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THE GOVERNMENT IS outlined its intention to cuts taxes and increase spending every year from now until 2020 in an ambitious but light-on-detail Spring Economic Statement in the Dáil today. In what is seen by many as the opening salvo of the  general election campaign, the opposition hit out at efforts to buy the next election.

Here are the main points of the Spring Economic Statement: 

  • Budget 2016 will see a 50:50 split between tax cuts and spending increases totalling between €1.2 and €1.5 billion.
  • Government forecasts employment to pass 2 million people by the end of the year with all jobs lost during crisis expected to be replaced by 2018.
  • Net outward migration expected to cease next year with a return to inward migration from 2017 onwards.
  • Economy to grow by 4 per cent this year with growth of 3.25 per cent per annum being forecast in following years.
  • Noonan to meet with six main banks to discuss mortgage rate reductions next month. Government to unveil plans to help distressed mortgage holders in coming weeks.
  • Emergency public pay measures to be gradually unwound. Talks with unions to begin in coming weeks following government approval earlier.
  • No mention of bank debt deal in Michael Noonan’s statement.
  • Pledge to announce measures on mortgage distress in the coming weeks.
  • Opposition parties criticise ‘PR exercise’. Fianna Fáil say statement offers nothing for struggling mortgage holders. Sinn Féin tells government its plans are “fiscal vandalism dressed up as fiscal rectitude”.

Here’s how it all unfolded: 

Hello and welcome to our liveblog of the government’s Spring Economic Statement. I’m Hugh O’Connell and over the next few hours the coalition will be outlining its plans for tax cuts and spending increases over the next five years in statements to the Dáil.

Proceedings kick off at 2pm but before that we have Leaders’ Questions at 1.30pm, where Enda Kenny will be quizzed by opposition party leaders. Well be bringing you live coverage of that here and you can also watch proceedings in the livestream above.

Speaking on RTÉ’s News at One, Transport Minister Paschal Donohoe claims that today’s Spring Statement is a “standard procedure”. Despite the fact we’ve never had a Spring Statement before. Ever.

The scene in the Dáil right now. Leaders’ Questions is about to get under way

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Ceann Comhairle Seán Barret warns TDs to be “conscious” of the need to stick to the time limits so we can get the Spring Statement under way at 2pm.

Fianna Fáil’s Micheál Martin is raising the Siteserv issue and says the decision to allow KPMG investigate IBRC sales is a “political error”.

Meanwhile, some people are very excited altogether:

“A lot of guff has gone on publicly,” says Martin, who’s asks Enda Kenny if he an assure the Dáil that the activities on the Siteserv share register will be covered by the inquiry and that there will be “full transparency” in terms of the personnel involved.

Enda Kenny says that the interests of the government is for the taxpayer and that the facts in respect of the Siteserv sale should be made available as quickly as possible. He essentially says that a Commission of Investigation into the Siterserv controversy would take too long.

Enda Kenny says, if necessary, the government are quite prepared to legislate for a further independent analysis of this by the office of the C&AG.

He concludes with his usual potshot at Fianna Fáil: “The only reason that the board of IBRC were taking decisions on behalf of the taxpayer was because of the decision of your own government… which caused absolute economic mayhem.”

“But of course you conveniently forget about that,” Kenny concludes.

Martin shoots back by noting that Kenny and his party voted for the bank guarantee and asked for it to be extended.

Micheál Martin again asks why there was not an independent inquiry. Enda responds:

 

What Deputy Martin would like to thinks is there was some sort of cover-up.

Lots of shouting from across the chamber. Now we move on to Sinn Féin’s Gerry Adams, who is also asking about Siterserv. He says Kenny seems insistent on proceeding with a review that no one has any confidence in.

Adams asks Enda Kenny when Michael Noonan informed him of the Department of Finance concerns about goings on at IBRC. Kenny responds that Department kept him informed of the promissory note deal and plans to liquidate IBRC.

