Wednesday, 30 January 2019
National Surplus (Reserve Fund for Exceptional Contingencies) Bill 2018: Second Stage (Resumed)
I am grateful for the opportunity to comment on the Bill and on the rainy-day fund. At the Committee on Budgetary Oversight last year, I strongly opposed the establishment of this fund at this very precarious and dangerous time for our economy and country. I felt then and still believe that all available current and capital resources should be allocated to addressing the serious needs of our people in health, housing, education, public transport and disability services and in the restoration of public sector salaries to pre-crash levels. Like many Deputies, I was out on the picket lines this morning with our nurses. Resources should also be allocated to the ending of all discrimination against younger public servants, particularly in health and education.
We celebrated the 100th anniversary of Dáil Éireann last week. One of the great scandals of our history was the decimation of the National Pensions Reserve Fund established by a former Minister for Finance, Charlie McCreevy, in 2001 following his crass decision to privatise Eircom and the national telecoms network. The growth of that fund from 2001 created a national wealth fund for the Irish people but the appalling decision on the part of Fianna Fáil and the Greens - subsequently and unfortunately reinforced by Fine Gael and the Labour Party - to splurge much of money in the fund on the blanket bank guarantee, which I strongly opposed and voted against, robbed our people of their national wealth. That decision remains one of the most disgraceful in the history of Dáil Éireann.
We know from recently published statistics that the National Treasury Management Agency, NTMA, has cash or near-cash reserves on hand of €14 billion or €15 billion. The Minister of State might provide an update on that figure. The former pensions fund has morphed into two funds, one of which is the Ireland Strategic Investment Fund, with assets of €8.5 million, committed investments of more than €3 billion and €5 billion invested in global equities and other assets for our people. The other fund managed by NTMA holds the State's shareholdings in the major pillar banks and it was recently estimated that its value was about €10.5 billion. The fund holding the State's pillar bank investments was originally earmarked to pay down our huge national debt, which, as the Minister, Deputy Donohoe, reminded us last week at the Committee on Budgetary Oversight, still stands at what he called the "highly elevated" figure of 105% of GNI* versus a comparable 87% level of debt across the euro area.
There are several other possible windfall assets for the national Exchequer, including the Apple escrow corporation tax account, which contains an estimated €13 billion. The Minister of State might also provide an update on that account and any current legal actions at EU level. Given that the national funds administered by the NTMA total €19 billion or €20 billion and that the agency has cash holdings of €15 billion, the question must be strongly put to the Minister of State as to why we need to salt away a vital €500 million a year from current revenues and raid the Ireland Strategic Investment Fund to the tune of €2 billion, which could be better used for much-needed productive capital investment in the economy. Of course, it is also planned that €500 million will be transferred to the fund from the Exchequer in each year to 2022.
When Deputy Varadkar was elected Taoiseach, he told The Sunday Business Postof his intention to scrap the rainy-day fund. The newspaper reported at that time - 18 months ago - that the Taoiseach stated that he "believes it does not make sense to salt away €2.5 billion in a rainy-day fund when the money is urgently required for new infrastructure such as public transport projects, schools, hospitals and roads". That sentence sums up my view and the view of many in the Opposition - the Taoiseach did not think that was an appropriate time to have a rainy-day fund. It is still is not the appropriate time. In fact, it is even less appropriate in these critical days with Brexit approaching.
The current rainy-day fund proposal, of course, originated with the former Minister for Finance, Deputy Noonan, in the 2016 summer economic statement, when he indicated an intention to put away €1 billion a year from 2019 onwards.
Of course, in the previous year, 2015, Deputy Michael McGrath of Fianna Fáil had also put forward the idea of a new fund similar to the National Pensions Reserve Fund to hold windfall gains and other unexpected revenues. It is striking that the two parties which have determined Ireland's economic fate since 2008, as they trooped into the Government lobbies on all the major economic decisions, which blew away the pensions reserve fund and lumbered us with a massive debt are now as always ad idemon this current regressive fiscal proposal.
I would generally favour a sovereign wealth fund if the needs of people in housing, health and education were being addressed in a proactive and timely manner and the national debt was reduced to the 55% debt-to-GDP target. What happened to that target? The Minister for Finance appears to have forgotten that it was one of his targets for the national debt. A sovereign wealth fund could be utilised as a fiscal buffer and fulfil countercyclical and contingency functions. As I mentioned, however, the funds administered by the National Treasury Management Agency, NTMA, fulfil some of those functions already. We are also familiar with the eurozone's €500 billion bailout fund, the stabilization reserve fund, and the efforts to create a European monetary fund.
In the context of global wealth funds, we are all aware of Norway's famous sovereign wealth fund which was established in 1990 and passed the $1 trillion value mark in 2017 from the surplus revenues of the Norwegian petroleum sector. China's sovereign wealth funds are also vast, as are those of the oil producing states such as the United Arab Emirates, UAE, Kuwait and Saudi Arabia. A number of countries also have funds earmarked for future pension, social and infrastructure needs such as New Zealand, South Korea, Australia, Iran, Russian, Turkey and Kazakhstan. A total of 48 of the American states also maintain rainy day funds but all 50 states have major restrictions against running a deficit. There is also usually some level of restriction on those states to access their rainy day fund, whose chief purpose is to act as a budget stabilisation fund. A number of countries maintain contingency funds as part of their annual budgetary process. The UK, for example, maintains a "contingencies fund" of 2% of expenditure to meet temporary cash needs of Departments. Spain and France have similar precautionary reserves.
It is unclear to me in the short Bill before us whether the key purpose of the rainy day fund is to be a contingency fund for unforeseen natural or other events in the State or whether its primary function is to act as a countercyclical economic tool, especially to impress our colleagues in the European institutions. The amendment to the NTMA Act of 2014 in section 7 includes funding for occurrences "in the State of exceptional circumstances", the prevention of the "potential damage to the financial system in the State" and to support "major structural reforms which have direct long-term positive budgetary effects". The rainy day fund seems to be intended to cover both the objectives of acting as a contingency and also as a countercyclical tool. Section 3 caps the fund at €8 billion and the Minister is given total control over the management and accounts of the fund in sections 4 and 5. The investment criteria for the fund, which will be held in cash or near-cash instruments, are set out in section 8. Unlike rainy day funds in some other jurisdictions, drawdowns from the fund in section 9 can be made following a simple majority resolution in the Dáil. In some parliaments there must be a two thirds majority so it must be the bulk of the parliament. As he outlined when introducing the Bill, the Minister has emergency powers for drawdowns under section 9 in cases of extreme urgency.
In its working paper No. 6 of May 2018, Designing a Rainy Day Fund to Work within the EU Fiscal Rules, Eddie Casey of the Irish Fiscal Advisory Council, IFAC, and his colleagues warned that "financing potential fiscal stimulus in future downturns by setting aside savings in good times may not be adequately facilitated in the EU Fiscal Rules Framework". I ask the Minister to address the point. The paper goes on to propose an enhanced policy toolkit available to member states when seeking to strengthen appropriately countercyclical fiscal policy. What steps is the Minister therefore taking to ensure further support for the operation of the rainy day fund at EU level? The same paper argues that contribution and withdrawal conditions should be clearly specified. Does the legislation before us address that criteria in sufficient detail in relation to future drawdowns from the fund?
