At the outset, I wish to acknowledge the sterling work and reports of the Committee on Budgetary Oversight and the Parliamentary Budget Office during the year.
This budget was framed against a background of several challenges, such as the impact of a possible hard Brexit, trying keep an open border with the North, President Trump’s “America First” policy, our over-reliance on corporation tax from a small number of multinationals, the ongoing desperate housing crisis, health waiting lists and, of course, climate change and all the issues highlighted yesterday by the Intergovernmental Panel on Climate Change, IPCC. The budget that has been presented is, at best, a type of holding exercise. It is a sadly familiar budget and is principally for the elites of Fine Gael and Fianna Fáil and their supporters in the property industry. While the National Treasury Management Agency, NTMA, is efficiently carrying out the necessary refinancing of our national debt this year and into 2019, the sheer burden of the €201 billion debt as a percentage of GNI* and in real terms is a sombre backdrop to our economic performance. In addition to that, there is the amount of money we are paying each year to the European Union, our net contribution. We are one of the nine net contributors. It demonstrates that much of our funding is pre-committed and that limits the ability of even a radical Government to address our major concerns.
As I indicated several times to the Minister for Finance at the Committee on Budgetary Oversight, despite the recent surge in corporation tax I still believe the introduction of the rainy day fund should not have happened this year and should have been postponed until the early 2020s. The Irish Fiscal Advisory Council has correctly criticised the proposed €1.8 billion fund as half-baked. The Committee on Budgetary Oversight and the Parliamentary Budget Office are still waiting for information on whether this fund would operate as a counter cyclical policy tool and-or an emergency fund. Had we not embarked on this course today we would have had an extra €500 million to spend on vital current services in areas such as health, education, disability and housing.
Last week, I delivered my pre-budget submission to the Minister, entitled “A Budget for All Our People”. The key expenditures I outlined cost €3.4 billion to €3.5 billion. The necessary revenue raising measures I favoured would have yielded at least €2.7 billion. Regrettably, one of the most opaque areas of the national finances is the lack of transparency and accountability for costly tax expenditures as well as the tax avoidance other Deputies have mentioned. Included in these tax expenditures are the crash era losses set against current corporation tax liabilities. Constituents are often very angry that companies such as Bank of Ireland, AIB and the like, which are now very profitable again, are not paying normal corporation tax in addition to the bank levy.
For years I have been calling on the Government to declare a housing emergency and introduce emergency legislation along the lines of FEMPI, but for housing. However, the housing package announced today is merely a rehash of earlier announcements and promised spending. The net additional social housing construction and acquisition capital spending appears to be only €210 million, with €69 million for servicing local authority sites. The over-reliance on the private rental sector for accommodating those with a social housing need through the HAP, RAS and rent supplement will be greatly exacerbated by this budget. There are almost 70,000 households being accommodated in this way now and today’s changes will add another 17,000 households to the uncertain future of living in a HAP house. The total reliance of Fine Gael and Fianna Fáil on developer-led housing has created major uncertainty about the ongoing vast government expenditures in the private rental sector. The Taoiseach, Deputy Varadkar, and his alt-right colleagues in Fine Gael still relentlessly oppose direct construction of social housing by the local authorities. In view of some of the changes made today, how will renters be any more secure following the removal of interest deduction limits for landlords? What will the increase in infrastructural funding up to €50,000 per subsidised home do to assist the homeless?
I am a member of the informal Oireachtas group on disability. I urged the Government to introduce a €20 per week cost of disability payment but all we got today was a commitment from the Minister and the Minister of State, Deputy Finian McGrath, to look at this important initiative in a study that will cost €300,000. The Oireachtas group presented a multi-annual investment programme of €211 million per year, starting in 2019, but as far as I can see there is only €150 million in additional spending for 2019. Obviously, some of the demographic changes will consume much of that.
As with housing, the Government’s response to the ongoing crisis in the health sector has been incredibly lacklustre. Lengthy waiting lists of over 700,000 have become the norm as citizens languish in pain and our two-tier system exacerbates inequality. Where are the extra beds we were expecting today or, indeed, the cardiac services in the Minister of State, Deputy Halligan’s, south east? Why did that not happen today? We were expecting some major initiatives in those areas. Only €206 million out of the proposed Vote for health in 2019 is being allocated to Sláintecare implementation, but the Sláintecare integration fund only receives €20 million. In that section of the budget expenditure report, the €206 million includes additional funding of €55 million for mental health services and €20 million for the National Treatment Purchase Fund. However, only a few weeks ago the Minister, Deputy Harris, told me that €189.2 million was needed to implement the A Vision for Change strategy.
The small restoration measures for social welfare recipients and pensioners in recent budgets have been welcome, but I expected the Minister to go a little further today with perhaps a basic €7 per week increase across all payments, which the Department of Finance estimated to cost just under €500 million. The increase that has been granted as well as the full restoration of the Christmas bonus are welcome, but the Minister could have done more for our most vulnerable citizens. As was highlighted during the national economic dialogue, budget 2019 should have addressed the feminisation of poverty. Many priority measures could have been taken to do this. Incidentally, I welcome the €150 earnings disregard for lone parents. That €20 is very welcome. However, given the growing feminisation of poverty and homelessness, it is unacceptable that the Department is not fulfilling the key recommendation of the Committee on Budgetary Oversight that an equality budget statement would be prepared and read by the Minister along with the Budget Statement today. He refused to do that when he met the committee recently. Why is the Department of Public Expenditure and Reform not using the SWITCH – simulating welfare and income tax changes – model in respect of gender income inequalities?
When the teacher unions and teacher constituents contacted me over the past year, their key demands were pay equality, lower pupil-teacher ratios, increased capitation rates and restored necessary middle management.
The current and capital education budget increases amount to just under €500 million and they do little but address the demographic needs of our population. For example, only €4 million will be provided in additional capitation in 2019. The move to an NTF levy of 1% is welcome.
The Revenue Commissioners’ statistics and economic research branch provided information on income, USC and other key tax changes which could have been positive. I welcome the change in the standard rate band and the slight improvements in tax credits but the national minimum wage should have been increased to €10.50 per hour rather than €9.80 because we should strive to reach a national living wage of €11.90 per hour over the next year or two at the latest. The Minister could have taken many other steps. For example, I proposed a 43% tax on incomes greater than €120,000 per annum in my budget submission, which would have yielded significant additional funding. I also supported Deputy Wallace’s proposal for a 25% vacant site levy. Deputy Wallace will be aware that the Department of Finance costed his proposal and if proceeded with, it would have yielded an additional €105 million up to 2020. The Government could have taken many more positive, fairer and egalitarian tax initiatives. In many respects, the Minister had scope for a much fairer landmark budget, even allowing for Brexit and the other severe external challenges. Once again, he chose the Fine Gael spin over substance route. Despite what the media may headline tomorrow, this budget is essentially a standstill exercise to see how the wind will blow from 29 March 2019 and whether another budget will be necessary in 2019. It particularly fails citizens who are in housing need and those who are ill.