Dail Speeches Stephen Donnelly

Stephen-DonnellyThese are the Stephen Donnelly Contributions to the 32nd Dail.

I will upload transcripts and Video if and when both are available



Stephen Donnelly asking the minister for Justice Frances Fitzgerald to close the loophole that allows, banks, debt collectors and financial institutions to register and act as charities therefore avoid tax on Irish profits.



Stephen Donnelly points out the fact that banks, debt collectors and other financial firms are using charitable status to avoid paying massive amounts of tax.



Stephen Donnelly gives his contribution to the Dáil debate on the democratic decision by the people of the UK to leave the EU.



Stephen Donnelly Giving his reply to the minister for Finance and the minister for public expenditures Summer Economic Statement



Stephen Donnelly TD speaking at the budgetary scrutiny committee to the commission for human rights and equality.



Stephen Donnelly TD speaking on the revised Health service Estimates. Asking for specific areas to invest the new money in.



Stephen Donnelly speaking on the Fianna Fail motion to form a task force to look at the horrendous cost and increase in Insurance.

Stephen Donnelly (Wicklow, Social Democrats)
I wish the Minister of State, Deputy Eoghan Murphy, all the best on his appointment. It is a great honour for him and his family. With financial services and government procurement in his portfolio, a background in nuclear disarmament may prove to be quite useful. I wish the Minister of State the best in his job.

The Social Democrats support this motion on the establishment of a task force to examine the rising costs of motor insurance in Ireland. However, we would like to go further than that. We all know that motor insurance costs are skyrocketing. According to the Central Statistics Office, insurance costs increased by 32% in the last 12 months. We all know that at least some of the reasons for these increases are historic under-pricing by insurers, new rules requiring higher reserves to be put aside, elevated personal injury awards and lower investment returns. These costs are being passed on to motorists, with drivers being asked to pay an additional 50%, 75%, or in some cases 100%. People are being stunned by their motor insurance renewal bills. The reaction of some people is to question what they have done wrong that has caused their premiums to increase.

Members of the Freight Transport Association recently reported premium increases of 50%, with some being asked to pay increases of up to 70% on their 2014-2015 premiums. It is not only in motor insurance that this is happening. Up to the end of March this year, home insurance premiums had increased by approximately 10%, and health insurance premiums have increased by more than 3% in the past year. This is in spite of the fact that 100,000 extra people have taken out health insurance following the introduction of lifetime community rating. The cost of health insurance for hundreds of thousands of VHI customers increased by an average of 3% since the beginning of May. This is the second increase announced by the State’s private health insurer in the last six months. It rolled out an average price increase of 2% last November.

As alluded to by other members, insurance costs for businesses are also worrying. The Small Firms Association, SFA, reports that insurance costs for its members have increased by approximately 30% since 2011, which is a significant additional cost for any firm to bear, particularly small firms around the country that are hanging on by their fingernails. This amounts to an increase in the average cost per claim of 8% in private motor insurance, 27% in employer liability and 8% in public liability. Clearly, the average claim is increasing at a steep rate. How do we address this? We need to drive down average claim costs. We can reform how awards are set by the Injuries Board and the courts. We must also have better non-litigation options such that legal fees are reduced.

I listened to a debate on this issue last night during which it was reported that 70% of claims are being settled out of court. There is no record of those transactions. The industry, rather than the State, is at fault in that regard. The industry must invest in proper data sharing. This happens in the UK and in Northern Ireland. Firms that are engaged here and in the North have invested in serious data sharing in the North but they have not done so here. The AA has suggested that a task force of all Government agencies be established. Obviously, this is a multi-departmental issue. The problem is not just related to motor insurance, nor is it related to insurance generally; rather, it is a problem related to the cost of living and the cost of doing business in Ireland. Child care costs here are the second highest in the OECD. Rents here have increased by over one third since 2011 and the cost of education has increased by almost 20% since 2011. Variable interest rates here are also much higher than in most European countries. The Social Democrats support the establishment of a task force on motor insurance, but we believe we have to be much more ambitious than that.

There needs to be a task force – be it an expert group, an Oireachtas committee or some combination of these – which considers not just motor insurance or the insurance industry but which also systematically addresses the cost of living and of doing business and comes back with a multi-agency, multi-departmental recommendation so that people can get on with their lives. Then the money in their pockets can buy them more, they can afford a decent standard of living and small firms can reduce the cost of doing business and get on with expanding their operations and employing people.



Stephen Donnellys Statement on delivering sustainable full employment

Stephen Donnelly (Wicklow, Social Democrats)
If we are to have full sustainable employment in Ireland, I suggest to the Minister that we need to do the following in this Dáil term. First, we need to increase investment in business-critical infrastructure, particularly broadband and transport. Second, we need to increase investment in our education system, coupled with serious reforms at secondary and tertiary levels. Third, we need to increase investment in basic scientific research, something that has been cut to shreds in recent years. Finally, we need to systematically reduce the costs of doing business, including in such areas as interest payments, compliance, energy, insurance and legal duties.

We need to be just as ambitious and provide just as much support for our small and medium-sized enterprises, SMEs, as we do for the multinationals. This includes cutting red tape, supporting innovation, getting credit flowing, equalising taxation and social protection for the self-employed and making it easier for people to go to work, for example, by making childcare affordable. All of these things are possible but they require a clear focus and determination by the State in the coming years. This includes us in the Oireachtas, local government, the Civil Service and a range of other State agencies.

