Deputy Broughan is sharing time with Deputy Billy Timmins.
Spring Economic Statement: Statements (Resumed)
I am grateful for the opportunity to contribute briefly to this important discussion on our spring economic statement for 2015. Of course, it is extremely clear that the Government is gearing up for a general election and apparently hoping that the Irish public has a very short memory. Let me start by saying that I welcome a process of regular economic and fiscal debate in the Oireachtas. For many years on the public accounts committee and finance committees I called for a move towards the Dutch and other EU models of full citizen and parliamentary consultation and discussion over each fiscal year on the choices and possible tax and spending decisions for each annual budget. In that context, the idea of a spring economic statement and national economic dialogue are welcome in principle as moves to democratise the budgetary cycle and process.
Tuesday's statements by the Ministers, Deputies Noonan and Howlin, were a great opportunity to signpost key policies to address the ongoing suffering and near despair caused to so many Irish citizens and households by the relentless policy of austerity since autumn 2008. On the Order of Business I identified one of those areas of total despair this morning regarding our homeless families. Sadly, both Ministers' statements, as I wrote on Tuesday, are "devoid of content" and do nothing to lay out a new approach on the key elements of our economy and society. The full spring statement and draft stability programme documents comprise together simply a history of economic austerity and a projection for its essential continuance to 2020. It remains incredibly sad that the Labour Party has seemingly completely tied its fortunes to Fine Gael in the economic planning to 2020. The failure of both Ministers to chart a new way forward is another clear sign that this Government can have no hope of being re-elected.
From the Minister, Deputy Noonan, we learned that a "fiscal space" of €1.2 billion to €1.5 billion has been found courtesy of Mr. Jean-Claude Juncker of "Luxembourg Leaks" fame to provide tax reductions and investment in public services and that the fiscal space will be split 50:50 between tax cuts and expenditure increases in budget 2016. The €600 million to €750 million projected increases for public current expenditure in 2016 represent little more than 1% of gross voted current expenditure and even less of gross current expenditure according to a table in the stability programme update. As there is a fiscal straitjacket imposed on Ireland by the EU six pack and two pack fiscal rules, the outlook in the stability programme projections down to 2020 are equally bleak. Of course, we are assured by the Minister that the annual debt ratio reduction of one twentieth of the difference between the overall level of national debt and the 60% of GDP threshold will be painless because "growth will do the heavy lifting". There was a mistake in the Minister's speech in that respect. The continuing total adherence of Fine Gael and Labour in following Fianna Fáil's betrayal to brutal and unyielding austerity means that major needs of our people now in housing, health and education will go unmet and that new humane and dynamic programmes will not be countenanced by this outgoing conservative Government.
The smug self-congratulating tone of these statements echo the comments of the Taoiseach and the Minister, Deputy Noonan, with respect to the Greek struggle under Syriza, led by Mr. Tsipras and Mr. Varoufakis, to alleviate the colossal debt burden imposed on Greece by its EU and other creditors. Ireland's debt burden is in the same league as Greece and will remain so under the type of lethargic bookkeeping prescribed for us by the Ministers, Deputies Noonan and Howlin. An earlier Greek Government did Ireland an immense favour by lowering the interest rate on part of the troika debt, which also greatly benefitted us. Recently, the Minister, Deputy Noonan, gave me comparative figures for Greek and Irish national debts in terms of gross national product, GNP, or gross national income, GNI, as overall totals per capita. The Minister reported that "at the end of 2013, the general government debt per capita figures were €46,950 for Ireland and €28,848 for Greece while the comparable gross national income per capita figures were €32,391 and €16,486 for Ireland and Greece respectively. These equate to a debt to GNI percentage of almost 145% for Ireland and 175% for Greece". Clearly this comparison demonstrates that there remains a shocking burden of debt also on the Irish nation. In the forthcoming general election, the Government's failure to follow up on the 2011 election promises and the 2012 EU commitment will be a huge reason for its demise.
Both ministerial speeches congratulate each other and the Government on the levels of employment and perceived falls in unemployment. In reality, employment levels have still not reached the pre-crash total of 2.1 million and a huge cohort of workers, approaching 400,000, are part-time, with tens of thousands underemployed with poor wages and conditions and little or no security. The Tánaiste yesterday announced that the number of persons unemployed now stands at 353,000. The headline unemployment rate would be at Greek or Spanish levels if the five full Aviva stadiums of young Irish emigrants had not fled the Fianna Fáil, Fine Gael and Labour austerity behemoth since 2009. The Ministers, Deputies Howlin and Noonan, referred to the end of emigration and indicated that young people are now returning to our shores because of our recovering economy. I wonder are they aware of the fact that it took a whole 12 minutes for the almost 4,000 Canadian working holiday permits to be snapped up this year as opposed to the seven minutes it took for them to go last year.
It is especially disappointing that the Minister, Deputy Howlin, cannot give us the details of a new capital programme until June.
The country needs radical investment in infrastructure, including housing, health, education, public transport and roads, water and sewerage, and coastal defences. The savage cuts in capital investment since 2011 have been most disastrous for social housing. The complete disregard shown towards citizens in need of social housing has been the main driving factor in forcing hundreds of families, including 911 children, into emergency homeless accommodation in the Dublin region alone. The most recent figures from the Dublin Region Homeless Executive, DRHE, revealed there were 411 families in emergency accommodation, 251 of which were headed by single parents and 160 by couples. This means the total of number of adults and children in family emergency accommodation stood at 1,482.
My office is in regular contact with the central placement service of Dublin City Council and Dublin Region Homeless Executive to make representations on behalf of many Dublin Bay North constituents experiencing housing and homelessness issues. As I informed the Minister for Communications, Energy and Natural Resources, Deputy Alex White, figures provided to my office show that on any given day between 60 and 80 families are unable to access emergency housing, yet the statements of the Ministers for Finance and Public Expenditure and Reform did not contain one word about this emergency.
House prices have increased this year by 16.8% compared to last year. Coupled with new mortgage rules for first-time buyers, these rising prices mean there will be no affordable homes for first-time buyers, in any case not in the capital and other larger cities. I repeat my earlier question and ask the Minister to explain the reason the Government has not employed financial emergency measures in the public interest legislation to address social housing and rent regulation.
The constraints of the budgetary envelopes implicit in ministerial statements mean that serious austerity continues in our vital health and education services. The health service is failing dramatically, with lengthy waiting lists to see consultants and for diagnostic procedures and treatments. Recruitment to the health service is in crisis and accident and emergency departments continue to be overcrowded and underresourced, while the Minister frequently gives the impression of being an innocent bystander. The additional €65 million in hospital funding announced this spring is welcome, as is news that general practitioner care will be free for children under six years and those over 70 years. Nevertheless, a large number of significant shortcomings persist in the health service, including in disability services for which funding has been cut to the bone.
The Minister for Public Expenditure and Reform, Deputy Howlin, trumpeted the fact that under this Fine Gael and Labour Party coalition, 150 schools had been built and 1,700 new full-time teachers had been employed. However, the figures he provided on demographic change show that at least 3,500 more primary and secondary school teachers will be required by 2020. The Irish National Teacher Organisation's April-May newsletter, which Deputies received recently, highlighted that more than 500,000 primary school pupils are attending what INTO describes as the "most overcrowded classes in the eurozone", with 76% of children in classes above the EU average, 24% of classes made up of 30 or more students and 66% of classes having between 20 and 29 pupils.
The most shameful aspect of the Government's performance is the ruthless cuts it has made to the means of the most vulnerable citizens who depend mainly on social welfare assistance and benefits. Those in receipt of social welfare payments have endured cuts to child benefit, lone parent's payment, carer's allowance and respite care grants, whereas developers, bankers and the elite have had debts written off and bonuses and contracts awarded to them. At least one quarter of the population hovers slightly above or below normative measures of poverty in society.
I was not surprised by this week's spring economic statement as it was, unfortunately, another example of a conservative Fine Gael Party Government with no vision, backbone or empathy that is backed by a Labour Party which, unfortunately for the Deputies concerned and their local organisations, is facing annihilation in the forthcoming election for turning its back on the very people who voted it into government.
One of the difficulties of modern government is its constant battle with the public relations machine to win hearts and minds. The spring economic statement reflects this battle in many respects. It is a case of "much ado about nothing" in that, following a big build-up and some leaking before the statement was made, we found, when we stripped away the various layers of propaganda, that it contains little of substance.
Having said that, it is important to acknowledge that the underlying figures show a dramatic improvement in the economy. Ireland is clearly in a much better position than it was six or seven years ago. Equally, one must also acknowledge that the Government and its predecessor implemented a programme that was laid down by the troika. It did not simply take driving instructions from the troika, so to speak, but took on the difficult task of implementing the programme. While the vision was framed by outside agencies, it had to be implemented by the previous and current Governments. According to some reports, the previous Government did 70% of the heavy lifting with the current Government responsible for the remainder. I do not know if that figure is accurate and in any case it is irrelevant because the important issue is that both Governments adhered to the troika programme. While it caused great difficulty, the programme was drawn up with a view to obtaining the maximum results with the minimum amount of pain.
Many people have responded to the spring economic statement by accusing the Government of seeking to buy the electorate and sell the country. I am not an apologist for the Government and I will not echo the line taken by my good colleague, Deputy Rabbitte, who asked if this is not what Governments do. However, buying the electorate is a trend that has characterised politics as far back as we can remember. The 1977 election, for example, was bought. I can still hear the words of Colm T. Wilkinson echoing from a loudspeaker at a polling booth in Kilkee as I hitched back home to do my leaving certificate. He was singing a famous song about Fianna Fáil selling the country down the Swanee with a giveaway budget. The impact of Fianna Fáil's approach to the 1977 election is still felt today, especially in local government. Subsequent spending spikes in 2001 and 2006 were decried on several occasions in this House, notably by members of the current Government.
The Government should not go down the road of previous Governments, tempting though that may be, by producing goodies for the electorate. It must do the right thing. While this presents a challenge to the political system in general, it also presents a challenge to the electorate. The Government has promised to split an additional €1.8 billion in revenue - I believe that estimate to be somewhat low - equally between tax reductions and increased expenditure on services. It should be noted, however, that the commitment given by some Opposition parties to abolish water charges amounts to an attempt to buy the electorate by another means. Everything must be paid for and only a fool believes that things can be obtained for free. Human nature being what it is, however, people like to hear good news and do not like pain. If a message can be dressed up and camouflaged with a nice sugar coating, we cannot resist it. This presents a challenge to all of us, including me. For this reason, I ask members of the public to view with scepticism any commitment to increase expenditure on public services, reduce taxation, increase public sector pay or abolish water charges or property tax and to assess whether the implementation of any such promise would benefit the common good.
I understand it would cost approximately €2.2 billion to restore public sector pay and pensions to the levels that obtained prior to the introduction of emergency legislation. While many people were hurt by cuts, many also understand there was very little choice in the matter. Their pain could have been greatly eased if the cost of services had reduced by a corresponding amount. If, for instance, energy costs, the cost of visiting a general practitioner or obtaining legal advice had declined, people would be slightly more willing to accept decreases in their pay. Such reductions have not been forthcoming, however. We must reform all the sectors that impose charges, many of which can be attributed to increased bureaucracy. I read a book by a Peruvian economist on this issue.
From his studies, he noted a strong correlation between the numbers in the legal profession and additional costs to administration.
I am a member of a new party, Renua, which is examining the water charges issue. In December 2013, I outlined the difficulties that would arise if we were to go down the road we did with water charges. I equated it to falling into a burning furnace out of which it is impossible to get. If one stays, then one gets burned, meaning there is no solution.
The natural inclination is to deconstruct the whole set-up for water charges. I do not know if that can happen. I do agree, however, that we must have a system in place that makes people respect and realise the fact we pay for water anyway. In doing that, those who conserve water and act responsibly have to be rewarded. Where there is abuse and waste, measures have to be in place to ensure that does not happen.
The issue of Siteserv has taken up much media space in recent times. I do not know what the report will throw up. However, a point I articulated in a debate here in 2011 is that IBRC and to a lesser extent Anglo Irish Bank sold off loan books at a price that may have not got the full value for the State. Whenever the formal review is carried out, I hope this will be examined extensively. It is particularly disheartening that having gone through all the difficulties with the banks over the past several years, we may have added to our woes by underselling ourselves in some cases.
Very little visionary policy was laid out in the spring statement. The usual statistics were rolled out but nothing concrete. People who access the health service have varying and conflicting reports of how it is. My understanding is the HSE is in a shambles but there is no major strategic plan as to how this will be turned around. The hospital groupings were launched several years ago to great fanfare but there has been no great movement in this.
If Ministers spent more time doing their job rather than trying to sell themselves, we would be far better off. I exclude the Minister opposite, the Minister for Foreign Affairs and Trade, Deputy Charles Flanagan, from that. Too much time is spent by Ministers pushing out their own image. The most important job a Minister has is to manage his or her Department. Several Ministers have fallen down and a few have been moved on as a result of not doing this.
The term league tables for schools caused much difficulty a few years ago. We need a system of measurement of schools’ performance. If one is going to book a hotel, go on a foreign holiday or go to a restaurant for a meal, one is going to check out if one will get value for money. However, we are expected to send children to schools for which we have no idea as to how they are performing. There has to be a mechanism to measure their performance.
Our party, Renua, has several other worthwhile proposals. We propose a credit network system with peer-to-peer lending through an invoice system. We want to see tax changes for the self-employed, equitable USC rates and an opt-in to PRSI to enable access to support for businesses which run into difficulty. We also want to see automatic enrolment in pension schemes for all employees.
We want to see e-citizenship developed for all documents, forms and payments processes, as well as a credit system for the unbanked. Many people complain about the banks and the difficulties they got us into but some 20% of the population cannot even access a bank. Will the Minister for Finance put in place a system with the banks whereby people can access small loans of between €500 to €1,000? This would consign moneylenders to history.
I welcome the opportunity for the House to debate economic policy and the Government’s plans to secure our hard-won economic recovery over the past four years. Since my appointment as Minister for Foreign Affairs and Trade ten months ago, I have been directly involved in promoting our country’s trade and export markets, working with embassies, agencies and businesses in Ireland and around the world.
In 2011, the Taoiseach summoned ambassadors and consuls general to Dublin. He then charged the 79 heads of mission with the task of engaging with international media, political and business leaders to deliver the key messages that Ireland was meeting its troika bailout package targets, was returning to economic growth, that the Government would protect Ireland’s corporation tax rate and that Ireland was the place to be for companies that wanted innovation, scientific research, cutting edge technology.
Earlier this year, I brought together all our ambassadors once again. This time the message was different. Ireland is now a politically and economically stable country, back at the heart of the EU. It has successfully exited the bailout, unemployment has fallen from a peak of over 15% to 10% and continues to fall. Last year GDP rose by 4.8%, making Ireland the fastest growing economy in Europe. International confidence is evidenced in our bond yields. A ten-year bond in October sold for a 1.63% yield compared to 15% yields in July 2011. The deficit has fallen from €22 billion in 2010 to a forecasted €5 billion in 2015. Ireland is open for investment and an investment opportunity here is like no other in the EU or beyond.
It is clear our core messages about Ireland are getting through while the relentless promotion of Ireland overseas by Ministers and ambassadors is most effective. Several weeks ago this was brought home to me when John McCain, the influential US Senator, approached me at an event to congratulate the Irish people and Government on our economic recovery. This is a message that I hear time and time again from foreign Ministers, Heads of Government and politicians, as well as business leaders when I travel abroad.
