Dáil debates

Tuesday, 23 January 2018

Ceisteanna - Questions

Economic Policy

4:05 pm

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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6. To ask the Taoiseach if he will report on the work of the economic policy division of his Department. [53042/17]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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7. To ask the Taoiseach when Cabinet committee A on the economy will next meet. [1682/18]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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8. To ask the Taoiseach if he will report on changes he has made or plans to make to the economic policy division of his Department; and the work it is undertaking. [1837/18]

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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9. To ask the Taoiseach the economic expertise available to him within his Department. [2112/18]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 6 to 9, inclusive, together.

The economic division of my Department supports me and the Government in developing and implementing economic policy aimed at sustainable and regionally balanced economic growth, well-planned infrastructural development and quality employment. The Cabinet committees and senior officials groups, supported by the division, help deliver policies in these areas.

Cabinet committee A covers issues relating to the economy, jobs, the labour market, competitiveness, productivity, trade, the Action Plan on Rural Development, the digital economy and pensions. It met last week, on 18 January, and the next meeting has not yet been scheduled. Cabinet committee D covers infrastructure, housing, infrastructure investment and delivery, climate action and the national planning framework, and is next due to meet on 1 February.

The data protection unit within the economic division supports the Minister of State with responsibility for data protection and contributes to a whole of Government approach to the challenges from the increasing digitisation of modern life and the associated significant increase in the amount of personal data generated.

The division also monitors implementation of the Government Action Plan for Jobs and supports Government priorities, such as pensions reform, labour market and skills policies, housing, infrastructure, climate action and regional and rural development.

It co-ordinates the preparation of the annual national risk assessment, which provides an opportunity to identify and consider potential economic risks and challenges on a structured basis. It co-ordinates Ireland's participation in the European semester and works with the Department of Foreign Affairs and Trade and the European Union division of my Department on the possible economic impact of Brexit.

I am satisfied my Department has a full range of skills and experience to provide me with the necessary advice on economic and other policy challenges facing the country at this time. As Deputies will be aware, my Department works closely with the Departments of Finance and Public Expenditure and Reform to ensure a coherent whole-of-government approach to economic policy, including challenges that now arise from international and EU developments. The economic division also includes officials and staff with a range of economic qualifications, including specialist staff recruited as part of the Irish Government economic evaluation service, IGEES, as well as at least five staff with either PhD or master's qualifications in relevant economic or other policy disciplines. Others have extensive experience dealing with economic and related policy questions. Appointments and recruitment in my Department are the responsibility of the Secretary General and senior management in the Department. There are no plans to change at present the current structure of the economic division but the Department staffing needs are reviewed on an ongoing basis.

4:15 pm

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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Zero-hour and if-and-when contracts are a problem for many workers in this State and last week there were protests here about zero-hour contracts. Workers called for an end to them. There is much pressure on workers affected by these contracts, who do not know how many hours they will work, how much money they will earn and whether they will have enough money at the end of the week to pay bills, including rents and mortgages. All this leads to serious health issues, including mental health issues. It has also led to the exploitation of workers and the hollowing out of worker rights.

Deputy David Cullinane produced a Bill to address this issue and it was subjected to rigorous pre-legislative scrutiny here and passed to Committee Stage. It is now held in money message limbo by the Taoiseach's office. Has the economic policy division discussed this Bill or Mandate's Secure Hours - Better Future charter? Has it been discussed? If not, why not? Will the Taoiseach consider dropping the money message rules holding up Deputy Cullinane's Bill? There are proposed amendments to be made by the jobs committee that could protect the rights of these ordinary workers and enhance economic policy.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We have the context of the Oxfam wealth report and the upcoming Davos meeting and, yet again, we find a report indicating the gap between a tiny group of the richest people in the world and the vast majority has widened to shocking and obscene levels, with 1% of the population owning 82% of all wealth. Oxfam cites in particular the erosion of worker rights and government policy and decision making, as well as the failure of corporations to pay proper taxes, as the factors responsible for this shocking rise in inequality. That is mirrored here, with record numbers of millionaires cited in recent reports, along with two additional billionaires, with some of those, interestingly, involved with construction and property areas.

On the other hand, there is a massive housing crisis arising from the fact that people's wages are not sufficient to buy housing on the open market. Construction workers do not want to work in construction because they will have to put up with zero-hour contracts, as has been mentioned. From day to day and week to week, those people do not know how many days or weeks they will be working. Their pay and conditions are not sufficient even to buy the houses they are building. Not surprisingly, we do not have the capacity in the form of workers to build houses for people. Does this give the Taoiseach pause for thought about the need to address income and wealth inequality in this country and, very specifically, to deal with the matter of zero-hour contracts?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Taoiseach will recall very well that his predecessor had an economic adviser who was, if I can put it this way, a very strong voice in all the deliberations of the previous Administration. Does the Taoiseach intend to appoint an economic adviser or is somebody fulfilling that role right now?

Over Christmas, the Taoiseach warned that wage growth posed a threat to the economy? It struck me as very odd that the matter he decided to focus on as the most significant threat to the future economic well-being of the country was wage inflation. Does he not accept that wage rises are very modest and wage growth in 2017 was below 2%, with average weekly earnings hardly rising at all in the past number of years for many workers? It is time they got a break so as to share in the recovery we can see that is manifesting economic growth rates. Does the Taoiseach accept that workers deserve a pay rise, particularly in light of pressures in the housing and rental markets that have become so obvious?

