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

Today’s budget has been billed as a giveaway budget. At nearly €11 billion, it is the largest for years. Who will benefit the most from what has been announced today? If we look behind the figures, that becomes clear. It is those on high incomes who will be most rewarded by the Government with tax cuts and an array of universal lump sum payments that disproportionately benefit the better-off. The Government is using a three-card trick to try to disguise the iniquity of its budgetary measures. The trick goes something like this: dismally fail to adequately increase core payments and supports to those most in need while pointing at temporary one-off measures as evidence that the interests of the most vulnerable have been protected. Nobody should be fooled by this approach. Temporary supports will not help people in the medium to long term. They will not provide sustainable relief to those who can no longer afford the soaring prices for necessities such as food, fuel, energy and rent. The tragedy is that this was a budget that could have made a real difference to people’s lives, our country, society and economy. Never before has a Government had so much money to invest in lifting people out of poverty and improving our public services. This is a budget that could have finally begun to address the chronic underinvestment in our public services, which have crumbled over many decades of mismanagement by Fianna Fáil and Fine Gael Governments.

It could have tackled the scourge of low pay by increasing the minimum wage to €12 and outlining a clear pathway to a living wage. It could have prioritised the elimination of child poverty, for example, by making primary and secondary education genuinely free while extending free school meals to all DEIS schools. It could have ensured that children with additional needs had both the therapeutic and educational supports they so desperately need. It could have introduced measures that signalled the Government was prepared to change its failed housing strategy and ensure the interests of renters and first-time buyers were, for the first time, prioritised over those of developers and vulture funds. It could have adopted an ambitious and credible approach to the energy and climate crisis by announcing a plan to dramatically increase investment in solar energy and install solar panels in approximately 100,000 homes. The Government had the power to do so much to permanently improve the lives of so many people, but what was announced in the Chamber this afternoon is an indictment of this Government's lack of vision and ambition.

Ultimately, this budget has three main features. It can be characterised by short-term thinking, not long-term reform. It will erode the tax base and starve our already threadbare public services of funding. Fundamentally, it is characterised by a lack of targeting with universal supports favoured over the targeting of resources to those most in need. This failure to target can perhaps be seen most acutely in the Governments tax cuts. These go far beyond what had been flagged as recently as last week. The increase in the standard rate cut-off point will benefit the highest income earners by €640 but is of no benefit to anyone earning less than €37,000 per year. Does the Minister know that this change will only benefit approximately 23% of workers, meaning almost 80% will receive nothing at all from this change? No effort has been made to claw back any of that gain from those at the very top. The Social Democrats have proposed a third rate of tax at 43% on incomes above €100,000 per person. Meanwhile, the Government is content for higher income earners to disproportionately benefit from the tax changes.

While some indexation of tax bands is warranted to keep the portion of income taxed at the higher rate roughly consistent, there is little justification for the kinds of indexation we have seen in the last two budgets. Earlier, I heard the Minister for Finance again pushing the misleading idea that inflation leads to people paying more income tax; it does no such thing. People pay additional tax when they get a salary increase, and wage growth has been far lower than general inflation. How does the Minister justify indexation of nearly 9% this year and of more than 13% over the last two budgets, when the latest available numbers from the Central Statistics Office suggest average weekly wages are only increasing at less than 2.5% per year? This is set to cost more than €800 million in 2023 and €1 billion in a full year. This money could have been far better targeted at low and middle-income workers and invested in strengthening public services, especially when no one earning less than €37,000 received any benefit from this indexation. The only benefit for these workers from the Government's tax plan is a mere €150 per annum through the expansion of tax credits, although this benefit will, of course, also go to higher earners. In total, higher income earners will benefit to the tune of nearly €800 while those on the lowest incomes will get €150 from this package.

