Dáil Éireann debate -
Tuesday, 5 Jul 2022

Vol. 1024 No. 7

Ceisteanna ó Cheannairí - Leaders' Questions

Deputy Mary Lou McDonald

We have just two weeks left in this Dáil term, which is two weeks for the Government to intervene with measures to alleviate the enormous pressure the cost-of-living crisis is placing on households. Yesterday, the Ministers for Finance and Public Expenditure and Reform, Deputies Donohoe, and Michael McGrath, respectively, announced to great fanfare that budget 2023 will be brought forward to 27 September. This does not mean very much to workers and families who are at breaking point today, 5 July. A week is a long time for households when every euro counts. It is a very long time when one cannot afford to pay extortionate energy bills or put fuel in the car or food on the table. It beggars belief that people who will struggle to make it to the end of this week are being asked to wait another 13 weeks for help from the Government.

This lack of urgency is especially stressful for parents who face the most expensive back-to-school period for a generation. As the Tánaiste knows, children go back to school in late August, not at the end of September. Schoolbook lists have already arrived, Bus Éireann has sent out the reminder emails for the fees for school transport, the letters requesting voluntary contributions are on their way and school uniforms, sport and PE gear will have to be bought in the next few weeks. Parents will fork out a small fortune. Many will be forced into debt simply to get their children back to school. These are the households pressed to the brink. My office is inundated with calls from families that are at breaking point. I am sure the Tánaiste has received similar calls. These are calls from families who never thought that they would need support from the State or from charities, much less from food banks, in order to make it to the end of the week. They have no idea where they will find the money to get their children back to school in September. The budget on 27 September will be far too late for these families. They do not have the luxury of waiting another 13 weeks for the Government to show up. They need action now.

Tá teaghlaigh i ndeireadh na feide le costais scoile ag ardú as cuimse. Caithfidh an Rialtas dul i ngleic leis seo láithreach. Tá mé ag iarraidh ar an Rialtas síneadh ama a thabhairt maidir leis an liúntas éadaí agus coisbhirt don scoilbhliain nua, agus an liúntas sin a ardú, chun sos a thabhairt do thuismitheoirí atá faoi bhrú millteanach.

Sinn Féin will bring a motion before the Dáil tonight. The motion includes proposals that would ease the financial burden of back-to-school costs and give families a real break in the here and now. As part of these measures, we are asking the Government to act immediately to improve the back-to-school allowance in two ways. First, we are asking it to extend the allowance to middle-income households. These are the households that currently receive no State support but who are at the pin of their collar trying to make ends meet. Middle-income households must get the back-to-school allowance and the help it offers.

Second, for low-income families and for those on fixed incomes, we want the Government to increase the back-to-school allowance by 50% to help meet the soaring costs of getting children back to school.

These are very reasonable, sensible and necessary asks. There is an urgency now in all of this. If action is taken in respect of these matters, it makes a massive difference at what is a very tough time for so many families.

The Tánaiste

I acknowledge that we are experiencing a cost-of-living crisis. We are seeing inflation at a level that has not been seen for almost 40 years. While this is driven by international factors in the main, it is very much being felt in every home across the State. Everyone is feeling the squeeze and, of course, those on lowest incomes are feeling it most acutely.

The Government's response has been dynamic and we have been responsive to the needs of people during this period of high inflation. That response started in January, when the budget measures kicked in. There was an increase in the minimum wage, reductions in income tax, increases in pensions and welfare payments and a number of targeted supports, particularly in respect of the fuel allowance. That was worth approximately €1 billion. Since then, another €1.4 billion has been given back to people in the form of: a reduction in excise on petrol and diesel; a 9% VAT rate on electricity and gas - the lowest such rate ever on both; a deduction of €200 from people's energy bills; cheaper public transport; cheaper school transport; and a targeted fuel allowance payment to the poorest families in the State.

Over the summer, people will see increases take effect as well. In the budget, there was a small increase in the back-to-school clothing and footwear allowance based on inflation projections at the time. Families will be receiving that payment starting next week. More than 120,000 families in the State will receive the back-to-school clothing and footwear allowance next week in respect of over 200,000 children. Because going back to college is, like going back to school, expensive, people will see the changes that were announced in the budget taking effect. There is an increase in the Student Universal Support Ireland, SUSI, grant and there will be more people qualifying for that grant, together with an improvement in the adjacency payments. A package is in place to help with the cost of going back to school and to college. That is an increase on last year and it will kick in before budget day at the end of September.

