The defining feature of this government is an obsession with spin and political positioning which means that you can take almost nothing it says at face value. The gap between the words and the substance has never been wider.
Behind the spin the evidence is of a government which does not grasp the scale or urgency of the problems which confront our country. The Taoiseach and his ministers are so focused on politics that they are failing to get a grip. Problems are routinely being left to become emergencies before any action is attempted.
It was once the tradition that Budget day would involve a focus solely on policy changes – with the reasonable expectation being that there are other opportunities to review ongoing policies. Unfortunately now nearly every area is shrouded in a cloud of meaningless figures which tell you almost nothing about decisions which have been taken.
It says something about the government that it put out videos praising the Budget before it had actually agreed what was to be in the Budget.
Because of this hyper-political and spin-dominated approach no one can say that today we have clarity on exactly what is proposed for many areas. On the day after the Budget key information is still missing.
In the coming days and weeks each Department will publish its detailed spending plans. We will also see legislation to enact the taxation and social protection elements of the Budget. It is only when we see these and when there is an opportunity to examine new initiatives will it be possible to see what is proposed for next year. And it is only then that will see if will be any change to the chronic failure to deliver which has taken hold in area after area.
If you look at the priority given to funding public relations, the endless streams of expensive videos, the regional promotion of ministers, the constant relaunching of policies, the scapegoating of others for failures and the hyper-political approach to every issue one thing seems obvious – this is a government which prefers to campaign than to govern.
According to many journalists there is a prevailing mood amongst ministers that they want to run to the country as quickly as possible because they are scared they will be found out if the government lasts much longer. The Ministers for Health and Housing, we are told, are particularly terrified at having to answer for their performance in January. The Taoiseach himself spent much of this year trying to create an instability which would allow him to collapse his own government.
And yet again this week we see stories based on Fine Gael sources focused not on getting to grips with the housing and health emergencies or the cost of living crisis – but on when it suits them to force an election.
We need to put these games aside and to focus on the issues at hand.
This is the third Budget of the Confidence and Supply arrangement which enabled the formation of a government after the last election. It is also the final one before a review process which will determine what happens next.
I will outline later what our approach to that review will be. Before doing so I will address what we what we know of this Budget and our concerns about the delivery deficit which has so comprehensively overtaken government.
It must also be put on the record that the preparation of this Budget was by some distance worse than in recent years. Basic figures were not available until Monday night until well after the promotional videos were already online. In the case of many areas explicitly within the Confidence and Supply we have to review the departmental estimates before we will be in a position to determine whether agreements have been honoured.
If it is the case that information which we sought was legitimately not available until hours before the Minister gave his speech this would suggest that this was one of the most disorganised Budgets in many years.
This particularly applies to the Health and Childcare areas.
Overall, this is a Budget which delivers no real clarity about major challenges and leaves unanswered the core question of whether the government understands the need for it to dramatically improve the urgency and effectiveness of vital initiatives.
Because of the manner in which the Budget has been prepared and the last-minute adjustments to both spending and revenue for 2018, there are serious constraints on what it is possible to do.
While Fine Gael backbenchers have been sent out over the last week to claim that all other parties want to spend and tax recklessly, the fact is that Fianna Fáil has not only proposed a responsible and restrained policy, we have succeeded in getting the Rainy Day Fund established. The Rainy Day Fund is the only current reserve in place in case of an economic downturn.
The position of the public finances rests on the buoyancy of key elements of the private sector and what has been healthy growth in international markets.
If you put aside the political spin you find that the core strengths of the Irish economy in recent years have all come from the foundations built by the Irish people over many years – and in particular their commitment to education and training. In fact, one of the remarkable things about this government is how little it has sought to change in the core industrial and economic model of the state. It has spent so much time trying to brand itself as modern that it hasn’t noticed how little it has changed.
Industrial development strategies are basically unchanged. Training and education programmes have been expanded rather than altered – and the main sources of investment are as they were a decade ago.
When the OECD conducted an independent review of the Government’s much-hyped Action Plans on Jobs it concluded that while they appeared to be a good idea it is not possible to identify any clear role they have played in employment growth.
