News & Media

Budget 2022 failed to address the cost of living

13 October 2021

Speech by Alan Kelly TD
Party Leader and Spokesperson on Northern Ireland

Speaking on Budget 2022, Labour Party Leader Alan Kelly said:

The theme of this Budget was Recover, Restore and Renew

It’s been more like reduce, reuse and recycle.

Reduced living standards due to inflation,

Reuse the same old ideas that have failed in the past,

Recycle the tax cuts and spending policies of the Ahern era,

Half-baked plans many of which have already been announced or already in train.

This Budget should have been a turning point.

It was a once in a generation chance to really make a difference.

Coming out of Covid this was the opportunity to deliver a new deal for a fairer Ireland.

Instead we got more of the same.

We have come through a pandemic the likes of which we haven’t seen in a century.

We saw a massive mobilisation of the power of the State.

Billions of euro committed to our health service and the preservation of lives.

Billions of euro to protect incomes and save jobs.

Actions unprecedented in our living memory.

People now know what the State can do when we really have to act.

We were able to build field hospitals, we were able to recruit, we were able to roll out vaccines incredibly quickly,

We developed the technology and the apps to make it happen.

And that’s the real takeaway from this year’s budget.

The people know the State can act when the political will is there.

This was the time to deliver a new deal for a fairer Ireland, but the opportunity has been lost.

Instead of a universal public childcare system we got piecemeal subsidies,

Instead of truly free education we got token gestures,

Instead of the radical efforts to tackle climate change the can was kicked down the road again,

Instead of a rent freeze there was more tax breaks for landlords.

Labour put forward a fully costed plan to build 20,000 social and affordable homes because we are still not building enough.

We got more of the same and no real vision for the future.

A budget package of €4.7 billion and yet we still can’t guarantee 10-year-old Adam Terry the scoliosis surgery he needs.

What people will judge this government on is how it works to resolve the problems they face in their everyday lives.

On work, on care, on climate and on housing there was little to give them hope.

Instead of really tackling these problems and investing in the services people need, the government its wisdom decided to commit €600m in a full year to an untargeted tax cut.

That is the ideology of Fine Gael and Fianna Fáil.

Cut taxes and increase spending.

There’s even an increase in the working from home relief that means the State is picking up more of the bill for employers but no relief on employment expenses for those who can’t work from home.

We’re a long way from April when the Greens were talking about a solidarity tax.

What happened Joe? We were right behind you. We all remember when you wrote to the Ministers for Finance and Public Expenditure.

Calling for a one off solidarity tax on the wealthiest.

Was it just for the headlines?

Labour has proposed a range of tax measures to raise €1 billion by closing down reliefs and taxing wealth.

Instead those same people, the wealthiest in our society will receive over €400 extra that they don’t really need.

That is the kind of spending that could have transformed our education system or delivered the Donagh O’Malley moment in childcare that we so desperately need.

The leaks in advance told us there would be €100m for childcare.

It was a lot less at €78m and it won’t kick in until next September.

Measures to control prices for parents won’t kick in until then.

People are sick of being told ‘this is a turning point’ for childcare when costs are some of the highest in Europe.

The budget proposals leave 11 months for some operators outside the EWSS and the proposed transition fund to rack up fees as much as they want.

There is nothing to make childcare more affordable over the next year when costs are rapidly rising.  

If anything, the government has started a race to rise prices if what will be introduced next September finally caps fees.

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The cost of living has been a dominant issue since the Dáil returned and I’ve flagged the cost of electricity and gas many times.

 

A winter of discontent lies ahead due to soaring prices and supply chain problems.

The €5 per week increase in social welfare payments doesn’t go far enough to protect those on the lowest incomes.

Since 2019 inflation has increased by 4.3% and from the government’s own figures is predicted to rise by 3.7% next year.

This budget spreads around lots of fivers but it doesn’t insulate those on fixed incomes from mounting price rises.

A fiver doesn’t go as far as it used to.

Jobseekers Benefit of €203 a week had to rise by a minimum of €7.50 just to keep pace with inflation.

The State Pension needed to increase by €9.19 to keep pace.

So when you look at the detail, prices are rising faster than incomes so people will have less to spend on everyday essentials.

Electricity and gas suppliers have already implemented multiple price increases that will cost households over €400 next year in higher bills.

I do welcome the action to increase the fuel allowance and acknowledge that the government took on board my call for the increases to kick in from the Budget.

But only 30,000 extra households will qualify for the fuel allowance. It is a lot less than the 130,000 Labour proposed.

I still am very concerned about what will happen if we have a severe cold snap.

Gas prices continue to soar. The government couldn’t guarantee we could keep the lights on this winter.

In 2020 an extra 4 weeks of fuel allowance were paid. I would urge you again not to rule out providing that again.

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Instead of tax cuts to the wealthiest, Labour also called for a refundable Carbon tax credit of €200 for ordinary working families.

