Dáil debates

Thursday, 14 July 2022

Summer Economic Statement: Statements


1:15 pm

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I welcome the opportunity to open the debate on the summer economic statement.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Has the Minister a copy of his speech?

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I am sure my office will furnish one to the Dáil as soon as possible.

The summer economic statement establishes the budgetary parameters for the discussions we will have in this House in advance of budget 2023. It also outlines the Government’s medium-term budgetary strategy for ensuring the public finances remain on a sustainable pathway.

I will outline the context within which the Government will publish the budget for 2023. Two and a half years ago, we found ourselves facing a public health emergency which no one could have anticipated. The Government responded in an unprecedented way to shield the economy. Years of careful and responsible budgetary management meant we had the resources to meet the challenges of that moment, and we deployed those resources in full. The cost was enormous, but we got the balance right. Government action prevented a deep and long-lasting recession and laid the groundwork for a strong economic recovery when we had moved beyond the most severe phase of the pandemic.

Nowhere is this more evident than in the jobs market. We now have more people at work in Ireland than ever before. When I think back to the depths of the pandemic when unemployment soared to record levels, this is a really important achievement. The actions and supports of the Government played a crucial role in this.

I would note we spent many years gradually building up the public finances. During this time, the constant refrain was that the Government should have been spending far more. Indeed, it may have been quite popular at times to do so, but if we had not restored the public finances, we would not have had the resources available to intervene on the scale we did and would have been in a more vulnerable position when the pandemic hit and, indeed, now.

We have proven our track record at being able to intervene at a time of such emergency and we have demonstrated the importance of being ready for new unexpected challenges, one of which we are now confronting today. I refer, of course, to the consequences of the Russian invasion of Ukraine and the after-effects of the pandemic on the supply of goods and services that have given rise to inflation not seen in many years. Now standing at 9.6%, inflation is at its highest level in almost four decades.

2 o’clock

Of course, Ireland is not unique in that most other developed countries are struggling with the same problem, but we accept and understand the difficult consequences of this inflation for our standard of living and for households and businesses throughout the country. We understand what the fall in living standards means for them and the difficult choices they are making.

While the drivers may indeed be global, we need to recognise there is no Government that can fully offset the impact of these changes on the lives of citizens. However, we have intervened to ease the burden and help with the costs, providing almost €2.5 billion in direct relief. Between the response to Covid and our response to the cost-of-living challenge, this means we have now provided in excess of €50 billion in budgetary support since early 2020 — a remarkable figure. The Government has not shied away from taking the necessary action when needed. The question now concerns what further action is appropriate and how we can strike a balance between intervening today and keeping our public finances safe so we will be safe tomorrow. We got the balance right during the pandemic and it is vital we again get it right as we address the consequences and challenges of cost-of-living increases. This leads on to the budgetary strategy the Government published.

Last year, we set out our medium-term budgetary strategy in the summer economic statement. This set out the pathway for gradually restoring the public finances to health while still allowing for reductions and changes in personal taxation. Under this strategy, core current expenditure growth will be limited to the trend growth rate of the economy so that, for example, if tax revenue exceeds expectations, it will not be used to finance new expenditure above levels already planned for.

However, the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and I recognise that the statement was drafted in a dramatically different inflationary environment. To reflect this, for one year only, we have amended the strategy for 2023. Core current expenditure will increase by 6.5% next year. The tax package to be announced in budget 2023 will be just over €1 billion, more than double what was initially provided for. Therefore, the total package for next year will be €6.7 billion. This is a change for 2023 only. For future years, our strategy will remain unchanged, with core current expenditure targets at 5% per year and tax packages reflecting what we hope will be different and better economic circumstances. This strikes the current balance, acknowledging the new economic reality while setting out a sensible plan for restoring our public finances to strength over the medium term. This overall approach has been endorsed by the Irish Fiscal Advisory Council. Taking into account positive tax developments, a budget package of €6.7 billion would be consistent with a very modest budgetary surplus for next year. I stress, however, that this would be due solely to the strong growth in receipts we have seen from corporate tax. As I said to this House on countless occasions, while these receipts are welcome and a sign of the strength of our multinational sector, they are also highly concentrated, with just ten firms paying more than half of the entire corporate tax take. This leaves the public finances exposed to vulnerability from a potentially volatile, unreliable revenue stream.

We know all too well in this country that leaving the public finances vulnerable to changes in transient revenue is potentially catastrophic. It is not so long ago that our tax receipts had become overly reliant on another source of windfall tax receipts – those related to the property market – and we are all aware of the consequences of that.

Over the medium term, we know that changes to the international tax regime are forthcoming. While the full impact of the changes agreed under the base erosion and profit-shifting, BEPS, process will take time to become apparent after implementation, our current technical estimate is of a loss of €2 billion. In reality, due to other changes, for example, in the business cycle, the costs could be even higher. With this in mind, I would caution that while a headline budgetary surplus is certainly positive news, headline figures alone can overlook very real vulnerabilities in our public finances. It would not be safe to suggest we can begin spending at increased levels once such a surplus is achieved, particularly if that surplus ultimately proves to be passing because it is built on conditions and foundations that change.

Accordingly, I have asked my officials to examine the issue of excess corporation tax in advance of the budget so we can move to address this vulnerability while continuing to ensure Ireland remains a destination of choice for highly successful multinational investment. Such investment benefits our economy not just through significant tax receipts but also by creating many highly paid jobs.

The forthcoming budget will be a cost-of-living budget. We have already acted, repeatedly, to help to ease the burden and will continue to do so. In particular, we will ensure workers do not pay more income tax as a result of inflation pushing them into a higher tax bracket. We will introduce a carefully crafted, appropriate budgetary policy that serves to assist people with the cost of living but not add to the inflationary difficulties we face. We will ensure we keep our public finances in a safe way. In short, the strategy set out in the summer economic statement seeks to get that balance right.

1:20 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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This debate provides an important opportunity to consider the Government’s fiscal strategy for budget 2023, as set out in the summer economic statement. This morning I was glad to have the opportunity, alongside the Minister for Finance, Deputy Donohoe, to engage with colleagues at a meeting of the Committee on Budgetary Oversight. The meeting gave us a good opportunity to tease out in more detail some of the issues involved.

The summer economic statement is an important part of our annual budgetary timetable. It sets out our fiscal and budgetary strategy for the year ahead, outlining the resources available in the context of budget 2023. Back in 2020, when the Government took office, the most pressing issue was tackling the pandemic and ensuring lives and livelihoods would be protected insofar as possible. The scale of the Government intervention has been truly unprecedented. Some €37 billion in direct public expenditure supports has been made available to fight Covid and its effects. This investment was complemented by a range of further taxation and liquidity measures.

Assessing the economy today, it is clear the Government made the right call in supporting incomes, jobs and businesses. As we emerge from the pandemic, our economy and labour market have shown remarkable resilience. At the end of June, the monthly unemployment rate stood at 4.8%. At the end of June last year, the Covid-adjusted unemployment rate was almost 16%. In the first quarter of this year, more than 2.5 million people were in employment. This is an all-time high in the history of our country and far exceeds pre-pandemic levels. It clearly demonstrates the scale of the recovery in the labour market, which was supported by the significant income and employment supports implemented by the Government over the course of the pandemic.

Businesses, too, have shown strong resilience, as the many Covid supports, such as the employment wage subsidy scheme and Covid restrictions support scheme, have been unwound. The economic rebound Ireland has achieved has not been the experience universally. Ireland's record, by comparison with that of our peers in terms of health outcomes and the strength of our economy, indicates Ireland has done remarkably well. We owe a considerable debt of gratitude to the public and private sector workers and the thousands of volunteers around our country who made this a reality.

