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Cabinet Committee Meetings

Dáil Éireann Debate, Tuesday - 17 April 2018

Tuesday, 17 April 2018

Ceisteanna (1, 2, 3, 4, 5)

Joan Burton

Ceist:

1. Deputy Joan Burton asked the Taoiseach when Cabinet committee A, economy, last met. [13572/18]

Amharc ar fhreagra

Mary Lou McDonald

Ceist:

2. Deputy Mary Lou McDonald asked the Taoiseach when Cabinet committee A, economy, last met; and when it is scheduled to meet again. [15858/18]

Amharc ar fhreagra

Richard Boyd Barrett

Ceist:

3. Deputy Richard Boyd Barrett asked the Taoiseach when Cabinet committee A, economy, will next meet. [16370/18]

Amharc ar fhreagra

Brendan Howlin

Ceist:

4. Deputy Brendan Howlin asked the Taoiseach when Cabinet committee A, economy, last met; and when it will next meet. [16461/18]

Amharc ar fhreagra

Michael Moynihan

Ceist:

5. Deputy Michael Moynihan asked the Taoiseach the Cabinet committee in which agriculture is discussed; and when it last met. [16522/18]

Amharc ar fhreagra

Freagraí ó Béal (20 píosaí cainte)

I propose to take Questions Nos. 1 to 5, inclusive, together.

Cabinet committee A covers issues relating to the economy, jobs, the labour market, competitiveness, productivity, trade, the Action Plan for Rural Development, the digital economy and pensions. There has been significant progress on these issues since the start of the year, including the publication of the roadmap for pensions reform, the launch of the Action Plan for Jobs 2018 and the publication of the review of Enterprise 2025, the Government's medium-term enterprise policy. The last meeting of Cabinet committee A took place on 18 January. The next meeting has not yet been scheduled.

Issues related to the agriculture sector are discussed as required in Cabinet committee A - enterprise and rural affairs issues; Cabinet committee C - Brexit; and Cabinet committee D - climate action and the national planning framework. As with all policy areas, agriculture issues are regularly discussed at full Government meetings where all formal decisions are made. It was discussed this morning.

As there are so many people asking questions, we need to stick to the time allowed.

I understand the Government is publishing the stability programme update this afternoon at 3 p.m. I presume it is being done right now. There was a practice introduced by the previous Government. The then Minister, Deputy Michael Noonan, and I introduced what we called the spring economic statement. Last year, it became the summer economic statement. When will the spring or summer economic statement be published and when will the amount of fiscal space available for October's budget be known? The objective was we would have a clear indication of the fiscal space available at this time of the year so we could have a proper debate. It is doubly the case when we have an Oireachtas committee that is supposed to scope out the options for Government and democratise the Government process. Is that still to be the case? I understand from reading the Sunday Independent, the Government plans to change its budgetary stance and move away from tax cuts towards funding what is described as working family social PRSI benefits such as childcare, parental leave and so on. Is that true? Will we have press releases determining these matters or will we have a debate on options within the Oireachtas as we envisaged? A new schools capital programme was published last week to deal with schools in population-pressure zones which caused great consternation to schools that have been waiting many years for very significant refurbishment and replacement schools. Will there be an additional capital plan to deal with that?

Other speakers have mentioned the real distress and pressure the ongoing fodder crisis is causing. Farmers are paying at least double the normal cost of feed which is an unbearable pressure for them. It is a scandalous situation. The Oireachtas Joint Committee on Agriculture, Food and the Marine met in emergency session last week but the Minister for Agriculture, Food and the Marine, Deputy Creed, has yet to outline any comprehensive plan to deal with the fodder shortage. That needs to happen urgently. Unfortunately, he was not in the Chamber today. The Minister said last week that he was prepared to talk to banks about credit for farmers and was prepared to pay for the transport of silage from one end of the State to the other. He also said he would not issue vouchers for feed concentrate to alleviate the very real animal welfare problems.

Teagasc advised subsidy of, and access to, these meal concentrates. My colleague, Deputy Martin Kenny, asked that the Minister start paying the 15% outstanding green low-carbon agri-environment scheme, GLAS, payments. That is a very sensible suggestion. Will the Minister do that? He should pay the farmers now because the need is real and acute. His prime responsibility is to Irish farmers who are in crisis, not to the EU rules. The transport subsidy scheme has been a failure and has merely resulted in the price of fodder rising and in spreading the shortage. Had the Minister spent the same amount of money on vouchers for meal as he spent on the transport subsidy and as advised by Teagasc we would not be in the situation we are now in. The Taoiseach did not respond to the earlier questions on this subject. I await his response and hope it will be more positive than that from the Minister of State at the Department of Agriculture, Food and the Marine, Deputy Doyle.

