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Government delivers backroom budget lacking in vision says Pearse Doherty TD

11 October, 2016 - by Pearse Doherty TD


Sinn Féin Finance spokesperson Pearse Doherty has described the budget as a backroom budget that is lacking in vision.  He said the government missed an opportunity to chart a new course, to reduce the cost of living, invest in public services and to deliver tax fairness.

Teachta Doherty’s full budget speech follows:

Pearse Doherty Budget 2017 Speech

Check against delivery

Introduction

During the past few decades the Irish people have each year had to live with the consequences of budgets drafted by Fine Gael or Fianna Fáil. One or the other, time after time. Now we get both in one Budget – the politics of the nod and wink, the politics of short-termism.

The cycle of boom, bust, economic collapse, emigration and underinvestment will carry on regardless. 

In the good years money was squandered by these parties and in the hard times it was our families and friends that paid the cost. 

We are told this is an era of new politics- that things are different now.

Then why is the government repeating the same mistakes in this budget as Fianna Fail governments did in the past?

Why are they shrinking the tax base, introducing property tax incentives that will only push up house prices, and relying on vulnerable tax receipts?

The answer might be that many of the same faces that sat in government and led the opposition, those same faces that sacrificed our sovereignty are still around and still selling the same old nonsense,they have no new ideas,they just want to go back to the way it was, but the way it was was the wrong way,

This isn’t new politics this is the same old parties and the same old failed economics. 

We are at a moment of real opportunity. An opportunity as the economy grows to chart a new course. To build a fair economy and grow employment. To reduce the cost of living, To invest in public services, to deliver tax fairness and to invest in our future and our children’s future. Today is a missed opportunity.

Instead of seizing on that opportunity what we have got is a deal cobbled together not in the interests of the country but in the interests of Fine Gael & Fianna Fáil. What we have is a backroom budget, lacking in vision and failing to learn from the past.

Our people deserve better, our economy deserves better. Ireland deserves better.

Caitear Finscéal amach go raibh muidne dúghafa go millteanach leis an bhorradh is cliseadh eacnamaíoch... cúrsaí nach bhfuil aon smacht againn orthu. De réir Fianna Fáil agus Fine Gael, ní raibh siad nó a gcuid gníomhaíochtaí freagrach as an ghéarchéim -  ní raibh ach mí-ádh orainn.

Seo an bhréag atá le feiceáil mar chuid den bhuiséad seo nochtaithe inniu. Bhí na beartais dochracha curtha i bhfeidhm acu, idir Fianna Fáil, Fine Gael agus a gcuid cairde a bhí in éineacht leo i sruth na meala seo, taobh thiar den chliseadh baincéireachta agus geilleagair. Agus arís, tá macasamhail de na polasiathe seo á ndíol agaibh mar chuid den phacáiste úr seo atá curtha os ár gcomhair inniu.

This is the first big test of the new government.  Come the end of this debate when the Dáil backs this Budget the government and Fianna Fail will doubtlessly say they have passed that test.

But the test is not about political majorities stitched up in backroom deals. The real test is whether this Budget will end the threat of villages in the West of Ireland being flooded because of a lack of flood defences. The real test is whether our older people will no longer be left for days on hospital trollies. The real test is whether the thousands of children who call a hotel room “home” tonight will have a home because of this Budget.

When the results of that test are looked at- what will the result be? Complete failure.

We have been through a lot over the last few years…the most brutal and unfair things have been done to the Irish people in the name of saving banks or satisfying international capital.

A generation’s hopes and rights were sacrificed. What happened to them was wrong- austerity was and is a brutal concept that prolonged and deepened our recession. It made tough times not only tougher but more unfair too. 

Now in 2016, a century after a group of men and women with a clear and genuine vision of what this country could be, struck for Ireland’s rights we must start rebuilding.

We are told that our economy grew by 26% last year. We are told Corporation Tax receipts are booming. But yet there are one thousand families homeless in our capital city. Last week there was an average of 376 people on trollies in our hospitals and over half a million people are on hospital waiting lists. This is the type of dysfunctional economy that Fianna Fáil and Fine Gael have built.

The economy should serve the people not the other way around.

This is a government who have sided with the landlords over the tenants and with the banks over the mortgage holders. A government who have let the insurance industry rip off struggling families while rewarding the wealthy.

A government who has empowered the vultures and began selling our country brick by brick to them tax-free from beneath our feet. 

This Budget could have been the Budget where we started reducing the cost of living and investing in public services. Today should have been the day we increased capital investment to build homes, schools, health facilities, flood relief works and roads. Budget 2017 should have been where the Development of the all-Ireland economy and investment in long-term economic growth began. 

Tax

Today should be about making our tax system fairer.