As well as their important work in connecting with international media and opinion formers, our missions play a key role in trade promotion, working with State agencies to organise trade missions and open doors to businesses. Local market teams are in place in priority markets, headed by the ambassador and comprising representatives of the embassy and relevant State agencies. The export trade council, which I chair, reviews their local market plans. All of this work is paying off as the latest figures show that exports by Irish firms have reached a new all-time high of €18.6 billion.
The hard-fought and hard-won turnaround is often subject of analysis in the international media. Indeed, Forbes last year ranked Ireland the fourth best country in the world in which to do business across eleven categories and the number one country for personal freedom. This is some turnaround from the period in which Ireland was locked out of international markets, broke, desperate and at the mercy of the IMF and our partners in the EU to bail us out of a catastrophic economic meltdown. We never want to be back there again. The dedicated work of my Department and our mission network will continue to consolidate our economic recovery.
I represent a constituency that was in many ways at the sharp edge of the economic collapse, representative of many communities around the country affected by the crash and its aftermath. County Laois is firmly located in the commuter belt. During the so-called boom years, many young families bought homes in the county at vastly inflated prices. The crash left a legacy of negative equity, ghost estates, unemployment, pay cuts and challenging taxes and charges, particularly for the many public and civil servants who live and work in and around Portlaoise. Gradually, as the economy recovers, confidence is returning slowly to the people, with the roads and main streets busy again.
Ghost estates were tackled and are being systematically dealt with. Job opportunities are opening up. Pupils now learn in new schools and school extensions are being completed. Laois is set to benefit from Ireland's Ancient East initiative with a number of our tourism attractions being included on the trail.
However, there is still much to be done for most people in my constituency to feel the recovery in their daily lives. That is why the spring economic statement can be a source of optimism for many people in County Laois, the midlands generally and other regions.
Public servants have made an enormous contribution to our economic recovery, including gardaí, prison officers, teachers, nurses, civil servants and other public servants. As the economy recovers, we can now look at gradual, sustainable pay recovery for public servants from 2016 onwards, linked to continuing reforms to improve public service efficiency and effectiveness.
Likewise, this year's regional Action Plan for Jobs will be of great value in the midlands by identifying some of the barriers to job creation and developing solutions of a new and exciting nature. The local enterprise office, which I had the pleasure of opening last year, is already active in assisting local businesses. Government plans to end unfair tax treatment for the self-employed and small businesses will also boost confidence in the regions.
Farmers feel good about the future with CAP reform, new markets and the abolition of dairy quotas taking effect. It is essential, therefore, that economic recovery is spread as evenly as possible throughout the State. I am looking forward with interest to the regional Action Plan for Jobs in the midlands region. I refer specifically to the need to ensure economic progress in the midland counties of Longford, Westmeath, Offaly and Laois. It is essential that economic recovery is seen to be spread as evenly as possible throughout the State but with particular reference to regions that have been most disadvantaged. In my constituency alone, 4,000 construction workers lost their jobs directly as a result of the property collapse.
I am confident that the changes and initiatives introduced by this Government to date and further planned reforms as well as the economic proposals set out by my colleague, the Minister for Finance, Deputy Noonan, in the spring economic statement, and the Action Plan for Jobs spearheaded by my colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, will deliver a comprehensive recovery across the country, ultimately benefitting all of our people.
I wish to welcome the spring economic statement. I have been around this House for quite a long time and one of the things that always frustrated me, particularly when I was spokesman on finance, was the extraordinarily opaque way in which budgets were put together. Typically, budgets were produced in massive secrecy; so much so, that if the slightest information got out, a person's career was on the line.
We have seen many cases where Ministers pulled rabbits out of the hat on budget day, often to the long-term detriment of the country. Decisions were made on budget day that were poorly researched and prepared. I remember the decentralisation programme and many tax reliefs that were not thought through in a way that would have made them sustainable. Neither were they circulated to other Departments so that the best information could be brought to bear. There was no chance for the public to participate in debating or shaping the priorities to be set.
We are successively moving away from that opaque way of setting budgets, which is an important development. The budgetary system has improved in many ways in recent years. For the first time, the comprehensive spending review moved away from the traditional manner of adding on a percentage every year. No budget ever contemplated a root and branch reform or the alternatives. It was a question of getting a little bit of an increase in the budget, but that was no way to run any programme.
We now see an increasing emphasis on the impact of, and outcomes stemming from, individual programmes. Through the new Estimates procedure, Deputies get a chance to examine how well various programmes are performing. They can also make judgments on their impact. The spring economic statement is a further step forward. It adds to procedures such as the pre-legislative scrutiny that seek to treat the Oireachtas seriously. It allows Deputies to consider options in the coming years and how we can best shape the options available to us. The spring economic statement provides material about the resources available to us, as well as how and where we should deploy them. It gives Deputies a chance to engage seriously in shaping future choices.
I particularly welcome the forthcoming process whereby the public will have a chance to propose ideas for the forthcoming budget. People have made extraordinary sacrifices to get to the point where we have budgetary stability and employment growth. People want to be assured that the sacrifices they have made will not be squandered by decisions that would not copper-fasten the strength of the economy and its potential to grow. It is absolutely right that people should be able to participate in this process to solidly shape future options.
I am surprised at the Opposition's reaction to the spring economic statement. It has been singularly disinterested in seeking to engage in such a debate. Many Opposition contributions this week have featured lists of things that should be done. We need to move away from long, uncosted lists and focus instead on opportunities that can be delivered.
Employment is another important area. I regard the employment journey as one where we are half way on a very difficult road. Back in 2011, we took on an economy and the only thing on people's minds was whether their job would be the next one to go. As the Minister, Deputy Charles Flanagan, said, we were locked out of borrowing markets and our banks were in free-fall. Businesses that had been built up over a lifetime, or over generations, were wiped out in a couple of months. Over 300,000 jobs were lost, people were facing into emigration and all their hopes and dreams had been shattered.
We have had to work really hard to deal with this. I acknowledge that the heroes of this recovery are the enterprises and workers of this country who stepped up to the plate. They went to remote markets and built an export-led recovery for us. That is evident in today's Enterprise Ireland figures. Over 3,000 companies that participate in Enterprise Ireland programmes are now sending €18.6 billion worth of exports across the world. The highest growth is in emerging markets. That is the sort of enterprise base we need to build in new and sustainable sectors.
I must also acknowledge the major role the public service has played in delivering this change. People forget that the public sector has been reduced by 10%, yet we are treating more patients, educating more pupils, and supporting more companies to build enterprises and go abroad. Many people have radically changed the way they do things in order to facilitate that. My own Department has revised many of its institutional structures to make them leaner and more effective. That represents a huge change.
We can now realistically set a target of achieving sustainable full employment within the lifetime of the next government. I believe that we can have full employment by 2018, built on sustainable sectors and not on a building boom that will vanish no sooner than it arrives. Nonetheless, that is a huge challenge.
The spring economic statement clearly shows that the full employment target will not just fall into our lap. We will have to adopt further changes in the way we do things. Business as usual with no policy changes will not deliver it for us. We face major challenges in new areas. For example, the war for talent will be crucial if we are to deliver on that target. Deputy Ó Cuív will know that from his own travels in the United States and elsewhere. We have the capacity to build our own enterprises to world-class standards and to attract some of the most ambitious companies in the world to develop from an Irish base.
To continue to do that in the next decade we will have to develop new skills, have an education system that is much more responsive to innovation and use technology to develop the way people are taught but also build incubators and build entrepreneurship within their four walls. We need to be able to share the innovation that is possible with companies and grow companies out of that environment. That is a massive challenge in the education sector.
It depressed me when I heard some prominent leaders of the trade unions in the education sector say recently that they need more pay but that there could be no more talk of productivity. Productivity in that environment, which is the boiler house of the future, is about better outcomes for our children and better job opportunities for them. To turn their backs on change and improving a system that is pivotal to where we want to get as a nation is selling short the challenge we face.
Growth in jobs cannot be taken for granted. The Action Plan for Jobs process has proven that if we adopt a whole of Government approach in terms of getting all Departments focusing on enterprise and employment as a challenge, setting targets and monitoring those targets as to their capacity and ability to deliver on time on changes that are necessary, it creates a great spirit around a national priority but also a great momentum.
I have sat in this House for many years and seen strategies produced by Governments. Governments have never wanted for ambition, but they have never had that focus on implementation that we have delivered. They have never been able to work across silos and make sure the resources and planning in an education Department are aligned with the resources and planning in an enterprise or a finance Department so that collectively we can develop sectors in a coherent way.
As we look to the future and the challenges of creating employment, increasingly it will be our capacity to build those systems and networks that support growing employment. It will be that mix in terms of the infrastructure, and we all know the role of broadband and the way in which technology is developing, the so-called Internet of things. In other words, we will have smart products that, for example, will allow people monitor their own health. It is no longer a question of just going to the doctor and taking a pill. People will be able to monitor their progress and respond in a preventive way. Those sort of technologies are available to be developed in Ireland but we have to get our manufacturing system talking to our health delivery system so that they can be test bedded in an Irish environment.
This spring statement has been portrayed as Government celebrating where we have got to but I see it as setting out huge challenges on the road ahead. What is optimistic about it, however, is that we now have a proven track record of being able to deliver the reforms within the public service and build enterprises that are sustainable. As the Minister, Deputy Flanagan, said, we now have to take the next step and consider how we maximise the opportunity in every region and build the clusters we need. It is a time of important input into this national debate, and I am glad to have an opportunity to contribute.
I am pleased to have an opportunity to speak in this debate but I am very disappointed with the tone of the Government's contribution, which seems more focused on a propaganda narrative to do with the next election than a serious analysis of what went right and what went wrong in the past 20 years.
The Government claims credit for everything. It inherited a ruined economy. The entire country was in a mess. We could not access the markets and, according to its own narrative, single-handedly and without any world events impinging on it, it saved us from ruination. It is a good story, but it shows the trite level to which Irish politics has sunk.
The reality, however, is much more complex but it does not suit the Government's narrative to say that. I have always believed, in government or in opposition, that when a Government does something right I should say it is right and when a Government does something wrong, I should say it is wrong. It is a very serious issue in politics if people start believing they have all the wisdom, they are always right and that nobody else has got a clue. We know it is not that simple.
If we look back over the past 20 years we see that two things happened in parallel, and to a certain extent one fed the other. There was a significant growth in the 1990s up to 2009 in both our indigenous economy and in the multinational companies. All throughout that period, companies that are household names came to Ireland and set up their bases here. It would be fair to say that if the Minister, Deputy Bruton, visited multinationals such as Google, Facebook and Intel he would find that most if not all of them had made their investment decisions long before he came into Government because he knows, and he knows I know, that it takes about five or six years from the time a Government starts looking at an investment decision before it makes it, not to mind setting up the factories.
We had genuine growth but we also had, and I would be the first to admit it, a bubble effect in the construction industry. Part of it was fuelled by the growth in that people needed houses and services, and as the Minister knows, there was a massive demand for new houses. Some of it was fuelled by cheap European money that came around the periphery, and if we had a problem in Ireland they also had a problem in Greece, Italy, Cyprus, Spain and Portugal. I accept that some of it was home grown and that, as I was in government at the time, serious mistakes were made but to think that the downturn in the economy and the problems on the markets were caused solely by decisions made in Ireland is simplistic and wrong. The Minister knows that.
The big issue that arose in 2010 was that bond yields rose dramatically across Europe and the euro itself came into question, not because of Ireland but because of much wider events. In particular, issues in Greece had a massive effect on bond yields here. We also had the flight of capital from the banks.
We also had an exacerbation of the downturn due to the overheated construction industry. It was like a bungee jump in that the higher it went up, the lower it fell when it collapsed. In terms of what happened, the building industry collapsed further than it needed to have done to remain sustainable, and having gone down so far it had to rise again because we are out of houses in all our major urban areas. There is the biggest housing crisis I have ever seen in my time in politics in Galway. We know about the crisis in Dublin. We have to build, and that means re-employing people in the building industry. If a reasonable amount of building had been done in the past four or five years, we would not be experiencing the current housing crisis. As sure as day follows night, once we had taken the big decisions, and this Government implemented them, there would be always a recovery.
What is often overlooked, and the Minister knows this from his work as Minister with responsibility for employment, is that during the downturn we were singularly fortunate in that the real economy, the productive economy, did not fail.
The Minister for Jobs, Enterprise and Innovation will admit himself that during his time in office, no more than in our time in the late noughties as they are called, the number collapses of major productive industries has been relatively small. In fact, foreign direct investment-based employment has remained solid. Agriculture has remained solid. Industries that should have been very prone to difficulty in the downturn such as the forestry industry have actually managed to adjust and stay out there in the markets. Parallel to the collapse in the domestic building economy, we were very lucky that the real economy stayed sound. That is a fairer assessment of what happened than this propaganda version the Government goes on with all the time.
As a society, we face huge challenges. What we get, however, is non-interaction with the Opposition, sloganising, boastful statements and very little debate. I agree with the Minister that reform of how we do business in the House is needed. I do not agree with him that reform has been as thorough as he asserts. It is not as all-encompassing as he said. When I was in government, I believed, as I still do, that the way we do business in the House, particularly around Estimates and budgets, lent itself to "Alice in Wonderland" politics. Let us start with the big decisions first. The Minister for Finance, Deputy Michael Noonan, stood up here the other day and said there would be €1.5 billion to give away every year over the next five years. I am glad he knows that. No one else can be sure of it. As we know, the world in which we live is an uncertain place. Maybe it will be more and maybe it will be less, but he has decided to give €1.5 billion back in one way or another. He said it will be half in expenditure and half in tax cuts. He has not said how this is calculated and whether we should have a debate on whether the first decision - the big decision - is the right policy. I would like to tease out what he has said a little. It always seems to me that Sinn Féin, the Deputies behind me on the Independent benches and the Government have one thing in common. They believe in continuous borrowing on current account. They believe in giving it out before they have it to give out and in continuing to borrow while putting the burden into the future. I would like to ask the Minister if the Government is willing to say that, excluding capital investment to which I will come, and taking into account interest and all current payments, it is not prudent for a household and a Government to spend more on day-to-day expenditure than it takes in in taxation. I would like some day for the Government to spell out whether that is its policy. Will it make it a priority to get there so that it is sustainable into the future?
On the other hand, I also believe there should be a major capital programme of investment in necessary infrastructure. It appears the European Union agrees with me. Contrary to popular opinion, the Government cannot create jobs, but it can create the circumstances in which jobs are created. It can also ensure that jobs are created in a regionally balanced way. Therefore, in line with what the European Union has indicated, there is a great deal of sense in borrowing money as long as it is for capital investment. We should have a comprehensive infrastructure programme. It should look to future needs which would include ensuring that every part of the country is accessible by a good road system. One of the great legacies of the good years about which one hears people talk all the time is the improvement in the roads where they have been improved. We have quite a good motorway system and an excellent one compared to what we had 20 years ago. However, in many parts of the country the road infrastructue is still totally deficient. We need public transport. If we do not provide it, this city will seize up, as will many others around the country. We need a power system that meets the needs of industries big and small, local and national. Those of us who have worked in industry know this is vital. For many small companies, it simply means getting a supply of three-phase electricity. For others it means major power lines.
We need a comprehensive plan to bring whatever is required to farmers, small businesses and large industries. We need fibre in every business and home, not this 30 Mb thing. We are on a small island and need fibre in every home. We need a proper integrated national water system. We need proper sewerage services. A great deal of infrastructure is needed. Of course, if one borrowed the money and invested it in a proper, comprehensive programme, particularly now that prices are competitive, one would create growth in the economy. The growth would occur in the long term on foot of the infrastructure and in the short term through the quick return to the Exchequer from building. Most of the requirements and materials will be home based. The labour will be home based and sand, gravel, timber etc. are all home produced. I am stunned that in all of the talk, there has been no mention of prioritising the needs of every region from the overcrowded cities to the rural areas like Deputy Harrington's, where it is easy for him to get to Cork and just west of it, but then he has torture all the way back to Castletownbere. We need to take a global approach.
