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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 Mick Wallace: Information on Mick Wallace Zoom on Mick Wallace]  It is going against the whole notion of what capitalism was. Let us pretend that we like it. It is actually breaking the rules of capitalism given what is going on and how we are allowing NAMA to operate. It is 100% crony capitalism but we do not have a Government that is prepared to shout "Stop". We did not even seem to have a problem with the fact the National Crime Agency in Britain was investigating this, that there are currently eight suspects under investigation, and that the US Securities and Exchange Commission is still looking at it. Mr. Justice Cooke is supposed to be getting an investigation off the ground here soon, yet we are looking at giving those fellows more responsibility after they made an absolute hames of our housing problems. They are a huge part of the problem. If I hear another person say they want to use their expertise to solve our problems, God help me. Anyone would be pulling their hair out.

When NAMA was selling Project Abbey, which belonged to the developer Harcourt, NAMA representatives boasted at the housing committee last year that they had taken that 72-acre portfolio and that it was land for the State, which was needed for housing, so they were doing a good job. NAMA sold Project Abbey. What did it do with the land? A few weeks ago, it did a deal with the same developer to build it out, but the developer was planning to sell the houses for €500,000-plus. What is the rationale? It is mad. Money is scarce but we are giving it to these guys to build unaffordable housing because €500,000 or €400,000 is not affordable for most of the people in this country who need housing. What about the people who have to spend too much money trying to get a mortgage and trying to pay rent? The percentage of their wages that is going towards keeping a roof over their heads does not make economic sense or social sense, but we are doing nothing about it because one of our biggest problems of all is that we think: "Let the private market at it. They will sort it out."

The reason NAMA gets developers to build out projects and lets the developer make a huge profit of €50,000-plus a unit is because it does not have the expertise itself, so it is paying through the nose for the developer's expertise, because the developer has it. Builders have it too, if we were prepared to organise them. Builders are not looking to make €50,000-plus a unit, however, and they would be very happy making €5,000 or €7,000 a unit clear - they would be delighted with themselves. There are plenty of builders but they cannot get funding because the banks are closed to them and, as far as I can see, the State is also closed to them. We would rather be giving the money we can get our hands on to vulture funds to build apartments and houses that the people cannot afford to buy and cannot afford to rent. It is ridiculous.

Deputy Thomas P. Broughan: Information on Thomas P. Broughan Zoom on Thomas P. Broughan I am delighted to have the opportunity to speak on budget 2018. In my own pre-budget submission, which I sent to the Minister, Deputy Donohoe, last week, I highlighted the need for investment, in particular in housing, public infrastructure and necessary public spending. Indeed, recent opinion polls confirmed that the majority of the electorate wanted to see that kind of investment rather than have an extra €4 or €5 in their pockets. While there are a few small improvements in areas like housing, health and education in the Minister's first budget, my overall first impression is one of deep disappointment and a sense of huge missed opportunities by the so-called Government of opportunity.

I also noted the glum faces of the Independent Alliance Deputies and Ministers. It is clear they were shafted by the Minister for Finance and the Taoiseach in this budget. The Minister of State, Deputy Finian McGrath, for example, has let down our citizens with disabilities and their advocates by only securing an additional €15 million in this budget, just a tiny addition on the extra resources secured in budget 2017 and barely keeping pace with inflation. Producing the necessary resources to implement the UN Convention on the Rights of Persons with Disabilities has again been put on the back-burner. While extra provision for the 1,500 18-year old school leavers with intellectual disabilities is welcome, the Minister of State, Deputy McGrath, and his Department have failed to address the increasing lists of hundreds of children assessed to be on the autistic spectrum who are waiting for early intervention supports, including preschool places. Many of us represent parents of those children.