Briefing paper No. 3 of 2017 was produced by the Parliamentary Budget Office, PBO. We had a brief meeting with the PBO today. I welcome the fact that the office has recently been established on a statutory basis. The paper, Rainy Day Fund, clearly envisaged a rainy day fund being used to address only specific events or shocks rather than as a countercyclical policy tool, although it does consider the fund being used for countercyclical purposes in the event of a severe economic downturn. The PBO is critical of the consultation paper on a rainy day fund produced by the Department of Finance because that paper uses inconsistent terminology including the use of "rainy day fund" and "contingency fund" as interchangeable terms when that is not the case. The PBO also asks that the criteria for drawing down the fund "should be outlined in terms of the events it is to address and that these should be clearly set out in legislation". The criteria for withdrawals outlined in section 9 hardly address that requirement, as laid down by the PBO.
The PBO also warns that if the fund is to be deployed as a countercyclical stabilisation policy tool, it must remain compliant with the Stability and Growth Pact. That is the same point that was made by IFAC. The PBO also advises that any budgetary contingency reserve be made part of Government expenditure ceilings and a Vote in the Estimates process and that expenditure from the contingency reserve would be made by way of Supplementary Estimate. The Minister was not very clear on that point when introducing the Bill.
The PBO makes the important point that with the rainy day fund, the State is forgoing a significant amount of money in the medium term and that there may be a big opportunity cost to the State by saving rather than investing the funds and developing the infrastructure we need in public transport, for example, and in health, by just salting the money away and trying to preserve its value. It is not opportune for us to do it at this time.
The PBO concludes that fiscal policies to pay down debt and mitigate risks to the population from natural disasters may have a better cost-benefit outcome than simply establishing a rainy day fund. In the current uncertain circumstances I believe the PBO's critique of the rainy day fund is very well founded.
I note that the consultation paper on a rainy day fund produced by the Department of Finance in October 2017, to which I referred several times, concludes that a rainy day fund is in line with what it calls "best international practice" and that the creation of a contingency reserve-rainy day fund "should be market-positive for Ireland". However, the paper also warns that "remitting funds to any rainy day fund will result in gross public indebtedness being higher than would otherwise be the case" and that the interaction between the rainy day fund and NTMA cash balances must be considered. I wish to focus on the role of the NTMA in the fund. I was pleased to hear the Minister say the NTMA will manage the fund. I welcome that news based on the track record of the NTMA in recent decades. One can at least hope those funds will be in reasonably safe hands and also accountable to us. I am pleased that point was clarified given that it was not clear in the Bill.
I support the creation of a national wealth fund when the current profound needs of our people in health, housing and other critical sectors have been addressed by the Government and when expenditure on the national debt is further reduced. When talking to nurses this morning it came home to us that we should not have a situation where nursing staff, the 40,000 brilliant workers in hospitals and health centres, had to take the action they did today. The matter should be resolved. I tried to establish the facts about the funding necessary to meet the needs of nurses but it is very difficult to get the information from either the Department of Finance or the Department of Health. There are crucial needs in the health service. Approximately 75 extra hospital beds that were promised in the budget should have been opened by now but they are still not open with all the ancillary staff provided. We must address that and other issues first and foremost. Given the existence of the funds administered and maintained by the NTMA, which is upwards of €30 billion, I believe that the time for this initiative has not come. It is not opportune to establish such a fund. The time has not come and it is not appropriate to do it now. Establishing a rainy day fund in the current circumstances is inappropriate and inopportune. It is a grave disservice to the millions of our citizens for whom the rainy days are here. It is raining right now in all the hotels and hubs where homeless people are waiting tonight, and for all the people who are on waiting lists. The all-party Oireachtas disability group spoke earlier about the significant waiting lists for early assessment for children on the autism spectrum. We have so much to do with the revenue we have. We have enough stashed away. It is the wrong time to set up a rainy day fund.
The Government has told us at length about the importance of the rainy day fund. It is more important to know exactly who will benefit from this fund when the time comes. The official statement on the Bill stated that a drawdown from the fund can be made if the Minister is satisfied on reasonable grounds, with evidence and expert analysis, that it is necessary in the event of a severe economic shock. This leaves the fund open to being drawn on wrongly. What can trigger a drawdown needs to be made very clear. My concern is what happens if a Minister turns a blind eye to a crisis and waits for it to escalate before the fund is touched? For many people in Dublin the memory of the fodder crisis last year may be long forgotten, but people in west Cork from Castletownbere to Goleen, Kilbrittain and Ballinalee were severely affected. No one did anything until it was too late for most of them. Time and again I raised this crisis with the Minister for Agriculture, Food and the Marine and asked him to take immediate action to put in place an emergency fund, but that fell on deaf ears. I strongly suggested a fodder transport subsidy to assist in transporting fodder to farmers affected by the crisis. I advocated making livestock meal vouchers available with immediate effect and putting an aid package in place for farmers to help them purchase fodder. I also asked the Minister of State's Department to co-ordinate with the HSE so that a support system could be put in place for farmers who might be under psychological stress because of the financial strain on them at that time. He did not take my suggestions on board until it was too late for many. Will an exigency like this be deemed a crisis or will these people be simply ignored? Unfortunately my experience of this Government so far suggests that the latter will happen.
Fishermen have also had a raw deal from the Government and the Department of Agriculture, Food and the Marine. Our fishermen suffered greatly as a result of Storm Ophelia. Fishermen in my constituency along the coast at Crookhaven, Schull, Union Hall, Glengarriff, Baltimore, Ring, Courtmacsherry, Kinsale, Castletownbere and the islands, and fishermen along the west coast had their fishing gear destroyed the storm. Damaged equipment included shrimp, crab and lobster pots. This was a crisis for them. I raised this matter with the Taoiseach in the Dáil and sought a compensation package to allow these fishermen to sustain their livelihoods. My pleas again were ignored. I wrote to the Minister over and over asking for a compensation package to be put in place urgently. What will happen in the future if our fishermen are again affected by such a storm? I greatly doubt the rainy day fund come into effect for them. Moreover, very importantly, if it does come into effect, will the money from the rainy day fund be used in an efficient manner to help the fishermen affected at the time? Fishermen deserve more from this Government. In light of the complexities arising from Brexit for our fishermen and for fishing in our waters, I strongly believe our fishermen deserve their own Minister for fisheries and the marine to fight for the funds if this reserve fund is put in place.
The Minister of State at the Department of Foreign Affairs and Trade, Deputy Helen McEntee, stated earlier this month:
The Government has worked hard to achieve these key economic aims, while committing to investing in the infrastructure and housing that are so important to our people. We have achieved a balanced budget and a sustainable tax base.
I am not sure where she got this impression, because my constituents still feel let down in the midst of the housing crisis. Despite all this Government's talk about tackling the housing crisis, I do not see the positive outcomes that were promised on the ground. I still know of people who have been waiting ten years or more on the housing list. They are living in appalling conditions. Will this rainy day fund be directed towards providing these people with a home as they find themselves in exceptional circumstances?
The economic crisis started in 2008 and continues to effect many people. The common trend I see in the crises I have mentioned is that they were left too late before the Government acted and this late action has left far bigger problems. It is also notable that rural issues were deemed non-emergencies. Looking at the history of this Government I am convinced that this will be a slush fund for Ministers for the rich parts of our capital that face problems. When it come to the Cabinet table, there will be no voice for rural Ireland in the administration of this fund, as always. A cross-party and non-party group of Members should be set up to control this fund if it ever comes into being. Deputies from rural and urban constituencies must be involved. Until this happens I am opposed to the setting up of this fund. Instead, the Minister of State should direct some funds to my constituency of Cork South-West, which has been cash starved for decades.