A failure to target supports is a recurring theme with this Government. Its energy supports for households are a further example of this. A succession of Ministers have claimed that it is far too complicated and cumbersome to target these payments, which amount to more than €1 billion, at low and middle-income earners. The consistent mantra from the Government is, "It would take too much effort and too much time." These jaded excuses for a failure to target resources, nearly a year into this crisis, are beneath contempt. Today, it is confirmed that this universal approach is not just being repeated, but it is being ramped up and tripled with every household getting €600 off their bills. There has been no targeting whatsoever. What has the Government been doing for the past ten or 11 months? Did nobody even attempt to figure out a way to target these payments at low and middle-income earners, or did the Government feel it was not worth its time or effort because it was happy for high earners, such as the Deputies in this Chamber who earn more than €100,000 per year and Ministers who earn in excess of €180,000, to receive the same energy credit as those on the minimum wage? Added to this is the fact that Deputies and Ministers will have their tax cut by €800 in this budget. High-income earners will benefit to the tune of €1,400 from these two measures alone. It is shocking that under this Government's plan, the super wealthy will get a bigger benefit than low-income earners, who must make a daily choice between feeding their families and heating their homes.

The Government's poverty of ambition is not only evident in its short-term solutions, but it also extends to its medium and long-term plans to tackle the energy crisis. The way to make the biggest dent in people's energy bills, in the quickest time, is with a huge investment in solar energy. Solar panels can reduce energy costs in a home by up to 40%. They can dramatically reduce emissions and remove pressure from our antiquated and overburdened grid. Ramping up investment in solar is a no-brainer. The Social Democrats recognised this in our plan to install solar panels on the homes of 100,000 low-income families. Our targeting of supports did not stop there. We would also have increased the grant for solar energy from just €2,400 to €4,800, which would ensure that the cost would no longer be a barrier to middle-income families who want to future-proof their homes and avail of clean and green energy solutions. This is a sustainable approach that attempts to help families not just in the short term but long into the future.

While the Government seems incapable of targeting supports at households, it has figured out a way to target resources at small and medium companies that need support to pay their energy bills. The Government's welcome announcement for businesses mirrors proposals that were contained in the Social Democrats' alternative budget, which provided for €1 billion for an energy-crisis support scheme for businesses. Unlike the Covid crisis, when wages needed to be supported, the current crisis necessitates the support of viable but vulnerable businesses in paying their energy bills. However, the Government must learn the lessons of the mistakes it made in its Covid response for businesses. It must ensure companies that avail of this support do not pay dividends to shareholders or make staff redundant and, if it transpires that they did not need state support in order to remain profitable, there should be a claw-back option. We want to ensure business remain viable and trading. We do not want to engorge their profit margins.

One of the biggest disappointments of this budget is the failure to adequately increase core social welfare rates or indicate they will be benchmarked against, for example, average wages or the minimum essential standard of living, MESL. Perhaps this should not come as too much of a surprise given what happened last year when the Government could only find it within itself to increase core social welfare rates by €5 per week. That €5 represented the first increase in rates for three years. Now, in the midst of the worst cost-of-living crisis in a generation, the Government has increased those rates by only €12.

This is not enough to insulate the most vulnerable from unprecedented inflationary price shocks. In our alternative budget, the Social Democrats proposed an increase of €15 per week to core rates which would begin to be paid immediately from next week. We would also have directed significant additional resources at the fuel allowance payment to provide relief to the most vulnerable in our society. Under our plan, the fuel allowance would have gone up by €15 and totalled €48 per week. The fuel allowance should also be expanded to those in low-income employment who are in receipt of the working family payment. Doing this under our plan would provide low-income families with an additional €1,344 per year. This would be far more beneficial to low-income families than the Government's proposal for a one-off payment of €500.

Lone parents and their children and working-age adults with disabilities and their children experience distinctively high rates of income poverty, deprivation and consistent poverty. In 2019, these two groups accounted for just over half of those in consistent poverty. I should not need to tell the Minister that. That information is contained in an Economic and Social Research Institute report commissioned by the Department of Social Protection and published at the start of the summer. What has the Government done to lift lone parents and those with disabilities out of poverty? I will tell the Minister what it has done, which is shameful. It has raised the qualified child increase by a derisory €2 a week, an increase so miserly in the context of this €11 billion budget that it borders on insulting.

