Alternative budget and cost of living
Deputy Bacik outlined Labour’s alternative budget amid cost-of-living, energy and housing crises and pressed for ambitious government action. The Tánaiste said the budget would deliver a multibillion-euro package, argued a dual response was needed to both inflation and Ireland’s structural costs, and said some support could be funded by windfall taxes on energy companies.
Later today, along with our finance spokesperson, Deputy Nash, I and my Labour colleagues will be introducing our alternative Labour budget and our proposals for budget 2023. We are doing so at a time when we are facing unprecedented crises. There is a crisis in the cost of living, and there are exorbitant price increases in food and fuel and in basic household necessities. We are also facing an energy security crisis and a chronic housing crisis, where are seeing so many people being priced out of homes, either to rent or buy. In the face of these crises, and while we are seeing healthy Exchequer figures at macro level, we in Labour are calling for Government to adopt a really serious and substantial cost-of-living package not only to invest massively in the building of new homes and in support for public services, but also to adopt a €4 billion emergency package of measures to help alleviate the real hardship that so many families and households are facing into over this bleak winter ahead, which will undoubtedly be exacerbated by the brutal Russian invasion of Ukraine and the ongoing war there.
There are measures that we in this country and this Government can take that are in our power to do, even in the face of massive international challenges. We, in Labour, have called for three key measures to be adopted as part of an emergency package of measures to help struggling households and families. Those three measures include, first, to cap childcare costs for families. Every week I hear from constituents who cannot afford the sort of increases in fees for crèches that they are being charged, and from parents who simply cannot access crèche places at all. We are calling for a massive investment by Government in the national childcare scheme to ensure that childcare costs for parents will be no more than €200 per child, bringing us into line with European average costs per month. That is a measure that could be adopted in this budget and could really help alleviate hardship for parents who are struggling. Second, we have called for the introduction of a €9 monthly climate ticket to enable individuals to have unlimited public transport journeys across Ireland. For the price of €9, this climate ticket measure would not only help alleviate pressure on families faced with rising transport costs, but would also ensure that we are going some way to meeting our climate emissions targets in terms of reduction in the transport sector. A similar measure was introduced in Germany. We have called for that to be introduced, even for a six-month period, in this budget. Finally, we are calling for the immediate extension of free GP care to all children and young people under the age of 18. It has been a long-standing ambition of my party. We saw the measure being introduced on an incremental basis previously. However, this Government and the previous government have not done anything to further that ambition and to ensure that parents no longer have to think twice because of cost if they are faced with having a sick child to the doctor. We want to see free GP care extended to all children under 18, and we want to see it done in this budget.
Comment on this
I look forward to reading the Labour Party's alternative budget, hopefully being able to take on board some of the suggestions made. We will have a budget next week. The details will be announced by the Minister for Finance and the Minister for Public Expenditure and Reform next Tuesday. People will see a response of scale from the Government to help them with the cost-of-living crisis. That will involve a multibillion euro package. People will see that in their pockets and off their bills within weeks. That will apply within weeks and will be deployed well before Christmas. People will also see a multibillion euro package which will take effect in the new year. It may not be possible to cushion everyone fully from the impact of the cost of living, but it will be our objective to do so for those on the lowest pay and the lowest incomes and for those on middle and higher incomes to help them out in substantial and meaningful way as well. It is important that everyone gets help with the cost of living, but that those who need the help the most get the most help. That will be our approach.
I think that when it comes to any household budget, there are three elements: how much one is paid, how much one gets to take home after taxes and how far the money goes. We need to help on all three fronts. I know the Deputy's party is focusing on the third element, namely, the costs such as childcare, public transport and healthcare. That is fair enough. Those are the kind of areas that we want to help in as well. On childcare, as all of the party leaders and the Minister for Children, Equality, Disability, Integration and Youth have said, it is our objective to reduce childcare fees next year. However, we need to do it in a sensible way. Notwithstanding the new agreement that we have to raise pay in the sector for childcare professionals and early educators, there are capacity constraints in the system. As we know from previous experience in other areas, if the cost is reduced dramatically, demand rises and then we are left with a different problem around capacity. We need to square that circle and get it right. We must ensure that in reducing fees we do not solve one problem and make another one worse.