While the economy has rebounded strongly following the pandemic, the global economic outlook has changed significantly. A complete cut-off of Russian gas to continental Europe is now a possibility, making the European economy especially vulnerable. This impact can be seen in the value of the euro, which has now reached parity with the dollar for the first time since 2002. For Ireland, as an exporting country, a slowdown in the European economy will have an impact on prospects.

As a consequence of the intervention during the pandemic, Irish Government debt has now reached nearly €0.25 trillion, representing €47,250 for each person in the country.

As the Minister for Finance has said on a number of occasions, the era of zero- or low-cost borrowing has come to an end. These are some of the many challenges that we, as a Government, need to consider when framing the budget 2023 package.

Domestic and international inflationary pressures are foremost among those challenges. Supply issues that developed over the past two years have contributed to price increases. This has been exacerbated by the conflict in Ukraine and the resultant impact on energy prices. We are acutely aware of the impact of these price pressures on households, families and businesses. We saw further evidence of that today, with the official measure of inflation now being at 9.1% annually, which is the highest level in almost four decades.

A range of expenditure measures that assist with the impact of cost-of-living pressures were included in this year's budget. They included €1.2 billion in expenditure across a range of sectors, with increases in social protection weekly rates, health affordability measures and childcare supports. They were complemented by a significant tax package. I recognise that the economic context has changed considerably since the last budget and Government and fiscal policy has been responsive to this. More than €500 million in cost-of-living spending measures have been introduced in the current year. This included an electricity credit of €200, which benefited more than 2 million households. Further targeted measures in respect of the fuel allowance, reductions in the drugs payment scheme threshold, reductions in public transport fares generally with an additional reduction for young people, and improvements in the working family payment have also been announced. In addition, the Government introduced a temporary reduction in the excise duties charged on petrol, diesel and marked gas oil and reduced the VAT rate on the supply of gas and electricity. We have to continue to fund these measures.

Last week, acknowledging the strain many families are facing with back-to-school costs, we announced a further package, including the abolition of school transport fees for the 2022-23 school year, a €100 increase in the back-to-school clothing and footwear allowance and the expansion of the school meals programme to the newly designated DEIS schools, benefiting 60,000 children. The Government is committed to continuing to help our people with the challenge presented by the current level of inflation. This context has framed our preparations for this summer economic statement and shaped today's debate.

Last year, the medium-term expenditure strategy set out the dual objective of delivering sustainable expenditure over the medium term by setting the core expenditure growth rate at sustainable levels and providing the necessary resources for ongoing improvements in public services. The strategy was developed against the backdrop of an average of 2% inflation over the past 20 years. The strategy must take account of the nature of the economic shocks we are experiencing. These shocks are exceptional and globally driven. It is clear that to protect public services, a short-term adjustment to the expenditure strategy is required for 2023. This is an important element of our budgetary plans. In framing the summer economic statement and budget parameters, we are seeking to balance the need to protect the real value of public services with policy measures that do not add to inflationary pressures. While the Government cannot absorb the full impact of the current inflationary shock, we have taken concrete action to support households, protect public services and continue invest in our critical public infrastructure. We must and will continue to do this through an adjustment to the expenditure strategy.

Budget 2023 will be a cost-of-living budget. We will follow up on the measures introduced this year and as part of the budget 2022. The summer economic statement sets out the key parameters for budget 2023. It outlines a total expenditure package of €90.3 billion for next year. This funding will deliver core services and help businesses and the economy to deal with the adverse impacts of Brexit, provide ongoing Covid supports, which will continue to be necessary, and provide for the humanitarian assistance of refugees arriving from Ukraine through additional non-core funding. This upward adjustment will result in an increased overall budgetary package of €6.7 billion, comprising approximately €5.7 billion in additional expenditure and a further €1 billion for tax measures. Some €400 million of this spending will allow for the early implementation of measures in the current year while €5.3 billion will be provided for the 2023 budgetary package.

Compared with the position set out in budget 2022 last October, this package will see core spending increase by 6% this year and 6.5% next year, meaning an additional €1.7 billion in resources will be available compared to the stability programme update we published back in April. This is a significant but warranted increase in the circumstances.

Next year, €85.8 billion in core expenditure will be provided for both the ongoing support of, and improvement in, public services and additional public investment. Approximately 3% of the core current expenditure base will be available to meet existing levels of service costs next year compared with the current year. This includes meeting public service pay commitments that have been made in the Building Momentum agreement and funding for demographic developments, including supporting a growing population and the changing profile of our citizens. It also includes meeting costs from the full year impact of measures from budget 2022 that are being implemented on a phased basis, such as the changes to the childcare scheme later this year and the changes to the Student Universal Support Ireland, SUSI, grant system that will kick in in the autumn. Funding has to be provided next year for such measures. There will be a €800 million increase in capital expenditure in line with the ceiling set out in the national development plan, NDP. Overall core capital investment will reach some €11.7 billion next year, with an additional €200 million as part of the national recovery and resilience plan. This represents 7% increase, in line with the NDP.

This funding will provide for important investment across all sectors, including housing, health, education, transport and also to tackle climate change. There is also likely to be some carryover from any unspent element of the capital budget in the current year. All of this means that €2.7 billion will be available for new current expenditure measures, of which approximately €400 million will take effect in the current year. This must accommodate priorities across a wide range of Government policy areas, including the public service pay bill, which is a significant driver of current expenditure, amounting to close to a third of core current expenditure each year. Spending on social protection accounts for a further third of core current spending. It must also provide for Government commitments on housing, climate change and health. Core spending will continue to provide the funding required to support and provide improvements in public services, while investing in our capital infrastructure around the country. As the Minister for Finance said, we plan to introduce a number of one-off measures for implementation in 2022. Those are being developed by Government and an announcement on this will be made on budget day in September.

Next year, the Government will provide €4.5 billion in non-core spending for temporary measures. This follows the provision of €37 billion since March 2020 in non-core funding, mostly for Covid-related spending. This reflects the Governments two-pronged approach to fiscal policy and expenditure management and is a vital tool to ensure responsive fiscal policy to significant external shocks. This funding will provide for the continuation of important Covid measures in the health service, the provision of supports to help counter the negative impacts of Brexit through the Brexit Adjustment Reserve fund and the continued provision of humanitarian supports for refugees arriving from Ukraine.

The revised strategy provides for a 6.5% increase in core spending for next year. This will be a considerable increase in funding and resources for the budget but it must accommodate a range of priorities. It can have a significant impact on the lives of our people but this requires a focus on the design of policy and it requires prioritisation. We cannot meet all the competing demands on public expenditure, but we can provide support to those most vulnerable and continue to enhance our public services. This will require decisions to be made across government and prioritisation of demands. A range of expenditure reforms have a role to play in supporting this process and ensuring that spending delivers efficiency, effectiveness and value for money.

These reforms include the ongoing spending reviews, performance budgeting and the use of Irish Government Economic and Evaluation Service resources across government to provide key information and critical insights to inform decisions. In that context, my Department will publish the mid-year expenditure report this month. This is an important document setting out a clear and detailed view of the baseline expenditure position in advance of the upcoming Estimates process.

While we undoubtedly face many new challenges, we have seen considerable improvements in the fiscal position of the State and we recognise the extraordinary resilience of the people and of our economy. This will allow us to respond to these challenges in a manner that is affordable and fiscally sustainable while protecting public services, improving outcomes and investing in our future, and above all else, recognising that we do need to respond to the significant cost-of-living pressures so many people are facing at this time.

