24th October 2012
I welcome the Minister to the House. We are all very acutely aware of the facts and reminded on a daily basis of the serious financial difficulty we have and the shortfall of €16 billion. There are also requirements under the terms of the EU-IMF bailout agreement to reduce our borrowing for 2013 by €3.5 billion. The Minister’s Department has a budget of €20.5 billion, accounting for 40% of overall Government expenditure, and I am very aware she is required to reduce the budget by €540 million in 2013. I appreciate the difficult decisions that have to be taken and cuts that must be made.
To build on the comments of my colleague, Senator Zappone, in the first part of this debate last week, there is a question about how these cuts are made and against whom they are directed. These are ultimately political decisions. There is nothing more disheartening as a Senator than to feel my interventions about any budgetary cuts are futile in the face of a done deal, so I welcome the Minister’s reassurance that no decisions have been finalised in respect of the 2013 budget.
We need to stop plugging the dam and looking for immediate savings, which are ultimately bankrupting us of our moral fibre. As a Government and society we must firmly establish our red lines, or the values and principles that we are unwilling to yield. An example of this was aptly articulated yesterday in the audiovisual room by the community and voluntary pillar, when it presented an alternative budget for 2013, with values such as dignity, sustainability, equality, human rights and working for the common good. Such values inherently seek to protect children, the elderly, disabled, weak, vulnerable and marginalised, it makes for a value system that I support and endorse.
We must articulate a vision for the Ireland we want in ten years, developing strategies that are necessary to achieve this vision by incorporating values and aligning them with national policies. We can do this and I do not agree that Ireland is bound by the current policies for achieving the €3.5 billion reduction in borrowing as set out in the letter of intent, memorandum of economic and financial policies, and the technical memorandum of understanding. Within the document I note the paragraph following the proposed revenue measures and expenditure reduction in the memorandum, which states:
Without prejudice to the minimum consolidation amount referred to in the previous paragraph and to the requirements to achieve the agreed fiscal targets, the Government may, in consultation with the staff of the European Commission, the IMF and the ECB, replace one or more of the above measures with others of equally good quality based on the options identified in the comprehensive review of expenditure.
I am not alone in reading this to mean that Ireland is free to change the method through which the requisite saving is made, once it is made.
It is interesting to note that Social Justice Ireland agreed with 130 of the 131 recommendations made by the Commission on Taxation report from 2009 on tax breaks. The exception was the recommendation on child benefit. Lists of savings are possible, and I strongly encourage the Government to consider the proposals. I do this on behalf of the more than 700,000 people in Ireland, of which 200,000 are children, at risk of poverty, and the more than one in four children between age 12 and 17 already living in poverty. The Oireachtas Library and Research Service gave a good presentation earlier this morning on the survey on income and living conditions, SILC, demonstrating that households with children are at more of a disadvantage and are more likely to enter poverty. Our current policy is not working, although it may satisfy the troika and meet international requirements. It is not working for the raft of Irish people bearing the brunt of the cuts.
In preparing for today’s discussion I pondered how we have a multi-annual plan for the troika and education officials are considering school infrastructure, responding to change in demographics with a multi-annual plan. The action plan for jobs brings us up to 2016. The plan for the country’s people, however, is missing. Where is that plan? I have spoken with friends who are holding on to savings despite being encouraged to spend. When there is no plan for the people, it is an issue.
Those living in extremely marginalised and vulnerable conditions do not know where the safety net is and feel it keeps moving. They are walking on this tightrope and are asking where the safety net is because it has moved again.
We need to look not only at one budget – all the focus now is on budget 2013 – but at things much more in advance. The programme for Government referred to working across Departments. If one looks solely at the issue of child benefit, the question is whether we tax or means test it rather the Minister’s Department looking outside itself and asking why we are giving child benefit and the purpose of it. Is there a better way to achieve the outcomes we wish other than by purely looking at cash transfers? I suppose I am trying to encourage the Minister and her colleagues in Cabinet not to look simplistically at cash savings but to have a plan for the people to say this is where we are going. We can do it for jobs and for the troika but can we do it for the people?