Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Labour Party for bringing forward this motion. While I do not support it, it is a very valuable opportunity for the Dáil to reflect on where our economy, society, citizens and workers stand today as we continue to see very significant change and new pressures in our economy, with which I will deal in my statement.

I acknowledge some common ground on the issues being raised by the Labour Party and the analysis I and the Government have regarding where we are. I acknowledge that for many families, workers and employers, particularly small and medium-sized employers, just as we hope we have put the darkest days of the Covid-19 pandemic behind us along with the significant economic insecurity and anxiety and the basic fear workers had to confront in recent years about whether a job would still be available once we defeated this pandemic, many families, businesses and workers find themselves dealing with a cost of living crisis, with prices of their key essential utilities and services rising far more quickly than was the case in their recent experience. I acknowledge the added level of worry and challenge this presents to many at the moment, especially those on fixed and low incomes. I acknowledge the points made by Deputies Nash and Howlin and others in recent days.

However, I will make two points that have not been present in the debate today. The first is that as we exit this pandemic, we have a national debt that is more than a quarter of a trillion euro. Many of the different demands I heard articulated here this morning regarding spending and doing more do not reflect the fact we now have, on a per capitabasis one of the highest levels of public debt in the developed world. That matters too for the living standards and prospects of the citizens being discussed today.

The second point is to underscore that while our economic prospects are changing and getting better in terms of job retention and creating more jobs in the future, we cannot forget the risks we were aware of before we entered the very dark days of this pandemic. These risks have been raised with me by some in this House and many outside it regarding where we stand with corporation tax in the future, with a reliance on corporation tax revenue that has deepened as we have moved through the darker days of this pandemic. Of course, that revenue was coming in at exactly the point where we needed it.

The further area of difference, which is telling in this debate, is that when we have had many debates in this House regarding the state of our economy during the pandemic, they have been dominated by the question of how we can keep jobs, how we can ensure those on the pandemic unemployment payment have a job to go back to and how we support the viability of employers at a point when we are asking them to close. I acknowledge the role of the Labour Party regarding ideas it brought forward during the pandemic and its support for many measures brought forward by the Government to deal with Covid. Seeing the debate that broke out across the Opposition benches, I acknowledge that if it was not for the role played by the Labour Party and some of the Deputies putting forward this motion during the equally dark days before the pandemic hit, we would not have an economy that was in recovery and national finances that were in such good condition before the pandemic hit. It is a point that will not be acknowledged by others but I acknowledge the role played by the Labour Party in getting us to this point.

Having acknowledged the areas where I agree and disagree with the Labour Party, before I address what the Government has done and is willing to do, I again say we recognise the challenge and understand the added anxiety and worry many workers, families and businesses are facing, but this is exactly what guided the introduction of the measures in budget 2022 that are being implemented. These measures were about how we deal with a cost of living we expected to increase, the clear warning signs of which became apparent across October, November and December. It is the reason we brought forward a range of social welfare measures dealing most importantly with the key rates, such as increases of €5 that make a difference to those on those rates, although I acknowledge that with the existing pressure, those people will be looking at how they deal with a cost of living that is increasing. This is the reason the Government brought forward not just a change in the key rates but also changes in the qualified child allowance, energy payments and the working family payment. We made increases in those payments in anticipation of the challenges many are facing at the moment. It is also why, through the Minister for Health, the Government brought forward measures to help families with the affordability of healthcare relating to GP care and prescription costs, again recognising this is adding to the cost that many are facing. It is also the reason the Government brought forward measures to slow down and, where we can, freeze the increases in costs many are facing regarding childcare.

The Government has brought forward measures and put forward a package to deal with the challenges that exist at the moment, but it is also the reason we brought forward changes and increases in personal tax credits and measures to increase the amount of income at which somebody will pay the lower rate of tax as opposed to the higher rate. We brought forward measures that make a difference to every taxpayer in the country. This House resisted and voted against this measures. The reality is that, if I had not brought forward those measures, the Deputies who voted against them would be here today accusing me of presiding over stealth charges. They would be accusing me of not making changes that are needed for low and middle-income workers to make a contribution to their after-tax pay rising with the cost of living. That is an essential area of difference. This Government and I believe affordable changes relating to personal taxation at a time when the cost of living is an increased burden for many is a core part of how we can respond to the challenges we face.

I heard Deputy Paul Murphy make the point that as wages and the cost of living increase, for some taxes, particularly income tax, in many cases this will automatically make a difference to the level of personal taxes collected by the State. I believe that at a time of rising inflation when wages are changing, for this and other reasons, it is very important to use a share of that to help workers deal with the increased cost of living. It is a reality that this is a measure that was opposed by many who support this motion today.

It is also why, through the Minister for the Environment, Climate and Communications, the Government recently introduced a measure to help with the increased cost of energy at a time when this cost is really biting for many.

Again, I hear from many descriptions that it is tokenistic and should go further. The key argument I would make to the House this morning is the importance of seeing all these measures in the round. The measures I have just detailed, which are worth between €1.2 billion and €1.3 billion, have been implemented through the budget. Those further changes were introduced this year to help with what we acknowledge is a rising challenge for many.

I heard Deputy Joan Collins conclude by saying what we need is a revolution. What we need is progress. With the State having shown its ability to stand by citizens at a time of such challenge, we are seeing the effect of our efforts now as our economy shows the signs of beginning to recover very strongly. The Government will use the proceeds of that recovery that has been delivered by the stamina and resilience of our country, combined with the right decisions by this and the previous Government, to continue to do all we can to make a difference in what we acknowledge is a rising burden and cost and an additional source of anxiety for many.

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