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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 Joan Burton: Information on Joan Burton Zoom on Joan Burton] For the second year, this is a calculation on the part of the Government and I hold Fine Gael, Fianna Fáil and the other people in government equally responsible for it. The Government's logic is that it is targeting preschoolers, but children over five, particularly teenagers, are expensive too, as we all know. Children and the costs associated with them are not recognised under our tax code. Instead, child benefit is the only recognition and it is paid directly to the caring parent, usually the mother. This is the second year in a row that the Government has failed to increase the rate of child benefit, which is enormously important to people on low and middle incomes, particularly those who are in work. While I welcome the increase of €2 per week in the rate of child dependant allowance for those on social welfare, I am hugely angry that people who are in employment and have children have again been ignored, as evidenced by the failure to increase the rate of child benefit.

A disquieting feature of the budget arithmetic is its in-built reliance on the temporary windfalls that regularly flatter Exchequer returns, notwithstanding the fact that there is no certainty these will continue to accrue. In other words, we are back to the good old bad old days. The money raised this year from the sale of AIB is a case in point, while another is the transfer of Central Bank profits to the Department of Finance, a tidy sum for the past number of years due to the sale of the Anglo promissory notes. The amount of cash coming from that source will inevitably fall in future years and this could give rise to a gaping hole in the national balance sheet. This points to the need to look for future flows of income which do not depend on windfalls returns. Ireland's tax base is already too narrow to deliver the revenue a modern society with a socially progressive purpose requires.

Like many citizens, I was disturbed by the boastful claim of the boss of AIB that his bank would not have any tax liability for decades due to the loss-offset rule that enables companies to reduce and even eliminate all taxes where they have accumulated losses to carry forward. While that is a legitimate use of a long-established tax rule, it cannot mean that a profitable bank has no contribution to make for many years into the future. I want the forthcoming finance Bill to set out clearly that all financial institutions will have to pay their proper share, by whatever means necessary, whether it is through levies or otherwise. Now is the time for proper consideration to be given to joining other EU member states that wish to impose a financial transactions tax. I was hesitant about proposing this while London was a major financial centre that could have drawn business away from Dublin. Sweden's previous experience of a go-it-alone transactions tax was a salutary reminder of the mobility of finance capital. Now, however, London is diminishing in importance as a world finance centre as a result of Brexit.

A group of EU member states, including Germany and France, has indicated support for this measure. We should join them to advance the proposal as a common tax measure. I emphasise that a financial transactions tax is a very low tax of, for example, 0.01%, or 1% of 1%, on each financial transaction. Any purchase of shares or bonds or trade in derivatives or currency would be taxed at this exceptionally low rate. A financial transactions tax would be a deterrent to highly speculative transactions with very rapid trading and only minimal profits. Speculation would be less attractive were such a tax in place. I lost track of the number of reviews and studies in the budget. I think I stopped counting after 12. This is one, however, which should be examined. It is really important.

I turn to the issue of overseas aid. The Government has decided to seek a seat on the UN Security Council for Ireland in 2021 and has already marshalled a substantial diplomatic effort to achieve this purpose. While that is fine and dandy and would represent an important reputational boost for this country, it must involve a critical examination of the commitment to reach the UN development aid target of 0.7% of GDP each year. While that commitment had to take a back seat during the retrenchment period, it must now be revisited if our diplomats are to embark on an international canvass for UN votes. We cannot send them out to hunt for votes in some very remote corners of the globe with one arm as long as the other. More than 128 million people in 33 countries are in need of urgent humanitarian assistance while more than 65 million have been displaced from their homes by war and conflict. Last January, I made a private visit to Tanzania where I worked in development and third-level education many years ago. I spent some time on that visit looking at some really valuable projects sponsored by Irish Aid, of which we can all be very proud. While some of these involve very modest financial contributions, they produce excellent results in health care and other fields. As GDP and GNI* increase at a steady clip, so too must Ireland's aid budget. We are currently quite far behind, but the actual demand for aid has increased sharply due to political conflict and the dramatic effects of climate change.

I questioned the Taoiseach about this matter last week and was disappointed by his tepid response. On the one hand, he proposes to increase substantially Ireland's so-called global footprint by having more embassies and trade offices around the world. On the other, however, he does not seem to recognise that a greater global footprint means a corresponding expectation of higher contributions to international development. Apart from the moral issues involved, there are definite and practical advantages for this country if it plays a more active role in this area. Climate change knows no borders and the impact of climate change events are already causing immense population movements which are heartbreaking to witness. The allocation of €13 million, which is what is in the Estimate today, is inadequate and should be closer to €70 million. As a former Minister of State with responsibility for development and as someone who travelled extensively on behalf of Ireland during the term of the previous Government, I am aware that our programmes in Africa and, on a smaller scale, parts of Asia are our calling card, not unlike our culture, music, writers and poetry. These programmes are the reason people pay attention to Ireland and want its representatives to occupy high office in different international institutions.

To some extent, every budget is a primarily political statement but this is one of the most nakedly political I have seen since the days of Mr. Charlie McCreevy. Its primary purpose is to keep the show on the road for another year. I detect very few elements in it that put national needs front and centre. Instead, it is designed to secure party advantage more than for any other purpose. I classify it as confused and remarkably devoid of vision at a time of exceptional uncertainty for this country. As such, it is a perfect reflection of the Government that produced it. Its sole purpose is survival and to limp along from month to month. We were promised a brave new world, but we did not get it today.

I turn to rural Ireland and disadvantaged areas in urban Ireland. As Minister for Social Protection during the tenure of the previous Government, I worked very hard to ensure that no post office was closed except where it arose as a consequence of the death or retirement of a postmaster. I have seen enormous resistance in the Department of Finance to the development of community banking in Ireland and I see no reference to that today.

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