Wednesday, 7 December 2011
Dáil Éireann Debate
Deputy John Browne: Before the debate adjourned, I was about to make a point about the six weeks reduction in the fuel allowance. While I welcome the Taoiseach’s announcement this morning to the effect that he will reverse the decision on disability payments, I call on the Cabinet to reconsider the fuel allowance issue. As the Minister of State, Deputy Brian Hayes, knows, this allowance is means tested and those who qualify for it must meet every criteria. To reduce it by six weeks is not in the best interests of old people in particular.
I welcome the announcement by the Minister of State, Deputy Ring, on sports grants. Last year, we argued with the late Mr. Brian Lenihan that these grants should have been introduced on a smaller scale. I welcome that the Minister of State will re-introduce sports grants and I hope the details will be made available as quickly as possible to allow sporting organisations to apply. I also hope that the money will be spread more evenly instead of large sums being given to the major stadia. I look with interest to my county of Wexford where a significant amount of money was spent on Wexford Park, yet health and safety officers have reduced its capacity from 25,000 people to approximately 15,000. With this in mind, I wonder why we were allowed to spend that level of money in the first instance.
Will the Government consider the question of community employment, CE, and internship schemes? CE schemes are important for rural Ireland and many organisations avail of them. The reduction in the available grant aid for such schemes will cause problems. The amount of money involved is not large, but the funds for retraining and materials formed an important element of the schemes.
Will the Minister for Health, Deputy Reilly, spell out the cuts in his portfolio? There seem to be many hidden cuts. That people in their 90s have been forced to go to court to get a decision on the closure of the Abbeyleix Community Hospital is disgraceful. I hope the situation can be resolved during the next 12 weeks, the time allocated by the judge today. It is not a good omen that older people in nursing homes have been forced under this Government to go to court to protect their rights.
Today saw 40 people, the most ever, on trolleys in Wexford hospital. When we were in government last year and 20 or 25 people were on trolleys, the then Opposition Deputies from my county were very agitated about it and we were getting abuse from that side of the House, yet nearly twice that number are now on trolleys and the Minister is discussing further cuts in the health service. I do not know what he intends to do, but further cuts will impinge on those who must go to hospital.
This is not a fair budget, but I welcome the Taoiseach’s announcement this morning. I hope people in receipt of disability payments will continue to receive €188 per week. They are special people who require special foods and must avail of taxis because most of them are unable to drive. They are in no position to take any reduction in the amount of money they receive. I welcome the Taoiseach’s change of heart.
Deputy Timmy Dooley: I welcome the opportunity to contribute on this debate. This is a budget of severe cuts across many headings and those losing out will need time to assess its impact fully. Far from the transparency promised by Fine Gael and Labour in opposition, their first opportunity to present a budget has given us a slew of stealth taxes and increased charges wrapped in a Christmas stocking. This budget is far from a gift for most people on low incomes. It is a ticking time bomb that will decimate the lives of many families.
Prior to being elected, the two Government parties made much of the necessity to rekindle economic activity. They set jobs at the forefront of their assault on the economic downturn. They promised a jobs budget but delivered a so-called jobs initiative. So much for all that bluff and bluster about the creation of jobs. In the past seven months, the Government has failed abjectly to halt job losses and to create new jobs. It has been schizophrenic in respect of the introduction of VAT. As part of its jobs initiative in May, it sought to create jobs by reducing VAT. Now it is telling the House that it can increase VAT without impacting on jobs or economic activity. The Department of Finance does not seem to understand that price elasticity means a lack of return for the State. The jobs initiative, jobs budget or jobs programme is in tatters and requires a greater level of foresight and action than we have seen to date.
The Labour Party cynically promised retailers that, if it was elected to office, it would resolve the so-called issue of upward-only rent reviews. While in opposition, Labour Ministers promised to address this issue retrospectively. At the time, Labour trumpeted its claim that there were no constitutional issues, a case supported by the legal advice it sought from a senior counsel. Was that opinion provided by a senior counsel who is now the Attorney General? If so, what has changed significantly since then?
Fine Gael made much of its NewERA proposals and the 110,000 jobs that would follow. The budget was silent on this matter and none of the Government’s proposals to date justify Fine Gael’s outlandish job creation claims. Many young people voted for Fine Gael and Labour on the basis of the commitments given. They have been disappointed a number of times and have been traumatised by this budget, given the Government’s lack of ability to create jobs.
The Minister for Transport, Tourism and Sport, Deputy Varadkar, outlined his plans to create jobs through investment in infrastructure. He stated that he had spent some time reading the Sinn Féin and Fianna Fáil budget proposals. He indicated that he had found them vague and that Fianna Fáil’s document was open to different interpretations in various parts of the country so that members of my party could claim that, if they were in power, they would support certain projects. This is not correct. The Minister indicated that all we had set aside was an additional €250 million, but this is not the case either. I urge him to read the document in greater detail.
We proposed a fund based on a mandatory total investment of 5% by private pension funds over five years, an average of 1% per annum, and a matching investment by the National Pensions Reserve Fund, NPRF, from its discretionary portfolio. This would allocate a potential €7.2 billion for investment on a commercial basis in infrastructural opportunities and would be separate from the public capital programme. The size of the fund could be further enhanced by allowing regular savers to invest in it in a manner similar to that of the national solidarity bond and by attracting additional market funding where available. This programme would not impact on the general government deficit and would provide the appropriate level of funding to give a stimulus to infrastructural investment and activity.
The Minister has considerable neck to make such statements. He tries to play a cool, clean hero espousing new politics over the smoke and mirrors of the past. Were he to review some of his comments and his party’s pledges prior to the last election, he might learn a thing or two. Was it not Deputy Leo Varadkar who said that none of the banks would be given another penny until bondholders, including senior bondholders, had taken a haircut? He made that statement in clear and unambiguous terms. In the budget document six weeks prior to the last election, Fine Gael indicated it would generate €1 billion in non-pay and administrative savings. I wonder what happened. Fine Gael has not been so creative or able to generate the same savings on this occasion. It sounds like old politics to me and if the Minister for Transport, Tourism and Sport, Deputy Varadkar, is prepared to debate it, he should come into the House and we would be happy to challenge him.
Deputy Timmy Dooley: ——and somehow create a cool clean hero image of people who came to power to solve problems and who will do things differently. Fine Gael bought the last election and put together many outlandish proposals it has not been prepared to stand behind.
Deputy Timmy Dooley: It was cynical in the extreme to make these proposals and seek to buy the electorate. It has been done but the people will not buy it. It was cynical in the extreme to suggest senior bondholders would be burned when the Government has followed the same policies as the last Government in respect of the bank guarantee scheme and burning bondholders. I understand why the Government has to do that but it is not appropriate for the Minister, Deputy Varadkar, to come into the Chamber and lecture Fianna Fáil and Sinn Féin on genuinely costed budget proposals.
Deputy Timmy Dooley: I am not having a go at the Minister, who has always reflected carefully on what he has said in this House. However, some of the young cubs have gotten loose from the leash on this occasion and it does not sit well with the Government or this House in terms of new politics and the transparency we were promised.
Minister for Arts, Heritage and the Gaeltacht (Deputy Jimmy Deenihan): I propose to share time with Deputies Dinny McGinley and Brian Hayes. Is mór agam an deis a fháil inniu chun Meastachán mo Roinne do 2012 a phlé. While the precise details of my Department’s Vote will be scrutinised by the Oireachtas in due course, I am pleased to have this opportunity to outline to the Dáil the principal features of the 2012 Estimates for my Department. As a result of the significant fiscal deficit which must be closed, we do not have the resources to fund all the services we would like to provide. We are faced with difficult decisions in order to provide the basis for a sustainable approach to the financial situation. In framing budget 2012, our approach has been to do this in as balanced a way as possible. In this context, gross funding for the Department of Arts, Heritage and the Gaeltacht will be €266.99 million in 2012. The allocation for current expenditure is €223.997 million and the capital allocation is €43 million. A further €8.558 million, which includes €7.558 million in current funding and €1 million in capital funding, is provided through Vote 34, the National Gallery.
My Department makes a significant contribution to supporting economic activity and employment throughout the country in the sectors that it directly supports and in the context of cultural tourism. My primary concern is to make every effort to ensure that, within this provision, front-line services provided with funding from my Department are protected as far as possible. Clear priorities must be established to ensure the greatest value is achieved with available resources. We will continue to strive to achieve good outcomes with an even greater focus on value for money in light of these constraints. To the greatest extent possible, savings have been sought through efficiencies rather than through reductions in services. Every saving that can be made from cutting down on overheads continues to be pursued. The current and capital allocations reflect the comprehensive review of expenditure and the review of capital expenditure, respectively, and are informed by the following primary objectives: the promotion of economic growth, sustaining employment through the promotion of the arts, cultural tourism in Gaeltacht areas and in the film and television production sectors, the need to achieve compliance with EU directives, the terms of the programme for Government and supporting North-South co-operation.
I propose to provide some further details on the key areas of expenditure under my direct responsibility and to refer briefly to the ongoing work of my Department in terms of public sector rationalisation and reform. As specific details on capital expenditure allocations were provided in the recent capital investment plan 2012-16 and the Estimates published on Monday, I plan to focus on current expenditure at this time. I will arrange for the breakdown of the current programme allocations to be made available through my Department’s website. With regard to the Department’s arts, culture and film programme area, some €29.552 million or 49% of my Department’s resources is being allocated to the area in 2012. The key focus for the arts and cultural sectors is to protect jobs and stimulate creativity throughout the country. There has been significant investment in art infrastructure in recent years. Accordingly, my priority in the medium term is to ensure that resources are made available to support the operation of these facilities. Funding for arts, culture and film represents a significant contribution not just to sustaining the arts and the national cultural institutions but also to the economically important cultural tourism sector. While the overall reduction will impact on programmes, my Department will continue to place the primary emphasis on prioritising front-line services and supports to artists at the expense of administration, overheads and ancillary costs. The 2012 allocation will facilitate continued support for jobs in the film and television production sector through the Irish Film Board as well as supporting national and regional cultural institutions and fostering and sustaining the cultural tourism sector.
The valuable work of the Arts Council in supporting the intrinsic cultural, tourism and economic value of the arts throughout the country has been recognised and is reflected in the 2012 current allocation of €63.1 million. This is a reduction of 2% on last year’s current funding and allows the council to continue funding arts organisations of varying sizes, from national bodies such as the Abbey Theatre to small, locally based groups, across a range of individual art forms and practices. I am sure Deputy McLellan will be very glad to hear that.
The Arts Council has responded to the reductions in the past two years through greater administrative efficiency and engagement with its client base in demonstrating cost saving methods as well as seeking new funding sources. With the main budgetary emphasis on programming, this will sustain the council’s main arts organisation, keep regional venues open and support festivals and touring. The intention is to allow the council to maintain its support to more than 50 venues, 200 festivals and 400 arts organisations. By supporting these areas, it continues to support employment in communities throughout the country, directly and indirectly. We do this by directly funding artists and organisations and indirectly in the tourism sector and in the wider economy. The council will also step up its work with others to stimulate new jobs.
The 2012 allocation is also an acknowledgement by the Government of the contribution by the arts in employing almost 50,000 people, almost as many as are employed in the ICT sector, who make and deliver arts in communities throughout the country 12 months of the year. The arts are the bedrock of our cultural tourism industry and play a key role as a research and development engine for a smart, creative workforce. Culture Ireland, a division of my Department, will continue to promote Irish artists worldwide with the aim of showcasing our world class strengths and cultural creativity, and restoring Ireland’s global reputation. Building on the focus at the second global Irish economic forum at Dublin Castle, Culture Ireland will continue to promote arts, culture and creative thinking as Ireland’s global calling card and the need for increased strategic focus on Europe and Asia. During the next year, Culture Ireland will focus on planning for Ireland’s EU Presidency cultural programme in January to June 2013.
The priority for the national cultural institutions in 2012 is to keep venues open and to maintain as far as possible front of house services to the public to ensure that what the national cultural institutions offer to the public continues to draw large numbers of people, including overseas and domestic tourists. Day-to-day funding for the national cultural institutions is maintained as close as possible to 2011 levels. Capital funding has been allocated according to priority of need to ensure the safety and preservation of national collections and the continued investment in high quality visitor experiences as part of an integrated cultural tourism drive.
In line with reductions in the public capital programme, the capital allocation for the arts, cultural and film area has been scaled back. The overall funding for the Irish Film Board has been reduced by less than half of the overall reduction to the capital allocation, reflecting its importance from a cultural and employment perspective. In that respect, I recently piloted a Bill through the Oireachtas increasing the spending limit of the Irish Film Board from €200 million to €300 million. The current allocation, at €2.54 million, represents a modest increase of 4% over the 2011 provision. For every euro of Irish Film Board investment, close to €10 is generated. Throughout 2011, Ireland has continued to build on its excellent international reputation for film talent and as a centre of cultural excellence, winning awards and being nominated for some of the international industry’s highest accolades and being selected for some of the highest profile festivals in the world.
Other highlights of the 2012 capital works programme include the redevelopment of Smock Alley Theatre in Dublin, the Waterford Theatre Royal and the Garage Theatre in Monaghan, as well as a major Asgard exhibition that is due to open during the summer and the Irish Museum of Modern Art’s programme at Earlsfort Terrace.
In addition to the €130 million in funding provided for the arts, culture and film sector by my Department, a further €8.558 million is provided through the Vote of the National Gallery. In 2012, the gallery will continue to focus on delivering the best service possible with the available resources. Work will continue in 2012 on the renovation of the historic wings of the gallery. This is a major development for the gallery and while there is an obvious effect in terms of room closures, the gallery will make every effort to minimise the impact for visitors and the upgraded website will be a help in this regard.