The second thing that becomes obvious is that the Government is trying to get involved in a scatter gun approach to buying the electorate. It gives tax relief to those who will vote for it, but not to where it is needed. It will reduce the top rate of tax, but not look at the people who are in the biggest trouble. It will increase the public wage bill.
I was interested in what the Minister, Deputy Bruton, had to say about productivity. I am very interested to know if he is going to say to the Minister for Public Expenditure and Reform, Deputy Howlin, that we need to ensure that service delivery in this country is efficient for the money we pay. I would like to see the low paid public servants, who have been particularly hard hit, get a lift. Will percentage rises be given back? Will the person on €100,000 getting 2% back get €2,000 and will the person on €20,000 getting 2% back get €400? Is that the way the Government will do it? It is absolutely vital that the Government makes a clear statement of intent on how, in principle, it will tackle its expenditure benefits.
There is nothing significant in the spring statement to deal with the problem of those who cannot get houses or those who have houses but who cannot afford to pay for them. It would be easy enough to deal with the problem of the variable mortgage if this Government had the will, but it is set on selling AIB and nothing else. We should hold onto AIB and our shares in Bank of Ireland until every penny that we put into all the banks has been recovered by the people of Ireland. All of the investment should be recovered. I do not know why the Government is in such a hurry to dispose of AIB, but it is doing it on the backs of borrowers with a variable mortgage rate. If the Minister really wanted to reduce the variable mortgage rate, he could tell the banks that if they want to get the at-source tax relief which is paid directly to them and which makes it possible for mortgage holders to pay their mortgages, they will have to reduce their variable rates to 3.5%. Can the Minister imagine the huge lift that would give to all of the hard pressed mortgage payers who are finding it difficult, if not impossible, to pay their mortgages? They would get a letter from the bank saying that it is delighted to tell them they have got a double gain, that is, a reduction in the rate meaning the tax relief is more significant in terms of the mortgage. Fianna Fáil has also proposed raising the amount of mortgage relief available. This would make it an even greater gain to the most hard pressed families in the country.
The Minister talks about having a serious debate but we have nothing but propaganda. I am glad the Government took the four year plan on board. I regret the good parts of it the Government has put to the side, such as reforming the legal profession, and the abolition of mortgage interest supplement. At least the Government, having eventually come to realise it was the only show in town, has implemented the broad parameters of the plan. The Government is falling into the trap that it accuses Fianna Fáil of falling into. That is the trap of believing its own propaganda and an unwillingness to stand back and look at both the good and the bad and the challenges in the future and to deal with things in a serious fashion in this House.
I call Deputy Noel Harrington who is sharing time with Deputies Seán Kenny and Michael Conaghan.
I very much welcome the opportunity to speak on the spring economic statement. The first thing we must acknowledge is that it is not a budget. It is a timely economic statement and a necessary development which outlines our current situation and future development and policy opportunities. It is an opportunity to set out our stall for the next couple of years. It is true that much has been achieved over the past two to three years. The unemployment rate has gone from 15% to 10% according to the figures published yesterday by the CSO. More than 140,000 people have left the live register to take up employment in the past 12 months. Almost 100,000 new jobs have been created since 2011. There are more people at work now than there has been for years. This is evidenced by the increase in the Exchequer returns at a time when, after the last budget, the tax rate was reduced marginally. More people are at work and they are earning more. There is a recovery. It is fragile, but it exists.
The rate of emigration has declined and the gap between those leaving and those returning is narrower than it has been in almost a decade. Net outward migration is due to cease next year. We look forward to welcoming home many of those people who left our areas, constituencies and parishes over the past seven or eight years and to giving them the opportunity to say Ireland is a place that can welcome them back, provide them and their families with a living and sustain them and their communities beyond 2020.
The public finances have been stabilised and this economy is currently the fastest growing economy in Europe with almost 5% growth this year and very sustainable growth projected at approximately 3.25% to 3.5% per annum up to 2020. This assumes that there will be no international setbacks but it is a relatively stable projection. The deficit will fall below 3% this year and we look forward to not having to borrow for current expenditure next year.
That is the context in which these statements are being made and which gives me pleasure to take part in these spring statements. However, where to from here? There is not a single Member in this House naive enough to believe that all is rosy in the garden, that all is well and that things will be great for our country in 2016 and beyond without addressing some huge challenges which remain. These will only be addressed by determined, stable, cohesive and sustainable policies and decisions taken now, next October and in the years beyond. Some incredibly difficult issues remain and these will have to be addressed in the coming months and years if we are to fashion this recovery for all sectors of our society.
We have an enormous problem in this country with jobless households. This did not arrive by accident. It is not a vagary of Irish society. This was a result of ill-thought out and lazy policy decisions taken since the late 1990s to the advent of the economic crash. When we saw a social problem in this country, because we had it we threw money at it. We abandoned sections of our society to poverty traps and dependency on the State. This was ill-conceived and has manifested itself as a stubborn issue that refuses to go away. We will have to address future policy proposals in the next few months, the next budget and the next few years. We need to make work pay for those already at work. We need to make work pay more than welfare by continuing to close down welfare traps. We need to break the cycle of intergenerational joblessness and poverty by helping vulnerable people who can and wish to get back to work. Poverty, including child poverty, remains an issue, but the most immediate way to address this is to create work that will pay more than social protection and by making the recovery a nationwide one.
As Deputy Ó Cuív rightly mentioned, rural Ireland has lost a generation. Much of this is well understood, but the reason it lost a generation is to be found in irresponsible Fianna Fáil led Government decisions and policies. These decisions and policies created a pyramid scheme in the construction sector which inevitably collapsed. There is not a parish in the country that has not lost a generation of its most active young men and women to foreign shores because there was no other alternative. These people had no other skill. The only world they knew was the construction sector. It abandoned them and they had to abandon Ireland and leave.
It is for this reason that rural demand is at a low ebb and there is such pressure on small schools. The latter is not due to a lack of investment, but to a lack of children.
We have lost 20 or 24 post offices in the past four years compared with the almost 1,000 lost in the preceding decade. Business has been falling because the younger generation has left. In the years to 2020, our challenge is to create a rural economy and society that is welcoming and can support those people and their families. Deputy Ó Cuív rightly stated that this could only be achieved through investment in ICT services. I am pleased that the national broadband plan, which is supported by almost €800 million, will provide public investment and deliver a minimum of 30 Mbps to every household by 2020. This is crucial. We will not attract back the brightest and best if we cannot support them in driving an economy.
Many reports to be published in the next year or two will have a major impact on short-term policy. We expect the report of the low pay commission to be published in mid-July. The signing of the JobPath contracts will provide in-depth work on a case-by-case basis for 100,000 of our long-term unemployed and, I hope, deliver major results in returning that cohort of vulnerable people to the labour market. This is a significant challenge.
The roll-out of the housing assistance payment is ongoing. People should not be afraid that taking up work will lose them their housing supports. As they earn more and the economy recovers, those supports will remain and be reflected in their household incomes.
We look forward to the publication of the Mangan report and to the conclusion of the expert group on child care. Investment in underfunded child care services is a major issue and will address one of our greatest poverty traps, that being, the lone parents allowance system.
We have made considerable advances and west Cork has benefited. Almost 12% fewer people are unemployed in Cork county than there was in 2014, equating to 14.5% fewer in Bandon, 10% fewer in Bantry, almost 15% fewer in Clonakilty, almost 10.5% fewer in Kinsale and 10.5% fewer in Skibbereen. The chambers of commerce got these figures from the Central Statistics Office.
The message I would like to see being put forward in the spring statement is that a fragile recovery is under way and major decisions are yet to be taken. There is an alternative. Those on the Opposition benches are providing them, namely, more of the same by throwing more money into dependency and the abandonment of families and creating more poverty traps. That mistake was made in the late 1990s, but the Opposition continues propagating the same outdated policies. Those policies created significant issues for the country and will not allow for a recovery across all sectors.
I thank the Acting Chairman for this opportunity and look forward to the many reports in the coming months that will address social protection, in particular, and poverty traps.
I welcome the opportunity to contribute on the spring statement. It is not next year's budget and does not contain the sort of detail or specifics of a budget. Rather, it is a picture of the economy at this point in time. It is about stating where we are now as an economy and how that compares with from where we have come. It is about stating where we want to go as an economy and a society.
The spring statement is a first step indicating the Government's strategy for managing the economy until the year 2020 and making the most of the economic upturn that is under way so that opportunities for our people, society and economy can be maximised. The economic upswing is at a point where the Government has the flexibility to change and improve some of the factors that people want addressed. As legislators, we cannot implement every initiative we would like. We do not have the resources to do so. In the next budget, the Government will have between €1.2 billion and €1.5 billion extra, which can be used in a sensible and sustainable way, given the strength of the performance of the economy at the moment. We must manage this extra money. Debate will be held in full public view in the national economic dialogue in Dublin Castle early this summer.
When I returned to the Dáil in 2011 after more than a decade away, I wondered what exactly we would see in 2015. Would the situation be as dark as it was in 2011 or better? I am happy to say that the situation is much better than it was in 2011. The Department of Finance is predicting 4% growth in the economy this year. If this prediction is met, Ireland will once again rate as the fastest growing economy in the EU. Consumer spending is up, as is business investment. Our national debt as a percentage of GDP is falling quickly and our economic targets have been exceeded. Most important, employment is continuing to rise and unemployment is continuing to fall.
In the last budget, the Government reduced the marginal rate of tax for people earning less than €70,000 and increased the level of income at which the marginal rate was payable. This will, broadly speaking, continue to be the approach in the taxation package for 2016. Low and middle-income earners will still be the priority, the low paid will continue to be removed from the USC net and taxes for those on middle incomes will be lowered progressively. We will implement an increase in the national minimum wage if that is recommended by the low pay commission.
The crisis greatly reduced the scope to improve services. It was a case of protecting them as best as we could while fighting to regain our economic sovereignty. In this year's budget, we made provision for more nurses, teachers and special needs assistants, SNAs. We are recruiting new gardaí for the first time since the collapse of the economy. All of this has come about as a new way of managing economic policy. The old-style Fianna Fáil way of spending and splurging during an unsustainable boom before cutting drastically when the boom stopped had to cease.
When I was a Deputy in the 1990s, the rainbow coalition got the economy back on track. Fianna Fáil took over power in 1997. By the time it had to give up the reins in 2011, it had made such a disaster of the economy that the troika of the European Central Bank, the European Commission and the IMF needed to be called in. This Government has seen off the troika and the reckless Fianna Fáil economic model. The new model is one of prudence and forward planning.
Despite Sinn Féin's protestations to the contrary, it knows and understands what the Government is doing. It is in government in the North and knows what it is to govern. It knows what it is like to have to make cuts because it has done so. It is implementing cuts made by the Tory government governing from Westminster. Sinn Féin is getting on with things, and without a protest, at what it is expected to do as Members of the devolved Assembly. The political approach of Sinn Féin is to propose one set of politics in the Twenty-six Counties while implementing the exact opposite in the other Six Counties.
Our country is in a much better place than it was four years ago when the Government took office. However, despite the positivity, the recovery is not yet secure. There may be setbacks, whether at home or abroad. We hope this will not happen but it might and a good Government will be prepared for it. Fianna Fáil was never prepared for it. Sinn Féin would not be either.
The country needs stable government and responsible management of our economy.
It needs parties in government which, even if there are bumps in the road at some points, are able and willing to face up to the social challenges of our time. We do not need and cannot afford the instability and mismanagement that would be inevitable if Fianna Fáil and Sinn Féin were in government.
Deputies Shane Ross and Paul Murphy are sharing time.
I thank the Acting Chairman. The debate so far has moved along utterly predictable lines. It is somewhat surprising to see so much Dáil time given to a debate on the economy given that we discuss it in more detail and in a more specialised way every week. The reason for it is quite simple, namely, that we are now in an election situation and this is the type of framework in which the Government wishes to operate for the next year, which will give it an opportunity, from time to time, to embark upon a kind of propaganda and media frenzy which it hopes will lift it into an electoral victory in 2016.
Having said that, it is only fair to make some concessions to the Government parties for the situation in which they landed themselves in 2011. They were unlucky when they came into power in that they inherited the worst economic situation in the history of the State, as Ministers constantly remind us. They had a mountain to climb, which was left to them by their predecessors. They were willing to do that, in accordance with their duty as public representatives. They won the election and inherited the poisoned chalice. They were unlucky, too, to face regimes at the ECB and in government in Germany which would not countenance any let-up in austerity. However, it also is true that the Government pandered to the desires of the bureaucrats in Brussels. Indeed, much of what this Administration has done and for which it is now claiming credit, if there is any credit to be claimed, was dictated not by it but from Brussels.
The Government is saying now that it has done extraordinarily well in a very short time and quoting figures to us which are supposed to prove that. While this Administration was unlucky initially, as I said, there is no question that it has got lucky recently. A lot of the extraordinary export and growth figures we are seeing is down to two factors, namely, the strength of the dollar and the strength of sterling. Those factors explain, to a great extent, why our growth rate is higher than that in the rest of Europe. It is, in short, because of our dependence on the United Kingdom and United States for exports. We have exploited that situation very skilfully and there is great credit due to those companies whose exports have increased by up to 10%, according to figures released this morning. That is a superb performance by our export companies but it has come about largely because of the happy fact that the dollar and sterling have been so strong and the euro so weak. That has absolutely nothing to do with the Government.
On the assumption, one can only presume, that the dollar and sterling will remain at the same or similar rates into the future, the Government has made some extraordinarily brazen forecasts which go out to 2020. That is madness and nobody has confidence in those forecasts. It is not that there is any suggestion of deliberate dishonesty but simply that nobody believes for a moment that it is possible to forecast five years ahead. We cannot tell what is going to happen in that timeframe and it is simply not feasible to base an economic strategy on that type of assumption. However, that is exactly what the Government is doing. We are now seeing the beginning of an auction politics based on fantasy figures which will go on for up to a year. It is the oldest trick in the world and what Fianna Fáil has always done. It is what all governments do in an effort to be re-elected. Those on the other side of the House who championed austerity and fiscal rectitude and claimed to stand for balancing the budgets, not exaggerating growth and avoiding extravagance are breaking their own ideological declarations by making forecasts which are bogusly optimistic and over which nobody could stand. The simple fact is that the lucky factors upon which the forecasts are based are reversible. Is the Government telling us the dollar will not fall by 10% in the next ten years? Is it telling us it can predict what will happen with sterling and the euro? It simply cannot know any of that.
In the declarations he has made, the Minister for Finance has spoken very eloquently about the proposed privatisation of Allied Irish Banks. The State owns 99.8% of AIB and the Government is determined, for some reason, to raise some of its funds from the privatisation of the bank. This proposal should be subject to a serious reconsideration in the light of what we have seen in recent days. If the Minister decides to privatise AIB, he is undoubtedly giving the green light to a new cartel in Irish banking. Despite what he is saying, we have seen for ourselves in the past few days what is happening in the sector. Ulster Bank, Bank of Ireland and AIB, which is owned by the taxpayers, have given the Minister the two fingers. They have all told him either to wait, which is a euphemism for "go jump in a lake", or simply that they will not take their boot off the necks of standard variable-rate mortgage holders.