Tax is not something that should be derided. It is part of the social contract that is supposed to be a core base for a republic.

Taxation can and should be a tool to deliver fairness, to invest in essential public services and infrastructure. 

USC

Today in Budget 2017 this government begins to implement its policy of abolishing the USC. 

A policy described by the Dept. of Finance as regressive and which will benefit the wealthier with little or no impact for those on low and middle incomes.

Today cuts amount to €330m but the process being put in train will hollow out the tax base of the State by €5.6bn by 2021. That is the context in which these steps today must be discussed. No credible expert, advocacy group or economist believe that this is a sensible policy- indeed they have warned against it. 

These cuts will mean little for the individual struggling on €20,000, getting a mere €1.90 back a week.

The cuts are going to be little comfort to the people facing a cost of living of crisis at present, with an average worker on €35,000 getting a paltry €3.30 a week.

A few euro off the USC will be welcomed by many I’m sure. It won’t go far though when your car insurance quote is suddenly twice what it was last year.

It won’t go far when the bank is ripping you off on your mortgage and sending the kids to college costs the same as another mortgage.

€3.30 a week is of little use when you are waiting at a LUAS stop for twenty minutes until one arrives that you can actually squeeze onto. 

Or when your rent for a box room in town is costing you more than your parents paid for their mortgage in the suburbs.

Those people who are struggling to get by day in, day out are better served by investing the potential €5.6bn into services we all use- that keep the country running and working. Tackling those issues requires a vision and that is not something Fine Gael or Fianna Fail do. They do gimmicks and tax breaks.

Thankfully public opinion has not swallowed the lie that the abolition of USC is possible or even desirable. Make no mistake, despite having to rein in their swagger this year both Fine Gael and Fianna Fail are determined to give the wealthy huge tax breaks at the expense of public services and ordinary workers- that is their short, medium and long-term policy. It is reckless and dangerous and they know it.

It is deeply dishonest for any party to continue carving out the tax base while saying they will make the investment in our country that it needs. It is simply not possible. It is a cynical mé féin approach- that Fianna Fail were the masters of during the nineties and noughties- that has served us poorly in the past and serves us poorly now. 

Hollowing out our tax base

I sat through the banking inquiry where we heard of the ever increasing reliance put on stamp duty which disappeared when construction stalled and then crashed, wreaking havoc on our finances.

Over 40 per cent of Corporation Tax was paid by just ten companies in 2015. This illustrates the rising vulnerability of total tax revenue to the tax affairs of a very small number of companies. In 2015, corporation tax payments from the top ten companies amounted to over 6 per cent of total Exchequer tax revenue, approximately the same proportion of overall Exchequer tax revenue accounted for by stamp duty in 2007. 

We are going down a dangerous road and it seems no amount of warning will convince the coalition government that it is a bad way to go.

CAT

The most unfair tax break that the government introduces today is Capital Acquisitions Tax. So a tax change that will benefit only two thousand people each year- people who have inherited €280,000 tax free will be allowed inherit an additional €30,000 tax free. This will cost the Irish public nearly €20 million. 

Last week in this house FG and FF rejected a Sinn Féin motion for 24/7 care for those in need of treatment for mental health. It would cost €20 million to provide such care.

Can I ask FG the Ind alliance or even FF why they believe that 2,000 individuals who have already received a 280,000 tax free windfall need and deserve and addition €20 million tax break above the thousands who are suffering from mental health illness above individuals who have suicidal tendencies and have no service to reach out to at weekends or at night time?

The government Chief Whip in rejecting our motion said: “we do not have the magic calculator that Sinn Féin obviously possesses.” 

It is not your calculator that is broken- it is your sense of right and wrong.

CGT

I don’t know if the Minister reads his Department’s Strategy Papers. I doubt it because if he did he would know that they are clear that last time we had a dramatic reduction in CGT that “tax yield and economic activity are not increased overall but simply moved in time” and that many assets were cashed in only after the reduction in full knowledge that less tax would be paid.

Self-employed

The move to increase the self-employed tax credit is welcome. 

My party would have gone further increasing it to €1,300. This is a fairness issue and I am disappointed that today’s increase represents a dragging of the feet on this issue. The tax credit like others should be tapered off so that there is no open ended gain for the higher earners.

There are other issues in this budget that are to be found in Sinn Féin’s alternative Budget and where the government has done the right thing we will support those measures and make sure that they are actually implemented.

The tax moves announced today fail the test of fairness, fail to help those in need of a break, fail our public services and lay the seeds of another disaster. 

They are the wrong choices.

Other Government announcements

First Time Buyers’ grant 

There is no help to buy or help for first time buyers’ scheme in this Budget. There is a help the banks scheme, first proposed by Fianna Fail, and it is taken directly from the Fianna Fáil guide on How to Wreck an Economy.

