Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

In the midst of all the noise that surrounds the budget these days, it is important step back and look at the direction of our economy and its ability to support strong public services.

It is remarkable how rarely in the past two and a half years the Opposition has even mentioned the economy, and now that we have secured a rapid increase in employment levels, even parties which like to pretend to be the voice of workers have nothing whatsoever to say about employment. There is a fundamental divide in this House between those who want to do the hard work of developing and implementing policies to secure both economic and social progress, and those who play empty and cynical politics. It is a divide between those who want to solve problems and those who want to exploit them. The desperate flaying around which we have seen from the Opposition, as it searches for a consistent line of attack, reinforces the fact that this is a balanced and ambitious budget which helps people at a moment of real need and delivers progress on urgent issues. While protecting our economy and its ability to create jobs and fund public services, it ensures that we can withstand future shocks and surely, if there is one thing we should all understand from the last two and a half years, it is that shocks are happening more often than ever and it is irresponsible to fail to plan for them.

The single most important background to this budget is that it shows that Ireland has come strongly through the pandemic and the fastest-hitting recession of the last century. It is genuinely remarkable how Sinn Féin and others cannot even bring themselves to acknowledge what has been achieved and that this Government’s actions have been central to helping our country through the pandemic, saving lives and delivering the fastest recovery recorded in Europe. At the heart of it, this is a widening gap in this House. Never before has there been an Opposition so completely disinterested in the overall economic picture. Never before have we seen an Opposition which has absolutely no concern for the need to have an economy strong enough to generate revenue for social supports. The facts show that the twin public health and economic emergencies which hit our country and the rest of the world have been overcome. Ireland rolled out one of the most successful vaccine programmes in the world, recorded dramatically fewer deaths than other countries and ensured a rapid economic recovery. Today there are over 400,000 more jobs in our economy than there were on the day this Government took up office. Our interventions saved businesses, jobs and family finances. That is why we have the resources available to implement an unprecedented range of measures to help families and businesses in the middle of a dramatic international crisis. Some €45 billion was made available by Government, with in excess of €20 billion alone provided in direct support for workers and businesses. This was expensive, but necessary and appropriate, given the nature of the challenge faced and the needs of our people.

Our exit from the pandemic coincided with new challenges and the weaponisation by Russia of European and global energy supplies. We are now experiencing the highest rates of inflation in decades. This is weighing heavily on the growth outlook for the economy as well as bringing significant uncertainty. This situation is having the biggest impact on households with lower incomes, as the proportion of their income spent on energy increases to new levels while they are trying to cope with other cost-of-living pressures. Ar fud na hEorpa, tá boilsciú, arb é an costas fuinnimh atá ag ardú, an cogadh san Úcráin agus deacrachtaí leanúnacha sa slabhra domhanda soláthair is cúis leis, ardaithe go dtí na leibhéil is airde anois leis na deicheanna de bhlianta. Anuas air sin tá dúshlán ó ghlúin go glúin ann i dtaobh an chostais maireachtála. Mar a tharla le linn Covid, ní bheidh aon easpa ar an Rialtas, agus le cáinaisnéis 2023, cuirfimid freagairt chuimsitheach, spriocdhírithe agus éifeachtach i bhfeidhm chun poist a chosaint agus chun cuidiú le teaghlaigh.

The overall budget strategy, which was unveiled yesterday by the Minister for Public Expenditure and Reform, Deputy Michael McGrath and the Minister for Finance, Deputy Donohoe, achieves three major things. It ensures that we have the resources to respond to new emergencies, it provides major support for families to help when international events are driving up prices and it delivers action on a range of vital public services. Everybody who is being honest about the major pressures of rising prices accepts that the dominant causes of inflation are international. The facts show that inflation in Ireland is just below the average in Europe and the United Kingdom. Some of the factors pushing up prices, and especially energy prices, will hopefully be short-term in their impact and prices will follow the historical trend and reverse. Others will likely be more permanent. Whatever the cause, we fully understand the scale of the impact these rising prices are having and we are responding with the measures that are part of a budget which totals €11 billion. It is, in both relative and absolute terms, the largest ever programme of direct support for families and businesses. As well as delivering tax and social protection improvements, our budget encompasses actions across a full range of issues. It directly helps families with children and it helps older people, students, apprentices, renters, small businesses, farmers and many other groups. As was the case with our first two budgets, the biggest benefits go to those who are most in need.

During last night’s debate we heard quite an amount of fake outrage from the Opposition claiming that this was a budget for wealthy people. This is nonsense and it is a conclusion which can only be reached by misrepresenting the tax packages and ignoring all of the direct supports we are funding. What we have seen is a desperate and cynical attempt to import the rhetoric seen in recent British debates. The Opposition would clearly have loved for us to produce a regressive package focused overwhelmingly on higher earners. We did not do that, we helped every family and did so in a progressive way but the Opposition is carrying on regardless. Every single independent report produced here or internationally has said that our policies have been highly progressive in redistributing resources. To refuse to acknowledge that is to refuse to accept reality. The progressive nature of budgets is central to our programme as a Government, but it is important to make the point that we completely reject the idea of Sinn Féin that people of average and above incomes should never be allowed to benefit from any income tax change. This is a zero-sum mentality which I believe is not shared by the Irish people. When all social payments and other income-linked measures are considered, this is, by any objective measure, a fair and progressive budget so please go somewhere else in your desperate search for a fight on this matter.