Funding of some €48.41 million has been made available in the context of my Department’s heritage programme area. When account is taken of the reductions in my Department’s administration funding, actual reduction and current programme expenditure is 2%.
I remain determined to address the turf cutting issue in a way that is fair, balanced and supportive of those affected. I have ensured sufficient funding is being made available in respect of a redress package for those affected by the cessation of turf cutting on the 53 raised bog special areas of conservation. The allocation for the National Parks and Wildlife Service of €14.397 million is an increase of 3% on the 2011 provision. This underlines the Government’s commitment to ensuring funding will be made available to meet the needs of those who are affected by the cessation of turf cutting on SAC raised bogs under the various schemes the Government has put in place.
The available allocations will allow for a programme of capital works to be undertaken next year at Ireland’s national parks and nature reserves to secure the conservation of our natural heritage and to contribute to their attractiveness as a visitor tourist amenity. Examples of projects include visitor facility centres, visitor walks, capital works for health and safety purposes, removal of invasive alien species to protect vulnerable habitats, and others. Some of the key capital projects to be funded in 2012 include the development of a new walking route to Glenveagh Castle, the restoration of Killarney House and the development of an interpretative centre for Killarney National Park. Heritage functions in my Department will also continue to be supported through the environment fund in 2012. Funding the area of built heritage will focus on protecting those structures that are most at risk, promoting tourism and supporting the work of the heritage council.
A total of €46.306 million has been allocated for the Irish language, the Gaeltacht and the islands. My colleague, the Minister of State, Deputy McGinley, will speak about the relevant aspects of the Irish language, the Gaeltacht and the islands Estimate in his address to the House.
Turning to North-South co-operation, I am committed to developing such co-operation within the broader arts, heritage and commemorative activities of my Department, as well as through the funding of the North-South bodies that come under the aegis of my Department. Provision of €42.718 million has been made in 2012 to support the two North-South implementation bodies, An Foras Teanga, comprising Foras na Gaeilge and the Ulster Scots Agency, and Waterways Ireland. These budgets will be subject to the approval of the North-South Ministerial Council in due course. It is envisaged savings will be achieved through efficiencies and increased focus on front-line services. The Minister of State will speak about An Foras Teanga but for Waterways Ireland the proposed breakdown for the 2012 allocation for this area is a provision of €22.59 million in current funding and capital funding of €4.5 million. This allocation will facilitate the ongoing maintenance and restoration of Ireland’s inland waterways, thereby increasing recreational access along routes and waterways. This expenditure will also assist in attracting increased numbers of overseas visitors and in stimulating business and regeneration in these areas.
I lend my support to the vital work of public sector reform. My departmental officials and I are fully committed to engaging with the public service reform process. We are continually reviewing our practices and structures to enhance coherence and ensure staffing resources continue to be allocated to the areas of greatest need in the Department. In this context, the responsive and flexible allocation of staff to meet specific strategic priorities will continue. The development of shared services will be key to the Department’s reform process and in this regard significant progress has already been made in the area of shared payroll services, IT services and human resources. Work on developing this further will continue into next year.
A key element of my Department’s reform programme is the rationalisation of certain State bodies under its aegis, including proposals in respect of a number of bodies funded from my Department’s Vote group. The Department will not engage with these agencies to give effect to Government policy in this area in accordance with the public service reform plan. I expect to see real benefits come from a less crowded administrative landscape resulting in greater democratic accountability and less duplication of effort. I should also say that shared services have the potential to transform the efficiency of State bodies and my Department is actively pursuing this issue. Sharing back office and other services will offer significant long-term savings in the operation of State bodies generally, and options in this regard are being examined by the Department. This is also being examined for the operation of the Department itself.
This Government has affirmed its commitment to fairness, jobs and reform in this budget. My Department and the sectors it represents will make a significant contribution to getting the country out of the current crisis.
Minister of State at the Department of Arts, Heritage and the Gaeltacht (Deputy Dinny McGinley): Is cúis áthais dom deis a bheith agam labhairt sa Teach maidir le Meastachán mo Roinne i dtaca le gnóthaí Gaeltachta, Gaeilge agus oiléan.
Is léir go bhfuil acmhainní an Stáit thar a bheith tearc faoi láthair agus go raibh cinntí crua le tógáil dá réir ag an Rialtas maidir le dáileadh na n-acmhainní sin sa cháinaisnéis a cuireadh i láthair na Dála le dhá lá anuas. Agus an cháinaisnéis á cur i dtoll a chéile, is cinnte gur thug an Rialtas aird ar leith ar an bpobal inár sochaí a bhfuil na riachtanais is mó acu agus ar sheirbhísí túslíne a chosaint oiread agus is féidir.
Tá leithdháileadh os cionn €46 milliún beartaithe faoin gclár Gaeilge, Gaeltachta agus oileán de mo Roinn don bhliain 2012, lena n-áirítear os cionn €37 milliún in airgead reatha agus beagnach €9 milliún in airgead caipitil. Chomh maith leis sin, tá leithdháileadh os cionn €15.4 milliún beartaithe don Fhoras Teanga don bhliain 2012 faoin gclár Thuaidh-Theas de mo Roinn. Ar ndóigh, ní miste a rá go bhfuil an buiséad iomlán don Fhoras Teanga do 2012 le faomhadh ag an gComhairle Aireachta Thuaidh-Theas.
Ar an iomlán, mar sin, tá os cionn €60 milliún le caitheamh ag mo Roinn in 2012 ar ghnóthaí Gaeilge, Gaeltachta agus oileán, lena n-áirítear An Foras Teanga. Ní dóigh liom go bhféadfadh aon duine a mhaíomh gur suim shuarach airgid í seo agus geilleagar na tíre sa riocht ina bhfuil sé san am i láthair. Is fúinne atá sé a chinntiú go gcaithfear an maoiniú seo ar bhealach straitéiseach a rachaidh chun sochair don phobal atá ag brath air. Mar atá ráite ag an Aire, beidh miondealú ar allúntas ár Roinne le fáil ar shuíomh gréasáin na Roinne amárach.
Mar is eol don Teach, tá cur i bhfeidhm na straitéise 20 bliain don Ghaeilge ar an gcloch is mó ar phaidrín mo Roinne. Ós rud é go bhfuil os cionn €9 milliún, idir maoiniú caipitil agus reatha, curtha ar fáil do na scéimeanna tacaíochta Gaeltachta don bhliain 2012, beidh mo Roinn in ann dul chun cinn suntasach a dhéanamh maidir le cur i bhfeidhm na straitéise sa Ghaeltacht.
Ar an taobh reatha, is í scéim na bhfoghlaimeoirí Gaeilge an scéim teangalárnaithe is tábhachtaí atá ag mo Roinn. Tá an-áthas orm a fhógairt nach mbeidh aon laghdú i mbliana ar an deontas a íoctar leis na teaghlaigh sa Ghaeltacht a choinníonn na scoláirí ar iostas ina gcuid tithe faoin scéim seo. Laghdaíodh an deontas do na mná tí le dhá bhliain anuas agus tááthas orm gur féidir liom an cúnamh fíor-thábhachtach seo a choinneáil ag an leibhéal céanna i mbliana.
Ionas gur féidir le mo Roinn an deontas do na mná tí a choinneáil ag an leibhéal céanna, beidh orm athruithe eile a chur i bhfeidhm ar scéim na bhfoghlaimeoirí Gaeilge chun maireachtáil taobh istigh den soláthar. Dá bhrí sin, tá sé i gceist ag mo Roinn an deis a thapú chun athchóiriúáirithe a dhéanamh ar an scéim chun í a dhéanamh níos éifeachtaí agus chun luach airgid níos fearr a ghiniúint don Státchiste. Tá féidearthachtaíéagsúla á bplé ag oifigigh mo Roinne leis an scátheagraíocht do na coláistí Gaeilge, CONCOS, faoi láthair agus bheadh sé i gceist agam na hathruithe ar scéim na bhfoghlaimeoirí Gaeilge a fhógairt amach anseo.
Ar an taobh caipitil, beidh mo Roinnse ag díriú ar thacaíocht a thabhairt do thógáil agus do chuíchóiriú ionaid phobalbhunaithe agus teangalárnaithe sa Ghaeltacht chun tacú le cur i bhfeidhm na straitéise ar an talamh. Ar ndóigh, bhí na scéimeanna tithíochta curtha ar fionraí ag an Rialtas deireanach in 2009. Chomh maith leis sin, ceal airgid, ní raibh sé d’acmhainn ag mo Roinn maoiniú a sholáthar do na grúpscéimeanna uisce, séarachais, muiroibreacha agus bóithre le cúpla bliain anuas. Sa chomhthéacs sin, tá cinneadh tógtha agam, ar mhaithe le soiléireacht, na scéimeanna sin a chur ar fionraí. D’fhéadfaí na scéimeanna seo a athnuachan amach anseo dá dtiocfadh feabhas ar chúrsaí eacnamaíochta.
Maidir leis na scéimeanna tacaíochta Gaeilge atá ag feidhmiú taobh amuigh den Ghaeltacht, tááthas orm go bhfuil soláthar os cionn €6 milliún curtha ar fáil in airgead reatha agus caipitil don bhliain 2012. Ciallaíonn an soláthar seo go mbeidh mo Roinn in ann dúshraith mhaith a chur faoi fheidhmiú na straitéise 20 bliain taobh amuigh den Ghaeltacht. Beidh mo Roinn in ann leanúint uirthi ag tabhairt tacaíochta don chiste tríú leibhéal in Éirinn agus thar lear agus d’eagraíochtaíéagsúla a chuireann an Ghaeilge chun cinn taobh amuigh den Ghaeltacht.
Ó thaobh cúrsaí caipitil de, tááthas orm go raibh ar chumas mo Roinne deontas €300,000 a cheadú níos luaithe i mbliana chun athchóiriú riachtanach a dhéanamh thar thréimhse dhá bhliain ar Amharclann Náisiúnta na Gaeilge — An Taibhdhearc. Maidir leis na háisíneachtaí a thagann faoi scáth mo Roinne, creidim go mbeidh soláthar dóthanach acu in 2012 chun a gcuid feidhmeanna reachtúla a chur i gcrích.
I gcás Údarás na Gaeltachta, tá sé beartaithe go gcuirfear beagnach €19 milliún ar fáil dó don bhliain 2012, lena n-áirítear buiséad caipitil de beagnach €6 mhilliún, buiséad reatha de €3 mhilliún agus buiséad riaracháin de beagnach €10 milliún. Ní miste a rá go mbeidh acmhainní breise caipitil idir €4 mhilliún agus €5 mhilliún dá chuid féin ag an údarás a bheidh á gcaitheamh aige in 2012.
Cinntíonn soláthar an Státchiste gur féidir leis an údarás leanúint orthu ag mealladh infheistíochta chun na Gaeltachta, ag tacú le bunú agus le buanú poist sa Ghaeltacht agus ag tabhairt cúnaimh do phobail Ghaeltachta maidir le tograí teangalárnaithe. Tá mise sásta go mbeidh ar chumas an údaráis a chuid feidhmeanna reachtúla a chomhlíonadh go héifeachtach an bhliain seo chugainn leis an leibhéal maoinithe seo.
Beidh suim iomlán de os cionn €15.4 milliún á cur ar fáil ag mo Roinn don Fhoras Teanga in 2012. Ní miste a nótáil gurb í an Chomhairle Aireachta Thuaidh-Theas a dhéanfaidh buiséad iomlán an Fhorais Teanga do 2012 a fhaomhadh. Cuirfidh an tsuim seo, mar aon leis an airgead cómhaoinithe ón Roinn Cultúir, Ealaíon agus Fóillíochta ó Thuaidh, ar chumas áisíneachtaí an Fhorais Teanga, is iad sin Foras na Gaeilge agus Gníomhaireacht na hUltaise, leanúint leis an obair thábhachtach atá ar bun acu ag tabhairt tacaíochta don oidhreacht chultúrtha luachmhar atá againn, Thuaidh agus Theas.
Maidir le hOifig an Choimisinéara Teanga, ní miste a rá go bhfuil soláthar de €650,000 curtha ar fáil don oOifig don bhliain 2012. Tá mé muiníneach go mbeidh Oifig an Choimisinéara Teanga in ann a cúraimí reachtúla a chomhlíonadh laistigh den soláthar sin. Ar ndóigh, mar a chuir mé in iúl don Teach le déanaí, tá athbhreithniú ar Acht na dTeangacha Oifigiúla 2003 ar siúl ag mo Roinn faoi láthair agus beidh moltaí le cur faoi bhráid an Rialtais ag eascairt as an athbhreithniú sin.
Maidir leis na hoileáin, cuirfear soláthar os cionn €6.8 milliún ar fáil dóibh in 2012, lena n-áirítear €5.9 milliún ar an taobh reatha. Cinnteoidh an soláthar méadaithe reatha go mbeidh sé d’acmhainn ag mo Roinn leanúint leis an mhaoiniú do na seirbhísí riachtanacha iompair do na hoileáin a bhfuil cónaí buan orthu.
Mar fhocal scoir, creidimse go bhfuil soláthar dóthanach curtha ar fáil agus go bhfuil tiomantas an Rialtais don Ghaeilge, don Ghaeltacht agus do na hoileáin le feiceáil go soiléir sa leithdháileadh atá beartaithe don Roinn don bhliain 2012. Ciallaíonn an soláthar seo go mbeidh mo Roinn in ann tosaíocht a thabhairt do chur i bhfeidhm na straitéise 20 bliain don Ghaeilge chomh maith le tacaíocht a thabhairt do phobal na Gaeilge, na hUltaise, na Gaeltachta agus na n-oileán tríd an réimse leathan gníomhaíochtaí a mhaoiníonn mo Roinn agus áisíneachtaí mo Roinne.
