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

This Finance Bill gives effect to the budget provisions. It is before us at what is unquestionably a very important and challenging time for our country. The Bill arrives in the middle of a global pandemic that has placed immense strain on our society, both in human and economic terms. We must recognise that. Nobody is suggesting that the crafting of the budget and the Finance Bill has been an easy task. It has not been easy, by any means. It has posed major challenges. Lives have been lost, families have been separated, people have lost jobs and Ireland is still grappling with the challenge of Brexit and the unknown future that will arise as a result of that.

It is important that this Bill should not be an attempt to return to the type of Ireland we had prior to Covid-19. It will not be enough to weather the storm and return to the Ireland that was. Before the Covid pandemic Ireland was dealing with the consequences of a decade of underinvestment, lack of access to housing, economic inequalities and lack of opportunities. All these challenges remain, and many have been worsened by the effects of the current crisis. The old normal will still be as difficult and divisive if we do not improve our society at the same time as we try to protect it. We must invest in surviving the worst effects of the Covid pandemic, while keeping people healthy and safe. That should entail providing economic security, protecting both mortgage holders and renters, and keeping businesses alive. There must be a clear commitment to provide the necessary funding to ensure the people of Ireland can get through the pandemic with the right healthcare. It must also support incomes and communities.

We must invest in the sectors that are being decimated by the pandemic, ensure that they survive and offer hope of a social and economic revival. As the Social Democrats have said over recent weeks and in the context of the budget, this must be a budgetary strategy that is not only about survival but also about revival. The revival as we emerge from the pandemic must be to an economy that is not only job rich but also one of quality jobs, with a priority on investing in public services and social goods that will benefit all. We must invest in a fairer future. This pandemic is a once-in-one-hundred-year event, and the budgetary approach must respond accordingly. We must be ambitious. It is important that there is a commitment to borrow sufficiently to ensure we survive the pandemic until a vaccine or treatment emerges, and the sectors and businesses impacted can be revived. They were all mainly viable before the pandemic.

It is important that we return to a situation in the longer term of dealing with deficit reduction, but that should not be on the agenda in the short to medium term. I must express concern at comments that were made in the Minister's Budget Statement about deficit control in the shorter term. That should not be on the agenda. We should use the very favourable situation at European level. The market is potentially very beneficial to Ireland if we take an expansionary response and an approach of borrowing to invest. Certainly, earlier in the year there were worrying signs from the Government that a conservative approach would be taken to the major crisis the country is facing. I am glad that position changed as the months passed. However, I still am concerned about a mindset that focuses on deficit control, by talking about it and trying to put it on the agenda for some time at the end of next year.

Currently, we can borrow at minimal rates and, in some cases, negative rates. That is continuing, mainly thanks to the changed policy approach of the ECB. We should maximise the potential of that borrowing situation. Earlier in the year, it was said that we would frighten the markets if we borrowed too much. There is no indication that this is happening. Obviously, the firepower that has been put there by the ECB is critical, but the markets also recognise that if one invests for growth, there will be good returns on borrowing. That is a key issue. Taking any type of conservative approach at this stage, which will result at some point in the next couple of years with a level of austerity, is not in our interest. It is not in our interest from a human perspective, and it does not make sense economically either. It also does not give any confidence to the markets.

The markets and investors want to see that there is a clear strategy in place to invest in growth and that must be the approach.

Equally, we must take an approach that is about putting people's well-being, both socially and economically, to the fore of everything that is being done. In that regard, one does have to express some concern about the approach that was taken in the budget. It was an enormous budget with a total value of €18 billion, which undoubtedly provided significant supports to business. That was welcome. However, at the end of the day when people looked at their own personal situation, many asked what the budget actually did to change their circumstances. There was very little in terms of support to individuals and families in the budget and in the Finance Bill.

The approach should have been to avail of the opportunity to invest in public services. That must be an overriding strategy of the Government. It makes sense from many perspectives. It is about creating the kind of inclusive, modern, progressive society that we could achieve in this country if we were prepared to invest properly in public services. Unfortunately, that has not been the approach taken by this Government or the previous one. There is still that two-tier approach to the provision of public services. It is very much a Fine Gael kind of approach, which is about public services being for low-income people and the poor and everybody else pays their way. That is a very regressive approach to public services. It results in a very divided society where there are high levels of inequality and where a lot of people do not feel they have a stake. In such circumstances, people on low incomes, who are poorer, have great difficulty accessing public services. I refer to the provision of affordable housing, social housing, healthcare, transport services, various community services or adequate policing services. People have a right to expect all of those critical public services in their lives and when they are not adequately resourced it does mean that people are excluded and left behind.

We talk about the squeezed middle, or whatever cohort the Minister wants to talk about. More and more, people who are not in the low-income category, who are in decent jobs and who are paying their way tax-wise, see very little return for that. Increasingly, they feel they have to pay for everything. That is not what an inclusive society is about. It is not what a progressive society is about either. Unfortunately, there is that mindset, in particular in Fine Gael, that does not see the advantage in having universal, properly funded public services. The approach should be to achieve the kind of social democratic model where public services are available on a universal basis to everybody. Such an approach creates an inclusive, equal society but it is also the type of approach that creates a sense of solidarity among people. There should be a social contract whereby one pays a fair share of tax and, in return, one gets good quality public services. In our lifetime we have never operated that kind of social contract in this country.