1:40 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Perhaps the Minister will supply copies of his speech at some stage.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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Tá bagairtí suntasacha agus dúshláin shuntasacha roimh gheilleagar na hÉireann agus roimh mhuintir na hÉireann san am atá amach romhainn, ón ghéarchéim chostas maireachtála go dtí teipeanna leanúnacha i réimsí mar thithíocht, shláinte agus chúram leanaí. Ag an am céanna, tá bagairtí fadtéarmacha ann ó Brexit agus ó Covid-19. Ní mór do bhuiséad 2023 aghaidh a thabhairt ar na dúshláin sin agus fíorathrú a dhéanamh. I welcome the opportunity to contribute on the recently published summer economic statement and the economic challenges facing households, facing our communities and facing our country.

The people and our economy have faced a multitude of crises and challenges over recent years. Since 2016, we have faced the threat posed by Britain's decision to leave the EU. Not only did Brexit pull the North out of the Union against its will, it has created grave economic uncertainty and political instability on our island. As the Tories proceed with anointing their new leader, uncertainty remains regarding the British Government's commitment to the Good Friday Agreement, and indeed to international law. We must remain vigilant and ensure that we do all we can across this island to limit the damage to our economy, to our communities, and to the Good Friday Agreement.

Two years ago the world was plunged into the greatest public health emergency in generations. The Covid-19 pandemic threatened the economy, jobs, businesses and the health of our people. Like states throughout the developed world, the Government introduced measures and schemes to mitigate the impact of the pandemic on society. I acknowledge the success of that response such as the wage subsidy scheme, which retained the vital link between employers and employees to stave off the threat of mass unemployment. Throughout the pandemic, Sinn Féin supported the Government in implementing these vital measures at a time of national emergency. While Covid-19 is now at the back of many people's minds, the virus remains in our communities. We must continue to support our health services and healthcare provision in the time ahead.

We have faced another challenge that threatens not only the competitiveness of our economy but also the living standards, the hopes, and the aspirations of our people. The housing crisis, which the President rightly described as a social "disaster", is not an accident. It did not fall from the sky. Just as the Government takes credit for employment growth and headline economic indicators, it must also accept responsibility for overseeing a housing crisis that has left so many people in unaffordable rental traps and many others struggling to buy a house they can call home. Home ownership rates have collapsed. Young people are facing an uncertain future. Persistent failures also exist in other areas. Hospital waiting lists are higher than ever before. Access to healthcare remains out of reach for far too many. Childcare costs remain extortionate. We must recognise that the provision of housing, affordable childcare, and accessible healthcare are not separate to the economy but are pillars of an inclusive economy

It is important that we reflect on these challenges in the context of the summer economic statement and the budgetary strategy in the next year and the years ahead. We do not have the time; people cannot afford for these challenges to be put on the long finger or made worse by the continuation of failed Government policy.

Workers and families are struggling in the cost-of-living crisis. With inflation reaching more than 9%, the highest rate of inflation in four decades, the causes are driven by a number of factors ranging from supply chain disruptions as the global economy emerged from the pandemic, some of which still persist, to the illegal invasion of Ukraine that has turbocharged inflation in energy and key commodities. Of course, the high cost of living is also driven by domestic and persisting factors such as high housing, childcare and electricity costs.

While inflation has darkened the economic outlook, including consumer sentiment, and impacted our trading partners, we have seen a sharp rebound since the pandemic with the second engine of the economy, the multinational sector, remaining resilient, despite the impact of the pandemic and rising inflation. The impact of the cost-of-living crisis on households is severe with low- and middle-income households spending a higher proportion of their income on food and energy. They are the people who are being hurt the hardest.

While the summer economic statement is concerned with budget 2023, it outlines an intention to introduce measures that will come into effect on budget day through one-off measures. The cost-of-living crisis is being felt today, not in late September but right here, right now and for the past weeks and months. It was being felt yesterday and it will be felt tomorrow. I believe it is a dereliction of duty on the part of the Government to not have brought forward an emergency budget before the Dáil breaks its summer recess. It is a disgraceful situation. For those people who are struggling, this is an abandonment by the Government of its citizens. There should have been an emergency budget with a comprehensive package of measures to support workers and families now. I am aware that the fiscal assessment report published by the budget watchdog in May found that 90% of the measures introduced by the Government so far this year have been untargeted. While I acknowledge the recent changes made to the back-to-school allowance, they were made under persistent political pressure, with too many families still not able to access that support.

For months, Sinn Féin has been consistent in its call for an emergency budget, with affordable and effective measures that would ease the financial burden faced by so many people. Instead, the most vulnerable in our society have been allowed to wither on the vine, with struggling households facing months of uncertainty as prices continue to rise and bills continue to mount. Any measure introduced on budget day must not only support workers and families for the remainder of the year as if the struggles experienced in the previous months and year never happened. A compensatory basis needs to be taken into account, including the impact of price rises right throughout all of 2022.

The summer economic statement outlines a clear budget strategy for 2023, with certain measures to take effect from this year. The budget strategy has increased the previously planned expenditure budget package by €1.7 billion. I understand this is in part a response to higher inflation, together with anticipated costs relating to a public sector pay deal, currently under negotiation. Similarly, the previously planned tax package of €500 million has now increased to just over €1 billion. It is crucial that any tax package should be progressive, recognising the changes solely to the standard rate band provide no benefit whatsoever to the 20% of taxpayer units who never reach the higher rate of tax. This is especially important given the uneven impact of inflation across income distribution.

The capital ceilings provided under the NDP remain unchanged, with an additional €800 million to be allocated capital expenditure. Given the heightened inflation in the construction sector, I have serious concerns regarding the ability of these capital ceilings to deliver the Government's targets in its housing plans, which simply do not go far enough in the first instance. Those targets are clearly inadequate in the face of a deepening housing crisis. We will continue to engage with the Government on this and other issues. Will continue to pressurise the Government to do what is right in regard to housing, childcare, and the cost-of-living crisis that so many people families are facing.

As I said earlier, we face a multitude of challenges, many of which are persistent problems that have been with us for far too long. From income inadequacy to childcare, housing and healthcare, budget 2023 must deliver and make progress on these vital areas. I do not believe that the budget strategy being proposed has the capacity to do that. I will leave it at that as we are running out of time.

1:50 pm

Photo of Mairead FarrellMairead Farrell (Galway West, Sinn Fein)
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As the Minister outlined, the summer economic statement is an important part of the budgetary process. It gives us the context ahead of the budget. Over the last two years our conversations at this time have been around Covid and the impact of the pandemic. Before that, the uncertainty surrounding Brexit dominated our conversations whereas this year the focus has shifted to record inflation. However, as we discuss the parameters for the upcoming budget, households across the State are also discussing financial matters and budgets. These budgets are their household budgets; they are talking money or more accurately they are discussing the lack thereof. Households are watching as the Dáil rises tonight and as we leave this Chamber until mid-September. Workers and families watch on in horror as they realise that there will be no further measures from the Government until the Dáil comes back from recess.

We have been clear over the last number of weeks that what people needed before we got to this point, the last day of the Dáil session, was an emergency budget, to get them through this time. We brought forward proposals but these fell on deaf ears, except for last week. I laughed when the Taoiseach said that our motion of no confidence was a cynical move because I have seen many a cynical move from the Government. After weeks of the Taoiseach and various Ministers saying that they would not move and would not provide additional supports, at the final hour before our motion was to be tabled, the Government made the most cynical move and announced additional back-to-school supports. While that was welcome, it would have been better to have listened to and supported our measures, which would have included an additional 500,000 children in the back-to-school supports, but at least the Government acted on this occasion.

