our country, in terms of both community and hospital services. These chronic problems in our health service have seriously hampered the country's response to Covid-19, forcing the State to secure additional emergency beds from private hospitals at very significant cost.

New demands on service delivery, infection prevention and control measures and social distancing requirements have put further extreme pressure on a system that was already operating way over capacity. Ireland has never had a fully functioning health service. There has never been any excuse for that and there certainly is no excuse today. The Sláintecare plan to reform our health service was published in 2017 and should now be in its fourth year of funding. Instead, it has never received the kind of substantial funding or backing from Government necessary to implement it. What matters now is what happens next. It is vital that the additional funding being allocated to the Department of Health not only caters for future surges of Covid-19 but is invested in a way that brings about the much-needed system of reform set out in the Sláintecare plan. While the headline figure of €4 billion for the health service is a very substantial one, it is important to look at the detail and note that more than half of that sum is going to fund continued testing and tracing and ensuring adequate levels of personal protective equipment, PPE, as well as other aspects of responding to Covid. That leaves less than €2 billion for the health service, a large proportion of which relates to capital investment about which we were already informed.

The Sláintecare plan sets out two key elements which relate to the very principles of a properly functioning public health service. First, we must ensure that we shift activity away from the acute hospital sector to the community and primary care level. There is very little mention of that today. There is no provision for the additional numbers of staff, including GPs, nurses and therapists, that are needed at community level not only to address the long waiting lists but also to ensure we can achieve the type of reform set out in the Sláintecare plan. The other key element is ensuring we remove the obstacles to people being able to afford to access care. In other words, we must remove the cost element. Again, there is no progress at all on that in terms of extending access to free GP care and medical cards or reducing the cost of medication. It is really important that we move in that direction. Unfortunately, in spite of the lip service paid by the Government to the implementation of Sláintecare, those key elements will not be addressed by what was announced today.

It is only at the point where we grasp those fundamental principles for having a proper national health service that we will start to make progress. The Government has signed up to Sláintecare but it is disappointing to see the slow progress as a result of today's budget announcement.

In childcare, Covid-19 has exposed the extreme precariousness of a privatised model of childcare where the State had to step in to pay the wages of staff and subsidise providers during the pandemic. An obvious failing in this budget is that there remains no pathway to the kind of national childcare policy that would guarantee quality, affordability for parents, and decent pay and conditions for childcare workers. We have traditionally completely underinvested in this area. The State stepped in during the pandemic and we should have looked to embed those changes that were made at the height of the pandemic so as to achieve the kind of reform that is so badly needed. Regrettably, the Government has not availed of that opportunity today.

In the area of education we are now counting the cost of having an underfunded education system, leaving us with the highest class numbers in Europe. We know only too well of the inequality in education outcomes and the uneven access to college and to third level education generally, but through the efforts of many, the participation rates have been improving in recent years. In third level, the weakness of a model that relies far too heavily on fees from overseas students has been exposed by the pandemic. The investment in education by this budget is welcome but is not of sufficient quantum to make a very real difference. It falls far short. Someone decided to get the news in early that the Government would introduce funding to bring class sizes down. We have to remind ourselves that within the OECD the average class size is between 21 and 22. An OECD report last year place Ireland in joint last place out of 33 countries ranked in investment in education as a percentage of GDP. Today's budget does not get us very further up that list. We need to view the Government's figures today in the context of a situation where nearly €20 billion is being spent. In that context the allocation to education is very disappointing indeed.

Chronic underfunding of social care and the light-touch regulation of the privatised nursing home sector have clearly failed older people over many years, not only during the Covid crisis when it was at it height. These policy failures have created a very real danger for older people in Ireland and, tragically, have led to many deaths that may otherwise have been preventable. Equally, the underfunding of home care and its deregulation have resulted in long waiting lists for care in the home and ongoing delayed discharges from hospital. While there was some allocation for home care in the winter plan, this will merely help to address the current waiting lists and do nothing to the expected substantial increase in waiting lists throughout 2021. In addition, we urgently need a statutory entitlement to home care.

