Thursday, 5 July 2012
However, back in the real world that we encounter everyday, the problem of unemployment gets steadily worse. In October of last year, the Tánaiste and leader of the Labour Party, Deputy Eamon Gilmore, said "There has been a significant reduction in unemployment. The jobs initiative is working."
The latest statistics from the CSO indicate that, at 14.9%, unemployment has reached its highest rate in 18 years. More than one in two of those people has been unemployed for more than a year and one in three has been unemployed for two years or more. We welcome the fact that more people are now on training schemes but that masks the real rate of unemployment. Some 75,000 people per year are leaving the country, which is 200 people per day. There has been a jobs initiative, a jobs budget and an action plan for jobs. In view of the statistics, does the Minister agree with the statement by the Tánaiste that unemployment is reducing and the jobs initiative is working?
On behalf of the Government, I thank Deputy O'Dea for the observations he made, which we welcome. We will probably have information about the bond auction before the end of business, and if I receive the information, I will convey it to the House. These figures are disappointing. The Government views unemployment as its number one priority and we believe these figures are far too high. We have succeeded in stabilising the live register. This is the 18th successive month of broad stability. The live register for each month has been within 3% of the figure for the same month in the previous year. It is also important to remember that there are always people coming onto and off the live register. For example, 62,000 people left the live register to take up work in the first five months of this year.
We all want to get the numbers down and the Government is sparing no effort to do everything it can to achieve this. When we first came into office we successfully negotiated the jobs initiative. We put in place the job strategy and we are ensuring it is being implemented across all Departments and agencies. We designed the budget to be jobs friendly and we included a number of employment promoting measures in it. We published Pathways to Work, a major reform of the education, training and social welfare system to ensure people are assisted in finding employment. We are working to bring forward an investment programme to stimulate activity in the domestic economy.
In addition to those observations, and I can make more, we export 80% of what we produce. All the schemes in the world, while they will assist people to upskill, will not provide them with jobs unless the economy grows. We are the most export dependent economy in the European Union and we export 80% of what we produce. Although last week's announcements have stabilised the market considerably, the continuing uncertainty in the euro means we will depend to a certain extent on factors over which we have no control. These include the buoyancy in the European market. By extension, because of the downturn in the European market, there has been a downturn in China, the United States and elsewhere. We will continue to improve the qualifications of people in the labour market but we depend on economic growth. It is to be hoped, as broadly anticipated, the ECB will announce a reduction in interest rates later today, which will be a further stimulus for broad economic growth.
On 30 June 2010, the Tánaiste said the biggest crisis facing the country at the time was the level of unemployment, which was then that a lower rate than now. He went on to berate the Government and said it should not spend another week in office because of the level of unemployment. What has changed?
When the previous Government left office in February 2011, 350,000 more people were at work than when it took office. I doubt this Government will ever be able to make that boast. Is the Minister for Education and Skills aware of the statements this morning from across the social spectrum, including the statement from ISME that the Government's job policy is a shambles? ICTU called on the Government to start tackling the jobs problem and the Chambers of Commerce of Ireland has issued a statement saying the unemployment levels in Ireland are at crisis point. That is the reality.
There remains a major problem of consumer debt in this economy. That includes personal debt, mortgage debt and the rest of it. It has taken us longer than we would have liked to get to the insolvency legislation that my colleague the Minister for Justice and Equality has launched in the House. The length of time required for Second Stage speeches is an indication of the complexity of the Bill. We hope it will work.
We are quite clear the change in property prices in some parts of the Irish market will give some degree of buoyancy and NAMA will soon make proposals on the construction sector.
If Deputy O'Dea were to ask me honestly as distinct from provocatively if we are satisfied with progress, the answer must be "No". As long as people are without a job, I am not satisfied with the progress we have made. All I can say is that the track record of this Administration the last time we were in government, which was far too long ago, is evidence of the fact we can do the job, unlike Fianna Fáil.
Who is to say? We outlined to the troika our view that the Government's austerity policies are not working. Not only are they hurting citizens, they are damaging the domestic economy and keeping hundreds of thousands of people on the dole.
They are killing off any prospect of the economic growth the Government claims to want to see.
It was clear from our engagement that on issues such as tax reform, public spending and social welfare payments, the Government has significant scope in the policies it can pursue. Will the Minister tell us today what issues are on the table and what choices he proposes to make? Will cuts to basic rates of social welfare be on the table? Will there be cuts in payments to the most vulnerable families?
Will the Government consider cuts to the extravagant salaries paid to its own special advisers? I have pursued this issue on many occasions with the Minister's colleague, the Minister for Public Expenditure and Reform, to no avail. Indeed, the salary cap for special advisers is more honoured in the breach than in the observance. Will the Government finally show leadership on this issue? The Tánaiste's two special advisers are paid €168,000 and €155,000 respectively. The salaries of the advisers to the Minister for Social Protection and the Minister for Public Expenditure and Reform also breach that cap. Will the Government deal with that matter?
Are tax increases for those earning more than €100,000 on the table or does the Government intend yet again to protect the high rollers and levy all of the pain on those families on low and middle incomes?
I am glad the Sinn Féin Party met with the troika. I hope its members continue to meet such people; it might detach them from the voodoo economics they spout in here. The reality is no family, no small business and no country can run a permanent budget deficit. The cycle must be balanced over a period of time. Unfortunately, because the tax base of this country was destroyed when the boom economy went bust, revenues plummeted. As the Deputy knows, the gap between revenue and expenditure is still there and although it is narrowing, we must still reduce expenditure next year, no matter how we do it. The way it is to be done has not yet been engaged upon so I cannot answer hypothetical questions.