It is unfortunate that the Government has not acted on rents, which continue to increase, with families are pushed into homelessness and more than 3,000 children in emergency accommodation under its watch. It is also unfortunate that the Government did not act on home heating oil as people in the west rely more heavily on oil than other forms of heating. That is not because they want to but because they have no other choice. It is equally unfortunate that the Government did not listen to the whole suite of proposals that my party colleagues and I put forward over the last number of months. While we have one eye on the gate, people will continue to struggle and wonder how they will make ends meet because the Government failed to act adequately to support them

Insín do na hAirí, agus muid inniu ar an lá deireanach de sheisiún na Dála go dtí 14 mhí Mheán Fómhair, go bhfuilimid ag seasamh sa Seomra seo agus ag plé cúrsaí airgeadais. Ar ndóigh, tá teaghlaigh fud fad na tíre seo ag déanamh an rud ceannann céanna ina gcuid cistineacha. Tá siad ag plé cúrsaí airgeadais a gcuid teaghlaigh nó an easpa airgid atá acu.

Nuair a théimid, ar bhriseadh, ní stopfaidh an plé sin. Beidh teaghlaigh fós buartha agus beidh go leor acu ag éirí níos buartha fós. Is mar gheall air seo go raibh muid i Sinn Féin ag rá le fada gurb é an rud a dteastaíonn ó daoine ná cáinaisnéis éigeandála, go raibh sé sin ag teastáil láithreach, agus nár chóir don Dáil dul ar saoire go dtí go raibh sé sin déanta.

Tá a fhios againn go raibh an ráta boilscithe chomh hard le 7.8% i mí Bealtaine. B’shin an ráta boilscithe is airde le 40 bliain. Tá praghas fuinnimh teaghlaigh tar éis ardaithe 57%, is é sin 41% ardú ar phraghas leictreachais, 57% ar phraghas gáis, agus 102% ar phraghas ola. Tá a fhios againn gurb iad muintir an iarthair is mó atá ag brath ar ola. Níl foinsí eile acu agus ní bhfuair siad cabhair ar bith don ardú praghais sin ón Rialtas seo.

Ceann de na rudaí ab breá leis an Rialtas seo a rá nuair a luaitear an ardú sa chostas maireachtála ná go bhfuil laghdú tagtha ar an bpraghas do thicéid bus. Is iontach an rud é sin ach céard fúthu siúd nach bhfuil bus ann dóibh. Ghearr an Rialtas seirbhísí bus i nGaillimh agus ní fiú caint ar seirbhísí bus faoin tuath mar nach bhfuil siad sásúil a bheag nó a mhór. Arís eile, is iad siúd atá faoi bhrú mar gheall ar an ola atá ag fulaingt arís mar nach bhfuil seirbhísí bus acu ach an oiread.

Ach, deirim leis na hAirí go raibh deis againn cabhrú le daoine. Chuir mé féin agus mo chuid comhghleacaithe rún faoi bhráid na Dála le moltaí simplí ach éifeachtach chun cabhrú le daoine. Bhí muid ag rá go soiléir go dteastaíonn cabhair ó chíosaithe. Caithfidh muid stop a chur le ardú cíosa ar feadh trí bliana agus creidmheas cánach a thabhairt dóibh atá cothrom le costas cíosa mí amháin.

Chomh maith leis sin, caithfear dleacht mháil ar pheitreal agus díosal a laghdú agus, faoi dheireadh, an rud céanna a dhéanamh le hola.

Caithfidh muid airgid a chur ar ais i bpócaí na ndaoine. Tuairim is €100 a thabhairt dóibh siúd idir ioncam €30,000 agus 60,000, agus €200 dóibh siúd ar ioncam níos lú nach €30,000.

Teastaíonn cabhair ó thuismitheoirí sula dtéann a gcuid páistí ar ais ar scoil. Bhí orm gáire a dhéanamh an tseachtain seo nuair a dúirt an Taoiseach gur cinneadh ciniciúil a bhí ann vóta mímhuiníne a mholadh, cé go ndearna an Rialtas an rud is ciniciúla a chonaic mé le fada an lá sa Seomra seo an tseachtain seo caite. Bhí an Rialtas ag rá le fada nach raibh sé chun tada a thabhairt do dhaoine roimh an gcáinaisnéis ach, ansin, nuair a chuir muid rún faoi bhráid na Dála Dé Máirt faoin gcostas dul ar ais ar scoil, shocraigh an Rialtas faoi dheireadh rud éigin a dhéanamh. Ach, ar ndóigh, ní raibh an Rialtas ag éisteacht i gceart. Seachas tacú lenár rún, rud a thabharfadh cabhair do 500,000 páiste sa bhreis, rud a chlúdódh 75% de teaghlaigh le páistí ar scoil, shocraigh an Rialtas gan an liúntas éadaí agus coisbhirt don scoilbhliain nua a leathnú amach do theaghlaigh eile.

Insím do na hAirí mar sin agus muid ag breathnú i dtreo an dorais chun dul ar ár gcuid saoire ón áit seo, go bhfuil teaghlaigh ar fud na hÉireann ag breathnú ina gcuid cuntas bainc, agus ag iarraidh orthu féin céard a dhéanfaidh siad idir anois agus deireadh mhí Mheán Fómhair chun bia a choinneáil ar a gcuid bord.

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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I am grateful for the opportunity to contribute regarding the summer economic statement. This discussion is of significant importance each year but in the current climate of high inflation and the largest erosion of living standards since the financial crash, it is of even more importance. As we discuss the current economic situation and the upcoming budget it is imperative that we focus on the cost-of-living crisis, the effects on ordinary workers and families and the costs to small and medium-sized businesses, which are still struggling to get back on their feet after the pandemic.

Just this morning, figures from the Central Statistics Office indicated consumer prices here rose by an average of 9.1% in the 12 months to June, the fastest rate of price growth seen in the economy since 1984. That is up from 7.8% in the year to May, which is staggering. Collectively this means Irish households are facing into the biggest cost-of-living squeeze in nearly four decades. Anyone who remembers the last one will know what that was like. All the indications are that this will be as bad, if not worse. If we cast our minds back to those times we can remember the news, with suicide rates rising and people freezing in their homes and people ringing the “Gay Byrne Show” to say they were getting on and off buses to try to keep themselves warm. There were pensioners struggling and put to the pins of their collars. I was only a child but I remember it. That was awful; this is likely to be even worse.

Sinn Féin has consistently proposed measures to address the cost-of-living crisis. We called for an emergency budget to address the most pressing issues affecting people, but this was spurned by the Government. The decision to bring the budget forward by two weeks was a tacit admission by Government that these are extraordinary times. Household energy prices have risen at phenomenal rates - electricity by 41%, gas by 57% and home heating oil by 102%.

I am not trying to place all the blame for such increases on the Government at all; of course not, but it could do more and it knows it.

The public, as with Members of the Opposition, are aware that high inflation has been driven by supply-chain bottlenecks due to the way the global economy reopened after the pandemic and the recent illegal Russian invasion of Ukraine. We know that and with the greatest of respect to the Minister and his colleagues, we do not need it repeated and explained to us every time. They can take it as a given that we read the newspapers as they do and we understand what is happening across the globe. However, we will continue to propose solutions and push for more to be done at a policy level where Government can have a positive influence to help ordinary workers and families. We know that the Government cannot do everything, but it can and should do more.