This lack of any serious review of industrial and employment policy is a subject which we should return to when there is more time available – but in the context of a period of rapid change and the urgent need for greater diversification, the failure to significantly evolve our core economic strategies is a serious exposure.
The international situation today is very tense and there are a series of events which could quickly reduce growth figures. Equally, it may well be that the impact of Brexit is already hitting not just individual firms but at an overall economy level. The serious decline in economic sentiment and the wide number of indicators suggesting a concern about the future combine to paint a picture significantly less rosy than the complacency shown in the Minister and Taoiseach’s speeches.
As such we support the recommendation of the ESRI for a broadly neutral fiscal approach. Were underlying sentiment and established risks less serious there would be a case for a surplus. The Government’s claim to have major buffers against potential shocks is not true.
Within the overall figures for next year there were still many choices to be made and much more which could be achieved within existing allocations.
The government’s approach has been highly conservative. The lack of substantive change was indicated yesterday by how often ministers talked about global allocations to their departments and presented existing activity as new. We also saw the re-announcement of large numbers of projects, often for the third or fourth time.
The most significant change in Fine Gael’s Budget policies since 2016 has been a move away from the regressive unfairness of its previous Budgets. This change was forced on them by the Confidence and Supply Arrangement and all independent studies have confirmed that the worst edges have been knocked off the pre-2016 approach.
Those regressive policies had nothing to do with lack of resources. When decisions were being taken Fine Gael chose every time to make those with less bear a bigger share of the burden. This is a policy so engrained in Fine Gael ideology that the Taoiseach used a series of regressive tax policies as the core of his leadership campaign.
The confidence and supply arrangement has succeeded in blunting Fine Gael’s regressive ideology. I know this is a claim which annoys the Taoiseach.
If he is not persuaded by independent commentators showing how we secured a move away from Fine Gael priorities he might listen to another very well informed voice.
In commenting on the first Budget under the Confidence and Supply Arrangement this expert stated that it was “the first fair and socially just Budget” in years.
Those were the words of the then Minister for Social Protection Leo Varadkar TD. It is reported that he quickly realised that he had been a bit too candid and said “I probably shouldn’t have said that.”
Perhaps the next time the Taoiseach wants to complain about Fianna Fáil getting credit for stopping the worst of Fine Gael’s instincts he should consult with Deputy Varadkar.
The social protection package includes modest improvements and we make no apologies for insisting that a minimum of €5 be given to everyone who receives a social protection payment. This has happened for the last three years and helps address some of the increased cost of living. The first step of introducing parental leave albeit from next November will be a progressive move for new families.
While we also welcome the reversal of some of the government’s past cuts directed against single parents, the effort of Fine Gael Ministers to lay the blame for them on Labour are ridiculous. The Taoiseach and Minister Donohoe were both members of the government which implemented those avoidable cuts and they share full responsibility for them.
One of the principal political claims for this Budget is that it supposedly ensures that we can meet and overcome the challenge of Brexit. The Minister described it as the biggest diplomatic and economic challenge of a generation.
Next week we will have an opportunity to discuss the overall situation relating to Brexit. It is clear that there will be a deal because a failure to reach a deal suits no one. A chaotic Brexit is a lose-lose outcome which is highly unlikely to happen – though of course we must be ready.
The fact that a deal is likely can be seen in the manner in which the Taioseach has been trying to shift the ground from his claims last December and to broaden focus beyond the supposedly “rock-solid” Northern Ireland backstop which both he and Minister Coveney previously defined as the continuation of the status quo on both customs and regulation.
In recent weeks the Taoiseach has started talking about having four objectives for the negotiations. Two of these, the Common Travel Area and EU citizenship rights, are not actually up for negotiation, having been agreed between all sides without debate. His staff have actually been out rubbishing the idea that the UK as a whole could be covered by the backstop even though he himself suggested it last December.
There remains much to be done on the diplomatic challenge and it is to be earnestly hoped that the Taoiseach and his staff will not revert to type and spend the next few weeks talking to the media rather than talking to the people we need to reach a deal with.
As for preparing for the economic hit of Brexit we need to start understanding that the best case scenario is terrible.
