My Response to Budget 2023

INTRODUCTION

Thank you Ceann Comhairle.

We knew facing into this Budget that we face an unprecedented series of crises – in the cost of living, in energy and in housing.

We knew that increasing numbers of households are facing stark choices between heating and eating right now and that up to half of all households are likely to be in energy poverty during the bleak winter ahead.

Right now, we know that Ireland is just not working – for far too many people; individuals, families, households and businesses.

And we face the frightening prospect that if urgent measures are not taken to get us through the bleak winter ahead, our communities and our society will fracture beyond repair.

Of course, these crises have been exacerbated by Russian’s brutal invasion of Ukraine and consequent international factors.

But many of the measures needed to address the crises and to support communities are within the power of this Government at national level.

So we knew this week that we would need Government to step up with a radical Budget of the scale and level of ambition to address the really severe levels of hardship faced by so many households, families and businesses.

Just as we saw urgent, ambitious and radical State-led measures rolled out to get us all through the Covid-19 Pandemic, so we needed to see the Government adopt similarly urgent, ambitious and radical measures in yesterday’s Budget.

In our Labour Alternative Budget published last week, we put forward a clear and costed set of measures to support the building of an Ireland that Works for All.

We called on Government to adopt the measures we had proposed so as to invest and redistribute the wealth generated by the hard work of so many.

Our Budget proposals represent a creative and radical plan to ensure a more equal Ireland - an Ireland that works for All.

----------

For families and individuals on low- and middle-incomes, yesterday presented the Government with an opportunity to move towards that vision of Ireland,

An opportunity to provide a lifeline to the tens of thousands of people for whom Ireland now is not working.

Unfortunately, it was an opportunity missed.

This was not a Budget which will provide the necessary pathway or forward track to ensure that households and communities are supported through this winter and beyond.

Sadly, rather than providing that pathway forward, this might better be described as a Treadmill Budget. A Budget for standing still.

Lots of money put forward for once-off measures by the Government, but ultimately no sense of forward momentum or progressive movement – no sense that this Budget will do anything other than provide a short-term quick fix which will wear off very quickly and likely before the New Year.

Indeed, the signs are that we may have to have another Budget in the New Year once the short-term measures have faded away.

----------------------------

With the Cost of Living crisis biting deeply, most people already feel that they are constantly running merely to stand still.

This Budget will not change that.

It was simply not good enough just to throw money at the crises like snuff at a wake as my colleague Deputy Ged Nash said yesterday

This was indeed a short-term ‘Bertienomics’ approach as Duncan Smith said – an approach that will do little for the ‘have nots’ while boosting the position of those who already ‘have lots’.

Rather, what was needed was a clear plan to take us through the winter and beyond; a plan with ambition and vision.

That was sadly lacking in the package of measures announced yesterday. And this has been recognised by many.

Just today, I got a message from a constituent, which I think accurately reflects public reaction to the Budget.

She said:

[This winter], I will have to choose between eating properly or taking the edge off the cold in my home. ..l will stay in bed to stay warm as my home is draughty and cold. [I feel as though] no one cares about my position in real terms. I am a worker. A grafter. I have not been helped in any way by this Budget.

Her reaction reflects the reality for so many.

A different approach was possible.

As I said, the Government could instead have adopted even some of the proposals we set out in our Labour Budget, published last week.

We proposed a costed programme for both an immediate term cost-of-living package, as well as longer-term plans to improve public services, and to insulate families from future fluctuations in the market.

The crises in housing, in work and wages, in climate, and in care are not the fault of working people.

The external factors exacerbating these crises such as market failure and the hideous war waged by Russia on Ukraine are not their fault.

And yet, it is ordinary households which are suffering the consequences.

They should be sheltered from harm but that’s not happening.

We had plans to protect them; in Housing, Care, Climate and Work.

Housing

First; on Housing –

An eviction ban and rent freeze should have been key features of any housing measures announced by the Government.

In an Ireland that works for all, public and affordable housing would be made a priority, built to meet the standards necessary for families to thrive.

Instead, the €500 tax credit for renters which was announced shows just how divorced Fianna Fáil and Fine Gael are from the lived reality of renters.

Rents are out of control in this country.

They are rising by an average of 12.5% annually.

Renters in Ireland are paying an average of €20,000 annually in rent payments.

In my own constituency of Dublin Bay South, this is a particularly serious problem. We have more than double the national average of people who are renting: 44% of households in private rental accommodation. And average rents in our area are more than €2,000 per month.

For my constituents who are renting, a €500 tax credit is meaningless. As Threshold put it, it amounts to just a week’s rent for anyone renting in Dublin.

The speculative housing market has a hidden human and social cost we cannot afford.