Not only does taking that approach create a more equal society and greater solidarity, but ensuring that we have good quality public services for housing, childcare, healthcare or whatever other aspect of public services, makes the country much more competitive. Given that there are such pressures on people's incomes, that they have to pay so much to access healthcare and for childcare, and that housing is such an enormous drain on family incomes, that fuels demands for wage increases and, in turn, makes us less competitive. It is a vicious cycle that has been created. For all of those reasons - socially on the grounds of equity and economically - it makes sense to have universal public services. The Minister has still not accepted that.

It is most disappointing that after all this country has come through over the past decade or so, those lessons have not been learned. Following an engagement with senior people in Fianna Fáil and in Fine Gael in the aftermath of the election, one of the reasons that the Social Democrats decided that we were not going to be a part of this Government was because those lessons did not seem to have been learned. The housing problem is the most stark example of how lessons were not learned. Everybody knows the action that must be taken by the Government is to drive down the cost of housing to make it affordable. We should be a in a position – it is possible – to build houses on publicly owned land. We have large tracts of publicly owned land in the Dublin area and also throughout the country that should be built on for affordable and social housing. We should be able to build decent three-bed houses for approximately €250,000. That is the cost price. That is the kind of intervention that is required by the Government in order to drive down the cost of housing. It is about taking on the vested interests whose sole objective it seems is to maintain high house prices. That has significant implications right across society and the economy. That nettle has not been grasped. We see yet again the Government repeating the mistakes of the past.

I question the lauding of the extension of the help-to-buy scheme. That is a very expensive measure that is not targeted and it fuels an increase in the cost of housing. We have seen that from how it has operated in recent years. It fuels the cost of housing and does nothing to achieve reform. It incentivises a continuation of the kind of dysfunctional housing market that we have here. That is one of the most disappointing aspects of the approach the Government has taken, which is provided for in this Finance Bill. Are we going just to keep repeating those mistakes or are we going to learn lessons and do things differently? Unfortunately, this Finance Bill will make very little difference to individual lives, family incomes and budgets.

The other area it is important to highlight in the Bill is taxation. From a macro-economic point of view, it is very good that the tax take has not been affected too much by the pandemic, but that in itself tells a tale. It tells us that we have a two-tier job situation where the majority of people who have lost out as a result of jobs losses due to the pandemic are people who were in very low paid and insecure jobs. We keep on talking about the essential workers in nursing homes, hospitals, retail and distribution and all of the key areas; they are the people who have lost out. They are the people who have been hurt most and they are the ones who are on the lowest incomes. When we are lauding those essential workers, part and parcel of doing that is for the Minister to put his money where his mouth is in that regard. It should be about recognising the essential nature of the work that so many people in this country do, not just by a round of applause but by ensuring the Government will work to achieve decent levels of pay and security in employment.

The budget and this Finance Bill is disappointing in that respect. We are still caught in a situation where we are not prepared to take that step towards a living wage. We are still expecting people to live on a little over €10 an hour. What is that about? The Minister has to get his priorities right on this. He must ensure some level of equality across society. It is not possible for people to live on that kind of minimum income. It is not possible for them to do that when having that income excludes them from accessing so many services. There needs to be a complete change in mindset. The programme for Government talks about moving towards exploring and considering all of these. One measure the Government is committing to over its lifetime is a living wage. It lacks ambition to a huge extent, taking that kind of approach.

There are many measures the Minister could have taken in raising revenue. He ignored them completely, however. That may have been on the basis that he was prepared to borrow so much. That is fine and nobody is objecting to that. There were also, however, opportunities to create a greater sense of fairness in terms of people's contribution. Obviously, corporation tax is a key area in that respect. A rate of 12.5% is one which people, in the main, are disputing. There is a major difficulty, however, in terms of fairness and perception, as well as lack of contribution to the economy with many companies paying only a fraction of that 12.5% rate. The Government should have moved to introduce a minimum rate of corporation tax which should have been applied across the board in establishing a level of fairness with many multinational companies based here being seen to make a fair contribution to our economy. The Minister should have moved to a minimum level of 6%.

The continuation of the special assignee relief programme, SARP, tax relief displays a mindset which is about giving preferential treatment to a small cohort of people who are high earners. There really is no defence in continuing with that scheme. Again, it is that mindset that some people are worth an awful lot more than others. These are already high-earning individuals. There is no justification for giving them preferential tax treatment. Again, it just fuels that sense that the country is not being run in a fair manner and the tax system does not operate in a fair manner. The opportunity should have been taken to end that scheme. So much more could have been done. It was a missed opportunity to create that kind of fairer and more inclusive society that we had the chance to do with the kind of borrowing involved. It could have been used to invest in people as well as in services.

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