Where is the Bandon bypass, which was promised in 2017 to the people of west Cork? Why is money being put into a rainy day fund when the Government cannot fund the projects it has promised the people? Why has the Minister of State not delivered, and why does he seek to put the money away and not use it? Why has this Government failed to spend any proper money to open up our roads in west Cork and to provide passing bays on the N71 from Bandon to Clonakilty, Leap, Skibbereen and Ballydehob or on the R581 from Bantry to Drimoleague, Dunmanway, Ballineen and Bandon? The Government should open up west Cork for business rather than hiding this money away for pet projects. What about all the promises made regarding Bantry General Hospital? Those promises are all verbal at present. I call on the Government to spend some money to set up a cataract unit there. It should spend the money now so that hundreds are not forced to frantically travel to Belfast to save their sight. The Government has left them to go blind on its watch. Ireland is ranked last in Europe at dealing with cataract patients along with Slovakia.
If the Government puts this money aside when these issues remain a crisis, how does it expect us to believe that it will sort a crisis out later? What about the new rooms promised to St. Brogan's college in Bandon two years ago? As yet there has not been a sod turned. The Government should use this money to carry out this project instead of having parents who are living across the
road from the school facing a situation where there is no room to take their child. There are several projects that need to be dealt with. Publicans in rural Ireland are going out of business. This is an emergency that needs to be dealt with straight away. If the Government is not going to deal with these issues, I will not support this Bill.
I am sorry to tell the Minister of State that I will not support the Bill. People in this generation are paying for the latest bank bailout. The Government is now getting ready for the next bank bailout and is asking this same generation to fund that bailout at the behest of the Central Bank. I do not know how the Government is tied to the pillar banks. Of the billions of euro the Government wants to put away in this fund, €170 million or €180 million would set up community banking. That would have saved a lot of rural Ireland's post offices, which are now being closed one after another. It is very hard for people to understand what the Government is at. Is it trying to cod the people? On the one hand, the Taoiseach says to the House that he cannot pay the nurses and the young teachers. He says he has no funding for this or that service, for hospitals or disability services, yet he can find money to put away to ensure that the Central Bank is paid and the banks are bailed out if something happens again as it did previously.
I refer to people with disabilities and people needing respite care. We have no services in Kerry. Not enough services have been provided for respite care for people with disabilities. I know many elderly people with a son or a daughter, people whose biggest worry is where their son or daughter will go. They are 75, 77 or 78 years of age. When they die, who will take care of their children? In Kerry at the present time we have no place for them at all. Why is the Minister of State with responsibility for disability issues not seeking to use some of the funding the Government is putting away to deal with those important needs?
We are falling by the wayside in dealing with mental health issues. We have no services, no facilities and no personnel. We just do not have enough resources to deal with people who have mental health issues. Sadly, so many end up committing suicide. There is too much of it around my own doorstep. That needs to be dealt with. As many as 600 people a year die by suicide. As I said the other day, if it happened on our roads, the roads would be dug up and grass would be grown on them. We would not be allowed to use them anymore.
We have a deficit and badly need more funding for infrastructure.
We have been waiting since 2004 for funding for the Killarney bypass. Killarney is choking with 18,500 vehicles passing through it each day. The little bypass we have is practically inside the town.
We do not have sewerage schemes in many of our towns and villages. Kilcummin has been waiting for a sewerage scheme since 2004. Castleisland is waiting for a sewerage scheme extension for the past 30 years. Scartaglin and Curragh do not have a sewerage schemes. Is it that all those people should go to hell? Is the Government saying it will put this money into this fund and everything will be grand? Is it saying to people in rural Ireland, "Manage away"? I am not being personal in terms of the Minister of State present but it is the truth. The Government is proposing to deny the people the services.
With regard to nurses and teachers, when the economy went bust they were told that they would have to suffer a bit for a while. If the Government has this money now, and I do not know if it has, nurses and teachers should benefit from some of it. I am very doubtful the Government has the money.
To take one issue I have been raising here religiously since I was elected to this House, namely, rural cottages, under the Government's watch ten rural cottages will be built in Kerry over the period 2016 to 2021. There are an additional 50 people on that list. They will provide the site and all they are asking is that the house be built for them and as sure as night follows day, those people will buy back those houses when they get back on their feet. That would put funds back into the local authority and those people would have a roof over their heads. I cannot understand why the local authority is being denied the funding to build those houses.
There is supposed to be a review of the tenant purchase scheme but that has been going on since I was elected to this House. That would put the Government back in funds. We cannot understand why people who are on pensions and could buy out their houses are not allowed to do so. We cannot understand what is going on. The Government is talking about social housing but it allows people to be evicted instead of letting the local authority buy the houses and allow the people to stay in them. In that way they might get back on their feet and buy them back again.
I cannot support the proposal because people today are suffering enough. They need the money. There is no sense in putting it away for another bank bailout.
I, too, cannot support this proposal on the following grounds. How can the Minister of State tell me it is prudent to put money into a rainy day fund on the day when our hard-working nurses the length and breadth of the country were standing outside their stations in a limited way because they wanted to continue to provide their services in hospitals? They did not want to be out on the picket lines but they had to be because the Minister of State, the five Ministers with responsibility for health and our Taoiseach did not give them what they want, which is fair play. That is all our nurses want.
In Kerry, we have been waiting for a community hospital to be built in Killarney. We are waiting for the beds in Kenmare Community Hospital to be opened and for additional beds and an upgrade to be provided for Cahirciveen Community Hospital. We are looking for beds to be opened in Dingle Community Hospital. It is unreal to ask a person in Dingle to have to go outside the Dingle Peninsula for respite care or to a hospital to convalesce after a hip or knee operation or some other serious surgical procedure. It is unreal and inhumane to tell them they cannot go to their own hospital where beds are empty. In many cases, offices are put in where beds should be located. Why in the name of Holy God should we talk about a rainy day fund when we are allowing that to happen? Why is it normal or natural that Deputies Danny Healy-Rae and Michael Collins and myself have to put people onto buses on a weekly basis and send them to the North of Ireland to have operations carried out, whether it be to do with tonsils, hips, knees or cataracts? We cannot provide that basic healthcare here. We are sending them up North on buses for those services and the Minister of State is talking about a rainy day fund.
Our farmers are not getting a fair deal at present. Many are under severe and unreal financial hardship. One hears people talking about bigger farmers. Bigger farmers mean bigger trouble. Small farmers means more trouble again because they do not have an income. They are trying to balance a very small budget, educate their families, ensure they have healthcare, and pay their loans, whether for farm buildings, the house they are living in or infrastructure they put on the farm. They are just trying to pay their bills. The Government is talking to them about putting money in a rainy day fund. Tell them that makes common sense.
The Government should talk to our fishermen. Myself and Deputy Ferris raised an issue here about spur dogfish. All fishermen want is a small change to be made. Deputy Michael Collins has been highlighting fishery issues. All we need are small changes to be made to improve the lot of our fishermen but what is the Government doing? It is cutting tonnage for the people who go out to sea. I know one group in particular and the tonnage for their boat has decreased from 134 tonnes to 26 tonnes. That is unviable and untenable. They cannot make a living.