Renters cannot continue to pay the price for the wasted years of Fine Gael and Fianna Fáil.

The State needs to step in, freeze rents, ban evictions this winter, and commit to building more affordable homes.

Indeed, it’s particularly disappointing to see the failure of this Budget to provide any real increase for building social housing.

Social Justice Ireland said another €1.4bn was needed.

But - with construction inflation at 14%, the extra capital allocated for housing was only €38 million!

That means there will be less public homes built next year than last - when Labour is calling for up to 20,000 social and affordable homes next year – homes which desperately need to be built.

Another disappointment in this Budget on housing is the lack of provision for households affected by construction defects.

This summer in the Dail, I raised the shocking bills facing people who are living in defective Celtic Era apartments.

I was heartened then to hear from the Tanaiste that the Government did have plans to support those individuals.

While I welcome that this serious issue is now getting the attention it deserves, there is little substance in the proposals brought forward by the government this week.

In essence, what has been proposed is a levy on concrete products to raise €80m a year.

But this is likely merely to increase the cost of homes for first-time buyers – in a housing crisis!

Our alternative proposal for a levy on construction profits would not have had that effect and could have really ensured adequate redress for so many apartment owners left high and dry currently facing massive repair bills.

It’s a symptom of the unwillingness – or the inability – to deal with the housing crisis which has paralysed the lives of so many people across the country.

Care

On Care –

We in Labour brought forward two proposals to give immediate relief to hard-pressed families to:

• A cap on childcare costs to 200 Euro per month for every family.
  • At a cost of €275m.

• The immediate extension of free GP care to every child and young person under 18.
  • At a cost of €100m.

No parent should have to worry about money when their child is sick, but unfortunately, this awful dilemma is a reality here.

Ireland is the only country in western Europe without universal access to GPs – the only one.

For four wasted years, the previous Fine Gael government, supported by Fianna Fáil, failed to use Ireland’s hard-won prosperity to introduce free-at-the-point-of-access primary healthcare.

Last year’s Budget committed to an extension of the current scheme for 6- and 7-year-olds. It is welcome to see that that has now, finally, been done, in a recycled announcement made by Minister McGrath yesterday.

But responding to the worsening Cost-of-Living crisis should have meant acting to extend free GP care to all children under 18.

That didn’t happen yesterday – and it’s a real shame.

------

The measures introduced on childcare were equally underwhelming.

At a cost of €121m, the Government say that they will fund a reduction of 25% in weekly fees for those availing of the National Childcare Scheme.

However, the reality is that creche fees are so high now that the reduction proposed will not amount to 25% for most families.

For example, even with the new announcement, a parent in my constituency will still have to pay approximately €250 per week per child.[1]

Under our Labour plans, childcare fees would be capped at €200 per month.

With Labour, parents would only pay €50 per week – in line with childcare fees in other European countries.

That radical and ambitious move would have cost the Exchequer €275 million over 12 months.

In my eyes, that is value for money – an investment in our children’s future.

It would also mean more money in the pockets of hard-pressed parents - money to pay for what matters – food, drink, gas and electricity, rent and other essentials.

We wouldn’t stop there either.

Inequality in Ireland starts the day a baby is born.

Public funding for childcare in Ireland remains a fraction of what other European countries invest.

UNICEF recommends that countries invest at least 1% of its annual GDP in childcare. Based on last year’s modified GNI figures, this year’s investment apparently amounts to just 0.4%.

That’s less than half of what is needed. The actual proportion is probably even lower, given the growth in Ireland’s economy in the past year.

In our Equal Early Years campaign, Labour and Labour Women have consistently called for a guaranteed publicly-funded pre-school place for every child, as is the case for primary school children.

Parents need affordable, accessible childcare.

Early years educators deserve decent pay and conditions and providers deserve support.

Most of all, our children deserve an equal start.

To begin to realise that bigger vision for childcare, Labour would invest €60m in 2023 and provide a clear pathway toward a universal publicly-funded childcare system on a par with other European countries.

Did we see anything resembling that kind of ambition or vision in this year’s Budget document? No, we did not.

Climate

On Climate –

What strikes me again is the lack of vision and ambition; the lack of any new initiative from the Government in yesterday’s Budget.

Our fiscal budgets simply must always be seen through the lens of the Climate Emergency.

Urgent action is needed to drastically reduce carbon emissions and transition to a clean green net-zero economy.

But at present, our emissions are going in the wrong direction.

Our energy, climate and cost-of-living crises are inextricably linked.

Climate inaction means hardship for communities.

And we needed real and radical action in this Budget – but it didn’t happen.