When it comes to disability, there have been calls for a cost-of-disability payment for years. This payment is a way for the State to acknowledge the significant additional costs of having a disability, which the Government's own report on the cost of disability indicated amount to between €9,000 and €13,000 a year. The Government has announced a one-off cost-of-disability payment of €500. Does it think that disability is one-off or temporary or that supports for disability can be dealt with by way of one-off measures? To speak frankly, the one-off nature of this payment is completely misjudged and insulting. A €20 weekly cost-of-disability payment, something the Social Democrats have advocated for, would amount to €1,040 over the course of a year, which is more than double the Government's one-off payment. It would also send an important message, which is that the costs associated with disability are recurring, unavoidable and very expensive. A weekly €20 cost-of-disability payment would not be a panacea by any means. It would be just a first step towards the State finally acknowledging that having a disability comes with increased costs not borne by others in society. This payment, once introduced, should be increased every year to reflect the true costs associated with disability. Including this as a one-off measure gives the erroneous impression that the costs of disability are fleeting and that extra financial supports could vanish at a moment's notice.

Education is the single greatest driver of opportunity, quality of life, social equality and economic growth. Ireland should be a republic in which every child has the opportunity to achieve his or her potential. One of the best ways to ensure this is through a well-funded and modern education system. One of the most radical reforms to our education system would be to genuinely make it what it claims to be, that is, free. Primary and secondary education in this country is supposed to be free but we all know that is a myth. Parents face very significant additional back-to-school costs every year. So-called voluntary contributions are another unwelcome financial burden. Making education genuinely free would mean fully funding schoolbooks and other classroom resources, increasing the capitation rate to eliminate the need for so-called voluntary contributions and permanently eliminating school transport scheme fees. Doing this for both primary and secondary schools would cost €253 million, which represents just 2% of the overall budget. There are few policy measures that would have as transformative an effect on the lives of families with children who live on the margins that can be attained for such a small investment. Instead, the Government has proposed making schoolbooks in primary schools free. Why is the Minister stopping there?

I am pleased to see that the Government has moved to reduce the extortionate cost of childcare, something the Social Democrats have been calling for since our inception. The Government says it will reduce costs by 25% next year and 25% the year after. We believe it could move further and faster and provide a 30% cut in 2023, which would undoubtedly be welcomed by parents. I also implore the Government to live up to the commitment in its programme for Government and ensure that parents have 12 months of paid parental leave in order that they can stay home for the important first year of a child’s life. Furthermore, the more accessible childcare system that is being rolled out should be implemented as a publicly funded and controlled system. The Social Democrats proposed an allocation of €20 million to start such a change.

My colleague, Deputy Cian O’Callaghan, is going to address the housing aspects of this budget, but I will just say that I am deeply concerned about what I have heard to date. The vacant homes tax proposed by the Government is pathetically low. It will not act as an incentive for the owners of vacant homes to bring them back into use. The €500 tax credit for renters goes nowhere near reflecting the current sky-high cost of renting. In the absence of a ban on rent increases, it will further inflate rents. Most disappointingly, this budget makes clear that the Government is wedded to its failed Housing For All plan, which is failing dismally to meet even its own anaemic targets.

The Social Democrats have repeatedly called on the Government to lay out a ten-year funding programme for Sláintecare and to include this cost in the pre-committed element of the annual budget process as already happens with the national development plan and public pay agreements. Only then will we believe the Government is genuinely committed to reforming our public health service. Notwithstanding the need for follow-through on Sláintecare reforms, the biggest challenge facing our health and social care services is the recruitment and retention of staff across all disciplines. Not only does this staffing crisis threaten patient care, it is also leading to the creeping privatisation of our health and social services. Workforce planning has been piecemeal at best, the number of training places has been drastically reduced and our highly-trained healthcare workers are leaving our shores in their droves. The Social Democrats would have prioritised the creation of additional supervised placements and established a national workforce task force to address both the short-term and medium-term needs of the sector.

These staffing challenges can also be found in community and voluntary organisations. Service delivery is being jeopardised by a recruitment and retention problem in such organisations as well. This escalating crisis is fuelled by the disparity in pay and conditions between State agency staff and staff in section 39, section 56 and section 10 agencies, along with certain other community organisations. The Social Democrats called for the allocation of €80 million to address pay and conditions as pay disparity threatens the long-term viability of these essential services.

The other big issue is the cost for patients of accessing healthcare. We have a long way to go to meet the principle underlying Sláintecare, namely, that of access to universal health and social care based on health need and not ability to pay. The extension of GP visit cards and the removal of inpatient charges is a welcome move on the part of the Government.