I turn now to employment. We entered Covid-19 with an economy with high levels of insecurity, a prevalence of low pay and a real lack of certainty for many workers in their working lives. We need to see recognition for our essential workers in this budget, at the very least in access to a proper sick pay scheme and in addressing the low-wage economy. At a bare minimum, all our workers need to be paid a living wage . We also need a sick pay scheme to protect workers and especially those who work in areas where many are at serious risk. These are workers in meat factories, for example, who felt they had no choice but to continue to go into work when they were feeling unwell. This was because they had no guaranteed sick pay scheme. Many care assistants in nursing homes were also living and working in very precarious circumstances, and did not have the luxury of taking time off when they felt unwell because of the absence of a sick pay scheme. We paid a big price for that.

Rather than kicking the can down the road, the Government should bring employers and workers around the table to thrash out a fair sick pay scheme. This is a matter of public health, particularly for those vulnerable workers I have referred to. It is also a matter of justice for them. Everyone should have security in their income if they get sick.

On mental health, the severe adverse impact of Covid-19 on the nation’s physical and mental well-being cannot be overstated. A recent surge in referrals as a result of Covid-19 has put new and extensive demands on mental health services which were already chronically underfunded over recent years. Coupled with long waiting lists to access mental health care, providers have been left completely overwhelmed and people who are in serious need of urgent care have been left waiting even longer. Budget 2021 needed to make a serious investment in mental health services to address the historic shortfalls and to make up for the additional resources now needed to grapple with Covid-19.  A figure of €80 million is required to be invested in mental health services. It is extremely regrettable that the budget has provided for less than half of that figure.

The pandemic has presented challenges across all of our society, but people with disabilities, their carers, and the organisations that provide social care and disability services have felt its affects particularly severely.  We are aware that day care services were very badly affected and are very slowly coming back on stream. Today's announcement of additional funding for disability services is very welcome. I warmly welcome that and it is not before time that this kind of allocation was made. I would raise one particular issue of concern, however, which is the cost of disability payment. It has been a demand by people with disabilities and advocacy groups for a very long time. There are additional costs that result from having a disability, including costs such as heating, special diets, adaption of the person's home and so on. This is why there is a very strong case to be made for a cost of disability payment. Regrettably, people have to wait yet again for consideration of that payment.

My colleague Deputy Cian O'Callaghan will refer to the issue of housing in detail shortly. Nothing illustrates the failings in public policy by successive Governments like this country's approach to housing. Policy has been driven by special interests, not the public interest, and has long been the hallmark of this country's approach to housing. This budget completely fails to address a key issue in housing, which is affordability. It takes no account of that whatsoever for those who rent or those who are purchasing. The tokenistic element provided in the budget of a mere 2,000 affordable homes is derisory. The Government should be setting out very clearly a range of policies to drive down the cost of housing. Yet again, this Government, headed by Fianna Fáil and Fine Gael, and indeed the previous Government, have completely failed to grasp the nettle in this regard. Two measures, help to buy and stamp duty, just reinforce the problems that are there. They are, effectively, subsidies to developers. This exposes what I believe is a complete misunderstanding of the nature of the housing problem in Ireland on the part of the Minister and his Government colleagues.

I turn now to income supports and the two big policy responses that were the introduction of the pandemic unemployment payment, PUP, and the employee wage subsidy scheme, EWSS.

These were introduced at great speed, which was the correct policy response at the time. However, there is a clear danger that withdrawing those schemes too early or reducing the rates or terms of same will hurt the very people who availed of them and will also hurt our wider society. At the very least we should have maintained the PUP rate into the future and should not have imposed a time limit on its payment. People need guarantees around their income to have some sense of security and an ability to make plans for the future. The employee wage subsidy scheme needs to be correctly targeted to ensure that workers in the sectors who need it most can avail of it into the future. I am concerned at today's announcement that the extension of that scheme to the end next year will not be on its current terms. I await further detail on what changes the Government is proposing in that area. The wage subsidy scheme has been very successful and we should be continuing it on its current terms at least until the end of 2021.

