Wednesday, 29 April 2015
Spring Economic Statement (Resumed)
Just over four years ago, in the face of an unprecedented crisis, a new Government was formed with a mandate from the Irish people to fix the public finances and get the country working again. We can all remember the depth of the crisis that then gripped the country. The economy was in freefall, banks were on the brink of collapse, thousands of jobs had been lost, Ireland's international reputation was in shreds and the country was in a troika bailout. Many in the Opposition believed the position was hopeless and ending the bailout, rescuing the economy and saving the country were impossible challenges. Deputies on the Opposition benches stated we should default, leave the eurozone and abandon 40 years of Irish economic progress in Europe. Instead of turning its back on the scale of the unprecedented challenge, however, the new Government, working with the people, faced up to the crisis and adopted a clear plan to stabilise the economy and turn the country in the right direction. The plan was not easy as it involved taking very difficult decisions that were painful. However, people displayed great patience and resilience during the crisis and thanks to their sacrifices and hard work, Ireland is recovering, the bailout is over and the troika has gone home.
After a lost decade of economic hardship, a new and more sustainable period of prosperity is within our grasp. This is confirmed by the analysis of the economy contained in the spring economic statement published yesterday. While the recovery is still incomplete, Ireland is recognised as the country with the fastest growing economy in the European Union. While the job of repairing the public finances is not fully complete, Government borrowing has been significantly reduced and interest rates on our debt have reached all-time lows. While too many people are still out of work, unemployment fell to 10% today from a high of more than 15% and employment levels are at their highest since 2009. While the small business sector still needs more support, exports and manufacturing output by Irish and foreign-owned firms are at an all-time high.
This is solid progress but it is not enough. For most people, economic statistics mean very little. Many people do not yet see or feel the benefits of the recovering economy in their daily lives. I hear their stories every week. Too many families are still struggling to make ends meet, pay their bills and meet their mortgage repayments. Too many people are still out of work and too many families are missing a family member who had to leave the country to find a job elsewhere. Growth rates and deficit targets are of little consolation to people in such circumstances. We must be clear, however, that we are more interested in the future than in the past. Families know the recovery is fragile and want and deserve a solid foundation on which to plan their future. Everybody remains nervous about the risks ahead and the danger of slipping back. With banking union and the new fiscal rules that apply, the Government has created conditions that will make it very difficult for this to happen.
My commitment to the Irish people is that, under this Government, we will never go back. For this reason, we set out in our spring economic statement a plan for the years until 2020 which will secure and strengthen the recovery. At the heart of this strategy is a commitment to protect the hard-won restoration of national competitiveness and stability in the public finances. By doing so, we will ensure that more and more people in every part of the country start to experience the economic recovery in their daily lives. Job creation will, therefore, remain the Government's top priority as without more jobs, little else can be achieved. More jobs provide more people with purpose, financial independence and an opportunity to provide for their families and contribute to their communities. They generate the resources needed to fund better services and reduce taxes on those at work and give brothers, sisters and children who had to leave Ireland in search of work an opportunity to come home.
The plan sets out four clear job-related targets. First, in the coming months, the Government will deliver, one year earlier than expected, the target it set itself when it took office of adding 100,000 new jobs. While this is good progress, it is not enough. Second, by next year, more Irish people will return to take up employment that will leave the country. Families will be reunited and hopes will be restored. Third, by 2018, we will have replaced every job lost by the previous Government during the recession with new and more sustainable jobs. Finally, by 2019 there will be more people at work than ever. In this way, our plan will bring the country back to full employment, keep it there and ensure that everyone who wants a job will be able to get one.
To achieve these targets the Government will assist businesses to add at least 40,000 new jobs this year and roughly the same number in 2016, 2017 and 2018, respectively.
These targets are ambitious and can only be achieved by a Government that continues to make the right choices, one that protects the solid foundations that are being laid, one that continues to reduce the burden of taxation on enterprise and employment, one that continues to improve Ireland's attractiveness as a place for businesses in which to invest and expand and one that ignores the calls from the Opposition for a return to the reckless tax-and-spend polices that destroyed the public finances during the past decade.
Our plan targets a steady growth of between 3% and 3.5% per year, not a boom and bust situation as pointed out by the Minister for Finance. Steady growth of this nature will eliminate the remaining deficit and bring government debt to below the average European level without any new taxes or new charges, while also allowing for tax cuts for working families, targeted improvements in education, child care, health services and in front-line policing. We can never go back to the “when we have it, we spend it” attitude to budget management of previous Governments. We need to avoid repeating Fianna Fáil’s mistake of making reckless spending commitments that then have to be painfully reversed. Our plan caps annual spending growth below the underlying growth rate of the economy. If that particular rule had been applied between 2000 and 2007, the sustainable growth in public expenditure would have been halved, leaving the public finances in a much stronger position to protect our people from the impact of the credit-fuelled property boom and bust.
The reckless commitments made by Fianna Fáil when in government, as well as the rest of the Opposition in recent weeks, suggests they have learned little from the mistakes of the past. Given that Deputy Martin was a leading member of the Government that made these mistakes which blighted the prospects of a whole generation of Irish people, this is quite unforgivable. Deputy Martin has yet to learn that what was unsustainable during his term in office, namely public sector hikes without reform, the narrowing of the tax base, the proliferation of quangos, cost hikes for small businesses, a welfare system that perpetuated joblessness and poverty, is still unsustainable now. We are never going back to that lack of oversight, wanton waste of public moneys and blatant disregard for our international reputation that brought this country to the brink under that Fianna Fáil Government. The reform of the budgetary process, including the addition of this annual spring statement that sets out the broad direction needed for growing the economy and repairing the public finances, means that we are never going back to show-time politics budgets, designed by Fianna Fáil focus groups, which destroyed our prosperity. Our plan ensures a fair sharing of the benefits of the recovery with those already at work.
There is welcome evidence that private sector employers are once again agreeing sustainable pay increases with their staff. Yesterday, the Minister for Public Expenditure and Reform, Deputy Howlin, announced the Government’s decision to commence discussions with trade unions on the issue of public service pay. All public servants have had their pay cut significantly and most are also working longer hours. The size of the public service has been reduced by 10% at a time of growing demands for these services. I want to acknowledge the too often unsung sacrifice and contribution that our nurses, gardaí, teachers and civil servants, as well as other public servants, have made not only to national economic recovery but also to keeping our society and our State strong at a time of unprecedented crisis. As the economy recovers, it is right the Government opens up the prospect of gradual and sustainable pay recovery for public servants from 2016 onwards, linked to continuing reforms to improve public service efficiency and effectiveness. In this way, we will ensure that pay awards do not come at the expense of services for the general public.
The Government’s plan offers fair rewards for hard work, not quick profits from speculation. It is wrong the Government still takes more than half of every extra euro in any pay increases for hundreds of thousands of low and middle-income families in both the public and private sectors. The universal social charge, USC, was introduced by Fianna Fáil as an emergency penal tax on low and middle-income families. This Fine Gael-Labour Government has begun and will now accelerate its phased abolition. In our first budget, we removed 330,000 low-income families from the USC. In the last budget, we removed an additional 80,000 low-income families from the USC, cut the two lower rates of the charge and removed those on the minimum wage from the higher rate. In the next budget in October, we will bring to 500,000 the total number of low-income workers that we will have removed entirely from the charge. Following the income tax cuts introduced earlier this year and consistent with the statement of the Government priorities agreed last July, we will cut the 7% rate of USC on all of those earning less than €70,000 per year. We will also end the unfair tax treatment for the self-employed and small businesses, starting in the next budget with those self-employed people on lower incomes.