The Budget documentation assumes no impact for at least two years and then a loss of growth which is based on a Departmental estimate which is two years old.
According to the only independent study commissioned by the government on the economic impact of Brexit, the current likely outcome of either a deep free trade agreement or continued Customs’ Union membership would lead to a permanent loss of 4.3% of national income. Using the conservative GNI* figure, that is equal to over €5bn a year – or over €5,100 per household.
This loss will in particular be felt by the nearly 6,900 firms who export to the UK. The bulk of these firms are indigenous SMEs.
This is the basis upon which we must assess whether the Government’s claim to be preparing Ireland for Brexit are true. Are they meeting the €5 billion Brexit challenge?
There is another ministerial roadshow underway at which various schemes are being relaunched and reannounced – however when you look at the hard figures you see a real cause for concern.
According to a survey published by the Government last month levels of preparation for Brexit are appallingly low – something which appears linked to the complacency which followed the over-spinning of last December’s deal.
According to the Government’s own work:
· Only 28% of exporting businesses have a Brexit plan.
· Only 13% of businesses likely to be impacted by Brexit have taken any mitigating action.
In fact, unless there is a dramatic change it will be 5 to 6 years before all businesses threatened by Brexit will be ready for Brexit.
And it is not hard to find a direct link between this lack of preparedness and the failure of the Government to deliver on its Brexit commitments.
· Last year a €300 million Brexit Loan Scheme was announced. As of last month 1.3% of companies which export to the UK had received a grant.
· Enterprise Ireland’s “Be Prepared” grant scheme is being awarded at a rate of 6 firms per month.
· Inter-Trade Ireland’s “Start to Plan” voucher scheme is also being awarded at a rate of 6 firms per month.
· The €25 million announced last year for the farming and fisheries sectors has been untouched and was reannounced yesterday as a new initiative.
· The long-term loan scheme signalled last year has also been reannounced and may eventually start next year.
The Government has made a lot of noise about a recent decision to hire new Brexit officials. At some point next year up to 400 will be hired and begin training. In contrast, the Netherlands, which has a similar level of trade with the UK, has already hired and trained 1000 officials to deal with Brexit.
We should also remember that this day last year the Government announced that it was retaining the special low rate of VAT for the hospitality sector as a critical part of its Brexit preparations. It appears that the Government now believes that the hospitality sector has become Brexit-proof.
In every single area except marketing spending there has been a systematic failure to deliver on Brexit preparations. 170 days before Brexit will take place the overwhelming majority of our businesses have not been helped to be Brexit ready and their fears of what lies ahead continue to grow apace.
This is a €5bn threat yet all we get is the same pattern of over-claim and under-delivery. The scale, ambition and implementation of Brexit measures is nowhere near what is required.
We believe there must be an urgent review of what needs to be done to address the massive under-delivery of Brexit preparedness efforts.
The development of critical economic infrastructure is more important than ever. Even though we have had an unprecedented publicity campaign claiming that everything is in hand, many critical projects are delayed. It is striking how many of the projects promoted this year will not be be prepared or tendered during the full potential life of this Dáil and the next one. The people of Finglas have been bombarded with literature calling on them to celebrate the good news of Metro North – a project which will not commence in the next decade at earliest.
Businesses throughout the country are suffering because of the abject failure to ensure that they have access to a basic requirement – reliable, fast broadband. They are becoming increasingly angry at a government which claims to be modern but forces them to operate in the dial-up era.
Before the government can begin to address this chronic failure to deliver it must first acknowledge the problem. The complacent self-congratulation and marketing-driven approach is causing real damage at a critical moment in setting the future economic direction of the Irish economy.
As Deputies Cowen and McGrath stated yesterday, and as we briefed throughout this year, in the limited scope available to us to influence specific measures in this budget we particularly addressed the emergencies in the housing and health sectors.
The almost overwhelming failures of the Government in relation to housing has led to an unprecedented crisis. A combination of indiscriminate cuts to key supports and an ongoing complacency by government allowed housing pressures to escalate dramatically.