How can we allow people and institutions that behave in that way to be freed out to persecute their customers in the way in which they are doing? Already, with the Minister in charge, they are defying his wishes. Even with the State as a 99.8% shareholder, he is being told AIB will do what it likes. That bank has decided to continue to screw its share of the 300,000 customers with standard variable-rate mortgages if it so wishes, and the other banks have followed suit. What we have here is a cartel encouraged by a Government policy based on a strategy of having two pillar banks. That policy created a duopoly. Duopolies become cartels and cartels take on the customer. It is not worth raising the small amount the Minister will get from AIB if it means having to allow these people to run amok in the banking and financial jungle which awaits them out there. He must take a lesson from recent days. He must take these guys by the scruff of the neck and tell them he will not tolerate their stance and they must reduce the rates.
The Minister had an absolutely heaven-sent opportunity in the past two days to do exactly that when he cast his vote at the AGMs of Bank of Ireland and AIB. That vote was influential in the case of Bank of Ireland and absolutely dominating in the case of AIB. He chose to vote for the re-election of the entire bank board in both cases, including members like Richie Boucher and Archie Kane at Bank of Ireland and David Duffy at AIB. Worse still, he voted for the payment of these people's remuneration.
It must be asked if he is in their pockets.
The chairman of AIB was given an increase of 33% over his predecessor last year. Imagine the Minister voting for a non-executive chairman of a bankrupt bank to get a 33% increase while others who that bank is persecuting - 130,000 of them in that case - are being fleeced. The Minister wants to approve an increase for the person at the top while this is going on. That is completely unacceptable. In the Bank of Ireland's case the Minister appears also to have voted for a €490,000 package for its governor. That is €10,000 a week. The AIB chairman is only getting €1,000 a day, which the Minister approved, while the Governor of the Bank of Ireland is getting nearly €10,000 a week. A stop must be put to that and if the only way to do that is to stop the privatisation, the Minister should stop it.
The Government in preparing its spring statement was perhaps reading some of the works of the 19th century English novelist, Samuel Butler, who advised that "the advantage of doing one's praising for oneself is that one can lay it on so thick and exactly in the right places". The Government took full advantage in a full week of Dáil time to do exactly that but it is a little disappointed with the public's response. Those in government do not realise it but the majority of the people do not believe the narrative that a strong recovery is in full flow and that austerity has ended because it is not their daily experience. People do not buy it.
I want to mainly focus on illustrating that people are right not to buy it. They are right to burst the narrative of this strong recovery as a result of the austerity programme implemented by the Government. Before I move on to that I want to raise a few points. The first is an omission on page 18 of the draft stability programme update, which comprises the budgetary projections from 2015 to 2020. In the previous two years of these updates one or two lines were devoted to the primary balance. That is the amount the Government takes in by way of tax revenue minus the amount it spends before it hands over any money to the bondholders. The primary balance in 2013 was a small deficit, in 2014 there was a very small deficit and we were due to have a primary surplus this year. Is it a coincidence that in the year that we are due to have a primary surplus, the primary balance has dropped off the budgetary projections? A line about the primary balance is not included anywhere in the document for the first time in the course of the stability programme updates. Why is it not included? Is it accidental? Were we to have it set out in black and white, and I am speculating here, that the State takes in more in tax revenue than it spends on all public services together, it would highlight very starkly that the Government's argument and rationalisation of austerity is completely false.
When those in government are interviewed on television and radio and say that the Government needs to implement austerity because we are spending more than we are raising and that the money is being spent on public services, nurses, gardaí and so on, the figures would show that is not true. If one were to calculate the figures, they would highlight, in a graphic way, that we have a primary surplus of about €4 billion and that the only reason austerity is continuing is because we are paying the bondholders at a rate of about €7 billion a year and that is ongoing. We should be under no illusion that austerity has ended with this spring statement or with the coming budgets. We have moved, as Michael Taft, the economist of Unite has said, into phase 2 of austerity. Phase 1 comprised actual real cuts in terms of the amount of money spent on our vital public services. Phase 2 comprises cuts when we take inflation into account.
In terms of public spending, the Government's projections for next year will see a decline in public spending once we take inflation into account. The Government has made play of the need for investment, with the Minister for Public Expenditure and Reform, Deputy Howlin, saying in his speech it is now time to invest again to meet our infrastructural needs. However, in real terms, investment by the State will fall 1% next year and there is no end to austerity in sight.
I want to mainly focus on challenging the economic forecasts of the Government and the idea that a substantial recovery is taking place, because I do not believe it is. The attitude of most people correct in that there is a recovery taking place and that austerity has worked for those for whom it is meant to work, which is for the rich. It has worked for the bondholders, who are getting €7 billion this year, and for the corporations, which have increased their profits by more than 20% during the course of the crisis. It has worked above all for the super rich in this society, with the richest 300 people having increased their wealth from 2010 to 2014 by more than 60%, from €50 billion to €84 billion, and with the richest Irish man among them having doubled his wealth in the course of six years, and now holding more than €5 billion.
The people believe there has been no recovery for young people, one in ten of whom has emigrated and with one in five of whom who are still here but unemployed. There has been no recovery for workers who during the course of the crisis have faced declining wages and now face stagnant wages. We have the second highest rate of low pay in the OECD and we have had the spread of zero-hour, low-hour contracts with precarious working conditions. There has been no recovery for the unemployed. The rate of unemployment remains at 10% and if we take under-employment - those who want to work more than they currently are able to work - into account, it is about double that rate. However, even with the rate of decline in unemployment, we are talking about ten years before we reach the levels of employment we had pre-crisis. People are right to think that there is no substantial recovery.
The Government has headline figures that are quite impressive in terms of GDP and GNP but GDP and GNP figures in Ireland are thoroughly distorted. We have to look beyond the figures to see the reality of what is happening in the economy, and the reality is that there is marginal growth at best and that marginal growth is aimed at and taken up by the 1% in our society, as opposed to working class people, small farmers, middle class people, young people, unemployed people and so on. When we look beyond the figures, we see that our GDP is thoroughly distorted. As a result of multinational corporations in Ireland routing profits through this country in order to avoid paying tax elsewhere, it massively distorts the figures. Supposedly, profits in Irish manufacturing are eight times that of the other EU-15 member states. That is not possible. The average Irish worker is not that much better than workers in the other EU-15 member states. It is a sign that the profits are being routed through here from other countries and it is a sign, therefore, that our GDP is over-stated. It is not an accurate reflection of the economy.
GNP figures used to be more accurate but they are no longer accurate because now we have multinational corporations that have their headquarters in Ireland and the reverse process is taking place whereby profits are re-domiciled into Ireland to the tune of €7.5 billion, or 5% of GDP in 2012, which again inflates our GNP figures. We have to go beyond the headline figures to reveal something stark. GDP is made up of consumption, investment, Government spending and net exports. The domestic economy is made up of all those things apart from net exports. Every component part of GDP, with the exception of net exports, is still down on what it was before the crisis. Investment, in particular, is dramatically down, at about 50% of what it was before the crisis. The only element within GDP that is growing is net exports. The other elements all show a sign of the collapse in the domestic economy of 15% to 20%, bouncing along the bottom, with no substantial recovery to pre-crisis levels taking place.
We also have to look further at what is happening in terms of net exports, and again the figures are massively overstated from a number of points of view. First, three quarters of the increase in net exports is down to a decline in imports because people cannot afford to buy goods they previously bought that are imported. Imports are down €14.5 billion while exports are up €7.5 billion, but even within that the growth in exports is highly suspect. If we compare the measurement of exports in the external trade statistics as opposed to those in the national accounts, the more accurate figures for goods exports, for example, are revealed. They illustrate, in terms of actual goods that leave the country, that the growth rate was 1% rather than 18.4%.
A similar distortion is at play in the service sector whereby the likes of Google, Microsoft, Oracle and Facebook are charging more for services as a way of routing profits through this country. The whole thing is significantly overstated. There is export growth taking place but it is significantly and substantially less than what the Government is claiming and what the headline figures would suggest. The consequences of that, when one looks at the actual figures, is summed up by the socialist economist Mr. Michael Burke, who says "Without the fakery of an 'export-led recovery', statistically there is no recovery at all". That chimes with people's real experiences. People's anger about what is happening is not based on nothing but is based on the reality of the economy as opposed to headline figures that do not speak to that reality. The reality is that there is no strong recovery but a stagnation for the majority of people in this economy. If we stick with this Government's model and its neoliberal policies, there will not be any change.
I note that the Minister for Public Expenditure and Reform, Deputy Howlin, said in his speech yesterday: "On its own, the State cannot create wealth. Instead, it must do all it can to create the right conditions for prosperity, through progressive taxation, appropriate regulation and targeted investment." What is the point of the Labour Party if it just buys wholesale the neo-liberal ideology and argues that it is the only way? If we do not break from that ideology and initiate a massive programme of public investment, a different model of economic development based on sustainable manufacturing growth, public investment and democratic ownership and if we do not say that we refuse to pay the bondholders and rip up austerity then we are doomed to continue with the same austerity, misery and stagnation for years to come.
At the outset I wish to record my personal admiration for the extraordinary achievements of the Ministers for Finance and Public Expenditure and Reform in very difficult circumstances. The concept of the spring statement is a good one in that it will help us to avoid boom and bust scenarios in the coming years. It lays out projections, figures and parameters, factoring in the new fiscal rules at European level. This will inform the subsequent debate because it forces both Government and Opposition to present workable and realistic proposals within those parameters, which is to be welcomed.
The optimism and possibilities set out have their basis in four pillar achievements of this Government. The first thing this Government set out to do after its formation was to restore Ireland's international reputation and it went about that meticulously and painstakingly. The fallout of that for the Irish people was the successful promissory note deal, involving savings of €20 billion over a decade and the consistent and continuing reduction in our interest rate bill. The second issue the Government wanted to take on was the state of the public finances, which had implications for inward investment, the delivery of services and the workability of the country. Prior to the Government coming into office, this country was spending €50 billion per year but only taking in €31 billion, leaving a deficit of €19 billion, which was completely unsustainable. Now the deficit is down to €4.5 billion and it will be under 3% of GDP this year. The third plank of the Government's work programme was to bring sanity and order into the banking system with the stabilisation of the two pillar banks and ultimately the liquidation of Anglo Irish Bank. That has been achieved, although challenges remain in that area, particularly with regard to the remaining distressed mortgages, numbering 30,000 households. I gather that proposals are due shortly in that regard and I hope they will be effective, comprehensive and will ensure, where possible, that people do not lose their homes. The other challenge in this area is that of mortgage interest rates. The Minister for Finance has been working consistently to get the banks to adjust their variable interest rates downwards. The fourth enormously important issue, to which the other three were related, was dealing with unemployment. The unemployment rate is now at 10% and we will achieve effective full employment by 2018. That is what it is all about and that is a huge achievement. In summary, we had a growth rate in 2014 of 4.8%, an expected rate of 4% for this year and an average of 3.4% for the decade as a whole, the highest rate in Europe currently. In jobs terms, since the low point of 2012, we have created 95,000 jobs which is absolutely crucial.
Of course, all of this required enormously skilful management and the maintenance of industrial peace throughout the period through the buy-in of the social partners and so forth. While all of this was skilfully handled by the Government which led from the front, nobody should deny the fact that ultimately this all came about through the sacrifices of our people. The people made enormous sacrifices and those sacrifices are fructifying now. The people deserve a dividend now - a reasonable and sustainable dividend. The sacrifices of our people must be rewarded and in that regard, the average industrial wage has increased, in net terms, by 10% since the last budget. We need to continue with further tax reductions and the Minister for Finance has secured €750 million for that purpose in the coming budget. The aim should be to reduce the amount of tax deducted from the lower paid in particular as well as reducing the number of people liable for the universal social charge. Doing that is an important element of social engineering because the USC in particular is very oppressive for many people, particularly those on lower incomes.
I am also happy that the Government has opted for a 50:50 split between public expenditure and tax reductions. There are a number of important areas deserving of additional public expenditure and I firmly believe that we should introduce a second year for the preschool programme. As a former primary school teacher and as a parent I would argue that a second preschool year is vitally important and would be enormously beneficial for our children and for society as a whole. The benefits of preschool education do not need elaboration here and I will not insult the intelligence of Deputies present by giving my reasons for arguing thus.
Another critically important issue is the need to deal with the biggest infrastructural deficit in the country, namely the lack of high-speed broadband in all areas. I hope that progress will be made on this in the next year or two. I am delighted that Cavan town now has exceptionally high-speed broadband through a recent initiative involving Vodafone and Eircom but I want to see that extended across Cavan and Monaghan in the coming years.
The Minister promised a regional dividend. He promised to try bring the rewards for the sacrifices made to every region of the country, which is extremely important. In that context, while I am happy with what has been achieved in my constituency during the worst of times, I would like more to be achieved in the period ahead. In the midst of the recession we built new schools in Mullagh and Virginia in County Cavan, approved a long-overdue secondary school for Kingscourt and invested in numerous schools in Cavan town and throughout the counties of Cavan and Monaghan. While all of that was welcome, I would like to see further investment. I would like to see the Holy Family School in Cootehill get a new school building, which would be a very worthy capital expenditure project. I would also like to see a new third level or further education campus in Cavan town. Such developments merit investment in the coming years and I have had meetings with the Taoiseach recently to discuss these specific issues.
The people of Cavan-Monaghan deserve infrastructural capital investment because they were part of the national sacrifices that were made. We achieved 460 new jobs in County Cavan in 2014, notably 83 in Lakelands Dairies, in Bailieborough, in Lagan Brick in Kingscourt, and recently 200 new jobs in Combilift in Monaghan. That is all good but we need further regional inward investment in counties such as Cavan and Monaghan. We need more IDA Ireland itineraries and more investment. Of course, the broadband and the proper road structure will assist that.
I know this is reflected in other areas, but I am elected to talk about Cavan-Monaghan within the national context. Cavan-Monaghan was very badly hit by the dislocation of the construction sector. Many people who worked in the construction sector have lost jobs there. That major issue needs to be addressed.
The spring economic statement sets out an optimistic scenario coming out of the lost decade, as the Minister, Deputy Noonan, called it. It is a stark but valid description. People have been to hell and back, as they say in one of those orienteering activity places. Now that we are back we need to create an optimistic scenario and the spring economic statement sets out possibilities. The people who made the sacrifices now need to experience the dividend and it needs to be spread nationally and sectorally. Of course, initially it needs to be targeted more at the lower paid. While doing this, it is critical that we do not revert to boom and bust economics and do not recreate the same situation again. With the aid of fiscal rules and domestic prudence we need to steady the horses here because if we do not the people will go through another lost decade. That is our challenge.
This is a very important debate. It is time for all of us to tell the truth about the economic recovery and not to hide behind the sort of speeches I heard coming from the Opposition a short while ago. Nothing makes reality clearer for anybody who has suffered under the recession than their actually getting a job. Moving into employment makes a huge difference to that home and that local economy, and how they feel and how they face the world every day. The reality is that this Government policy is working. In the constituency of Louth from where I come, in the month we were all elected to the Dáil, there were 17,356 unemployed. This month that has reduced to 13,844. In County Louth there are 3,512 more people working today than there were on the day we came into office. That is clearly a very significant and welcome development.
In County Louth in 2010 there were 1,322 people working in IDA Ireland client companies and this week it was 3,029, a doubling of the figures and extremely welcome news for us all in that county. Of industrial FDI, €1 in every €10 is coming to County Louth. In County Louth in 2010 there were 4,885 people in Enterprise Ireland client companies and last year it was 5,434, which is again a significant increase. It shows that Government policies are working. People are getting jobs. Families are better off. People have more money in their pockets. They are feeling more secure in their employment. They have greater confidence in the future. More businesses are being set up. That is the reality and the truth.