Strong growth and jobs are funding tax cuts on working people. Less tax on work means, in turn, more jobs. In that sense, the central goal of our economic plan is to reinforce a circle of rising living standards, lower taxes, increase job creation and improve public finances. The Opposition parties propose the reverse with higher taxes on incomes, jobs and enterprise, putting at risk all the progress the people have made. They call for higher corporate tax rates that the Department of Finance claims could put at risk over half of the 175,000 jobs created by foreign direct investors in our country. They also call for a reversal of our income tax cuts at the cost of losing 20,000 new jobs, higher employers’ PRSI, risking tens thousands more jobs, a reversal of our welfare and labour market reforms, putting at risk the reductions in unemployment achieved in recent years which is epitomised by the 10% unemployment rate announced today down from 15%.
In contrast to those propositions from Opposition parties, the Government’s plan will also ensure work pays more than welfare while reducing the numbers of working people and their children experiencing poverty. We will deepen the reforms to welfare and labour activation systems that give people who can work a hand up rather than never-ending handouts. After the Low Pay Commission makes its first recommendations in July, the Government will respond with a package of measures to address them in the October budget.
There is renewed optimism in our country, an optimism for which there is a strong basis. The recovery that Ireland is now experiencing can be just the beginning of a more sustainable, authentic and fairer phase of long-term economic and social development and prosperity for our people. If secured and strengthened, the recovery will translate into real improvements in our people’s day-to-day lives, more jobs, more security, more money in their pockets and better services. There are, however, risks to our recovery outside of our control from economic developments in the eurozone to instability in Eastern Europe and the Middle East. By far the greatest threat to our continued recovery comes not from Greece or Ukraine but from the economic amnesia of some Members, from those who have learned nothing from the mistakes in the past and those who would repeat the same mistakes, from those who want to once again narrow revenue base and hike up taxes on workers and investment and from those who want to go backwards rather than forward.
For the next year, this Government, Fine Gael and the Labour Party, will continue to work day and night to secure the recovery in the people’s interests. At the next election, the people will judge whether we have fulfilled the mandate they gave us. They will have a clear choice between a stable and coherent Government that will secure and strengthen the recovery or chaos and instability.
It is a clear choice between moving forward or risking the country's progress to those who wrecked it in the past, or those whose policies would clearly wreck our future. I do not want, and will not stand for, Ireland to be dragged back to the failures of the past, or for our country's progress to be ruined by those who are intent on blowing a huge hole in our recovering national finances. Populist promises to reverse every tough decision are nothing but empty rhetoric, irresponsible leadership and downright bad politics. They are not the solution to these problems.
Working together, the Tánaiste, Deputy Joan Burton, and I lead a strong and stable Government. We know from other countries that hard-won stability and progress can be too easily reversed. This Government will never again allow mistakes to be repeated. We continue our work to secure the recovery and strengthen its impact on the daily lives of our people. In due course, they will judge whether or not we have fulfilled the mandate they gave us.
The spring economic statement contains a lot of important data and statistics, but they translate into one thing which is opportunity - the opportunity to secure the economic and social recovery, spread the benefits of growth and relentlessly raise living standards. They will ensure that everyone who wants a job gets a job, and that work pays a living wage so that families can get on rather than just get by.
They will also ensure that we can invest additional money to build new schools and health care facilities, as well as ensuring that we have more gardaí on our streets so that our communities are safe and secure for our loved ones.
The statistical data also ensure that we maintain a strong welfare State to protect our vulnerable and older citizens, in addition to ensuring that a generation can come home to a rebuilt, better Ireland of new hopes, dreams and possibilities. That is the potential underpinned by the data and statistics.
Today, I can inform the House of more welcome statistics. The latest live register figures, released this morning, show that the number of people on the register has fallen to 343,551. This is a reduction of 45,008 or 11.6% since April 2014.
Unemployment is at 10% and continues to fall. By contrast, when this Government took office, unemployment was soaring towards a crisis peak of 15.1%. Through determined policy implementation we have turned that around, but we have a lot more work to do because a 10% unemployment rate remains far too high.
However, the progress made by this Government on the employment front underlines a crucial point. To secure the recovery, deliver on our economic potential and realise the opportunities for our people, it is essential that we stay on a proper course. That is the path laid out by Labour and Fine Gael in Government.
The spring economic statement is a snapshot of the Irish economy at this point in time, spring 2015. It is a description of the policies that have brought us to this point and it paints a picture of where we are now. It lays out the Government’s strategy for managing the economy to 2020, and making the most of the opportunities for all our people.
The statement is also the first step in a reformed budget process, providing a framework for debate. We want a meaningful discussion as to how the Government might use the limited flexibility available to ensure the recovery is sustained and the benefits are fairly spread.
We are starting that debate in this House this week, but it will continue in full public view in the national economic dialogue in Dublin Castle in early summer. I welcome this new process and thank the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, for the significant reforms he has introduced in this and other areas.
In terms of the debate, it is undeniable that we are moving rapidly in a good direction. There are more people at work, while businesses are opening up again and beginning to prosper. We can even see it in the streets with tourists visiting and local people shopping. The feeling that things are turning is palpably there.
The Department of Finance is now predicting 4% growth in the economy this year. If this prediction is met, Ireland will once again rate as the fastest-growing economy in the European Union. All the other economic indicators are also moving in the right direction. Consumer spending is up, business investment is up and our national debt as a percentage of GDP is falling fast. Our budget targets have been exceeded once again.
Most important of all, as previously mentioned, employment is continuing to rise. There are more and more people in full-time work and today's statistics from the CSO show that unemployment continues to fall. The Government has set an ambitious target to reach full employment by 2018. Today’s figures confirm that we are well on the way to meeting that target.
When we compare this with the experience of other crisis-hit countries, it would be a major historical achievement. Finland and Sweden, for example, experienced their own financial and economic crises during the 1990s and it took them close on two decades to get employment back to pre-crisis levels. We want 2.1 million people working by 2018. Through Pathways to Work and the Action Plan for Jobs, we have the strategies to achieve it.
We will continue to pursue foreign direct investment, and will continue to encourage indigenous industry and local businesses, particularly in the SME sector. Small businesses are the beating heart of communities up and down the country and it is a priority of mine to provide them with every possible support.
I visited a small business centre yesterday and saw the level of activity and variety of ventures being undertaken there. They ranged from catering to small IT-based start-ups. This is what will get us to full employment.
My Department will continue to play its part under the Pathways to Work strategy. Since the first day I became Minister for Social Protection, I have been determined that the Department should do much more than simply hand out welfare payments to jobseekers. The Department now actively helps individuals to identify the best way to get back into the workforce, whether it be through education, training or work experience. In my experience, education, upskilling and investing in people are the most important parts of this. When we came into Government, I met many people who had great educational qualifications but had never worked in a job. Therefore, they could not land an interview to get a job because they had no experience. Thankfully that situation is changing. One of the best features of recent times is that in all our third-level institutions employers are back recruiting people in fourth year to train and work on graduation. It is fantastic to experience it happening in law, accounting, engineering and consulting firms. They are all back recruiting our young, bright, well educated graduates. Employers tell me that they need more of these people. We have therefore had a turn-around in employment which is little short of a miracle, considering the template we were offered some years ago. Ireland is now below the eurozone unemployment average.