We will have the budget in September. There will be two sets of measures. These are measures that are one-off and can take effect within weeks of the budget being announced. The latter means that people will have more money in their pockets come the autumn. Then there are the regular actions that will take effect on 1 January.

As the House can see, the Government is responding to this crisis as it unfolds. There has been action in January and since then and there will be action over the summer, in September and again next January. That is the right approach to take because this is an unfolding situation. It is completely appropriate that the Government should help people with the cost of living, given that our economy is strong and we have the financial firepower to do so.

It is also important to point out that no budget on its own is going to enable us to tame inflation. A comprehensive anti-inflation strategy is required which involves: action at an international level, working towards peace in Ukraine; action on monetary policy by international central banks; action at European level by the European Central Bank involving changes to the European fiscal and state aid rules and other things; and, of course, action at home, particularly to bring down some of the high structural costs that exist in this country and that are out of line with the level of such costs in other northern European countries. One example I can give in respect of the latter is the cost of childcare.

Deputy Mary Lou McDonald

I thank the Tánaiste for his reply. Those high structural costs, as he knows, long predate this particular cost-of-living crunch, which I am sure he would acknowledge.

The Government's response to these matters has been slow. It has lacked urgency but we can agree to disagree on that. What I would like us to agree on is that families preparing to get children back to school in late August need help and assistance now. I put it to the Tánaiste again that it is crucial that middle-income families have access to a back-to-school payment.

The Tánaiste pointed out that there was some improvement in the budget. That is now grossly insufficient.

We calculate that as many as 500,000 households need to be given this payment in middle-income brackets. Furthermore, those on lower incomes and fixed incomes need a substantial hike in the level of the payment made to them. Will the Government move on this urgent matter now? The children will go back to school in August and as I described, the bills and the pressure for payment is happening now and we need action now on these precise measures.

The Tánaiste

If there is one thing we absolutely agree on it is that back-to-school is really expensive for families, and so is back-to-college. That is why there is an increase in the back-to-school clothing and footwear allowance which will be paid from next week. It is why there is an increased SUSI grant for those going to third level and is why we changed the rules only in the last few weeks to allow students to earn more over the summer without affecting their grant. These are changes that are taking effect over the course of the summer. However, I acknowledge, particularly in respect of back-to-school, that when we made those changes on budget day, we anticipated inflation being much lower than it is now. For that reason, the Ministers, Deputies Michael McGrath, Humphreys and Foley, have been in discussions today and yesterday to see if we can do anything to enhance the back-to-school package, acknowledging that September will come too late for back-to-school. That work is under way.

Deputy Róisín Shortall

We all know that the cost of living is out of control, inflation is now almost 10% and prices right across the economy are soaring. On Friday Electric Ireland hiked its prices for the second time in just three months, adding a further €350 to the cost of gas and €164 to the cost of electricity. Other providers will undoubtedly follow suit. Families who are already struggling to pay their bills and put food on the table must also cope with the huge cost of back-to-school, which costs up to €1,500 per child. Where does the Tánaiste think those families will get the money for back-to-school, because it is not coming from the State?

The back-to-school allowance was actually more in 2007, 15 years ago, than it is now, which is really pathetic. Is it any wonder that last year almost one in four families went into debt to pay back-to-school costs? This year the figure is likely to be significantly higher than that because the Government is refusing to help. The Tánaiste and his Cabinet colleagues have acknowledged that ordinary workers and families are under immense pressure at the moment. They have also said that exceptional measures in addition to the budgetary measures would have to be taken to assist them. However, when he announced the summer economic statement yesterday, the Minister, Deputy Michael McGrath, said that once-off exceptional measures would not be announced until the September budget, which is three months away. That delay will guarantee one thing: more and more people who are barely scraping by at the moment will fall into poverty and debt.

