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Budget Statement 2021

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Snippet Contents:

Budget 2021 has been developed and delivered under the threat of a no-deal Brexit as well as the added risk of Covid-19 and its impacts on our health, livelihoods and economy, not to mention the climate emergency we are facing. None of us could have predicted that we would be in the midst of a global pandemic and that we would have a Government in which the Tánaiste still thinks he is Taoiseach and which has more leaks than a bottomless bucket. However, here we are, underwhelmed on budget day yet again. We are facing a crisis and this budget fails to demonstrate the necessary leadership or vision. Instead, it seeks to keep a lid on things in order that we can be brought back to the old normal. The old normal did not work in the past and will not work in the future either.
Covid-19 has brought the damage of Fianna Fáil, Fine Gael and Green Party policies to the forefront of conversations in Irish households. That damage includes the consistent under-resourcing of our health service; the inequalities of the two-tier health system; the lack of appropriate, adequate and affordable housing; the working conditions in our meat factories; the inhumane conditions in direct provision centres; and the lack of adequate infrastructure for working from home, particularly in rural areas with bad broadband connections. I could go on and on here and the reality is that if the left were in Government, we would now be addressing these inequalities rather than looking at what we have today. Instead, the Government has decided to put together a piecemeal budget with some small morsels for people, like the €5 increase in the living alone allowance and the €150 increase in the carer’s support grant. Realistically, there is nothing in today’s budget that will make much of a difference to the majority of people in Ireland. Not only does it not have vision; it also does not have heart. It is clear that it does not see us all in this together.
The reduction of VAT for the tourism and hospitality sector from 13.5% down to 9% is a wasted measure in this budget. I can only assume that the Government is trying to pay lip service to a struggling sector, because the many reviews of the previous reduction from 2011 to 2018 showed that it had little or no impact on prices for customers or employment in the sector and that prices, particularly Dublin hotel prices, actually rose during that time. The 9% reduced VAT rate was introduced from 1 July 2011 in the midst of the downturn and recession and was due to be restored at the end of December 2013. However, the delay in restoring VAT to 13.5% meant that by the end of 2017, this measure had cost the Exchequer an estimated €2.6 billion. The IMF, OECD and EU all recommended that the reduced rate be reviewed or abolished, as it certainly was not bringing lower prices to consumers or affecting employment in the sector. In fact, the Government's own Irish Government Economic and Evaluation Service paper of July 2018 stated that "the 9% rate is regressive, benefitting better-off households disproportionally more than worse-off households." It also found that small bed and breakfasts are not VAT-registered and therefore, could not and did not benefit from this reduced rate.
I understand that businesses in the tourism and hospitality sector are seriously worried about the impact of closures and reduced numbers and other impacts of Covid-19 on their businesses. I recognise that this has been one of the sectors most affected by Covid restrictions. However, surely the sector would be better served by support grants for businesses and not by a measure that reduces what is available. I acknowledge the call from 60 hospitality businesses in Donegal, which asked for four specific measures in this budget to assist the tourism sector in the area. A letter, which went out to all Deputies, stated that around 5,500 jobs were at risk in the area. I support calls for the extension of the moratorium on bank loans from six months to 12 months and the extension of the local authority rates waiver for a minimum of 12 months.
Donegal has the highest proportion of the population dependent on social protection payments and social transfers. Four of the top ten areas with the highest incidence of Covid recently have been in Donegal, namely, Lifford-Stranorlar, Carndonagh, Letterkenny and Buncrana. With the increasing numbers in the North there has been speculation about the Border counties being moved to level 4. What financial assistance will be made available to Donegal under the town and village renewal scheme or any other initiatives? We are already the forgotten county and the only region without a rail network or major motorway. During the summer, the Parliamentary Budget Office publication on regional economic disparities showed that Donegal had the lowest disposable income per capita, at €15,546. Of course, disposable income per capita was higher in the east and midlands at €23,869 and Dublin had the highest disposable income at €25,497 per capita.
Donegal needs investment in public transport for many reasons, including to address climate change. I successfully proposed that the need to expand rural public transport radically be included within the report of the Joint Committee on Climate Action. What we have here today is further penalisation of those who cannot afford to spend €40,000 or €50,000 on electric cars or hybrids. Electric vehicles are prohibitively expensive for many people.
There is nothing in this budget to address sick pay for workers. I have said before that Covid has exposed the many faults in some areas of employment and that there are people who simply cannot afford to stay home from work when sick. It is recommended that we work from home where possible and not use public transport, but there is no recognition of the many workers who simply do not have these options. Basic employment rights with adequate workplace inspections or enforcement of these rights would have made a huge difference here. I support ICTU’s call for mandatory sick pay for all workers and I would be interested to see what aspects, if any, of gender and equality budgeting were taken into account in the production of this budget. I would say consideration of those aspects was fairly light.