We were so far above it we were the outliers.
In terms of the Department, we do not just help jobseekers. We help employers as well, and bringing together the jobseekers and the employers is the next important achievement we seek. JobsPlus, for example, is a simple scheme that pays monthly cash grants to employers who hire persons who have been long-term unemployed. JobsPlus is particularly advantageous to small businesses, and more than 4,000 people have returned to work under that scheme alone.
In terms of larger employers, the Department will very shortly appoint new key account managers in its employer engagement unit. We are knocking on employers' doors and, through the Labour Market Council, telling them that when they have vacancies we want them to give people who have lost their jobs, mostly through no fault of their own, an opportunity to go for some of those job vacancies. These key account managers will work closely with some of the 460 largest employers in the State.
I commend organisations like the ESB, Irish Rail, Eircom and Aer Lingus which have begun to recruit apprentices and trainees because for many young people, particularly young men, apprenticeship is where they would like to begin their working experience. Through all of this work they will identify and plan recruitment requirements and actively promote candidates from the live register for available positions.
I will keep all of these schemes, supports and interventions under constant review to ensure that we are meeting the needs of jobseekers and employers alike. That in turn will help to increase the momentum we are making on the jobs front. I am determined to ensure that unemployment will fall below 9% this year and that tens of thousands of people benefit from new jobs, new opportunities and share in the recovery.
The tangible evidence of the recovery is what our friends in the economic trade call fiscal space. That simply means the scope we have to increase public spending and reduce the universal social charge, USC, and taxes in terms of what we know about how this year is going to date and how we expect it to go for the rest of the year. It is very simple. If I was sitting down at my kitchen table looking forward to later this year and next year I would be asking what I can do in terms of putting money into health and education while, on the other side, reducing taxes and reforming the USC. It is as simple as that, although it goes by a fairly fancy name.
It is important to appreciate that this scope is not determined just by the level of the budget deficit, which we want to target, and everybody here know what that is. It is also determined by the application of the technical rules we agreed to when approving the EU fiscal treaty. The purpose of these rules is to smooth out increases and reductions in public spending over the economic cycle to avoid the boom and bust cycle we have seen so often under previous Governments.
It was John Maynard Keynes who famously said that when the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. That was Fianna Fail’s way – throw all the chips on unsustainable land speculation, a construction boom, "spend it when you have it" and hope, like Mr. Micawber, that something comes along if harder times hit. That is the casino model, and in Fianna Fail’s case, who came along? The troika.
This Government waved good-bye to the troika, and we have waved good-bye to Fianna Fail’s destructive economic model too. We will abide by the fiscal rules to ensure spending increases are kept at sustainable levels and that we build up something in reserve for the famous rainy day. That means being prudent and planning for the future. The statement, therefore, identifies the room we have sitting around the table as we discuss what we will do next as being between €1.2 billion and €1.5 billion. That is a sensible and sustainable level of investment given how strongly our economy is now performing. The exact figures will be decided closer to budget day when we have more information available to us but when we look at the tax returns month on month, particularly the PSRI returns, we see the flow-through of revenue into the Government as a result of more people, and businesses, being at work and those who are at work having more activity.
The Government has decided that 50% of the available space will be used to reform USC and taxation, and the other half will be used in respect of spending. In doing that, we are looking to strike a balance between putting more money in people’s pockets and investing in the services on which we all depend. Obviously, the details of the budget package for 2016 have not yet been decided. The Government is anxious that we should have a thorough debate on the options that are available. We will be convening the national economic dialogue for that purpose in a few weeks’ time.
It might be useful if I set out some of my priorities for the budget in general terms. The Taoiseach is fairly familiar with them at this stage because we had long discussions immediately after I became the leader of the Labour Party when I agreed a statement of Government priorities with him acting on behalf of Fine Gael. In that statement, the two parties confirmed that we would look to reduce the burden of overall taxation for people on low and middle incomes in work in the two remaining budgets of this term. We began this process in October when we reduced for this year the two lower rates of USC and took large numbers of people on low income out of the USC net. We also reduced the marginal rate of tax for people earning less than €70,000 and raised the level of income at which the marginal rate is payable, which is one of the most difficult aspects of our tax system compared to other countries. I expect that the Government will continue the broad thrust of this approach when we come to agree the tax package for 2016.
Low and middle income earners will continue to be our priority, continuing to remove the low paid out of the USC net and progressively lowering taxes for those on middle incomes. In doing so, we will continue to rebalance the tax system, work which is already under way. That means reducing tax on labour so as to boost employment and ensure the recovery is sustained. It is a classical stimulus model of social democracy around the world, and it works.
We also need to ensure that Ireland will be a welcoming place for the many emigrants who want to return home. In particular, we need to ensure that taxes on labour do not act as a disincentive for those who want to return.
I recall the remarks made by my colleague, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, when he presented the Haddington Road agreement to this House in 2013. At that time he said he fully expected that on the next occasion Government sat down with the public sector unions it would be to discuss pay improvements and not pay reductions. That is exactly what I expect to happen when the Minister meets those unions in a few weeks’ time. Public servants have made a huge contribution to getting this country out of the fiscal crisis brought about by the disastrous management of the Fianna Fail-Green Party Government. The pension levy of 2009, the pay reductions of 2010 and the adjustments of Haddington Road have resulted in a very significant loss of pay for all public and civil servants.
The Government is also very much aware of that fact and of the very significant reforms to which public servants have signed up. Public services are being delivered with many fewer staff than were employed at the start of the recession and I express publicly my appreciation to public servants for the forbearance and commitment they have demonstrated at a time of national crisis. I know that many individual families have struggled to make ends meet and this has been a very difficult time for them. It would be foolish and irresponsible for me to give the impression that the cuts of the last few years can be undone in one fell swoop, but I hope we will be able to make a start in the near future. That is about improving living standards and helping families, particularly those with children, and pensioners. The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, and his officials are committed to sitting down with our colleagues in the trade union movement in a few weeks with a view to agreeing a way forward.
I am aware that 80% of Irish workers work in the private sector and not in the public sector. I have said already that the Government will look to improve the circumstances of those on low and middle incomes by reducing income tax. We will also implement an increase in the national minimum wage if that is recommended by the low pay commission. However, I also expect that private sector employers will play their part in improving wages, as many are already doing. IBEC has already stated that it expects a majority of its members to increase the pay of their workers this year, and I welcome that. I appreciate that not all businesses have come through the recession unscathed, but we also know that many more business are now profitable. It is entirely appropriate that employers who can afford to do so should agree wage increases with their workers. It is in the interests of both employers and employees and in the interests of the economy as a whole.