Obviously it is not enough and we need much more investment in job creation throughout the country. However, the trend is in the right direction. This is a point at which the whole economic situation has clearly changed for very many people. It is a turning point in our economic cycle and clearly the Government policies are working. People have more money in their pockets now in terms of the tax they are paying because we have reduced the highest rate of tax and we will continue to reduce it. The Government has announced that whatever Government is in power over the next five years - we hope we will be returned to office - there will be more reductions in income tax, more reductions in the USC, and more investment in new schools, health centres and other essential infrastructure.
The discussion has commenced on public sector pay. Clearly increased social protection will be important. We have faced challenges over the past ten years. More than 500,000 new people have come into the country. We have the highest proportion of young people under 15 in Europe. We have the highest fertility rate and we have more people living longer than ever before. Many things are changing in our economy and with our people, and we are dealing with them in the appropriate way.
The increase in the number of older people will mean that for every year up to 2021 we will need to invest €200 million per year in services for older people. By 2021 we will also need 3,500 new teachers to look after the 50,000 additional second level pupils in our schools and the 20,000 additional third level students. At the end of all this will be much greater employment. The Government has committed to full employment by 2018.
We now need to improve the social infrastructure, in particular in my constituency we need to deal with the significant issue of social housing. Every day in my office I see people who are concerned that the rent allowance is not adequate for them and the Minister needs to tackle this. I welcome some flexibility in this matter that depending on the size of family the cap can and must be changed. However, there is a significant shortage of housing anyway. Notwithstanding the Government programme to build more housing in County Louth, which I welcome, it is not enough over the period of time that we face now.
While there is land zoned for housing in County Louth there is a significant necessity for the local authority to fast-track planning applications. I have spoken to the new chief executive officer in our county and she is top class in every way. I have asked her to be proactive in encouraging more people to get involved and build the houses that are so badly needed. Assistance offered by the local authority through pre-planning meetings and encouragement to people to invest and build certainly represents the way forward.
I listened to Deputy Ross. However, he did not mention that at the height of the disastrous economic situation which was brought about by the bankers and the Fianna Fáil-led Government, our ten-year bonds, which are critical for future investment for any Government, had a yield of 14% and that is now below 1%. That is very significant.
The deficit - the amount by which we were overspending - was €15 billion a year when we came into office. That was €15 billion of money we did not have. We have reduced that deficit to €4.5 billion a year, which is still significant, but we hope to have it below 2.3% this year so that we will be in a position to balance our budgets in future.
Between €1.2 billion and €1.5 billion will be provided in this year's budget to cover tax reductions and expenditure on social and economic infrastructure. The public has suffered greatly, but poorer families suffered more so because they have smaller incomes on which to live. This Government will not only make work pay but we will also help those who rely on fixed incomes, pensions or disability benefits. As the money begins to come back into the economy, it is incumbent on us to ensure their boats also rise. That is the balance we must strike between job creation and social protection.
It is only by putting people back to work that the economy will improve. If we take 10,000 people off the unemployment register, we can save €98 million. That is money the taxpayer does not have to provide to keep people on social welfare. The income these people earn and the tax they pay will bring huge benefits to the economy. This Government is on the right track and this is the right time to be having this debate. The time has come and the change is here. It is our job now to ensure the budget delivers on our commitments.
As Sinn Féin spokesperson on children's affairs, I intend to focus on child care and the contributions made by Ministers to the debate. The Minister for Public Expenditure and Reform stated that a successful child care policy will help people to participate in the economy and that we need to find a balance between the needs of children, parents and the wider economy. The Minister for Children and Youth Affairs has established a working group on the issue of child care and is calling for submissions. The child care crisis has reached breaking point in this State. Parents, workers and child care providers have all been calling for an immediate focus on finding lasting solutions to the challenges in the sector. Time is of the essence and strategies urgently need to be put in place. I welcome that the Minister, Deputy Reilly, has acknowledged the urgency of the matter but I am not convinced that a lengthy consultation process and calls for submissions from the public are the best solution to this immediate crisis. I recognise that consultation is needed but stakeholders and children's organisations have been giving their input and recommendations for many years. Parents have voiced their opinions through these groups and they are waiting for change. There is growing sentiment within the sector and among parents that the decisions being made around consultation are delaying the desperate need for progress. The interdepartmental group set up to address the issue is apparently meeting regularly. I have repeatedly asked the Minister when can we expect an update on what is being discussed but I am routinely told that this group of representatives from seven Departments and their advisers are working on a plan. Policy documents and reports from the most knowledgeable of people in Irish NGOs and children's organisations have already outlined proposals and solutions. Are they being taken on board?
The spring statement boils down to the announcement that the Government will have between €1.2 billion and €1.5 billion available for tax cuts and spending increases, which it intends to split on a 50:50 basis. Cuts to taxes should provide an extra few euro a week to some people but the taxes imposed through water charges and on other living standards will ultimately cancel that money out. This is why the debate on tax credits for child care is made redundant. Tax credits will do nothing to improve the quality of child care or parents' ability to access it. Any extra money in the pockets of struggling families will be used for what they most need at any given time. Tax credits will not improve the quality of early years services and or help the most disadvantaged. The best way to achieve the affordable, high quality child care that is so badly needed in this State is to invest in services and link that funding to quality. The children's' organisation Start Strong has pointed out that research from the OECD suggests the best way to make child care both affordable and high quality is to directly subsidise places in early year services, and to tie that funding to quality. We need to learn from other countries rather than repeat their mistakes.
Investment is the key to sustainable long-term growth by expanding the productive capacity of the economy and increasing employment and incomes. Last year the Government pledged that budget 2015 would introduce measures to assist low income families by improving the system of child income supports such that those moving from welfare to work will retain payments for children to ensure that people are better off in work. The increase in child benefit and the introduction of the back-to-work family dividend is welcomed but it is well documented by child stakeholders that the lack of high quality affordable child care will keep many families in poverty. Austerity budgets over recent years included cuts to child benefit which put additional pressures on families whose incomes are already stretched as a result of the recession. Child benefit was cut from a peak of €166 per month to the current rate of €130. The increase to €135 from January 2015 and to €140 from 2016 is minimal when compared to recent cuts. The back-to-work family dividend announced in budget 2015 is intended to help families move from social welfare to employment by allowing them to retain the qualified child increase, QCI, of €29.80 per child per week. Families will keep the full QCI for the first 12 months after taking up a job and 50% of the QCI for the second 12 months. However, the largest cost faced by many families when moving from social welfare is the cost of child care. The average cost of a full-day place is €167 per week. The €29.80 back-to-work family dividend is insignificant when viewed from that perspective. This commitment does not a support parents wishing to take up or return to work. We need an investment in quality and affordable child care so that parents can return to work in a dignified and realistic manner.
The Government also pledged to increase access to subsidised child care and after school places by extending eligibility. International research shows that early care and education services only benefit children if they are of a high quality. Quality of child care in this State is inconsistent and variable. Improving quality must be the central aim of early years policy. Although the Government is committed in theory to a second free pre-school year, the sector has called for improvements in quality for the first year and to make access universal in practice rather than in name. Children with special needs are frequently denied access to the free pre-school year due to a shortage of appropriate staff and special needs assistants in creches The Government's promise of universal care is in name only.
The after school child care scheme did not provide the solution to after school services for children that the Tánaiste and Minister for Social Protection promised. Only 267 children use the scheme compared to the 6,000 places proposed in 2012, for reasons such as accessibility. The scheme, which was launched with great fanfare by the Tánaiste in 2012, was to be allocated €14 million per year. The allocation was intended to provide over 6,000 part-time after school child care places for the children of low income parents. Significant cuts have been made to the scheme's funding have been made and uptake is minimal but the Tánaiste continues to fly the flag for the scheme by portraying it as one of the success stories of this Government. The scheme has not worked and credible new proposals must be made. Investment is needed.
A recurring message on which the Government has tried to relay in its spring statement is that we are, apparently, beginning to move out of the recession. If this is so, the Government has a duty to start immediately investing in critical services, such as child care. The Government's attitude towards child care and the needs of families must change. We must start investing in our youngest children. We in Sinn Féin believe that investment in services that will better the quality of lives is more effective than nominal tax cuts that will amount to little more than a few euro a week. Token gestures solve nothing in the long term. However, given the Government's commitment to a 50:50 plan in tax cuts versus spending, I call on it to put investment in quality child care high on the list.
As a country, we invest very little in our young children, less than 0.2% of GDP. The average investment in OECD countries is 0.8% of GDP. In my capacity as special rapporteur for the upcoming Committee on Health and Children report into child care in Ireland, I have been meeting with a large number of representatives from both the sector and parents and have found that the overarching issue is the serious under-funding of the sector. It is unrealistic and short-sighted to presume improvements can be made while the resources are not being provided to make those critical changes. It is common sense that investment in child care is ultimately an investment in children and the future of society. Affordable and accessible child care for all types of families should be a right, not a luxury. Child care is not only about caring for children, but about the education and development of the individual from his or her earliest formative years. The attitude and terminology needs to change. The child care sector deserves equal status and treatment to that of every other stage of childhood education and development. The Government must acknowledge that.
A long term vision and plan for the sector is urgently needed. The Government demands the further professionalisation of the sector and quality improvement. However, in order for that to happen, proper resourcing and wage structures are essential. A clear message from meeting with workers and providers is that they are extending themselves as far as they can to keep services open and running to a high standard. The commitment to the welfare of children, of both employers and employees, is unquestionable. They are calling for any changes in policy to be children focused. What we need to see now is a matching of that commitment from the Government in the form of real solutions.
Here we are at the end of a great week of the Government's spring statement being told all is well. Fair enough, but any future recovery must be a fair recovery. Any benefits must go to those on low incomes, in particular low paid workers, and towards restoring and improving public services. Jobs have been created and this is welcome, but this is down to the fact we are coming from a situation where we have very high rates of unemployment and there are other external factors. Many people have emigrated in the intervening period and wages being paid across many sectors are lower than they were six or seven years ago. It is in that context that jobs are being created.
The Government has put yet another commission in place, the low pay commission, but what is needed is action. Sinn Féin has launched a document calling for decent work and a living wage in which it puts forward its proposals. We are often challenged in the House to produce our proposals. We launched them within the past week and they are here in black and white. We would welcome the views of those on the other side of the House on them, in particular the views of the Labour Party who might see a common cause in them.
The latest position is coupled with the fact that taxes and other impositions, such as the local property tax and water charges, are placing a heavy burden on households and many people now are significantly worse off than they were. It is also the case that recovery in employment is not evenly spread. In my own county of Laois, unemployment remains high and the fall in the numbers on the live register has not been so great. We welcome any fall in unemployment numbers, but the numbers of long-term unemployed remain sky high. This applies across the midlands region. Some 7,388 people in Laois are unemployed and the number unemployed in Kildare is over 15,000.
This is reflected in a range of ongoing social problems. Last week, figures were released which showed that Laois had the highest rate of claims for exceptional needs payments from community welfare officers, in other words, emergency payments. Many households, including those with members who are in work, also continue to be burdened by debts. Mortgage debt in particular is a huge problem. There have been hints from the Government that it will raise this matter with the banks, but the banks have basically told the Government to get lost. That is what has happened. The Minister for Finance, Deputy Noonan, has attended their annual general meetings and that is what he has been told. The Government has not used the 98% share that Joe and Mary public have in AIB to try to address the issue even with that bank.
The statistics show that many people in County Laois are in mortgage distress. Some 76% of people in the county who are on shared ownership loans are in arrears and what is most worrying is that 60% of those households are in arrears of three months and more. This is the case despite the fact that local authority staff are trying to do everything they can to address this problem and to come up with solutions. The figures for households with private mortgage loans are equally as worrying. According to the most recent figures, some 16% of mortgages in Laois are in arrears of three months or more and in Kildare the figure is 12.4%.
The Government is not dealing with or facing up to this issue. The fact is that the Labour Party and Fine Gael gave the banks and lenders a veto on any settlement for those in mortgage distress. We pointed out the problems this would cause nearly three years ago, but were ridiculed for that. The Government asked what we would propose and we said what we needed was an independent agency with the power to compel the banks and lenders to accept reasonable proposals and see them through. We advocated this three years ago and advocate the same again now. We urge the Government to do this. There has been some talk about doing this in recent days and we want the Government to move towards that.
Much has been made of the potential of the mortgage-to-rent arrangement as a possible solution, but the numbers approved so far are derisory. There has been just one mortgage-to-rent arrangement in County Laois. The Government has failed to deal with the issue of spiralling rents and the growing gap between the rent allowance threshold and actual rents. This is causing homelessness, not just in cities but in the country where we now find people sleeping in cars. Some 90 people showed up homeless at Laois County Council in the first three months of this year.
The situation is causing huge stress also for families living in private rented accommodation. Some of these people come to our clinics every week because they are in danger of losing their accommodation. There is a housing crisis. A dampener is being put on house building by the new building regulations. We want building regulations, but they should be realistic regulations that work for and do not strangle the building of extensions and one-off houses. This issue needs to be addressed.
Yesterday, the Joint Committee on the Environment, Community and Local Government was to discuss a report on the housing assistance payment. That report includes very worrying figures on the numbers of people who are dependent on emergency accommodation. Of most concern is the fact that a huge number of these people have children. In County Laois, there are over 1,800 households on the housing waiting list and I believe another few hundred should be on it. In County Kildare, the number of households on the waiting list is now heading towards 8,000. This is unsustainable. We need a housing programme similar to what we had in the 1930s, and in the 1950s under a Fine Gael-led Government, and similar to those we had again in the 1960s and 1970s. Temporary accommodation is no substitute and merely acts as a subsidy for private landlords.
In regard to the home tax and water charges, it is noticeable that the Government appears to be content to ignore this issue for the time being. We were to have legislation and I would have hoped it would have come before the House this week. However, all Dáil business was suspended to allow for the spring statement. The Minister for the Environment, Community and Local Government, Deputy Kelly, has failed yet again to bring the legislation before the House. That is hardly surprising, given the Millington, SiteServ and IBRC controversy and given also that the cost of water metering jumped in the space of a month in 2013 by approximately 40%.
In that context, we should look again at the Government's claim that the economy has turned a corner. It may say that and some figures may be put together to show it is happening.
The Government has been less than up-front if we consider how it has dealt with issues. The water charges underline this approach to the economy. The Government has introduced a fake scheme called the "water conservation grant" of €100 per household that has nothing to do with the conservation of water; water will be wasted because of it when people see there is no incentive to conserve water. It has nothing to do with having more efficient use of water or stopping wastage.
We have had a week of the Government slapping itself on the back. The problem is that while the Government is doing this, citizens are carrying a heavy load on their backs. There are people under significant stress and under much pressure, and that is affecting mental and physical health. All of us meet these people every week in our clinics, offices and on the street. These are people who are broken mentally, physically and financially. They cannot cope and they have suffered years of trying to deal with mortgages. Results of a survey in England were published this week which demonstrated the stress arising from mortgage issues. When doctors examined the people over a period, they found that the stress was similar to that experienced by people on battlefields during war. We can see that in people's faces. The issue of mortgage debt has not been dealt with, either in the private area with respect to AIB, Ulster Bank etc. or the local authority loans. We must face up to that for the good of society, our own good and that of our children. It would even ease the burden on our health services as this affects those services. People are really suffering because of this.