Minister of State at the Department of Public Expenditure and Reform (Deputy Brian Hayes): I had the opportunity to listen to this debate in my office for approximately two hours this afternoon. There is a certain air of unreality about the debate — possibly on this side as much side as the other side — because we must all realise that no one owes us a living. The only way forward for the country over the coming years is to stabilise our public finances and get them back on an even keel so that the country can grow and develop again. That requires fundamental change not just in how we spend and raise money, but also in how we evaluate the appropriate way to spend money.
I looked back over a speech I gave in County Donegal in the summer. Some of the information I put on the public record then screams out in the context of this debate on the budget and the collapse in the public finances we have seen over the course of the three years. Of course the biggest scandal is that over the past three years 300,000 of our people have lost their jobs. The new inequality in this country is the fundamental difference between those people at work and those who cannot find work. The primary responsibility of the Government through the budget and in everything we do is to ensure we create the opportunities for those people to get back to work.
The most rapid rates of annual expenditure increase in the past decade at 18% and 14% happened in 2001 and 2006, respectively. There was 18% growth in public expenditure one year before the general election in 2002 and 14% growth in public expenditure one year before the general election in 2007. Those statistics highlight the great problem we face in this country. Collectively there is great responsibility on us all because no one shouted stop. In order to get back to a balanced budget we need to ensure in every way we spend money there is proper value for money, there is fundamental change in the public sector and there is ultimately stress testing of how we spend money. We can no longer go to that kind of situation because we are no longer in that situation.
The country is bankrupt and the lender of last resort is here. The country is being held together by international agencies, not just on bridging the deficit but also in terms of the funding of the banking sector, which adds up to €150 billion from ECB funds. There is no easy way out of this. Ultimately we need to mature as a Parliament and the ridiculous debate I was hearing today from some people in the Opposition with business as usual, Punch and Judy politics, suggesting nothing has changed, and the same kind of pantomime performance will not do anymore. There is no way forward for this country with that kind of ridiculous politics. Collectively we need to ensure that everything we say is rigorously debated. A new economic fiscal council, independent of Government, has been established by eminent economists, its task to comment critically as it sees fit on what Government says. The Opposition, including Fianna Fáil, Sinn Féin, the United Left Alliance and others, should send their proposals to the new economic fiscal council to be critically appraised. If we reach a mature politics in terms of how proposals are assessed, then never again will our people be faced with this catastrophe. The great challenge of this new Dáil is to ensure proper, rigorous and value for money auditing of expenditure is a fundamental part of this House. As stated by the Minister for Public Expenditure and Reform, Deputy Howlin, recently, we need a new budgeting strategy and committees wherein Government and Opposition engage honestly in terms of stress testing proposals to determine how competent they are in terms of the financial envelope available. If we do that, we will have done a good day’s work.
What is important now is that we keep the 1.8 million working at work and that we create new opportunities for people to return to work. There are many measures in this regard in the budget, which I will not go through now. We will not do that if we continually increase marginal rates of taxation. The top rate of tax of 41%, plus 11% through the universal social charge, USC, and PRSI, amounts to a top marginal rate of approximately 52%. The sum of €110,000 is a substantial income. The effective tax liability on that in this country is 41% while in the UK it would be 34%. We cannot solve our problems by increasing tax at the top end. While that might be possible the first year, the people involved will not be around the following year. No economy in the world has ever resuscitated itself, following such a huge collapse, by increasing taxes. Principal to this budget, from the perspective of Fine Gael and many other people in the country, is to work out how we can increase tax but in a way which does not inhibit the potential of jobs growth, which is crucial to the resuscitation of this economy. It is important that people know that under this budget their take home pay next month will be the same as it is this month. While indirect taxes will increase, this will allow people to make decisions about their patterns of expenditure next year and provide stability in respect of what they have left.
The Opposition has made the charge that the Government has not sufficiently increased taxes on capital, acquisitions and savings, and has not introduced a new surcharge on property charges and so on. However, these increases are but first steps. It is likely that additional increases in taxes in these areas will be made during the course of the next few years if we are to balance our budget by 2015, which is the ambition of the Government. To do that will require much greater fairness in the manner in which our taxation system is constructed and structured. There is an enormous debate that has to occur in this House over the course of the next six months which will allow us, as we go into the next budget, to develop such a fairer system.
Ireland is a small, open, trading, privatised economy. Exports are doing well and we have managed to reduce costs and increase productivity. The way forward for this economy is to return to the type of economy of the early to mid-1990s, before the property bubble took hold, at which time we were a strong exporting economy. For this to happen, we must continue to encourage exporters, who are the lifeblood of this country as an island country, to trade within the eurozone and internationally. We expect and hope that the world economic situation will improve so that we as a country can come back.
We have submitted our Estimates for next year and a growth rate of 1.3% is predicted, which I believe is conservative. I believe we can do better than that if the world economic situation changes. This ultimately will provide the way out of this crisis, which the Government has been asked, on behalf of the Irish people, to sort out.
Deputy Peadar Tóibín: I would like first to respond to a couple of the Minister of State’s final statements. Fiscal responsibility is not just in the gift of the right. Nordic countries in Europe are fiscally responsible yet deliver left wing services. We have a Government that promised Nordic services but US taxes. However, we received neither. Public services fall between the two stools. Sinn Féin believes that Nordic-type public services require a Nordic-type tax scheme. Nordic countries are economically successful and extremely competitive. Also, there is a great deal of social equality in those states. As such, it is achievable.
The Minister for Finance, Deputy Noonan, and Minister for Public Expenditure and Reform, Deputy Howlin, have stated that this budget is about jobs and that it is fair. There is a deep contradiction between the words being used around discussion of the budget and the actions of the budget. The Government must have found a way to operate outside the laws of physics and economics if it believes that taking money out of the economy, cutting capital spend and increasing costs will lead to growth in jobs. That cannot work within the bands and laws of economics.
Despite the claims of job creation, the Government, sadly, has settled upon what it believes to be an acceptable level of poverty, unemployment and emigration. The evidence for this is the Government’s statement that 400,000 will be unemployed in this State in 2015. The Government claims to be able to create 100,000 jobs in the interim but the net decrease will be brought about by emigration, based on the Government’s figures. It is a shocking indictment that any Government would accept that level of unemployment, poverty and emigration. These figures may be acceptable to well-insulated Ministers but they are not acceptable to our people, our businesses or our economy. To add insult to injury, the Minister for Finance, told us yesterday that the market is flexible and that 125,000 have come off the live register. The inconvenient truth is that under this Government the level of long-term unemployment has grown. The budget announced in the past 48 hours has delivered a body blow to the 450,000 people who are unemployed and the 76,000 people emigrating from this State.
Let us look at what the budget did in terms of promoting growth, tackling unemployment and ending emigration. As discussed by my colleagues, the VAT increase will disproportionately hit people on low and middle incomes, pushing many into poverty. VAT is known to be regressive in that regard. VAT will also have a massively negative effect on business in this State. Drawing a line from Dublin to Galway, everywhere northwards will suffer a lack of competitiveness, in terms of retail, vis-à-vis their competitors in the North of Ireland. The Minister yesterday said that a 3% differential does not make a difference. The Minister earns €170,000 per annum. It might not make a difference to him but to people on low incomes every penny counts. In a similar fashion carbon tax increases will result in job losses, closure of businesses and a reduction in tax receipts. Every year growth and tax receipt projections are reduced, yet we continue with the same policies. The only long-term way of dealing with the issue of North and South swings and roundabouts when it comes to changes in tax is to create a convergence between the tax rates North and South. The Minister would find a willing ear in Stormont in that regard.
Although the Government talks about jobs, apart from minor initiatives in respect of research and development and export support, the only new initiative detailed in this budget was the allocation of €20 million for job training. All the other initiatives that were discussed had been launched during the summer and have yet to be implemented. One should juxtapose this point with the fact the Government has taken €3.7 billion out of the economy and will take a further €3.1 billion out to pay the Anglo Irish Bank promissory note next year. The resources going into the Anglo Irish Bank promissory note are 150 times greater than those being invested in job creation in this budget, which constitutes an obvious underlying of where the Government’s priorities lie.
Members have been told the Government will act to create jobs. At the same time however, the Government reduced the capital expenditure budget by €750 million and as a result will put 7,500 people out of work next year. Members were informed of the creation of the JobBridge scheme comprising 5,000 placements. However, 5,000 people are being made redundant and 5,000 people are emigrating every month in this State. The public spending cuts and the new taxation measures will lead to 15,000 people losing their jobs while on the other side, the Government intends to create 6,500 temporary training spaces. The Government’s response to the crisis is disproportionate to its scale.
The budget also has sought to revive the spectre of property speculators. For some reason, the Government has decided to reduce stamp duty on commercial property by 4% and to give a seven-year capital gains holiday to new commercial property purchases. This is jobs-free pump priming of the speculative market that would have been announced in the Galway tent five years ago. The Government also has ruled out the ending of crippling Celtic tiger era rents. At the beginning of its term in office, the Government promised retailers that it would reform the upward-only rent review system in this State. Yesterday, the Government buried in the budget the fact that it will not reform this system. Basically, it has promised landlords and speculators that they will retain their upward-only rent reviews into the future and they must be rubbing their hands as a result. The retail sector has offered legal opinion which identifies a way in which this issue can be resolved. As the Government blames the Attorney General for not being able to proceed, it should supply Members with the evidence provided to it by the Attorney General on this issue. Celtic tiger era rents must be reduced across the board because this would make Ireland more competitive and would save jobs. It appears as though the Government again has sided with speculators against small businesses.
Another extremely important point in this regard is that the Government pays €53 million per annum, through the Office of Public Works, which is the responsibility of the Minister of State, Deputy Brian Hayes, to rent out properties in upward-only rent contracts. Were its contracts reduced in line with natural falls in rent, the Government would save €10 million straight away. Again however, this issue is not being tackled by the Government.
The Government is doing nothing about either the regressive rates or investment in information, communications and technology infrastructure. Moreover, investment in transport infrastructure has been stalled and the €18 million going to Enterprise Ireland next year has been taken from this year’s budget. In other words, the Government is robbing from this year to pay for a supposed increase next year.
All the while, the Government is buttressing French and German banks from contagion but is not helping small Irish businesses. In case Fine Gael and the Labour Party have not realised, they are democratically responsible to the Irish people and not to the bondholders or the German electorate. The Government has received a mandate to show leadership and not to outsource it to two of the 27 member states in the European Union. It was elected to show leadership, not to call for it elsewhere. The European Union should be a common market and should be a partnership of states. The Government should be defending that concept, rather than scurrying around looking for ways to serve up what remains of our sovereignty to Merkel and Sarkozy. The hand-over of budgetary and tax powers to Brussels will cost thousands of jobs in this State and will condemn this State to at least ten years of cuts and austerity. Misgovernance under democratic self-determination can be ousted at election time. German and French-centred governance, oblivious to Irish needs on the periphery, cannot.
Sinn Féin has outlined costed alternatives in line with best international practice that would prioritise and stimulate growth and would create employment, tackle the deficit and share the burden fairly. Only through growth can one break the cycle of austerity, recession and unemployment. I urge the Government to change tack and prioritise growth.
Deputy Sandra McLellan: I welcome the opportunity to speak in this debate. From the perspective of the portfolio for which I am Sinn Féin spokesperson, I welcome the announcement by the Minister of State, Deputy Ring, that the sports capital programme will be up and running next year. I also welcome the announcement that funding will be available for the tourism initiative, The Gathering, in 2013. Those announcements aside, however, this undoubtedly will be one of the defining budgets of this difficult period in Irish history. It was a budget that promised much from a Government that did likewise.
If one casts one’s mind back to this time last year, the Labour Party and Fine Gael were part of a vocal opposition that opposed Fianna Fáil at every turn. Their actions at that time were telling, particularly when they facilitated an ailing Fianna Fáil to ensure its budget passed. Fine Gael and the Labour Party, in what could only be described as political opportunism, were quite happy for Fianna Fáil to take the hit. They would not risk showing their true colours and being obliged to claim ownership of their collective strategy. That move allowed Fine Gael and the Labour Party to go to the electorate in the long-awaited general election last February and put themselves forward as some kind of alternative. It allowed them to spend the first ten months of their term blaming all their woes on Fianna Fáil. They claimed they had no choice because Fianna Fáil or the EU-IMF made it so.
However, in the most real and telling way thus far, this budget has shone a light on the true politics and policy of the Labour Party and Fine Gael in coalition. It shows what they hold dear, their principles and their priorities. Labour and Fine Gael in coalition are no different from Fianna Fáil and the Green Party in coalition or Fianna Fáil and the Progressive Democrats in coalition or the EU and IMF in coalition. The devastating fact for ordinary families is that together, they employ the same compass that Fianna Fáil used to such good effect to steer us deeper and deeper into this crisis. In budget 2012, just as Fianna Fáil had done in the previous four budgets, Labour and Fine Gael made sure it was the most vulnerable in our society who would suffer most. Consequently, high earners remain protected as young people with a disability, carers, widows, lone parents and people, particularly elderly people, who are dependent on fuel allowance, were targeted in a clear indication of the Government’s priority. It is absolutely astounding and unbelievable that any so-called Labour Party in government anywhere would stand over, propose and endorse a budget that sees a couple with three children in receipt of social welfare benefits lose more than a couple with three children earning €150,000 per year, but that is true. This is what Labour and Fine Gael have conspired to do in government. They have conspired to continue the disproportionate assault on the most vulnerable people in our society, the very people the Government is supposed to protect.