Four ministers and many more major announcements have come and gone yet the situation has continued to get worse. For the first time in our history we have simultaneous emergencies throughout the sector, which mean that even people in secure, well paid employment are struggling.
Ministers first denied there was a problem, then said it wouldn’t be tackled overnight and then started declaring victory. 12 months ago the Taoiseach announced “the plan is working”. He even claimed that the homelessness figures had turned a corner and were getting better.
Yet today there are 800 more children homeless than there were on the day the Taoiseach took up office last year. Despite the ongoing efforts to massage the figures, there are almost 10,000 people homeless.
The facts show that had Fine Gael chosen to simply maintain the level of house building in 2010, the worst year of cutbacks, there would today be 6,000 more families in social housing.
It was a combination of government neglect and bad choices which created this emergency and it has been a basic lack of urgency and competence which has kept it going.
We need a decisive change to get all elements of the housing system going – with social and affordable housing as the first priority.
In our limited discussions with the government we were clear in our demands for a step-change in housing funding, delivery on social housing and a new approach to help people on modest incomes regain the chance of home ownership.
We have insisted that a new era of state intervention must begin.
We also prioritised removing blockages from the system. We secured agreement to reduce the four stages of planning applications form local authorities to the Department to one stage, we also removed the ceiling of €2m that requires Authorities to apply for even very small developments. .The ceiling is now increased three-fold to €6m.
This will enable Authorities to build 30 house projects without getting clearance from the Department. We pressed for extra social and affordable houses to be delivered in 2019. While funding was already announced under the Rebuilding Ireland Plan we secured an extra €210 m for social housing,€60 m for homelessness and an extra €310m over the next three years for affordable homes. This affordable scheme will cover the cost of building homes on state owned lands up to the value of 50,000 euro. As the average cost of a home varies across the country this will significantly help people get on the housing ladder. Based on an average price this will deliver over 6000 affordable homes.
We also prioritised the need for a MICA scheme to address the horrific situation that thousands of Donegal and Sligo families find themselves in due to faulty bricks being used to build their homes and which are now crumbling around them. This was announced yesterday and there will be money allocated in the REV in December .
The obvious question now is whether this government is capable of delivering on its promises. This is an issue which is central to any discussions on the future of the government.
The emergency in key sectors of the health system has been growing steadily in recent years.
There has been a sustained attempt to blame the staff and the structures of the system for problems, but the now clear evidence is that the key errors trace directly to the holders of the office of Minister for Health.
As part of a wider strategy of trying to persuade people that the health system is the problem, the Taoiseach and his ministers have acted as if the now endemic and dramatic budget overruns are the fault of a system out of control.
This is provably false.
These overruns are a political creation and they are undermining the ability of the system to use its resources most effectively.
Thankfully a Fiscal Advisory Council study has shown the truth. In the years before Fine Gael took control of Health, the HSE had built a very strong record of budget control. Through a succession of years the system came in on budget and any variations stemmed largely from overall economic impacts.
This changed in 2011, and since then there have been regular and rising overruns.
According to the Council, there have been two reasons for the overruns. Firstly there has been a failure to provide for the true cost of services at the start of the year. This is a political decision by Fine Gael Ministers to build overruns into the system as a feature. Secondly there has been a lack of central overall management oversight – something caused directly by Fine Gael’s decision to abolish the highly-effective HSE Board.
Given the chaos which has been evident in recent weeks over exact figures in Health, we do not know yet whether another overrun has been made inevitable by the Budget. We will be looking at this in depth in the weeks ahead.
We welcome the increased funding for Health, but need to see a lot more detail about what the core funding will achieve and whether there is any substantial movement on Sláintecare implementation.
The dramatic expansion in waiting lists and times since 2011 was a direct outcome of changes made by the government.
The significant increase in the National Treatment Purchase Fund is solely a result of our initiative – just as its restoration in 2016 was. Its success in helping thousands of patients and beginning to reduce waiting times is one of the few bright spots in the sector at the moment. Proof of this can be seen in the fact that the Taoiseach talks about the Fund regularly – in spite of his opposition to its restoration.