On the €9 public transport ticket, such a scheme was introduced in Germany. However, what the Deputy did not mention was that it has been abandoned in Germany. After consideration, the Government decided not to continue with it for a number of reasons, including affordability. What we have done is to reduce public transport fares by 20% or 30%. I think we have had a good result from that. There are more people using public transport, but there are not problems with affordability or overcrowding. We will give consideration to extending and maybe even improving on that in the context of the budget next week.
On free GP care, the Deputy rightly pointed out that we made a good start on that. Sometime ago, the former Minister of State, Deputy Lynch, and I brought in free GP care for children under six years. We have managed to extend it to some other groups, for example, people with terminal conditions, children with cancer and people in receipt of the carer's allowance, since then. However, to date we have not been successful in negotiations with the IMO and the doctors to extend it beyond six-year-olds. Unfortunately, that is the reason why it has not proceeded.
Comment on this
I think everyone across the country will welcome the Tánaiste's commitment that in the budget in just five days' time, we will see from Government a response of scale, and in the Tánaiste's words, "a multibillion euro package". However, what we need to see is also an ambition of scale and a real ambition to address these crises that are confronting so many households and a real ambition to take the necessary radical measures that will be required to sustain families, households and businesses through a bleak winter. They are the sort of measures that we saw turned around swiftly by Government in the face of the Covid-19 pandemic. They are the sort of measures we are going to be calling for in our budget proposals this afternoon in order to build an Ireland that works for all. Currently, there is a sense of a two-tier Ireland. There is a sense that while some people are doing well, for many and increasing numbers of households there is simply this paradox of plenty, where Exchequer figures are positive but they are not feeling it in their own pockets. What they are feeling is deeply pinched and squeezed by rising costs. That is why we are focusing on social wage elements and the need to ensure that we are bringing down costs for families and households. We are really hopeful that radical measures will be taken in this budget by the Government.
Comment on this
I will be brief. We probably need to take a dual approach to this. There is an international inflation crisis that is driven by monetary policy, the war in Ukraine and high energy bills. We need to respond to that reality by helping people with their bills. We need to help put more money in their pockets and also help to reduce energy bills in particular. As a country, we had a high cost of living long before this current inflation crisis. There are areas in which the cost of living in Ireland is out of kilter not with Mediterranean countries or countries in eastern Europe which are very different from ours, but countries similar to ours in northern Europe, in childcare, healthcare, public transport and rents. This is an opportunity not just to deal with the immediate inflation crisis, but also to bring down some of those costs where we have been out of kilter with other northern European countries. I believe we should take that opportunity now.
Comment on this
Nearly 100 years ago, Ireland's national poet, W.B. Yeats, wrote that this was no country for old men. If he was writing today in the face of a cost-of-living and housing disaster, he might well write that this is no country for older people, younger people, working people, people with disabilities or the vulnerable. It is a country for profit-hungry energy companies, big corporations and property vultures - for the greedy and obscenely wealthy. I think it is that sense that is going to lead thousands of people out on to the streets this Saturday to assemble at Parnell Square and march to this Dáil before the budget to demand relief and protection from the cost-of-living and housing disaster that people are suffering. The older people might be there because any pensioner, or for that matter any person on disability, who is solely dependent on State payments lives below what the Central Statistics Office, CSO, says is the minimum weekly disposable income necessary not to live in poverty.
Let us think about that. The vast majority of people who get State pensions or disability payments in this country, and students who receive student grants, live below the rate that is officially believed to be necessary not to be living in poverty. That is the situation faced by our older people, younger people and vulnerable people.
I spoke to students in UCD yesterday. They all said they intend to leave the country because they feel they have no choice. They said they do not want to go but they can never hope to own their own homes. They simply cannot afford the rents. They do not want to face a future of uncertainty or pay the extortionate cost of rental properties where they have no security.