Since I became Minister for Social Protection, I have been determined to protect core social welfare rates and I am pleased that I have been able to so. Now that the recession is over, we are able to consider targeted improvements in supports. We began that process in the most recent budget, with the introduction of the back-to-work family dividend, increases in child benefit and the living alone allowance and the partial restoration of the Christmas bonus. The Government has already announced its intention to further increase child benefit in the forthcoming budget and I am looking at other targeted improvements which can be made in 2016, including further improvements to the Christmas bonus. In this year's budget, we made provision for more nurses, more teachers, and more special needs assistants. We are also recruiting new gardaí for the first time since the collapse of the economy. As the leader of the Labour Party, I am an enthusiastic proponent of quality, well-financed public services that deliver high quality to citizens. The crisis greatly reduced the scope to improve services. It was a case of protecting them as best we could while fighting to regain our economic sovereignty. We are in a different and much more positive space now. As we return to financial good health, I look forward to making greater progress in improving public services in the next few years. One of the main drivers behind this investment is the population change we are experiencing. We have more older people who require care, more young people who require schools and more children who require child care. It is patently clear that €1.2 billion to €1.5 billion will not allow us to do all that we would like next year. Having said that, the forecasts in the Spring Economic Statement make clear that if we continue to manage the economy responsibly, we can look forward to similar improvements in years to come. This will see a gradual but clear improvement in our public services and in our standard of living.
I said at the start of my contribution that our country is in a much better place than it was four years ago when this Government took office. While that is unquestionably true, it is important to note that the recovery is not yet secure. We could be blown off course by international events beyond our control. We could also be set back by domestic events which are within our control. This country needs stable government and responsible management of the economy. It needs parties in government who are willing to face up to the social challenges of our time. We do not need, and cannot afford, the instability and mismanagement that would be inevitable if the parties opposite had any influence on government judging by the promises they have made and the positions they have adopted. This is not a time to take risks. As we acknowledge the progress made over the last few years, it is worth remembering that back in 2011 there were siren voices demanding that we do things a different way.
Deputy Gerry Adams first wanted us to tell the European Union to take a hike and to take its money with it. He used more colourful language. However, he does not have to worry about economics as he told us. In all of this, Sinn Féin neglects to mention what it is delivering in government in Northern Ireland at the moment where 20,000 public sector jobs have been cut for a start. While our Government announced 1,700 new teachers and education posts in the education budget, Sinn Féin is slashing the number of teachers in the North.
Nevertheless, Sinn Féin has the gall to lecture the Government while being the leaders of austerity in the North. For all its rhetoric, Sinn Féin conveniently forgets the North when it wants to.
Before next year's Spring Economic Statement is delivered, the country will choose a new Government. The people of this country will have to decide who they want to stand up in this House to read that statement. Fianna Fáil is the party that caused the crisis in the first place, Sinn Féin is the party that would return us to crisis judging by its current plan for the North, and the Independent Members cannot govern themselves, let alone the country. The hard left is opposed to governing. In short, there is a pathway to difficulty and despair, which the parties opposite will surely lead us on, but there is also a pathway to continued progress, as set out by this Government in these statements.
The past seven years have been very difficult for our country. Hundreds of thousands of people lost their jobs and many others emigrated. Many households have experienced debt and negative equity for the first time. The effects of the recession were always going to take time to pass. What has enabled us to get to this point have been the sacrifices and perseverance of the people in the face of uphill struggle. We have reached the brow of the hill and can see our destination, which is an Ireland of opportunity and prosperity for all. However, we have not reached that destination yet. It is in sight and within reach. The spring statement is a measure of the progress which we have already made. It is also a challenge to the Government to ensure to ensure that the benefits of the recovery are spread fairly and that nobody is left behind. This is a challenge which we can, must and will meet head on. At the end of the day, it is about improving living standards for families and individuals and creating opportunities for all of our children.
The spring economic statement was intended to open the next stage of the re-election campaign which has always been the Government's main concern. As the Taoiseach was honest enough to say in the past, its primary purpose was to allow the Government to announce tax cuts and spending increases well beyond anything it could implement during its current term.
After six months of an increasingly desperate attempt to buy its way out of unpopularity, the Government has announced budget plans which have no legal or administrative force. The statement is simply another political stunt. As with so many others, it is fooling no one and it is exposing the core failure of this Government. In fact, it illustrates how detached this Government has become. It does not address the challenges and struggles that families and communities are facing every day. The statement has provided almost no new information. It sets out no new vision. It ignores most problems and is complacent and arrogant. It seeks to rewrite history in a deeply cynical way. It is, in short, a powerful confirmation of a deeply unpopular Government which is addicted to spin and detached from the reality of Irish society.
Every time we have a debate like this, the gap between the Government's rhetoric and the facts of what is happening to people gets ever wider. The speeches we have heard so far have set a new standard for just how out of touch the Government is. As the dust settles on the self-congratulation and the months of media spinning, it is the silence which is most striking. There is silence on inequality, child poverty, waiting lists, class sizes, the spread of drugs, insecure jobs and many other areas where the impact of a deeply unfair and two-tiered recovery are being felt.
After four years in office, this Government still has no core vision for the type of society it feels we can be and the role of Government in supporting it. Time after time it has opted instead for short-term political manoeuvring. It is, after all, a Government which was elected on promises to abandon an inherited economic plan which, as its first decision, it decided to leave in place for three years. The basic strategy has not been to find ways of shaping the recovery, but to find ways of claiming credit for it. We now have the bizarre situation where two parties which voted against a range of policies are now delivering speeches claiming credit for them. Both Ministers in their speeches yesterday and in the documents they published sought praise for a whole series of positive developments which had nothing to do with this Government. At one point this was a tactic which was confined to claiming to having delivered the whole fiscal adjustment. This basic dishonesty has now spread into nearly every area and some of it is reaching the level of the bizarre. Initiatives implemented years before 2011 were yesterday suddenly swept up and hailed as the achievement of Fine Gael and the Labour Party.
The Taoiseach will remember that his first speech of the last election was delivered at the launch of a public relations company's report on the levels of trust in Government. He compared Ireland's situation to the siege of Leningrad, promising that he would lift the siege and lead a Government which would re-establish trust with the people. He had a fist pump as well.
The economy has been experiencing significant growth. Its medium and long-term growth prospects are good, especially when compared with many other countries. However, this recovery was not delivered by Fine Gael and the Labour Party. It was delivered by the Irish people. It was delivered by the skills, expertise, resilience and commitment which they developed over many years. If the Government were in any way sincere about the claim to want a mature economic debate, it would start by acknowledging this. Instead of claim to have delivered the extra jobs created in the economy, the Government would acknowledge that these jobs have been created because of the basic resource of a highly trained workforce and improved international conditions. Instead of the facts of a country with long-term strengths, it sells its own short-term myth. A Government which cannot bring itself to be honest about the underlying foundations of economic growth is clearly incapable of shaping that growth for the long-term benefit of all our people.
There is no reason to accept that any of the specific figures in the statement will still be relevant later this year. The gaps between forecasts and outturns have grown steadily in recent years. No mention has been made of areas where significant overruns will be experienced. It remains highly likely that the huge Supplementary Estimate required last year for the Department of Health will be repeated again. Ministers will remember that they were denying the need for any Supplementary Estimates almost up to the moment they announced them last year.
More important is the fact that the Department of Finance itself has no confidence in its own projections. In spite of four years of changes to the staffing and structures of the Department and the budget process, the documents published yesterday reveal that the Government does not understand its own revenue projections. In the Spring Economic Statement it is confirmed that the Government has no idea why it has been getting its tax projections wrong. I refer the Taoiseach to page 29 of the report which states that tax and VAT are growing at rates far in excess of what was suggested by growth and macroeconomic variables and established elasticity. Officials accept that their forecasting models are wrong and that there are dynamics which they cannot capture or do not even understand. Yet at a political level we have Ministers demanding credit for something they cannot explain.
