Marian Harkin (Sligo-Leitrim, Independent) | Oireachtas source

I fully respect the Minister of State's commitment to be here and I understand she may have to leave shortly. I am deeply disappointed that the Minister for Finance could not see fit to be present at this debate for the Finance Bill. I received an email from the Minister, Deputy McGrath, during the budget debate in which he apologised for being unable to attend. I accepted that in good faith. However, this is a short debate. It is the largest piece of work the Minister will undertake for the entire year. It shows disrespect to the Dáil - not to me personally; I do not matter - and to the people who elected all of us to this House. For a debate on the single largest piece of work the Minister will undertake, he could not stay, listen and, it would have been hoped, respond to this debate. I made this point to a colleague recently and the response I got was that they had stopped making arguments and making the case; they simply make political statements. I can see why. I want to emphasise that is nothing to do with Minister of State. I appreciate the attendance of whatever Minister is here, but it is the role of the Minister for Finance to be here because this is the Finance Bill.

There are a number of positive aspects to the Bill. However, the role of the Opposition is to look at the gaps and suggest changes that need to be made. I want to look at two aspects of the budget and the Finance Bill.

The first is the impact of one-off payments vis-à-vispermanent changes in social welfare rates, taxation changes etc. and second is the failure from a budgetary perspective to address in any way the worsening regional imbalances and the widening economic gaps between regions in Ireland. In my contribution on budget day, I compared the one-off measures in this budget to lights on a Christmas tree, lovely to look at and they brighten up any room at Christmas, but when they are switched off, we go back to the normal lighting for the dark days of January and February and indeed for the rest of the year. The normal lighting in any room is permanent, night in and night out. Like our basic social welfare rates and our taxation changes they are permanent and they are what sustains families and individuals year on year. Only a Christmas Grinch would argue against the fairy lights but they are temporary. While I understand the rationale for one-off payments due to high energy costs, food inflation etc., the permanent increases in social welfare benefits, in disability allowances etc. are the bread and butter of any budget.

In order to understand the impact of these once-off payments vis-à-vistemporary measures, detailed analysis needs to be carried out, looking at the medium- to long-term impact on different groups of people. We are greatly indebted to Social Justice Ireland for the detailed analysis it provided last year, this year and in other years because it allows us to see the bigger picture, the ongoing impact, on children, individuals and families. On page 59 of its socioeconomic review for 2023, Social Justice Ireland points out that it has consistently argued for the prioritisation of low-income welfare-dependent families in budgetary policy. While it welcomed how recent cost-of-living supports have particularly assisted this group, it went on to state:

However, we are concerned that there is a contrast between permanent changes to income taxation levels in Budget 2023 [of course, the same happened in budget 2024]... In time these temporary measures will disappear, but the permanent changes will remain, and these permanent measures have favoured better off households. Regrettably, much of the recent progress will be reversed.

It provides any God's number of tables here in this book. One clearly shows that a couple with two earners at €100,000 from last year's budget gained €55 per week. A couple with one earner at €60,000 gained almost €36 per week. A couple with one earner at €30,000 gained under €9 per week. The analysis of this year's budget is the same. Those on higher incomes are the people who are gaining. While I welcomed the changes and particularly the changes in the USC which should benefit those on lower income, we still see that the overall impact of the changes in taxation and USC measures benefit working people who are better-off.

Low-income families, in particular those whose incomes are below the standard rate income tax threshold, have gained least from the Government's budgetary measures over recent years because they cannot benefit from the income tax changes and their benefit from the USC changes this year are minimal. Some form of income tax credits could make a real difference to those families because they are falling between two stools. Furthermore, the most recent statistics for 2022 show that average weekly earnings were €881. Social welfare payments should be benchmarked at about 27.5% of average weekly earnings, but that did not happen last year. Social Justice Ireland has estimated that just to ensure the value of the spending power of the money in people's pockets, an increase of €25 per week in social welfare payments would be required this year just to keep pace with increases that have already occurred in average earnings. However, the budget only provided a permanent increase of €12 per week. We know that the weakest in our society get left behind unless welfare increases keep pace with earnings elsewhere in the economy, but that is not happening.

Let us consider those on contributory pensions, the National Pensions Policy Initiative proposed a benchmark of 34% of gross average industrial earnings for the contributory State pension. However, the Government failed abysmally to deliver on pension adequacy. In fact, pensioners' spending power is now €19 less per week than it was in 2020. Even though this budget has been claimed as progressive, the permanent income gains from budget 2024 mean that households with the highest incomes will gain the most. If we exclude all temporary measures, a single unemployed person will gain about €12 per week; a couple earning €25,000 will gain about 88 cent per week, that couple in the middle I spoke about earlier; and two earners on €125,000 would gain over €30 per week. That is not a progressive budget; that is a regressive budget.

There is a complete lack of any attempt at balanced regional development in budget 2024. An excellent budget submission from the Northern and Western Regional Assembly was completely ignored. It just asked for three things: a stimulus package for the region of about €570 million; a policy of positive discrimination; and looking at how greater regional autonomy could be delivered. It provided the full analysis to show that regional inequalities continue to rise in Ireland. The Minister of State, Deputy Naughton, may have sat there earlier when I outlined all of these to the Taoiseach, showing that disposable income in the northern and western region is now an astonishing 25 percentage points less than in the eastern and midland region. The gap has grown in recent years.

I explained that the census data showed that population growth is unstable and uneven. I explained that while employment levels are largely similar, the region has far fewer jobs in the knowledge economy, the jobs of the future. I quoted the European Commission which has pointed out that the northern and western region has fallen back to a lagging region with the Border region being described as in a development trap. Those are the words of the European Commission from this year. It also points out that the GDP per capitain the northern and western region is 17% below the EU average, not the other regions in Ireland, but below the EU average where there are rich regions and also very poor regions. We cannot keep up. Back in 2006 we were 5% above. Anybody who does not recognise that there is a huge imbalance in regional development in this country is just closing their eyes.

When I said this to the Taoiseach today, he basically told me he does not use GDP as a form of economic measurement.

That is up to him, but the CSO uses it, the European Commission uses it and every country in its economic data and forecasts uses it. Why does he just disregard it? Is it because the gaps in GDP are so astonishing that he cannot find an explanation for them so, rather than trying to do that, he refuses to use GDP as a measurement of economic wealth?

The other thing the Taoiseach did was to accuse me of pushing for my own area, as all Deputies do, but I was not doing so. I was pushing for eight counties, for a region that is simply falling further behind. I was not just disappointed with that attitude from the Taoiseach; I was shocked and really surprised by his offhand attitude to this. I thought to myself, it is no wonder the gaps are increasing. I can only make the case; Government Members are the people to make the decisions.

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