My colleague, an Teachta Pearse Doherty, has already mentioned that Sinn Féin has repeatedly and consistently called for an emergency budget, proposing sensible measures that would support lower- and middle-income households or as these people are now known thanks to this Government's policies, the working poor. We have proposed further reductions in the rate of excise applied to petrol, diesel and home heating oil; an increase in the minimum wage and a realistic plan to move quickly to a living wage; further reductions in the rate of excise applied to petrol, diesel and home heating oil; a refundable tax credit equivalent to one month’s rent and a ban on further rent increases; and a substantial reduction in childcare fees.

The Government’s response to the cost-of-living crisis has remained slow, piecemeal and inadequate. The focus of budget 2023 must be to support workers and families. However, we must also look at the plight of small and medium businesses. I was recently contacted by the owner of Wharton's, a small take-away restaurant in Bantry. She sent me a copy of two electricity bills, one from September last year and one from June of this year. In September 2021 her electricity bill for two months was €1,974.03, but in June 2022 her electricity bill was €4,230.33. That is phenomenal. I pay tribute to the owner for keeping the show on the road in the face of those increases. She wants to keep her business open, but she needs some assistance and she needs hope.

This is replicated across the board. I have received correspondence from shops, supermarkets and other small and medium-sized enterprises highlighting the financial pressure of running fridges and freezers to keep products fresh and frozen. Many business owners say that unless something is done, they will either dramatically reduce the number of fridges and freezers they have and only sell a limited number of products, or the next step is to close their doors.

There is time in advance of budget 2023 for the Government to listen to the Opposition, to listen to the trade unions, to listen to the public and to listen to the plight of SMEs in order to make sure the budget delivers for those most in need.

In the few seconds remaining to me I will relay to the Minister as I have done previously to some of his colleagues the contents of a letter sent to me by a constituent. When something in her house is broken it stays broken. That is it; no repair. The only bill she has that is in anyway flexible is her food bill which she had already cut. Her message to the Government is she cannot cut anymore. She needs help and she needs it now.

2:00 pm

Photo of Duncan SmithDuncan Smith (Dublin Fingal, Labour)
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I welcome the opportunity to speak on the summer economic statement on behalf of the Labour Party. It is undeniable that the statement shows how well the economy is doing on paper right now, but this is only on paper. These abstract economic figures do not tally with the real lived experience of hard-pressed households in my own Fingal constituency and across the country. The only numbers that matter to them are the increasing price of food, energy and services. Strong GDP figures are not helping them pay the bills or get the kids back to school. Nor do they support those local business owners in the real economy who face ever-increasing costs, such as insurance and energy.

To paraphrase the President’s recent comments, being a star performer for the speculative sector is not what is important. Instead, what really matters for people are building affordable homes, investing in quality public healthcare and taking real measures to tackle the cost of living. The Government has consistently failed on all these fronts. The reality is our economic performance is largely driven by the multinational sector. Many of these are footloose companies which could up sticks tomorrow. Yet we remain completely over-reliant on them for revenue as the summer economic statement shows.

Just under half of the Government’s corporation tax receipts, worth €8 billion, might be unsustainable or at risk according to the Central Bank. We now have the crazy situation where just ten foreign multinational firms are paying half of all corporation tax. To say we have put all our eggs in one basket would be a gross understatement. We need to be clear that this is a short-term tax boon that will soon come to an end.

Labour's spokesperson for finance and public expenditure, Deputy Nash, has consistently warned about the overconcentration on corporation tax for years. We have called for the development of a new industrial strategy, one that creates decent sustainable jobs for the long term. The Government seems to have no strategic plan beyond milking the multinational cash cow in the short term. We already saw how the last Fine Gael-led Government squandered corporation tax receipts on expensive overruns, such as on the national children’s hospital. We need reassurance that these once-in-a-generation tax receipts will not be wasted again. Will the Minister give guarantees that such revenues will be used solely to fund infrastructural or one-off projects, or be added to the rainy-day fund?

In addition to corporation tax receipts, the summer economic statement shows bumper increases across other take headings. It is important to note that the summer economic statement only cites earlier analysis from the spring about tax revenue projections, whereas the most recent tax figures are ahead of these projections. In short, there will be much more tax available for spending in the budget. Much of this increase can be accounted for by inflation. Simply put, as prices have risen, so too have the Government’s VAT receipts. Budget 2023 must aim to put this tax windfall back into the pockets of those who need help the most.

Last month the Minister signed off on a further extension of the 9% VAT rate for the hospitality sector. At €500 million, this will come at a significant cost to taxpayers, but what benefit will they see? In many cases employers in this sector pay poverty wages. Basic services through the hospitality sector such as a cup of coffee, a couple of pints, a meal or a trip to the cinema remain out of reach for most ordinary working people as prices have steadily risen. Rather than tax breaks for big business and higher earners, budget 2023 must instead see cuts in consumption taxes for ordinary citizens. For instance, the 9% VAT rate on electricity, which took nine months to introduce, must be retained.

According to the summer economic statement, budget 2023 will focus on the cost of living with an overall package of €6.7 billion. Again, on paper, this looks impressive. But in reality, nearly half of this, €3 billion, is already committed to meet existing health, welfare and other calls on the public finances. This leaves just €2.7 billion to allocate in additional social protection, education, childcare and related spending on services. Most of this additional spending for public services will barely keep pace with inflation.

In addition, only €400 million has been put aside to help people through the cost-of-living crisis to the end of the year. To put this into context, a repeat of the €200 electricity credit for all households would cost €400 million alone. While everyone acknowledges that the €200 credit makes some difference, it has not gone the distance on electricity alone, never mind other utility services or cost-of-living pressures. It shows how far the Government needs to go.

We have seen Minister after Minister speculate on the return of the €200 electricity payment. This short-term political stroke will do nothing to solve the long-term problem of rising energy costs. At this stage it should be completely ruled out in favour of more long-term sustainable measures to tackle the cost of living. At a time of scarce resources, it is simply not acceptable that some of the richest households in the country and those with two or more homes get a €200 giveaway while people who are really struggling to make ends meet get the same.

Instead, Labour has proposed a €200 carbon credit for families with incomes under €50,000. This would be a targeted measure to help those who need it most – working families and those on stretched incomes. At €100 million, it would only cost a fraction of the Government’s recent energy credit. We have proposed that the remainder be used to bring some 150,000 working households into the fuel allowance net. This is something we are all hearing at our advice clinics. It is incredible that in the middle of a warm summer people are coming to our advice clinics seeking to get access to the fuel allowance of all things. It just shows the depth of the cost-of-living crisis. Many social protection measures could and should be introduced now.

We all know that moving the budget forward by 14 days is a tokenistic exercise.

The Taoiseach repeated this week that we are facing a winter of discontent. We are already living in a summer of discontent. The reality is that hard-working families are facing into a cruel autumn beyond this difficult summer, with rising childcare and back-to-school costs and the high price of keeping food on the table. The cost-of-living crisis is not a joke or a game for people. It is their daily lives and lived experience. People have their household budgets to draw up and they need certainty to plan for the autumn and winter months ahead.

The Government should not be playing politics with people's lives. Our social protection system is a prime example of this. Most countries, including the UK, index welfare payments so they automatically rise with inflation. This means that those who rely on the State for their income, whether pensioners, lone parents or people with a disability, will not be left short-changed when prices rise. Only Ireland retains a politicised budgetary process where stability in the core income of 1.6 million people is to be begged for each year. It is shameful that Ministers then claim credit for securing any increases that would be given as a matter of course if payments were indexed to inflation. The Government must finally put an end to this charade and provide real certainty for those on fixed incomes.