It has been slammed by anybody who has looked at the idea. It failed miserably when the Tories tried it. It will lump further debt onto our young families. It sums up this Budget- bad old ideas dressed up as bad new ideas.

What part of the supply and demand rule does the government not get?

Nobody thinks this is a good idea outside political circles where they think this is a vote winner. I see the attraction if I were seeking to buy a home but overall people will see through this scheme as an ill-thought out move. House prices will follow the credit available as we know. I urge you to drop this reckless proposal.

Brexit

There has been much talk of Brexit in this budget. We need to recognise that there are many areas outside our control. But there are areas where we can influence the effects of Brexit and they go far beyond taxation policy. 

That is why Sinn Fein have proposed an all-Ireland forum. We have known Brexit is happening for four months now yet that forum still hasn’t been convened.

What is the Fine Gael/Fianna Fail answer to Brexit? Tax cuts.

That is not good enough. It is lazy and cynical.

It is an insult to farmers, businessmen and workers facing a future of an even more economically disjointed island.

There was a lot of talk of Brexit in the Minister’s speech. The far more fundamental point he misses is that Brexit is so damaging because it compounds partition. For this country partition is the problem. A Brexit of Britain without the north of our country would be a far less daunting prospect.

That is why policies that tackle the damage of partition and that undermine partition itself must be supported in response to Brexit. That is why we need to increase the funding for North- South bodies and capital projects.

The best defence we as a country can have to a downturn whether triggered by Brexit or anything else is to have made the investment in our infrastructure. That is why Sinn Féin have proposed frontloading €1.2bn of capital spending. Using the flexibility allowed to us to do that is now more important than ever.

Excise increases

Every Budget throws up a new issue or something unprecedented. This year the Minister for Finance is ignoring the Revenue Commissioners. The same Revenue Commissioners who he has defended so vigorously when it comes to deals with multinationals. Today he tells us increasing excise duty on cigarettes by 50c will bring in €65m. We will have to vote this in before midnight. But the Revenue Commissioners say that actually this move could cost us up to €44m. That is a difference of €109m- that is quite the hole in a budget.

Why does the Minister not believe Revenue? His Department refers opposition parties to the Revenue Ready Reckoner yet the Minister can ignore it when it is convenient it seems. He is so determined to cobble together things to raise money to cover his USC fixation that he will just simply ignore what the people who collect the tax say.

This is pulling a fast one in full view of the evidence and the witnesses. It is not good enough

Spending


Health

This is the Budget where the conservative parties finally admitted that they were simply giving up on the public health service. It is to be run down, healthcare is to become something for the better off. The measly increases today will not sustain the hospitals and clinics of the State.

And when we get to October or November or December and the health budget has been spent and the EU say we can’t bail it out like we do every year -what then? Will we close down the health system for a month, for two months? 

There is not enough money in this Budget to keep our health system operating at even its critically overloaded state for the year 2017. 

The reliance on the National Treatment Purchase Fund shows up in bright lights that there is no vision of a universal public health service. Sinn Féin have shown how this could be the start of building a health service fit for the 21st century and accessible to all.

We would have a combined capital/current investment of over €600m. That would build the hospital beds we need and pay the nurses and doctors that look after our citizens who need them. It would build a world class mental health care system that would reform and resource our Suicide prevention Strategy.

From maternity care to empowering people with disabilities to dental care provision a universal health system could have started today. But the vision to start that work does not exist on the other side of the House.

Housing/homelessness


Today you announce an additional €150 million for capital investment in housing. Once again you fail to recognise the extent of the crisis and the resources that are required.

In our alternative budget, Sinn Féin has called for an increase in funding for homeless accommodation by €24 million in 2017, while investing an additional €491 million in the delivery of new social housing units.

When are the resources going to match the rhetoric from this government?

In 2011 the Taoiseach pledged to end homeless by 2016.

In December 2014 after the tragic death of Jonathan Corrie only metres from here Enda Kenny said “I believe we best honour Mr Corrie by acting once and for all on the issue of homelessness”. 

Last year when I said your Budget would not solve the homelessness crisis I was heckled. Yesterday the state had 4,000 adults and 2,300 children living in emergency accommodation.

Simply put the government’s Action Plan for Housing, while better than its predecessor, lacks the ambition and urgency necessary to put a stop to homelessness.

Sinn Fein has shown how you could invest an additional €491m of capital investment into building houses but you refuse to listen.

Rent certainty

One of the biggest cost of living expenses is the issue of rents

We have fought hard for rent certainty measures to be brought in and produced the legislation. Unfortunately Fine Gael and Fianna Fáil voted against Sinn Féin’s rent certainty Bill in June. This has cost families thousands of euro with rents increasing in certain parts of Dublin by up to €2,000 per year. It would have reduced the cost of living for thousands of renters while providing certainty to landlords would have prevented many families from becoming homeless.