By contrast, we in Labour had made a flagship climate proposal for Budget 2023 – to introduce a €9 monthly ‘climate ticket’ for unlimited journeys country-wide on public transport, at a cost of €300m for a 6-month period.

A similar scheme was trialed in Germany this year.                                                                                      

In three months, that German scheme saved 1.8m tonnes of CO2 emissions - and the scheme is now being adapted across the different German regional authorities.

In Ireland, that would be the equivalent of taking 23,000 cars off the road.

The Labour Party also proposed a range of measures to protect ordinary workers and families from rising energy prices in our Cost-of-Living Package.

We would have invested more in retrofitting programmes, in frontloading investment in active travel and city bike schemes, in supporting farmers to meet sectoral emissions, and in targeted investments to improve biodiversity and sustainability.

We provided for an extra capital investment in climate measures of €376m, with €150m dedicated to retrofitting, €104m for solar installation, and €117m on public transport and cycling.

We called for a doubling of the grant available to fit solar panels from €2,400 to €5,000.

We proposed an ambitious ‘Cycle to School’ scheme to enable parents to buy bikes for their children; and a creative scheme to incentivise people to scrap old cars in exchange for e-bikes or cargo bikes.

And Ceann Comhairle; to support the funding of these and other measures, we would have imposed a 30% windfall tax on energy companies – many of which we know are raking in record profits during the cost-of-living crisis.

Instead, the Government have proposed a very disappointing “wait and see” approach on the idea of a windfall tax.

So it’s a very disappointing Budget for Climate.,

Yes, very welcome additional funding has been proposed for  existing schemes such as retrofitting – but with these schemes  already in place, we are still badly missing our crucial climate emissions reduction targets.

This is just not good enough.

It’s not good enough for the young people who demonstrate outside the gates of Leinster House every week with Fridays for Future.

They want system change not climate change.

They won’t be getting it this year, by the looks of it.

Jobs/Work

Finally, on Work –

Again this is a deeply disappointing Budget which has failed to address the real concerns of so many in our low pay, high cost economy.

Today, so many in Ireland are working to live when it should be the other way around.

Stagnating wages, the rising cost of living, and an energy crisis leading to job insecurity – working people, young and old, now cannot afford to get by and are fearful for the future.

Indeed, many young people, facing a future of working long hours for pay levels that can never enable them to buy their own home – are now voting with their feet and leaving our shores.

They are emigrating to other countries, bringing their skills and talents abroad and depriving their communities here of their contribution.

That’s just not good enough.

We need an ambitious jobs programme to provide secure, and crucially - well-paid jobs for everyone.

Ours should be a society where work is valued – and where low pay is really addressed.

That’s not the case right now and, judging by the contents of Budget 2023, it won’t be the case next year either.

That’s why we in Labour say that Ireland Needs A Pay Rise.

We had a unique opportunity in this Budget to devise a scheme to build better jobs while also helping to tackle the climate crisis, and through Jobs for Good to generate goodness for society – to develop a Just Transition to a fairer, greener future.

Instead, what we see is a derisory increase in the minimum wage, not to come into effect for nearly half a year, already effectively a cut in pay, given soaring inflation rates.

A programme of tax cuts that patently offers disproportionate benefits to those on higher incomes.

And an inadequate increase of only €12 per week for those on pensions and social welfare – well below the meaningful weekly increase of €20 that we in Labour had proposed.

-----------------------

Ceann Comhairle, the Government had a clear set of questions to answer in yesterday’s Budget.

Will Budget 2023 work to keep people warm in their own homes?

Will it use taxpayers’ hard-earned money to stop low and middle-income households from going under?

Will it support people and businesses struggling to pay energy bills?

Will it help those who now cannot afford their rent or mortgage payments?

And critically, will the Government keep the lights on this winter?

I am sad to say that it appears as though Fianna Fáil and Fine Gael have failed those tests.

A Budget should draw a big picture for Ireland.

It should be ambitious and show vision.

Yesterday we saw no ambition and no vision.

Instead we saw a conservatism – the conservativism of Fianna Fail and Fine Gael that sees every aspect of public spending as a cost, rather than an investment.

Yes, there were welcome measures to reduce costs in yesterday’s Budget, and an important acknowledgement that supports for households, businesses and communities are needed.

But at its heart this is not a Budget that works for all.

A Labour Budget would instead have sought to achieve real equality:

• To provide safe and secure homes for everyone.
• To create quality well-paid jobs that move us towards a green economy, a cleaner environment
• To reform taxation to prioritise fairness and redistribution.
• And to fund a health and care system for our youngest, oldest and everyone in between.

That’s the Ireland that Labour wants to work for.

That’s an Ireland that Works – for All.