I recognise that. However, it falls very far short of where we should be with the implementation of Sláintecare. The most basic access required is to primary care, yet little progress has been made in improving access to services in the community. A series of interventions is needed in social care to address progressively privatised services. Employees within the sector deal with precarious working terms and, occasionally, other forms of exploitation. This is particularly problematic in the home care sector, which is largely unregulated. Investment in universal social care services is vital to ensure that older people and people with disabilities have the necessary supports to reduce dependence on family and friends and to maintain a private life with dignity and independence.

The European Commission has noted Ireland’s over-reliance on institutional care, while home care, which is a key part of long-term care services in many other EU member states, has been historically under-provided here in Ireland. Although funding has improved in recent years, outstanding issues in home care, such as employment barriers, a statutory right and tender arrangements, require urgent attention.

In the context of mental health services, an additional €100 million was needed in this budget. That was made very clear by Mental Health Reform and many other advocacy groups working in this area. The €58 million announced today falls far short of what is required to support new services and address the historic shortfall. This is especially the case given that mental health service provision has often been described as the Cinderella of health services and, regrettably, remains so following today’s budget. This is in spite of the explosion in the demand for mental health services among young and older people right across the board, particularly in light of the major anxieties, pressures and bereavements caused by Covid over the past two and a half years.

Lifting people out of poverty and insecurity could be done with a sizeable increase in the minimum wage. Instead, the Government is going to increase it by a mere 80 cent. I should not need to remind the Minister that this is a Government that has promised to implement a living wage. Let us leave aside for now the fact that the Tánaiste and Minister for Enterprise, Trade and Employment is trying to redefine the living wage as something that has nothing to do with what it actually costs to achieve a decent standard of living. It is clear that this Government is more interested in rhetoric around a living wage than actually implementing one. The Social Democrats called for an increase of at least €1.50 in the minimum wage, which would have brought it to €12 per hour. Instead, the Government has proposed barely more than 50% of this amount. No real progress has been made here. Low-income workers will suffer as prices continue to spiral. We need a pathway to a living wage to be outlined, something that will bring us to our goal in the next three years. The Government’s empty rhetoric will not pay the bills of low-income earners.

If the Government really wants to reduce the cost of living and give working people and families a break, it makes more sense to use the majority of available resources to invest in better-quality public services and social infrastructure. The Parliamentary Budget Office and the Irish Fiscal Advisory Council have calculated that an additional €7 billion per year is needed to meet inflationary costs and allow public services just to stand still. This budget, as far as I can see, allocates less than half that amount - just €2.2 billion. This will have major implications for public services in 2023 and beyond. The impact will be felt in a further erosion in the availability of vital supports.

I wish to comment on the erosion in the tax base and the question of fiscal credibility. It seems that the overall theme of this budget is the erosion of the tax base, with a consequent reduction in the money available for public services over the long term. This cannot continue. The Government must chart a course for sustainable funding of our public services. Last week we learned that neither of the two main governing parties deigned to make a submission to the Commission on Taxation and Welfare. We know this country needs more revenue to improve service delivery, look after an ageing population and meet our environmental targets. Yet these parties, seemingly with no ideas of their own to share with the commission, were quick to dismiss the content of the commission’s report. The reason the commission was necessary in the first place is because Fianna Fáil and Fine Gael in government have for so long refused to accept the need for revenue to increase as a proportion of national income. Having outsourced this job to an independent commission made up of experts from all fields of Irish society, their immediate response to findings that do not fit their ideology has been to politicise and dismiss this work before giving it any kind of proper consideration.

Fianna Fáil and Fine Gael like to poke fun at the supposedly unsound economic policies of the left, but independent expert groups, from the Commission on Taxation and Welfare to the Irish Fiscal Advisory Council, have consistently pointed out how these parties, namely, those that have been in government for many years and decades - are asleep at the wheel when it comes to accepting fiscal realities and future-proofing our finances. There are a number of points to support this. There is the continued and increasing over-reliance on corporation tax receipts, the use of windfalls to fund current spending and the lack of proper costings of both Sláintecare and planned climate measures.

This Government clearly has no overall financial plan. Increasingly, it has no credibility whatsoever when it comes to making this a more vibrant, fairer and more equal society. This is a disappointing day. The Government had the opportunity to do great things with the resources that are available and it fell very short of what people were hoping for.

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