The one area where the coming to power of Fine Gael and the Labour Party did mark a decisive shift in budgetary policy is in the move to a consistently regressive approach. The budgets under the previous Government involved the majority of all reductions in the overall deficit. Yet they were progressive. The wealthiest bore the greatest burden. Core measures of inequality fell. Since this Government came to power, under Fine Gael and the Labour Party the exact opposite has been the case. In four budgets out of four the biggest hit has been against poorer sections of society and the biggest relief has been given to the wealthiest. It is not just us saying this. It has been confirmed by independent analysts and bodies. This did not happen by chance; it was the Government’s deliberate choice. At one stage Fine Gael was so obsessed with its regressive and increasingly right wing ideology that it demanded that any hit on high income earners be matched by social welfare cuts. In fact, it threatened its junior partner with serious consequences unless it agreed to implement cuts to child benefit which the Minister for Finance, Deputy Noonan, had angrily dismissed out of hand before the election.
When the Minister for Public Expenditure and Reform, Deputy Howlin, said yesterday that his Government had always recognised the need to protect our society’s most vulnerable, not even his own backbenchers believed him. Of course, the rhetoric of each budget claimed to be delivering fairness, while the exact opposite was being implemented. Nothing said yesterday suggests that this will change in the coming budget. Ministers do not accept the evidence of rising child poverty. They do not accept the fact of growing inequality. The report published in January this year that shows one in eight of Ireland’s children live in consistent poverty was ignored. The Government just wanted to restate it is happy with everything it is doing and is committed to delivering more of the same.
The Labour Party has changed its leader but its capitulation to Fine Gael on tax policy is even stronger than before. It has accepted that planned tax cuts for the highest income earners will have exactly the same priority as supporting vital public services. It has failed to get agreement to reverse the many cuts in the Tánaiste’s Department which have hit women, in particular, and children the most. The only thing that the Labour Party has succeeded in is getting the distributional impact of Government decisions hidden. There is not one mention in the documents published yesterday of the impact of changes on different sections of society. I asked the Taoiseach during Question Time yesterday if he would provide such data and information in the Spring Economic Statement and he failed to do so. There is no mention of reducing poverty levels or reversing growing inequalities.
Information which was in the past a basic part of budgets and economic statements and documents has been removed. The Government has removed it. The Government is obliged to make regular formal reports on poverty levels. Why have we not been treated to a set-piece debate on these reports?
The announcements yesterday and the daily stories planted on the media front pages suggest that the Government still does not accept the fact that it is delivering an unfair recovery. In a week where it was revealed that the very richest fraction of our society has recovered fully from the crisis, Fine Gael and the Labour Party want to keep going with a policy which favours the wealthiest. It is at best shameless for the Ministers to have pointed to the progressive nature of Irish tax in their defence given that they voted against all of the measures which made it progressive and that their record is one of favouring the wealthiest.
In our pre-budget statement last year and in the various policies we have announced since, Fianna Fáil has shown that it is possible to end the regressive policies of this Government, to implement tax reductions that give the greatest benefit to those feeling the most pressure and to do all of this with lower borrowing limits than the Government set for this year.
For anyone who ever doubted the "spin first, policy later" strategy of the Government, yesterday will have been a final awakening. Not one of the dozen and ever growing list of giveaways announced in front page leaks was confirmed. These included paid paternity leave, tax relief for landlords who agreed not to increase rents, a free second year of child care, tax relief subsidies for child care, abolishing the public sector pension levy, a rates holiday for small start-up businesses, giving the self-employer the same dole as PAYE staff, a reduction in the USC rate for the self-employed, bonus pay for couples if they split parental leave, removal of the banks' veto on personal insolvency arrangements, the return of first-time buyer grants and an increased bank levy to force banks to cut variable rates. These were front-page headlines in particular newspapers, leaked by Ministers as measures that were going to be taken. Some were actually contained in Ministers' statements. When I asked the Taoiseach about them in the Chamber, he feigned ignorance about any Minister promising any of that.
To be fair, perhaps these are being saved for another round of fake exclusives in the run-up to the election. I have no doubt of that. However, something is now sure - what we will get later this year is a doubling down on a failed, divisive and damaging tax policy. The "carry on regardless" approach to tax changes of Labour and Fine Gael was reinforced yesterday by the failure to mention the regressive models of property tax and water charges they had implemented. Taking account of the ability to pay is not even on the agenda. The fiasco of the water charges is to continue. After 13 U-turns and in even the most optimistic compliance forecast, they will deliver a negligible net income. We will probably get net €25 million in revenue because of the grants and so on that the Government is providing. The charges will not deliver extra investment for water services.
As the figures revealed yesterday confirmed and as we have stated repeatedly, investing in water infrastructure can be achieved without adopting accounting tricks. We were told that there could be no investment unless the money was off the books and that it could only be off the books if Irish Water was created, yet now the figures show that the investment would have been possible without going off the books, thereby destroying the last remaining threadbare excuse for the creation of Irish Water. This company is a long-standing policy of Fine Gael dating back to 2009. Fine Gael in government did not allow a fair examination of whether the company was needed or who should run it. It rushed through the legislation without proper debate and against its advice from PricewaterhouseCoopers. The company has been allowed to waste millions of euro in taxpayers' money on its establishment and bonuses and on the installation of water meters that now serve no purpose. The only significant impact of the Government's water policy so far has been to divert money from improving services. The obstinate, almost bloody minded commitment of Fine Gael to maintaining Irish Water, the meter installation programme and regressive water charges remains a mystery. The willingness of the Labour Party to guarantee the continuation of Irish Water and prop up the failed and opaque initiative of its senior partner becomes more extraordinary every day.
The creation of secure, well-paid jobs remains an essential part of building a lasting and secure economic recovery that delivers social benefits for all. This issue is absent from the Government's complacent jobs agenda. A review by the OECD of the Government's Action Plan for Jobs stated that it was not possible to credit the plan with any specific level of job creation. However, this has not stopped the Government from claiming to have created tens of thousands of jobs. In reality, the only major change in employment policy in recent years has been an iron rule handed down to agencies that no announcement may be made without a Minister or the Taoiseach being present. Announcements that were viewed as routine in that Department are now not allowed to happen without a political presence and a press release claiming credit for the Government. Employment offices and research centres have been renamed in order to provide ribbon cutting events. It is happening all over the place.
Apart from the spin, there has been a deeply worrying development-----
-----that the Government has ignored in its statement. We have witnessed a growing division in employment between those with secure jobs and good terms and the increasing number in insecure and poorly paid jobs. A statistic ignored by the Government yesterday and so far today is that, at the end of last year, there were 130,000 part-time workers who wanted, but could not find, full-time jobs. Many more were in poorly paid jobs or jobs with zero or low-hour contracts. The growing exploitation of large numbers in employment is causing serious economic and social damage. It is dragging down employment standards and forcing companies that want to provide decent employment packages to match those that do not care. Tackling this issue should be a priority. So far, though, it has not even been an after-thought. All references to the low pay commission revolve around the minimum wage, but there is a far deeper issue at stake in terms of-----
The point I am making is that there are 130,000 people in part-time jobs who want to get full-time jobs but cannot. We know from the Dunnes Stores strike what is happening-----
Everything is being timetabled to the electoral cycle. We will get the low pay commission in July and some sops thrown in October, but the core issue will not be tackled-----
-----where there is consistent downward pressure on wages and terms and conditions. This needs a far more comprehensive response. One would have thought that we would have got that comprehensive response in the Spring Economic Statement yesterday but we did not get a response in any shape or form to what is a growing issue for large numbers of people in our workforce. That is the point.