This would be capped at a household income of €50,000 and targeted at those living in homes with a low energy rating.

This would have made a real difference by specifically addressing the impact of rising heating costs in poorly insulated homes.

This problem won’t go away, and the government’s retrofitting plan is moving too slowly.

If Carbon tax is to increase every year a measure like this will be needed.

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The Health budget is a masterpiece of distraction.

An allocation next year of over €22 billion but we still can’t deliver scoliosis surgery for children.

An extra 8,000 staff are due to be hired next year.

But we were told there would be 16,000 last year and we are really struggling to recruit for those funded positions as it is.

And there doesn’t seem to be a plan to resolve that.

We need more detail on what type of staff are actually planned to be hired and a breakdown of those 8,000 positions.

These are the workers serving on the frontline for us throughout the pandemic.

How many will be consultants

How many will be nurses

How many will be public health nurses or midwives, or healthcare assistants or psychologists.

Other departments are very quick to tell us how many teachers, gardai, SNA’s will be hired.

If we can figure out a pupil teacher ratio for our schools, then we should also be able to implement a staffing to patient ratio in our hospitals.

We can’t have a repeat of the situation from last week of nurses having to use baby monitors, because we don’t have not enough nurses to cover ICU beds.

As we try to recruit ever more nurses and doctors and other healthcare workers, we are also at risk of losing the ones we already have.

90% of nurses are facing burnout according to an INMO survey.

We need safe staffing levels, and action to address the pressures people are working under as we come out of the pandemic and the impact of the cyberattack.

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Over 900,000 people are on waiting lists.

And the only solution that Fine Gael and Fianna Fail can agree on is to outsource people to the private sector.

We will never develop the capacity or the skilled workforce we need if the approach is always to pay private investors for access to for-profit healthcare.

There’ll be an extra €250m for waiting lists of which €200m goes to the HSE and another €50m to the National Treatment Purchase Fund.

Next year €150 million will be spent on outsourcing public patients. We can’t keep doing this and expect waiting lists to ever fall permanently.

The NPTF has been back now since 2017. First €20 million, then €55m in 2018.

€75m in 2019

€100m in 2020

We were told at the last Budget it would €130m in 2021

And it’s to be €150m for next year

Half a billion over 5 years.

Lads, when are you going to realise it isn’t working?

The state is lining the pockets of private owners and giving the impression of tackling waiting lists.

We’re meant to be developing a single tier health service, not slowly privatising it.

This policy is building up a reliance on private care that will be impossible to wean the system off.

If we really want to build out our capacity rapidly, we must look at buying at least two private hospitals to provide immediate extra capacity.

And even when we build extra public capacity, it must be staffed and resourced.

If you look at my closest hospital, UHL, we’ve opened extra beds but there are still 91 people on trolleys on Tuesday, the highest since the start of the pandemic.

To bridge the funding and staffing shortfall in Limerick to bring it to the national average for a model 4 hospital would cost €41m.

If we don’t address that deficit then we will never get on top of waiting lists or A&E overcrowding.

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At last funding will be provided for free contraception as Labour has called for since the repeal referendum, but I would urge the government to ensure this does not send the wrong message.

Contraception is as much the responsibility of men as for women, so this measure should be gender proofed when it is finally implemented and a commitment given to expand it beyond 24 year olds.

We can’t have a repeat of the situation around GP care for children where we’re constantly told it will be expanded but never properly delivered.

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The government have announced a range of measures to support students. The problem is that it won’t come into effect until next September.

The crisis of student accommodation and the cost of living is now.

If the government had any sense the €200 increase to the student maintenance grant, increase to income limits and change in the adjacency distance would be backdated to September.

That would be a real support to students.

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There was also nothing for renters. Tax cuts for workers won’t cover the expected rent increases they face next year.

And the State is still not building enough homes.

The zoned land tax is long fingered for over 2 years.

I brought in a vacant sites levy of 3% in 2015 and it has since been increased to 7%.

Considering FG have been in government for the last 5 years if it wasn’t working during all that time why are you only getting around to fixing it now?

If the levy hasn’t been collected, then at least send a message now that you will be coming to collect it next year.

There will be a Finance Bill coming through in the next few weeks,

Reform it now so we’re not waiting years for another new tax.

Collect it on the land it already applies to.

If we’re really serious about activating land for development, then target those vacant sites now.

Conclusion

For many groups this budget was a disappointment.

It was a confetti budget that failed to deliver.

For those in our Defence Forces it kicks to touch again the need for proper terms and conditions.

For those on low pay and the minimum wage it delivers little to meet the rising costs of living.

The Living Wage of €12.90 is even further away for too many people.

For young people out of work there was barely an acknowledgement of the crisis they face.

We need a new deal for a fairer Ireland.

As I said at the start - what people will judge this government on is how it works to resolve the problems they face in their everyday lives.

On work, on care, on climate and on housing there was little to give them hope.