Thursday, 15 October 2020
Financial Resolutions 2020 - Financial Resolution No. 7: General (Resumed)
This week we had a budget like no other. The total budgetary package announced this week came to in excess of €17.75 billion. Budget 2021 represents the largest investment in the history of the State. The budget deficit for 2020 will be around €21.5 billion and next year it will be about €20.5 billion. The national debt level for 2020 will be around €219 billion. The words "shock and awe" come to mind, but this unprecedented budget is absolutely the right one for these unprecedented times. Covid-19 and Brexit, be it deal or no deal, pose a real threat to livelihoods and to our economy generally. The budget is rightly based on the assumptions of there being no EU-UK trade deal and that the virus will be around for all of next year. For the first time in many years, the budget has been broadly welcomed by a wide range of interest groups, and that is noteworthy.
An allocation of €4 billion extra has been made to the Department of Health. The budget provides for an additional 1,146 acute beds. Currently, there are around 11,000 acute beds in place. In addition, a permanent increase in adult critical care beds, from 255 pre-Covid to 321 by the end of 2021, will be delivered. As the second wave of Covid-19 gets under way, it is vitally important we have enough capacity in our ICUs.
People are genuinely concerned about the situation and want to be assured there will be an ICU bed for them if they need it. The progress made in the budget is most welcome but this investment needs to continue in future budgets. Currently, Ireland has fewer than six ICU beds per 1,000 population; the European average is 11.5. The Irish Medical Organisation is calling for 550 intensive care and critical care beds to be provided. Some reports have indicated that approximately 580 permanent ICU beds are needed. ICU beds are expensive. They must be accompanied by highly specialised staff, including anaesthetists and critical care nurses. I am pleased that approximately €1.8 million has been provided for the training and education of the staff who are needed.
I understand negotiations are taking place with private hospitals for an additional 130 ICU beds to increase our surge capacity. This is the correct approach. The wholesale takeover of the private hospitals earlier this year was, in hindsight, a mistake and caused a lot of problems throughout the health service generally. In the weeks and months ahead, we need to continue with non-Covid procedures and have ICU capacity to facilitate this. ICU capacity in the acute hospital system must be increased for the long term.
I refer to foreign direct investment, FDI, and multinational companies. We hear talk of a K-shaped economic recovery whereby the multinationals continue to grow while the domestic economy has collapsed. FDI is an essential component of the Irish economic model and it has worked very well for us since the 1960s. Multinationals employ approximately 250,000 people and they pay 79% of all corporation tax. Multinational employees pay 45% of all income tax receipts. We are very fortunate that income tax and corporation tax have held up well despite Covid-19. In 2020, just under €7.5 billion was received in corporation tax receipts. This revenue has been vital in paying for the Covid-19 crisis.
Sinn Féin in its alternative budget proposed to take €720 million in corporation taxes from multinational companies. This is a most unwise proposal. These companies do not have to locate in Ireland and instead they must be encouraged and supported. The OECD recently proposed a new global maximum tax rate for multinational companies. This is the so-called pillar 2 reform. Reform of corporation tax is needed and the OECD is the place to deal with this at a global level. No doubt this process will pose problems for Ireland but we can respond to these challenges in a pragmatic way as the situation unfolds.
I welcome the proposals brought forward in the budget on education. There will be a further reduction in the pupil-teacher ratio at primary level by one point, providing from more than 390 mainstream teaching posts in addition to the more than 265 posts being recruited for to meet pressures throughout primary and post-primary levels. This is most welcome. The allocation for education in 2021 is an unprecedented €8.9 billion.
I also want to refer to the housing budget outlined earlier this week. An additional €500 million is being directed towards capital expenditure. This will facilitate the construction of 9,500 new social housing units in 2021. A total of 12,750 units will be added to the social housing stock, including leased units. I wish the Minister, Deputy Darragh O'Brien, well in his endeavours. As I have said previously, he has hit the ground running. There are concerns about how long it takes for proposals to be sanctioned by the Department and I know he is dealing with this issue. I also welcome the fact that a practical affordable housing scheme, whereby people can fill out their application forms and apply for specific housing units, will be announced in the coming weeks. Certainly during the recent general election the big issues were housing, health and education. These three areas have been given significant attention in the budget and I have no doubt progress will be made as a result of the allocations made in budget 2021.