-----Labour may get agreement on some announcement on the issue of low pay, but the implementation of genuine reform will not be agreed by Fine Gael. This is clear in all that the Minister, Deputy Bruton, has been saying on the issue.
The statement is correct in saying that the agriculture and food sector is important, but yet again it is an area in which the statement of commitment-----
To be fair to the Minister, he stated when he entered office that Food Harvest 2020, which was produced by the former Minister, Deputy Smith, was an excellent blueprint for the development of agriculture and food.
In Cork county alone, the Government cut Leader funding by 71%. Go there and heckle the people of west and north-west Cork - they are outside my constituency - and east Cork if the Minister of State thinks it is so funny.
On page 27 of the Spring Economic Statement, the Government claims to have set out its vision in Food Harvest 2020, but the Minister of State should, like the Minister, Deputy Coveney, did when he started, remember and acknowledge that this strategy was prepared and published by Deputy Smith in July 2010. It provides the blueprint for all developments in the food and agriculture sector, which is the largest home-grown industry that Ireland has, and should be fully implemented.
By all measures, education is central to our economic and social future. According to Fine Gael and Labour, the most we can expect is to have demographic pressures catered for. This is the new wheeze and spin. For example, we are employing new teachers. When the population and pupil numbers increased, the pupil-teacher ratio stayed the same. This automatically meant additional teachers. That is all we are getting in the spring statement.
There is no commitment to reversing any education cuts, even those which continue to cause huge damage to schemes helping disadvantaged children and children with special needs.
As I have said, throughout the speeches and documents issued yesterday there is a core dishonesty in the figures used to spin the Government's record. The base years used to show improvement constantly change to suit the issue at hand and a range of specific policies are pointed to as coalition achievements when they have nothing whatsoever to do with its work. It is in the area of education that this is at its most brazen and dishonest. The statement claims the Government has delivered "improved outcomes in higher level mathematics, literacy for 15 year olds and an increase in the number of PhDs graduating from our universities". In respect of literacy and maths improvements, it is an uncontested fact that there was no change whatsoever from the policies implemented by the previous Government. Every single one of the PhD students referred to began their study before February 2011. If that is the best the Government can do when trying to claim success in education, it shows how bad the reality is.
This is the Government which ended all dedicated guidance and counselling support for schools. That was a shocking decision. We are always talking in this House about mental health and the needs of young people. The provision of career and guidance counselling in second level schools was a service that was actually effective. Students could approach their school counsellor ostensibly to discuss career issues but also could raise personal issues and other matters in respect of which they required counselling. Despite all its rhetoric about mental health and looking after young people, the Government took away that resource.
Stop it, Taoiseach. This Government took 1,000 posts out of the system. Guidance counsellors were categorised as occupying ex-quota positions, and they were removed. The Government has cut support for disadvantaged schools, reduced special needs provision and ended grants for people who want to do PhDs.
Given the needs of the economy, the decision to withdraw grant supports for postgraduate students was an incredibly backward one. The costs involved were not huge. We should be doing more at fourth level to encourage the take-up of master's degrees and PhDs.
The early school leavers scheme, which brought school completion to its highest ever level, is being fatally undermined. This is an issue I feel passionately about. In 1999 the Government of which I was a part introduced the school retention initiative, which saw completion levels increasing from 78% in 1998 to 91% ten years later. Does the Taoiseach have a clue what is going on in this regard? The school completion programme has been brought under the remit of Tusla and subjected to cuts in funding in the past two to three years. The home school liaison programme, likewise, has been brought under Tusla. Both of those programmes should be returned to the Department of Education and Skills because they are a core part of its remit.
The only reason these functions were transferred to the Minister for Children and Youth Affairs is that not enough responsibilities could be found for that Department. That is the reality. Civil servants got together and said they had better make this thing look like it has capacity. The Taoiseach can ask anybody in the field and they will tell him that is what happened. He should ask anybody working in communities on the school completion programme. I have met with people involved, Business in the Community and so on, and they are saying that what is going on is shocking. It amounts to a dismantling of a school completion programme which has been working effectively for the past decade. The money involved is not huge and the decision that was taken shows the Government does not have a clue what is going on in terms of providing a coherent education policy. No amount of spin will cover that up. Any Government which refuses to give a clear priority to education in long-term economic planning and acknowledge the impact of its own policies is one that has no idea about how to shape an inclusive future for our country.
The massive overrun in the budget of the Department of Health last year is likely to be repeated this year because the core policy has not changed. That policy involves a refusal to allow honest budgets at the start of the year, relying instead on a wasteful catch-up later in the year. The Minister for Health was warned six months before it happened that Government policy would lead to a massive crisis early this year, but he and his colleagues did nothing. Massive damage is being done by abandoning initiatives which were working and by the commitment to move the entire system to a private insurance approach, which escalates costs and reduces service guarantees.
It is welcome that there will be some increase in health service staffing. What is not welcome is the absence of any strategy for funding or developing health services in the near future. The spring economic statement was billed as a setting out by Fine Gael and the Labour Party of their priorities for the next five years, but it seems health is not one of them. There was no acknowledgement in the statement of the 405,000 people waiting for outpatient appointments and the 67,000 people awaiting inpatient treatment. No mention was made of the fact that the numbers of patients on trolleys last month was the highest ever, with an average of 500 patients per day in that position. There was no reference to the 30,000 people who had their medical cards removed before it was even admitted there was a problem. If the Government will not even acknowledge these problems, let alone identify them as a priority, how can anyone believe it will tackle them?
Housing is another area where a policy of disengagement and denial has allowed a national crisis to develop. There are 1,000 children in emergency accommodation in this city alone. The plans announced so far are nowhere near sufficient to tackle this or the wider housing crisis. After yesterday, all we have is a continuation of existing policy in this area.
The Minister for Finance, Deputy Michael Noonan, is a man with an acute memory. He will remember the countless times he came into this House to reject calls by Fianna Fáil that he intervene to address the mounting crisis in household debts. He will recall how he rejected all of our legislative proposals to help those in deep trouble. He and the Government have followed a steady policy for four years now of putting the fattening of the banks in preparation for a sale ahead of any concern for mortgage holders or small businesses. It is only in the past month that there has suddenly been an awakening to the fact that the economic and social damage this has caused has political implications. Since then, there has been a scramble to make as many statements of intent as possible.
Yesterday, however, the Minister, Deputy Noonan, again placed most emphasis on selling the banks rather than dealing with the household debt crisis. From the manner in which this issue was presented, it is clear that he wants to be able to claim before the next election to have "got the money back from the banks". He will have done nothing of the sort. What he will have done is empower those institutions to charge extortionate variable rates and deny basic relief to families in deep trouble. The statement's spin in regard to banking debt is among its most cynical and misleading. It is striking that the Government has completely changed its argument concerning the conversion of the promissory notes into long-term debt, as indicated on page 24. Most of the claimed benefit of that deal is being lost because the Central Bank is selling off its bonds and the Exchequer will no longer have the interest it pays returned. The Government is now refusing to put any figure at all on what was supposedly saved.