With regard to infrastructure, myself and my brother, Deputy Danny Healy-Rae, adore Kerry County Council. It is probably the best county council in Ireland, and probably in the western world, but it needs more money for basic infrastructure. I want to highlight schemes in other parts of County Kerry for which we are waiting. In Castlecove, Caherdaniel and other parts of south and west Kerry we need basic infrastructure. We need extensions to existing sewerage schemes and sewerage schemes to be provided where they do not exist. Our excellent county council will spend that money very wisely once the Government provides it. We proved that point previously when we lobbied for local improvement schemes to be reinstated in our county and our country. They had stopped from 2011 to 2016 but they have started up again. We proved we can deliver them in our county. The roads are ready. All we want to do is spend the money, but we need more of it. There are hundreds of these roads. Contrary to what a previous Minister said on one occasion when he went down to Kerry and forget himself, namely, that the road up to a person's house is not all that important, the road up to a person's house is probably the most important road in the whole world to that person because wherever he or she goes, he or she has to go out that stretch of road every day. The more of those we can do in our county and in our country, the better for the people who are our bosses - the taxpayers, the people who pay for everything.
With regard to other road infrastructure we need in County Kerry, give us the rainy day fund and we will spend it every day of the week. It need not be raining because we have many projects and so much we need to do. As my brother outlined, we need an extension to the bypass in Killarney. We need additional car parking in places like Killarney town but to do all that we need money.
It is true that housing is a critical problem. I am very sorry to say, and I am not critical of Ministers, that when I see a wrong being done I want it to be put right. I have asked time and again for an incentive to be put in place with regard to all the vacant houses in our towns and across the countryside. A small incentive would allow people to do up those properties and bring them back onto the market. Is that being done? It is not being done in a meaningful way.
We need to build more local authority houses. We need to bring in a tenant purchase scheme that is real, not the current unreal one which debars 80% of the people who should be eligible to purchase their houses from purchasing them simply because they are not in full-time employment. At the same time, they might have enough of a retirement fund or income from some other source to allow them pay for the house in which they are living but they are being told "No". We waited seven years for a tenant purchase scheme to come in and when it did, the Government made a mess of it. It gave us something that was unworkable, untenable and unreal, which means that many people cannot buy their houses.
When it comes to other issues such as banking, I put on the record of the Dáil yesterday a report that was brought to my attention and to the attention of the Government last week. It was done by a respectable former detective Garda inspector and clearly outlines criminal activity that was perpetrated. The fall guys for that criminal activity were respectable managers of building societies, many of whom I know, who gave great service over the years.
They were shafted and they were the fall guys for the bad practice that was carried out.
I am asking the Minister of State to use this rainy day fund to try to put right an awful lot of the wrongs that we have in society at present. Being financially prudent is smart and we were all taught that we should save up a few bob for a rainy day but not when there are so many issues. If one is in a house and there is a hole in the roof and the water is falling in, one would not advocate continuing to put money away for a rainy day. If the rain is coming in, one will try to plug the hole in the roof and that is what we should do. As a Government and as a society we should put right the wrongs that are there at present. We should use this money now and not save it for some aspirational problem that will come in the future and for some Minister or Government to use it at their whim, perhaps for political advantage at that time. I ask the Government to please be sensible about money and forget about the rainy day fund because it is raining on the people of Ireland enough right now and they are our bosses.
A rainy day fund gives the impression that times are so good that we can begin saving for a rainy day. It is to pretend that the rainy day is something off out there in the future that may or may not come to pass. It is to pretend that we are easily able to afford to save significant sums of money because we are financially stable. We cannot equate a state to a household but in normal households, paying the bills is prioritised and putting matters right before investment is made for the future. Yet Ireland's house is not in order. On paper, the Government might point to cold statistics such as GDP, GNP and so on but the health of our country cannot simply be measured this way. That is very much a bookkeeper's exercise. In the past, Fine Gael governments have been accused of carrying out bookkeeping exercises rather than looking at the social component of issues.
Homelessness among adults and children is at unprecedented levels, housing lists continue to grow beyond all reality, public services are crying out for strategic investment and we are still under the unbelievable debt burden left to us mainly, although not exclusively, by the financial institutions and the bondholders in the wake of the banking collapse. Make no mistake, we are still very much experiencing a rainy day in terms of what needs to be done. I am conscious of the looming impact of Brexit and its potential fallout. How could we not be? We have to shield and prepare ourselves for what could be an unprecedented blow to our economy but there are other considerations as well.
The State will be forced to pay cold hard cash in fines to the EU very soon because we will have failed to meet our 2020 climate targets. We will have to put money into meeting the targets. Instead of committing the funds to key infrastructural improvements that would help us to reach those targets, we are putting it into a rainy day fund. By missing the 2020 targets, we set ourselves much further back from reaching the 2030 targets and we will face even more fines. I asked at the Committee of Public Accounts how much we would be looking at in terms of fines and the economist from the Department of Finance told us that from 2021, we are looking at €600 million a year. Over ten years that will be €6 billion. When we start to look at what we could invest in, that money would reduce the prospect of us paying fines. It makes sense for us to invest in that and it is financially prudent to do so if we look at it in the round.
Ireland has a significant infrastructural deficit and it is holding the country back. If we look at the Nordic countries, why is an equivalent investment being made by foreign direct investment in those countries? They do not have a low corporation tax rate so what do they have that is attractive? They have good education and training, they have fantastic services and they have excellent infrastructure. It can be done in a different way but investment must be made. Our continued lack of investment in basic services means that our people are constantly waiting. They are waiting on hospital trolleys, never-ending housing and health waiting lists and waiting at bus stops and train stations.
I am also a member of the Joint Committee on Transport, Tourism and Sport and transport is one of the components that will contribute to the bill we could end up with for failing to meet our climate targets. It takes five years of a lead-in time to order and have a train delivered. We now have overcrowded trains which makes it unattractive for people to use them at peak times when we need to get them to use them. We have to make it an attractive proposition because there are more people in cars. Instead of making that kind of investment, which not only makes sense in terms of the cost of congestion, productivity, accident rates and all of the rest of it, but it also makes sense in terms of these fines. That kind of investment brings a return.
On a purely theoretical level, an emergency fund makes sense. It can be set aside with boom-time taxes such as we experienced last year with the large extra amount that came in from corporation taxes. It was not set aside for capital projects, it actually just went into the health budget. That is the very opposite of what the Government preaches to the rest of us about the kind of economics that it sees as not being very prudent, but that is exactly what happened. The reality is that such a theoretical view fails to take account of the value of spending now to save in the short, medium and long term.
For example, in excess of 40,000 households are being supported with the housing assistance payment, HAP. Private landlords are getting the benefit of that because the Government has not made the investment to build houses. Some of that money could have come from the European Investment Bank; it does not always have to come from national coffers. There was a lot more money in that fund that we could have leveraged, even during the tough times straight after the crash. If there had been more investment in more direct builds, that would have had an impact on the cost of rents generally because the capacity issue would have been dealt with. That feeds directly into the cost of living, which is unsustainably high. In parts of Dublin, for example, it is just not possible for people on ordinary or reasonably good wages to live in rented properties because rents are constantly increasing. That is because there is a capacity issue. While there is a role for the private sector in building houses, there is also a much greater role for public sector involvement and it has a direct bearing on the price of rents. I cannot get my head around why there has been such resistance to that. The cost of living continues to rise because of the lack of investment.