This week has been a diversion to distract attention from the fact that we continue to pay money to the after-effects of the banking bailout and what has had to be mopped up by the Government. Spring statements cannot hide or change certain facts. Low-income families continue to be hit hardest, and particularly those in need of accommodation. The Government has failed to deal with key crises in the sectors of housing, mortgages, health and child care. Disposable incomes are at an all-time low. The Government has had four years to address this but in some ways, many people are telling me they are now in a worse position. What we are seeing now is window dressing and electioneering.
Deputies Joe Costello and Willie Penrose are sharing time.
We are sharing time in an unbalanced way. I will only take five minutes. I welcome the publication of the spring economic statement. It may not seem obvious to many people, and particularly those on my left, but this all started with the blanket bank guarantee approved by Fianna Fáil-----
Which we opposed.
-----and Sinn Féin and the Greens.
It is on the record.
It certainly is.
It was 17 October 2008.
Deputy Stanley was not here at the time. His party voted for it.
I can quote the names. Some of the same people are still talking about burning bondholders and telling the troika to take a hike.
On a point of order-----
There is no point of order. The Deputy only has five minutes.
The Deputy is misleading the House, as he has done recently. Sinn Féin voted against that on 17 October 2008.
These are political charges.
The Deputy is eating into my precious time. I will bring in the list the next time and show it to the Deputy so he can see exactly what happened.
Yes. It was 17 October.
No, it was 30 September.
From the moment Sinn Féin and others agreed to give a blanket guarantee to Anglo Irish Bank's €34 billion debt, Ireland was committed, effectively, to a special bailout deal with the troika, and that was negotiated by Fianna Fáil with the European Central Bank, the International Monetary Fund and the European Union Commission. It was agreed from 2010 to 2015 but we managed to exit the programme more quickly due to the good economic methodology and so on used by this Government.
With respect to the spring statement, during that period we were excluded from the normal European Union budgetary process because we were within our bailout system. We could not avail of what we had voted for in 2012, the fiscal stability treatment. All this provides for the first time for the member states to engage in a process of consultation. There is a European Semester, with every country doing a spring statement outlining budgetary principles, parameters and policies for discussion with a view to ensuring that the terms of the growth and stability pact are adhered to by all member states, so as not to have the blow-outs we have seen in various economies in the past. The spring statement is proof that Ireland's economy has been stabilised and has returned to normality from being the sick economy of Europe under Fianna Fáil and the Green Party.
The news is positive for the future. Ireland is the fastest growing economy in the EU, with 4% estimated growth in 2015. Unemployment has been reduced by a third from 15.1% in 2012 to 10% in 2015. There will be €1.2 billion to €1.5 billion available in the autumn budget, to be divided 50:50 between tax reductions to reward work for low and medium earners and spending increases to invest in our public services. A multi-year budgetary process will be put in place in October 2015. The Minister for Public Expenditure and Reform, Deputy Howlin, will publish a new capital investment plan in June this year which again will allow further debate prior to the budget. The Minister, Deputy Howlin, will shortly begin discussions with the public service committee of congress to restore in a sustainable way the 14% or €2.2 billion reduction in pay that was taken through the financial emergency legislation. The public sector sacrificed much in the interests of the national economy in the past number of years, and it is extremely important to recognise that the majority of public servants are low-paid. They deserve to benefit from the recovery as quickly as possible.
In July, again before the budget comes about, there will be further public consultation with civil society groups, a national economic dialogue to facilitate a transparent and inclusive debate about the challenges faced and the spending options we should prioritise. For the first time in the history of this country, there is a formal structure in place for all stakeholders and public representatives to engage in the budgetary process. It will be the norm for the future and it will be a multi-annual process. Political parties will no longer be able to trot out vast swathes of expenditure willy-nilly and they must come within the €1.2 billion to €1.5 billion expenditure parameters agreed with the European Union. Proposals must be costed and any that would increase expenditure must be matched with funding commensurate with the proposals.
With the spring statement being the norm from now on, the process should be welcomed by all instead of being derided by certain sections of the Opposition and the media. The citizenry of the country will find it most beneficial and it will put an end once and for all to the multi-billion euro uncosted proposals from the Opposition seeking to delude the public. It will also put an end to the secrecy surrounding that most important date in the Dáil calendar, budget day. We are setting the process in train, which is welcome, and I strongly recommend the spring economic statement before us.
I am glad to have the opportunity to contribute to the debate. Not only is this Government's spring statement an event of significant importance to the country but it also has a significant ring about it. The notion of a "spring statement" carries both the promise of spring and the tangible growth of summer, and for those of us in Irish society who have our dinner in the middle of the day, spring is always warm and warmly welcomed. We sense growth in every fibre of our being and see it within our grasp, hoping it will be realised for all our people who have suffered so much.
On Tuesday, RTE carried an interview from Ms Áine Lawlor on the lunchtime programme, who is one of our best, most informed and knowledgeable broadcasters. She interviewed a professor of economics who explained that it made sense for this Government to borrow for day-to-day expenditure. He explained that with interest rates so low, the stimulus triggered would more than cover the cost of borrowing. That would appear to be a portent of happy days. These are happy days, at least for some, but for too many, happiness is still some distance away on the horizon.
Everybody in the House knows that Ireland has a large number of people desperate to work and who are anxious for the country to return to growth. They are still so hobbled by debt that it is the responsibility of the Government to fix the issue. These people are not fools and they did not take inordinate risks.
These are the people who forsook emigration and continue to go to bed hungry in the cold and dark. They are deserving of our praise and commendation because it is they who weather the storm in the bilges of the sinking ship of Ireland's economy. They can smell the sweet scent of the harvest as the country reaches the safe harbour of recovery but they remain chained and shackled below deck by debt and frozen by the unnecessarily drawn out process of bankruptcy. While three years may appear short, when added to the wanton deprivation of a lost decade it acquires the appearance of a sentence of indeterminate length. It is too great a period to ask. It matters not whether a person is shackled by mortgage debt or chained by personal debt, all of it is debt. It is of the first magnitude, therefore, that Ireland quickly draws a firm line beneath its past. We must get these people back to work and restore their dignity and sense of self-worth.
Need and entitlement are the new objectives. The country needs the individuals in question to contribute to the economy again. They want to contribute and are entitled to do so. Their contribution to the nation's needs will be joyously measured when they resume their central role in family life, which is so dear to the well-being of this nation but which has been all but destroyed by fear, anxiety, loss, loathing, emigration and mental stress.
Let us place to one side the predictable response of the ill-informed and ignore the crass suggestion that the people in question are wasters or should not have been given loans for whatever reason. What is done is done. If their borrowing was imprudent, the lending was clearly more imprudent. Why should the pain always be visited on the unfortunate borrower?
While we cannot change the past, we can influence the future, which is as close as tomorrow, the day after that, next week and the week after that. It is time to acknowledge the contribution to the recovery made by citizens, specifically those at the worst end of the spectrum of those with financial difficulties. That such people are still standing means they have courage and a will to survive that defies logic. They have shown extraordinary resilience and are enormously talented. Who among those who have husbanded tiny sums to feed and clothe their families would not be talented in the basics of economics? The individuals in question are true survivors. They are not the subject of dramas or documentaries but the real people of Ireland. They deserve the help and acknowledgement of this House and our compliments. They deserve a stimulus package and freedom from the chains and shackles that keep them drowning in the bilges of this ship of state that is safely docked for the rest of us.
We justify borrowing for a stimulus package. We do not need to justify reducing the bankruptcy period to 12 months, which would be a self-contained stimulus package. Its dividends will be reaped from the day a bankruptcy order is made as it would set out for people a clear path forward, one that is tangible, attainable and stimulating. It is the function of government to help those in need and this Government has a responsibility to do so. It is also common sense.
I propose to highlight an issue that is close to my heart, namely, the failure of RTE to accommodate or facilitate on its broadcast media Irish-originated music, whether singers, producers or songwriters, of all genres from folk and pop to classical and country music. Irish music attracts thousands of people to dance venues and concerts but does not find favour with the national broadcaster, which will undoubtedly claim that no one listens to this type of music. I have news for RTE. A recent weekend of country and traditional music in Mullingar attracted more than 2,000 people of all ages. Moreover, almost 300,000 people will attend the Fleadh Cheoil in Sligo in August. Is RTE aware of artists such as Nathan Carter, Michael English, Derek Ryan, Jason McGilligan, Johnny Bradley and Johnny McNicholl, all of whom attract thousands of young followers? Why do the national broadcasting channels not feature specific programmes to accommodate these artists? RTE broadcast various programmes focused on Irish music years ago but has now deserted us.
I extend my best wishes to the broadcaster, Donncha Ó Dúlaing, on his retirement last Saturday night after more than 50 years in broadcasting.
I understand RTE intends to cease broadcasting the "Fáilte Isteach" programme, which has special resonance for elderly people and Irish people abroad. Is this not another sign that the national broadcaster will up sticks at the first opportunity and an illustration of a view in RTE that the culchies are alright and do not matter because they are outside the Pale? If it cared to check, it would find that people outside the Pale also pay the television licence fee of €160. It is time to acknowledge Irish music of all genres and commission dedicated programmes to allow it to take its rightful place in this country. We had such programmes in the 1960s. What is wrong with Irish music now? Is it a case of turning up our noses because it is Irish?
I have listened with great care over the years to the well-rehearsed mantra repeated across the health service that money will follow the patient. This policy, we were told, would deliver benefits such as better outcomes, greater throughput and output, more efficiency and effectiveness, improved case-mix and shorter turnaround periods. As far as I can determine, this objective has been binned in respect of the Midland Regional Hospital in Mullingar, which in recent years has catered for a significantly increased level of activity with a noticeable decrease in its budget allocation. The hospital provides very good care for patients not only from its natural hinterland of counties Longford and Westmeath, but also from County Roscommon to the west and counties Meath, Offaly and Kildare to the east, without any additional allocation being made available to accommodate its additional workload.
If the policy of having money follow the patient is to have any meaning, the Health Service Executive should match its sugary words with deeds. We need only consider the wrangle in the past six weeks when a firm commitment by the HSE to have 35 additional staff appointed to the Midland Regional Hospital in Mullingar started to unravel only a short period after it was given. Ten midwives, ten emergency department nurses and 15 other staff were to be placed across hospital wards where pressure had been clearly identified. More than 560 patients spent time on trolleys in March, which is the second worst record in the country after St. Vincent's Hospital in Dublin. The number of patients on trolleys was 125% higher in March 2015 than in March 2014. People in Mullingar want all the recommendations of the emergency department task force report implemented without any side-stepping or obfuscation. Acute beds which have been closed since as far back as the previous Fianna Fáil-Green Party Government must be reopened. On average, seven babies are born each day at the Midland Regional Hospital in Mullingar. It is vital, therefore, that the additional nurses promised for maternity services are appointed.
The health service nationwide will need additional resources. These must be complemented by a significant improvement in outcomes and a change in work practices to permit X-ray machines, PET and MRI scanners and all other radiological equipment to be utilised on a 24 hour basis.
The Midland Regional Hospital is part of the Dublin east hospital group. The aim of the hospital is to deliver a quality-driven, people-centred service to the population of the Dublin east and midlands region, in particular the Longford-Westmeath area. The hospital has 204 beds and provides the following services: accident and emergency; radiology; general medicine; general surgery; obstetrics and gynaecology; paediatrics; pathology; dermatology; and outpatient services, including ophthalmology. It also provides diagnostic radiological and pathology services; physiotherapy; occupational therapy; speech and language therapy; cardiac diagnostic and rehabilitation services; pulmonary function services; laboratory services; and respiratory services.
The out-of-hours general practitioner service, MIDOC, was relocated to the hospital in September 2014 and is accommodated in the outpatient department. In 2014, the hospital had 21,594 inpatient discharges, with an average length of stay of 3.17 days and dealt with 8,276 day case procedures. Some 2,796 deliveries and 32,859 emergency department attendances were recorded. Expenditure in 2014 was €61.43 million, while the allocated budget for 2015 is only €57.9 million. One does not need to be a mathematician to work out that the hospital will have a major deficit this year.
The hospital has a number of key areas for development. A design team has been appointed to develop a project consisting of operating theatres and associated developments as a single build project consisting of a new operating theatre department with a dedicated obstetric theatre; a new endoscopy department; a new combined critical care unit; a rehabilitation ward; and a therapies department for physiotherapy, occupational therapy, speech and language therapy and treatment facilities. It is also planned to update the current hospital development control plan to allow for further expansion of facilities in the years ahead. In addition, work has commenced on remodelling and upgrading the emergency department. I hope this important project will be completed by the end of the first quarter of 2016.
The hospital has highlighted the need for an MRl scanner as it currently shares a scanner with Tullamore and Portlaoise hospitals. This scanner, which is based in Tullamore, is operated through a public private partnership arrangement. One machine cannot cope with demand from a population of nearly 250,000. Members of the community are willing to raise funds towards the cost of providing a new scanner. I ask the HSE to provide co-funding for this equipment.
Provision must be made for the appointment of a consultant geriatrician at the Midland Regional Hospital in Mullingar and the establishment of a community and elderly care liaison team for the Longford-Westmeath area. Other requirements include the development of an in-reach and outreach service to nursing homes, the development of an ambulatory care assessment unit for older people using the day hospital model, step-up care beds and domiciliary visits other than nursing homes in the local hospital area, with a clinical case manager role for older people, and support for the education of staff in nursing homes. Much remains to be done.
The unemployment rate has fallen below 10% and 90,000 new jobs have been created. It is important that a sustained effort is made to ensure the benefits of employment growth are not confined to large urban areas but are spread nationwide, especially to rural areas. As an advocate for the midlands, I raise again the continuing failure by the IDA to get some industry to locate in the industrial park in Marlinstown, Mullingar. This is an ideally located site housing two major indigenous manufacturing industries which are doing extremely well. Notwithstanding the many positive features associated with the site, its location and the town of Mullingar, which has excellent facilities, efforts to attract foreign direct investment have been fruitless to date.
In the context of the policy shift by IDA Ireland where the midlands is now subject to a special focus of its development team to highlight the region's attractiveness and suitability, has Mullingar been elevated to the priority status which it deserves for such a campaign? It is the least the people of Mullingar and the wider north-east region deserve rather than copious platitudes and voluminous words. While the ultimate decision as to where a company locates resides with the company itself, I hope IDA Ireland will redouble its efforts in this regard.
Much of the debate on the statement focused on taxation and multinational enterprises. While multinationals account for a large proportion of our exports, the sector only employs a small share of the workforce. Up to 90% of Irish-owned firms are small and medium-sized enterprises, and 69% of private sector workers work in SMEs. Since 2008, employment in SMEs fell much more than it did in the multinational sector. Future employment growth depends on SMEs. Despite a great deal of rhetoric about the importance of the self-employed and the SMEs, some of the provisions of the economic statement were detrimental to the sector.
There is no justification for the 11% universal social charge rate imposed on the self-employed, particularly as they are not entitled to the same level of benefits as those on lower USC rates. Given the outrage over the low corporation tax paid by Apple and other multinational companies, it is worth noting the 11% USC rate paid by the self-employed earning more than €100,000 is the same as the percentage of tax paid on profits by the multinationals. Unlike the multinationals, the self-employed person pays a 40% marginal income tax rate in addition to PRSI contributions. What is the justification for a marginal rate of income tax of 55% for the self-employed while PAYE workers pay a marginal rate of 52%?
It could be argued that because of the level of insecurity and risk the self-employed must endure, they should pay a lower marginal rate than those in secure employment. Some left-wing politicians and commentators seem to think that the entire self-employed community is well-off. Some, however, take home little more than what they would earn on the minimum wage. It is very inequitable that tax credits given to PAYE workers are not available to the self-employed and low earners. Despite this rhetoric we hear from the Government claiming it is supporting the self-employed and those setting up small businesses, the income tax system discriminates shamefully against the self-employed. A self-employed worker earning €15,000, half the average industrial wage, will pay 14.9% of tax on that income while his or her counterpart in the public service will only pay 1.9% of the same sum. The self-employed person will pay €2,235 while the PAYE worker will pay only €285. The self-employed person will be entitled to fewer benefits despite his or her large tax contribution.
