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

I welcome the opportunity for this debate. However, I would echo the points made by other speakers on the process behind the development of the recovery and resilience plan and the economic recovery plan. It would have been much better if there had been wider involvement and debate in the preparation of those plans. They are supposed to be national plans. It was short-sighted of the Government not to include all parties and all Members across the House in the development of those. It could have had the various Dáil committees feeding into the work behind those plans.

Overall, the two plans, published yesterday, are short in detail. Regarding the economic recovery plan, everything seems to have been thrown into that, including the kitchen sink. Many measures arising from the budget, or which had already been announced during the year, were just reheated. It is quite a hotchpotch with a lot of spin associated with it but very little detail or timelines.

Several points must be made on the pitch to the European Commission for our share of funding from the recovery and resilience fund. I very much welcome the changed attitude from the European Commission on the appropriate response to an economic crisis. The approach being taken in the context of the pandemic is very different to that taken as result of the crash following on from the banking crisis. In the latter case, it was about retrenchment and austerity. To a large extent many of us, including a large number of people in Ireland but right across Europe, are still paying the price for those austerity policies. It would seem that there has been a step change in terms of the attitude in responding to crises. I very much welcome that change of approach, particularly the change in the attitude of the ECB which, in turn, feeds into policies and approaches by national Central Banks.

The intention now in providing access to substantial funds, both as grants and loans, is that we have to work our way out of this crisis through growth and job creation. I hope that those messages will be fully taken on board by this Government and I will come to some points on that later on in my contribution. This is a very different approach to what one would associate with Fine Gael, in particular, in government and also as to some of the measures that were supported by Fianna Fáil over the past number of Governments.

I will also make a point on the allocation for Ireland and to the fact that in the first tranche for this and next year that allocation is €915 million, which is a very substantial amount of money to receive in grants. The second tranche in 2023 is due to be about €420 million. There is some doubt about that which arises from the fact that our GDP does not accurately reflect the growth or lack of growth in the country. There is that distortion factor in our GDP arising from the high level of activity and exports in the pharma and tech areas. When one looks over the past year or so, where everybody had a very rough time, it is incredible to think that we are looking at a situation where our GDP says that we have had positive growth over the past year. The only reason that is the case is because those exports in pharma and tech completely distort our GDP. We should be using a different measure for GDP because the allocation of the fund from the Commission is based on GDP as well as some other related measures.

Can the Minister say if the Government has made an approach to Europe to use a different measure for our economic growth? The gross national income, GNI*, measure is a much more realistic and appropriate one. Has the approach been made to change the measurement that is being used for Ireland? One would wonder if the Government has done that. It is unlikely that it has and one then has to ask why it has not highlighted this issue. It must be the case that the Government was nervous about making much noise about this issue because it draws attention to Ireland’s economic and taxation models, including the amount of corporate activity by multinationals here that does not really happen here. We know this is an issue that Ireland has dodged or made a pretence about over many years. The reality is that we are going to face something of a cliff edge on this with changed approaches and economic policy from the EU Commission over the coming years, particularly on our corporation tax and on taxation generally. Perhaps the Government should have made that case because we are now paying a price for the fact that our GDP distorts the real economy. Those with expertise in the area would say that the figures that are there at the moment do not represent the reality of what our economy has gone through over the past year. We have had 500,000 job losses and a decrease in domestic demand of over 19% in 2020. Some reliable estimates would also propose that the economy actually shrunk by 5% last year rather than growing as our GDP would indicate.

This is a point and issue that will become very important when it comes to the second tranche of what Ireland is likely to receive. While at this point that figure is supposed to be about €420 million, it is estimated that that could be decreased and could fall back to about €68 million because of the kind of measures that could be used to determine the second tranche. That is a very significant price to pay, which would be a loss of over €300 million because our GDP does not accurately reflect the level of economic activity and the real economy.

On the plan itself, I will make a number of quick points. It is based on three different areas: advancing the green transition, the digital reforms and transformation plan; and the social and economic recovery. On the green transition, while much of that is very important and I would support, the issue of retrofitting is not being handled properly. We have seen with retrofitting in the main that households that are better off are able to afford the scheme in the way it has operated. The proposals for the new way of operating are not going to help working families on low incomes. We should be talking about a pay-as-you-go scheme whereby the energy companies could carry the initial cost and households could then pay back the cost of retrofitting over an extended period of time through their energy bills because those energy bills would be reduced with retrofitting. That is a much fairer way of doing it. On low-income families who simply will not be able to afford to take out loans, there needs to be an extension of the provisions that we have been talking about if we are serious about a just transition.

On the social and economic recovery element of this plan, I spoke yesterday about the pandemic unemployment payment, PUP, and that it is proposed to cut the PUP by 40%, even though many of the jobs that have been lost will not be replaced and there will not be employment opportunities for those people. That is wrong.

I welcome the proposals on the upskilling opportunities but there is no detail on them. It is very important that where people have lost their jobs, have gone back to reskill which is the right approach to take, there are proper training allowances for them and that they have adequate income support because they will not take on the training opportunities otherwise.

Overall, there is a great shortage of detail and timescales on this report and I hope we will be getting that critical information soon.

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