A useful topic to mention is Sláintecare if we take the example of the health service. By investing in the infrastructure that allows for primary healthcare centres, the demand on public hospitals can be reduced, which is a much more expensive way of delivering healthcare.
Spending now to save in the long term is the approach that we believe is needed. In the absence of such a system in terms of healthcare, people find they have to fork out for private health insurance. I come across pensioners who are struggling to pay their private health insurance, terrified that they will get sick. If there was a primary healthcare centre in their area, they may only need to be monitored for, say, diabetes or other such illnesses. That would be a much more efficient, cheaper and satisfactory way to deal with healthcare provision for some cohorts of illnesses.
If we view matters with a colder economic eye, it is clear that the higher cost of living in Ireland is making it unattractive for investment, whether it be domestic or foreign direct investment, and it will continue to be unattractive. As I said, the Nordic countries are a very good example of the where the type of investment needed has been made to benefit sustainable growth into the future.
We have expressed serious concerns as to whether this fund could ever be used. The Minister of State has linked the fund to a catastrophic event, making it more like a very expensive insurance policy as opposed to a fund for perhaps capital investment as the need arises. It can be very useful in the event of a downturn to have a fund for capital investment and thereby keep people employed and add to growth in the economy. We accept it is prudent not to rely on corporation tax receipts or development levies, resulting from a one-off boom, for ongoing revenue but that does not mean that revenue from a boom in the form of those taxes could not be used to fund infrastructural projects, as the need arises.
We do not believe a rainy day fund is an appropriate approach and instead the Social Democrats have proposed the creation of an infrastructure contingency fund, which at least is descriptive about what it can be used for rather than having a fund for a catastrophic event. It is not clear how this fund could be leveraged. The fund we proposed would be held in reserve for key infrastructural projects and made available for capital projects in such areas such as health, housing, energy and transport on the principle that if we invest now we will save in terms of climate change obligations, housing or programmes such as Sláintecare, which I have highlighted.
We have an opportunity to address key infrastructural deficits and, in so doing, save significant costs in the medium and long term and reduce the cost of living for people. The more the cost of living rises, the more demand there will be for wage increases. That would give rise to an never-ending round of problems if that were the case.
We had the National Pensions Reserve Fund in the past. There was €67 million in that fund or it may have been much more than that. We had a very significant amount in it because we have pensions time bomb. That was raided predominantly to bail out the banks. We have a national debt that is realm of the stratosphere. It is more than €200 billion. Essentially, if we are going to sustain that debt and pay it off, we must have a vibrant economy. A vibrant economic depends on us having housing that people can afford, not raising our cost of living to a level that is unsustainable and not incurring debts such as those we will incur if we do not invest to ensure we do not have debt on foot of our climate obligations. It is prudent to look at proposal in the round. We believe it has been looked at in a silo-based way. This fund will be put out of reach when it could be used in a way that we would end up with a much more sustainable country and economy.
This proposal in this Bill flies in the face of most people's logic. It is proposed that we would have a rainy day fund. When hearing about it initially the public will say it is a good idea to have savings and have something put by. However, when one studies it, while the money is to be put away, it cannot be spent under Stability and Growth Pact rules and all the other rules in place on what would normally be considered a rainy day situation. It can only be spent on shoring up the financial services sector.
The bailing out of the banks bankrupted the country. In the context of this Bill, we are saying that we are going make sure that does not happen again, that we will not bankrupt the country and that we will have saved up to bail out the banks the next time they go down. What will that do? It will create a situation where the financial services sector will become as reckless as it was in the past because it will know it will have that buffer in place, and that the Government will bail it out with taxpayers' money. I do not believe that is right, and neither would any logical, thinking person.
It is time we recognised that the exceptional circumstances which happened in this country should not bring us to a situation where we repeat the same patterns again and again. That seems to be what we are setting out to do. We are putting a fund in place so that those guys can go mad again and we will bail them out. What will happen then? The economy will keep going down and down.
Thousands of people the length and breadth of the country have been destroyed by the economic crash. They cannot afford the repayments on their houses or to pay their debts. The sheriff is writing letters and threatening to evict them. Much of that is down to the greed of the banks and the fact the country and the economy were destroyed because of what they did.
Tonight is a very cold one, although not a rainy one. It is very harsh for the many people who are homeless and who have no place to stay. Efforts need to be made and funds need to be put in place to provide homes and a secure future for those people.
We have major problems in our health service, particularly in our health infrastructure. Apart from the situation with the nurses, I would point to the physical buildings we need to put in place, including a cath lab in Sligo as well as the various services needed around the country. We are abandoning all those projects and are saying they not are important and that what is important is to save up to ensure that if the banks get into trouble in a few years' time, we have money to bail them out. That is a terrible message to send the public, namely, that we are prepared to do this at this point in time.
The money in this fund can be used to remedy exceptional circumstances. Those exceptional circumstances are to ensure the stability of the financial services system. That is simply going back to where we were before which is what we need to avoid doing. If we consider our climate change obligations, we are facing approximately €600 million a year in fines if we do not meet the 2020 agreement in regard to our carbon sequestration target. We are putting €2 billion away when we have to meet fines like that. We are not going to invest and develop the sectors that we need to develop in order to sequestrate the carbon to meet those requirements. We have major problems throughout the country in terms of how we are going to manage all this. The farming sector is under major pressure, with pressure on farmers from every direction.
Basically, a plan is needed and sectors need to be developed. The Government needs to invest to resolve those problems and save the country millions of euro in fines, which will turn into billions of euro very quickly if we do not carry out those actions. At the same time we are talking about putting all this money away to bail out the banks.
Regional development is another major problem. As the Minister of State will know, rents in Dublin are going through the roof and people cannot afford to buy houses. Yet in other parts of the country, there are major problems with rural depopulation and rural decline. We need a Government that invests in the rural economy, and that invests in the areas that have the most potential and that ensures we develop those places, attract employment to them, get people to live in them again and get things happening in them again. The Minister of State is nodding in agreement that this needs to happen. Yet the Government is going to put €2 billion, or €2,000 million, into a fund and the only stated cause that it can be used for is to bail out the financial services sector if and when it gets into trouble again.
I am sure every public representative here has dealt with people among the public who have got into trouble with the financial services sector when their loan could not be paid or ran into arrears and it was sold to a vulture fund. The bank would not do a deal with a homeowner because it said there was a moral hazard and if they were not forced to pay the entire amount borrowed that it would set a precedent which would be bad for the future. We have already set the precedent that it is bad going into the future and a moral hazard by bailing out the same banks and financial institutions in the past. Setting up a fund to bail them out again is copper-fastening that moral hazard.
Under the EU rules, we cannot use this money for anything other than bailing out banks. That is the big problem with it. I do not think any logical person in a normal, functioning economy would say that it is a bad idea to put a fund in place to invest in the future when bad times or a downturn comes. But it is not for that: it is just for this one purpose. The other problem is that we do not have a normal, functioning economy yet. We still have large sections of the economy that are struggling. Many people cannot afford to live, are under significant stress and find the pressures of the costs of living very difficult. They are overtaxed for the services they receive.