It seems to me that the most elementary function of a government in order to have a functioning economy is that its citizens can exist in that economy at the most basic level. Students from Dublin City University, DCU, gathered outside Leinster House today because they have been asked to suffer an increase in rent from €4,500 per year to €8,700. For many that means they will leave education.

An open letter was written today by a student nurse who is leaving nursing studies because after paying for her accommodation and her bills she has €4 a week left to live on. Even somebody on average industrial earnings is paying 70% of their income to meet average rents, which are now between €1,800 and €2,000 in Dublin city.

Does the Taoiseach recognise that if students, people on low income, nurses and a vast number of our citizens cannot put a roof over their heads we have a serious economic problem? Does he recognise how serious the problem is? Talking about limiting rent increases to 4% against that background is worse than useless, a futile exercise in closing the stable door after the horse has bolted. Does he not need serious emergency measures to bring the cost of accommodation down to a level where people can exist?

For the past month or three weeks there has been enormous pressure on agriculture. People say there have been 12 dry days since 23 July 2017 resulting in a crisis. The agriculture industry is fantastic. Yesterday, my constituency colleague, the Minister for Agriculture, Food and the Marine, Deputy Creed, announced the reopening of the Chinese market. Many people, officials, Ministers and successive Governments have worked extremely hard for a long time to get everything right but none more so than the farmers, the primary producers, who have adhered to the highest possible regulations in the way they conduct their business. The majority of farmers are excellent at what they do and produce a top quality product. We must make sure we have sustainable agriculture.

Yesterday, at a Dairygold meeting, a farmer told me that the former Minister in the Department, Deputy Coveney, had said six or seven years ago that there were exciting prospects for agriculture. There was nothing exciting about it yesterday when 2 inches of rain were falling. Herds face health challenges and farmers and their families are under real pressure. The weather pattern is that when autumn is very wet there will be a late spring, although this is not scientific. The Department has to have a unit to prepare for this type of crisis. It is only five years since the last one. There was one in 1985-86 and in 1998-99. The crisis needs to be considered holistically and not just in an immediate way.

Has the economy committee in the Department of Finance undertaken any work on the impact of quantitative easing on economic performance? What is the likely impact of the unravelling of the quantitative easing over time on interest rates and our economy? I think there are issues bubbling in the background that have not been properly interrogated, notwithstanding other medium-term risks.

I share Deputy Howlin's concerns about schools. There seems to be a woeful lack of planning in the announcement of schools. Many schools announced four or five years ago in my constituency and around the country are on split sites or in prefabs. There is no planning and they are in crisis because they have no accommodation or very poor accommodation. It baffles me that those schools, which have heard the type of announcements we heard last week, have not been prioritised although many of them are in dire straits, because there is a lack of follow through.

The Government has a tendency to fail to act on a problem until it becomes a crisis. That tendency is manifested in housing, health and the fodder crisis. The Minister for Agriculture, Food and the Marine said a couple of weeks ago that there is no issue with fodder and it is a simple matter of transporting it around the country. A week later the co-operatives imported fodder from Britain. Something that could have been dealt with much earlier was allowed to become a crisis causing much stress and strain to the farming community.

The stability programme update, SPU, will be published this afternoon. The Minister for Finance is doing that in line with new procedures. He will then consult with the budget oversight committee thus giving the Oireachtas an opportunity to engage with him on the SPU. We do not yet have a date for the summer economic statement but there will be one and it will be in the summer.

It will be in May or June, I suspect, but we do not have a date for that as yet.

Will the Taoiseach guarantee the weather as well?

I wish I could.

Is the Taoiseach promising a summer?

The forecast is looking good for the next few days anyway. I am looking forward to it. It is going to be a good weekend.