We must see more long-term investment in all our budgetary processes. Today, we saw the announcement of a health facility near Alicante in Spain that will be part of a licensed arrangement with the HSE for public patients using the EU cross-border directive scheme. I believe this initiative will be oversubscribed. The model of healthcare provided cannot be a combination of sun, sea, an operation and a cost to the individual getting the care. If those availing of the initiative are able to get a holiday, it will have to coincide with a much-needed, long-overdue planned procedure. If we are building, we should be building and increasing our health capacity here. We should be looking at primary care capacity in particular because that is where we can reduce waiting lists, diagnose people who are ill early and cure them in their communities. While I understand the EU cross-border directive is helpful, it is not the model by which we should be paring down the waiting lists that developed during the crisis.

On transport, we need to show a commitment to projects such as MetroLink. I am happy to see the Cabinet has signed off on MetroLink. We must also show that big projects such as that link in with active travel projects that are being rolled out, namely, cycle paths and better pathways for pedestrians. This is all linked to future-proofing public infrastructure. That is how the conversation should proceed. MetroLink does not exist in isolation from improved cycling infrastructure and other such measures that must be and are being introduced.

Families cannot take another summer of budget kite-flying. They can ill afford to wait for a "spin" budget in September. Instead, the Minister could provide real support and reassurance now with a few strokes of a pen, irrespective of whether the Dáil is sitting. The Labour Party has already indicated our desire to extend the sitting of the Dáil to pass an emergency summer budget. That discussion has been and gone, but we strongly encourage the Minister not to put off until tomorrow what he can do today.

2:10 pm

Photo of Joe CareyJoe Carey (Clare, Fine Gael)
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I welcome this opportunity to contribute to this important debate. The summer economic statement is a testament to how the economy has been managed in the past decade in a careful, balanced and prudent way. The balance between taxes and expenditure and managing a prudent economy is always made up of difficult choices. It is easy to promise everything to everyone, an approach those on the Opposition side of the House have been practising since the last election.

Over the past decade, various Governments have had to have a steady hand on the tiller in order to navigate us through the major storms that have been sent our way, from the Celtic tiger collapse and the banking collapse to Brexit, the pandemic and the war in Ukraine. These have combined with other difficult challenges, including climate change, logistics and supply chain difficulties, the Northern Ireland protocol and now inflation. The creation of the rainy day fund allowed us the leeway to take very decisive support measures for employees and businesses in the first two months of the pandemic and that safeguarded and secured many businesses and families. This has led to the recovery of the economy in the past year. It is worth noting that the Government provided €40 billion in support measures to citizens and businesses over the period of the pandemic. That sum is six and a half times the total budget increase proposed for this year.

While there have been significant changes in specific sectors of the labour market, the fact that there are now 2.5 million people working in Ireland out of a population of 5 million gives us a better dependency rate, which has positive long-term benefits for pension funding. Chasing inflation is not the prudent thing to do, as was proved in the boom-and-bust years of the Celtic tiger. As we well know, when the bust happened we had to take drastic measures at the behest of the Troika. It is prudent that the Cabinet should have as much information available to it before drafting the support measures it will introduce in the next budget. All independent economic commentators agree that we have kept the national finances on track over the past ten years under successive Governments and Ministers for Finance and Public Expenditure and Reform. This is the way we intend to continue.

The worst effects of different crises have been felt by the squeezed middle. It is for this reason that I welcome measures that were announced recently such as the proposed reduction in the cost of childcare. I welcome other recent initiatives taken by the Government, including that tickets for school bus transport will be free for the next academic year, the increase in the back-to-school allowance and the proposed childcare package, which will assist those in the early years as part of the forthcoming budget in September. There is no doubt that we have targeted the support measures. In the previous budget we increased tax relief by €415 for those on the average wage. We have raised the minimum wage eight times since 2011. We introduced the living wage to replace the minimum wage by 2026 to align those on the lowest wage with the average wage. In 2011, unemployment was 15%. Today, it stands at 4.7%. In fact, we now have labour shortages in certain sectors. I am pleased to note the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Harris, is expanding apprenticeship schemes throughout the country over the next three years. That is another example of prudent planning for the future.

I have some points to make to the Minister for Public Expenditure and Reform, Deputy Michael McGrath. Regional development must be more balanced. One measure that would address the imbalance is to continue Shannon Airport's inclusion in the regional airports programme. That must happen. For the first time this year, Shannon was included in that essential programme, as was Cork Airport. These grants are used to support the growth of both Cork and Shannon airports and to help to correct the glaring imbalance that exists whereby 83% of airline traffic goes through one airport. I welcome the fact that the national aviation policy is to be reviewed in the autumn. I put forward a proposal to the transport committee, which secured unanimous support, that the committee would look at this issue in detail and consult stakeholders and policymakers so that we can put together a more informed national aviation policy that can benefit the regions, including Shannon Airport. If Shannon were to continue to be in the regional airports programme, it would free up vital revenues to enable the Shannon Group to market and develop routes and relationships with airlines. Shannon is much more than an airport; it is an economic driver for the mid-west region. There needs to be a focus on that in the forthcoming budget. Transport is an area we need to target.

Another significant issue in the mid-west region is University Hospital Limerick where we need additional capacity.

3 o’clock

The Government has, in fairness, invested more than €100 million in the hospital over the past five or six years and there is increased capacity, with additional consultants, doctors and nurses, but we need much more. Currently, far too many people are in the emergency department and that is not acceptable. We need to accelerate capital investment in the hospital, expand capacity and look at enhanced roles for the model 2 hospitals, Ennis Hospital, Nenagh Hospital and St. John's Hospital, which will require additional resources. Another key issue in the mid-west relates to the provision of an elective-only hospital for the region, as proposed in the Sláintecare report. I have raised this issue with the Taoiseach, the Tánaiste and the Minister for Health, and a group of us Government Deputies in the mid-west have been pressing for this. I look forward to some support being forthcoming in the budget later this year for that type of initiative.

More than half of our population have never experienced inflation of this sort, and a steady hand is needed to secure our journey through these stormy economic times. I look forward to working with the Ministers for Public Expenditure and Reform and Finance to ensure the budget, which is critical at this time when people are feeling the bite of inflation and the cost of living, will be dynamic, and this summer economic statement puts us in a strong position to respond in a constructive way to address the issues we face.

2:20 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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On a point of order, I want it noted that the two senior Ministers, as we are about to begin the summer recess, are leaving the Chamber, meaning only the Minister of State with responsibility for heritage will remain, when the spokespersons for many of the party groups have not yet responded to the summer economic statement. That is outrageous.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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We had two hours of debate in committee.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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This is the Dáil.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is not a point of order. The Deputy's slot will come up in due course.

Photo of Chris AndrewsChris Andrews (Dublin Bay South, Sinn Fein)
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The soaring cost of living and the rising inflation rate are showing no let-up, pushing ordinary working families to the pin of their collar. The impact is far-reaching, and it is not just in regard to food and household bills that families are feeling the pressure. The cost-of-living crisis is having an impact on the health and well-being of children throughout the State. I have never had so many parents call me to outline the struggles they face to cover the costs of their children's sporting activities. Week in, week out, parents make more and more sacrifices to provide for their children. The cost of club fees, summer camps, swimming lessons and new boots and gear is adding to the pressure on households. In the past, children used to go and play football in a field and come back when the tea was ready, but nowadays there is much more structure around it. The cost of these camps is significant and it all adds up. Even a one-week camp is significant, at €200 per child. Children are feeling the brunt of this. Sport contributes to good health and well-being, and for children, that cannot continue to be taken for granted.

