Dáil Éireann Debate, Wednesday - 11 July 2018
65. Deputy Joan Collins asked the Minister for Finance his views on whether the priorities for budget 2019 are increased spending on public services and increases in basic social welfare payments as opposed to cuts in income tax; and if he will make a statement on the matter. [30939/18]
View answerI take issue with the Minister regarding the fact that my original priority question, which sought to ask about funding for the Sláintecare report, was delegated to the Minister for Health. It is a very cheap sleight of hand to avoid answering the question. The Minister for Health is not responsible for drawing up the budget; it is the responsibility of the Minister for Finance. That is why I had to put this question as a third question in respect of public services over tax cuts.
The way in which questions are assigned is not a matter for me, it is a matter for the Office of the Ceann Comhairle. During my time on questions, which comes around every second week in the House, I answer as many questions as are put to me, including supplementary questions.
To answer the question the Ceann Comhairle's office allowed to be tabled, sound public finances are essential to support sustainable economic growth. I have outlined my views on the budgetary parameters for this in the summer economic statement. As I have emphasised on a number of occasions, the changes we make on expenditure and taxation should be gradual. While it is a very demanding thing to deliver, I am committed to doing it. If one looks at recent changes in our economy, one can see that we have provided for increases in public expenditure, with a particular focus on health, housing, education and social protection. In recent budgets, in particular, we have seen increases in the weekly social welfare rates.
The Government is committed to reducing excessive tax rates for middle income earners while also maintaining a broad tax base. We will, however, do this gradually. I made this point at other fora recently. Those who would criticise a gradualist approach to doing this must outline what is the alternative. Are they suggesting that any given budget would make no difference to tax rates? If that is the case, we will have a tax code that gradually falls out of line with changes in people's incomes which in turn would create a long-term problem. Those who suggest that I should do more are advocating the big-bang approach to taxation that was pursued in the past. Look how that turned out. In response to calls that have been made I will in the next budget outline a longer timeframe in respect of economic forecasts in order to give all Members confidence regarding the longer-term choices I seek make.
In the past four budgets, more than €3 billion in tax cuts were given away, mostly to those who are already well off and to businesses and corporations. Deputies' wages, for example, have risen and we are now better off by €5,000. Some 50% of workers on medium incomes - and those who earn less - are only better off to the tune of €707. The average increase for most workers was €5.
Like our health services, the public services are the sectors that soak up people's wages. It would be much better if the Government concentrated on actually funding the implementation of the Sláintecare report, in respect of which €600 million will be required each year. The extra funding for the out of pocket costs and for changes in the way the health service works would benefit poorer and average workers much more than giving them a €5 increase. This should be looked at when prioritising where the money goes.
I do not know what the Deputy's response would be if I was to introduce a budget that had no tax changes at all for any worker in the State. I am, however, certain of the reaction of many other Deputies. They would condemn me for introducing, at a time of economic stability in the country, the first budget that did nothing at all in the context of workers' take-home pay. Deputy Joan Collins may have a different view. Perhaps she might outline it shortly.
The Deputy referred to the allocation of resources in the health service. We have allocated more than €15 billion to the health service for this year. In publications earlier this year, I indicated that we are seeing difficulties for the HSE delivering its plans, even within the existing framework. We have made additional resources available to the Department of Health. The Minister for Health, Deputy Harris, and I are committed to bringing in an implementation plan for Sláintecare and we are working on that.
If the Minister was earning the average industrial wage and he received a €5 increase in his weekly wage, what does he think would be the impact of that increase in the context of, for example, paying utility bills? What impact does a €5 increase have on a person who is in receipt of a pension and whose rent increases, even if that individual is a local authority tenant? The increase does not have an impact. Most people accept the idea that they would prefer to see money going into public services - such as the health service - where it matters.
The Government has not grasped the import of Sláintecare. The Minister stated that the Government has agreed to it. Members of the Minister's party were on the Sláintecare committee that agreed the final report. The report was to be implemented last year so we are one year behind. It requires €3 billion - €600 million each year - for implementation and €2.8 billion over ten years in ring-fenced funding to pay for the expanded entitlements to which the report refers. Implementing the report would make a big difference. If people saw the Government implementing the ten-year plan, they would agree that this is where the money should go. They would see that they could access the care and hospital services for the benefit of their health and that of their children. That would make a difference.
I will deal with each of the points made by the Deputy. She referred to the impact of, for example, tax changes on citizens who are on very low levels of income. What she did not acknowledge, however, is that - in all cases - if a person is on a low level of income, he or she is already paying a very low rate of income tax.
They are not getting paid that.
If we make any change in this regard, it would mean that the effects will be gradual, as I have already outlined, and if we were to make any bigger changes, we would then face the scenario where this group would not be paying any tax. We have already been down the path of seeing how quickly our tax base can narrow. Figures were published by the Revenue Commissioners earlier this month which show the care I need to take in ensuring that our tax base does not narrow too much, in order to sustain growth in spending and public services.
I shall now turn to investment in public services and in Sláintecare. In the past two budgets, the ratio of tax changes to public expenditure changes has been 2:1. The vast majority of additional resources have gone into investment in more public services. We are committed to Sláintecare but, as outlined in the summer economic statement, the total amount of resources available - once we pay for more investment in houses and in public transport, which I know the Deputy also wants - is €800 million. In the second half of the year, we will have to make choices regarding how we respond back to the array of different demands.