The independent Irish Fiscal Advisory Council, in a statement issued yesterday evening, confirmed that the special supports provided in the budget are even more targeted than in previous years. Over the past week, it has also been shown that Governments have to be careful in responding to inflation. They can make matters worse in many different ways. We were determined to deal with the urgency of the impact of inflation but also to not add further fuel to the fire and to protect the basic soundness of the public finances. The provision of reserves means that we can both respond to any new events and guard against the real issue of revenues which may not be permanent. I welcome the statement by the Irish Fiscal Advisory Council on the budget. It has confirmed that all of the core assumptions underpinning the budget are in line with independent forecasts. The council has also noted:

The use of the Reserve Fund is welcome. It is in line with the Council’s advice to unwind the State’s overreliance on excess corporation tax receipts gradually over time and build up a buffer that can be used in future downturns.

As I mentioned before, the council notes that spending has been increased significantly in response to inflation and that the majority of funding is targeted at groups in need. The Irish Fiscal Advisory Council also states that, in its view, the budget strikes a balance between providing support and avoiding adding to inflation. So the first independent review of the budget by the body charged by the Oireachtas to review fiscal policy has found it to be progressive, generous and responsible. The distributional effects of budget 2023 were also assessed using the Economic and Social Research Institute, ESRI’s, SWITCH model, and found it to be strongly progressive. The winter cost-of-living measures will boost the net disposable income of the lowest income households; that is, those in the lowest two deciles of income, by 5% compared with 0.7% for the highest income households, those in the two top income deciles. The core budget 2023 package will boost the net disposable income of the lowest income households by 5.8% compared with 2.3% of the highest income households. I know that is uncomfortable for the Opposition to hear but it is a balance which is central to us being able to deliver for people.

A major problem in these debates is that they are deeply unbalanced. On one side, the Government has produced detailed proposals on every area of public spending and taxation, has costed them down to exact figures and has shown the short and medium-term impact of these measures.

On the other side, we have policy sound bites and figures that do not come close to adding up or to providing an alternative. For example, the costings we have heard from Sinn Féin in relation to housing are a complete fantasy. It is time we ended the charade of Opposition parties claiming everything is costed but hiding the detail and never addressing the total cost of services or the impact of taxes. This is a recurring feature of Sinn Féin presentations: the absence of detailed costings and a refusal to publish any detailed assessment of their impact or, indeed, the details themselves.

As I have said, this budget of €11 billion helps families and businesses to cope with the impact of rising prices. There’s no trickle-down side to this. It is direct and substantial aid, with those most in need seeing the biggest benefit. The single biggest measure, costing nearly €900 million, is a permanent increase in social welfare payments of €12, the largest ever increase in these payments and part of the largest ever social protection package. We reject the Sinn Féin idea of giving less to pensioners. Pensioners deserve our support, and we will continue to oppose the idea that they should be treated unequally. It will apply to all people who receive a principal social welfare payment.

Low-income families will benefit in a range of ways. More will qualify for the working family payment. The qualified child allowance and fuel allowance are being increased and so, too, are payments to carers and people on community employment schemes. This is on top of benefiting from other once-off measures addressing inflation. Families with young children will benefit from a cut of up to 25% in the cost of childcare, part of a package that will dramatically increase support for those working in the sector and for quality childcare places. This is a historic move, representing a decisive step towards accessible and affordable childcare. The Minister for Children, Equality, Disability, Integration and Youth, Deputy O’Gorman, will ensure this support is rapidly put in place and benefiting families.

These are, each, permanent improvements in State supports which will directly help households in need. However, in light of the enormous increase in energy prices, we are going further than this and are doing much more. There are too many measures in this budget to deal with them all individually, but it is necessary to mention the €600 reduction in energy bills we are implementing. This is a practical, substantial, credible and immediate support for all households at a very tough moment. We have chosen this way of helping people with bills because it is more direct and sustainable than alternatives. It is an approach that is being followed in the majority of countries. It is different from the populist sound bite of capping prices proposed by Sinn Féin. As we have seen elsewhere, that can completely destabilise markets and is not sustainable.

We want to be clear: we will go after windfall profits by energy companies. Where they are State-owned, the profits will go back to fund public supports and services. Where they are not, we will take other measures. We will work in Europe and with our European partners to agree a common approach to these profits and, if we have to, we will go further. I know the Opposition would love to claim that we are somehow siding with big energy companies over the Irish people, but the fact is we are doing everything to reduce costs for people and to block excess profits.

We understand the critical role a strong business sector plays in creating jobs and supporting both our economy and our society. Small- and medium-sized companies are facing enormous pressures because of energy prices and they need our assistance. That is why we are introducing both a targeted support for exporting companies which are energy intensive and a wider measure which is open to all businesses. This will be directly linked to increased costs and could be worth up to €10,000 per business. That will help them get through the enormous challenges they are facing today, as will the wider economic stimulus provided by the budget.

The surge in energy prices has reinforced the urgent need for us to move to carbon neutrality. The dramatic challenge of limiting climate change goes hand in hand with securing a sustainable and affordable energy supply. The Minister, Deputy Ryan, yesterday outlined details of actions we are implementing across the economy to expand public transport, reduce energy usage and support energy independence. We are accelerating and scaling up our drive to create a new economy based on clean energy, one which provides good jobs throughout the country and that can make Ireland a leader in renewable energy and energy efficiency.

Hand in hand with this, we are pushing forward with measures to protect and restore the biodiversity which should define our island. There are those here who like to talk a good game about climate change but who, ultimately, oppose every tough decision. As with so many other areas, they run away from anything they think might be unpopular, no matter how fundamental it is to tackling the problem and, of course, they remain hurlers on the ditch when it comes to setting out specific targets and actions to deliver on those targets.

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