The Minister probably does not agree, but I would posit that the previous Government got many things wrong. However, it is important to give credit where credit is due, and nobody can deny the job growth that we have seen and continue to see. Approximately 135,000 jobs were created during the term of the last Government. Unemployment is now thankfully below 8% and continues to fall, and we continue to lead the world in attracting high-value foreign direct investment, FDI, to Ireland, which is something for which IDA Ireland and the former Minister, Deputy Richard Bruton, deserve great credit. Interestingly, in the first quarter of this year tech firms in Ireland raised €237 million in venture capital. That is twice what was raised in VC for tech firms last year, so there are some very encouraging signs this year in the marketplace.

However, I think we would all agree that job creation has been very unbalanced. One of the largest failures and areas for focus to date is youth unemployment, which is still nearly 20%. The research by the World Bank shows sadly, that in terms of economic and social indicators, this high level of unemployment will stay with and affect that generation until retirement.

Business in rural Ireland has been decimated. I travelled last weekend around towns and villages in Mayo and I would say there were some where one in every three shopfronts was closed and others where two in every three were closed. Entire towns and villages are becoming ghost towns, which clearly needs to be addressed. In Wicklow, my constituency, vacancy rates in commercial property are still at 13%. I am sure the Minister is talking to business owners around the country, as I certainly am, many of whom are still hanging on by their fingernails.

Sadly, of course, the greatest reduction in unemployment over the last five years has been due to emigration. 35,000 people emigrated last year alone and – I was shocked when I read this figure this morning – 220,000 people under the age of 25 have left the country since the economic crisis began. That is a huge number of people for the size of our population.

The question we are addressing today is how to turn a fragile and uneven jobs recovery into a sustainable and full one. I would like to suggest a range of different measures to consider. We must utilise much more fully the multinationals that are here. Long may these companies continue to come and long may they stay, but we must start linking indigenous industry much better to the multinationals. The original FDI strategy, if one looks back a few decades, was that the multinationals would come and Irish indigenous industry would become the supply chain to them. However, that has not happened. The multinational base in Ireland is becoming more productive, but the data show that the gap in productivity between the multinationals and the indigenous sector is growing. Dr. Catherine Mann of the OECD stated recently at a conference, “The assets are here [that is, in Ireland], but they’re not being linked in to the domestic economy. They’re not being levered up by domestic firms, and they’re not being married to domestic workers”. Enterprise Ireland is tasked with creating these linkages but it is operating on a very small scale. There needs to be a lot more investment and Enterprise Ireland’s team needs to grow. This is a huge area of potential for the indigenous sector.

We also must get much more serious about helping our SMEs access not just credit, but affordable credit. The ECB’s latest statistics show that Irish companies are paying on average 5.8% interest on loans under €250,000. In France the average rate is 2.4%; in Austria it is 2.2%. Our firms are therefore paying between 60% and 100% more for their credit. We need our firms to be internationally competitive but they will only become competitive if they can borrow at the same rates as the international firms – the French, Austrian and American firms – with which they are competing.

There are many things we can do here. We can work with the banks to find ways of reducing their average cost of capital. We can establish a community banking system. The credit unions alone have about €8 billion on deposit that they are waiting to use and lend out but because of the current legislation, the Central Bank rules, they are not able to do so. We need to make firms much more aware of the Credit Review Office. When firms go to the Credit Review Office they are getting very positive responses. If one does a straw poll of the firms, however, to ask them whether they are aware of the Credit Review Office and the other supports around, be it the local enterprise offices, LEOs, or other areas, the level of awareness is not that good. There is therefore very important work to be done to reach out to the SME sector and educate SMEs as to what is already available.

Ireland’s investment in infrastructure needs to be increased. This is critical. IBEC, ISME and everybody else are calling for it. I understand investment levels are about half of the OECD average at the moment, at about 2.2% of GDP. We must get the national broadband plan back on track. The dates that are now being used have been pushed in some cases by two years so far. It is already slipping a lot, and my fear is that it will continue to slip. It is probably the single most important piece of strategic infrastructure required for job creation in the country at the moment.

Some very critical transportation links also need to be completed. A high-quality connection between Cork, Limerick and Galway is one and the ring road in Galway for the multinationals is another. The latter has become a car park. It has become so bad that many people are saying they cannot get to and from work, so very serious investment is needed.

We probably agree on the need for investment. Where we may disagree – I ask the Minister to have a very serious think about this – is that if we are to be serious about having the money to invest, then a tax erosion policy is not the way to go. We are a fairly low-tax economy, so I ask the Minister to consider that if we are to have the money to invest, further erosion of the revenue base is not the way to proceed.

We must also invest in education. The Minister has a serious background in education. Class sizes are still far too high. Per-student investment in third level has fallen off a cliff in the last eight years. It is at about 50% of what it used to be. Funding to basic scientific research has been cut by about 60%. That may save a few euro today, and maybe it was necessary in the recession, but it is cutting off a pipeline of innovation and high-calibre scientific research for decades to come, something that must be addressed.

There are also many ways of making business easier in Ireland. We can reform the commercial rates regime, not to just take into account the theoretical value of the property, but also to perhaps take into account turnover. Perhaps we should also consider the number of people employed so that we do not disadvantage small firms competing with bigger firms or higher-turnover ones, such as some of the supermarkets. They have the same footprint as smaller firms but a huge turnover and therefore pay much less tax as a percentage of revenue or profit.

We can simplify compliance for small businesses all over the place. We can implement a user-friendly web portal. The Norwegians did this very successfully in 2003. It is called Altinn and we should examine it. It was established for tax compliance and is used for a range of services in Norway. We need something similar here.