The Government had choices to make in this budget between those who have and those who have not, between those who can afford to pay and those who cannot, between the strong and the weak, the vibrant and the vulnerable. They chose the former at every opportunity. Yet again, those least able to fight their corner have been indiscriminately targeted. In the general election last February, people voted for change. This budget is more of the same. It provides no solutions for ordinary people or for the economy. Increases in stealth taxes, carbon taxes, petrol, diesel and other fuel charges, road tax, household charges and the like will have a huge impact on already struggling families.
Members can only relate the effects of this budget to their own experiences inside and outside politics. I could with absolute ease name scores of families I know personally and have dealt with over recent months and longer who will be driven further and further into hardship. They are largely a voiceless people and have been targeted repeatedly. Their quality of life will be cut in a harsh and inhumane way. They, and in some instances their children, will go that bit hungrier and that bit colder and life will be that bit harder.
By and large they will survive the effects of these cuts because people are resilient and adapt. If history has taught us anything, it has taught us that people can put up with terrible circumstances and come out the other side, but some will not be that lucky, if lucky is the right word.
All those indicators that measure quality of life will trend negatively for these people, as will all those indicators that show we are a caring people, that we care for each other and that we afford each other the right and support to get along. More people will live in, and die from, the cold. Stress, depression, anxiety and other mental illness will increase. Poverty, relative poverty and fuel poverty will increase. Suicide and alcoholism will increase but life expectancy will decrease. This budget is a blueprint for chaos in these people’s lives.
Separately and in regard to yet another minority group which has been targeted in this budget, I want, as one of the few female Members of this House, to draw a particular and focused attention to the adverse effects of this budget on women. This budget was a brutally savage one on women and in particular on vulnerable women. The 35% cut to the National Women’s Council, an organisation whose raison d’être is to promote women’s rights and women’s equality, is astonishing. It is unprecedented and is a terrible indictment on the Government’s consideration for women.
In addition, the effect of the myriad of stealth charges introduced in this budget will have a real impact on mothers. With little or no employment in many parts of the country many women lucky enough to have work are completely dependent on their own transport. Increases in the price of fuel, road tax and VAT will make running a car even more expensive. It will make balancing the household budget that little bit harder. I cannot help but think of young mothers of school children in rural areas like, for example, those at Adair national school in Fermoy, County Cork whose school transport scheme was cut this year. The Government is now intent on heaping further hardship on these mothers. Heaven forbid they are lone parents or have more than two children because they will be even further disadvantaged. These women will be devastated by this callous budget.
If ever women in general and vulnerable women in particular had a reason to support and implement political reform in this State, the proposals outlined in this budget serve as ample evidence that this House still needs serious change to be in any way reflective of the needs of women.
My party has long argued for an alternative economic strategy. We cannot afford to pay billions of taxpayer’s money into redundant toxic banks on the one hand and demand even more from those same taxpayers on the other and still expect to run first world public services. The money simply is not there.
Health and social welfare, two of the most important pillars of any society, were the focus of the cuts yet again. Health budgets are being further cut. VAT increases will further compound this. When will we realise that we cannot continue to increase workloads and decrease budgets and services? The Minister can be guaranteed that we will continue, despite his best efforts, to retain pre-emergency and emergency services in the Cork area. Proposals to cut ambulance services in east and west Cork will continue to be met with resistance. Whatever the budget savings the Government has to make, they are not worth lives.
This budget will have far-reaching implications. Once again the Government has made sure that it is those least well able to take it who are asked to pay — the weak, the poor, the vulnerable, the elderly, the disabled, those living in rural Ireland and the list goes on. It is unjustifiable.
Deputy Pádraig Mac Lochlainn: Where does one start and stop with all of this? It is incredible that the Taoiseach in his address to the Irish people or any Minister or Deputy in government can argue that their strategy is to see economic growth in our country while they have overseen the removal of €3,800 million from this economy. This is the seventh fiscal adjustment in a row, according to Social Justice Ireland, in which austerity has taken place. This policy has failed spectacularly. It has put more than 450,000 of our people on the dole and has brought back the spectre of emigration yet again to our rural communities.
I come from the Inishowen Peninsula, the most northern peninsula on the island, and my peninsula and county have seen more than their fair share of emigration. My grandfather had to emigrate. He had to send money home at times and he had to come home and build a family home. My father had to emigrate before he was 15 years of age. I have had to emigrate in my time and virtually all my extended family in terms of those who are in their twenties are overseas. Many chairs around tables this Christmas will be empty across Inishowen and Donegal.
The unemployment numbers in my home peninsula of Inishowen have decreased from 5,000 to 4,500. I would like to report that is because of a surge of employment, but it is because of emigration. That is what is happening to our communities.
I do not plead that I am better than and care more than the Government Deputies. I plead and appeal to the sense of Irishness and decency of the Ministers present. What is happening is so wrong — that we would allow a scenario whereby we will pass on €1,200 million of our money to unsecured bondholders in Anglo Irish Bank, and we have done so in recent times with the payment of €750 million. How will future generations, who will probably be living overseas, our grandchild will probably be living in Australia or America, judge us on that? They will read about this situation in books. They will not be here. They will judge us very harshly because they have been denied a future in their own country. That is the reality of all this.
I listened to talk from the Minister of State, Deputy Brian Hayes, about fiscal responsibility. The facts are that before Ireland entered the euro in the late 1990s we had economic regeneration, export and employment growth and something that genuinely would have been a Celtic tiger and that was sustainable, but when we joined the euro, our banks, those reckless private institutions, were able to access unlimited amounts of cashflow from other European banks which, combined with low interest rates from being in the euro, was like crack cocaine. There was no regulation. It was not only an Irish but a European and an international problem. It was a complete systematic failure of capitalism. The Irish people were not responsible for it. They listened to those in politics and leadership, supported Maastricht and the other treaties eventually, took all the assurances that came to them, did what they were asked to do and now they are being punished beyond belief. We see the blight of emigration and the impact it has on rural communities.
I want to outline for Members opposite some of the impact this budget will have on rural communities. It will result in the closure of Garda stations, the loss of policing services in rural areas and proper policing services as opposed to simply a garda driving around an area in a car every now and again, the threat of bed closures and the closure of community hospitals and nursing units, the loss of funding for basic maintenance of rural roads, the closure of library services in local authority areas because replacement staff cannot be found thanks to the moratorium on recruitment, the erosion of rural transport services, poor and all as they are, a two thirds cut in the value of grants for those on community employment schemes, cuts to schools — I could go on. This is madness: it is insane. No economist on the left, right or in the centre ground in the world believes this makes sense. One cannot cut one’s way out of this profound recession. That policy is failing.
The Chinese had a form of capital punishment called death by a thousand cuts. That is what this budget is — it comprises a plethora of small cuts that combined is choking the lives out of our people. However, in his address to our people the Taoiseach stated they were not responsible for this economic malaise and crisis. How can the Government stand over this? I do not preach that I am better than those on the Government benches. I do not claim to be a better person and I do not claim to care more. I presume we care the same, or perhaps those on the Government benches care more, but how can they stand over this? How can they possibly go back to the communities where they were born and reared and meet the people with whom they grew up——
To those who might be listening on their monitors and those in the Chamber I state this is wrong. How long can they stand over it? When we walk down the corridor we pass the 1916 Proclamation and the men and women who are our heroes. When will we find the spirit they had? When will we start to fight for this generation of Irish men and women and boys and girls? If we can find it we might turn this thing around but the budget, the approach we will take, and the European summit in the coming days are an absolute betrayal of everything the Proclamation stands for. I will leave the Government to think about this.
Deputy Seán Crowe: We would all agree that in the lead-up to the budget many people were very frightened about what was coming down the tracks and were very nervous about the budget. The newspapers were full of leaks, with the journalists stating they were coming from Ministers and their advisers. People are scared for many reasons, with most of them concerned about how they will pay the bills. Many people are also frightened about their jobs. People with a few bob in the bank are concerned about the euro going bust.
Ministers assured anyone who wanted to listen to them that it would be a reforming budget, with one Minister suggesting it would not be as bad as one thought and that one might even consider taking a holiday. Words and phrases such as “adjustments”, “austerity”, “painful process”, “fiscal adjustment”, “consolidation”, “sharing the burden” and “heavy lifting” punctuated the rhetoric. When we hear the word “reform” one thinks of improving what currently exists, enhancing something, perhaps abolishing a wrong or bringing about change. However, I do not see this in the budget. To call the budget reforming is wrong.
In his television address the Taoiseach stated the budget would seek to look after the most vulnerable in society. I presume he had a look at the budget but the cuts announced in it are being imposed on schools, teachers, the elderly, lone parents, young people and those with a disability so I do not know where the Taoiseach was coming from on this. If there is any guilt it is that the Government is guilty of implementing the same ill-thought out regressive policies of its predecessor. This is not what people voted for. They voted for change and they thought there would be a difference.
People are still scared. They are adding up the figures and wondering what they can cut back on in their shopping baskets. They will also face new bills with regard to sending their children to school. The budget will undermine the rights of children and young people with regard to their access to a fair standard of education. It is a Minister of the Labour Party who will oversee the implementation of these cuts. We have seen a complete U-turn on pre-election promises.
The Minister has also increased the third level contribution fee by €250. Changes to fees and maintenance support will prevent many students from middle income backgrounds availing of postgraduate courses. Approximately 9,000 students receive grants from local authorities for masters and postgraduate courses. Many of these students earn very low incomes and we have all dealt with people trying to fill in CAO forms. Those attending universities and institutes of technology receive support of €3,120.
The main point I wish to make is with regard to guidance counsellors. I cannot understand why the Minister is making a cut to this service. This is a time when guidance counselling is required. Guidance councillors provide not only career guidance but also counselling and I cannot understand this cut. They deal with children who have suffered bereavement, experience anxiety or depression, who have anger management issues, who suffer bullying or who self harm. The Minister speaks about removing guidance councillors from the system and this does not make sense. With regard to positive changes, these will not be experienced by vulnerable people and this is an area the Minister should reconsider.
Minister for Children and Youth Affairs (Deputy Frances Fitzgerald): In his address to the Irish people on Sunday night the Taoiseach spoke for all members of the Government and, I am sure, Members of the House when he identified the imperative to retrieve Ireland’s economic sovereignty. This is the seriousness of the work in which we are engaged. I have heard much outrage on the other side of the House but I must say I have not heard many positive proposals on how to deal with the extraordinary financial situation we face.
The Minister for Finance announced yesterday that the Department estimates the general government deficit will be 10.1% of GDP this year. There is no country, business or household that could allow expenditure to exceed income by this amount other than for the shortest period possible. The budget has been framed so as to achieve fiscal consolidation of €3.8 billion. This will be sufficient to reduce the general government deficit to 8.6% of GDP next year.
We must state repeatedly that given the task we face, the choices we have had to make have been very difficult. Trying to achieve the type of consolidation we seek in the coming years will involve very difficult choices. However, if we want to get our finances back in order, it is precisely what must be done.
As with any budget there is intense focus on cuts and on what is not being delivered next year. However, it is important that we do not lose sight of what is being delivered and what commitments have been made. The best support we can give to Irish families, children, women and men is to create the economic conditions that will ensure jobs are created. Everybody knows the best way out of poverty is through getting a job. For jobs to be created we need to put in place the right conditions. We heard initiatives in a range of areas announced in the budget. I did not hear anyone on the other side of the House welcoming the initiatives in tourism, agriculture and trade——
Pressures on credit exist but they will be dealt with by creating a microfinance fund and ensuring the partial credit guarantee scheme will work. These are the actions we must take if we are to create an economic environment that will support the creation of jobs. As I stated, creating jobs is what will help the families, men and women of the country. It is a priority of the Government and we have taken action in every area to ensure job creation will be a reality.
Another priority with regard to the budget was to be fair and ensure we protected those who needed protection. I would argue that many initiatives and decisions taken in this budget do protect families and children. For example, schools in disadvantaged areas will continue to be prioritised for targeted supports. The overall number of resource teachers and SNAs will be maintained, which is incredibly important for families and children who need those kind of supports. There have been changes and the scheme is being reviewed. Different types of decisions have to be made about the use of SNAs. We have to examine some of the research on outcomes for SNAs that suggests varying approaches that are needed in schools in order to help children. That is being done.
Deputy Crowe referred to the mental health difficulties of young people. I support what he said about the huge challenge we are facing in supporting our young people who are experiencing mental health difficulties. We know this is a very real problem and that alcohol is a major factor. It is important to note, however, that in the budget €35 million has been ring-fenced for the development of mental health teams around the country. It is critical that has been ring-fenced and it has been done by this Government. It will be a support to those young people who need it and to families throughout the country.
Likewise, in the area of disability there has been a reaction to one element of the budget. Let us also point to the fact that €50 million has been ring-fenced under the leadership of the Minister of State, Deputy Kathleen Lynch, for disability funding for those who need it. In addition, important capital projects are getting support, including the National Children’s Hospital and other initiatives such as youth cafés.
We have given certainty to families. Some Deputies spoke about the worries people have had. I agree that families are very concerned about the future. How could they be otherwise, given the fiscal legacy the Government has inherited? However, the budget has given security to families about their incomes for the next period. We have said we will not be increasing income tax or cutting core welfare rates. That provides security to families and certainty concerning their incomes in the coming year.
Of course there are difficult budgetary measures. How could one possibly deal with the scale of this financial crisis and deficit without difficult decisions that have an impact? However, we have tried to take tough decisions in as fair a way as possible. For example, the pupil-teacher ratio has been maintained, which is important. People were concerned about that but the Government has managed to maintain it. It is important to have a balanced and honest discussion here about the difficulty of the choices that would confront any government at the moment. Many of the initiatives have been supported and maintained by the budgetary decisions taken yesterday.
I am privileged to have responsibility in Government for children and youth affairs. More than one third of Ireland’s population is less than 26 years of age. Restoring our economic fortunes and addressing our national debt are essential if the future prospects of our youngest citizens are to be secured. A provision of €408 million has been made for the Department of Children and Youth Affairs next year. There is also provision for some capital spending. This is a significant level of provision for families and children. I will speak later about the provision that is being made under the health budget, which has not yet been transferred to my Department.