We need to increase investment in sports. Ireland has been lagging behind our European peers for too long. Our EU peer group invests on average almost three times as much as we do on sport and recreation. We urgently need to see real-time investment in sport and recreational facilities throughout the State. Almost €90 million in funding has been allocated through the large-scale sport infrastructure fund for projects, which is welcome, but barely a fraction of this funding has been drawn down. Because of the rising costs of building, many of these sports facilities will struggle to reach completion. The sporting community needs to see the Government step in and provide increased support where needed. The costs of not investing in sports participation or increasing the levels of physical activity far outweigh the initial costs. Physical inactivity has been estimated to cost the health budget €1.5 billion each year and is responsible for an estimated 14% of all mortality in Ireland. The benefits of sports and recreation do not stop with health and well-being. Research by the Federation of Irish Sport has shown that for every €100 invested in sport by the Government, the Exchequer receives back €195 through taxes on sports-supported expenditures and incomes. We should not look at sports and recreation as a cost but rather as an investment with far-reaching yields.

On a separate issue, Debra Ireland, an advocacy group for people living with butterfly skin, or EB, made a presentation last week. Emma Fogarty, who lives with EB, and the parent of someone living with EB made a powerful presentation. It was difficult to hear about the impact the condition has. Their ask for the budget, at less than €1 million, would provide for nursing treatment, outreach treatment and mental health supports. In the context of this huge budget, their ask is very small, yet it would have a significant impact on the quality of their lives. As anybody who is familiar with EB will know, it is very difficult. One girl who just turned 18, Claudia, is an inspiration to young people. She is about to start on a make-up course in college. The condition is devastating, not just for Claudia or Emma but for their entire families and the relationship between husband and wife, yet the State is not willing to intervene and give the resources this family and all the families who have children with EB need to ensure their lives will be made somewhat easier. I beseech the Minister of State to consider them and take them into account, when the budget is being prepared, in order that Debra Ireland will have increased supports to alleviate the daily pain these families are going through.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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I welcome the opportunity to speak in this debate, if it can be called a debate, or to make statements, although it is regrettable that neither of the Cabinet Ministers with responsibility for the finance area could see their way to spending two hours in the Dáil to listen to what Deputies have to say about the issues. It is especially regrettable given there is virtually no co-operation in respect of the budgetary process. We have a short period today for Deputies to make statements and not a whole lot of engagement after that until budget day itself, when there is the big reveal. There is no attempt by the Government to engage constructively, whether with Opposition parties or the many organisations working across society, to identify priorities. That should be done on the basis of looking at the evidence and identifying priorities for what can be achieved within the budgetary space. This is no way to do it. It is an outdated and outmoded way of preparing a budget, rather than looking at what society needs and trying to reach a consensus on what those priorities should be.

I welcome the fact we are looking at what can only be described as a strong and healthy economic situation, given the figures before us. That is important in light of the considerable economic shocks this country has experienced in recent years, from Covid to the savage war in Ukraine, the need to respond to the considerable movement of refugees and, most of all, the impact of that war on people's living standards in this country and the soaring inflation rates, much of that driven by the high cost of energy.

The combination of all of those things undoubtedly raises huge challenges for the Government and for the country generally. For that reason, it is important that we have strong headline figures. The question is what do we do with that strong economic performance. That is the issue because under those headline figures are people's real lives. When we look at what is happening in this country, it is becoming increasingly unequal in the way it is structured. There are major structural problems with regard to low incomes. More than one fifth of workers are on low pay, and fairly miserable pay at that, with very little in terms of job security. A whole host of people then are dependent on welfare income, yet those welfare rates are not benchmarked to any kind of standard whatsoever despite the fact that really good work has been done through the minimum essential standard of living, MESL, study and by the Vincentian Partnership for Social Justice regarding what people actually need in real terms to live a life with any kind of dignity. They have done great work in that regard across a whole lot of different household types yet that research is consistently ignored.

We have been in a situation for a number of years now where welfare rates are entirely dependent on the whim of the Minister of the day. There are, therefore, very serious issues of inequality and structural problems. In addition to that, of course, we have the significant Government failures with regard to inadequate public services. That is the real world for an awful lot of people in this country who live below that strong economy. It is fine to boast about the strong economy, which is very important, but how do we use the proceeds of that economy? That is the key question. The Government has clearly ignored the massive impact of those shocks that have taken place over the past couple of years on people's day-to-day lives. Those of us on this side of the House, as well as many other groups outside of the House, have been calling over recent months for urgent action from Government and highlighting the need for an emergency budget. That has been very clear.

The Children's Rights Alliance yesterday set out very clearly the problem we have with growing rates of child poverty and stated clearly that the meagre steps the Government has taken over recent months do not go anywhere close to addressing the rising problem of child poverty. In the context of us being a wealthy country, it is pretty shameful that we have rising rates of child poverty. People are concerned about things like being able to put food on the table. Parents worry about what will happen and how they will manage to feed their children when the schools and breakfast clubs are closed and school meals are not available. People are really struggling to pay their bills. That is why the Social Democrats and so many other people were calling for an emergency budget. It should have happened.

There is a recognition by Government that there is a need for emergency care and support in the September budget. In principle, the Government recognises the need for it. Why is it delaying that when people need the support now, and will undoubtedly need more support on budget day and following on from that?

The point I am making is that in the context of those shocks the country has experienced in the last couple of years, now more than ever, there is a need to prioritise spending in the country. We might look at the figures that have been set out in the summer economic statement. I agree with the point that the 5% limit should be breached; that is the correct approach to take given the exceptional circumstances we are in. We are talking about €6.7 billion, however. When we break that down, €3 billion of that is already committed in terms of services and is also required to cover the whole issue of demographics in respect of an aging population and a growing child population. There is €1 billion earmarked for tax, which I will come back to in a moment. There is €400 million on measures for the last three months of this year, including pay rises. There is €2.3 billion then for new spending, of which we know a major part will be taken up by the public sector pay agreement. As the Minister of State will know, there is already an offer on the table of €1.2 billion, which has been rejected. Even increasing that by a small amount to bring it up to €1.4 billion would leave us then with €900 million for spending measures. Where does that €900 million go given the level of need right across our public services? On what basis is it thought to be a priority that €1 billion be set aside for tax cuts?

Everybody is faced with higher bills at the moment, particularly energy bills, but not everybody experiences those increases in the same way. A large number of people in society can absorb those increases. None of us likes paying higher costs but many of us are in the fortunate position that we can absorb those. I will put to the Minister of State the same thing I asked the Cabinet Ministers who left the Chamber - do they honestly think they need support? Do they think they need help in addressing and coping with inflation in their own lives on the basis of their salaries? We have large numbers of people in the public sector generally on similar kinds of pay scales. Do they need assistance? Do Ministers of State need assistance? Do many other public servants on that level of income need assistance? I would argue absolutely not. Do Teachtaí Dála need assistance with meeting the increased costs of living? Absolutely not. I do not believe there is anybody in this Chamber who needs support to cope with his or her bills yet the Government is talking about tax-cutting measures that are likely to give additional money across the board to all those earning more than approximately €36,800. What on earth is the rationale for that? There cannot be any rationale on any grounds for a measure like that.

The kind of dog whistling we are increasingly now hearing from the Tánaiste is an absolute disgrace in the context of growing child poverty in this country and the huge pressures being experienced by low-income families, of which everybody in this House is aware. Deputies who talk to any of their constituents will know what those pressures are. In that context, how can the Government possibly justify giving an across the board tax cut to people that will make our tax system less progressive than it is? Does Fianna Fáil agree with that kind of approach? Does the Green Party agree with it? It is deeply unfair and it will only have one impact, which is to make this country even more unequal than it is at the moment.

