Gerald Nash (Louth, Labour)

IFAC, the usually demure, dismal scientists, waded in last week. They usually keep their mouths shut on policy pronouncements. They said that every tax cut or tax foregone comes at a cost. They set out alternative homes for this cash. Over 11,000 nurses could be hired, or 7,800 teachers. Critically, tax bands could be moved by €3,000, saving an average worker €600. As far as the Labour Party is concerned, IFAC is right, this money would be better spent supporting children and workers. Fine Gael and Fianna Fáil have made their bed. These measures are never temporary. The temporary help to buy scheme is still in, and will be extended. The special assignee relief programme, SARP, was supposed to sunset this year and is being brought back in. It was meant to be given a decent burial but it is still here. I sound like a broken record, but now, when the economy is running red hot, is the time to take counter-cyclincal and not pro-cyclical measures to dampen things down.

Back in 2022 the Commission on Taxation and Welfare set out a menu of €14 billion of options for sustainable revenue-raising measures that would not harm jobs and enterprise. There are two reasons we should go for this. One, to broaden and diversify the tax base, and two, to help us meet the aging, climate and demographic challenges that are well and truly here. The simple fact is that once the plethora of performative reliefs and stunts like help to buy, the apartment VAT relief and hospitality are accounted for, only about a third of this year’s €1.5 billion set aside on the tax front goes towards the common good via the renter's tax credit, which has been extended but the rate has not been increased, and the continuation of the VAT relief on energy bills.

The story of this winter will be ever rising energy bills. Without targeted action, the 170,000 in gas arrears and the 300,000 in electricity arrears will go up and up. This Government has made a rod for its own back. Even those who did not need them got its famously untargeted energy credits, when those who needed more were left to flounder. The credit papered over the cracks. The Government was throwing cash at a problem, never asking why we have the second highest energy costs in Europe, or why we have a regulator that routinely nods through savage price rises and fails miserably to honour its consumer protection role. The Government has failed to take a State-led approach like the Labour Party would in strategically investing €1 billion to make our moonshot moment in offshore wind a reality, weaning us off imported gas, which would be good for consumers and good for climate.

With families and small businesses reeling from unaffordable price rises, the Minister, Deputy Darragh O'Brien’s answer is “can anything be said for another task force?” Freezing families cannot heat their homes with reports from task forces. There are a few bits and pieces on SEAI and little improvements to grants and so on, but what has also been revealed is a failure to understand the scale of the home energy crisis in Ireland in 2025. Mark my words, this is the thing that will drive people over the edge this winter.

Here is the problem: they cannot afford to pay the bill and neither can they afford to do the retrofitting that is still out of the reach of so many. I urge Government to take our advice. We have proposed further extending the fuel allowance to all of those on working family payments. There have been some moves in that direction today and we will look in detail at what has been proposed but more needs to be done in terms of extending the period for which the fuel allowance is available.

The Government is using the tax system to boost the bottom line of large takeaway businesses and the developers. Why not use it as we proposed, to providing an energy income tax credit to working families in draughty homes who are earning less than €80,000 a year? The Labour Party's idea would see €400 go back into the pockets of working people, in the same way that people are used to claiming annual medical relief, a carer's credit or the renter's credit. These are simple, straightforward and, most importantly, targeted reliefs. We have no difficulty saying we would put a 20% windfall levy on energy companies’ profits and a levy on data centres to pay for them - cost neutral to the State. This is the kind of real action that will keep people warm this winter.

Nothing reeks of failure more than the numbers of children we have who are poor. This should have been a children’s budget but it is far from it. Over the last 20 years, child poverty levels have averaged 18.5%. Now, it is a scandalous 21%. One in five of the children we meet are in poverty. Poverty in childhood, and the embarrassment, stigma and shame that go along with it, follows children around for the rest of their lives. However, the embarrassment and shame ought to be on the Government. For a dozen years now we have known the solution. It gets fixed with a second-tier of targeted child benefit, which happens to cost the same amount of money as a full year of VAT relief for the hospitality industry. I note there has been an announcement today from the Minister, Deputy Chambers, about a €300 million package for child poverty. You will find that is just rebranded. He has put together all of the initiatives we know are out there already and put a different label on them. That is insincere and indifferent. What is the difference between children in poverty and the hospitality sector? Poor kids do not have well-paid lobbyists and their families rarely vote for Fine Gael or Fianna Fáil. I actually believed Leo Varadkar, when he became Taoiseach again, when he said he wanted to do the business on child poverty. I was prepared to take that promise in good faith. I should have known better. The Labour Party would bite the bullet and allocate the €770 million for the second tier. We would go further than the Government has done this year in terms of the welcome increases in child support payments, but we would also ensure that we had a living wage, do more on DEIS plus, which is a pioneering Labour initiative, and we would end voluntary contributions - all of the things that go in to making child poverty history. We would make education truly free and invest in our Cinderella youth services like never before. This is not a time for incrementalism and crippling caution. The response to child poverty demands urgency, courage and single-mindedness. Anything else is indifference and an unforgivable moral failure. There has been one consistent political figure at the top of national politics since the first child poverty target was introduced in 2000, some 25 long years ago. Who is it? Micheál Martin. This target was in the first national children’s strategy signed off by the then Minister for health, Deputy Micheál Martin.