Like other Departments, I have been involved in the comprehensive review of the expenditure process. We have examined every area of expenditure as part of this process. One has to do that, as we have a dedicated Department. Given the scale of the challenge, my Department has had to look carefully at its expenditure. I have critically examined the priorities and have tried to streamline services and resources as effectively as possible in order to meet the fiscal challenge that every Department has been asked to meet.
The challenge for all of us who work in the public service today, or who provide services funded from the public purse, is to maximise policy outcomes and service delivery. Under the comprehensive review of expenditure, savings of some €16.5 million have been agreed by my Department for next year. That process, which has been initiated, will continue so that the reform of programmes and schemes identified under the comprehensive review of expenditure generates the efficiencies and improvements in outcomes that are possible within the resources available. The Government is committed to improving outcomes for young people, in particular through transforming child and family services and the reform of funding streams and delivery mechanisms across all programmes to make the best possible use of resources.
Before going into the detail of where we will make those savings and changes, I would like to draw attention to the significant commitment by the Government to maintaining the universality of the free pre-school year in early childhood care and education, known as the ECCE programme. Given the budgetary constraints we are facing, I am pleased to say that in line with the programme for Government the universal free pre-school year is being maintained. We currently have 65,000 young people attending that programme, and next year the figure will be 68,000. Some 95% of all our three and four-year-olds are now attending that scheme. I believe it is important to maintain the universal nature of that programme. It is important for early childhood development, including preparation for school and the embedding of skills that are critical to achieving improved outcomes in literacy and numeracy.
It was interesting to read the OECD’s recent economic review of Ireland, which spoke of the importance and great potential of our human capital — that is, our people and in particular our young people. They comprise our future workforce, innovators and leaders. The OECD report talked about early intervention and investment in our young people as an economic driver. We do not often speak about that, but it is the truth. The free pre-school year is an investment in our human capital and in the country’s future prosperity. We will recover from our economic difficulties. In time, too, the generation of children benefiting from this programme will repay our investment by proving the long-term value of investment in early education. For those reasons I am delighted this universal free programme has been maintained. Demographic factors mean there is an increase of some 3,000 in the number of children participating in the programme next year and they will require additional funding. As a result, the programme will cost €175.8 million in 2012, which is an increase of €9.8 million. I have received additional funding for that.
In addition to the early childhood care and education scheme, the other two main programmes of support for child care operated by my Department are the child care education and training support, or CETS programme, and the community child care subvention programme. All three programmes are being retained but some revisions are being made to certain payment rates and subvention levels under each programme. Under the ECCE scheme, for example, I will change the staff-to-child ratios from 1:10 to a ratio of 1:11, which is well within international norms. I will amend the Child Care (Pre-School Services) (No. 2) Regulations 2006 to accommodate that change. This increase will give the majority of pre-school services some flexibility to manage a modest reduction in the capitation rates, which I am introducing from next September. A reduction of €2 per week, or approximately 3%, will be made to the capitation rates paid to providers. The reduction in capitation rates will achieve savings of €2.2 million in 2012 and €5 million from 2013 onwards. Notwithstanding these reductions, the funds available under this programme in 2012 will increase by €9.8 million or 6%. Some changes have to be made therefore, but the universality of programmes will remain for all children.
The child care education and training support programme provides qualifying FÁS and VEC students with free child care places for the duration of their courses. The Department pays child care services €170 per week for each full-time place contracted under the programme in some 1,600 community and commercial facilities. This is the only category of parent which currently pays no contribution towards the cost of meeting child care requirements. From September 2012, the Department will reduce the weekly price paid to services to €145 per full-time place. The services will be allowed to charge a weekly fee of not more than €25 per full-time child care place, with pro rata reductions applying for shorter hours. In practice, it is expected that the charge passed on to parents will be less than the €25 reduction owing to cost efficiencies and competition on fees. In many places, it will be closer to €10 or €5.
Under the community child care subvention programme, parents with a social welfare entitlement or who are in receipt of family income supplement qualify for subvention rates of up to €100 per week for full day care. The parents concerned must be using a community service to avail of the programme. Payment is made to the service and allows community providers to charge reduced fees to eligible parents. From September 2012, the higher subvention rate of €100 will be reduced by €5 to €95. To qualify for the higher rate, it will be necessary to have an entitlement to a medical card, as well as a social welfare entitlement. No reduction is being made to the education welfare service operated by the National Educational Welfare Board.
The capital budget for 2012 will include €1.5 million for youth projects, a significant increase from 2011, which will support the further nationwide development of youth cafés. These are a priority for the Government, in particular in providing alcohol-free venues for young people. There is a dedicated subhead in the budget under the Health Estimates, totalling €568 million, for child and family services under the HSE. When the new child and family support agency is established, this will be part of the agency’s budget, pending some changes which might be necessary when considering the service plan for the HSE.
Our children are our future, but if we do not bring a halt to the economic and fiscal chaos which has enveloped the State, what future are we leaving them? This thinking informs the decisions we have made to bring our budgets under control and manage our economic problems.
Minister of State at the Department of Foreign Affairs and Trade (Deputy Jan O’Sullivan): Sadly, Deputy Mac Lochlainn was correct in saying there would be many Christmas dinner tables with empty chairs in Ireland this year. The only way we will be able to bring these people back is by fulfilling our mandate as a Government which is to rebuild the economy and our society, restore confidence in Ireland at home and abroad and support the protection and creation of jobs. Job creation is the basis for action in the budget. As Minister of State with responsibility for trade and development, these priorities are central to the work I do and are the clear focus of the measures announced in the budget. Nobody would want to take the difficult decisions required in the budget across all areas of Government policy. However, we have a duty to the people to take the necessary action and do so with the greatest degree of fairness, ensuring the most vulnerable people are protected. We have managed to strike that balance.
The promotion of Irish exports and the strengthening of our international aid programme are central elements of the Government’s foreign policy approach. From the start, the Tánaiste and Minister for Foreign Affairs and Trade and I have taken an active role in promoting our economic and trade interests and are re-engaging actively with our international partners while opening up new opportunities for Ireland on the world stage. In October the Tánaiste and Minister for Foreign Affairs and Trade visited Seoul for the annual meeting of the Asia-Pacific Ireland Business Forum and had a series of economic and trade-related meetings in South Korea and Japan. Last month he led the Irish delegation to our joint economic commission with the Russian Federation in Moscow. I led Enterprise Ireland trade missions to Saudi Arabia, Qatar and South Africa, as well as a trade event in London. I was very impressed by the representatives of the Irish companies who accompanied me on these missions. A tremendous amount of business was done, which is how we will pull the economy out of its current difficulties.
With regard to our aid programme, the Tánaiste and Minister for Foreign Affairs and Trade has visited Tanzania, co-hosting two major international meetings on global hunger and under-nutrition with the US Secretary of State, Hillary Clinton. I have also participated in the aid programme and have just returned from a visit to Vietnam which focused on development and building trade links. There is no doubt that Ireland’s international reputation has suffered in recent years but one area in which it remains stronger than ever is our contribution to international development and the fight against global poverty and hunger. I am very pleased there is such strong cross-party support for our aid programme. I pay tribute to Opposition spokespersons in that regard. This reflects both the true values of the people and our sense of long-term interests globally.
Ireland’s aid programme is recognised internationally as one of the very best in the world. It is strongly focused on the fight against global poverty and hunger, especially in the poorest countries of sub-Saharan Africa. It is recognised by the OECD as cutting edge and a champion in making aid more effective. Last month, in the run-up to the Busan conference on aid effectiveness, the Centre for Global Development in Washington rated our programme as one of the three most effective in the world. In recent years, in response to the economic crisis, funding for the aid programme has been reduced by approximately one third. The programme for Government contains a clear commitment to supporting the aid programme and reaching the UN target of providing 0.7% of GNP in overseas development aid. Against the most difficult of backgrounds, we have acted on that commitment in the budget. For 2012 the Government will provide a total of €639 million in overseas development aid, which on current projections will represent a figure of over 0.5% of GNP.
There has been some comment on the extent of the reduction in overseas development aid; the total reduction on the projected outturn for 2011 is €20 million; with a reduction of €10 million in funding for Vote 27 — international co-operation — Department of Foreign Affairs and Trade, and an estimated fall of €10 million in overseas development aid provided from other sources, particularly as a result of an expected lower allocation in respect of Ireland’s share of the EU development co-operation budget. The overall allocation represents a strong positive statement on our continued commitment to the world’s poorest people and communities and Ireland’s determination to build on many years of voluntary effort and the aid programme to end extreme poverty and develop more mature links with countries in Africa and elsewhere which have not, until recently, been seen as potential political and trading partners.
We have launched a new Africa strategy for the Department of Foreign Affairs and Trade, recognising that development is about more than just providing aid. It involves empowering people to drive their own development and build mutually beneficial economic and trading links. In Africa, for example, The Economist has predicted that in the next four years, four of our priority countries — Ethiopia, Mozambique, Tanzania and Zambia — where extreme poverty and inequality persist, will also be among the world’s fastest growing economies, with average GDP growth of approximately 7%.
When I visited Vietnam, I saw how Ireland’s development programme was responding to the remarkable ongoing transition of that country from conflict and poverty to lower middle income status. Ireland is providing vital assistance for poor and marginalised rural and urban communities, while at the same time assisting in private sector development. At the request of the Vietnamese Government, Ireland is also sharing its own development experience. In Vietnam there is also strong co-operation between Irish Aid in the Department of Foreign Affairs and Trade and Enterprise Ireland which is highlighting important economic opportunities, especially in information technology and education.
For several months we will review the White Paper on Irish Aid in order to set priorities for the aid programme for the coming years. We will engage with Members of the Oireachtas, the public, Ireland’s development non-governmental organisations and our partners in the developing world. The review will confirm our fundamental focus on poverty and hunger, putting policy into practice with the poor communities in which we work, especially in Africa. It will also help to strengthen public support for our aid programme as the right action for Ireland for the world’s poor and also the people.
Ireland’s economic recovery is export-led. It is essential, therefore, that we make a concerted system-wide effort to maximise the opportunities in the global market. The Department of Foreign Affairs and Trade now has a key role in implementing the Government’s integrated strategy for the promotion of overseas trade, tourism and investment. The Tánaiste has established the Export Trade Council, which he chairs, bringing together the relevant Ministers and State agencies to drive this strategy forward, with the private sector participating in its work. One example of the work is that the council is examining progress in aligning our visa regime with our economic priorities. That will build on the visa waiver programme announced in June and represents the kind of joined-up action required of Government if we are to meet the challenges of export-led recovery.
The transfer of certain trade promotion functions to the Department of Foreign Affairs and Trade has sharpened the focus of our embassy network in the promotion of this country’s economic and trading interests abroad. Our embassies are taking a leading role in the promotion of a co-ordinated “Team Ireland” approach with the State agencies in local markets and in the management and operation of the global Irish network overseas.
Arrangements for a programme of trade missions in 2012 will take account of the reality that the balance in the global economy is shifting markedly and that emerging economies are assuming ever greater importance. They currently account for a relatively small proportion of this country’s exports but their share is increasing rapidly. Budget 2012 prioritises the promotion of international trade. It introduces a foreign earnings deduction to support our export drive by aiding companies seeking to expand in emerging markets. This targeted deduction will apply to individuals spending 60 days a year developing markets for this country in the BRICS countries — Brazil, Russia, India, China, and South Africa. The Minister for Finance will provide details of those measures in the Finance Bill.
Small and medium enterprises are making, and will continue to make, a vital contribution to our export performance and economic recovery. They will be eligible to avail of the new foreign earnings deduction when they expand into the BRICS markets. Measures such as that will provide a stimulus for SMEs. I would encourage them to take full advantage of the opportunities that are now on offer.
The budget emphasises our determination to build growth and employment, restore confidence and rebuild this country’s international reputation. From the visits I have made abroad, especially where I have been accompanied by a large number of strong, creative indigenous Irish industries, that is very much appreciated internationally. This country is recognised as one that has strong exports and we have the potential to build on that in a way that will address the issue to which I referred at the start of my contribution and which was raised by Deputy Mac Lochlainn, namely, the number of Irish people who, sadly, have had to go abroad for work. As a Government we will continue to focus on ensuring that we develop every opportunity we can to provide jobs in this country by developing exports and indigenous industries. My colleague, the Minister of State, Deputy Perry, will address those issues.
Minister of State at the Department of Jobs, Enterprise and Innovation (Deputy John Perry): As Minister of State with responsibility for small business, I wish to emphasise the commitment of the Government to small and medium-sized enterprises, as evidenced by the budget, the programme for Government, the jobs initiative and the governmental jobs strategy which we will announce early in the new year.
The Government is acutely aware of the importance of the small business sector and its potential for generating employment. Our challenge has been, and continues to be, where to best target our efforts and financial supports and interventions to best effect in the coming months. In these constrained economic circumstances, this requires difficult choices to be made in the face of enormous challenges — choices to ensure we achieve change and make a difference not only to the business community, but also in balancing the human, social, and economic costs to protect and enrich the living and working conditions of all the people we represent. My aim, as Minister of State appointed by the Government with specific responsibility for small business, is to continue to ensure that small businesses play a central role in our economic recovery.
Small businesses are a central part of the economy and their ability to succeed and grow underpins our future potential for jobs, growth and prosperity. There are approximately 200,000 small businesses in Ireland, involving 655,000 people throughout the country. They are currently operating in a particularly difficult environment, and I believe it is vital that we continue to focus on actions to achieve positive improvements in the operating environment for small businesses.
