Government austerity and budget policy
Deputy Gerry Adams urged the Government to abandon austerity and use the forthcoming budget to protect citizens, arguing that its policies had failed. The Taoiseach defended the Government’s fiscal and jobs strategy, its progress toward exiting the bailout, and attacked Sinn Féin proposals on income tax, capital gains tax and employers’ PRSI as damaging to investment and employment.
I agree with an Teachta Martin on the withdrawal of medical cards from citizens who need them. I invite every Deputy, including Fine Gael and Labour Deputies, to send the Taoiseach the list we have for him to review. I appeal to him to listen to what is being said. I especially appeal to him regarding the Government's austerity policy. He spoke about changed social circumstances. There are greatly changed social circumstances because austerity has not worked and is not working. The budget offers a chance to change that and the Government should use the budget to turn the ship and protect citizens as opposed to following the diktat of the European leaders or, indeed, the Taoiseach's own ideological position.
Tá mé fíor-chinnte go dtuigeann an Taoiseach agus an Rialtas gurb iad an lucht oibre, gnóthaí beaga, meán gnóthaí agus teaghlaigh na daoine atá ag fulaingt mar gheall ar an ghéarchéim, géarchéim nár chruthaigh siad sa chéad áit. The Taoiseach knows the people on the live register did not create the crisis. The 300,000 citizens forced to emigrate did not create the crisis. The growing number of citizens awaiting hospital treatment did not create the crisis, nor did the citizens who are denied medical cards. However, they are carrying the burden. This will be the seventh austerity budget if the Government, as appears likely, does not listen to people such as those on these benches. It has taken €30 billion out of the economy. The people need a break. In his heart of hearts the Taoiseach must know that. He must know that people cannot bear the awful punitive measures that are being forced upon them. The budget could reduce the tax burden on ordinary families, protect public services and invest in jobs. That would be a thought. The Government could actually invest in jobs to get people back to work.
I understand the Economic Management Council is meeting this evening to take its final decisions on the budget so there is still time.
There is still time to look back over the past two and a half years and the role of the last Government before that. This is the seventh austerity budget. If it is not working, why does the Government keep doing it? Is the Taoiseach prepared to face the economic reality that austerity is not a sound policy and, probably more important, the social consequences of this policy, and move away onto a more enlightened course?
Comment on this
The Minister for Finance, Deputy Noonan, will present his third budget to the House next Tuesday. The Economic Management Council will meet today but the Government, the Cabinet, has not and will not sign off on the details of the budget affecting every Department until some time before next Tuesday.
The mandate given to the Government, made up of the two parties of Fine Gael and the Labour Party, was to fix our public finances in a way that will allow for us as a country and as a people to exit the bailout later this year and, second, to accelerate the number of new jobs that are created to provide growth in the economy and hope and confidence for families who either have unemployment or are on very average incomes. They are the two steps involved in the presentation of the Minister's third budget. That is why the framework for the budget for next week has been agreed and accepted by the troika in Brussels as presented here with a change in emphasis from €3.1 billion to €2.5 billion.
I note that the budgetary submission sent in by the Sinn Féin party also has a reduction of €2.5 billion. I am unsure how Deputy Adams relates that to the charges he has just made. We are now in the 15th consecutive month of reductions in the live register. It is very important, as the Minister pointed out, that there be a primary surplus to help us to start reducing debt and to meet our targets, because that sends out an international signal to investment markets of the continued capacity of Ireland to meet its targets and the continued capacity to be recognised as a location for strong investment, which brings about competitiveness, which is always followed by investment in jobs.
The ESRI report indicates the potential to have 3% growth in GNP next year and 2% in GDP. If that can be reached it carries serious potential in terms of jobs. I note the comment from the European Commissioner, Mr. Rehn, in respect of the European Commission endorsing the position taken by the Government as we move to present this budget and, later in the year, as we move out of the bailout programme.
While the crisis was not caused by any of the people Deputy Adams mentioned, the difficulties and the challenges that the Government has had to face take into account the concerns we have about so many families and ordinary people who have had to put up with this for so many years. That is why the Minister, Deputy Noonan, will present his budget in the fairest and most equitable way that the Government can, given the constraints upon us and, at the same time, allow for the capacity for investment and for jobs to be created in schools, roads and capital infrastructure, following on the stimulus package announced by the Minister for Public Expenditure and Reform last year and this year and in the context of the capital programme between now and 2015.
Our targets and objectives are set and we have achieved them to date. We expect to continue to do that and to exit our programme this year and, between now and the coming years, move to a position where the mindset that applied some years ago will never return. The aim is that we can have put in place safeguards such that whatever happens our country will not slip back into that mentality. That is why the independent Irish Fiscal Advisory Council and all the other opportunities to prevent that happening are important. We recognise the challenge the Government faces. The Government, the Cabinet, as a cabinet, will make its decisions finally before the Minister presents his budget next Tuesday.