Our child poverty scandal would look a lot different if we did not have such a problem with family homelessness and insecure housing. For a Government that says housing is its number one priority, it has a funny way of showing it. We managed to hear from two Ministers earlier on and not one of them mentioned homelessness. What an outrage. Since Fianna Fáil brazened its way through the general election telling porkies on housing targets, this has been the Government's record. We have had garden sheds in lieu of homes; slashed apartments standards; rushed changes to RPZs; €1.4 billion of capital top-ups because the Government got the sums so wrong last year; cuts to the tenant in situ lifeline; not enough money for housing adaptation grants; and most disgraceful of all, over 5,000 children in homeless accommodation. We have a housing Minister who is the very definition of an empty suit, missing in action. Most people could not pick him out of a line-up. A Government that could stand over the new plan we are told to expect would publish it well before the budget because that would help them lay out the spending and policy ambitions in it. Instead, the plan is being suppressed and kept under lock and key until the slow bicycle race to the park is done and dusted. Of course, we only get advance leaks of good plans. It is telling that all we have heard from Government on housing before this budget is talk of tax cuts for builders and Robert Troy having a pop at people in social housing. You would think that with his record, the Rigsby of the Dail would have been best served keeping his thoughts to himself.

This budget contains little or nothing that will radically increase supply. The Government is simply all over the place on housing. You know you are in trouble when the Taoiseach launches an attack on councillors and officials for not zoning enough land. He needs to stop with the deflection and dishonesty that is his stock in trade. He needs to cop on and, for once in his political career, take some responsibility. Somehow with Micheál Martin, it is always somebody else’s fault. Quite frankly, it is this nonsense that undermines faith in politics. Anything Fianna Fáil and Fine Gael have tried has failed but of course they will never fail in their fealty to the demands of developers. Apartment builders and landlords asked for changes to unit sizes, other planning law changes and amendments to RPZs, which really exposed renters. As we know this week, exposing renters is par for the course for Fianna Fáil. The Government has delivered on all three requests and now we have a VAT cut and other tax adjustments that were never asked for, with no guarantee of more supply. This is bone lazy policy. I said here previously that the situation on housing is so desperate that if some form of tax incentive scheme, time-limited and with social conditions, that would focus on turning around vacant and derelict sites was proposed, the Labour Party would be prepared to take a considered view of it, such is the emergency in our country. However, a VAT cut is just bananas. It will feather the nests and bottom lines of developers. I am looking forward to seeing the advice from the Department of Finance officials on this ill-conceived proposal. This is the very last policy lever that should be used and it is a sign of desperation. Let us be clear that neither party in government ever sought a mandate for tax cuts for developers for smaller apartments, or garden sheds as housing solutions. Of course, this is back-of-the-envelope stuff. The tax strategy group papers state that a cut to VAT on all residential construction would cost around €800 million. How would this be done for apartments only? Many projects, as we know, have a commercial and retail element too. How will that work? What about mixed-use multi-unit developments including duplexes? This will have to be thought through and it seems to me that it has not been.

Our housing crisis is a supply problem, plain and simple, and it is getting worse. The Labour Party, uniquely among the Opposition parties, actually supported the proposition of the Land Development Agency because we thought it had the prospect of evolving into what we have described as a State construction company. This is something that has been rejected by the Government and in this budget there is little sign of the kind of ambition we have been showing around investment in social housing, affordable housing and cost rental. However, I welcome two changes for which I have advocated for years. These are the extension of the living cities initiative to towns like Drogheda and Dundalk and the Government decision to answered our calls here in Labour and give Revenue the job of collecting derelict sites levies. Councils can be ignored-----

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