The Commission for Energy Regulation, ComReg, urgently needs to be tasked with examining energy prices. They are far too high for households and businesses. It must be systematically addressed. There are many ways we can make it easier for people to go to work. Child care is a major trap for people returning to work. New apprenticeship programmes, including advanced qualifications would be very useful, as would equalisation of tax credits for the self-employed and social protection. Making research and development tax credits much easier for small firms to access would be very useful. I would love if innovation were taught as part of our educational curriculum in some way.

Ireland is a very small country competing in a highly competitive and increasingly globalised world. It is not enough for us to be successful in attracting foreign direct investment and multinationals which can leave just as quickly as they arrive. We must back our own businesses as much as we do the multinationals, and we can. The Social Democrats have laid out a wide range of ideas and I would be delighted to sit down with the Minister, her team and officials and go through them. Now is the time for significant investment and to systematically reduce costs, remove barriers for people returning to work, back our indigenous sector and be just as ambitious for our indigenous sector as we are and should be for the multinationals.



Stephen Donnelly on his parties motion to create a cross party committee to look at Healthcare provision

Stephen Donnelly (Wicklow, Social Democrats)
I thank all the parties and Independent Deputies who have signed up to the motion before us. There is much concern about the fact that we have a minority Government, and those concerns may, in time, prove to be well-founded. While I hope they do not, they may. However, the minority situation also provides the Dáil with a voice it has not had before. It provides the Dáil with the opportunity to table motions and legislation and build cross-party coalitions for good ideas. While the Social Democrats initiated the motion before the House, it is a motion of the Dáil, supported by all parties and groups. Hopefully, through this cross-party approach, we can achieve some important breakthroughs in health care.

The motion calls for the establishment of a committee to examine four specific health care challenges, namely, the existing and forecast demand for health services; how to progress a model of health care that advocates the principles of prevention and early intervention, self-management and primary care services, and integrated care; the different funding models available, which I imagine the committee will spend much time on; and how best to reorient the health service from an acute-based system towards an integrated, primary and community care system.

The motion outlines “the need to establish a universal single tier service where patients are treated on the basis of health need rather than on ability to pay”. It is a very serious statement for the Dáil to make. It is a cross-party statement signed up to by all the Independent Deputies. It is a major departure from today’s health care system and I very much welcome the fact that the statement has got such agreement in the House.

There is more that most, if not all, Members agree on. They agree that our health care system should provide a high quality, modern and timely service which should be provided as close to the patient as practicable. They agree our health care system should be cost-effective and should invest in prevention and early detection. They agree our health care system should protect people’s dignity, which our clinicians try to do every day but which, sadly, they are not always able to provide, for a variety of reasons. They agree that our health care system should be a rewarding and exciting place for clinicians and non-clinicians to work in and that it should be open to change, responsive to concerns and accountable for its work. I, and many Members of the House, would argue that this is not the case.

It is important to recognise some of the successes we have had in health care, including the great success and progress in paediatric leukaemia treatment during recent years. However, the system is struggling. International comparisons do not suggest Ireland does very well. For example, the European Health Consumer Index ranks us 21st out of 35 countries, which puts us close to the bottom of the middle group. The index also found that we have the longest waiting times for emergency care in Europe, which we must take very seriously. Today, nearly 300 people are on trolleys. In west Wicklow and Kildare, more than 1,800 people are awaiting speech and language assessments. The vast majority of these are children, and the waiting time is 18 months to two years. By the time some of those children receive care, much of the opportunity to provide help has been missed. Over the weekend, we heard the bone density scanners in Galway University Hospital have been shut down. We have two high-tech machines that had been running five days a week, and both have been mothballed due to lack of staff. We cannot allow this.

The Cappagh National Orthopaedic Hospital has seven operating theatres which used to operate every day and a surgeon in a given eight hour list could do approximately seven procedures. Two of the operating theatres have been closed indefinitely and another two have been closed for refurbishment with no understanding as to when they will re-open. Only three of the seven operating theatres of the Cappagh National Orthopaedic Hospital are being used. It is worse than that. A given orthopaedic surgeon takes one of the three operating theatres for a given day. The surgeons are being told they can have a theatre only every second or third Monday, for example, given that only three are available. They are also being told not to do as many procedures as they could. For example, rather than doing seven procedures, they are told to do only four, and then go home. The HSE will still pay the €22 million it costs to run the hospital, and will pay the surgeons, theatre teams and all the costs. The reason the surgeons must go home is that the only thing the HSE will not pay for is the implants.

We have a hospital, surgeons, technicians, operating theatres, wards, a car park and insurance. We are going to pay for all of these, but we will just not pay for implants. Therefore, rather than having seven operating theatres within which six or seven procedures could be carried out each day, we have three within which perhaps four procedures are performed each day at more or less the same cost. We paid €22 million for the hospital and some of the €1.5 million for implants. That is the what is happening in the hospital system. Consequently, those who can afford it can avail of private care. The waiting time to see a surgeon to whom I spoke recently was 18 months in the case of his public list but only six months in the case of his private list. Therefore, there is a two-tier system. There is health care for those who can afford it but not for those who cannot.

What is frustrating is that it is not due to a lack of funding. It is not that there is not enough money going into the HSE. We have the second highest expenditure ratio on health care in the OECD. We spend money, but we do not get the service we should for it. The issue is not clinicians. We have some of the best trained clinicians on earth, as well as some of the best doctors, nurses and surgeons. We have the second highest expenditure ratio on health care, yet we are effectively telling the National Orthopaedic Hospital to close more than half of its operating theatres, not to carry out as many procedures as possible on patients with deteriorating conditions which will result in their ending up in wheelchairs because we do not have the money for implants. That is what is happening on a daily basis.