“I don’t have the date, but he kept us updated on the IBRC,” the Taoiseach says in a surprisingly brief answer.

Kenny to Adams:

I think, deep down, you have problems with the institutions of the State here.

Taoiseach is essentially reverting back to his usual form during Leaders’ Questions in the Dáil, ignoring questions to launch his customary partisan attacks.

Kenny notes that liquidation of IBRC saved “serious money” for the taxpayer. We now move on to Paul Murphy who is citing George Orwell’s Ministry of Truth… This should be interesting.

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Paul Murphy also raising Siteserv issue and asks Taoiseach if the investigation meets the requirements Tánaiste laid out in Dáil last Thursday, that inquiry needed to be independent and carried out by a competent authority.

Paul Murphy asks if Michael Noonan should resign. Laughter in the Dáil. Enda Kenny says “that last retort” is hardly worth of an answer.

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Taoiseach repeats much of the answers he has already given to Gerry Adams and Micheál Martin.

Uh-oh: Ceann Comhairle Seán Barrett asks Paul Murphy to withdraw a remark that Michael Noonan deliberately misled the Dáil. Murphy says Noonan did. Barrett’s not happy and says that Murphy cannot make charges like that against any minister in the Dáil.

“I withdraw the ‘deliberate’,” Murphy says, before he then goes on to say that he “misled the Dáil”, exempting the word ‘deliberate’.

There’s a bit of a row breaking out now.

Murphy moves on and calls for a broad inquiry to the IBRC issue… “We need to go deep into the rabbit hole that is Siteserv,” he says.

Enda wraps up by saying a Commission of Investigation would lead opposition to claim that government was putting off finding out what happened until after the election.

And now for the Spring Economic Statement. Hold on tight.

Michael Noonan: Since taking office in 2011, the government has determined to fulfil the mandate given to us by Irish people, to repair economy and public finances, to give hope and confidence to our citizens of a better future. Scale of crisis has been unprecedented.

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Noonan: Such a bright future is not guaranteed and is contingent on a continuation of policies and reforms introduced and being followed by this government. There are external risks, but choices taken in this house are important.

Noonan: The ‘if I have it, I spend it’ is by far the biggest risk to recovery…

Noonan: The young people who have left are coming back and they will continue to do so. The public finances are under control. Debt levels to move down to European average.

As a result, we will be in a position to implement another expansionary budget this year and every year to 2020.

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Noonan says the Irish economy will grow 4 per cent this year and has the capacity to expand by around 3.25 per cent every year up to 2020.

Noonan: 95,000 net new jobs have been created since the low-point of the crisis.

Noonan: A continuation of the current strategy will see two million people at work by the end of 2016. The employment lost during the downturn will be recovered by 2018 and there will be more people working in Ireland by 2020 than ever before.

Noonan: “Over the remainder of the decade we expect all sectors of there economy to contribute to growth an employment.”

The Minister for Finance goes on to outline growth in the area of tourism, foreign direct investment, International Finance Services, construction, agri-food, payment technologies and…. Irish Water.

Noonan: Irish Water will invest €5.5 billion between 2014 and 2021.

The investment is also required to prevent the massive wastage of water through leaks and to ensure a reliable safe water supply for all our citizens.

Noonan on mortgages, says it is the “single biggest debt most people will eve take on” and that government is “actively considering a range of options to strengthen the mortgage arrears framework”.

He says there will be an announcement on this “in the coming weeks” with a particular focus on enhancing the role of the Insolvency Service of Ireland, and the range of solutions through an insolvency arrangement.

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Michael Noonan tells Dáil that government will have between €1.2 and €1.5 billion available for tax cuts and public spending in the next Budget in October. “The final scale of the space will become clearer closer to the Budget,” he says.

Noonan says that Fine Gael and Labour have agreed a 50:50 split between tax cuts and spending increases in Budget 2016.