In my personal submission to the Minister last week, I urged him to support major new investment in public transport for Dublin, Cork, Galway, Limerick and Waterford. I also reminded the Minister that cities like New Delhi in India and a host of other Indian, Asian and European cities had begun to build out major city metro systems in the past ten years. Despite this, the Minister, Deputy Ross’s Department of Transport, Tourism and Sport budget has received miserly increases in budget 2018. For example, there is just €6.5 million for new tourism and cycling measures and only an additional €15 million in all for additional resources. The Minister, Deputy Donohoe, trumpeted a number of new bypasses and interchanges but there is only €46 million in an increased capital envelope for 2018, barely above capital depreciation levels. The Minister, Deputy Ross, like the Minister of State, Deputy McGrath, has clearly lost all the budget battles and the Minister for Finance has once again totally ignored the Dublin metro north project and light rail systems for other cities. He mentioned Bus Connects but we have Network Direct, which Dublin Bus has been working on for years. The Minister, Deputy Ross, may say he helped to retain the 9% hospitality VAT rate but the €600 million in lost tax expenditure in that now unnecessary tax cut would have greatly enhanced the health, disability and transport budgets. I urged the Minister for Finance to taper the 9% rate to 13% by 2021.

Before looking at other key budget 2018 measures, I would like to acknowledge the work of the Committee on Budgetary Oversight and the new Parliamentary Budget Office, whose staff are led, respectively, by Mr. Ronan Murphy and Ms Annette Connolly. I believe all of us on the Committee on Budgetary Oversight have benefited greatly in our understanding of the budgetary process and key fiscal issues. It is regrettable the Minister did not welcome the final establishment of the Parliamentary Budget Office under its director, Annette Connolly, in his speech earlier today. I believe the creation of the Committee on Budgetary Oversight and the Parliamentary Budget Office, along with the special health and housing committees, will be an enduring achievement of the 32nd Dáil.

Budget 2018, as many citizens are noting, is a lost opportunity from a Taoiseach who spoke about an Ireland of opportunities. The Taoiseach and the Minister for Finance could have done much more to alleviate the great distress of our citizens on housing and hospital waiting lists in particular, but they chose not to do so. The Irish Fiscal Advisory Council advised the Committee on Budgetary Oversight that there was €2.2 billion of gross fiscal space for 2018, with a net fiscal space of only €650 million or less. The Minister told us the water charges refunds and any Christmas bonus would be met from the 2017 Estimates and that the Minister, Deputy Eoghan Murphy's proposed and desperately needed affordable housing scheme would be funded under the 2018 budget. Like Deputy Wallace, I am still looking for that affordable housing scheme. We have been misled by two Ministers. Based on the Irish Fiscal Advisory Council estimate of fiscal space, the Government could have raised at least €1.35 billion of net revenue from new taxes, efficiencies and the closing of unnecessary tax expenditures. I note the Irish Fiscal Advisory Council and other witnesses at the Committee on Budgetary Oversight who called for a prudent and neutral budget did not rule out an expansionary fiscal stance once the net figure for fiscal space was maintained through new taxes and savings. However, the Minister chose to expand current expenditure by only €684 million and capital expenditure by only €214 million, while raising extra revenues of €830 million in a total budget package of €1.2 billion. It is a disappointing effort in this first and possibly last budget from the Minister, Deputy Donohoe.

We ourselves set the famous medium-term objective to which the Minister keeps referring, that is, the structural balance of minus 0.5% of GDP - it is we who have set this rod to beat our own backs. It is widely believed that the common agreed methodology, CAM, for the calculation of the output gap which determines our fiscal space is totally unsuitable for Ireland. I note also that if Ireland was already at its own medium-term objective, which we should have been at last year, permitted expenditure would be 4.7% of GDP, not the 2.4% set out in the summer economic statement. This would imply a gross fiscal space of €3.3 billion, which is far more scope than the Minister allowed himself today. I agree with a general balanced budget in 2018 but only in tandem with significant additional investment in public services, especially in housing and health, from a widening of the tax base through new taxes on wealth and very high earners.

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