I spoke to a woman recently who told me how she and her husband have an income of almost €80,000 coming into their house. When taxes are taken out of it, they have just under €50,000. Yet, when their child was sick and they went to the hospital's emergency department, they had to write a cheque for €100. She asked what we are paying all this tax for if we cannot get any service when we look for it except if we pay again for it. That frustrates people. She is paying a mortgage and almost the same amount again in childcare. These are real crises and real rainy days. I am not talking about people who are on the dole but people who are working. People who are unfortunate enough to depend on social services are in an even worse situation, yet the Government thinks it is okay to put €2 billion into a rainy day fund and grow that to €8 billion over the next years in case the financial services need our help again. The priorities here are all backwards and it is time to rethink this situation.
We are here to talk about the National Surplus (Reserve Fund for Exceptional Contingencies) Bill 2018, a name which I will simplify for people outside of this Chamber as a rainy day fund, or as we call it, another bank bailout fund. This Bill will see up to €2 billion transferred from the Ireland Strategic Investment Fund into the reserve fund. More worryingly, €500 million will be transferred from tax revenue every year until 2023, totalling €4 billion. The Government spoke about where it can and cannot be used. It states in black and white that the money can be used to remedy exceptional circumstances, to ensure the stability of the financial system and to support major structural reforms. Unfortunately, those three points are all for the banking sector. The only explicit use of the fund in this Bill is to ensure the stability of the financial system and capitalise the banks if they fall on so-called hard times.
The Government and Fianna Fáil advertise this idea of a rainy day fund as a sensible policy to save in the good times and to spend in the bad times. The European fiscal rules do not allow for this and Sinn Féin, from a freedom of information request, showed that the fund cannot be used to increase general spending on health, education or jobs during a downturn, nor can it be used to protect the economy from any Brexit fallout or to mitigate climate change. That sets out fairly clearly that whatever kind of rainy day we will have, these will not fall into that category. This is not a rainy day fund but a contingency reserve fund with an explicit purpose of recapitalising the banks that broke this country not long ago. Following another freedom of information request from the Department of Finance, Sinn Féin received information confirming that the fund would not be used for Brexit or general spending such as on health, welfare or education. This is the second time that we have been told that this money cannot be used to invest in services in the event of a major downturn. The National Surplus (Reserve Fund for Exceptional Contingencies) Bill and the setting up of the reserve fund for exceptional circumstances is an attempt by Fine Gael to cut public investment and an attempt by Fianna Fáil to improve its image after it caused the crash, and to set up a fund to bail out the banks again. This fund is not a rainy day fund as the money stored cannot be used in hard times to support employment or stimulate the economy as a counter-cyclical policy. It is a contingency fund for another bailout for the banks and financial institutions.
The only shock this economy has witnessed in the past decade is a financial crash that was followed by a bailout of the banks. The evidence and options before us can only lead to the conclusion that this fund is designed to recapitalise the banks if they fall on so-called hard times again. Sinn Féin rejects the fund which could see up to €8 billion in taxpayers' money given to the banks.
I have a few questions which I do not expect the Minister of State to answer tonight but I will put them on the record. If the Bill did pass, which I hope it will not, on the back of a number of parliamentary questions, will the residential care capital plan for 2016 to 2021 be affected? If we take €500 million out of the Exchequer each year, there has to be a knock-on effect. Youghal Community Hospital is supposed to have a 38-bed unit by 2021 at a cost of €2.67 million. Is that part of the €500 million that we will lose? In Midleton, County Cork, a 50-bed new community nursing home is supposed to be completed by 2021 at a cost of €10.3 million. Nobody is saying what will be hurt here. It is not rocket science. If one puts €2 billion in additional money into an economy, it stimulates the whole economy with a knock-on effect. Put €2 billion into housing or health and people would get real jobs with real wages, paying real tax, alleviating the housing situation, helping the health system, and be able to afford to take out mortgages. I cannot understand this. The Minister of State can correct me if I am wrong but I think, for the 2017 budget, that one of the submissions from IBEC stated that there were housing and health emergencies and to tell Europe that Ireland would not provide the €2 billion bailout because we needed to spend it here. It is a matter of investing in our people.
My background is in mental health services and they are falling apart. We will be here again tomorrow, discussing child and adolescent mental health services, CAMHS. We have been told lies and sold pigs in bags that we cannot see. Some €84 million in additional funding was mentioned last year. It was not €84 million but €35 million. There is the same old spin and it is still about this fabulous little thing that the Government has cooked up, called a rainy day fund. It can be prudent to save and plan for the future but this plan for the future is only for the banks and a bailout. By Jesus, are we going to stand here and let this happen again? I have kids and we will all hopefully have grandchildren. Let us do something right of which we can be proud. Taxes are for investment in our own country. The banks castigated this country, broke families and sent people to the graveyard. We are well aware of it. The Government comes up with some of these fantastic ideas and how it sells them is beyond me. I am trying to get the points across of people outside this Chamber who listen to us and say this will not be spent on health, education, disability, mental health or rural Ireland but is an extra tax to bail out the same gang that has put them in the deepest hellhole that this country has ever witnessed.
People mentioned the moral hazards. It would be a moral hazard if we backed this fund. Everybody paid their tax, then paid it again for the bailout. Every citizen in the country is paying back the bondholders and now the Government wants us to pay as much as €8 billion extra over a number of years. People will get nothing for it but an extra fund so the next generation might not be hit as hard because there is a contingency plan for the bank.
As for services we are supposed to expect, such as those the Government's property tax was supposed to provide, we are getting very few of them because the Government takes that money from us. It is stealing it from us. It just drives me mad.
The tools are already in place to ensure that in the event of banks succumbing to the old mistakes of the past, to put it politely, it is the bank and the shareholders that will have to pick up the bill, not the Irish taxpayers, and that is as it should be. The Government should regulate the banks rather than writing them a cheque, again using taxpayers' money. Instead of setting up a bank bailout fund worth over €4 billion of taxpayers' money, the Government should invest in measures to deal with the greatest threats we face in our economy and society, future-proof our economy and invest in public services, including public housing, health, education - I could go on and on. How is the Government approaching these issues in the Bill, though? It proposes to collect billions of euro of hard-earned taxpayers' money and do nothing with it. It will put the money into a pot and let the banks mind it. It beggars belief.
At the start of my statement I mentioned that €500 million will be transferred from tax revenues every year until 2023. I reiterate that if the Government takes €500 million extra out of the economy instead of putting it in, where there is an action there will be an instant reaction. It will have devastating effects on our crumbling health system and the mental health service, which is not only crumbling but practically non-existent. It will also affect disability services, education, housing, rural transport, broadband and planning for the future energy-wise - the list is endless.
Sometimes people are not in touch with reality. The Taoiseach referred today to the nurses' and midwives' strike. He said he did not want to put an extra burden, a cost, on taxpayers, for the sake of pay equalisation. The Government still sees fit, however, to take an additional €500 million - not €500,000 - out of our crippled services from now until 2023 and stick it into a slush fund for the banks. It will not make money. As I said, the Government should put the €2 billion into the economy. If it does so and invests in the areas where it is falling down, it will have a knock-on effect. This goes back to action and reaction. We could start alleviating the housing problem and get real jobs and real pay. It would go on and the knock-on effect would be endless, but the Government is going to drain the whole system.
