Aideen Hayden (Labour) | Oireachtas source

Senator MacSharry made a point about the fiscal council. It has agreed with the headline figures. It is for the Government of the day to decide how we spend our resources. The Senator stated that we needed to spread the recovery beyond urban areas. It is important that we use the budget as a mechanism to do so.

This morning, the ESRI reported that Ireland was the fastest growing economy in Europe, with the latest forecast being 6%, an upgrade from the ESRI's summer forecast of 4%. Last year, Senators were considering our first expansionary budget. It was in the region of €500 million, representing an increase of €1.5 billion from the previous year when over €1 billion was removed from the economy. This year's budget represents a €3 billion turnaround, which should be noted.

There has been a recovery in domestic demand. According to the CSO's figures, the overall volume of retail sales has increased to 2005 levels or thereabouts. The best route out of poverty is a job, as has been mentioned repeatedly. The Government has stated its determination to bring the economy back to full employment by 2018. We are approaching the point of unemployment decreasing to 9% this year, according to the ESRI, and even lower next year. We did this while managing to increase the national minimum wage, which gives lie to the idea that one must have a low-cost economy to grow, improve and increase employment.

In spite of the commentary to the contrary, it must be noted that we have a highly progressive income tax system. Senator Michael D'Arcy made this point. There is a tax wedge for those in receipt of 160% of the average wage in comparison with those who are on 60% less than the average wage, placing us second highest in the OECD. It is also worth pointing out that the Irish tax and welfare systems have been effective in reducing inequality during the crisis. The OECD figures show that Ireland is a more equal society now than it was at the beginning of the crisis. These factors should be recognised as we face into budget 2016. I do not want to capture an old cliche, but it is a case of a lot done, more to do. A great deal of progress has been made.

I disagree with Senator White regarding capital gains tax and capital acquisitions tax.I come from a family in which there was a saying "Money comes to money". I see absolutely no reason people who have inherited wealth or have been given gifts pay a lower tax rate than somebody who works an extra hour in a supermarket. One of the great things that this Government has done is to have moved the CGT and CAT tax rates more in line with the tax rates on earned income.

The universal social charge, which was introduced by a previous Government, has been reduced for those on low and middle incomes, as has already been pointed out. We have all read the speculation that this Government intends to reduce it even further in this budget and I welcome that.

I want to move on to some specific issues. This is a pre-budget statement so I want to move on to the issue of the housing crisis. There is a housing crisis. The President thinks so, the ESRI thinks so, almost every voluntary organisation in the country thinks so, and I think almost every citizen in the country thinks that we have a housing crisis. I welcome the announcement yesterday of €2.9 billion for the construction of social housing and a further €300 million to promote PPPs in delivering social housing. The fact remains that our housing crisis threatens to derail our economic recovery. This point has been made by a number of people.

Politically, there are a number of issues still on the table. One of them, which is particularly close to my heart, is the issue of the rent certainty legislation. The Minister for the Environment, Community and Local Government, Deputy Kelly, made a statement in February 2015 which, I believe, he acted on and produced legislation to introduce rent certainty into our legal system. Not to put too fine a point on it, there is a political issue between the Labour Party and Fine Gael on this matter. I want to be clear on a number of points here. We are dealing with an extreme family homelessness crisis in this country. We all agree that housing supply is the issue and once housing supply recovers, the system will step in and rents will fall and equalise and so forth. In the meantime, homelessness will rise in this country unless we act to limit the issue of rent increases.

I will speak from my own experience. In 2013, because I work closely with a front-line organisation, I noticed that the number of families becoming homeless was growing exponentially. We had not seen this before and it happened for one clear reason: people could not afford to pay their rents. It is an economic issue. The fact remains we are in a situation in which rents rose by 35% between 2011 and 2014, and in the past 12 months they have risen by a further 10%. There is no way out of this situation if we do not regulate the rate of rent increases. I know the Minister for Finance has ideological reasons for not interfering with the market but the fact is we interfere with the market in many other areas. If we do not regulate the rate of rent increases, we will see homelessness rising at an exponential rate. We are not alone in this crisis. The Greater London Authority is also looking at introducing a rent certainty model. Nobody is suggesting that landlords should not get a decent return on their investment. This model does not mean they will not get rent increases. It just means those rent increases will be regulated.

There is a reluctance to increase the rate of rent supplement while there is no cap on the rate of rent increases. Were we to have a rent certainty model, I believe we could look again at the issue of rent supplement. I believe very firmly that a significant number of European countries that have this model have a very vibrant, well-regulated rental sector. One in five Irish families lives in rented housing and they will continue to do so. That number will rise. It is very important that if this Government achieves nothing else in the housing area, it gives those families a secure future. People have come to me and said they will not buy a school uniform for a particular school because they do not know whether their child will be in the school in 12 months because they do not know where they will be in 12 months. That is not a reasonable position for families to be in. I ask the Minister to exercise whatever influence he has with the Minister for Finance to get this legislative provision over the line because it will have a serious impact on the number of homeless families in this country.