Why is the Government waiting? Is it because it has run out of ideas or is it because of division within the Government? We know that there is disagreement in Government about whether it should introduce another universal electricity credit. Is it refusing to act now because of wrangling behind the scenes about the nature of the measures to be introduced? We heard much about listening to the experts during the Covid pandemic, but the budgetary advice the Government is getting now appears to have fallen on deaf ears over recent weeks. The Government is not listening to the experts such as the ESRI which has said that the Government has the capacity to introduce targeted measures now and critically they must be targeted at those families most in need.

It is truly unforgivable that the Government is about to swan off on its holidays when the Dáil goes into recess for two months in the knowledge that so many people are in dire need of assistance.

Deputy Heather Humphreys

We are not swanning off.

Deputy Róisín Shortall

Therefore, will the Government reconsider and to do the right thing? Will it introduce an emergency budget now before it is too late for so many families?

The Tánaiste

I again acknowledge on behalf of the Government that back-to-school is a very expensive time for families and puts much pressure on family budgets, as is also the case with back-to-college.

The Government is responding. The back-to-school clothing and footwear allowance will be paid from next week. There is an increase to €160 for children aged four to 11 and €285 for children aged 12 years and older. There is an increase in the third level grant, the SUSI grant, that kicks in in September. We have also made changes to make more people eligible for that grant and to allow students to earn more over the summer without it affecting their grant next year.

As I mentioned earlier, Government accepts that when we announced the increase in the back-to-school clothing and footwear allowance in January, we did not anticipate that inflation would be as high as it is now. Our projections were for inflation of maybe only 2% or 3%. It is now closer to 10%. It is precisely for this reason that the Ministers for Education, Social Protection and Public Expenditure and Reform were in discussions yesterday and today at the request of the Taoiseach, the Minister for the Environment, Climate and Communications and me to see if they can come up with some measures to enhance supports available to families when it comes to back-to-school. We acknowledge that the end of September is too late in that regard and that work is being done at the moment.

Deputy Róisín Shortall

I do not know if the Tánaiste realises how difficult it is for low-income families. The Society of St. Vincent de Paul is really concerned about the summer holidays because it does not know what is going to happen to those families that are utterly dependent on breakfast clubs and school meals. Where is the food going to come from during the summer holidays? What will happen when parents just cannot afford food, school uniforms, shoes for going back to school or books? The Tánaiste talks about looking at this again. An enormous catch up is required in order to bring the back-to-school allowance anywhere close to what is required. How will parents cope when they get a request for a so-called voluntary contribution because the State refuses to adequately fund all our schools? We need answers to these questions now. Poor families need answers now. They cannot wait three months.

The Tánaiste

I understand it very well. The hot school meals programme, which is working extremely well, was introduced by my colleague, Senator Regina Doherty, when she was Minister for Social Protection. The back-to-school clothing and footwear allowance is being increased by the Minister for Social Protection, Deputy Humphreys. The former Minister for Education, Deputy Joe McHugh, introduced the grant to encourage schoolbooks rental schemes and extended that to all DEIS schools so we understand very well that the cost of going back to school is very high for families. This is nothing new but has been the case for years. We were working on it then and under this Government, we are working on it now. In particular, the Minister for Education, Deputy Foley, put much effort into discussions today and yesterday with the Ministers for Social Protection and Public Expenditure and Reform to see if there is more we can do in addition to what is already committed to - an increase in the back-to-school clothing and footwear allowance kicking in next week and an increase in the SUSI grant for third level kicking in in the next few weeks. However, we acknowledge that when those decisions were made last year inflation was not anticipated to be as high as it is now and that waiting until September is too late specifically when it relates to back-to-school and back-to-college.

Deputy Matt Shanahan

I have significant concerns regarding the absence of publicly available data on Government spending, a matter I raised previously with the Tánaiste. In particular, capital spending is a black hole. We see the money going in - some €87 billion this year, €12 billion of which is on capital projects with €165 billion heading out the door by 2030. We see bits and pieces of the outcomes - often just the stuff that gets attention, the calamities or the patronage. How can this House provide parliamentary oversight of public spending when appropriate standardised spending data is not provided by Departments? Budget 2023 is being framed at the moment and this Dáil knows virtually nothing of the choices and plans. Parliamentary questions on spending are answered glibly if they are answered at all. Ministers usually pivot away from the questions asked. The Committee of Public Accounts and the Comptroller and Auditor General only provide look-backs to identify failures in process. Our national economic dialogue bizarrely operates with virtually no standardised data. This House offers benedictions rather than debate over voted expenditure. The capital tracker, which is a welcome gesture towards better data, has withered becoming more opaque with every subsequent version.