Over the next two years, the Government will commit approximately €1 billion in enterprise capital supports. It recently committed to a multi-annual action plan on jobs, with quarterly targets and a strict implementation process. This will be key to delivering a rolling set of reforms across the economy and Government to support the Government’s number one priority of job retention and job creation.
Access to finance is a key issue for the small business sector. We need a financial system that is better suited to the needs of smaller companies. Financing the productive capacity of the economy is critical to long-term economic success. While large businesses have various options open to them, including the capital markets, small businesses are heavily dependent on the banking system, which is why it is so critical. The initiatives taken by the Minister for Finance to restructure and recapitalise the banking system were the principal response to making credit available. The recent restructuring of the domestic banking sector creates capacity for the pillar banks to lend in excess of €30 billion in the next three years to the SME and other important sectors. The Government has imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks will be required to sanction lending of at least €3 billion this year, which will be benchmarked, €3.5 billion next year and €4 billion in 2013 for new or increased credit facilities to SMEs.
A number of targeted initiatives are being developed by my colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, within the Department, in order to build on the recapitalisation platform and ensure a flow of credit to businesses in order to sustain jobs and generate new employment opportunities. The introduction of a targeted temporary partial credit guarantee scheme was one of the commitments announced in the jobs initiative. On 22 November the Government approved the design of a scheme. The invitation to tender was published on Monday 5 December. We intend to roll out the scheme in 2012. The microfinance scheme, which is equally important, will provide loans to small companies and it will be rolled out in the first quarter of 2012. The temporary partial credit guarantee scheme and the microfinance loan fund will not solve all the issues around access to credit but they will form key components in the solution.
As the Minister of State with responsibility for small business I want to be the voice of small business to Government. I established the small business advisory group in June. Over the summer months we produced a worthwhile publication which every Member should have received this week. Hard copies will be delivered in the coming days. The Government has agreed that five of the recommendations will be progressed immediately. They are pragmatic ideas which are capable of early implementation to help troubled small businesses obtain supports, address some of the challenges of the hidden economy, assist their cashflow by promoting prompt payments, and seek ways to reduce administrative burdens.
I have established an interdepartmental SME liaison group to pursue those recommendations of the group which require cross-Government implementation, as joined-up thinking is very important. The report also identifies measures which call for action by the industry itself and by business representative bodies. I also deal with the high level group on business regulation which has the remit of reducing the regulatory and administrative burdens on business. It operates on the basis of the “think small first” principle.
Small businesses are not just a vital part of our economy. They play a vital role in society and local communities as well. That is why I intend to continue to ensure that the business environment is supportive of them. Our future economic prospects depend on sustaining our strong entrepreneurial spirit, even in the face of unprecedented economic challenges. The Government is focused on ensuring that small businesses are supported in every way to develop their business, increase exports, create jobs and rebuild the economy.
Deputies McGuinness and Ó Cuív, as former Ministers, will be familiar with high potential start-up companies and the development of the potential of small companies. We have a major plan of action that will be demonstrated clearly on the ground in every region in order to ensure that credit and confidence is restored in banks and the banking sector. Given that 650,000 people are working in 200,000 small companies, we must encourage the confidence of employers and, equally, the confidence of employees, because in an economy of €90 billion it is very important that employees spend in the economy.
Deputy John McGuinness: I thank Deputy Ó Cuív for the time given to me in this slot. I congratulate the Minister of State, Deputy Jan O’Sullivan, on her appointment. I have not had an opportunity to say that to her in a debate in the House. She plays a very important role in the Government in terms of trade abroad. I can identify with the work she is undertaking on behalf of the Government. I agree with her that Irish companies that trade abroad are to be applauded for the work they undertake. It is not easy for them to move from the comfortable trade area this shore was at one time, go to a country where there is a different culture and way of doing business and face the challenges of currency costs and everything associated with that. The work of Enterprise Ireland in conjunction with those companies is also to be applauded. We do not celebrate Irish companies, we do not do enough for them and we do not tell them often enough how good they are at trading abroad. Against all the odds, they win huge contracts which mean so much to us at home in sustaining and creating jobs, paying taxes and assisting society in the difficult challenges we face.
Much more could be done to support Enterprise Ireland. I hope the Government will look at different and imaginative ways to support that organisation and ensure that it can play its role to the fullest in what it does abroad for Irish companies. Breaking new ground in the countries the Minister of State has just mentioned, in Asia and the Middle East, is difficult. It is not simple for Enterprise Ireland or its officials, but they do it with great professionalism and pride in the country. They have the confidence of the companies that travel with them as they break that ground and make new markets. There is much potential in those markets and I welcome the Government’s initiative in supporting companies that will go and break into the markets of Brazil, Russia, India, China and Africa. That is where the future is.
We should be proud of our Irish companies. They often take to foreign markets technologies they have tried in Ireland and which were not even tested here. When they win orders they are often asked to show a recommendation from a company in their own country. I say this particularly about the HSE, which all but refuses to buy products from Irish companies, even companies that are trading abroad. We need to address this so that when an Irish company goes abroad it can show recommendations and big orders from Government Departments in their own country. We should not be afraid to support our own. I understand the Minister of State at the Department of Public Expenditure and Reform, Deputy Brian Hayes, is dealing with the public procurement issue. It is also partially the responsibility of the Department of Jobs, Enterprise and Innovation to impress on Departments the need to improve their procurement methods, include the SME sector and give SMEs the opportunity to test new products at home so they can go abroad with confidence and say, not only that they have the stamp of the Irish Government but that the Government is supporting and buying from them. That is critical.
I know Deputy Perry’s background. A company law reform Bill has been stuck in his Department for a number of years. That Bill should be debated by a select committee. It would be useful to have a law on the Statute Book that pulls old company law together and speaks in a language that is understood by Irish companies and by foreign investors. Foreign companies could examine such a law and decide if Ireland was an easy country to deal with. We need to debate the Bill, at the beginning rather than at the end of the legislative process.
I have one disappointment concerning the Government. The previous Government turned out to be a shambles at the end and did not do much service to the country. The people were demanding a new style of politics and a new way of doing business. That is what they voted for and what the parties now in government convinced them about. The Government side now has a huge majority. The people gave the Government a mandate to change everything, reform the public sector, do politics differently and do business differently on their behalf at home and abroad. The Government has abandoned its promise to tackle the issue of upward-only rent review, for example. As a businessman and a politician I am disappointed by that. The Government created an expectation over a nine month period that it could be done and that the Government would do it. At the end of that period, those businesses are faced with the stark reality that rent reviews can only go upward. Small business people have serious difficulties in dealing with those rents. In 2012, when all the blow and bluster of the budget is over and they face into the reality of trade, they will still be faced with that cost, which is embedded in their system and cannot be changed. They looked to the Government for that change and the Government did not deliver it to them.
Fine Gael and Labour candidates spoke to the electorate about the need for reform of commercial rates. I still hope that, following the recommendations of the Valuations Office, the Government will take up that challenge. This is another business cost that an employer, or business owner, cannot reduce because it is set by law and it is for the Oireachtas to change that. Fine Gael and Labour said they would do it but they have not done so. There is still time for the Government to turn around and address these issues.
Deputy Perry spoke about €3 billion being made available from banks this year, €3.5 billion next year and €4 billion over the next few years. Let us be honest. The banks are not lending money. Deputy Perry knows that, as a businessman. When Fianna Fáil was in government we said the banks would lend €3 billion and €4 billion, and they did not do it. Deputy Perry is now addressing the very same problem with the same rhetoric. It is not happening. Businesses are in real trouble.
The budget emphasises the importance of the exporting sector, and rightly so. However, in the retail sector some people who were hanging on by their fingertips are now hanging on merely out of pride. They are proud that their businesses were handed down through generations and are in good central locations in our towns, villages and cities. They are now hanging on out of pride, hoping they will get through the Christmas period and that the upward-only rent review and rates issues might be sorted. Those issues have not been sorted. They are now faced with a poor Christmas trade and poor prospects for next year. That is the difficulty for them and we need to do something about it.
Deputy John McGuinness: We were promised a budget that would look down over the next two or three years and explain to people what kind of money they would have in their pockets. The Minister for Finance was right. It can be said they will have the same amount in 2012 as they had in 2011. However, the cost of what they spend their money on will be different. The increases in VAT and in all the other areas announced in the budget remain. Out of fear for the future, they will not spend their money because they are paying increased costs and are watching every cent they spend.
Deputy Perry, more than most people in the House, knows one cannot address a budget without looking at the cost of employment. We cannot continue to look at budgets in the context of the Croke Park deal. I am not talking about front-line workers. They are the band-aid that is holding the public sector together. I am talking about people who are on big salaries and expenses. We should start from the top down. The Government promised that too and it did not happen.
On the Government side of the House we now have a very poor whisper from the Labour Party, which is unfortunate because Labour has a big contribution to make in government in maintaining that balance.
Deputy John McGuinness: Having a huge majority, the Government has a greater responsibility to ensure that what was said during the general election was not an untruth. It must prove that is the case. I encourage each Government Deputy not to ignore the reality beyond this House. In here they are in a bubble.
Deputy John McGuinness: What the Minister for Public Expenditure and Reform said on Monday does not hold out much hope for the future. The hard pressed taxpayers must continue to pay for the high salaries and the Croke Park deal. It is not sustainable.
The choices the Government made yesterday tell us more about Fine Gael and the Labour Party after the election than we knew beforehand. Every word the Government utters and every action it takes tell us more about it. Fine Gael and the Labour Party should stand up for what they stood for in the general election and deliver on it, because that is the mandate they received.
Deputy Éamon Ó Cuív: I am glad to have the opportunity to speak on the budget. We should lay out the direction we want to take in the future. Having risen to great heights in terms of expenditure and services and having improved services beyond recognition, we are all anxious to maintain those services as far as possible and to protect those who depend on them.
Listening to the debate in the Dáil yesterday, I was interested to see Ministers, one after another, point out something we had been pointing out when in Government, that 80% of current expenditure goes on health, education and welfare. When people were coming up with all sorts of handy solutions last year and the year before, we kept pointing to the fact that, by definition, any cutback made in expenditure inevitably hits health, education and social welfare. Large numbers of the recipients of the payments in those Departments are the poorer people in society.
If we want to work towards a future, we must realise that austerity alone will not resolve the problem. I have a theory I call the three fives. Take, for example, a budget deficit of approximately €15 billion. A debt of €5 billion would be sustainable, particularly if there was a good element of capital expenditure. That would be the 3% that could be borrowed on a sustainable level, leaving €10 billion to be raised. Some €5 billion of that would have to be got by curtailing expenditure or raising new taxes. The final €5 billion would have to be got through growth. Any government that would try to raise the €10 billion through taxes and austerity, would find it was continually chasing its tail, because as it cut expenditure, the tax take would reduce. What this budget lacks is a coherent plan as to how we will create growth within the economy and how we will encourage people to become economically active and do that in a reasonable and sustainable way.
On the other hand, a large number of Deputies sit on the benches up behind me. They go on all the time about our fiscal sovereignty and oppose cutbacks of any type and any extra taxes, yet they never tell us how they would bridge the gap. Whenever they are challenged on that issue, they come up with false sums and move moneys around within State funds to try and give the illusion of coming up with free money. I often wish they could be given two or three weeks on the Government benches, because no more than the government that is in power today, they would face the reality that most of their handy theories do not work in practice when in government and realise that the easy answers of the magic money have no basis. The Fine Gael Party when in opposition used to speak about the €4 billion of waste that could be eliminated with the stroke of pen, without ever looking at the Estimates to point out where the waste existed that could be easily eliminated.
Deputy Éamon Ó Cuív: Deputy Buttimer got what he wished for, but maybe he does not wish for what he got. The problem with the budget is that it does not provide a stimulus. The Government took the easy option of cutting capital expenditure, but some capital expenditure can be self-financing. It increased VAT, an easy option, but not one that will stimulate consumer confidence. The irony is that VAT and the takings from it have been very sensitive to the mood of the people, as one would expect, but what has the Government done but made their mood worse.
I often hear Deputies talk about more schools and hospitals, which are badly needed in terms of capital expenditure. However, they should realise that if moneys are spent on something that is 100% State funded, they must come up with the gross amount of money less whatever tax take would arise from the construction itself. However, there are other types of social expenditure that could be self-financing and that could give us a long-term saving into the future. As spokesperson on energy, I could give perfect examples from the energy sector. Despite what the Department of Finance will say about dead weight, if we give a 35% grant to somebody to upgrade a house thermally, it is easy to prove that between the VAT, PAYE and PRSI take and the removal of people from the live register, we get more back in taxes and savings than is spent on the 35% grant. However, whatever small work is happening in the building trade of that type currently, a large amount of it is happening in the black economy. Therefore, we are not getting any PAYE, PRSI or VAT take and we are also paying the dole in the case of many of those carrying out that work. I used to have this argument with the Department of Finance when I was in government, but it never seemed to be able to grasp it. The standard argument it made referred to what it called dead weight. In other words, my argument was fine in theory. The person was spending €10,000 on upgrading, €3,500 of which was coming in the form of a grant from Government, which was then getting back in taxes more than it put in. The only argument — a weak argument — the Department could give against that was the dead weight argument, saying that people would have made those improvements anyway.  However, people are not doing these things currently. Anybody with a connection with any small builders around the country can tell us they have no work.
If we put significant money into such a scheme, on a self-financing basis, our homes would be much more comfortable. The Department could work out exactly the level of grant that could be given to ensure the scheme would be self-financing. Providing such a scheme would help us achieve our Kyoto targets, mean we would not have to buy carbon credits and would reduce the amount of oil imported into the country and give us a hedge against rising oil prices.