Noonan says that reducing the State’s debt burden remain a key priority for government and points to measures already taken. He says that the government intends to offload State’s share in banking system.

The exit strategy about recovery of the full cost of the taxpayer’s investment in these institutions and sing the proceeds to further reduce the debt.

Noonan: “The sale of 25% of PTSB that concluded yesterday, further improves the position and I am now confident that all the taxpayers money invested in AIB, BOI and PTSB will be fully recovered.”

Michael Noonan now moves into ‘attack the opposition’ territory:

“The forecasts for future Budgets are contingent on continued sensible economic and budgetary policies being pursued. Prudent policies support growth, support job creation and generate the taxes and the fiscal space for further investment in the economy.

“The scale of the fiscal space available in later years will be determined by the growth and if the wrong policies are pursued, the economy will not grow and the fiscal space will not materialise.”

Michael Noonan escalates attacks on the opposition parties:

In fact the principal domestic risk to Ireland’s continued economic growth is the tax and spend policies of the Opposition.

Unfortunately the policies proposed by the opposition will do exactly this. They will increases taxes, increase expenditure, increase debt, lower growth rates, reduce tax buoyancy and cost jobs. The policies of the opposition will again cause the economy to spiral downwards.

You were wondering about the corporation tax issue, weren’t you? You were worried it might be raised, weren’t you? Well, worry not:

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The 12.5% corporation tax rate will stay. This is a red line for the Government.

Michael Noonan:

A Cheann Comhairle, we must never again repeat the mistakes that left Ireland on the verge of bankruptcy in 2010 and resulted in a lost decade and such hardship in the lives of so many people.

Michael Noonan concludes by saying he looks forward to contributions from Brendan Howlin and the opposition parties.

Órla Ryan will guide you through Howlin’s statement now…

Brendan Howlin is up now:

Today is about recognising the point we have reached in our recovery,
and then setting out the context for Budget 2016. Today is not an
alternative to that Budget; it is a point-in-time assessment of where we
stand now and the challenges ahead.

Having come through the worst economic shock in our history as a
State, our primary focus must be, and will be, on sustainability. The
Minister for Finance and I share one overriding priority. That is to
ensure what we endured as a nation over the last seven years cannot
happen again. We will not throw away the hard won progress we have
made as a country.

Howlin: “The economic crash has taught us that nobody owes Ireland a living. We received emergency funding at a time when the markets stopped lending to us. We owe it to ourselves to ensure we do not allow a return to this position again. That is why we have sought to broaden the tax base to prevent the over-dependence on property and transaction taxes, which contributed to the crisis in the State’s finances.”

Howlin: “It became fashionable for a while to decry this country and its potential. But the turnaround that we have achieved in our economy is indicative of its fundamental strengths. We are now the fastest growing economy in Europe. Our recovery from this crisis has been as remarkable as our original descent into it.”

Howlin: “We have learnt just how vulnerable we can be to a global downturn exacerbated by domestic policy mistakes. Our purpose into the future should be to mitigate these threats where we can, to build resilience, and to focus on how we can grow our economy.”

Howlin: “Budget 2015 marked a very welcome point in our recovery. It was the first time since 2009 that reductions in expenditure were not required to meet our fiscal targets.”

Now – as outlined in today’s fiscal forecasts – as we prepare for Budget 2016 we will look to increase gross voted current expenditure by an additional €600 to €750 million. This increase will allow government to deal with underlying demographic pressures in key areas such as Social Protection, Education and Health. It will also allow us to target enhancements in key public services.

“As a proportion of the overall economy, government spending is roughly the same size it was in 2001.”

People are talking about a broad range of issues today:

Howlin turns his attention to pensions:

“We currently spend over €6.5 billion annually on pension provision. Over 400,000 people are in receipt of one of the two main State pension
schemes, the contributory and non-contributory State pensions. The cost of paying for these two schemes alone is projected to increase by €200 million per year out to 2026.