It is simply impossible to see where public money goes. Vast parts of Ireland feel now that they are frozen out of a fair share of capital spending, such as in the midlands, the north east, the west and my home region in the south east. It is these regions that have turned their backs on the traditional parties of Government.

My personal analysis suggests that the bulk of discretionary spending is being funnelled into Dublin and Cork, which are homes to almost all of our Ministers. Do not tell me that I am wrong, or name check for me some projects that are happening in my neck of the woods. Show me where the totality of money is going. Publish proper, granular spatial data on public spending, particularly on capital projects. If not live or future-looking data, the least we should be able to see is historical data on completed projects. With €12 billion of capital expenditure this year, the southeast should be getting €1 billion. Waterford should be getting €330 million. With the data available to me, I estimate that the whole south east is just getting €330 million, which is a third of its due. Please do not tell me that I am wrong or that I am incapable of understanding economic data. Show me the regional breakdown of the €12 billion in capital spending. Without the data, we just look continually to the think rule of outputs in our hospitals, higher education, our public transport, our roads, our airports and our urban infrastructure. Why can ordinary people in this country not see where the money goes?

The Tánaiste

I thank the Deputy for raising this important policy question. I agree that we should have better data on how money is spent and on where it is spent. That is something that we are very much aligned on. I also agree that governments do not have any money. The only money that governments have is the money that we take from people and business in the form of taxation. It is not our money. It is the people's money. That is why we have to spend it responsibly. That is why we have to account for it properly.

We do have strong accountability mechanisms. We publish accounts every year. Every Government agency does so. Every Government Department has an annual report. We have a Committee of Public Accounts, which is chaired by the Opposition and which has considerable powers. We have a constitutional office in the Comptroller and Auditor General, who is responsible for auditing Government spending. Therefore, we have strong accountability mechanisms in that regard.

Capital spending happens all over the country. Sometimes when people do regional analysis as to how it is spent, they only focus on the big projects. I have seen some of the reports that Deputy Shanahan has mentioned. Often, they only count projects of over €30 million or €40 million. That is a misleading analysis. Of course, big cities will have the bigger, expensive projects. In more rural areas, there will be many smaller projects. Any analysis that only counts investments above a certain threshold is only and can only ever be a partial analysis.

One of the biggest investments that is under way at the moment, probably the biggest single investment that is under way at the moment in the State, is the national broadband plan. That is heavily skewed towards regional areas. It includes all regions but particularly regions outside of Dublin and areas that are most rural. The more rural the area, the more that project costs. The last mile is the most expensive aspect of that project. That project is doing something that almost no other country in the world has done. It is bringing fibre broadband to pretty much every home, farm and business in the country. It is really important, in my mind, in future proofing and digital proofing our country. The targets for its implementation have been revised after the Covid-19 pandemic. However, they are now being met. We now know that the cost of that project will be less than had originally been budgeted for. It will come in at under €3 billion. That is significant. That is the biggest single capital project happening in Ireland at the moment. Metro when it happens will be bigger, but at the moment this is the biggest one and it is very much focused on regional development and on rural areas. Yet, it gets left out of many of these analyses. I do not know why.

Deputy Matt Shanahan

It might interest the Tánaiste to know that I asked the Library and Research Service, L&RS, to conduct a review for me last year. It told me that it could not do it because it did not have adequate transparency around data. That is something that the House needs to take up.

I will digress to share my frustration about capital downgrades. This morning we heard about a downgrade of vascular surgical services at University Hospital Waterford. That came on the back, I would say, of another steered report that has again ignored completely the population demographics down there; the fact that we have a rising population; the fact that we have a model 4 interventional cardiology and oncology service; the fact we have one of the busiest trauma units in the country; and the fact that we have one of the busiest orthopaedic services in the country.

Yet again, there was another steered report to send services up the road to Cork and take them out of Waterford.