One thing that astounded me with regard to the Labour Party’s part in this budget was the refusal to increase taxes on the wealthy. There is no significant increase in the burden on the wealthy in the budget. The burden in this budget is on the least well off and the middle income groups. There is often talk about what Fianna Fáil did when in government and it is important to put it on the record now. We raised the higher rate of tax. Taking into account the USC and tax, we raised tax by 12% in the past three years. We covered all income with the USC. In other words, it covers all income, including that going into superannuation. We also reduced tax breaks dramatically, both the amount that could be put into them and the tax break given for investments. We increased the minimum effective tax rate for high net worth earners using tax shelters for their income. Compare this to what has happened this year. No significant burden has been placed on those at the top, but significant burdens have been placed on those who cannot carry the burden.
To return to the current position and what we are spending, sometimes listening to politicians would make one think we had gone back to the expenditure levels of 2000, 1997, 1986, 1985 or somewhere back in the dark ages. It is interesting to note that the gross voted expenditure in 2006 was €50 billion and in 2007, total gross voted expenditure on services was €56 billion. In 2011, we spent €57.704 billion — in other words, gross voted expenditure was higher in 2011 than in 2007 when everybody said we were at the height of the Celtic tiger years. In 2012, it will be €55.815 billion. We are still well ahead and are closer to the 2007 than the 2006 figures.
It is interesting to look at social protection. We increased social protection expenditure when in government. In 2006, it was €13 billion, in 2007, it was €15 billion and in 2011, it was €20 billion. In 2012, it will be €20.542 billion. Despite all the cuts which have been implemented, it will only drop a little bit next year because there is no control on the unemployment situation. When one looks at the social protection figure it is interesting that it is caused in part by the increase in the live register but mostly by increased numbers of pensions, increased rates of payment and dramatic improvement in schemes, such as carer’s allowance.
That brings me to the question of unemployment. There was nothing in the budget for the unemployed, lone parents or people on disability. The other night the Taoiseach told us the unemployment problem would not be solved for some considerable time. I accept that in terms of commercial employment, it will be a long haul back and it will not happen overnight, although we could be doing a lot more to ensure something happens. I accept there are a lot of people on the live register who are not unemployed but who are part-time employees, seasonal workers and so on. The core figure of long-term unemployed is 200,000. Can we accept that we are saying to them to stay at home and do nothing and that if they do something, we will reduce their payments? I do not believe that is socially acceptable. One of the things which struck me when I went into the Department of Social Protection was a two page document given to me by the chief medical officer which showed the detrimental effect of unemployment on people’s health, in particular mental health. I hope people in this House sometime listen and take on board ideas that need action.
For years, the Department of Social Protection resisted any money being transferred to it from the Department of Jobs, Enterprise and Innovation to put people on schemes and release them from the nightmare of not being allowed to do anything in return for their payments. Departments would wear anybody out and they fought the battle to stop the transfer of the money year in, year out.
Brian Cowen, as Taoiseach, appointed me Minister for Social Protection and transferred all of the employment schemes to the Department of Social Protection because I had argued for this for years. The idea was quite simple — it was to get over the bailiwicking that happens between Departments and to say to the Department of Social Protection that it could look at its €5 billion in unemployment payments in tandem with the €0.5 billion expenditure on schemes and that it would be a good idea to take €1 billion from unemployment payments and put it into the schemes and allow all of those who want to go on schemes or to stay on schemes to do so.
We had teed all of this up. We set up the Tús programme which, I am willing to admit, took people off social welfare on a cost neutral basis because certain costs were associated with the community employment schemes which were not associated with the Tús scheme. My idea was that over time, one would go on to a community employment scheme to be trained. However, there is only so much training a person can absorb. At the end of the training period of say three years, instead of doing what we do, throwing people back on the scrap heap, we could move them on to the Tús scheme. There is not a Deputy here who has not had endless numbers of people begging him or her to be left on a community employment scheme, small as the financial gain is to them.
The Minister mentioned €20 million in total for activation. She is sitting on €5 billion of a gold mine of money and people with plenty of skills. We have never had as many unemployed people with skills. She could have transferred some of that money over and given people an opportunity to provide all sorts of services our communities need. All of us know of the heritage centres which we cannot keep open, of the community centres we cannot staff and use to their full potential and of all the other community services we need. All we need is a little bit of imagination within the existing budget.
As I said, the hard work was done because we had done the transfer before the Minister came in. I was very disappointed to hear the 5,000 places on the Tús scheme, for which I was derided last year as not being sufficient, have not yet been filled. I said when I filled the 5,000 places, I would get more.
I will speak on social welfare in detail the next day but this budget, when one accumulates all the different aspects, is anti-family, anti-rural, anti-women and anti-disability and I will come back to that again.
Deputy Éamon Ó Cuív: We ran budget surpluses in the years I gave the money. That is a fact. By the way, most of those opposite were quick enough to come into the House to tell me to spend more. They were queuing up at my door looking for more money.
Deputy Éamon Ó Cuív: Some of those opposite should re-read their manifestos for 2007. The Government has increased mortgage interest relief. Somebody under no financial pressure and with plenty of money to buy a house in the defined period will get extra relief. I hope a good proportion of that money will help people who have mortgage difficulties but as I said, it is a scatter-gun approach. We should be honest about it in that many of the people in trouble with mortgages are not paying any tax currently. What did the Government do to fund this? It took €22 million from the mortgage interest supplement and €55 million from rent supplement. Those who have lost their jobs are getting walloped to pay for this mortgage interest relief. If the Government had given the mortgage interest relief and had not taken it from anywhere else, it might have been sustainable. The people in receipt of mortgage interest supplement were able to afford houses but have now hit hard times due to unemployment.
The same little trick was used with the universal social charge. When the Minister was speaking he made great play about the exemption for anybody earning less than €10,000. He said it would cost the Exchequer €34 million per year. However, when one looks at the small print, one finds he made another change, that is, the way the universal social charge is deducted to make it cumulative. It will bring in €45 million per year. The two changes to the universal social charge take €11 million from low paid workers.
Deputy Olivia Mitchell: I have little enough time. I welcome the decision to put on hold and review the disability measures. Although we must save money, those with a disability already have enough to contend with and matters would need to get much worse before we went to them for money. The services and cash payments are equally important to them. As occurred last year, will the Minister direct the HSE to ring-fence disability spending so that people with disabilities will not bear the full brunt of the cuts?
Given that the budget’s core function was to cut €3.8 billion, no one could have had high expectations. By definition, such a budget was going to be almost completely bad news. Our commitment to the public was to get public finances back on track so that we might regain our sovereignty and grow the economy out of this hole by protecting jobs as much as possible and by creating new ones. The budget achieved this commitment.
Even if people fully appreciate the overall need to save €3.8 billion, it is understandable and inevitable that there is resentment towards the details. This is the fifth austerity budget with which people have had to contend. Many people have been hit several times and on different fronts. Apart from Government-induced hits, people have suffered a loss of personal wealth, jobs and expectations.
While the budget cannot be regarded as being benign, it succeeds in achieving the required savings, clearly prioritises jobs and effects savings by introducing long overdue reforms of practices that were inappropriate, even in the good times, and have become untenable in the current climate. For example, the budget reduces the six-day week for unemployment purposes. During the debate on the jobs initiative, I raised this matter as a constraint on employment.  Small wonder that this practice was abused. How many of us would not love to work for three days and be paid for six? One would be mad not to accept an offer like that. The reform is essential as this practice has been a disincentive to employers to take on three-day workers.
Another practice is the double payment to lone parents on community employment, CE, schemes. While this was meant to act as an incentive to move into employment, the lone parents in question were serially employed in CE schemes, thereby defeating the schemes’ purpose. Although they acquired a range of skills, they could not be placed in employment because any job they got would pay less than two social welfare payments plus the payment they received for their children. As harsh as these reforms may be, they are essential to our effort to get spending under control and to reform the system.
In recent weeks, there has been increasing speculation about the sustainability of the Croke Park agreement. Even if the agreement is desirable, sustaining it will be difficult. One must ask whether restricting the number of nurses, teachers and gardaí in order to leave the salaries of those who are still in employment untouched is fair to those who cannot get work as a result or to those who need the services in question. However, the real question is whether we can afford the agreement. It is widely accepted that linking pensions to current salaries was beyond the wildest dreams of the private sector even in the best of times. That link is increasingly unaffordable and difficult to justify. In replies to two parliamentary questions this week, I learned that the income taxes paid by the public sector barely cover the sector’s pensions bill, €2.8 billion and €2.7 billion, respectively. I was shocked by this incredible statistic. If these are this year’s figures, what will they be next year when there are fewer people working in the public service and more retirees? This significant drain on their taxes cannot be sustained.
The private sector’s taxes cannot fund the entire cost of all public services, nor can we continue to ask it to do so. I am not saying that the Croke Park agreement can or should be torn up, as we need industrial peace and flexibility if we are to enact vital reforms. However, we will need to renegotiate the deal, not because we want to but because it is a deal that we cannot afford to keep. The bargain was made in different times and we now realise it cannot be kept.
The transfer of responsibility for redundancy payments to employers has been discussed. When small and medium-sized employers shed staff, it is because they are in trouble. It is not right that they cannot plead inability to pay unless they are bankrupt. People should be able to make arrangements to try to save their businesses, even if it means sacrificing the jobs of the few to save the jobs of the many. People should be able to plead an inability to pay at a point short of bankruptcy. Will the Minister of State consider introducing a measure to this effect in tandem with the one that passes responsibility to the employer, particularly in terms of the small and medium-sized businesses that will bear the brunt of the latter measure? We are not concerned with the Dells and so on, but with the small businesses that we hope will be the backbone of future growth.
Deputy Jerry Buttimer: The budget is about facing up to the country’s realities, addressing our problems and tackling difficulties at home and abroad. The circumstances in which we find ourselves limit the Government’s options and present choices that are neither easy nor pain free. As Deputies, it is important to acknowledge that many people are in significant difficulties and suffering. This is not easy for any Member, be he or she in government or opposition. We wish the situation was different, but we have an obligation.
Last Sunday, the Taoiseach stated that the ordinary Irish person did not cause this problem. I listened to Opposition Members. While recriminating about who caused this mess will not get us out of it, it is about time for Fianna Fáil Members in particular to recognise that they and their policies brought us to this point. I would love it if members of the former Government were held to account in some shape or form other than politically by the electorate. The policies they pursued, their lack of regulation and their friendliness with certain cosy cartels left much to be desired.
This budget is about a road to recovery, growth and putting in place a package of measures that will help our country rise again and our people to become economically sovereign once more. Each of us loves and believes in this country. We have an interest, not just in the past, but in the future. That is why we, as parliamentarians, and those who have been handed the seal of government have a unique opportunity to play a role with the people in this recovery. In the short term this may cause profound difficulties but by taking these decisions, we can and will generate growth and recovery.
Despite all of the difficulties we face as a nation, the Government has taken a range of targeted and focused decisions that demonstrate clear priorities. Two important Government commitments in respect of health policy have been delivered on in the budget. A universal single tier health service is the long-term objective of the Minister for Health and providing €35 million for mental health services and €15 million to provide free GP care for people participating in the long-term illness scheme are the Minister’s initial steps towards achieving this objective. These initiatives will enable implementation of A Vision for Change and the delivery of free GP care to almost 56,000 people. The Minister, with the Ministers of State, Deputy Kathleen Lynch and Deputy Róisín Shortall, has set out an ambitious and much needed reform agenda in the health system which needs massive change. The Minister has demonstrated leadership and needs our support, along with that of stakeholders such as VHI, the HSE, the consultants and the INMO, in order that we can deliver an improved health service. Those on the front line of the service are doing Trojan work. However, they require leadership and reform from those at the top of the HSE. I call on it, its chief executive in particular, to join the Minister in bringing about reforms.
A key commitment in the Fine Gael election manifesto was to increase mortgage interest relief to 30% for first-time buyers who purchased homes between 2004 and 2008. In our first budget we have delivered on this commitment, in providing help for those who have become known as the negative equity generation. This measure alone will not solve the problems faced by those who were enticed to buy homes in the bubble years, but it will provide much needed assistance in helping them to cope with the challenges they face. The property market accounted for 20% of GDP but that figure has fallen to just 5% today. While no one in the House is promulgating a return to that market position, the market should be restored. It is in the interests of the economy that we re-establish a functioning and realistic property market. Reducing stamp duty on non-residential properties will stimulate the commercial market, while continuing and increasing mortgage interest relief for first-time buyers through 2012 will stimulate the residential sector. The Minister’s proposals are targeted initiatives designed to restore confidence and encourage purchases by those fortunate enough to have access to the necessary funds.
Access to funds is not just a problem for those who want to buy a home. It is a daily problem faced by businesses. Business people I meet talk about the difficulties encountered in dealing with banks and the banks stating one thing to the Government and the opposite to viable businesses. The Minister of State, Deputy John Perry, spoke about the importance of SMEs and setting lending targets for banks. This is welcome, but there must be constant vigilance and negotiation with the banks to ensure they are delivering to the SME sector which is the driver of growth and employment creation.
The international financial crisis shows that no country can survive by having perpetual budget deficits. Like any home or business, a country can only survive and provide for its people if its income exceeds expenditure. It is because we have a shared, common future that we all have a role to play in the recovery of Ireland. If we are to benefit, we must establish the basis on which it can return to growth. We cannot shirk that responsibility. We cannot walk away from the fact that we have a generation of young people who require leadership. We cannot be catch-all, with everyone in favour of everything. Membership of the Government requires responsibility to lead the people back to a new prosperity. The budget marks a beginning and is difficult. It is unfortunate that hard decisions have to be made, but we must take them.