There are many reasons for the low performance rate in the health system. There is a lack of local autonomy for hospitals and there is a poor level of accountability and transparency in the HSE. There is little econometric analysis to show where we need to provide health care. We do not have integrated ICT systems for the management of patient records. In many places we have silos rather than continuous and holistic care pathways. We have a deep culture of mistrust between clinicians and managerial staff across the health care system. It is corrosive. However, such a culture does not prevail in other countries in which I have worked. There is little access for patients to clinical quality data. Consequently, they do not know which hospitals are good and which are bad. Some are good and others not so good, but we are not allowed to know which is which. There are also poor working conditions for clinicians. The list goes on.

Each of these operational challenges is solvable, but they are not being solved. Why? It is because behind it all there is a lack of vision. We cannot achieve success in health care because we have not agreed what it is. We cannot give managers and clinicians the tools they need to succeed because we have not told them what we want them to do to succeed. We need a unified strategy for health care, but for that we need to know what it is to achieve and right now we do not know what that is. That is why the motion is important. It will bring together a cross-party group to which we can all bring political ideas, but I hope it will not be used as a political football. We can bring the group together to ask some of the following questions.

What are the health care services we need and where are they needed? How do we support prevention and early detection programmes? How can we move to an integrated primary care system? How much money are we willing to spend on health care, as we can spend as much as we want to spend on it? How will we raise the money? If we can make progress on these questions, we can put a long-term system in place with agreement on what it is we are trying to achieve, how we are trying to achieve it and, critically, how we will pay for it.

We need to be honest about some uncomfortable political truths which the committee will have to examine. One is that a modern health care system requires an increasing amount of money because it is becoming more sophisticated and people are living longer. Another is that a modern health care system is of a scale which makes it impossible for all services to be delivered everywhere throughout the country. We will have to have a serious conversation about that issue. Another truth is that some hospitals are simply better than others and that people have a right to know which are doing well and which are doing badly.

We need a vision for health care for which we need cross-party support. We must also learn to start trusting clinicians and managers in primary care centres, hospitals and hospital groups.

I wish whoever will serve on the committee well. They will face some very difficult technical and political issues. If the committee can succeed in bringing back to the House a vision for health care and real options in terms of how much it will cost and how we can fund it, we can start to move on and accept that if we are to spend more on health care than almost any other country, let us have the best health care system in the world for that money.



Stephen Donnelly gives the his and the Social Democrats Statement on the morning of the vote for Enda Kenny as Taoiseach

Stephen Donnelly (Wicklow, Social Democrats)

It is fair to say that the previous Government did get some things right in a difficult environment—–

Damien English (Meath West, Fine Gael)

Thank you.

Stephen Donnelly (Wicklow, Social Democrats)

—–but it also got many things wrong. After five years in here trying to change some of the things I and the Social Democrats believe they got wrong, my conclusion is that at the heart of the errors the previous Government made was a failure of ideology. Allowing a republic where one child in nine lives in daily poverty to continue is not a failure of policy, it is a failure of ideology. Designing and implementing five regressive budgets in a row that asked those who had the least to bear the greatest burden was a choice. It was a very damaging choice and it was a failure of ideology. Selling more than 13,000 family mortgages from IBRC to vulture funds, many of whom are now having to deal with those vulture funds who are making very serious profits, rather than facilitating the families when every other situation had to be dealt with on a case-by-case basis was a failure of ideology.

Campaigning to cut taxes at a time when parents are putting their children to sleep in the back of cars is a failure of ideology. That failure of ideology continues through to the leaked document we saw outlining tax cuts to investment ratios of 1:2. The previous Government, Fine Gael in particular, campaigned on a slogan that we have to make work pay. It is one of the three pillars of its 130-page manifesto, Making Work Pay. The ideology says that if one taxes people for working, one is disincentivising them from working so they will not work and one has to make it pay for them to work. However, objective, impartial analysis from the OECD says that Ireland has between the lowest and the fourth lowest tax wedge, tax on work, in the OECD, depending on what type of family one is in. The Government that is coming in now is backed up by a document whereby it is going to continue with tax cuts to make work pay, because presumably work does not pay. At a time when one in nine children are living in poverty and we are dealing with a homelessness crisis, when there are not enough gardaí on the streets, it is not just a failure of policy, it is an absolute failure of ideology.

The Social Democrats – I am sure with many others here – would love to be in government. We would love to be driving policy but we do not see evidence that the ideology has changed. As other Members have referenced before, there are some welcome phrases that it is hoped will be followed through in this coming Dáil, but what we do not see is a change in the ideology that has led to an awful lot of very bad things happening to a lot of vulnerable people in this country in the past five years.

I hope we are at a time where we can start rebuilding society. If we are to rebuild a republic that genuinely provides every single man, woman and child with dignity and opportunity, then we need to do it with a different ideology based on values of dignity, genuine equality and democracy.

Consequently, for this reason and many others, we in the Social Democrats do not believe the ideological basis of what Members are about to see will be good for this country and for that reason, we will vote against this Government.


Stephen Donnelly speaks during Irish Water Debate. Pointing out again how it only collects enough money to pay for the collect of the money at maximum


Stephen Donnelly (Wicklow, Social Democrats)

I propose to share time with Deputy Catherine Murphy. I welcome the fact that the issue of Irish Water has been brought into the Dáil for debate. It is something the Social Democrats called for this week. It is an important issue but it is only one of the important issues facing the country, and we are also dealing with crises in homelessness, housing, distressed mortgages, health care and child poverty, to name but a few. However, it would have been entirely unacceptable for the Thirty-second Dáil to fall because of an inability on the part of Fianna Fáil and Fine Gael to find a compromise solution in talks in which none of the rest of the Dáil is involved.