I will finish with a very simple point. Sinn Féin will reject the Bill, and the Minister of State should not be surprised by that, but we also want to send it back to the Department of Finance and certainly back to the drawing board. It is one of the most ill-conceived Bills I have ever spoken on in this House since I was elected.
When will it rain? I represent Limerick city. I am sure the same issues come up in the Minister of State's constituency clinics as come up in mine. People cannot access houses. I know for a fact that in Limerick there are roughly 70 council houses that are boarded up and owned by the council. They do not have the funding to do them up. The Minister, Deputy Eoghan Murphy, tells me every time I ask him about this that funding is not an issue, but the council staff - I spoke to some of them again today - are stressed to the gills because they are under pressure from people who see the houses in their local communities boarded up and who have family members and friends in emergency accommodation. If that is not a rainy day, I do not know what is.
The hospital in my constituency, University Hospital Limerick, is home to the most overcrowded emergency department in the State. Almost 12,000 people waited on trolleys last year. Again, I would like to know how the Minister of State would define "rain", given that the Government does not put the money into dealing with this. The Government has not delivered the 96 beds that are critically needed. Funding for third level institutions is also causing people huge concern. I have met representatives of local universities who tell me they are totally underfunded. No proper funding is put into infrastructure. For instance, the Limerick to Cork motorway has not been delivered or progressed as quickly as is needed. We now have 22 Dáil sitting days before we face the calamitous Brexit, whereby the UK will probably crash out of the Union. We see the heads of the Bill the Government produced last week with the policies and solutions it is coming up with in the Department of Business, Enterprise and Innovation. There is nothing new in those heads, no additional measures, no new proposals. They have recycled a Bill that has been floating around since 2017. We have a loan scheme for business which most businesses say they cannot access.
When would the Government access a rainy day fund? What is it for? The idea of a rainy day fund would be very good if it were not already raining for so many people. It is hard to understand why the Government is putting away money when we have critical situations in housing and health. Deputy Buckley referred to CAMHS. I have a whole list of kids who have been waiting 18 months to get assessed by CAMHS, and I can tell the Minister of State that the issue is a lack of funding. The idea of a national reserve fund would be a good idea if we had solved many of the critical problems we have, but I do not believe we are anywhere near addressing them at present.
There is no place more comfortable than where the three Sinn Féin Deputies are sitting. Sinn Féin is sitting on the fence. It is a national past-time for Sinn Féin. It does not take its seats in Westminster and it abdicates-----
We are dealing with the finances of the State in a careful, prudent and coherent way.
I want to stop the lie, gentlemen, please, and I use the word "lie" because what they said about this being only about bailing out the banks is a lie. I do not think I am being unfair when I say that is more or less all Deputies Buckley and Martin Kenny said, nothing else.
There has been speculation that the fund could be used only for a future bank bailout. To clarify the fund and the drawdown, the latter can only be to the Exchequer. Direct payment to any other body or organisation is neither contemplated nor permitted. Drawdown is also subject to Dáil approval, and any onward payment from the Exchequer will be subject to the normal public financial procedures. I just wanted to clarify that for the Deputies in order that they accept it. For completeness, I wish to add that the use of the fund for a bank bailout is not forbidden. It, therefore, could potentially be used if there is a wild emergency at some stage in the future, but these measures could not take place without a further decision of the Dáil, so the Dáil will decide. The measures the Deputies are talking about at national and EU level are intended to protect against such an eventuality. I refer in particular to the banking union, which is an EU bank supervision and resolution system developed in the aftermath of the previous financial crisis and the subsequent crisis in the eurozone. The banking union is intended to place the European banking sector on a more sound footing and will restore confidence in the euro area. At its core, the banking union aims to ensure that banks are robust and able to withstand any financial crisis, to prevent situations in which taxpayers' money is used to save failing banks and to protect consumers. It is this break between the sovereign State and the funding banks that has been worked on for the past decade. However, the Deputies, in particular Deputies Martin Kenny and Buckley, said this is only for the banks. It is not. Do the gentlemen accept that?
The Bill legislates for what has been termed the "rainy day fund", a commitment in A Programme for a Partnership Government and an important element of the Government's strategy to put our national finances on a sound footing while building resilience to external shocks, and there can be external shocks for which none of us is prepared. That is what the Bill is for.
A number of Deputies questioned the very purpose of the Bill and claimed that international experts have recommended other courses of action.
Let me be clear that all the international and national experts have endorsed the establishment of a rainy day fund. Given our current strong economic performance, we should make provision now to address the effects of a potential future crisis that will be outside our control. This fund will be an economic buffer available for drawdown in the event of a sharp economic downturn. This will also allow the Government of the day to mitigate the effects of that downturn. It allows capital investment and current expenditure to continue even if there is a sharp reduction in tax receipts.
A number of Deputies referred to the level of indebtedness of the nation. Ireland's level of indebtedness is somewhere between €200 billion and €210 billion. Everybody says it is the fault of the banks. The Sinn Féin Deputies also said that. For clarity, in 2007, the national debt was approximately €40 billion. The figure for the banks is €30 billion. The remainder is what we borrowed from partners such as the European institutions and other countries which directly funded us. We relied on the kindness of strangers. The remaining amount of approximately €150 billion-----
The crisis was a result of the collapse of the tax take and over-reliance on VAT and excise. We kept spending. The Sinn Féin Deputies are encouraging us to keep spending and that this time will be different. That is Sinn Féin's policy: tax, spend, destroy the economy, have a good time, and we will spend the next decade trying to tidy up afterwards.
It has been a hard decade for people. We have not had the money to spend on capital projects that we wanted but we are going to spend €116 billion. None of the Sinn Féin Deputies mentioned the €116 billion for Rebuilding Ireland. They only mentioned the negatives.
Deputies have a variety of positions about this. Some want more funds transferred into the fund and many others want no contributions to the fund due to the challenges being faced now by citizens, including the shortage of housing. Some €2.4 billion will be available to be spent on housing next year. I stand to be corrected, but that is the most money the State has ever spent on housing.
Deputies also referenced health expenditure. We will spend €17 billion on health in 2019. We have never spent more before.
Wehave never before spent as much on health.
Deputy Quinlivan referred to child and adolescent mental health services, CAMHS, and the issues with CAMHS are nationwide. The issue is not having the right, qualified people working in the sector. That is the main issue with CAMHS. It is not about money. I can only speak about Wexford, the area that I know best. We have money and positions that are funded and available in CAMHS but we cannot get the appropriate people and the correct staff. Those are facts.
Responsible Governments must address a multitude of challenges. Sinn Féin would not know anything about responsible government. It is out of it in Northern Ireland, does not even go to Westminster and chooses not to participate here.
A Government cannot focus all its resources on one challenge as this will only exacerbate the other challenges. The Government is addressing the shortage of housing with the creation of the Land Development Agency, the establishment of Home Building Finance Ireland and the refocused Ireland Strategic Investment Fund. These steps will help to deliver new homes on the scale now needed, and alleviate price pressures in housing. In the third quarter of 2018, we saw new house completions increase by 33% and granted planning permissions increase by 62% year-on-year.
Deputies Michael McGrath and Fleming raised concerns as to the €8 billion cap. This cap reflects the advice of experts who have offered constructive views and is particularly informed by our high debt levels. It is not feasible to continue incurring interest and carrying costs while holding a sizeable rainy day fund.
