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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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  2 o’clock

(Speaker Continuing)

[Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin] In total, those measures delivered an extra €336 per annum to the average older person. It not a huge sum, but a modest sum. We were castigated by members of Fianna Fáil at the time, which described it as an insult in this Chamber and on doorsteps throughout the country later on. This year, the headline weekly rate increase is slightly higher, but significantly delayed. There is no increase in the fuel allowance and only a 10% increase to the Christmas bonus. The package will deliver to the average older person approximately €245. The Fianna Fáil-Fine Gael contribution to the elderly in 2017 is €245, having derided our €336 last year. I note that Fianna Fáil does not consider its collaboration in a much lesser figure to be an insult. That said, any increase in the support for older people is welcome.

The move towards a universal child care scheme is also welcome but, as already pointed out by Deputies, it is wholly underfunded. We have heard much in recent weeks about the increased investment required of between €100 million and €150 million to deliver universal child care. There was much talk and it would have made sense. If the House recalls, at the last two summer debates - the economic dialogues in Dublin Castle - child care was the overarching issue. It is the block in our society that prevents people, particularly women, getting involved in the workplace and an enormous burden for young families. Last year, we spent €82 million to introduce a second free pre-school year. That shows the scale of what it would cost to make a real impact in this area. What was announced yesterday was different by a quantum. Yesterday's announcement amounts to a new scheme to be funded with a miserable €32 million.

The Taoiseach: Information on Leo Varadkar Zoom on Leo Varadkar It starts in September.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin It starts in September, but why not earlier? If this is the real issue it has been identified as being, why wait three quarters of the year before providing the support that is needed? We support the Minister's overall approach. However, to imagine that a sum of €32 million will deliver anything like universal coverage is obviously misguided. It will be quite complicated to deliver the scheme outlined by the Minister, Deputy Zappone. We will see the meat of it in the coming weeks. The Labour Party put forward during the last election and again in our pre-budget submission a clear and understandable universal scheme that applies to everyone. Everyone would get a break. At the end of the day, we might even get a chance to return to it.

I have deliberately spoken at some length on the positive aspects of the budget. It is important to do so. This Chamber should acknowledge when we are going in the right direction.

Deputy Finian McGrath: Information on Finian McGrath Zoom on Finian McGrath Hear, hear.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin I have said from the outset of my leadership of the Labour Party that we will give credit to and support the implementation of any measures in this House that are positive and progressive. I also made it clear that we will not support measures we regard as negative or backward moving, which is why we will not support this budget. The budget in the round cannot be regarded as having achieved the improvements in public services and living standards to our people that could have been afforded this year.

Notwithstanding the Supplementary Estimates, which the Government denied could or would happen this year, of which we got confirmation yesterday, the fiscal space was limited this year. We know that. However, even within that limited fiscal space, choices were possible. We in the Labour Party argue that the wrong choices were made. In the first instance, it is because of Fine Gael's insistence on the abolition of the universal social charge. The tax cuts announced yesterday amount to less than €2 a week for those on €20,000 and €3.25 a week for those earning median income. It is a tokenistic sum of money. It is therefore hardly a surprise, as other Deputies have pointed out, that workers are not rejoicing in the streets.

To give that sum of money to so many, however, demands a big chunk of fiscal space, and the opportunity cost of that decision is the real tragedy of the budget. With that money, the Government could really have made a difference for some. By deciding to press ahead with universal social charge cuts, even when funding was so limited, the Government was unable to fund important other areas. One area where this budget is particularly lacking is in meaningful support to those in low paid work.

I was astonished to hear the Tánaiste on the radio this morning declaring that the budget published yesterday is making work worthwhile. The reality is truly different. For those on the minimum wage, yesterday saw a miserly increase of 10 cent an hour in their pay. If estimated inflation of 1.5% becomes a reality next year, an increase of 15 cent would have been needed just to stand still. Therefore, in real terms, there is nothing in it for those who go out to work on low pay. I spoke to a colleague this morning who had been talking to a colleague of his in the security business who is working on the minimum wage. There is nothing in it for him. He is going backwards.

To make matters worse, the Minister, Deputy Varadkar, did not include any increase to the thresholds for family income supplement, so a low income household will see a reduction in State support. To give a concrete example, take one-parent households where the parent is in full-time work on the minimum wage and has one child. Before yesterday, they had an income of €366 per week and received a further €87 a week in family income supplement. In total, those people working on the minimum wage were taking home €453 a week. Yesterday's pittance of an increase to the minimum wage would see their weekly income rise to €370 per week, but their family income supplement will fall to €84.60 a week. In total, therefore, they will now take home €454.60 a week. After the budget, those households are better off by the princely sum of €1.60 a week, which will be more than wiped out by inflation.

I do not know if the Taoiseach has bought a litre of milk recently-----

The Taoiseach: Information on Leo Varadkar Zoom on Leo Varadkar It is 2 litre ones normally.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin -----but Wexford Creamery milk is €1.32. That is roughly the equivalent of the difference of this budget to a household on the minimum wage. It is hard, seeing that reality, to agree with the Tánaiste that this budget is making work worthwhile. What is maddening about this is that it would not have cost much to make it different. A simple change to the terms of reference of the Low Pay Commission would have mandated it to work towards delivering a living wage for all, as the Labour Party demanded. It would have led to a larger increase in the minimum wage and a small amount of funding to increase family income supplement could have raised the income thresholds accordingly. That is not a choice that the myriad on the committee, from Fine Gael to Fianna Fáil to the Independents, thought to make yesterday.

This Government has shown scant regard for the low paid. What of other vulnerable groups? Notwithstanding the Taoiseach's words, children are arguably the group most poorly served by yesterday's budget.

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