Notwithstanding speculation in newspapers, the Government's overall budget policy remains unchanged. It is to be prudent first of all and to continue to reduce the deficit. We still have a deficit so we will continue to reduce it and also the debt. While our debt has come down, it is still very high. Our national debt works out at roughly €45,000 per person. That is a consequence of the financial crisis and the lost decade, which Members will have heard me speak about before. When we entered the financial crisis, the debt per head in Ireland was approximately €15,000. Although we are in a good position, with the economy being strong, with the fall in the deficit and in unemployment and with incomes rising, and with all such trends going in the right direction, the country is still dealing with many legacy issues, not least the enormous debt placed on the heads of people. It now stands at €45,000 per head. As well as reducing the deficit, we need to reduce the debt. The most important thing is that the Government will be prudent in the decisions it makes on budgets. We will not adopt the policy of the past – the if-I-have-it-I'll-spend-it procyclical economic policy. I encourage Opposition parties not to go back to that philosophy in their demands in the run-up to the budget. After that, it will be matter of investing on a two-to-one basis in favour of investment and public spending. I refer to spending on infrastructure and public services. It will also be a matter of finding some space for tax reductions, particularly focusing on middle-income earners and the fact that people on very modest incomes pay income tax at the highest marginal rate. The average person working full-time in Ireland earns €46,000 per year. If he gets a pay rise, does a bit of overtime or gets an increment or promotion, he finds more than half of it is taken away in income tax and PRSI. We would like to raise the threshold further and allow more people to keep more of their hard-earned money.

With regard to the fiscal space, the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, prefers not to speak of that and instead prefers to talk about the fiscal stance, which takes into account issues wider than the question of how much money is available to allocate. I refer to the deficit, for example. We would all agree that no matter what the fiscal space is, we should not have a higher deficit next year. The economy is going well. When the economy is going well, one should try to reduce and eliminate the deficit so there will be some headroom should the economy slow down. No matter what the fiscal space is, we should still try to reduce or eliminate the deficit. We should still be trying to reduce the debt. That is why we have put forward the concept of the rainy-day fund, or of setting aside some money for a downturn in the economy, if it occurs.

A Fianna Fáil proposal.

It is ours as well.

It is a bad proposal.

Great minds think alike sometimes. It is a good proposal because we do not want to go back to the mistakes of the past whereby, in a downturn or slowdown, public spending was reigned in and people were asked to pay more taxes at the worst time for them.

We had a pension reserve fund of €25 billion.

In terms of what is available to allocate in the budget, it is important to state most of what may appear as so-called fiscal space is already allocated. We have already announced that capital expenditure will increase by €1.5 billion next year. That means extra money for housing and health care, such as the children's hospital. The cost of that really falls into next year. There is to be further investment in transport. This is good expenditure but it is already committed. Also to be considered is the impact of increased public sector pay. There is a further pay increase for public servants in October. The full-year cost of that next year has to be borne in mind. This is good spending. It is extra money for teachers, nurses and gardaí but it does mean the money has to be taken out of the budget for next year. Also, there is the full-year cost of the increases in social welfare for jobseekers, lone parents, the disabled, carers and other groups who have seen a welfare increase in the past few weeks. The full-year cost of that has to come out of the allocation for next year also. Also to be considered are the demographic effects of an ageing population. There is to be an extra €200 million for pensions, and there is to be an additional health care cost. Taking into account the full-year cost of measures already announced and committed to, including the costs of demographics, pensions and health care, the figure amounts to well over €2.5 billion already. When one looks at the figures in that way, one sees that what is left to be allocated for new measures in the budget is quite small.

With regard to the capital plan for education, we are building more schools and providing more school places than ever before. In fact, we doubled the number of additional school places provided since 2010. Some 9,000 new school places were created in 2010. In 2017, we provided 18,000 additional school places. The capital budget of the Department of Education and Skills has increased by 56% since 2012. That is a major increase. It had been slashed by 40% between 2007 and 2010.

Prefabs are only ever a temporary solution. There are quite a few classes in prefabs in St. Mochta's in Clonsilla, which is in my constituency, but that is because a whole new school is being built. The children are in the prefab while the school is being rebuilt. Back in 2008, at the height of the so-called Celtic tiger, when there were many fewer children in school, there were 2,000 prefabs. Now, after a big-----

Ruairí Quinn's efforts.

----- increase in the number of students in school, and after a number of very difficult years, the number of prefabs has been reduced to 1,325. That contrasts significantly with the position in 2008, when there were more children in prefabs but fewer children in school. At that time, there was a much worse situation than currently.

With regard to the capital allocation for education, that is outlined in Project Ireland 2040. Some €8.4 billion has been provided for investment in school buildings. That is up from €4.9 billion in the previous ten years. In the last ten years, just under €5 billion was allocated for school buildings. That increases to €8.4 billion for the next ten years. That includes the prefab replacement scheme, commencing in 2019; the deep refurbishment of existing buildings; the modernisation of science and PE facilities, which is very important now that PE has become a subject for the leaving certificate; and also investment in digital technologies in schools.

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