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Financial Resolution No. 2: General (Resumed) (Continued)

Wednesday, 12 October 2016

Dáil Éireann Debate
Vol. 924 No. 2

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  1 o’clock

(Speaker Continuing)

[Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin] Their failure to do so is due to their lack of interest or commitment, not their lack of a majority in Dáil Éireann. There is a need for greater cohesion and better strategic planning. Many in this House are wondering what the Minister for Transport, Tourism and Sport is doing in his portfolio. There has been absolute silence for the past few months.

Deputy Dara Calleary: Information on Dara Calleary Zoom on Dara Calleary He is wondering himself.

Deputy Kevin Boxer Moran: Information on Kevin Boxer Moran Zoom on Kevin Boxer Moran He is working hard. He is a new Minister.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin We are all wondering what will emerge from that Department in due course.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin Nothing.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin The Taoiseach may take the matter in hand. There was a time when he was very enthusiastic about report cards. I respectfully suggest the report cards of some of his Ministers would not be glowing at this juncture.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath Zero for effort.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin There is no room for taking fiscal risks at this time.  The international situation is far too uncertain.  We have to be in a position to respond to any number of possible economic crises.  The longer term debt target announced yesterday is essentially irrelevant as it is too far out to be meaningful.  What matters is the immediate future and in this regard, a prudent approach is absolutely essential.

It is a pity that the Government has gone from being sceptical about the huge GDP revision for last year to embracing it as a vindication of its policies.  The underlying position is nowhere near as positive and more restraint and less spin are in order. It reveals the lack of a strategic direction that no effort was made in advance of publication of the CSO figure of 26% growth for the country and the Government to have a more realistic model to outline the true underlying position in the economy. The overall fiscal stance must help to underpin domestic confidence and address critical issues which are, undoubtedly, a drag.  The proposed outturn is mildly expansionary and sustainable.

The rainy day fund which we have promoted, on which Deputy Michael McGrath has been consistent in the past two to three years and which the Government proposes to adopt in the next year or two is prudent and should in time, once implemented, ensure Ireland will have one of the better outcomes of any country in meeting our fiscal treaty obligations, although the reservations of the Irish Fiscal Advisory Council should be given more serious weight by the Government. It is our sense that the Government has been too dismissive of the council in recent years and that seems to be a continuing trait of the Ministers for Finance and Public Expenditure and Reform.

It should be noted that in the pre-budget proposals produced by groups and parties there was no economically credible alternative to the proposed fiscal aggregates. The €25 billion package announced by the AAA-PBP group is welcome because, for the first time, it lays out in detail the incredible anti-worker policies of the hard-left.

Deputy Paul Murphy: Information on Paul Murphy Zoom on Paul Murphy How so?

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin Because massive new taxes on the private sector and other targeted hits designed to drive up private rents show a consistent ideology.

Deputy Paul Murphy: Information on Paul Murphy Zoom on Paul Murphy All workers would benefit.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin While the Socialist Party and the Socialist Workers Party which form the core of the two alliances have still not been able to agree on everything, they have finally shown to every private sector worker what they stand for. It would result in the loss of thousands of jobs if Deputy Paul Murphy's policies were to be implemented.

Deputy Paul Murphy: Information on Paul Murphy Zoom on Paul Murphy A total of 50,000 jobs would be created.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin Everywhere except in the private sector. You do not believe the private sector should increase the number of jobs.

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl Will the Deputy, please, address his remarks through the Chair?

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin I am, a Cheann Comhairle, through a circuitous route.

Sinn Féin is obviously uncomfortable with the full scale of the policies it advocated in the Right2Change manifesto this year. Everybody should read the manifesto to which the party has signed up because its alternative budget includes almost €2 billion in new taxes.  The claim that this would have no negative economic impact shows that the party remains obsessed with its left flank rather than offering a credible alternative.