Most, if not all, Members of the House agree that investment in the water system is required to the tune of an additional several hundred million euro per year for at least the next seven to ten years. Most, though probably not all, Members of the House also agree that the water supply should remain in permanent public ownership in this country. The solution to the second of those points is very straightforward. First, we should hold a referendum seeking to change Article 10 of the Constitution enshrining the water supply in public permanent ownership. Second, we should disband Irish Water as a commercial semi-State and set up a public board, or whatever we might call it. Those two acts would absolutely guarantee that the Irish water system remains in permanent public ownership. Regardless of what happens to domestic charges, those two things should happen and I imagine that a very strong majority of this House would support a referendum and ending the commercial semi-State entity that is Irish Water.

The solution to how to find the funds for investment is a lot more complex. The main argument for domestic charges has been that the money is needed for additional investment but this is a false argument. The economics of the water charge are such that the money raised more or less covers the cost of raising the money so not a single euro paid out by Irish households is being used to invest in the water system, nor is it being used to provide people with water. It covers the cost of taking the money from them. Nevertheless, capital investment is happening. This is much needed and welcome but how is it happening if the domestic water charge is not raising any money to make it happen? It is happening because Irish Water is borrowing.

The second argument put forward by the Government for a domestic water charge is that a domestic water charge allows Irish Water to borrow this money, which means we do not have to shrink the fiscal space to which the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, referred. However, Irish Water is borrowing on balance sheet so the Irish State can borrow on balance sheet, but at a much lower cost, to do exactly the same thing. It costs approximately twice as much money in Ireland per capitato supply water as it does in the UK, including in Northern Ireland where there is a similar geography and population density. Therein lies the answer to finding the several hundred million euro per year required for capital investment in the system. Targets have already been set and agreed by the regulator and a significant cost saving can be found by bringing 34 utilities into one national entity and that money can and should be used to fund the upgrading of the system. There is a short-term cashflow lag between the savings that can be found because, for example, it would have to be done without compulsory redundancies, so it would take time. The investment, however, is required now and Irish Water is bridging that funding gap by borrowing but it is borrowing on balance sheet and the State can do exactly the same thing.

It is a reasonable argument to suggest that everybody be provided with a very generous allowance for free and we would charge people for excess usage. The reason not to do that is that it costs some €100 million a year to charge people for water and it is too expensive just to stop a very small number of people from using too much water. For these reasons, the Social Democrats believes the domestic water charge in Ireland does not make sense. We would like to see a referendum held, the commercial semi-State ended and a national water board constituted.


Stephen Donnelly Dail speech where he castigates the government and the Cathaoirleach for the sham debate on the EU stability report


 Stephen Donnelly (Wicklow, Social Democrats)

Before I get into what will be a limited response to the stability programme update because of the time available, I will call out what is happening in the Dáil right now. The stability programme update is a serious document. It is the start of the budgetary process, as acknowledged in official documentation. It is not just a technical and statistical document, as the Taoiseach called it this morning. The update sets the country’s expenditure ceilings for next year. This document frames the budget. As such, a detailed discussion of its contents is important. For example, a table in last year’s update made all manner of highly technical adjustments to the likes of the expected growth and inflation rates that radically changed the fiscal space that was available this year. Things that are happening and not happening in Ireland today are directly related to the technical analysis contained in last year’s stability programme update. This is not a technical and statistical backup analysis. It frames the entire budgetary process.

Let us consider what has happened. We got this document at 10 p.m. last night but were not told about it, so I only picked it up at 7:30 a.m. this morning. We found out yesterday that there would be statements on this important document today. The acting Ministers, Deputies Noonan and Howlin, entered the Chamber, made speeches that they had clearly had a great deal of time and resources to prepare, tolerated Deputies Michael McGrath and Pearse Doherty and then left. With genuine respect for the Minister who is sitting opposite representing the Government, her Department is Arts, Heritage and the Gaeltacht. This debate is nonsense.

The acting Minister, Deputy Noonan—–

Bernard Durkan (Kildare North, Fine Gael)

Any Minister can take business.

John Lahart (Dublin South West, Fianna Fail)

Deputy Donnelly is commenting on the arrangements for the debate rather than on the debate itself.

Eamon Ryan (Dublin Bay South, Green Party)

It is perfectly valid and relevant.

Stephen Donnelly (Wicklow, Social Democrats)

I can comment on whatever I want. It is very relevant that neither Minister, Deputy Noonan nor Deputy Howlin, thought fit to listen to what the Dáil had to say about the start of the budgetary process.

David Cullinane (Waterford, Sinn Fein)

Hear, hear.

Stephen Donnelly (Wicklow, Social Democrats)

It is relevant that neither is present. The Minister, Deputy Noonan, stated that he would take on board feedback from the Chamber. How can we give meaningful feedback with approximately two hours’ preparation, no meeting with Department of Finance officials and no briefings? It cannot be done. Even if it could, how could the Ministers possibly take our feedback and incorporate it into this document? The Minister, Deputy Noonan, stated that the document had to be with the European Commission by tomorrow or Friday at the latest.

I am calling out what is happening. This is meant to be new politics and political reform. Last autumn, the OECD drafted a thorough review of Ireland’s budgetary process.

It states: “To be effective, the measures proposed above [namely, the measures coming out of the Department of Public Expenditure and Reform for better parliamentary engagement] will need to be underpinned by a renewed commitment by Government, at political and administrative levels, to engage with the Oireachtas as a partner throughout the budget process.” It is difficult to explain quite how I feel about what is going on here this morning without using unparliamentary language so I will leave it at that. What is before us is nonsense. It is an insult to the Dáil, the Independents and the political parties. The finance spokespeople or other appointed Members would gladly have met finance officials and the two relevant Ministers. This is important stuff.