Comment on this
The mandate the Government received was not to do the things it is doing, it was to do them differently from the last Government. The people listening in to Leaders' Questions will be very disappointed and depressed. The Taoiseach says the European Commissioner, Mr. Olli Rehn, is happy. Is that how the Government judges its policy, if Olli Rehn says it is good? It gets a pat on the head. What about the people that we have just talked about, those who, the Taoiseach acknowledges, because he could not do anything else, did not create the crisis? The Taoiseach has cited that we are looking for an adjustment in the deficit in our budget proposals which is the same as the Government's, and that is true, but he asks what the difference is. Tá difear mór ann. It is about who carries the burden. We have not seen this budget but if we go by the past number, they were very unfair and mean and they placed the burden upon working people, small businesses and all those who, the Taoiseach freely acknowledges, did not create the crisis. There is the big difference; our budget is fair and tries to lift the burden of those who cannot bear another austerity budget.
The Taoiseach keeps talking about growth projects but the Government does not deliver. There is zero growth this year. Why does the Government not increase the respite care grant for carers? Why does it not provide the €12.58 million needed for bilateral implants for profoundly deaf children? The Taoiseach spoke about listening. I have talked to the Taoiseach about that issue on at least four occasions, I have given him two notes on it, I have written him formally on three or four occasions and I have talked to the Minister for Health on the issue as well. Young profoundly deaf children in this State are given one implant. It is like giving a blind child one eye. Every other state puts in two cochlear implants and the HSE recognises that this is best practice. That is something the Government could do. Why does the Government not take the approximately 300,000 citizens out of the universal social charge net? That is something else the Government could do. Why does the Government not invest in jobs, particularly for young people?
If the Taoiseach is determined to stick with austerity - there is still room to change - I appeal to him to explore with us the social consequences. If the Taoiseach acknowledges, as he has done quite freely, that the litany of citizens who are under great pressure did not create the crisis, then what will another budget do to them, especially if they are already in distress, scattered throughout the globe, on the dole queues or on the waiting lists? What are the social consequences?
As for those in the Labour Party, I appeal to them to wake up to the reality of what they said they would do in government and what they are actually doing in government.
Comment on this
It is all down to the bank guarantee that Sinn Féin voted for.
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Deputy Adams and his party contributed to the wrecking of the economy of this country, North and South, for 30 years.
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Along with a few other things as well.
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Deputy Adams should understand clearly that this Government has made the decisions with the people that it has made. That is why people abroad recognise the validity of the case that Ireland makes as we make progress for our budget and to exit the programme. Deputy Adams's party is anti-worker, anti-entrepreneur and anti-jobs.
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The Taoiseach will have to explain that. We are anti-austerity.
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Sinn Féin has set out in its programme a higher third income tax rate of 48%, which leaves a total top rate of 59% with the universal social charge. That is 48% plus 7% USC plus 4% PRSI, which would drive every higher-paid worker out of the country.
Comment on this
Sinn Féin has stated that the VAT on tourism is very important, which it is. It was introduced by the Government and by the Minister for Finance, Deputy Noonan. Sinn Féin has not decided to point out in its budget submission how that would be paid for.
Comment on this
It would be through the pensions levy. The Taoiseach should read the document.
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The Sinn Féin proposal to increase capital gains tax to 40% would wipe this country off the international start-up market, yet Deputy Adams says this Government is anti-jobs and anti-company.
A 40% capital gains tax rate would mean that no company would come to this country to start up.
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Yes, like in the 1990s when the economy was booming. That is right.
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As a nation, we have worked hard to set up an ecosystem, particularly in the digital sector, and the message should go out that Deputy Adams and Sinn Féin want a 40% capital gains tax rate. Were that ever to apply, there would be no start-ups.
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The Government increased it last year. The Taoiseach should cop himself on.
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While Sinn Féin's idea to increase employers PRSI literally is a tax on jobs, Deputy Adams comes into this Chamber and speaks of the necessity to create jobs. Sinn Féin has opposed every single measure of the last three years and now it conveniently forgets all of that.
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Sinn Féin supported the Seanad amendment.
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Deputy Pearse Doherty is right. Sinn Féin supported the bank guarantee.
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Sinn Féin has no idea. It just pockets the savings and states it is getting on with it. Sinn Féin chooses to ignore what has been done. Its budget proposal for this year is a carbon copy of what it submitted for the 2012 and 2013 budgets, namely, crippling higher income taxes that would mean a serious loss of place in this country in respect of entrepreneurship or businesses being set up or people working.
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The Taoiseach actually believes this.
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The reason the Government always publishes the medium-term fiscal statement each year is to show people the breakdown of the adjustment for each year up to 2015.
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Does it publish it in the German Parliament? In which Parliament does the Government publish it?
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It publishes it in order that people can see the steps our country is taking to deal with our public financial problems, to restore our economic good health, to get out of this bailout and economically to fly independently again.
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The economy is taking off like a rocket with 0% growth this year.
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It is being done because the people gave the Government a mandate to sort out this problem and I am aware Deputy Adams does not like to hear the ESRI state that Ireland is doing well.
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He does not like to hear the European Commission state that Ireland is making progress.
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The Taoiseach is out of his saddle now; he is not sitting back.
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He hates to see people coming in here who independently conclude this is a country into which they should invest because it is energetic, has the technology and is moving in the digital space.
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They are all over in Australia or Canada.
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-----in which, when moving out of difficulties, one can create a real future for all the people.
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The Taoiseach still is not listening.
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-----Deputy Adams's party never did anything substantial to help the economy, North or South. Deputy Adams should change his tune too.