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Budget Statement 2018 (Continued)

Tuesday, 10 October 2017

Dáil Éireann Debate
Vol. 960 No. 1

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(Speaker Continuing)

[Deputy Catherine Murphy: Information on Catherine Murphy Zoom on Catherine Murphy] Affordable housing is a public good and must be seen as one. The focus has got to shift because, essentially, it is now seen as almost a private sector endeavour. We were told earlier today that housing remains a priority for the Government. Saying that is one matter but we are not seeing delivery or investment in social housing. Some of us raised these issues in 2013, the same year the then Minister for Finance, Deputy Noonan, introduced a capital gains tax advantage for a particular sector in encouraging land use. It was evident even at that stage that we were going to have a problem. Now this has been reversed.

Most of the measures listed in the Budget Statement refer to plans for 2019, 2020 and 2021. Where is the urgency or the sense of priority for the 3,000 children in emergency accommodation? We must parse out the measures announced and juxtapose them with what they really mean. There is a promise of 3,800 new social homes for 2019. It must be remembered that there are 90,000 individual applications on the housing waiting lists, which probably comes to 230,000 people. When one drills down into the extra €500 million provided for direct builds and the promise of 3,800 social homes, it effectively means direct builds would cost €131,000 per unit. That means it is only a small number of direct builds and it is mainly for housing assistance payment, HAP. This has increased by €149 million, which the Minister claims will support an additional 17,000 homes and households. All this does is recognise the significant rent increases in recent years, however. That is costing all of us because the lack of investment has created this problem.

It also poses a significant difficulty for people who are just above the thresholds where they qualify for HAP and it puts another group in peril. It is an expensive short-term measure for the State, yet it has become the main key response to the crisis.

Similarly, the vacant site levy will not actually kick in until 2019. The amount of the levy is way below the level of land inflation and, accordingly, it represents a carrot but not much of a stick. The legislation on this issue is full of loopholes that allow land hoarders to avoid the levy. Unless those loopholes are closed, the levy in and of itself will not be enough. The Social Democrats recently introduced the Urban Regeneration and Housing (Amendment) Bill 2017 which will address those legislative anomalies and ensure land hoarding is not financially beneficial to landowners.

I welcome the increases in stamp duty on commercial property transactions. However, how much tax will be realised? Critically, if it is not realised, what services are at risk? Crucially, there has been no announcement of an affordable housing scheme, despite the fact the lack of housing affordability is the number one issue driving the ever growing housing emergency. Instead, the focus is on the private sector and, therefore, it is hoping rather than planning for affordability. That is a really critical point because it will impact on those who require housing in the short to medium term. It drives up wage demands and limits our ability to grow the workforce. It has a major impact on our country and economy. Affordability is left to the private sector to deliver on.

I am genuinely disappointed that the measures announced today will not even scrape the edge of the housing emergency. Rebuilding Ireland has many good points to it and is a good plan. There is a real problem, however, with the Government making that plan a reality, even with the modest number of houses announced, relative to the housing waiting lists.

What of the proud statements on the corporate tax rate? The Minister stated our corporate tax system is recognised as one of the most transparent internationally. However, last month's Government-commissioned Coffey report still managed to find 18 areas in which the code could be brought more into line with OECD norms. The Minister also boasted of the tax regime's stability and competitiveness, words at odds with those of the Comptroller and Auditor General, who concluded in his 2016 annual report that "corporation tax receipts are subject to dramatic changes year-on-year, and have been difficult to forecast". There is too much of an over-reliance on a fragile and volatile tax base. Up to 37% of corporation tax receipts came from ten corporate firms. As it stands, 13 companies pay an effective tax rate of less than 1%, significantly lower than that of the 12.5% headline rate. This no doubt reflects the significant tax credits and reliefs, in particular double taxation relief and research and development tax credits.

There were great announcements to abolish the universal social charge during the general election. This was a big lie and one of the most dishonest statements presented during the general election. The Government knew full well it was simply not possible to deliver on that due to the cost. We are constantly preached at about how Fine Gael is financially prudent and is the only one which can run the economy. The fact Fine Gael is talking about amalgamating PRSI and the universal social charge is one hell of a major U-turn. That is far from what was promised during the election. It was a dishonest way to enter into the general election.

I will not forget the so-called "game changer", which never features anywhere, namely, the Anglo Irish Bank and Irish Nationwide debts and promissory notes. We were told there would be retroactive recapitalisation of our banks. We are carrying that debt and we have extinguished €8.5 billion of debt which is not owed to anyone. To give up on that is an absolute shame. It is a shame that our children, grandchildren and other generations will pay for it, not us.

There is the issue of spending now to save later. We are on the hook for €600 million in fines for not complying with our climate change targets. What is wrong with a good scheme for retrofitting our housing stock? What is wrong with investing relatively modest amounts for the return one gets in cycling and public transport infrastructure? These require us to spend money now because we are going to have to pay later if we do not spend it. Considering this is the first budget in which there is some scope, the absence of any kind of ambition in this regard is outrageous.

The most significant point of today's budget is the small print measure which shows €5 million will be allocated to the strategic communications unit for the Department of the Taoiseach. It is significant because today we witnessed the results of some of that expenditure through the exercise of competent presentation, plenty of spin and bluster, all designed to hide the fact that when one scratches the surface, one will find little evidence that these loud pronouncements will actually make much real difference to the fabric of Ireland.

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