On the back page of the documentation, page 47, there is a copy of the letter from Professor John McHale in his capacity as chairman of the Irish Fiscal Advisory Council. It is dated 20 April. That was quite some time ago as it is now 27 April. A week ago, Professor McHale was able to write to the general secretary and state the council was provided with the SPU forecast on 7 April, which is 20 days ago. Twenty days ago, the Department gave these figures to the Irish Fiscal Advisory Council. Seven days ago, the council wrote back to the Department and said it was broadly satisfied with its projections. Today, the day before the document must legally be sent to Europe, we in the Dáil finally get to see it and debate it without either of the Ministers present. I actually had several questions for the Minister for Finance, Deputy Michael Noonan, and the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, based on what they had to say.

Bernard Durkan (Kildare North, Fine Gael)

On a point of order, the impression is being created that there is no representative of the Government present.

Stephen Donnelly (Wicklow, Social Democrats)

That is not a point of order.

Bernard Durkan (Kildare North, Fine Gael)

I am sorry but the information is on a point of order.

Stephen Donnelly (Wicklow, Social Democrats)

It is not a point of order.

Bernard Durkan (Kildare North, Fine Gael)

On a point of order, the impression is being created that the Government is not represented at all. A Government is sitting here, and officials are sitting here taking notes. It is totally untrue to make that kind of allegation.

Stephen Donnelly (Wicklow, Social Democrats)

That is not a point of order, as the Deputy well knows.

Bernard Durkan (Kildare North, Fine Gael)

The Deputy knows he is wrong.

Stephen Donnelly (Wicklow, Social Democrats)

It is more bombast and nonsense from that side of the House.

John Lahart (Dublin South West, Fianna Fail)

The Deputy should be allowed to contribute without interruption, please.

Stephen Donnelly (Wicklow, Social Democrats)

I had several questions for the two Ministers and I will happily put them to the Minister present, Deputy Humphreys. However, I doubt that she is in a position to answer the technical questions I have.

Bernard Durkan (Kildare North, Fine Gael)


Heather Humphreys (Cavan-Monaghan, Fine Gael)

The Deputy should ask the questions.

John Lahart (Dublin South West, Fianna Fail)

The Deputy should be allowed to speak without interruption.

Stephen Donnelly (Wicklow, Social Democrats)

What level of demographic adjustment has been made to the fiscal space? Why is the fiscal space not laid out in the document? Does the underlying fiscal space include projected overruns of €500 million? How is the projected overrun broken down? What percentage of inflation assumption has been applied to the expenditure ceiling for this year? Last year, the assumption was incorrect.

In the time I have left for what is essentially a meaningless debate, I contend it is good news that we hear from the Ministers that the fiscal space is potentially €900 million. If we have expenditure overruns – the SPU says we could have them to the tune of €500 million but I believe they will amount to much more – the figure will come down. However, it is imperative that whatever fiscal space is available be used for investment.

Part of the debate defining the election campaign concerned whether the universal social charge should be abolished. The Social Democrats took a position contending that we need to maintain the existing tax base, and the Government said we should cut taxes further. We found out yesterday that the rolling out of the broadband programme will be delayed by up to two years. We found out yesterday that patients in the public health system are awaiting up to 25 times longer than patients in the private system for important oncology scans. We know from the Association of Garda Sergeants and Inspectors that the Garda needs to hire and train approximately 800 additional gardaí and that the force is under-resourced to the tune of 20%. We know that one in nine children in the country is living in consistent poverty. We know that the capital expenditure programme set out in this stability programme update is one of the lowest in the EU, which opens us up to very significant social and economic risks and challenges.

The argument given by the outgoing Government to reduce the tax base further was that we need to “make work pay”. I believe that is the phrase that was used. Last week, the OECD released the latest analysis of the so-called tax wedge for 34 OECD countries. This is a combination of tax on work and tax on employers related to work. It shows that for a married couple with one earner and two children, Ireland has the lowest tax wedge in the OECD. Of the four examples given, Ireland was among the lowest seven countries in terms of tax on work in the OECD.

We do not need to erode the tax base further. We need to maintain a stable tax base and invest. I request, as did Deputy Doherty, that detailed briefings, although they are too late for the stability programme update, be provided by the Department of Finance. We need to start preparing for the budgetary cycle now. We will need access to finance officials to go through a lot of this in detail.



Stephen Donnelly speaking on the order of business before the Dail begun its work for the day

Stephen Donnelly (Wicklow, Social Democrats)

Under the fiscal compact, every national parliament must consider the stability programme update and return it to the European Union. This matters. It sets parameters for the budget, is based on the growth forecast and comes from the Commission. This is the first part in a very important part of the budgetary process. We got it at 10 p.m. last night. We telephoned the Minister’s office yesterday, as soon as we knew statements were coming, but the officials refused to speak to us. We telephoned the Department of Finance and it refused to speak to us.

This is a very pretty document in that it has had graphic designers, typesetters and printers, which means the data in the document has been available for a considerable period of time. It is completely unacceptable that graphic designers, typesetters, printers and civil servants have all had access to this document, which is a key part of the budgetary process, and that the caretaker Minister, the acting Minister, would put it in pigeonholes for Parliament to consider at 10 p.m. at night and say we can have a chat about it in the morning and he will then send it off to the European Commission.


Stephen Donnelly Dail Statement on the cost of Insurance for the country and the causes of same.


Photo of Stephen Donnelly Stephen Donnelly (Wicklow, Social Democrats)
I welcome the opportunity to address the rising costs of insurance and, more generally, the ongoing increases in the cost of living in Ireland. The Social Democrats campaigned on reducing the cost of living and we will pursue this goal in this Dáil term.