This statement marks the moment when the Government quietly abandoned the search for relief on the impact of other bank-related debt. Nearly three years ago, after the famous EU summit, the two Ministers, Deputies Noonan and Howlin, were giggling like schoolboys at the prospect of the billions of euro which were on the way. As I recall, a figure of €6 billion was mentioned. The Minister for Finance refused to say how much he was seeking because his experience of selling sheep at the Fair of Glynn taught him never to reveal what one is looking for. Yesterday we found out that we have received and are looking for nothing. Every single part of the relief Ireland has received was negotiated by and for other countries and extended automatically to this country. Ireland is not even aiming for equality with other member states through seeking the return of ECB profits on its holding of Irish bonds.
The failure of the Dublin, London and Stormont Administrations to move forward on any joint approach to economic development in the Border region and for the whole island has been a major failing of the past four years. There are huge potential synergies in an all-island approach but they are being lost because of the lack of political will. This goes directly against the objectives set in the Good Friday Agreement. The Sinn Féin-DUP decision to implement a long-term economic development plan which ignores the South is part of that Administration's wider failings to make the institutions work in the interests of all. It is regrettable that our Government has taken the same approach. It also is regrettable that the savage austerity being implemented by Sinn Féin and the DUP has not been challenged by our Government and we have failed to speak up for the need to invest in underpinning peace rather than taking it for granted.
The spring economic statement was devised to be a political launching pad for the next stage of a re-election campaign. It has failed because all it involves is more of the same. It ignores deep social and economic problems. It is political in everything and none of its statements can be taken at face value. It offers no long-term vision of our economy or society. It does not say what role the State should play. It is silent on growing inequality. After six months of hype, it has fallen flat because it is more of the same from a Government of spin and broken promises, a Government that is complacent about the future and in denial about its record. We will now enter a new budgetary cycle where there will be more and more leaks and a policy of promising everything to everyone. The Government will fail in this just as it has failed thus far.
Ní raibh rud ar bith nua i ráiteas an earraigh ar an gheilleagar inné do shaoránaigh nó do theaghlaigh atá ag obair go dian agus atá thíos leis le blianta anuas mar gheall ar an déine ón Rialtas seo.
Yesterday's spring statement marked a depressing, boring and tedious continuation of the conservative and deeply destructive political agenda of Fine Gael and Labour which has so badly served our people over the past four years. It is clear from the outline provided by the Government that it intends that the next general election campaign will be reduced to auction politics with the Government parties seeking to outbid each other in terms of tax cuts, but this will do nothing to address the serious needs of our society. It will do nothing to rebuild our battered public services, to tackle the scandal of hospital overcrowding or poverty, to build affordable childcare provision, or to tackle homelessness or the housing crisis. Meanwhile, the Government stumbles from one political crisis to another caused by increasing revelations of Fianna Fáil-type cronyism in government despite all the Taoiseach’s promises of a new era of openness, transparency and a democratic revolution. The Taoiseach is clearly a very skilled politician and I often wonder how he and his colleagues get themselves into these binds and how, when an issue presents itself, they do not deal with it in an appropriate way in keeping with the mandate they sought.
We have seen the continued breaching of pay caps for ministerial advisers, the scandalous waste of €85 million of taxpayers' money on consultants at Irish Water, the cruel way the Government took away medical cards from children and others with profound disabilities, and the abuse of the Oireachtas with strokes such as the McNulty affair. Now we have the IBRC scandal and the Government will not face up to the need for a fully independent commission of investigation. Its refusal to have the very serious issue surrounding Siteserv and the IBRC transactions independently investigated shows it is not in the slightest bit serious about genuine political reform. One of the issues with Siteserv and the IBRC scandal that outrages ordinary citizens is the presence of the same group of solicitors, brokers and accountants on the various sites of the deal.
There also was, as we famously know, another small group of insiders in place when this State was brought into the very serious financial collapse that all of us experienced. Fianna Fáil and then Labour and Fine Gael took this so-called banking debt, which was created by these elites, and turned it into the people's debt and saddled citizens with €64 billion of a bill, which our children, grandchildren and great grandchildren will have to pay. The other aspect that really annoys people and which is causing deep anger, because of the degree of radicalisation, education and politicisation that has taken place, is that there are insiders still making huge sums of money out of the recession, and that is the truth of it. The overriding theme of the Fine Gael-Labour coalition has been a deeply unfair economic policy. It has imposed destructive austerity measures on struggling families and vulnerable citizens. Thousands have been forced out of work or into low-paid jobs. Hundreds of thousands have been forced to emigrate. This Government's budgets have been the most regressive in this State's history. It has heaped onto citizens one stealth tax after another. The imposition of domestic water charges, in the face of huge public opposition, has proved to be the final straw for many families. This Fine Gael-Labour Government is all about protecting the wealthy, the privileged and the insiders. It offers nothing but hardship for the majority of families, workers and vulnerable citizens.
The Government has also seriously undermined public services. Children, older citizens and citizens with disabilities who are reliant on these services are the victims. The Government ignores poverty, including child poverty. Mar shampla tá na rudaí uafásacha seo déanta ag an Rialtas. It cut jobseeker's allowance and respite care. It abolished the cost of education allowance and undermined the school completion programme. It taxed maternity benefit and cut the invalidity pension and rent supplement.
The spring statement has done nothing in terms of dealing with the crisis in our hospitals. There are 450,000 people on waiting lists as a result of the accident and emergency crisis. The Government has failed to make any inroads into reducing waiting lists and waiting times. January of this year saw record numbers of citizens on trolleys, more than 600 for the first time on the Taoiseach's watch. Despite promises to end the scandal of patients on trolleys, there is no sign of this problem being resolved. On the Taoiseach's watch, the health workers available to tackle this crisis have been reduced by 11,000 full-time equivalent staff. Yesterday's announcement saw no change in direction, no new course being charted, no relief to low and middle income earners or vulnerable citizens.
The Government talks about a recovery but it is an unfair, two-tier recovery. Most people, and the Taoiseach has acknowledged this, are not experiencing any improvement in their daily lives. The Taoiseach accepts that they are not feeling the benefits of his talk of a recovery and that is because there is no recovery for those people who he has impoverished. If they cannot feel it, it is not happening. The reason they cannot feel it is that it is not happening. Vast swathes of rural Ireland have seen no recovery whatsoever. Rural schools, Garda stations, post offices have been closed at an alarming rate. The genuine bottom-up approach that was so central to the Leader programmes has been removed. Small and medium businesses have been starved of credit and neglected by the Government so that many of our rural towns are dying on their feet. If the Taoiseach were to go up the main street of any small village or town, he would see the number of closed shops. The Government has consistently made living in rural Ireland more difficult with cuts to rural transport programmes, higher costs for private car users and cuts to Bus Éireann and Iarnród Éireann.
The Government has also presided over unprecedented levels of emigration in modern times. The Taoiseach described this as a lifestyle choice. We were told yesterday that a reduction in the marginal tax rate is about bringing home emigrants. Does the Government seriously believe our emigrants left because of the marginal tax rate, that there are people in Boston, Baltimore and Brisbane waiting for this news, that they got the news yesterday that the Government is brining in a marginal tax rate and said "let's go home" and that they are now packing their bags?
