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Financial Resolutions 2019

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Budget Statement 2019

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Snippet Contents:

It says 5% in the budget booklet. That is modest because schools are being put to the pin of their collars to meet their running costs. If it is an older school building such as an old parish school, it is very likely that it is not well insulated against heat loss and consequently, that its heating costs are very expensive.
I mention the living wage and in that context I wish to look under the bonnet and see some features of the economy that can often be hidden from view but have a significant impact on the lives of people. We talk here a lot about taxes. We need to talk just as much about wages. Recently, we thankfully have witnessed many consecutive months of net jobs growth and an exceptionally long streak of reduced unemployment. That, in itself, is undoubtedly good news and is a vindication of the relentless focus on jobs that my party pursued in government. The growth has brought down the official unemployment rate month by month and labour force participation, which counts the number of people working or actively seeking work, is also ticking upward. That indicates that people who may have given up on finding a job are starting to return to the workforce. Despite the sustained job growth, there remains a deep dissatisfaction that the recovery has not been adequate to meaningfully boost the fortunes of ordinary families. One reason for such deep public scepticism is that wages have yet to grow substantially in line with the growth in jobs and indeed in line with growing productivity. People are deeply disappointed with the sluggish wage growth, because their expectations have risen after years of consistent job growth. Now, in the fourth or fifth year of the official recovery, working people are justifiably less patient and no minuscule tinkering with tax rates will alter that until the longstanding stagnation of wage rates is tackled. It seems that we have gone a long way to deal with the job quantity issue but we have lagged too far behind on the job quality issue.
The gender pay gap has finally and belatedly come to the fore and it will need a sustained sector by sector effort to close off this running sore. In more general terms, we should recognise that workers are fully entitled to obtain a greater share of the fruits of quite dramatic levels of economic growth. To ignore this is to tolerate ever greater and wider inequality and all the social disruption and strains such inequality brings. Interestingly, the International Monetary Fund, IMF, has come to recognise how inequality in incomes is now a serious barrier to economic progress in advanced economies. The evidence is stark - excessive income inequality actually drags down the economic growth rate and makes growth less sustainable over time. We need to take this evidence on board and recognise its profound significance for wage policies and tax policies.
Additionally, a sustainable wage boost can encourage workers to make better provision for their pension pots. I am a strong advocate of auto-enrolment in private pension schemes but that can be realistic only when workers have the capacity, through better wages, to save adequately for pensions and it is only when governments, including our own, are prepared to match those contributions - as employers should be as well - that such measures will come into place. There are now annual reviews of the minimum wage but I feel this is inadequate, welcome as today's announcement may be. It is a very small increase in the minimum wage. It is the living wage that should be the focus of all policy making. It is a well researched concept based on firm evidence and it properly incorporates all the elements that enable an acceptable standard of living. It certainly would be one way of dealing with the crisis in the spiralling costs of rents and would allow people, especially young people, to feel some measure of safety in that not everything they earn would be entirely gobbled up by massively increasing rents.
I wish to refer briefly to the budget allocation for international development aid. The Taoiseach has been eloquent on his travels about Ireland’s global footprint. It is a worthy ambition and has wide support, as has the decision to campaign aggressively to secure a UN Security Council seat for Ireland. However, it has to mean a lot more than just Irish Embassies all around the world. It must also involve a critical look at the commitment to reaching the UN development aid target of 0.7% of gross domestic product, GDP, each year and to ensure that tax treaties cannot be abused to enable widespread corporate or individual tax evasion. The gradual move towards the 0.7% target did have to be postponed during our painful retrenchment period, though many hundreds of millions of euro were allocated annually even in the worst of years. Last year, the cash allocation amounted to over €700 million. I acknowledge there has been a significant increase of over €100 million today but now is the time to set out a clear and obligatory timetable, lest our diplomats have to embark on their vote-seeking travels with one arm as long as the other. War, conflict and climate change have caused immense suffering, as have famine, drought and population displacement. More than 128 million people in 33 countries currently are in need of urgent humanitarian assistance and more than 65 million people have been displaced from their homes by war and conflict.
I worked in Tanzania with Irish Aid and the Agency for Personal Service Overseas, APSO, for a number of years and I went back there last year on a private visit. I had the opportunity to spend some time visiting some very innovative and interesting projects financed by Irish Aid and, therefore, by all of the taxpayers in Ireland.