A couple of days ago, the Tánaiste made a reference in the national media to difficulties in recruitment to the cath lab in University Hospital Waterford when, in fact, interview panels were not even put together and applications were not even made available for the jobs because they are not even advertised. The Tánaiste has been getting briefings and in the past he sometimes suffered from getting failed briefings from the South-South West Hospital Group.

What I really want to know is when will the Government start to defend the south-east region model 4 hospital with adequate finance and capital? When will it publish some funding strategy for University Hospital Waterford?

The Tánaiste

I am not up to date nor have I been briefed on the issue relating to vascular services in Waterford. I will check up on that. I got the Deputy's email the other day regarding the staffing of the second cath lab in Waterford University Hospital not having proceeded. I am concerned about that too and I have spoken to the Minister, Deputy Donnelly, and Senator Cummins about it. I will look into that further. It is important to get on with staffing the second cath lab in Waterford University Hospital. Staffing is difficult and-----

Deputy Matt Shanahan

That is why what we advertise counts.

The Tánaiste

-----there are not many people in Ireland or the world who are currently looking for employment in the cardiology space. We need to begin that recruitment process to recruit as many staff as we can, however, and extend the hours of that service. That is something on which the Deputy can be sure I will follow up.

With regard to the health service generally, the fact is that investment in our health service is unprecedented. The figure is €22 billion this year, which is 50% more than when I was Minister for Health, which was not that long ago. More staff and doctors are working in our health service than ever before. We have 1,000 more beds than two years ago. There have also been significant investments in the south east, with the Dunmore Wing and second cath lab being part of that.

Deputy Michael Collins

The latest statistics from the EUROSTAT agency estimate that Ireland's annual inflation hit 9.6% in June. This is the highest rate of inflation since 1983. Ireland's real economy is in a very dire place today. The Government is good at cherry-picking certain economic variables and spinning those to make matters look better but the sad reality is that this country is now more unequal than at any point in our history.

A recent nationwide survey of 2,300 people by The Mirror highlighted that 64% of Irish people feel they are living in relative poverty. Eight out of ten Irish people are struggling to pay their bills and more than half are under pressure with their mortgage repayments. A figure of 64% are eating less healthy to save money, 58% spend less money on their children, 88% are staying at home and are stopping social activities and 39% have asked family and friends for financial help. The findings of this survey tally with what the people in my constituency of Cork South-West tell me.

The cruel and heartless decision by the Government not to introduce an emergency budget illustrates that it is out of touch and cares little about the struggles of these people. Instead, the Government is behaving like a British landlord in Ireland during Famine times and looking the other way. It is a shameful and despicable treatment of the Irish people.

The current cost-of-living crisis is financially crippling to all lower-income earners, including pensioners, struggling mortgage holders and the unemployed. It is also having a disproportionate impact on all rural residents. Farmers face a 300% increase in the cost of fertiliser combined with the huge impacts of fuel and feed costs. Fuel costs are leading to fishermen's boats staying tied up at piers across the country. The skimpy packaging measures announced by the Government to date are grossly insufficient. It feels like a wet sticking plaster on a wound given the depth and impact of this crisis. That is why a robust emergency budget, for which the Rural Independent Group tabled a motion back in February and which the Government blocked, is now long overdue.

The Government has been idle, allowing costs to soar while simultaneously benefiting from record VAT excise duties and carbon taxes from fuel, home heating, electricity, household goods, building materials, fertiliser and animal feed. The only meaningful way to tackle current inflation and protect consumers is through taxation reliefs. Unfortunately, swift Government action on this or any public crisis is rare or reserved only for the large corporate vested interests such as banks that were bailed out by Fianna Fáil and the Green Party. Standing by and paying lip service to this emergency is no longer a tenable position to hold, however. Measures introduced in a budget that will be brought forward by two weeks in the autumn will be too late and pushes the response out into 2023 for many.

We need action now from Fianna Fáil and Fine Gael. Will the Tánaiste immediately introduce an emergency budget? Will he immediately drop the carbon tax on fuel, which will help struggling families, or will he brazenly sit on his hands leaving the Irish people to lose their homes, fishing boats, businesses, lorries and livelihoods?