Yesterday’s economic statement had nothing to say about this major housing crisis. Thousands of tenants face an uncertain future as rents continue to rise and those in mortgage difficulties continue to be pursued by the banks. What has the Government done? It has given the banks the veto and then the Taoiseach stands up here and says he is unhappy at the behaviour of the banks. The Government voted down a Sinn Féin Bill to protect the family home that could have prevented the repossessions that are now occurring. The Government claims it will take action on the issue of mortgage arrears and interest rates but its response to the housing problem has been to impose a tax on the family home.
On the jobs front, every job is to be welcomed, but this State has the second highest percentage of low-paid jobs in the developed world - sin í an fhírinne. More than 20% of jobs are now low paid. Many workers are poorer now than at the time this Government took office. The Low Pay Commission will not deal adequately with this issue. It does not need the Low Pay Commission, rather it should be moving in a structured way to having a living wage for all workers in this State.
After four years of the Labour Party in government, workers still have no right to collective bargaining. What is the Labour Party in government for? The failure of the Labour Party has been stark. We know that Fine Gael governs primarily in the interests of the privileged and the elites but the Labour Party continuously tells us that it is there to put the brakes on Fine Gael and that things would be worse without it. The evidence, however, tells us the opposite. The Tánaiste lauded and commended herself today but let us not forget that the Labour Party leader, Deputy Joan Burton, helped to negotiate the programme for Government. She is one of the architects of the austerity policies of this Government. That programme saw the Labour Party buy into the austerity policies of Fine Gael and deliberately break its election promises. Did no-one stop to think, "We said this during the election; we cannot do that. We made a promise, a commitment, a contract and sought a mandate"?
Politics is about choices. The choice this Government faced was whether to invest in public services so that all our citizens have the same rights or to return to pre-election promises about tax cuts. The Government has chosen to pursue policies which have increasingly polarised our society. The richest 250 people in Ireland are worth a combined €75.03 billion and have seen their wealth increase by 15.9% in the last year. The Sunday Timesrich list claims that Ireland is home to 13 billionaires who have a combined fortune of €37.89 billion and that the net worth of the country’s wealthy elite is now significantly ahead of that recorded at the end of the so-called Celtic tiger era in 2008. During the recession, these folks have become wealthier than they were during the boom. Under the Taoiseach's Government this is still the best small country in the world for golden circles. Meanwhile, homeless people are dying on our streets, families are being evicted from their homes, children are going to school hungry and workers, including gardaí, are being forced to sleep in their cars.
Sinn Féin would choose a fairer way of doing things. We believe in putting the interests of citizens first, as opposed to those of the rich and powerful. We believe in putting the interests of citizens at the centre of political considerations. Sinn Féin would use any improvement in the public finances to build a fair recovery, to repair the damage that has been done. That means investing in public services, not repeating the boom and bust cycle caused by tax-cutting. Why did the Taoiseach not do that? He says that he does not get constructive suggestions from the Opposition. Why does he not stand for a basic threshold of economic justice? Imagine economic justice - the right to a home, access to education, the right to a job and to universal health care. Sinn Féin believes it is the State's responsibility to improve conditions for ordinary citizens and struggling families, and in particular to deliver on jobs, housing, health care and education. We would seek to relieve the burden on struggling families by abolishing water charges. Why did the Government not do that? Why did the Taoiseach not announce the abolition of the family home tax? That would give €800 million back to working families. Why does the Government not take 200,000 people earning below €17,542 out of the universal social charge net? Why does it not invest in public services and ensure that they are accessible to citizens regardless of where they live in this State? Sinn Féin would genuinely work to bring our emigrants home but this Government will not even deliver on voting rights for Irish citizens abroad, notwithstanding the Constitutional Convention's recommendation on the issue. There is also a need to ensure a recovery for rural communities. It is beyond me how Teachtaí like the Taoiseach, who represents a rural constituency, do not appreciate that people in rural areas have the same right to a decent life as people living in urban areas.
Why does the Government not ban the scandal of zero hour contracts and get rid of JobBridge? Why does it not introduce rent controls to help stem the rising tide of homelessness? Why will it not offer greater security and protection from exorbitant rent increases? We have spoken about poverty and economic difficulties but the biggest challenge facing people is stress as a consequence of their social and economic position. We should be at least able to offer people greater security and some sense of protection for them in their pursuit of human happiness. Why does the Government not help to keep tenants living in the private rented sector in their homes? The security of a home is fundamental. Why will the Government not change the insolvency laws to remove the banks' veto? It has refused to do that but we will do it after the next election if we have a mandate.
Fianna Fáil has a point when it says that this Government is implementing Fianna Fáil policies. This is true and is why it is so hard for Fianna Fáil really to oppose what the Government is doing. It might pick one or two fights but in reality, the Government is implementing what Fianna Fáil set in train. Yesterday was all about election promises and was an abuse of the Dáil for the purposes of party political propaganda. However, the citizens who have felt the brunt of Government policies will not be fooled by the empty rhetoric. What is required now is a radical change of political direction. We need a fair recovery, a recovery for everyone, one that leaves no family or community behind. That is not on the agenda of this Fine Gael-led administration. This Government has figured out the demographic to target with its promises and as long as it delivers that vote, to hell with everybody else. This Government prefers giveaways for the wealthy and the privileged and tax cuts for the better off.
I have asked the Taoiseach consistently since coming into this House what the social consequences of his Government's policies are. What are the social out workings of those policies? What kind of society will be left after another year of this Government? Where is the recovery for the thousands of families in mortgage and economic distress? Where is the recovery for our rural communities blighted by emigration and starved of investment?
We need to ask ourselves, as we approach the centenary of the 1916 Rising and the proclamation of the Republic, if we want another period of austerity for low and middle income families while the wealthy remain untouchable. Do we want a real republic, based on equality; a citizen- centred and rights-based society? Do we want an economy built on property bubbles or one where, when the banks fail and the golden circles cause a calamity, the people have to foot the bill? There was no chance of socialising the wealth of the Celtic tiger but no problem with socialising the debt caused by the golden circles. Sinn Féin stands for a real and fair recovery, for decency and for a society that is based on the right of citizens to live in comfort, with some modicum of contentment. The alternatives that we have put forward, of reducing the tax burden on low and middle income families, protecting public services and investing in real jobs, are the ingredients of a genuine recovery.
I note that the Tánaiste mentioned the North, while the Taoiseach did not mention it all. The Tánaiste and the Fianna Fáil leader rolled out the usual misinformation about issues there. This is the same Tánaiste who said not a word in my presence at meetings with the British Government when Sinn Féin made it clear that it would not embrace austerity, whether from the Tories in London or Fine Gael and the Labour Party in Dublin. The Fianna Fáil leader, to my knowledge, has not yet met the Deputy First Minister since he took up that position.
What of the Tánaiste's friends in her sister party, the SDLP, who failed to turn up in the Assembly this week to support marriage equality legislation put forward by Sinn Féin resulting in the Bill being lost by two votes? One third of the SDLP MLAs did not turn up. The Tánaiste is welcome to comment on the North as is the Fianna Fáil leader, but I ask them to try to be accurate. The platitudes that come from here impress no one - not in this State and especially not in the North.
Fine Gael and Labour have long since abandoned the mandate on which they were elected. Rather than yesterday's PR exercise, they should put their policies to the people and call a general election.