Covid-19 has demonstrated clearly that we cannot separate economic policy and the provision of public services. The assumption made by some that public services are funded as some kind of afterthought to economic growth has been totally undermined by the pandemic. Good quality, strong public services underpin the economy and our society. The consequences of decades of underinvestment and separating the economy and public services from society have been laid bare. The importance of positive connections and a robust community where people look out for each other has been clear to see in recent months. The sense of solidarity across society has been essential in responding to Covid-19. The Social Democrats have long insisted that we live not only in an economy but also in a society. This means that we see the economy and society as being inseparable. Strong investment in public services can sustain positive economic benefits and fairness and equality of outcome are the principles which should underpin all our economic policy.

If the State can intervene to provide certainty to businesses, and it is absolutely right that it should, it must ensure that this process is fair. It should, of course, include the voices of employees in those businesses. We must ensure that the money is spent in targeted, effective ways and not wasted. We await further details on the Government's proposals in this area and my colleague, Deputy Catherine Murphy, will be responding further on business supports tomorrow.

Another important area in this budget is that of carbon tax and there are parts of this budget that we welcome, undoubtedly. We support the steps being taken to increase carbon tax as a means of changing people's behaviour in respect of the environment. However, a commitment on carbon tax must be accompanied by a commitment that people on low incomes will not be punished financially. The increases in the fuel allowance and the living alone allowance announced in today's budget do not fully offset the €7.50 increase in carbon tax. It is important to bear in mind that the number of people in receipt of one or other of the aforementioned allowances is limited and is likely to be fewer than one in four people. There is a glaring omission in today's announcement in terms of a failure to introduce offsetting measures for working families, many of whom can be described as the working poor. I refer in particular to people on very low incomes, trying to support families with children at a time when the cost of living is increasing. The Government should have introduced a measure to support low-income families because increasing carbon tax should not be about impoverishing those who are least able to carry the burden.

Budget 2021 includes many measures to support businesses and employment but these must be accompanied by measures to support decent and secure work. That is why, in addition to the basic requirements for a sick pay scheme and a move towards a living wage for all, we must improve people's quality of life in respect of work. Part of that should be the introduction of the legal right to collective bargaining but this and previous Governments have dodged this issue for a long time. In recent times there has been a lot of recognition of and praise for the essential workers who have kept this country going during these most difficult times, but that is hypocrisy unless the Government is prepared to take the next steps to provide secure employment by legislating for collective bargaining and the right to fair representation in the workplace.

There are other issues that we need to address vis-à-visthe world of work, including the right to flexible work options. Experience over recent months has shown that people would like to have greater access to flexible work options. That is why the Social Democrats have proposed that a commission be established to examine the area and make recommendations on how to move towards the introduction of a statutory right to flexible work options, including a four-day week. Now more than ever, staff working from home need the right to disconnect to prevent overworking and to safeguard their mental health.

Lessons must be learned from the experience of recent months. We must ensure there is no going back to the kind of dysfunction that we saw pre-Covid-19. We must ensure that our society improves as a result of the lessons learned over recent months. The main lessons relate to the provision of public services and ensuring they are adequately funded, but today's budget does not go far enough in terms of learning those lessons. It does not help with the cost of living either. The main areas that feed into the cost of living are the cost of housing, healthcare and childcare, and these key elements needed to be addressed today but were not, unfortunately. The Government did not avail of the opportunity to do so and there is no excuse for that. We know that there is almost endless borrowing available at very low, even negative interest rates. The Government should have availed of that important opportunity and borrowed more extensively, as well as raised taxes from those areas that can afford to increase their contribution to our society. That would have enabled us to go much further in terms of the reform and extension of our public services. It would have enabled us to do something really meaningful on housing and healthcare. It would also have enabled us to provide the necessary funding for mental health services. Unfortunately, those steps were not taken.

There is still a mindset in Fine Gael and Fianna Fáil that is hung up on deficit reduction. I am really concerned by the comments of the Minister for Finance on a return to concentrating on deficit reduction at the end of next year. That is not the mindset or the approach that is required, not only at this difficult time but into the future if we are to develop our economy and society to be inclusive for everyone. People need hope that lessons have been learned and that a better economy and society can emerge. The budget will be judged by whether the Government did that today but I believed it failed to do so.

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