Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

Yesterday, we heard the details of the Government’s €11 billion budget, the largest package of budgetary measures in the history of the State. The question is, with a cost of €11 billion, whether people soon will begin to feel short-changed and whether the Government will be obliged to intervene again early in the new year. A large intervention was no doubt needed. We are currently battling three separate but interlinked crises, namely, the cost of living, energy and housing crises. People all over the country are under serious pressure from soaring prices. In January of this year, before inflation spiralled to nearly double-digit figures, we learned that consumer prices in Ireland are 40% above the EU average. In 2016, we were 29% more expensive, so the gulf in prices between us here in Ireland and in other EU member states keeps widening. We have the dubious distinction of having the most expensive housing and healthcare costs in Europe. Our goods and services are the second most expensive in the EU, while the price of food and communications are the third most expensive. It is clear that people needed to get some significant help from the Ministers, Deputies Donohoe and Michael McGrath, when they got to their feet yesterday, but was it the right assistance and will it help in the long term?

Were the unprecedented sums that have been spent targeted at the people who most need it?

As the dust settles and the numbers are crunched, it is becoming clear to more and more people that this is a regressive budget. Tax changes saw those at the top get cuts of more than €800, while those on lower incomes received just €190. This is the most glaring example of that. Just 23% of income earners in this country pay the top rate of tax, but more than 80% of the benefits of the budget's tax changes accrue to those workers. There are a lot of high-income earners but 23% of our workers are on low pay, one of the highest proportions in the OECD. What did the budget do for low-paid workers, those for whom we all stood here and clapped earlier during the pandemic, such as retail workers who kept shelves stacked, delivery drivers or cleaners in our hospitals who put themselves at risk? Under the tax changes in this budget, they will get an additional €15 a month.

Two other cohorts of people disproportionately live in poverty, namely, lone parents and disabled people. Earlier this year, the Department of Social Protection published an ESRI report it had commissioned that warned that lone parents and their children, and disabled parents and their children, experienced high levels of deprivation. In 2019, these two groups accounted for just over half of those living in consistent poverty, a truly shocking statistic.

One of the meanest aspects of yesterday’s budget, which has been billed as an €11 billion bonanza, was the €2 increase in the qualified child allowance. This money targets those families with children who are in receipt of a social welfare payment and, therefore, it is paid for the most vulnerable children in society, yet they got a €2 increase in the budget yesterday. That is shameful. The Children’s Rights Alliance has also criticised this puny increase and stated that the qualified child allowance is a crucial intervention to help the most disadvantaged children.

The Government has given disabled people a €500 lump sum as a cost-of-disability payment, which is welcome, but why has it included this payment, which is supposed to be a way for the Government to recognise the significant additional cost of having a disability, as a one-off measure? The Social Democrats have called for a €20 per week cost-of-living disability payment, which equates to €1,040 annually, to be introduced. This would have been a way to signal that the payment would be retained and increased in future years until it matched the additional cost of having a disability. The disability capacity review was published in July of last year and we are all waiting for the Government to publish its action plan arising from this review, almost 15 months after it was released.

Yet another example of the Government's one-for-everyone-in-the-audience approach to the budget is the €600 energy credits, which will be paid to the highest earners as well as the lowest. I cannot understand why, when there was an energy crisis for almost a year before Russia's illegal invasion of Ukraine made it even more acute, the Government has not figured out a way to target these payments. A €200 energy credit was first announced in December 2021. Has anyone in the Government even tried to devise a way to target the payment since then? Some parents are skipping meals and going to bed hungry and children sometimes do not have a winter coat to keep them warm, and that is before huge energy bills hit the letterboxes this winter. Is the Government really saying those families should get the same level of support with their bills as people on very high incomes, who can absorb these increased costs? The Minister stated yesterday that the €200 energy credit would mean more to people on low incomes because they have less money. Does he think the energy bills of low-paid people are as modest as their pay cheques? They are not.

The main ongoing failure of this Government and previous Fine Gael Governments relates to housing, and nothing in this budget will change that. What is most concerning is there is no acceptance within the Government that the approach it has embarked on is failing. This is a key issue for all age ranges. Parents worry about their adult children's futures, while adults in their 20s, 30s and 40s feel trapped and cannot save for a deposit, given the sky-high rents, and even when they do, they find they are competing with vulture funds for the limited number of homes that come up for sale. This was a key issue in the two most recent general election campaigns and it is certain to be so again when the next election is called.

In the budget yesterday, no additional money was allocated to capital investment and there was no acknowledgement of the fact we need a massive ramp-up in the delivery of affordable homes, both to rent and to buy, if we are ever to resolve this crisis. Social housing has become a lucrative product in the housing market, involving long leases, usually for 25 years, where the developer retains the house at the end with no asset accruing to the State. We were assured this would be phased out but it was provided for yet again in this budget.

The Government has finally indicated it will proceed with the vacant homes tax but it has been set at such a low level that it will have little impact. Tens of thousands of homes have been lying empty for years throughout this crisis, and their owners have had more than enough time to sell or rent them. They do not need a gentle nudge to convince them these homes need to be brought back into use; they need a severe push with a punitive vacant homes tax and we have suggested a figure of about 10%.

Similarly, real estate investment trusts, REITs, and vulture funds pay barely any tax, but the Government’s response is yet another lengthy review of vulture funds while they continue to make windfall profits from our housing disaster. The Social Democrats wanted to see a windfall tax imposed on the energy companies that are making off like bandits in the middle of an energy crisis. We should similarly impose a levy on REITs and vulture funds to ensure they will pay a windfall tax on the enormous profits they are earning off the back of this housing catastrophe.

The Government has also introduced a rent credit that will barely cover one week's rent in Dublin but, bizarrely, it has refused to introduce a ban on rent increases at the same time, despite the Minister, Deputy Donohoe, publicly stating that a rent credit in the absence of a ban would only lead to rents increasing even further. For once I agreed with him, but he should listen to his own advice.

One of the main reasons the Government was in a position to announce such a large budget package yesterday related to the huge surges in corporation tax but, obviously, this is not sustainable and cannot be relied on. We need to do much more to future-proof our economy with, for example, a massive expansion in green energy. The Government talks a lot about developing offshore wind, but the only port in Ireland capable of delivering offshore wind is located in Belfast and not a single offshore wind project has yet even received planning permission. Last week, Shell pulled out of the Irish renewables market, the largest energy company to do so since Equinor pulled out last year. The Government must deal swiftly with the impediments to delivering in this space. My colleague Deputy Whitmore will presently go into more detail about this area.

With such a large budget, there are bound to be positives, such as the elimination of inpatient hospital charges. It is clear, however, that the Government suffers from a poverty of ambition and an inability to deliver when it comes to big projects that would make a difference. This budget is yet more evidence of that.

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