During the campaign, it is fair to say there was broad political agreement across all parties and the Independents on the need to put money back in people’s pockets after eight years of austerity, and it is something we can probably all agree on in this House. Where we differ is as follows. Fianna Fáil, Fine Gael and Labour propose to do this by cutting taxes to make work pay, even though the OECD has just shown we have one of the lowest tax wedges on labour in the 34 OECD countries. The Social Democrats do not believe the way to put money back in people’s pockets is to cut taxes, which we believe is irresponsible.

We need a stable and an ongoing tax base to invest in infrastructure, supporting small businesses, sorting out the housing and homelessness crisis, policing, tackling child poverty and so forth. We must find ways to put money back in people’s pockets. We believe the way to put money back into people’s pockets is to systematically and ruthlessly address the costs of living in this country. They were too high to begin with. We now know from the Central Statistics Office that these costs are increasing across the board.

We are debating insurance costs today and they are a good example of this. They were too high to begin with and are on the rise. The CSO data show that insurance costs are rising across all measures except one, that is, travel insurance. Last year insurance costs increased on average by more than 11%, an extraordinary increase. Most people pay a plethora of insurance premiums. Most households are already at the pin of their collars in trying to make ends meet and pay the bills at the end of the month. An average increase of 11% on insurance bills will push many people over the edge. It will force people to cancel insurance, for example, health insurance. I wish we did not need health insurance in this country but many people believe they have no choice but to pay for it.

Car insurance deserves a special mention because it increased by one third in the past 12 months. There has not been a one third increase in the number of crashes, whiplash cases or fatalities, thank God. However, car insurance has gone up by one third. That is an extraordinary additional bill for many people. Some drivers have been asked to pay up to 50% more. The Freight Transport Association has reported receiving premium rate increases of between 50% and 70% over 2014 and 2015. Home insurance costs have gone up by 10% in the past year. An additional 100,000 people took out health insurance in the past year because of lifetime community rating. However, although the base has increased by 100,000 people, health insurance costs are up 3.5% this year. Premiums for hundreds of thousands of VHI customers are to increase by a further 3% in May. This will be the second increase for them in the past six months. Businesses are suffering. We know that hauliers have seen significant increases in their insurance costs. The Small Firms Association has estimated that insurance costs have increased by 30% for small and medium enterprises since 2011. Let us think about that. Since 2011 there has been significantly less economic activity and yet small businesses in Ireland are paying nearly one third more in insurance bills than they were paying in 2011. That suggests a serious lack of focus on this issue by the last Administration.

Why are costs going up? We know that the book of quantum is past its sell-by date. Whiplash injuries account for 80% of motor insurance claims in Ireland. In some other jurisdictions, the corresponding figure is 3%. Perhaps Irish people have extraordinarily delicate necks or maybe we rear-end our fellow motorists 20 or 30 times more than in other jurisdictions but it is highly unlikely. More likely, we have a litigious culture where people claim to have whiplash and the costs associated with firms defending or trying to disprove those claims are such that the firms simply pay out. What happens in this scenario? Everyone else suffers.

The book of quantum currently gives guidelines for remuneration of €14,400 for a neck injury lasting up to one year and €16,300 for back injuries. As someone with a long-suffering back injury myself, I believe that in many cases there is a need to pay. However, given that 80% of claims are for whiplash versus a corresponding figure of 3% in other jurisdictions, clearly something is not right. The book of quantum was introduced in 2004, some 12 years ago. To the best of my knowledge, it has not been updated. It needs to be updated quickly.

The price for legal services continues to rise. I recall a meeting we had with members of the troika when they were here. They were very exercised about legal costs. They showed us a graph with many lines starting in 2008 and going downwards over time. The presenter pointed to a particular line and explained that it referred to the accountants. He pointed to another line and said it referred to the consultants. He pointed to yet another line and said it referred to someone else. All the lines were trending down very quickly. However, there was one line that was going up and up. The presenter explained that this line referred to the lawyers. Somehow, even though we have solicitors and barristers who are unemployed and are screaming for work, legal fees have bucked the trend of those in all other professional services and have managed to increase significantly. Obviously, this needs to be dealt with very quickly.

What do we do? Average claim costs need to come down. We need to reform how awards are set by the Injuries Board and the courts. We must have better non-litigation options in order that legal fees are reduced or, in as many cases as possible, abolished. We must have better information sharing in the industry such that fraud can be more readily tackled. We need to make it easier for drivers to switch premiums for car insurance. We need to make insurance options far more readily accessible and consumer friendly. I heard an analyst explaining health care insurance policies on the radio one day. I imagine many people listening that day had blood coming out of their ears while trying to understand the plethora of different options and non-options available. There needs to be a serious focus on consumer friendly products and simplicity in the market. AA Ireland has suggested that the Government should set up a task force to bring all relevant Government agencies together. That is something the Social Democrats strongly agrees with.

While we are systematically and thoroughly addressing the increasing costs of insurance and ensuring that not only do they stop going up but that the 33% increases we have seen in motor insurance start coming down, we must do the same for the costs of living more generally because Ireland is an expensive country. It is simply too expensive to live here. Rental prices have gone up by 9% in the past year, education costs have risen by 4% and the cost of third level education has gone up by 5%. Child care in Ireland is already the first, second or third highest in the world but it has actually increased by 1% at a time when inflation is essentially 0%. What do we need to do? Here are some of the things we need to do. We must improve State funding for child care and cap fees for parents. We have to introduce paid parental leave for 12 months and legislate for better work flexibility. We have to introduce truly free primary education by covering the cost of school books and transport. We have to cap third level fees. The Social Democrats has proposed a cap of €2,000, which is far closer to the European norm. We have to end water charges.