This Administration will try to move towards a budget deficit of 3% so we have a platform for a budget surplus. The last surplus was achieved in 1997 by this Administration.
It was a planned surplus, which had never happened before, and we will do it again if we get the opportunity. In the meantime we will look at all the issues that are on the table, but this is the second week in July and the budget will be delivered in December.
All of the special adviser salaries are a fraction of what they were, in both amount and numbers, compared to the previous Administration.
Our meeting with the troika was the third such meeting. The Minister's own brand of voodoo economics is catastrophic for families the length and breadth of the State.
We are coming towards the end of this Dáil session and the Minister says the budget will not be ready until December. That is fair enough, but the deliberations and decisions surrounding the budget are well in train and much of the thinking and planning will be done over the summer months. The Minister is out of touch with reality when he sings his own praises, because the ESRI has pointed out in its studies that the budget of December 2011 involved greater proportionate losses for those on low incomes than any of the previous austerity budgets. Is the Minister aware of that?
The Minster spoke about unemployment earlier, which now stands at almost 15%. Citizens are losing their homes because of the mean-spirited changes introduced to rent supplement; there will be a demonstration against those changes outside today.
The cap for advisers' pay was introduced by the Government.
I will not ask Deputies a second time. I am getting sick and tired of this. Deputy Boyd Barrett is entitled to say what he has to say and the Minister will reply on behalf of the Government side of the House.
As I was saying, I am sure the Minister is familiar with the plays of Seán O'Casey, in which he depicted the squalid tenements and poverty-ridden conditions of working class people at the beginning of the century. I put it to the Minister that the Government's cuts in rent allowance and the new housing policy threaten a return to those slum tenement conditions we thought we had left behind.
This week in the Visitors Gallery, I have about 30 families who are threatened with homelessness or who have been made homeless a result of the cuts in the rent allowance cap. It would not be a problem if the Government provided council housing for the 96,000 people on the council housing list. However, in June of last year, without making any public announcement, the Government decided to abandon the direct provision of council housing. As a result, no council housing will be directly provided by local authorities in the future. It is a veritable counter-revolution in social housing policy.
Will the Minister admit that the Government has abandoned the direct provision of council housing? Does he accept that this decision and the cuts in rent allowance caps is a policy that is disastrously failing the 96,000 people on the housing list and represents a massive waste of taxpayers' money? Will the Government abandon the policy and revert to the direct provision of council housing and tell the people in the Gallery and the 96,000 people on the housing list when they will get a secure council house of their own?
I accept what Deputy Boyd Barrett said about the crisis in housing. It is one of the most extraordinary contradictions of our times that on the one hand we have people who cannot afford to buy a house, who are on rent supplement in privately owned houses, and at the same time we have acres of ghost estates. When the history of this period is written from a distance of objectivity, people will ask how a whole community got it so wrong. I would love to see those houses that are in NAMA converted into social housing, if that is possible, but I must honestly say to Deputy Boyd Barrett that it does not seem to make sense to build new houses at a time when we have an over-run of existing houses, irrespective of the ownership of those houses. The first step would be to look at how one could rationalise the oversupply and use the empty houses that are privately owned or are owned by NAMA and convert them into long-term sustainable social housing so that one does not have the distortions that exist. I will raise the points the Deputy raised with me with my colleague, the Minister of State, Deputy Jan O'Sullivan.
I appreciate the Minister's response but I wish to put the following points to him. I asked a parliamentary question this week and got a response from the Minister on how many social houses would be provided in the next year. He said it would be approximately 4,500. However, they are not council houses. They are what is now called social housing. In other words, they are either provided by voluntary housing associations or through the rental accommodation scheme, RAS, involving private landlords, all of which represent money going out of the public coffers to non-public bodies. That seems to me a waste of money.
Whether we acquire the NAMA houses or provide them directly through building the houses, the only thing that makes sense is for the State itself to provide council houses so that we save the €500 million a year in rent allowance payments and get an extra €250 million in extra tax revenue. Even the troika could see the sense in that approach. Why has the Government said it will not provide council housing anymore and is outsourcing it to NAMA, RAS and voluntary housing bodies? The condition of some of the accommodation provided by the latter that I have seen in the past week is deplorable, but that is not the case with all of it. Some voluntary housing associations are, in effect, big business and they are putting people into squalid conditions. The State should be responsible for housing people. Will the Government tell people on the housing list when they will be housed? Will they have to wait ten or 11 years, which is the current situation, to get a secure council house?
It would not make economic or social sense to divert scarce capital resources into a new local authority house building programme. We have a surplus of houses, irrespective of the ownership. We should look at getting effective, efficient use from what is there already.
In many respects, that is a matter that must be dealt with, and the Minister of State, Deputy Jan O'Sullivan, will be able to do so in due course. In the next six years 70,000 young people, most of whom are alive today, will come into the education system and we must prioritise capital-----
-----in the areas of the country where there are population increases. We have limited capital resources and a surplus of empty houses. Let us sort out the ownership by all means, but in the meantime we must use the scarce capital resources we have to meet a rising demand that nobody denies. We will have a total of 70,000 additional pupils - 45,000 extra pupils in the primary school system that currently has 500,000 and 25,000 coming into the post-primary sector. That is where capital should go and that is where we will get the economic return in terms of taxes.