2:30 pm

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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There is no doubt that the overall economic performance of the country has stood the test of Covid-19 and the war and so on. That is being shouldered by many of the small to medium-sized businesses that all of us know within our own constituencies. They are, if you like, hiding the fact that they are experiencing enormous difficulties just to continue in their development and hold on to jobs. That must be recognised.

The National Treasury Management Agency, NTMA, has done very well in the context of the overall national debt of €240 billion. It has borrowed long. Its interest rates are reasonable and will appear to be even more reasonable as interest rates increase. It continues to have €30 billion in cash assets, which is a good, prudent measure and a good policy measure.

There are many risks to our economy. One of the main risks, which has been mentioned by previous speakers, is the risk of corporation tax where one in every four euro is collected and included in that corporation tax. If we strip that €6.7 billion out of the figures, we will find that all the other figures that make up our tax take are actually weaker than what we expected. There is a real problem in terms of corporation tax and how other taxes are performing.

That will give the true story of what is happening in the economy. It will show the true difficulties that businesses have with regard to their performance in markets at home and abroad and paying their taxes. I believe that is a problem that is being stored up because during the Covid-19 pandemic many businesses warehoused their tax obligations, and they will have to be paid at some stage.

Looking at the overall economy, one can certainly put forward an argument that the policies have worked and the economy is doing well, but my measurement of all this is always to look at how the people we represent are faring. They are not faring very well. On a micro level, people who are elderly, who are marginalised in any way, who are sick or who are carrying debt difficulties from the past, are in serious difficulty. That is where I want to see the moneys that will be pushed through on budget day go. It is our responsibility to see that it goes to the weakest in society.

Then there are the other issues, such as Sláintecare. The Irish Fiscal Advisory Council said that the Government has not costed its planned major healthcare reforms under Sláintecare beyond this year and that there is no clarity on how much progress has been made to date in terms of the overall cost of those reforms. Again, we have the headline figure being announced by the Department or the Minister, but when one looks from the bottom up at what the performance is like and what the outturns are, they are not very good. All one has to do is walk through the gates of Leinster House most weeks when the House is sitting. For example, cervical cancer sufferers made a presentation in the audiovisual, AV, room. They have described what they are being put through in the tribunal and in the courts as barbaric. Money is required to resolve that. It is a crisis. We must show compassion and deal with that issue. It is a budgetary issue because that is where the money comes from.

Those who are campaigning for an end to the thalidomide argument should be supported. Instead, we are pushing them through the courts. The Department has to provide documentation relevant to that which will cost it the best part of €4 million, yet it will not turn around and resolve that issue. It is an issue that has gone on for far too long. As regards the Lyme disease issue, people have been outside the gates for as long as I have been a Member of the House and to this day they are not being recognised. The laboratories in Germany are not being recognised. They are recognised in the rest of the European Union, but apparently they are not good enough for the Irish Government. That has to be changed.

These are the small things at the bottom end of the scale that are causing me and the people concern. Recently, I met three women. Again, they were in the AV room and they met with Deputy McDonald with regard to the mesh issue and what they are facing in their daily lives relative to correcting that procedure. It is bureaucracy gone mad. It is insufficient money. It is a pathway, as it is called, within health that is simply not delivering. That has to be examined. It is likewise with regard to mental health and therapists for those who have autism or who are on the spectrum. They cannot get them in the schools. It is fine for the summer statement to announce these big figures or for us to say on budget day that we are allocating billions of euro to health and millions of euro somewhere else. However, at the bottom end of this where the money is supposed to be spent, it is not being spent. Public service delivery has almost collapsed for those who need it most. Many families who have children with autism come to me. They cannot get through to the HSE about their care and where they should go. They cannot get therapists or speech and language therapists. Special needs assistants, SNAs, are refused.

We had the outrageous situation in Carlow where there are two schools on the same site, being attended by students from the same families, and one has received DEIS 1 status and the other failed. Is it a gender thing? I do not know because the Minister for Education, Deputy Foley, said to me that these are not matters that should be published. I believe they should be published. It should be known how that decision was made. That, too, is about supporting families. It is about budgetary measures and the big figures we are talking about allocating again this year.

I have said repeatedly in this House that the mental health services are in dire straits. In private mental health care at present one cannot get an appointment with a psychiatrist until next year. If somebody is in a mental health situation where the health circumstances require that the person be seen right now, it is not much use telling the person that he or she will have to wait until next year. It is the same in the public services. However, when I raise these questions with Ministers, I am told what the big picture is and that the HSE will get back to me. That type of politics and that type of budgetary spend are not acceptable to me. The Taoiseach tells us that government is about getting things done. On the bottom rung of the ladder things are not being done in a way that would satisfy the general public and that would give me at least the impression that we have public services that are being delivered correctly. People generally are suffering because of the inefficiency within the public service and the lack of proper policy to ensure that all those services are delivered to those who need them most.

I ask my Green Party colleagues, or the ones I know who are in the Government, please to try to inject a little common sense into their budgetary take on things. The Irish Fiscal Advisory Council has said, in a comment regarding greenhouse gases and so forth, that the impact on the public finances has not been fully assessed or factored into budgetary plans. They are daft not to do that. Everything should be factored into a budgetary plan. Looking at agriculture and the 22% target: if it goes beyond 22% they will destroy rural Ireland. Maybe that is their mission. I do not know. Certainly, in policy terms it appears to be their mission. We have tried time and again at parliamentary party meetings of my party to explain all these issues. The Minister of State, Deputy Noonan, might ask why I am raising them here. I am raising them here because I do not think they are heard within the parliamentary party democracy that we have. I ask the Minister of State to tell his Green Party colleagues to lay off rural Ireland and to ensure that it is 22% and no more. Everyone is willing to do their bit, but they are not willing to be screwed in the process for some goal that the Minister of State believes in.

Finally, I wish to say something about democracy here. Bills have been rushed through this House at an alarming rate, so much so that even the President has commented on it. We do not debate them in full. Now there is a move to restrict the length of time for pre-legislative scrutiny on many issues. I am a member of one of the political parties, but I choose to try to change it from within. I may not be successful, but I will not stop trying.

2:40 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Deputy is wasting his time there.

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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This House means something to me. It means something to the people who elected me and to the country generally. Deputy Boyd Barrett is on the Business Committee. He should do something about it instead of slagging me about it.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I was not slagging the Deputy, I was slagging the party.

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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The fact is that we have to do something as a Parliament. We have to be heard, and we are not being heard.

The other frightening aspect of all this is that real detailed budgetary matters, this summer economic statement and policies that would make a difference to the country and the people who live in it are now not being debated even at those parliamentary party meetings, and I am speaking for my own party.

That is a disgrace because people believe this legislation or any other legislation is being scrutinised to the extent that there will be a comfort around parliamentary party meeting debates, around committees and their debates, around pre-legislative scrutiny and, finally, on the grand presentation in this House.

I am very disappointed that, as far as democracy is concerned and about the issue of hearing many varying voices, we are excluded from the debate on the issues within parties and within this House. I have on occasion appealed to the Ceann Comhairle to reach out and give the Members the right to speak. We are being deprived of the right from within a political party. That is a sad thing to say but it is true on this side of the House. That we are in a three-party coalition makes it even more difficult. I have to gain every opportunity I can to take debates like this and to put on the record of the House the demand for change. As far as the budget goes, please remember the little people.