Older people

It does a great disservice to our older people to be lumped together and told that they will be looked after some month soon.  For those pensioners most in need an increase of €5.70 should happen from the 1st January- no ifs, no buts. Practical, targeted measures are needed.

Sinn Fein would:

Reinstate the Transitional State Pension Payment, Increase the Fuel Allowance by 3 Weeks, Introduce a Bereavement Grant of €600, Extend the Warmer Homes Scheme, Increase home help hours by 1 million hours and Increase homecare packages by 10%.

That is a €410 million package for our older citizens to be delivered from the first day of 2017. That is what a well thought, properly resourced package for our older people looks like. Instead the government thinks it can buy pensioners off for €5 a week. To add insult to injury they’ve been told they have to wait.

Did the cabinet collectively blush when delaying a €5 pension increase but not delaying the increase in TDs’ and Ministers’ pay? Each TD will earn €2,700 from April of 2017 and the same again from the following January. That is small beer though considering An Taoiseach will gain €14,650 over the next two years and each Minister €12,735. Yet pensioners have to wait.

Sinn Féin alternative

So what is the alternative to a return to bad old habits? The alternative is reducing the cost of living and investing in public services. The alternative is a capital plan to build homes, schools and hospitals. The answer to Brexit should be the creation of an all-Ireland economy through long term investment.

The alternative is fair taxation.

That means abolishing water charges and the Local Property Tax.

That means stopping the scandalous surcharge that is applied to those who can only pay their motor tax in instalments.

That means protecting those earning below the minimum wage from the USC.

That means making sure the self-employed are treated equally and have access to the Start-up Relief for Entrepreneurs.

And Yes it does mean asking some to pay a fairer share.

Tax breaks that have served their purpose should be repealed. Very high earners should pay a third rate of tax. 

Betting duty should be levied at a rate that means the Horse and Greyhound Fund is restored to an operational level that doesn’t require a State subsidy.

These measures together would increase the space available by an additional €1 billion euro so that we could properly invest in services and infrastructure.

Gaeilge

Agus tá dearmad déanta ar an Ghaeilge arís. As bhuiséad de €1200 milliún, bhí níos mo ná ceistiú de €4 mhilliún á lorg ag Conradh na Gaeilge ar son Foras na Gaeilge agus Údarás na Gaeltachta le haghaidh an clár infheistíochta a sheachadadh mar a bhí molta ag os cionn ochtó eagras Gaeilge agus na Gaeltachta.

Éileamh chothrom is measartha a bhí ann agus é á teastáil ó ghrúpa atá lárnach dár tsochaí agus dár gcultúr, ach tugtar neamhaird orthu i bhfách le cánacha a ghearradh agus le sochair breise a thabhairt do fhorbróirí. Tugann Sinn Féin tacaíocht do bheartais Chonradh na Gaeilge agus don phobail Ghaeltachta, agus thabharfadh muid (or tabharfaimis) creidmheas cánach na Gaeltachta isteach - liúntas beag cloí le tosaíocht an náisiúin chun ár dteanga a choisint agus a chur chun cinn, ionas go gheobhaidh páistí ó réimse leathan cúlraí an seans chun iad féin a thumadh sa Ghaeilge.

Water Charges 

There a couple of complete mysteries in this Budget that defy all logic.

First of all there is no provision for the abolition of water charges. As things stand water charges cease to be suspended at the end of March 2017 and will once again come into force. 

That is what the Budget says- that is a mystery because Fianna Fail who support this Budget are against water charges this week. Something doesn’t add up. This is a Budget that brings in Water Charges, make no mistake about it.

Sinn Féin are the party that can abolish water charges- no spin, no temporary measures- the immediate abolition of domestic water charges on all households- rural and urban.

Conclusion:

It’s different this time they say. We have the warnings from the Central Bank, Fiscal Council, the EU, and so on but the conservative old school politicians know better. 

Fianna Fail and Fine Gael know better- they think we can go back to the way things were and that this time it will be different. It is not different – it’s the same old politics that failed us before.

This year we have a clearer choice than we have had for a long time. The choice is between a policy that invests and strengthens or a policy that returns to the old ways.

Maybe things will go along ok for a while, more and more tax breaks will pop up…they will be temporary and then permanent, spending will be willy-nilly , short term and without any plan and eventually when the next challenge comes the whole economy and our country will be left exposed.

The health, education and social system will stagger on with no vision and only the bare minimum investment.  Eventually they too will be exposed when they are needed most.

The people who steered the country straight into a crash are not the people to build a new economy- they are not saviours they are the inside men who want the old days back.

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