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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The Taoiseach might indicate if he intends to appoint an economic adviser. I understand there have been a number of Bills published relating to zero-hour and banded hours contracts and the Government is due to publish a Bill. Will the Taoiseach confirm if that will be in the next two weeks, as we were told that would be the case? Will the Government be flexible with amendments coming from the Opposition with that Bill so we can work collectively in the House to get the right resolution for workers with unacceptable conditions? There is a lack of a banded framework in many cases and people are living from week to week. They cannot get security in terms of mortgages, bank or car loans, etc., and their lives are on hold for many years. The confidence and supply agreement between the Fianna Fáil Party and the Government refers to the need for improvement of rights in this specific area.

The Taoiseach's economic division is involved with the development of the capital plan, which has been ready for well over a year but has been withheld in order to extend it to ten years.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It is being redrawn.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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This will also allow the preparation of an advertising campaign led by the Taoiseach's staff. It is fair to say the expertise within the Taoiseach's Department has focused largely on recruiting communications staff and allocating €5 million towards marketing and communications advice he requires. I am aware that Ministers have been ringing around telling people to get their plans together so they can be submitted to the national plan. The rigour and criteria we were led to believe would inform the national plan have waned somewhat recently. I know this and word has gone to constituencies to get some sort of a plan in anyway because if they are not in the overall national plan, they will have no hope in future of getting funding. That is what seems to be happening. It is meant to be a ten-year plan but it will be the first without estimates or costing attributed to it. Will the Taoiseach explain the exact criteria being used for the inclusion of projects in the plan? Will he give a personal assurance that there are no cases of Ministers telling State agencies where projects are to be built in direct contradiction of expert advice?

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I will start with the question on employment rights. The Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, is leading on the legislation to abolish zero-hour contracts in some circumstances and also to give people more generally greater certainty about the hours they work and income earned. The legislation was published in December so perhaps Deputies missed it because of the Christmas period.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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We are wondering when it will come before the House.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I do not know that.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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When I asked about this, the indication was that it would be as soon as time allowed.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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That is the answer. The Bill was published in the first half of December. It supersedes the Bill put forward by Deputy Cullinane. I am keen to have it in the House as soon as the Business Committee can provide time for it. When we deal with the legislation, it is important we do not throw the baby out with the bath water. I refer to when provisions in contracts might make sense. For example, emergency services operate on an if-and-when basis.

It can make sense to have a certain number of core hours and an if-and-when provision on top of that, so people are called in when the work is available. People who work in transport, logistics, shipping and aviation say that the same applies in their areas. The ship comes in when it comes in and it is not always possible to know the exact times when staff are needed. It is important that what we do makes sense. We must protect workers and ensure they have greater certainty about their hours and incomes, but we also must not have a situation where employers are paying staff not to do any work for a prolonged period and then cannot get staff when they need them because of excessively restrictive legislation. This was discussed at Cabinet rather than in the Cabinet sub-committee.

Regarding the housing crisis, there are many reasons for us having such a great challenge with housing in the State. However, the underlying issue is a lack of supply of suitable homes, apartments and houses. There are more people who can afford to buy than are able to buy at present due to the lack of availability. I do not fully agree with the Deputy's analysis in that regard.

I am struck by the number of times today that Deputy Howlin has asserted I said certain things that I did not say. I certainly did not say that wage increases were the largest threat to the economy as that is not my view. It is probably Brexit, but other threats to the economy may arise. I did say something along the lines of unsustainable or excessive wage increases potentially being a threat to the economy. If they are unsustainable they would have to be taken back at a later stage. We should not repeat the mistakes of the past by giving people welfare increases, tax cuts and wage increases only to take them back from them when they most need them a few years later.

4:25 pm

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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That hardly arises now, does it?

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I did not say it arises now-----

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Why mention it now?

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I mention it now because the Deputy raised it.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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No, the Taoiseach's article did.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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It was not an article. It was a report from a press conference. I did not read the reports but I guess, as is often the case with reports on press conferences, they are quite different from an article I might have written. They only take elements of what one says. However, I did not say, and I am sure that was not reported, that it was the largest threat to the economy because that is not my view.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It is a significant one.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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However, I believe excessive tax cuts, wage rises and increases in public spending would drive inflation and would be counterproductive. I am determined that this Government should not repeat the mistakes that were made by previous Governments, which operated the inflationary and pro-cyclical economic policies that caused so much damage in years gone by.

I said that the Government is committed to improving living standards. By any objective measure living standards have been improving for the past two years. The most recent Central Statistics Office, CSO, numbers from the survey on income and living conditions, SILC, show unemployment is substantially down, pay is increasing, poverty and deprivation are falling and inequality is narrowing. I said that we could improve living standards in a number of ways, but particularly in three significant ways. One is wage increases, which are well deserved. That is why we increased the minimum wage and negotiated pay restoration with public servants. The second area is tax reductions. That is why we reduced the USC and income tax in the budget and improved tax credits for the self-employed and home carers. It should be borne in mind that while the Government can increase the salaries of public servants it cannot increase the salaries of people who are self-employed or in the private sector. One of the best ways of putting money directly back in the pockets of the vast majority of people, that is, people who are self-employed or work in the private sector, is through tax reductions. That is the reason I disagree with the view of other parties that we should not have any tax reductions and that only public servants should see an increase in their wages.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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We must move on to the next group of questions.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Finally, the other way is through reductions in the cost of living, which is why we introduced the child care subsidies and reduced the prescription charges and are taking action on insurance to reduce its cost.