Tuesday, 8 October 2019
Budget 2020: Statements
Kieran O'Donnell (Fine Gael)
I welcome the Minister of State to the House. He is just as much a frequenter here as a Minister of State as he was when he was a Senator.
Listening to the delivery of the Budget Statement this morning by the Minister for Finance and the contributions here, I note Brexit looms large. The projected growth rates were about 3% in normal times. These have been scaled back to 0.7% because of Brexit. We are looking at running a deficit of 0.6%, before we ever look at borrowing for specifics for Brexit. In normal times, we would have expected to have a surplus in place.
If the Government had not prepared for Brexit, people would claim it was not prudent. We have made preparations. We have gone for a prudent budget while, at the same time, looking to address specific areas where people are under pressure. There is also the backdrop of making a start on the whole area of reducing carbon emissions and raising carbon tax. We are working off cross-party support through an all-party committee to get carbon tax up to €80 per tonne by 2030. It is currently €20 per tonne and will go up by €6 in this budget. It will have an impact. However, the Government has also increased the fuel allowance by €2, effective from 1 January. Hopefully, the carbon tax in the main areas of fuel will not commence until May 2020. It is not ideal but the Government has ensured we are dealing with a range of measures.
The budget has been framed in the context of Brexit and ensuring that we deal with infrastructure. When the economy dived after the Celtic tiger, infrastructural investment collapsed. We should have probably invested in housing then. We are now doing serious catch-up in this regard. There will be a €2.5 billion investment in housing this year through the Department. If the housing assistance payment, HAP, was not available, many people would not get access to social housing. It was supposed to be a temporary measure. The rental accommodation scheme, RAS, long-term leasing and social housing is the place to which we all want to get. We have people coming to our clinics every day who would like HAP to be higher but it takes a burden off people who need social housing which is not available. At times, HAP gets a bad name. At the same time, however, it is a temporary measure which has become more a long-term measure. We have to move towards a proper social housing building programme. We are looking to building between 8,000 and 9,000 units next year which is positive.
I welcome the fact that the living city initiative has been extended to 2022 for Limerick. However, it is still not working effectively. I have spoken to departmental officials about this and they are examining it. We have to think outside the box in this regard. The footprint of Limerick city centre is Georgian. It is critical we find a route through which people can invest and that it is not prohibitive to do so. The initiative could have a significant role in improving the city.
I welcome the fact that €1.2 billion has been set aside in funds if there is a hard Brexit. Reports from the UK suggest there is a strong possibility that people are playing political games in the UK which will have a significant impact on people's lives on this island, both North and South, and in the UK. If there is a hard Brexit, it is critical we can move quickly. Under the €1.2 billion fund, €650 million has been allocated for a contingency fund with €220 million to be spent with immediate effect across a range of areas. On top of that, €40 million will be spent on tourism, €220 million on small and medium-sized enterprise and agriculture with a further €265 million for supports for people who may become unemployed and €45 million set aside for activation.
I have been pushing for Shannon Airport to be made a major European hub. It is the only international airport in Ireland which does not have major European hub connectivity. We have excellent connectivity to Heathrow Airport. However, if there is a hard Brexit with any question of uncertainty around access to Europe through Heathrow, we must have a major European hub connection. I have had the Shannon Airport board meet the Minister for Transport, Tourism and Sport, Deputy Ross, to discuss this in February. It put in a proposal at the end of March. It is critical that Shannon Airport is supported in establishing major European hub connectivity.
I welcome the fact that several areas in social welfare are being looked at. I am a great believer in providing mechanisms whereby we can ensure people have the supports in place to enable them to get back to work. The increases in the income disregard for the working family payment, one-parent family allowance and the transition payment are to be welcomed. These are important in providing people with supports. I welcome that the jobseeker’s payment for those aged 25 will increase to €203. These are genuine cases. I welcome the fact that people between the age of 18 and 24 in receipt of social welfare payments are entitled to the increased amounts as personal circumstances can differ.
I raised the issue of health costs at our parliamentary party meeting two weeks ago. One issue coming up on the ground with the over-70s medical card is where people were caught by being €100 or less over the threshold.The increase in the income threshold for a medical card by €50 for a single person and €100 for a married couple for those over 70 is very welcome. It will make an enormous difference to people's lives. I welcome that the living alone allowance is being increased by €5.
I would have liked to have seen much more being done in this budget but the message the public want to hear is that we are facing into the unknown with Brexit. A year ago, everyone felt there would be a deal but with the way events are unfolding, we are heading into the unknown. We cannot afford to take risks with the public purse on behalf of the taxpayer and the people. In recent years, we restored full employment, which was critical. We must ensure that if there is a hard Brexit, we are prepared to act with immediate effect. There are various programmes within the Brexit strategy. It is critical that they are up and running so that if we are hit with a hard Brexit, there is due diligence in that regard.
On the increase in carbon tax, we must ensure that as it progresses, and the budget has been framed to ensure there is just transition, it does not affect people who are badly off. It must be looked at repeatedly to ensure that the people who cannot afford it are not hit with extra taxes.