The Tánaiste

I am not interested in cherry-picking data or statistics. I am a medical doctor by training. I take science and data seriously and I always like to see and know the numbers. When I seek the data, I seek them from reputable independent bodies such as the Central Statistics Office, CSO, or the Central Bank, which act independently and produce robust data that we can stand over. I tend to be a little more sceptical when it comes to surveys that are done by lobbyist groups, interest groups or NGOs because very often those data are non-scientific.

The facts are that the employment level is at the highest it has ever been in the State at 2.5 million and median incomes are rising, notwithstanding the impact of inflation. We would not see income tax receipts being as strong as they are if that were not the case. There are more people at work in the country than ever before, with employment growth in every region of the State. The highest employment growth last year was in the Deputy's region of the south west, followed closely by the south east.

The CSO compiles data on income distribution. It is contained in the survey on income and living conditions, SILC, which is published once a year. It is the only robust scientific data on income inequality. It measures something called the Gini coefficient. In Ireland, we have seen income inequality narrow and reduce in the last five to ten years. It is trending downwards, unlike in most developed countries. The number of people experiencing consistent poverty and of people at risk of poverty and deprivation can go up and down year by year, but it has been trending downward significantly over the past five or six years. Those are the facts. People are absolutely entitled to their opinions and ideologies but they are not entitled to their facts. Those are the facts for anybody who is interested in them.

However, I acknowledge that there are real risks, particularly with inflation being so high at 9% or 10%. It is the highest we have seen in 40 years. People are really feeling the pinch and there is a real risk this year that for the first time in a long time we will go backwards, with real incomes falling, increasing poverty levels and possibly increasing inequality. That is something I and the Government do not want to happen. That is why we are doing what we are doing - the measures we have introduced already, which I have outlined previously in the Dáil, measures that will take effect over the summer with regard to back to school and back to college and measures that will take place after budget day in September, immediately putting money in people's pockets, while more will be implemented in January. This is a dynamic response to a cost-of-living crisis which, unfortunately, is going to continue for some time.

Deputy Michael Collins

I thank the Tánaiste for his reply. The Government is simply going to stand idly by and let many businesses go to the wall over the next few months. I hope that during the summer recess the Tánaiste will speak to the owners of those businesses, as I have done in places such as Castletownbere, Clonakilty, Bandon and even at the Dunmanway Agricultural Show last weekend. The public are rightly furious and angered by the Government's inaction, hiding behind Putin's war and hiding behind taking urgent measures to reduce VAT on fuel because of Europe. The price of a litre of diesel in Malta this weekend was €1.21. Malta is in Europe. The price of a litre of diesel in Ireland, also in Europe, is heading to €2.30, with the Government taking almost 50% in tax. It is the Government's green buddies who have destroyed this country, aided and abetted by dreaming Fianna Fáil and Fine Gael Deputies. Will the Tánaiste commit to eliminating the excise duty, carbon tax and VAT on both fuels, including agricultural diesel, from now until at least 31 December? Waiting for September or October and then for 1 January 2023 is not a sustainable position to cling to. The Government must give people a break, let them see their families, let them drive to work and let them live affordably. At this stage it is the very least the Government can do for the Irish people.

The Tánaiste

I can assure the Deputy that I talk to business owners all the time. I am the Minister for Enterprise, Trade and Employment and that is my job. What they are telling me is that, by and large, they are busy. The biggest problem they have at present is finding staff. That is the biggest issue that is brought to me from business, and not just in hospitality and retail but across the economy. They also tell they are struggling with very high increased input costs, particularly regarding energy, and other costs as well. I very much understand that. However, in terms of insolvencies, and the Deputy can check the figures for himself as they are publicly available, we have not seen a huge number of insolvencies, thankfully, at business level in recent years.

That may increase over the next few months because of the withdrawal of the employment wage subsidy scheme but we are seeing insolvencies that are at relative lows.

I do not know what the situation is in Malta. I will check it out. It might be that it has a special arrangement as it is a relatively new member of the European Union-----

Deputy Michael Collins

We would like a special arrangement too.

The Tánaiste

If the Deputy goes to places closer to here and looks at the price of petrol and diesel, such as the North, Britain, France, the Netherlands, Denmark, Switzerland and other countries in our neighbourhood, he will see the price, unfortunately, is similar to here or higher.

Deputy Michael Collins

We are in the one Europe.