After the collapse of the building industry in 2008, many self-employed builders found themselves almost destitute. Despite having paid substantial sums in income tax, they found in some cases they were eligible only for a means-tested supplementary welfare allowance. Due to the way the building industry is organised, many building workers are forced into self-employment and, while earning no more than PAYE workers, they are entitled to fewer benefits. Far from being a path to riches, being self-employed or establishing a small business is often a high-risk activity with little return.
One of the most misleading figures quoted about Irish industry is that it is the most profitable in the EU. When the multinationals are removed from the picture, Irish firms are among the least profitable in the EU, coming third from the bottom after Lithuania and France. While employers’ PRSI is low in Ireland, other business costs, such as energy and professional services, are among the highest. It is important risk-takers are rewarded. The Government must address some of the inequities identified in these areas. The divide in this area is growing. We are going to depend on self-employment. We have to look at pension provision in this area too. I am aware of the issues in this regard having been employed and self-employed. The self-employed must pay for everything, be it a licence or whatever. This comes out of a non-existent profit and one’s overdraft. Banks are now cutting out overdrafts.
Coming from a small rural area, I know there are many protests about the closure of services in such areas. I am not joining any more of these protests, however. While Government policy can contribute to this, the very people who close these services are the people themselves. There are facilities there which they should use.
Use it or lose it.
Exactly. The Aldi and the Lidl stores are great with lower prices. I know people have very little money and have to get best value. Shoppers can gravitate to those stores but that will wipe out small rural shops, leading to no shops between two major towns. Once the multiples have everyone in, they will increase their prices. We must look at rates and other incentives to keep rural shops open. Otherwise, we will just have big towns with big stores, having wiped out rural Ireland. Then there will be crocodile tears. I am not joining any more protests in this regard. People should save their shops and post offices themselves by using them.
I call Deputy Maureen O'Sullivan who is sharing time with Deputy Noel Grealish.
Bhíos i mo shuí anseo tráthnóna Dé Máirt ag éisteacht leis na hóráidí ó na hAirí. Bhíos ag tnúth le hóráidí dearfacha ón Rialtas seo.
It was to be expected that the Government, the Minister for Finance and the Minister for Public Expenditure and Reform would make the speeches they did, speeches that would present their work over the past four years as positive. There is no doubt about the situation inherited from previous Governments, the crisis, the mess and the catastrophe. Their speeches acknowledged difficult decisions had to be taken with significant sacrifices made by the people.
The problem I have, however, is that not everyone made sacrifices and the pain was not experienced proportionately. Yes, there have been repairs to the economy and the outlook is brighter. People, however, do not feel statistics in their pockets or wage packets. It is claimed the economy is growing at the fastest rate in Europe with 4.8% in 2014, with a predicted 4% growth this year and a stable economic growth of 3.75% on average for the rest of the decade. This is meaningless, however, to many people unless they see an improvement in the money they take home in wages or in their social welfare benefit or pension and until they have disposable income after the bills are paid. Until then the percentages and the statistics come across as pure rhetoric and propaganda. What effect will 4% growth have on those public servants whose salaries generally are down 14%, on those whose pensions have been decimated, those other groups in society who have really suffered, such as those with disabilities and housing issues, and in the areas especially of health and education?
I have no difficulty with a spring, summer or winter statement. I like the idea behind this of standing back and taking stock of where we are, how we got here and where we are going. Maybe we do not have enough philosophical debates in this Chamber. I have heard several speeches on the spring statement. They are glowing from the Government’s side but critical from the Opposition. I have also heard criticisms about the amount of time given to this debate. There would be a criticism if there were not enough time, however. It is important everyone who wants to contribute should have an opportunity to do so.
The disappointment is the way in which we approach this debate. It is the same old, same old with no debate or real engagement on the issues. We are still rooted in the traditional roles of them and us. We had a small example of the alternative during Private Members’ business on Tuesday night on mortgages, with contributions from Deputy Stephen S. Donnelly on this side and the Minister of State, Deputy Simon Harris, on the other side. There was almost a glimmer of how it might be in this Chamber if we had real debate.
Another disappointment with this statement is the use of phrases such as, “We must never again repeat the boom-and-bust economic model” or “Prudent policies support growth and job creation”. Where is the engagement with the Opposition on how to work on this? There has to be another role for the Opposition besides just opposing. There are good ideas on this side of the House but politics continues to be adversarial and confrontational. We are all public servants in this House. I do not know any other sector in the public service, in health and education, where teachers, nurses, social workers or doctors work in an adversarial and confrontational way. Everything is done in a congenial atmosphere with consensus building and working together. That is the rational human being in me speaking rather than the political. I will be dreaming of and hoping for a new way of doing politics.
No one expected a pre-budget statement of who is getting what. I would have liked to have heard more, however, about a vision that will guide us forward on the values that are going to be uppermost, as well as an acknowledgement of the areas and people who were hardest hit and the areas of crisis that would be prioritised. One of these areas is housing. I was disappointed we do not have a vision or an action plan included in this economic statement on this matter. The largest number of calls coming to me every day is about housing. Rents in the private rental sector are increasing between €100 to €400 a month for individuals, couples and families. Many of them cannot pay the increases, even those in employment.
We have had our scandals in the past around child abuse in industrial schools, the mother and baby homes, the Magdalen laundries and, in recent years, children living in direct provision.
The next scandal is the way in which children are being treated when their families become homeless. They have to live in bed and breakfast accommodation or a hotel room and rely on takeaway food. There are also issues regarding their education, physical and mental health, the lack of social events and sports facilities. I hope it will not take a tragedy involving one of those children before the issue is seen as urgent.
Landlords cannot discriminate on the grounds of sexuality, ethnicity, religion or colour, but they can discriminate against those who are offering rent allowance. Deputy Donnelly's motion last week contained commonsense and practical solutions for mortgage arrears. Many of them had been agreed with the Government at the Committee on Finance, Public Expenditure and Reform to try to deal with this mortgage crisis. When will we see action to make a real difference in preventing people from becoming homeless?
The size of families is increasing and we also see adult children returning to the family home. Making money available for home extensions, which can be erected quickly, could help to alleviate the lack of residential space.
There was an opportunity to recognise the housing crisis in the spring economic statement, thus giving real hope to people, especially families with children and also single men. Some of them may never get a local authority flat or apartment in their lifetime. Rhetoric and fine words will not build houses.
Government Ministers have spoken about job creation and everybody wants to see jobs, but we have a working poor. The use of zero hour, dead-end contracts is a worrying trend. Such payments do not allow people to live in dignity. In recent years, employers have taken advantage of the economic crisis to phase out staff on pre-recession contracts, while phasing in contracts that offer no stability or any prospect of a dignified life.
The Minister for Finance, Deputy Noonan, spoke of his plans to increase employment, replace lost jobs and attract returning emigrants. That is all great, but significant segments of society must accept poor working conditions, low pay, few or no benefits, and ridiculous contracts. Jobs are being created but they are not economically viable enough to allow people to live in dignity. There is a disparity between the growth on paper, which the Government highlights, and the lack of growth being felt by ordinary people.
Whatever about able-bodied people weathering a recession, there is one group that finds it extremely difficult. They are the people with physical or mental disabilities, or both. They should not have suffered in this way. Over 600,000 disabled people and their families were not protected during the worst recessionary times. A guiding vision is required for them to move forward.
I am sure that other Members of the House have also received the letter from St. Michael's House about issues of concern for severely affected school leavers. The school completion programme took massive hits and it also had to make up for the shortfall from other cuts to Traveller teachers, career guidance and counselling. Their work was not really appreciated. I took hope, however, from the most recent reply I received about this matter from the Minister for Children and Youth Affairs, Deputy Reilly. The Spring Economic Statement should have included a vision for the most vulnerable sections in society.
The effects of the recession, including cuts, have been felt in my constituency of Dublin Central. For many months, we have had a major battle over community development programmes for the most marginalised. I am aware of the stress, anxiety and tension that has created. There have been some positive outcomes, however, for the Inner City Co-op and the Tolka Area Partnership.
Drug addiction is not confined to Dublin Central but it is an ongoing issue there. I wish the Minister of State, Deputy Ó Ríordáin, well in his new portfolio. There have been issues concerning drug-free accommodation and detox beds.
We have also seen the effect of cuts to community policing. Major work was done by the community policing forum in building up relationships between local authorities and the Garda Síochána. Cuts to community policing have resulted in open drug dealing on so many streets in the north inner city. Although it is a cliché, it is true that we can judge a society by how it treats vulnerable people. I do not think we have done well in that regard.
Ireland is respected overseas and despite the recession we have been able somewhat to maintain our overseas development aid. We are a major contributor in times of disaster, as can be seen currently in Nepal. However, we are moving further away from the 0.7% target figure of gross national income for overseas aid.
We could be a strong advocate for human rights, workers' rights, tax justice and preventing illicit flows of capital. We must ensure that Irish firms doing business abroad are totally transparent in their negotiations.
Nobody enters politics to damage their country; we are all here because we love our country. We want to do our best for the country and its citizens. Any recovery and growth is welcome. However, the facts for people on the ground belie what was said in the spring economic statement. I have tried to outline those facts in my contribution.
The recent TASC report showed that there is a growing inequality gap which is approaching US levels. That problem has to be taken on board. There are other parameters to measure success besides economic ones. They include quality of life, especially for the most vulnerable.
The holy grail of a 12.5% corporate tax rate is fine, but can we be transparent about it? Can we see exactly who is paying what, and are we getting the full 12.5%?
I am delighted to have an opportunity to speak on the spring economic statement that was issued by the Government on Tuesday. Yesterday, the Minister for Finance, Deputy Noonan, spoke about the employment lost over the period of the recession being fully recovered by 2018. The Minister for Public Expenditure and Reform, Deputy Howlin, made much of employment increases in every quarter over the past two years. I want to acknowledge what has happened in my constituency of Galway West and south Mayo, involving the recent job announcements by Apple. It is right next door to me and I look forward to visiting the plant in Cork next week and meeting Apple's senior executives there. It is an €850 million investment involving 300 jobs. We must acknowledge the tremendous work that has been done by the Government and the IDA, as well as Apple's decision to pick Galway.
I also welcome the announcement earlier this year by Zimmer which is setting up a base in Oranmore involving 250 jobs. I compliment Adrian Furey, the general manager of Zimmer, who is a native of Oranmore. It is a great achievement for him to return to Oranmore and provide such employment there.
Emigration was missing from the spring economic statement. In the past five or six years, there has been huge emigration from all towns and cities, but particularly from rural Ireland. No Minister has mentioned that subject in their contributions to the spring economic statement, however. Many families in rural towns and villages have been affected by emigration. GAA and soccer clubs have also been drastically hit. Four years ago, there was one GAA club in the Australian city of Perth, while now there are nine. That shows the level of emigration with young people leaving this nation in recent years. In addition to Australia, they have also emigrated to Canada, the United States and the United Kingdom. It is true that emigrants are returning home, but only some of them.
Hopefully, the economy will grow more, but it is currently only growing in major towns and cities. Rural towns have not benefited from that economic growth. I hope that we will see our brightest and best young people coming back to this country again. I know the Minister of State, Deputy Deenihan, is working to achieve that.
There is one sector of society that has not enjoyed the benefits of an improving economy. Figures released last week by the Central Statistics Office show that while the number of people on the live register has fallen substantially, those with dependants have grown as a proportion of the total. Four years ago, 24% of those signing on had child or adult dependants, or both. The latest figures show that this has now jumped to 29%.
While the overall number of people on the live register has fallen by over 96,000 in the last four years - a lot of it due to emigration - the number of those with child dependants has risen. This is a shocking indication of how young families are continuing to suffer. Doubtless, the high cost of childcare is a major factor preventing parents of young children from getting back into the workforce.
The cost of child care can be the equivalent of a second mortgage for most families. That has resulted in a huge number of poor working families. It is imperative that the working group on child care, established by the Minister for Children and Youth Affairs, can come up urgently with a targeted solution to a problem that is preventing a substantial section of our population from enjoying some of the fruits of the recovery.
I heard few details yesterday of any real relief for those who have paid most for the price of austerity. The middle class, ordinary working people are those whose wages have been cut, in some cases by up to 20% in the public sector and up to 30% in the private sector. It has been even more in some cases. They have been hit by property tax and water charges.
Many of them bought their houses at the height of the boom but are now in negative equity and struggling to meet their mortgage payments. They still have to pay the universal social charge, a temporary emergency measure introduced in 2011, and even though the economy is heading in the right direction the Government will not abolish what is the most hated tax.
There is no relief for the people in middle Ireland who suffered the most but are getting nothing in return. We must start giving back to those people who should be treated as a priority.
The spring economic statement also dealt with the plans for increased housing provision but most of those measures will take years to implement. Previous attempts at solving the housing crisis would not instil confidence that they will be successful.
The waiting list for housing in Galway and elsewhere in the country is out of control due to the fact that many people are finding themselves in the unfortunate situation where they are unable to continue to pay their mortgages or rents. An allocation of €58 million was received recently by Galway City and County Councils to buy, build or lease homes for social housing needs but the houses are not available. Every Deputy in the House can confirm that. How long will it take to build houses? That waiting list will get longer.
An article in the Connacht Tribune stated that there are 4,401 people on the housing waiting list as of 26 April. That figure has risen by over 670 in the past year. Osterley Lodge is full to capacity. People are being put up in hotels because there are no houses available. I challenge the Government to come up with some solution to that problem.
I have a short-term solution. While we are waiting for all these new houses to be built the councils should allocate some of the social fund towards renovating derelict private houses and renting them from their owners. There are many private houses that are derelict in which an elderly person might have died and the house left to a son, daughter, niece or nephew who does not have the money to renovate it. If such houses were renovated they could be rented to the State, which would alleviate some of the problem and be beneficial in terms of renovating old, derelict houses. I ask the Government to consider that solution, which could work well in terms of helping the families in these areas. Also, I would like to see the old family home or the old uncle or aunt's house done up.
A major issue is the home sharing scheme and respite services. Every Deputy in this House will have families coming into their clinics on that issue. It is very difficult to sit at a table with a family who are struggling with a loved one who needs respite care. The respite care grant is being cut. It is not even available in Galway. I have tabled Dáil questions on that issue and the reply from the Minister was that it was a matter for the local health manager but if one meets the local health managers they say it is a matter for the Brothers of Charity but they do not have the funds to provide the service. I beg the Minister to provide the funds for these services because these families are at breaking point. They cannot cope. Some of them will have a nervous breakdown, and the children will then have to be taken into State care.
There are over 400,000 people on hospital waiting lists. I recall some years ago Fine Gael putting down a motion of no confidence in the then Minister, Mary Harney, when the waiting list figure hit 130,000. It is now at over 400,000. Mary Harney brought in the National Treatment Purchase Fund, which reduced the waiting list, but the former Minister for Health, Deputy James Reilly, did away with it. I am dealing with a case involving an 87 year old man whose hip operation has been cancelled five times. The man is in agony.
I will conclude by quoting from an article in the Irish Independent this morning. I offer my condolences to the late Tommy O'Brien, who collapsed at his daughter's wedding. It should be the greatest day for any couple to celebrate their daughter's marriage but he collapsed and died later as a result of a massive heart attack. Eoin, his son, addressed the congregation at his funeral. He stated:
The truth of the matter though is that Tommy shouldn't be laying in front of us here today. He was due for a heart by-pass last September and it was continually postponed due to the waiting lists - well that waiting list is now one name short and we are down a wonderful man.
