Dáil debates

Thursday, 14 July 2022

Summer Economic Statement: Statements

 

1:40 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Tá bagairtí suntasacha agus dúshláin shuntasacha roimh gheilleagar na hÉireann agus roimh mhuintir na hÉireann san am atá amach romhainn, ón ghéarchéim chostas maireachtála go dtí teipeanna leanúnacha i réimsí mar thithíocht, shláinte agus chúram leanaí. Ag an am céanna, tá bagairtí fadtéarmacha ann ó Brexit agus ó Covid-19. Ní mór do bhuiséad 2023 aghaidh a thabhairt ar na dúshláin sin agus fíorathrú a dhéanamh. I welcome the opportunity to contribute on the recently published summer economic statement and the economic challenges facing households, facing our communities and facing our country.

The people and our economy have faced a multitude of crises and challenges over recent years. Since 2016, we have faced the threat posed by Britain's decision to leave the EU. Not only did Brexit pull the North out of the Union against its will, it has created grave economic uncertainty and political instability on our island. As the Tories proceed with anointing their new leader, uncertainty remains regarding the British Government's commitment to the Good Friday Agreement, and indeed to international law. We must remain vigilant and ensure that we do all we can across this island to limit the damage to our economy, to our communities, and to the Good Friday Agreement.

Two years ago the world was plunged into the greatest public health emergency in generations. The Covid-19 pandemic threatened the economy, jobs, businesses and the health of our people. Like states throughout the developed world, the Government introduced measures and schemes to mitigate the impact of the pandemic on society. I acknowledge the success of that response such as the wage subsidy scheme, which retained the vital link between employers and employees to stave off the threat of mass unemployment. Throughout the pandemic, Sinn Féin supported the Government in implementing these vital measures at a time of national emergency. While Covid-19 is now at the back of many people's minds, the virus remains in our communities. We must continue to support our health services and healthcare provision in the time ahead.

We have faced another challenge that threatens not only the competitiveness of our economy but also the living standards, the hopes, and the aspirations of our people. The housing crisis, which the President rightly described as a social "disaster", is not an accident. It did not fall from the sky. Just as the Government takes credit for employment growth and headline economic indicators, it must also accept responsibility for overseeing a housing crisis that has left so many people in unaffordable rental traps and many others struggling to buy a house they can call home. Home ownership rates have collapsed. Young people are facing an uncertain future. Persistent failures also exist in other areas. Hospital waiting lists are higher than ever before. Access to healthcare remains out of reach for far too many. Childcare costs remain extortionate. We must recognise that the provision of housing, affordable childcare, and accessible healthcare are not separate to the economy but are pillars of an inclusive economy

It is important that we reflect on these challenges in the context of the summer economic statement and the budgetary strategy in the next year and the years ahead. We do not have the time; people cannot afford for these challenges to be put on the long finger or made worse by the continuation of failed Government policy.

Workers and families are struggling in the cost-of-living crisis. With inflation reaching more than 9%, the highest rate of inflation in four decades, the causes are driven by a number of factors ranging from supply chain disruptions as the global economy emerged from the pandemic, some of which still persist, to the illegal invasion of Ukraine that has turbocharged inflation in energy and key commodities. Of course, the high cost of living is also driven by domestic and persisting factors such as high housing, childcare and electricity costs.

While inflation has darkened the economic outlook, including consumer sentiment, and impacted our trading partners, we have seen a sharp rebound since the pandemic with the second engine of the economy, the multinational sector, remaining resilient, despite the impact of the pandemic and rising inflation. The impact of the cost-of-living crisis on households is severe with low- and middle-income households spending a higher proportion of their income on food and energy. They are the people who are being hurt the hardest.

While the summer economic statement is concerned with budget 2023, it outlines an intention to introduce measures that will come into effect on budget day through one-off measures. The cost-of-living crisis is being felt today, not in late September but right here, right now and for the past weeks and months. It was being felt yesterday and it will be felt tomorrow. I believe it is a dereliction of duty on the part of the Government to not have brought forward an emergency budget before the Dáil breaks its summer recess. It is a disgraceful situation. For those people who are struggling, this is an abandonment by the Government of its citizens. There should have been an emergency budget with a comprehensive package of measures to support workers and families now. I am aware that the fiscal assessment report published by the budget watchdog in May found that 90% of the measures introduced by the Government so far this year have been untargeted. While I acknowledge the recent changes made to the back-to-school allowance, they were made under persistent political pressure, with too many families still not able to access that support.

For months, Sinn Féin has been consistent in its call for an emergency budget, with affordable and effective measures that would ease the financial burden faced by so many people. Instead, the most vulnerable in our society have been allowed to wither on the vine, with struggling households facing months of uncertainty as prices continue to rise and bills continue to mount. Any measure introduced on budget day must not only support workers and families for the remainder of the year as if the struggles experienced in the previous months and year never happened. A compensatory basis needs to be taken into account, including the impact of price rises right throughout all of 2022.

The summer economic statement outlines a clear budget strategy for 2023, with certain measures to take effect from this year. The budget strategy has increased the previously planned expenditure budget package by €1.7 billion. I understand this is in part a response to higher inflation, together with anticipated costs relating to a public sector pay deal, currently under negotiation. Similarly, the previously planned tax package of €500 million has now increased to just over €1 billion. It is crucial that any tax package should be progressive, recognising the changes solely to the standard rate band provide no benefit whatsoever to the 20% of taxpayer units who never reach the higher rate of tax. This is especially important given the uneven impact of inflation across income distribution.

The capital ceilings provided under the NDP remain unchanged, with an additional €800 million to be allocated capital expenditure. Given the heightened inflation in the construction sector, I have serious concerns regarding the ability of these capital ceilings to deliver the Government's targets in its housing plans, which simply do not go far enough in the first instance. Those targets are clearly inadequate in the face of a deepening housing crisis. We will continue to engage with the Government on this and other issues. Will continue to pressurise the Government to do what is right in regard to housing, childcare, and the cost-of-living crisis that so many people families are facing.

As I said earlier, we face a multitude of challenges, many of which are persistent problems that have been with us for far too long. From income inadequacy to childcare, housing and healthcare, budget 2023 must deliver and make progress on these vital areas. I do not believe that the budget strategy being proposed has the capacity to do that. I will leave it at that as we are running out of time.

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