Budget poverty proofing and anti-poverty strategy
Deputy Shortall repeatedly asked whether the budget had been poverty-proofed and argued it was regressive, especially for low-income workers, pensioners and welfare recipients, while prioritising tax reliefs elsewhere. The Tánaiste defended the budget as a set of choices made under Brexit uncertainty, said supports were targeted at the most vulnerable, and maintained he had answered the question despite repeated interruptions.
I asked a particular question during the budget debate on Tuesday evening but I did not get a reply, so I will now ask it of the Tánaiste. Has the budget been poverty-proofed? Several features of the budget are clearly regressive, particularly the failure to index-link social welfare payments. Although the Government flagged that there would be no standard increase of €5 in welfare and pension payments, most Deputies expected that, at a minimum, welfare payments would be index-linked. The failure to do so, when combined with an inflation rate of, at least, 1.3% or 1.4% next year, with a strong likelihood that it will be more than that, amounts to an effective cut in payments to State pension or social welfare recipients. For example, there will be an effective cut of €6.12 in the weekly income of a couple on the contributory State pension.
The proposals related to carbon tax and the decisions taken in that regard in the House on Tuesday night are also regressive. I refer to the additional €6 per tonne in carbon tax. In promoting this measure, the Government referred at length to the recommendations of the all-party Joint Committee on Climate Action. It is important to bear in mind that the committee also requested a review of energy policy but, in spite of many promises, such a review has not been produced. The Society of St. Vincent de Paul stated that the measures to offset the impact of carbon tax on low-income households are inadequate and that many households will struggle with increased energy costs, notwithstanding the increase in the fuel allowance. Of course, the fuel allowance is only payable to one in five households in this country. On what basis was it decided that the increase in the allowance was an adequate response to the serious problem of fuel poverty? How did the Government come to the conclusion that it was sufficient to address the issue of fuel poverty?
There has been a failure to reform the existing grant schemes. A carbon tax should act to encourage people to change their behaviour but a very large number of people cannot afford to change their behaviour because of the way the grant schemes are structured. One needs money upfront to take advantage of them, but many low-income households simply do not have such money upfront. Will there be a commitment to roll out at an early stage a pay-as-you-go or pay-as-you-save scheme? Will the Government reform the warmer homes scheme, which is currently only available to those in receipt of fuel allowance, and make it more widely available? There is a very strict limit such that if one has one's attic insulated, one is not entitled to a further grant.
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I sometimes think that when the Deputy comments on the Government's budgetary strategy, she fails to accept that choices must be made.
We have had to make a choice this year to assume the worst possible outcome to the Brexit negotiations. This has been necessary to ensure we have a resilient budget for next year. The Deputy's response to the budget largely ignores all of that. We have put in place a social welfare package which increases the social welfare spend by €170 million next year. We have deliberately prioritised and targeted the most vulnerable people for these extra supports. The Minister, Deputy Regina Doherty, has repeatedly outlined where they are. We are ensuring the overall budget is fit for purpose for next year. For the past three years in a row, we have had annual increases of €5 in social welfare and pensions across the board. This was well ahead of inflation. We took this approach deliberately because we wanted to give back some money while the country could afford to do it. We will get back into that space again when we know we can afford to do it. We felt that rather than giving small increases across the board, it was more appropriate to target the lowest-income households, people living alone and people on fuel allowance.
We chose to protect the people on the lowest incomes because we knew they would be affected by Government policy, including the increase in carbon tax. We gave them the support they need to reflect that. That is what we did. We do not pretend otherwise. We had to make difficult choices in the context of the economic challenges that may well be on the horizon. Clearly, Deputy Shortall does not seem to be willing to make those choices. The idea that we should not introduce a carbon tax increase is counter to what practically every climate change expert on the planet is saying. Nobody is saying that increasing carbon tax will solve the climate change issue on its own. By giving a clear direction of the charges that are to be imposed over the next ten years as a means of placing a value on carbon into the future, we are giving society an indication of the kind of change it needs to accommodate. It is a modest enough increase, but it is a signal of the direction we are taking for the next ten years. We have put in place measures to compensate the lowest-income families for that. It is not true to say one cannot draw down grant aid unless one has resources. Some €53 million is being provided for the warmer homes scheme, which is targeted at people on fuel allowance. The poorest people are those who will get support from the State.
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Of course everybody understands that choices have to be made.
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This Government has chosen to hit low-income workers, pensioners and people on social welfare. That is the effect of the choices it has made. These people will take the brunt of Brexit, just as they took the brunt of the recession. The Government has chosen to hit those people.
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On the other side of the equation, it has extended the special assignee relief programme and introduced a range of tax cuts for business, while failing to introduce taxes that could have been imposed on the richest people in this country. The Government made those choices, just as choices were made during the recession. That is the problem. That is the issue. Basically, Fine Gael is not interested in the issue of poverty. I will repeat the question I put to the Tánaiste. Has this budget been poverty-proofed? I have another question I would like him to answer. Where is the anti-poverty strategy the Government promised two years ago? We are still waiting to see it.
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The Deputy seems to be suggesting that we should do nothing to promote economic growth.
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I have asked two questions. I would like the Tánaiste to answer them.
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Is the Tánaiste going to answer the two questions?
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The Tánaiste should answer the questions.
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Was the budget poverty-proofed?
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I have asked the question three times now.
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I have a right to an answer.
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As a result of the economic choices that have been made by this Government over many years-----
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-----we can now afford to spend money on supporting the most vulnerable in a way we would not otherwise have been able to do.
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Did the Government poverty-proof it?
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We can now afford to borrow substantial sums of money to protect this country in the context of the challenges and the disruption we may face.
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Did the Government poverty-proof the budget?
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In each budget we have introduced, we have committed to support and target the most vulnerable people in the context of poverty.
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The Tánaiste has been asked two straight questions about poverty. Can he not answer either of them?
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Was the budget poverty-proofed?
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Where is the anti-poverty strategy?
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I think the Tánaiste should have some respect for people who ask questions.
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I have asked three times whether the budget was poverty-proofed.
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Can the Tánaiste tell us what page it is on?