We have also prioritised the area of mental health services. Over the past two years we have had a constant battle to try to get the government to honour its commitments and to spend the agreed allocation. We have secured a significant increase for next year but it is important for people to know that it is not of the scale claimed by the Minister yesterday.
In the Budget speech he claimed that he was giving €84m extra for mental health services. In fact €29 million is simply to cover universal changes such as pay increases. A further €20 million is a re-announcement of funding agreed in the past and not delivered. This leaves a genuine new service increase of €35 million – which we are pleased to have secured, but it is important that people not be misled by the government’s announcement.
I believe we need to be honest with people about how the health service is being funded, how much new money is being allocated and where it is actually being spent. There are just are too many challenges and too many difficulties with getting access. With nearly one million patients on waiting lists there will have to be a serious change in the approach to planning and delivering health spending.
We have always been a party which invests in education and we delivered each of the major expansions in education access seen in the last fifty years.
We have already delivered a reversal of some of the worst education policies of this government. These include access to guidance and counselling, postgraduate grants and core school funding.
Overall this Budget is for education similar to its overall education policy – incoherent and damaging.
Other then the modest increase in the capitation grant there is little else. In fact Education will receive a below-average increase next year. The Minister tried to save face by announcing €300m from the Training Fund that can be accessed for higher and continuing education from 2020-2024 but this of course has nothing to do with next year’s Budget.
The funding crisis which is now hitting our higher education system is set to continue. While the Government holds ceremonies to honour itself, its higher education policy is a complete shambles. The loss of the highly-regarded Chief Executive of the Higher Education Authority seems to have been out of frustration at the failure of government to understand what is happening.
The money announced yesterday is tokenistic and due to be allocated to maximise political control and minimise autonomy. To say to a sector caught in a financial crisis that there will be a competition for new funding is shameful. And the idea that what we need is more competition for funding with the government serving as jury is fundamentally ignorant of how world-class higher education works.
We should be seeking to recruit excellent staff from Britain and doing everything possible to help students achieve as much as possible. Instead what we get is lip-service and interference.
The growing lack of transparency in decisions and the refusal to fund science identified as at the international cutting-edge is deeply disturbing.
The Budget includes capital funding for a new research programme which will for the first time in 21 years give ministers a role in deciding on funding. The funding is welcome, but under no circumstance should it be allocated in this way.
Throughout government there is an active effort underway to repoliticise grant schemes. The Taoiseach’s belief that politicians should take the credit for all good news is leading to a dangerous reversal of past progress. Ireland’s status as a place which values scientific excellence was fundamentally built on our decision to make awards solely due to independent and international review. The science and research policies of recent years have been deeply damaging. If you move ahead with your proposals the damage will accelerate.
This is a Budget which raises many issues. Its true nature will only become clear when we see more details of departmental spending plans. The chronic and near-systematic failure of government to follow words with action on the deepest challenges we face should concern everyone.
As I have said before, my party fulfilled a duty others shirked – which was to enable the formation of a government after the last general election.
We have been entirely straight and honest in how we have honoured our agreement. We have done this in spite of many difficulties and what can only be described as provocations particularly over the last year.
I informed the Taoiseach yesterday that we will continue to honour the agreement between our parties and will enter a review the Confidence and Supply Arrangement. We will do so as we have always done – in good faith and without the sort of spinning and briefing which there has been far too much of in recent months.
We have no intention of accepting artificial deadlines or any proposal which would deny the thorough review which we envisaged when reaching agreement in 2016.
No party has a divine right to power – no matter how much time it spends praising itself.
The chronic deficit in delivery on housing, health, Brexit preparation and many other areas means that it is impossible for the government to argue that we should assume all is fine and carry-on regardless. We want a genuine review and a genuine discussion upon which to decide.
In case anyone tries to use the Brexit situation as an excuse for claiming there is instability, we have assured Ireland’s European partners of the stability of Ireland’s negotiating position and that nothing will be done to in any way interfere with a deal being done and implemented.
The Budget speech has been delivered, but there is a lot of information yet to be published and the details of the Finance Bill and Social Protection Bill. We will be constructive in dealing with them and focused as we have been so far, in ensuring a more progressive and effective policy for addressing the concerns of the Irish people.