Our anger at losing Dad in this way is hard to quantify.
There are political figures in the congregation today. We can accept your sympathy and your kind words, but we shouldn't have to accept this level of health service in a first world country.
In conclusion, Eoin stated: "To you I say 'please do more'". I ask the Minister to please do more to help the most vulnerable in our society.
I call Deputy Bernard Durkan who I understand is sharing time with Deputy Peter Fitzpatrick.
I believe we have two separate slots.
Deputy Durkan has 15 minutes.
I think I have 20 minutes now and, according to the Whips Office, my colleague has a separate slot.
I listened attentively as Deputy Grealish mentioned a very important issue because I heard the same views expressed in the middle of the boom when money was falling out of the trees. It was not possible to focus on the issues at that time but enough of that, we will not go there.
They say that Moses wandered in the wilderness for 40 years. In those days poor old Moses did not have the benefit of the GPS and so he wandered around for all of 40 years. When I was a child I never understood what was wrong with him. He never found the promised land but at least he was within sight of it. Listening to the members of the Opposition over the past few days it seems their intention is to lead the people into the wilderness when the promised land is in sight. That is an extraordinary development, and in biblical terms there would have been an instant massive retribution.
The members of the Opposition have not been very inventive. They have accused the Government parties of more of the same and said there is a lot of back-slapping and self-congratulation on this side of the House. Nothing has changed on that side of the House because the Members are as negative as they have been every day for the past four years. I cannot understand how there could be any congratulations or back-slapping on this side of the House. The Members opposite never ceased to forget where they are coming from and where they are going, and they keep reminding us of the same negative things. There has not been a single positive word from them in four years, with one or two notable exceptions who I will not mention. I am tempted to mention them-----
-----but the order of the day now appears to be that everybody is mentioned, particularly people outside the House who have no possibility of answering any accusations.
The members of the Opposition seem to have forgotten one very important factor. One speaker, Deputy Shane Ross, correctly stated earlier that this Government inherited the most awful economic situation the country ever experienced. He went on to say that the Government was lucky. It was not lucky because every negative event that could have happened both within and outside this House happened. Challenges were a daily occurrence. In the first two years in government there was not a morning that a controversy did not come down the tracks. It was doom and gloom on issues such as whether the euro would collapse. The prophets of doom and gloom were saying we should have rejoined sterling. We were told repeatedly that the cause of our demise was the euro, and that we should have burned the bondholders. At that time, when we needed €16 billion that we did not have to spend on our public services, they said we should have burned the bondholders but we would not have been able to borrow any more money in the international markets and we could have starved.
What did we avert? From what did we save ourselves? From what did the people of this country save themselves? In the past four years the resilience of the people and the leadership of the Government averted disaster.
They averted a situation where salaries and wages across the public service would have been reduced by 65%. While it is correct that there were cuts all over the place which hurt a lot of people, it was not 65%. We were told we should emulate the Icelandic model, the Swedish model or the Finnish model. One would not see so many models in a fashion show. Then the Greek model was trotted out. There is not much talk about the Greek model now. They do not remind us too often now of its benefits. I presume they have forgotten it on the other side of the House. More important, there was talk of a second bailout in 2011-12 when the Government had been in office for barely a year. It was inevitable, we were told. The children of this nation were suffering and their children's children were going to suffer and there was nothing but oblivion in store. There was as black cloud over the nation that was never going to lift again. People were leaving the country in their hundreds of thousands. We were reminded of all this on a daily basis. I congratulate the Irish people for having the resilience to stand up to that barrage of negativity and the total lack of confidence in their ability to revive themselves and to rise up again. We were told on numerous occasions that we should spend more and spend our way out of the economic disaster. That was always the policy of Keynes and there were those on the other side of the House speaking about him as if he was a buddy of theirs with whom they were drinking in the pub every second night. They were wrong about that too. The policies followed by the Government, harsh as they may have been, brought results and saved the country the worst excesses of what could have happened. What we have to talk about and think about now as a people is how the worst was averted. All due credit goes to the people of this country and the Government for the leadership it gave. If there had not been leadership over the past four years, this country would have slid below the surface and not reappeared for many years.
One of the things that has been mentioned was the cyclical nature of development in the economy over the years. We have been told this is inevitable, but it is not. With proper forward planning, one can avert all these pitfalls or at least minimise them to a huge extent. If we look at the situation that faces us now, what are the basic items of infrastructure needed for a growing economy over the next 20 years? We need an adequate road structure. We need an adequate supply of water that is on tap at all times. That is needed to a much greater extent than was the case over the past 20 years. We need investment in urban and rural areas to have that supply. It is a taboo subject, however, because according to the Opposition no one wants to pay for water. They say we have the right to water. Of course, we have the right to water. Everybody has the right to water and can go to the river or the well and take it from there. That is what we did in this country for many centuries. However, we have a different situation now. There is a greater demand and a greater need for investment in basic water infrastructure. If we do not now provide the infrastructure required, we will have failed the next generation. To those who admonish us on a regular basis that we do not do in time the things we should, I ask what are we to do now? Do we succumb to the promises of the Opposition and spend more money on ourselves or do we spend it on infrastructure and provide for a long, ongoing and steady economic development in this country? Which do we choose? We have heard people call on the other side of the House for spending money we own in one of the major banks. We have 89% of the value of the bank. Implicit in that is to get our hand in the till and toss it out to people for whatever purpose. It is the craziest notion I have ever heard. I have never heard anything like it in my life and I am sure no one else in the House has either. What we must do now is be careful. We have dragged ourselves up albeit with huge sacrifices. Now that we have done so, let us take the next steps carefully. Let us make absolutely certain that we do not dump on ourselves again and walk ourselves into another cul-de-sac to find our way blocked again. The next part of that vital infrastructure is transport. That means rail, road, air, sea and bus to bring the people of the country closer together. We live in a global economy nowadays. Ireland is not the isolated place it used to be. We have access to modern transport and technology which we must use to the best of our ability to spread the economic benefits of good planning throughout the country for the foreseeable future. That can go on for up to 50 years with steady improvements and an absence of the cyclical downturns we have experienced in the past.
Another thing I am a bit worried about is the fact that some Opposition Members have become desperate. I can understand why. They must be very disappointed. Their predictions of just a few years ago have all fallen by the wayside. The Government must continue along the same road for the next couple of years. It must be prudent and careful in what it does, encourage investment and encourage employment. Unfortunately, the prophets of doom will be out of business. What will they be able to say to the community? They will have to say "Actually, we were wrong". They are going to change their tack to something else, obviously, and try to find another scapegoat in order to further their own ambition. That is a political ambition that has nothing to do with reality. I mention in particular some other things that have been trotted out over the past number of days in relation to the ailments and ills of our economy. When the people on this side of the House were in opposition, we were ironically blamed for some of the things that happened despite the fact that the then-Opposition was excluded until the last-minute phone call at 7 a.m. to say: "The country is broke, we have a very serious problem and now have to call in the Opposition." That is how much notice we got. People have forgotten that. There is no more reference to it on that side of the House.
It reminds one of the Arms Trial.
Absolutely. Nobody refers to it on that side of the House. It is one of the things we have had to live with. During the period of doubt about the IBRC and other institutions, I was the recipient of countless phone calls from small savers on a daily basis who were inquiring about what they should do with their few shillings. They said they had been saving for a few years and asked if they would have to take their money out of the banks and hide it in boxes under their beds. Several people did that. The reason was they were afraid the banking system was going to implode, that bondholders would be burned and that they would have nothing to offer their families or even enough money to bury themselves. It was a sad state of affairs. I hope we averted that particular problem.
Another area that is taboo now is energy. We tend to avoid the difficult issues. I predict that if the country does not address over the next four or five years the energy problem and our energy requirements, as with water, we will find ourselves beset by carbon penalties that will cripple us. It will not be the European Union, but the international community that will impose those penalties on us. Whether we like it or not, if we fail to put the machinery in place to increase dramatically the alternative energy available to us, a high price will be paid. It will be paid, inter alia, by the farming community as it will not be possible to complete Food Harvest 2020. Certainly, in the aftermath of the abolition of milk quotas, the expansion of the dairy and beef industries cannot take place and will be hit by huge penalties and fines across the board. We can do all these things, however, if we plan in time and adopt the necessary measures.
Another aspect of vital infrastructure is housing. Housing is a vital part of the economy and it is in an awful state currently.
There is a simple reason for that. There was no forward planning. For 15 years there was no particular planning for local authority housing. There were no targets. It was handed over to the private sector and voluntary housing agencies. These agencies are excellent in dealing with special needs housing, sheltered housing and other particular areas of housing. However, for the general thrust of local authority housing, there is only one answer: build enough houses through the local authorities and ensure the local authorities are to the fore in meeting that market. That has the effect of balancing the value and the cost of housing generally throughout the economy. It means there is competition, provided by the public sector, in the marketplace. There is no harm in having a little competition between the public and the private sectors. If we have that competition, we will have houses that are good, valuable, safe and reliable. These houses will last a lifetime and will be available to people on the housing lists.
Deputy Stanley mentioned that there are almost 8,000 people on the local authority housing list in my constituency of Kildare. More than 7,000 people are on that housing list and there are housing emergencies every day. Kildare was one of the places that experienced a boom during the building boom. Houses were being built to beat the band on a daily basis. I have hope for the plans put in place by the good people in this House.
How many more minutes do I have? I want to leave five minutes for my colleague.
He will have only four minutes and 30 seconds now.
I am sorry about that. I am sure the Chair can extend the four minutes and 30 seconds. Perhaps if we have long minutes - Irish minutes.
It is now four minutes and 10 seconds.
I will conclude by saying that there are many other things that I would love to deal with but it is not possible to do so in the length of time available. Shared ownership loans have been referred to. We have done a lot of work on them as well and we are going to do it.
Is Deputy Durkan sharing his last few minutes?
I am operating on instructions received.
The Government's slot can only be 20 minutes.
I will therefore concede to my colleagues, each and all of them, and remind them that at some stage in the future I expect them to do the same thing for me.
That is very generous of Deputy Durkan. I call Deputy Fitzpatrick who has four minutes.
I welcome the opportunity to speak today on the spring economic statement. I first entered politics in 2011 when the people of Louth and east Meath gave me the great honour and privilege of electing me to represent them. When we took office in 2011, we were faced with the biggest financial crisis in the State's history. We had lost our financial independence, had to rely on a bailout to keep the country going, more than 300,000 people had lost their jobs, emigration was the only option for our younger generation and our economy was in free fall. In short, as a direct result of Fianna Fáil's reckless policies and its sheer greed in wanting to hold on to power, our country was on the verge of collapse.
We must remember that this was only four years ago. When I read the spring economic statement this week and consider the progress we as a country have made in that period, it is not difficult to understand why the economy is now the envy of our partners in Europe. The Opposition parties are in denial. It does not suit their political aims to have an economy that is growing or a people who are finding their feet again. If we had followed the advice of Sinn Féin and Fianna Fáil, I dread to think of where we would be today. Their advice was to default or leave the eurozone. They were prepared to walk away from 40 years of economic progress in Europe.
Where are we today? The facts speak for themselves. The bailout is over. Austerity is over. The troika is gone. Our economy is growing. I know better than most that the recovery is both fragile and weak and is not yet secure. I meet people every week who continue to suffer as a direct result of the collapse of the economy. I hear stories of families struggling to make ends meet and parents missing their children who have had to emigrate to find work. Too many people are still out of work. The people of Ireland have made great sacrifices over the past four years for the sake of Ireland. We must never forget that. They must be rewarded for their hard work and determination. It has been proven time and again, and I see it every week in my clinics in Dundalk and other parts of Louth, that people who have secured jobs are the ones who are starting to reap the benefits of the recovery that is taking place. In Dundalk alone there have been more than 1,000 new jobs announced by companies such as eBay, PayPal, Prometric and SalesSense, to name a few. The unemployment rate has fallen by almost 30% and by almost 24% in Ardee and in Drogheda, respectively. To put this in perspective, the number of people who have come off the live register in County Louth over the past four years is almost 3,500.
We know this is still not enough. This Government has set out a clear plan to get Ireland out of the mess left behind by the Fianna Fáil economic crash, namely, the creation of sustainable jobs. Our spring economic statement has set out a four-year plan with clear targets for jobs creation, including 100,000 new jobs over the coming months, which is one year ahead of plan. By the end of next year we will have net immigration and by 2018 we will have replaced every job lost due to the Fianna Fáil economic crash. By 2019 we will have more people in employment in this country than ever before.
We are driving towards an economy that will have full employment and in which every person who wants to work will work. The Government and I know that these targets are ambitious but we also know they are achievable. We plan to grow the economy by between 3% and 3.5% each year. There will be no more boom and bust cycles. As the Taoiseach said, we are never going back to the "when we have it, we spend it" approach of Fianna Fáil and nor will we follow the "even if we don't have it, we'll spend it" approach advocated by Sinn Féin. Our economic plan offers reward for hard work and not quick profits for speculation.
The universal social charge was introduced by Fianna Fáil. I am pleased to see that we are now starting the process of phasing it out of our tax system. In our first budget we removed more than 330,000 low-income families from the universal social charge net and in the previous budget we removed a further 80,000. By the next budget, we will have removed more than 500,000 people from its net.
I am pleased with the progress we are making but understand that more needs to be done. The people have a very clear choice moving forward. They can choose a stable government that will secure our recovery or a government that will wreck our future with populist promises it simply cannot keep.
I call Deputy Fitzmaurice who was allotted 20 minutes, but there is only four or five minutes remaining.
I thank the House for the opportunity to speak on this issue and understand that the Chair may have to call time on it shortly. The spring statement is a new idea in Ireland. I am not that long in this House, but from what I understand it had been circulated in recent years. It is basically a statement of where we are and a projection of where we are going. There are positive things in it. We do not need to be always negative. The projections include figures of between €1.2 billion and €1.5 billion in revenues with which we can try to alleviate some of the difficulties facing people at the moment. That is to be welcomed. I hope the forecast will stay on target during the course of the year. It would be great if there was even more available to help alleviate some of the problems because people in Dublin and every other part of Ireland face many difficulties. There is a projection of more than 2 million people in employment, which is good. We need to keep a focus, however, on the quality of these jobs and the salaries being paid. Some of these jobs are low-paid, but at the same time, every job created is a job to be welcomed.
There is one major problem. We seem to be living on an island of two Irelands. Dublin seems to be faring well, which is a good thing and no one begrudges that. There appears to be a lot of work in Dublin and a lot of foreign direct investment companies are coming to Dublin.
While this is welcome, the knock-on effect involves problems with housing and traffic congestion. Problems may be also caused in places where there is some prosperity.
The serious housing issue needs to be addressed. I have spoken with a few county councils around the country. The day of the budget last October was my first day in the Dáil. Everyone would welcome the announcement on social housing, but one should dig into the reality of that. We have great dreams in terms of what we are announcing, but the money has not yet been utilised because, when one decides to do some of these jobs, greenfield sites are considered, meaning that planning permission must be acquired and the land must be bought. All of this takes nine, ten or, if there are objections, 11 months. Many of the houses in question will not come on stream this year. It may be even a struggle to bring some of them on stream next year despite the announcement of X amount of houses this year. When we make an announcement, there should be substance supporting our claim that we will deliver. It should not just be aspirational. This is important.
I welcome the fact that some towns and cities are picking up, but other towns across Ireland have not yet seen an increase in prosperity.