I congratulate Deputy Brendan Howlin for his newspaper article on Monday in which he condemned the budget as not being "fair, progressive or sensible".  Given that even his one-time colleague, the Minister for Social Protection, has said the past five budgets were not "fair and socially just", the Labour Party is clearly still living in denial.

Before dealing with the detailed areas covered by the budget, it is important to address the budgetary process which is a shambles.  It works directly against soundly-based policy and credible political debate.  This must be the last budget produced in this manner. If we assume - I accept that the assumption could be naive - that the Government was not deliberately misleading people, both in public and in private, the appearance of an additional €300 million in the past week suggests, at best, a lack of control. It was not acceptable that so many additional millions of euro became available at the eleventh hour and communicated to other parties a few days in advance of the budget announcement.

There has been no serious review of what the budget will deliver or the figures behind it.  Ongoing activity is sold in the same way as new initiatives and the debate is reactive rather than strategic.  The spring economic statement and announced spending envelopes are meaningless and never reflect the final outcomes. The idea of an annual budget day should be ended.  Let us have detailed scrutiny of "no-policy-change" Estimates and policy initiatives in advance.  A single high-stakes political showpiece makes no sense and does not deliver good policy.  Most countries have a more lengthy and iterative process which makes greater demands on the government and the opposition alike. We will insist on the early establishment of the independent Oireachtas budget office and seek early discussions on a deeper reform of the budget process. That would impact on the Opposition as well as on the Government and would carry with it responsibilities for Opposition parties in making proposals. The Committee on Budgetary Oversight was not in position early enough to have a meaningful impact on this budget. People need to face up to the challenge. If we have proper budgetary scrutiny within Parliament, people must properly assume responsibilities in that regard.

As I have said previously, the fact that the fiscal space is limited still allows for choices.  The forced rebalancing of the budget towards essential services and supports has allowed for some improvements.  Public services have been cut to the bone in the past five years and had to be given priority. Fianna Fáil insisted on services being given priority over tax cuts as it was the right thing to do. The increases in pension and other payments are a direct result of the rebalancing and specific provisions of the confidence and supply agreement.  To brief otherwise fools no one.

On pensions, Fianna Fáil makes no apology for giving priority to the elderly.  In recent years cuts to a range of vital supports for the elderly, including the fuel allowance, the abolition of the telephone allowance, the increase in the prescription charge from 50 cent per item to €2.50, and the imposition of the property tax have had a disproportionate impact on those surviving on the State pension. All of these measures, cumulatively, had a negative impact on the net income of pensioners, with the huge health expenditure they incur.  The increase in pension payments, on which we were clear, and other changes such as the changes in prescription thresholds will help, although the prescription charge of €2.50 is still too high. I recall Senator James Reilly coming into the House as Minister for Health five years ago to propose the abolition of the 50 cent charge, but he then proceeded to increase it to €2.50. That has had a significant impact on those who take a lot of medication. GPs and pharmacists say this is the particularly the case for pensioners and those who are ageing. The increases in other payments are possible only because of the rebalancing forced on Fine Gael due to the confidence and supply agreement.  It is amusing to watch those who took an unreconstructed right-wing approach in the general election and the negotiations afterwards trying to soften their image through partisan briefings.

Deputy Paul Murphy: Information on Paul Murphy Zoom on Paul Murphy Is the Deputy now watching his own left flank?

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin We support the increase in all payments and, as we said repeatedly in discussions with Ministers, their decision to delay starting dates is bad policy. We regret that the Government has chosen to delay implementation of certain commitments on education.  The emptiness of the so-called action plan on education is reflected in the fact that the budget does not fund any initiative contained within it. It is not a strong budget for the education sector. The confidence and supply agreement requires a reduction in class sizes and we will insist on this being addressed. The decision to end all ring-fenced provision for guidance and counselling services was incredibly damaging and regressive and its impact on disadvantaged communities, in particular, has been terrible.


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