Workers have seen the real value of their wages drop by €4,000 or €5,000 in the past year and a half. Section 39 workers who look after people with disabilities and vulnerable people have been forced out on strike because they have not received pay restoration. Meanwhile, corporate profits have tripled in the past ten years. The profits of real estate investment trusts, REITs, have tripled in the past four or five years. The wealth of the very richest in this country is growing exponentially. What has the Tánaiste to say to those who are coming out on to the streets to assure them this will be a country for young people, old people, working people and vulnerable people after the budget?
Comment on this
I thank the Deputy. He paints a bleak picture of the country in which we live. One would not think that the United Nations - not me but the United Nations - considers Ireland to be one of the top five or ten countries to live in the world. That is based on health, education and economic well-being. One would think from the remarks of the Deputy that we were seeing a massive outflow of people from our country. In fact, the reverse is the case. The CSO, which the Deputy mentioned earlier, has indicated that the population of Ireland increased by 89,000 last year. That is an extraordinary increase in population. That includes tens of thousands of Ukrainians fleeing the war, but that is not the half of it. Many more are coming from the UK, the European Union and other parts of the world to work in this country. Ireland is seen by them as a country in which there are great opportunities for employment and advancement. Those same figures crucially show that more Irish citizens returned to Ireland last year than left. That has been true for a number of years now. The impression the Deputy would create is a different one. People are entitled to their opinions but they are not entitled to their own facts. This is a country that is ranked in the top ten in the world as a place to live. Some 89,000 people have moved to this country this year. More Irish people return to Ireland every year than leave. Those are the facts; the Deputy is welcome to his opinions.
I agree with the Deputy on the cost-of-living crisis. It is something that affects everyone in our society, including people who are young and old, people who are working, pensioners, people in receipt of social welfare payments, people on middle incomes and people in business, who are concerned about the future of their businesses in the years ahead. That is why the Government needs a response that helps everyone. We also need a targeted response that helps those who need the help the most.
As I indicated in my earlier replies, any household budget has three elements, namely, how much the people in the household get paid, whether that be pay from a job, welfare or pension payments; how much they get to keep after taxes and statutory charges; and how far the money goes. It is our objective in this budget to help people on all three fronts. That is what we intend to do. The Deputy will hear the detail of that on Tuesday when the Minister for Finance, Deputy Donohoe, and the Minister for Public Expenditure and Reform, Deputy Michael McGrath, make their announcements.
Comment on this
According to the CSO, approximately 54,000 people left this country last year. I suspect we will see those numbers rise. It is true that marginally more came in but that is still a significant outflow of people. It was not my opinion I was sharing. I was sharing the opinion of the young students I was talking to yesterday in UCD. I met a group of postgraduate students who said they have to exist on miserable stipends, which makes it difficult for them to conclude their doctoral studies. There is a problem. Young people, in increasing numbers, feel they have to leave because that generation has been locked out, crucially, from the ability to buy a home or afford rent. They are faced with the disastrous housing crisis that the Government has failed to deal with, while REITs and property vultures have seen their profits triple. Corporate profits have also tripled. Old people are frightened as we face into the winter. That is why they will be out on the streets. We will see at the weekend whether this is my opinion or the opinion of many tens of thousands. What is the Government going to do to assure those people that there will be a future of affordable houses and rents and that they will be protected against the profiteering of energy companies and property vultures?
Comment on this
The Deputy has got the numbers wrong again. Substantially more people came to Ireland last year than left.
Comment on this
The Tánaiste should check with the CSO.
Comment on this
More Irish citizens returned than left. The difference was marginal but more returned than left. The impression the Deputy would create is a different one. He would create an impression of a country that is seeing its citizens leave in large numbers and not return in greater numbers.
Comment on this
The Tánaiste should check the CSO figures.
Comment on this
People can check the facts.
Comment on this
People will see the Government's response to the cost-of-living crisis on budget day. As I mentioned, there must be three elements. We must increase pay and pensions, reduce the amount of tax people pay to allow them to keep more of the money they earn and reduce the cost of living in areas such as childcare, healthcare, public transport and rent. That is what we are working on. We will be working throughout the weekend to finalise that package. To answer the Deputy's question, we do intend that some of that will be funded by a windfall tax on energy companies because it is not appropriate that energy companies are making massive profits they never intended to make and never in their wildest dreams thought they would make. We will be taking some of that back.