I am pleased the Dáil is taking this seriously. I hope we see some very focused and targeted reductions in insurance. However, we must broaden the conversation to reducing the costs of living in this country quickly and significantly.



Stephen Donnelly Speaking on the European Council Meeting: Statements


Stephen Donnelly (Wicklow, Social Democrats)

I start by expressing on behalf of the Social Democrats our deepest sympathies to the people of Belgium, the people of Brussels and the many foreigners living there, including Irish people. I was living in London and working for Transport for London when the Tube bombings took place. The effect of horrific attacks on cities and people cannot be overstated. I express our deepest condolences and solidarity with the people of Belgium and Brussels.

I am sorry the Taoiseach has just left. I will direct my comments on the European Council meeting instead to the Minister of State, Deputy Dara Murphy. The Social Democrats are very disappointed with what has just happened at the European Council meeting in respect of the migration crisis. It is very clear from the statements from the European Council that the main focus has been on securing Europe’s borders rather than on doing what is best for the people fleeing five years of horror and conflict in Syria. The communications from the European Council meeting include a focus on border guards and returning a great number of asylum seekers to Turkey. The European Council statement mentioned that priority would continue to be given to regaining control of our external borders. It does not say anything as strong or definitive about giving priority to the rights and dignity of the many men, women and children fleeing conflict. It is very disappointing to see that. Indeed, it was very disappointing, as I listened carefully to the Taoiseach’s statement this morning, not to hear him give such priority to the fleeing asylum seekers, the so-called irregular migrants. What of the priority of the dignity and rights of these Syrians? With regard to the joint action plan with Turkey, what measures are being implemented to ensure that the asylum seekers being relocated are treated with dignity? I imagine they will be forcefully relocated if they do not want to go back to Turkey. According to the European Council statement, the EU reiterated that it expected Turkey to respect the highest standards when it came to democracy, the rule of law and respect of fundamental freedoms, including freedom of expression. This statement was made in the context of Turkey’s track record in these areas. It is very clear that words are not enough. Expecting Turkey to do the right thing by these men, women and children is not enough. The EU needs to put in place very clear safeguards and standards, including monitoring of how returned fleeing migrants are treated in Turkey.

Amnesty International’s response was unambiguous. It decried the joint action plan for Turkey as “an historic blow to human rights”. Amnesty says Europe is turning its back on these refugees. The Amnesty response continues:
Guarantees to scrupulously respect international law are incompatible with the touted return to Turkey of all irregular migrants … Turkey is not a safe country for refugees and migrants, and any return process predicated on its being so will be flawed, illegal and immoral.
I cannot see any safeguards that have been put in place for these migrants. It is safe to assume that the return of migrants – of asylum seekers – to Turkey is predicated on words in the statement to the effect that the European Union expects Turkey to do right by these people, to respect international law and to respect human rights. I cannot see any resources being put in place to ensure that those rights are respected. It seems sadly safe to conclude that the return of irregular migrants to Turkey will be flawed, illegal and immoral.

I would like the Minister of State to set out when he addresses the House what safeguards are being put in place for these migrants and, critically, to say what safeguards, measures and resources the Irish Government has insisted on for migrants being forcefully relocated back to Turkey, given its track record. He might provide a report to the House. It is welcome that emergency resources are being provided to Greece to help cope with the crisis as long as those resources are used to support migrants and their human rights and dignity. I ask again what measures the Irish Government asked for and advocated for at the European Council meeting in that regard. We need to play a role in ensuring the protection of the rights and dignity of people fleeing conflict in Syria.

We also need to play whatever role we can, as a small neutral country, to address the underlying causes of the migration crisis. Nearly 5 million people have fled their homes in Syria over the last five years and we are now entering what has come to be known as “drowning season” in the Mediterranean. The situation in Syria is so bad that people feel they have no choice but to risk their lives and those of their children to get out of Syria and Turkey and into the European Union. It appears that the European Union has just agreed to send back to Turkey people who have risked their lives and the lives of their children to get into the EU. It is unclear how they are going to be treated once they are relocated. Providing resources to tackle people smuggling and to discourage people from attempting the journey is really not going to have much of an impact as long as people feel the situation is so bad that they have no choice but to risk their lives and those of their children. As such, we must support peace building efforts in Syria so that the Syrian people can return there to live without fear and rebuild their country after five years. Ireland can provide more resources directly. We have sent our Naval Service vessels, and the Social Democrats recognise fully the role they have played. We must also support calls for more funding for the UN Commission on Human Rights, as well as Amnesty International, Oxfam and other groups trying to work in Syria and outside it to support the people fleeing that country. What plans does the Government have not only to contribute more but also to call on others to step up? The UN has been calling China out on its contribution of less than €1 million. If that is not the exact sum, it has certainly been a very small amount so far. There has been a focus on the lack of aid from some Asian countries. We can obviously play more of a role in that regard.

It feels to the Social Democrats, based on what emerged from the European Council meeting and the Taoiseach’s speech today, that the Irish Government is fine with relocating these people to Turkey without the right safeguards being put in place. In his summing up to the House, I ask the Minister of State to indicate whether the Government is satisfied – and if he is satisfied, as Minister of State with responsibility in this area – that all of the necessary supports and monitoring mechanisms for the welfare of the men, women and children being returned to Turkey are in place. If the Government is not satisfied as to that, what will it do to advocate that these things be established? If it is not satisfied, will it advocate at European Union level that these men, women and children should not be returned to Turkey?