As raised by other Deputies, the Government must assess the range of competing priorities of the requirements for capital investment in housing and health, the need to make our public finances stable and sustainable and the need to manage the significant debt burden we are still carrying as a result of the previous crisis. I will leave predictions of what will trigger a future economic shock to others but it is certain that there are external risks and challenges out there, of which Brexit is only one. Some of these risks are known and are being planned for. There are other risks that we do not know about and for which we are not planning. They are the ones that come from left field and surprise everybody.
We are only too well aware of the impact of a severe economic shock on the citizens of our country. While we have made huge progress, the effects of the most recent economic and financial crisis have long lived with us and are still being felt by too many people today.
I am confident that we are in a far better position to weather the storm when a future crisis hits. Setting reserves aside now, under this Bill, is important.
I wish to touch on the issues that were raised as best I can, although I am not sure I will deal with all of them. Spending on our health service is already at record levels. In 2017, OECD data placed Ireland fifth in spend per capitaamong the EU 27. The additional expenditure in 2018 alone is around €1.2 billion and, as I said earlier, there is an expenditure of €17 billion for health in 2019. There is simply no question whatsoever that health funding will suffer as a result of the establishment of this rainy day fund.
The Fiscal Responsibility Act imposes a duty on the Government to comply with fiscal rules. The national surplus does not amend or change this obligation. In setting out the circumstances for drawing down funds from the rainy day fund which will be formally known as the National Surplus (Exceptional Contingencies) Reserve Fund, Government has been careful to make a clear link with the existence of exceptional circumstances within the meaning of the stability and growth pact.
We cannot do it all again. Too many Deputies on the other side of the House, and not just those from Sinn Féin, think that we should spend money on this, that and the other. I did not have a method of calculating exactly how much money could or should be spent but it has already probably run into billions. This is an irresponsible type of politics. If those Deputies switched from that side of the House to this one, and were suddenly in a position whereby they had to be responsible and prudent, they would find they could not do everything they have promised. That is irresponsible. That is the politics of populism that has the body politic in trouble worldwide.
I did not interrupt any of the three Deputies.
I will try to answer some more of the questions as best I can. The State money available from what was formerly the NTMA amounts to approximately €8.5 billion. The money in the escrow account from Apple amounts to approximately €14 billion, including interest. That is to be decided by the European Court of Justice at some stage in the future.
I live on a farm, down a lane in rural Ireland. I do not have the rural broadband connection I would like, like approximately 320,000 other people. I continually hear about rural Ireland being impacted by Government and nothing is further from the truth. I do not have a breakdown of figures per county but I have the figure for my own county. Last year, in 2018, €9.8 billion was spent by Government Departments, mainly the Department of Rural and Community Development, in County Wexford. That money was spent in rural Ireland, not in the large towns, but in smaller towns and villages in the countryside to support rural Ireland. Rural Ireland is not exclusively about post offices. It is not exclusively about being able to have a couple of pints, or a few drinks, and drive home, as some of the Rural Independent Group Deputies would like.
That is not what rural Ireland is about. Every area in rural Ireland is not thriving but some areas are doing much better than others. Deputy Martin Kenny has heard me make this point before. I can name dozens of places that are thriving and dozens of other places in rural Ireland that are not. We are investing in rural Ireland and in communities in small towns and villages. The rural regeneration programme and the Minister, Deputy Ring's pot of money is, and will be, of huge benefit. The first €55 million was announced before Christmas and the second portion of that pot will be announced soon. They are crucial projects for rural Ireland. It is not all about the post offices. The congregation area that was the post office will change into the community centre run by communities. That is how I see the successful communities that are thriving and doing well. There is money available if they are organised and focused on how they draw down those moneys.
The Rebuilding Ireland programme will cost €116 billion. There is a lot of talk about the potential for climate change, its negative impact and fines we may have to pay because we will not meet our 2020 targets. It is unquestionably disappointing that we will not meet them. The Taoiseach, others in Cabinet and I are committed to ensuring we meet our 2030 targets. Of the €116 billion for the Rebuilding Ireland programme, the largest pot of €23 billion is to deal with climate change and the decarbonisation of our society. It is the largest amount that will ever be spent on it and it will be spent in a multitude of ways. There will be changes and reconfiguration in the areas of agriculture and transport, which are two areas that are having an impact. The change will come pretty rapidly. It will be positive because we will all benefit from it.
I am only back from a visit to China for the Asian Financial Forum where I presented Ireland as a place to bring business. We all have to do our bit with regard to climate change. Pollution was particularly bad on that occasion. I was surprised by the level of pollution, which I had never experienced previously. Anyone who has not seen it or experienced it would have to see it to believe it. It was very serious. Ireland will do its bit. We will move faster than we have done before. We are moving away from fossil fuels. The Fossil Fuel Divestment Act was a Private Members' Bill introduced by Deputy Pringle, which the Department and I supported fully. It was a good step in the right direction. The sustainable green finance bonds are our first national sovereign bonds in that area and €3 billion was raised last October. It was oversubscribed by four to one. We are doing our bit and we are going in the right direction. We would like it to be quicker but we are doing our bit.
I will touch on a number of other issues. Deputy Catherine Murphy raised the issue of the European Investment Bank, EIB. It is making good investments in projects that will be crucial to the correct development of our country but they are loans. An EIB loan has to be paid back. The EIB is on board. The multilateral banks, from my dealings with them, are doing a lot of good work. Ireland is now part of the African Development Bank, the Asian Infrastructure Investment Bank and others. That will have a major impact on how we blend funding to deal with climate change in the future.
It is a pity Deputy Murphy is not in the Chamber. She made a statement that is wrong, which is that Ireland is unattractive to foreign direct investment. Ireland is very attractive to foreign direct investment. We have won a large share of Brexit jobs from the United Kingdom. In terms of Brexit, I have always been on the record as saying that when I was presenting Ireland as a place where business can be done, I was not presenting it on the basis that the structures that we have put in place are not to be opportunistic. The point I made to companies that had a Brexit difficulty was that if they had a difficulty, we could be part of their solution. I told them to have a look at the offering we have in Ireland. These jobs are all over the country. They are not all in Dublin. One third of the jobs in international financial services are outside of County Dublin. We keep being told by some in Opposition that rural Ireland is dying. In State Street in Kilkenny there are almost 1,000 jobs; in Pramerica in Letterkenny, there are 1,400 jobs; and in BNY in Wexford, there are 500 jobs. They are important to the economy of rural Ireland. They are all over the country.
The fund is not to bailout banks.
As I said earlier - I did not sugarcoat it - it could be permitted in a severe economic shock. We do not know what the next economic shock will be. The book was written during the crisis. This time it is different. It is always different. There is just a different spin or view on it. Will it be the banks or will it be something else? I do not know what the economic shock could be. It could be a hard Brexit. It could be Britain leaving without a deal. There is an ideological clash happening in the House of Commons. It does not seem that common sense will prevail. I am a believer in politics and I am also an optimist. I believe common sense will eventually prevail. It could be the UK crashing out with a hard Brexit and no deal by accident. There is research showing that it could have a larger impact on the world economy than the economic recession we have just come out of. We do not know what is coming next. This is prudent and diligent and it is the right thing to do. My friends on the other side of the House - although not all of them - are saying this is wrong. This is not wrong; this is prudent.