Let me be clear. There is no threat to the pension. This Government is committed to pension provision and to sustaining the value of those pensions. It is because of this commitment that, in our discussions on spending, it is important to consider future trends.

“Not enough of our citizens are planning for the future to supplement State pension entitlements. It is in this context that the Tánaiste has set up a working group to examine the pensions issue.”

Howlin on education:

“In education, the number of school children is set to increase every year over the next six years. By 2021, we will need an extra 3,500 teachers at primary and secondary level to provide education to an additional 50,000 pupils. The number of third level students is also projected to increase, by 20,000 in the same period.

“These are positive developments. Our economic future is bright as our highly educated workforce expands. But we need to plan to ensure our public finances can meet the challenge this represents.”

Howlin on jobs:

“We take the view that reducing unemployment remains the best route to recovery. It increases the tax base and allows investment in public
services. By continuing to get people back to work we make our recovery sustainable.

Irish people want to work. This has been a central focus of this Government’s efforts. We are now starting to reap the benefits – employment has increased in every quarter for over two years and we expect this trend to continue. Almost 100,000 new jobs have been
created since the low-point in mid-2012.

“We are achieving success through a range of measures, including the Action Plan for Jobs and investment in key capital projects such as
social housing.”

After all the build up to today, not everyone is impressed:

Howlin on public service pay:

“Earlier today, the Government agreed to my proposal to enter into discussions with the trade unions on the issue of public service pay. The pay reductions are governed by financial emergency legislation that requires me to annually review the status of that emergency. As
the economy improves, the prospect of a successful legal challenge to the financial emergency increases. It is prudent therefore to plan for an orderly unwinding of the emergency provisions. Not to do so would be foolhardy. I don’t intend to have those discussions here. But let me say this.

All public servants have had their pay reduced significantly. Over the last two years, they have seen the beginnings of pay awards in the
private sector. As the economy recovers, we need to ensure that remuneration and the cost of the Public Service more generally are managed to ensure that they remain sustainable.

“Of course, without the productivity gains made in recent years, we would not be in a position to discuss unwinding the FEMPI measures. Given their value to the State, the unwinding of those measures will take time. To do anything else would jeopardise the public finances again – something we will not do.”

Howlin has a jab at Fianna Fáil:

“I want to repeat that we must not allow this country to return to the devastating cycle of boom-and-bust that has been the
hallmark of previous governments. We must learn the lessons of the past decade and not repeat the mistakes that brought us to ruin.

“Our vision and plans for renewed prosperity will not be built on the sand of short-term and unsustainable increases in Government
spending. It will be built on the rock of fiscal responsibility and investment in the productive capacity of our people.

We cannot and will not throw money at problems. Expenditure growth must continue to be linked to performance and reform. Any increases in expenditure and incomes must be in line with growth and productivity. Decision-making must be evidence-based, with a strategic focus on improved outcomes for citizens.

Ceann Comhairle tries to hurry things up:

If you have your chats outside please, I’d appreciate it.

Now it’s over to the opposition to, well, oppose everything we just heard.

Fianna Fáil finance spokesperson Michael McGrath: People will be scratching their heads wondering what all the Spring Statement fuss was about.

McGrath asks Noonan and Howlin why they didn’t say they will scrap the banks’ veto in personal insolvency deals, or do more for the 1,000 children who will sleep in emergency accommodation in Dublin tonight.

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Former Labour TD Róisín Shortall agrees with McGrath

McGrath is unhappy that local property tax was not addressed in statement.

On another housing note, McGrath said Noonan came into the Dáil today “pumping his chest” and saying variable mortgage rates are an issue for the banks, not him.

“You were dragged into the debate, minister, kicking and screaming”.

Fianna Fáil’s Spokesperson on Public Expenditure and Reform Sean Fleming thinks this is an exercise in ministers “congratulating each other”.

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Pearse Doherty first up for Sinn Féin, says the government is not serious about political reform.

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Doherty: A fair recovery would get rid of the “unfair home tax” and water charges, and stop shifting the income tax burden onto lower-earning families.

“I understand your big day isn’t going down as well as you planned,” Doherty tells Noonan and Howlin, adding that Sinn Féin would do the “radical” thing of keeping its promises if the party came to power.

That’s it from me now, I’ll hand you back to Hugh O’Connell.

Enjoy the rest of #SpringStatement day! – ÓR

Hello again everyone. Hugh O’Connell here. Sinn Féin’s finance spokesperson Pearse Doherty is in the middle of having a considerable go at the coalition.

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While Pearse continues, it’s fair to say that the general consensus is that the Spring Economic Statement was incredibly light on detail and underwhelming when compared to the considerable build-up.

Right now, the opposition attempts to paint this as a PR exercise are likely to have more impact than anything the government said in the Dáil today. We’ll have full analysis on the site later today.

“Fiscal vandalism dressed up as fiscal rectitude.” – Pearse Doherty‘s assessment of the Spring Statement who describes today’s announcement as “McCreevy-style with a Limerick accent”.

In a break with tradition during recent Budget speeches, Michael Noonan and Brendan Howlin have remained in the Dáil chamber for the opposition speeches. But it’s fair to say they’d rather be elsewhere.

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Here’s a statement from Brendan Howlin on plans to talk to trade unions about public sector pay and unwinding the emergency measures taken during the crisis. The talks will begin in May.

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Mary Lou McDonald, Sinn Féin’s public expenditure spokesperson, speaking now, says that spring statement has been full “grandiose claims that have amounted to nothing”. She goes on to quote Jonathan Swift:

“Blessed are those who expect nothing for they shall be never be disappointed.”

Mary Lou says that the government should have abolished water charges and the property tax. They didn’t, you’ll be surprised to hear.

The Green Party finance spokesperson, councillor Mark Dearey, says the Spring Economic Statement will have left “few any wiser as to how the government intends to address worsening social problems”.
The Spring Statement served to prove that the Government are satisfied with their performance; their self-appraisal has delivered an A+. But today’s report will do little to assuage public concerns about growing inequality, under-investment in services and infrastructure, or tax reforms that disproportionately favour society’s wealthiest.

Mary Lou notes that prescription charges – which the government pledged to abolish – have risen from 50 cent, when it came to office, to €2.50 at present.

As Mary Lou McDonald finishes up, Noonan and Howlin leave the chamber before the Technical Group begins its response. Sinn Féin’s Padraig MacLochlainn raises hell over this, saying it shows disrespect to independent TDs.

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“The ministers have been here since two o’clock, I think they are entitled to a comfort break at least,” the current Dáil chair, Olivia Mitchell, says.

Responding first for the Technical Group, independent TD Catherine Murphy welcomes the economic growth and job creation (that’s probably the first time anyone not from the government has said something positive about today) but adds:

The economy has been stabilised at the expense of society.

She goes onto criticise the lack of political reform.

Catherine Murphy:  We’re still very much in the ha’penny place when it comes to broadband provision.

Catherine Murphy: “I think it’s criminal that people are continuing to pay for the Anglo debts. We’re still paying every penny back – just over a longer time.”

Catherine Murphy returns to the Siterserv issue, which she has championed. She is incredulous at the fact there are no notes of two meetings between former IBRC chief Mike Aynsley and ex-Department of Finance sec gen John Moran.

Catherine Murphy concludes and Clare Daly is up now, she says that coalition backbenchers are embarrassed by the government’s announcement today:

There hasn’t been a single one of them present for the jamboree, they’re a bit scarlet.

With that we’re going to conclude our liveblog today. Dáil debate on the Spring Statement continues until around 5.30pm.

Michael Noonan and Brendan Howlin are holding a press conference at 7pm. We’ll be livetweeting that on @TJ_Politics and bringing you more reaction later today.

Hugh O’Connell signing off.

About the author:

Hugh O'Connell

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