Deputy Bernard J. Durkan: I am glad and sad to speak on the budget. I am sad that we find ourselves in this situation and that the people must shoulder the burden they are expected to carry. I am also sad because those who were in government before the Government ran away from their responsibilities. They remind me of the guy who went into a pub, ordered a drink for everyone in the house, went to the washroom, got out the window and ran away. It happened most spectacularly in the past 15 years. Do Members remember the pristine condition the country was in in 1997 when the outgoing Government left office with a budgetary surplus?
Deputy Bernard J. Durkan: The Deputy does not remember because he had his eye on something else at the time. There was a budgetary surplus and the economy was in pristine condition. What did the incoming Government do with it? Like the guys who built the Tower of Babel, it built people’s expectations and handed out money left, right and centre——
Deputy Bernard J. Durkan: ——and bought the elections of 2002 and 2007. There was no end to the money on offer. It created an expectation that this would work, but it did not and, like the people who built the Tower of Babel, the Opposition is now speaking in diverse tongues and its members cannot understand one another. I am not surprised by this, but they have certainly run away.
What really takes me to the fair is when I hear Opposition spokespersons who were in government only ten months ago expressing surprise that there has not been a transformation in the past ten months. We are asked on a regular basis why the economic problems have not been solved. They took 15 years to bury the economy up to its ears. They are like the truck driver who drove into a swamp and then, when the relief driver arrived on the scene, told him to get the truck out. I am surprised that they have not apologised. I would have expected this of Opposition spokespersons in the party of which Deputy Mattie McGrath was previously a member. I hope he will make the apology on their behalf since they are not present. I would have thought they would apologise for leaving the country in such an appallilng mess. However, they have now reverted to a series of soundbites, expressing baby-like surprise and wondering about the awful state the economy is in and asking why the Government has not done something about it in the past ten months.
I compliment Sinn Féin on the constructive way in which it has gone about its business in Northern Ireland. It has taken its responsibilities seriously and, with its coalition partners, set about shrinking that economy because there is no money available. It accepted the need to do this, and I would like to see it do the same here by applying the same rules and principles and recognising that the people face a serious problem. Rhetoric will not solve the problem. All of the decisions taken by the Government, sad though they are, had to be taken simply because there was nothing else it could do.
I hear Members on the other side of the House saying there should be a stimulus package; let us inject more money into the economy. Where is the money about which they are talking about? Do they not know the country is broke? Do they not know what this entails? Do they not know the sacrifices the people must make in order to drag the country out of the mess it is in?
Deputy Bernard J. Durkan: The Deputy was speaking in diverse tongues before it because he saw the opportunity to jump overboard when it suited him. He would jump back in again if he thought the boat was big enough to carry the lot of them. It is now a smaller boat which will take fewer people.
Deputy Bernard J. Durkan: The Deputy must also accept responsibility and should send for his former colleagues, ring or text them to hear the other side of the story. Let us see what he has to say about this. Since members of the main Opposition party are not present, on their behalf, we should echo an apology to the people for what they did. The people will pay for an awful long time to come.
Do people remember what the previous Government did? There has been much talk about child benefit. It is appalling that we have to do what we must do. What did it do? In 2002 it sent a letter and a cheque to every mother of every child in the country for up to €1,000, €2,000 in some cases, in respect of an increase in benefit one week before the general election. I can only think it was naivety on the part of the governing party which did not think it would have any effect on the election results. In 2007 it had another go. It was the general election of 2002 which broke the country because it was calculated to secure an overall majority for Fianna Fáil which is what it wanted at the time. If Fianna Fáil had got that, it would have treated the people to something else afterwards. Anyway, what the party did then was to run further before the storm, spending more money, saying it was a great thing and that Fianna Fáil was magic, that it knew how do to it. Well, that was not the case and it was only when Mr. Chopra arrived and looked at the accounts that he asked what was this off balance sheet recording of debt. It was apparently accepted practice in the past but he said no, we could not have that anymore. Reality dawned.
I compliment the former Minister for Finance, the late Brian Lenihan. He took very courageous decisions. I do not know how much support he got from his colleagues but he took those decisions because he realised the reality. Reality is what we face now, and more of it, and it will take another four or five years before we work our way out of it. It will mean everything going right and there will be occasions between now and the end of the four or five year period when we must revise and review again and again, much in the same way President Roosevelt did in the USA in the 1930s, where again and again he had to explain to the people what the problem was and that he understood what was happening and was trying to help.
John Steinbeck wrote The Grapes of Wrath, and we hear a lot of expressions about anger and all the angry people out there; there are many people in government angry about having to face what we face now. He called it The Grapes of Wrath; he could have called it The Fruits of Anger but anger does not put bread on the table. It never did and it never will. I would hope there would be a realisation on the part of the main party in Opposition that what it did to this country is appalling and that it should accept responsibility for it so we could move forward together in the clear knowledge we are going in the right direction.
Deputy Tom Barry: I congratulate the Minister on this progressive budget from a progressive Government. It is a pity there is no Opposition here to listen to the other side of the argument. While they are writing their arguments about how wrong all this is, they are not prepared to listen to the counter argument.
I am one of those people who set up a small to medium sized enterprise 16 years ago. Thankfully we are still in business; we are only a small business with less than ten employees but we create good employment. At least I know what I am talking about. Some of those who spoke today, as my late mother would say, would put wooden legs on hens for us. They have no clue what they are saying. It is just rhetoric.
Let us look at the facts. The first €100,000 of research and development expenditure for all companies is allowed as a tax credit. This is an excellent idea because jobs will be created in research and development. Outsourcing of research and development is allowed for small companies that do not have in-house facilities. Corporate tax exemption for start-up companies for three years is another good idea. There were commitments on the 12.5% corporation tax rate and a microfinance scheme where businesses with less than ten employees can get loans of up to €25,000. They may have had credit refused due to a lack of collateral or the banks considered them too high risk so this is being put in place. A temporary partial loan guarantee for businesses that have insufficient collateral or where the lender does not have enough skills or could not be bothered listening to the application is another good scheme that will play a part for small businesses in the years ahead.
The new seed capital scheme for PAYE workers who have become redundant and want to form a business was not mentioned. They can place the previous six years' income tax into share capital in their new company. Along with a redundancy lump sum, this will provide opportunities for enterprising people to create business. This is what it is all about.
Foreign earnings deduction is a brilliant idea which will drive exports into countries such as China, India, Brazil, Russia and South Africa. This will be a great help to the food industry, because at present we are supplying huge amounts of baby formula to China, an amazing market. China has only 8% of the world’s landmass but 20% of the world’s population so there are huge business opportunities there.
The Government’s commitment to farming is commendable. Following the excellent document Food Harvest 2020, the Government has allowed stock relief for farmers who are expanding their herds. There is a reduction in stamp duty from 6% to 2% and 1% for close relatives up to 2014. These are good measures that will encourage land transfer because young people must be brought in. We saw what happened to the beet industry when there was no transfer of quota from old to young and a corrupt Government — we lost it. Only 0.5% of the land in this country is offered for sale each year so this will help it along. There are benefits in capital gains tax and retirement relief to incentivise early transfer of farm assets and encourage the sale of assets by those with no successors. That is vital because land must be transferred. Fragmentation is one of the biggest issues in successful commercial farming.
Open farms will benefit from a 9% VAT rate and the universal service charge exemption is being increased from €4,004 to €10,036, benefitting low-paid workers. Farming has been always a low-paid sector but people are happy doing it; they never wanted the millions that were thrown around, they just wanted to keep working. Look what they have done; they are the sector that has grown by €1 billion in exports in the recent past.
The carbon tax is a hit but at least the Government has recognised it and is giving double income tax relief for increased costs. That must be welcome. The Government recognises that farm partnerships are important by granting the stock relief.
Mortgage interest relief of 30% for first-time buyers between 2004 and 2008 must be welcomed. This will go along with the Keane report. I have worked in this area because this Government is adamant it will address the mortgage situation that is crippling part of this country. Those people deserve to be treated properly and we will work with them and hopefully find a solution. It will not happen overnight but it will happen.
The two restructured pillar banks have targets for lending to small and medium sized businesses, €3 billion this year, €3.5 billion next year and €4 billion the following year. I hope we can make sure they follow these targets. They must be set because the banks will not do it on their own.
There has been no increase in personal taxation rates but if we listened to the Opposition, we would think we had robbed every penny from their pockets. This is the first time I remember a budget that does not affect personal taxation. That is important.
The VAT rate increase is there but as someone who runs a business, we have discretion on the VAT we charge. I charge a lot of VAT and pay a lot of VAT buying and selling but we have discretion of up to 10% when trading because we are so glad to get a good sale, we will discount. The 2% will come out of the discretionary 10%. That cost can be borne and will contribute to bringing back the country economically.
Exports are up 4.6% this year and next year we are expecting growth of 3.6%. This could be an awful lot more and we are narrowing the Exchequer deficit. We have modest growth targets next year of 1.3% but we are in the food business and have the infrastructure to create lots of value added food. We are a food exporting nation and we should seek to feed 50 million people with high value and high quality produce. People have to eat; they might not buy televisions but they will feed themselves. A reduction in interest rates and stability in Europe will help us and if we get half a chance we will beat these targets and bring back our economic sovereignty.
The primary focus of this budget is job creation and taxes on employment were kept to a minimum. I commend the Minister because removing €3.8 billion was a difficult job but he has done it. He showed us the way forward and if those who were giving out sat down and looked at the facts, they would realise this budget will be remembered for a long time because it is a progressive budget that will help us regain our sovereignty.
Deputy Tom Fleming: Unfortunately owing to our straitjacket restriction within the confines of the IMF framework agreement, there was not too much room for manoeuvre to make decisions that would be more favourable and palatable for the majority of our citizens. I give credit to the Ministers and the Government for retaining most of the social welfare payments, increasing the exemption from the universal social charge from annual earnings of €4,004 to €10,036, and increasing the mortgage interest relief to 30% for first-time buyers who purchased between 2004 and 2008.
I am very concerned regarding the Department of Health cuts of €543 million which will have a detrimental effect on the provision of services. General medical services, mental health and community services will be particularly impacted as will the retention and upgrading of quality services in our public hospitals and public nursing homes. With the present policies our community hospitals are facing meltdown. If the approach of the Minister and the HSE is allowed to continue the vast majority of our excellent community hospitals will become history in a short number of years. That is the bleak outlook that faces us.
I believe there is a deliberate planned strategy to expedite the closing down of these fine and well run public institutions through the over-stringent implementation of regulations by the HIQA. I urge the Minister of State along with his Government colleagues led by the Taoiseach to intervene to prevent these closures proceeding in the reckless and ruthless manner that the HSE is being allowed to do at the moment. At present it costs €850 per patient in private nursing homes and €1,300 in public hospitals. However, the €1,300 in public hospitals does not reflect that there is also ancillary care, appliances and other costs. I do not believe these are being included in the statistics that are being prepared. Therefore we are not getting a true cost-benefit analysis for public nursing homes vis-à-vis private nursing homes.
This matter should be revisited so that there can be more rational decision making based on true value for money. Historically they have given a wonderful service and with minimum refurbishments or alterations these public buildings are quite capable of continuing into the future. The next generation would regret it if we allow what is happening at the moment to continue. There are also jobs for the staff which provides a very high quality of care.
It was most insensitive and inhumane to even contemplate the proposals to dramatically reduce disability allowance payments for new claimants and eligible young people with disabilities. I understand the Minister for Finance has already made a statement that the matter will be revisited. I urge the Minister of State, Deputy Sherlock, to talk to the Minister for Social Protection to have this rescinded immediately in order to allay the fears and upset it has caused to these vulnerable people and their families. They are also very dependent on their families and this should not have been imposed on them in these tough times.
Another unnecessary decision is the six-week reduction in the eligible period for receipt of fuel allowance. We have a very damp climate and for the past two years we have experienced longer and colder winters. This matter should also be re-examined.
Child benefit should be means tested. While I am aware there would be a difficulty in administration, I believe it is the only fair and equitable method and would also protect lower-income earners and those dependent on social welfare. It would allow the greatest amount of money to be given to those most in need and would avoid the possibility of reductions in payments now or in the future. It is not too late to amend this and alleviate the hardship lower-income earners are experiencing. Other reductions in the back-to-school clothing allowance and the changes to the jobseeker's allowance only compound the situation for this category of people at present.
This morning I got a telephone call from a distressed constituent who outlined how her family will be affected by the budget’s social welfare changes. Her son has sensory disabilities and receives domiciliary care allowance. She is also a recipient of carer’s allowance. Her husband has gone from full-time employment to part-time employment in a garage workshop. The family is receiving family income supplement. His wages are €310 a week and the carer’s allowance is €248 a week. The family income supplement threshold is €703. When the wage of €310 is deducted from the threshold of €703 it gives a figure of €393. The family income supplement is 60% of the €393, which is €235.
With a loss of €148, he is now receiving €87. On a rough calculation, 148 by 52 is €7,696, plus losses in child benefit of approximately €230 per annum, which amounts to a yearly loss of €7,900 for these people.
I commend the Minister on protecting the special needs assistants complement. I urge him to strive to reduce the pupil-teacher ratio in the short to medium term, thus ensuring equality in the classroom for all pupils. I believe much can be achieved with a slightly smaller budget. Owing to procurement and competitive rates in terms of tendering, we can achieve the same amount of buildings constructed or refurbished and so on. Replacement of prefabricated buildings must be a priority as they are costing a great deal of money. Also, many jobs could be created through the construction of new buildings.
I compliment the Minister for Agriculture, Food and the Marine, Deputy Coveney, on the excellent job he is doing in his Ministry. There are many positives in the budget for him. The Minister has done a great deal since taking office. I wish him well in the future. Agriculture is a huge growth industry in this country. It is the lifeblood of rural Ireland. While there are a few negatives in the budget in this respect, overall the positives outweigh the negatives. Farmers’ income is on the increase. It is hoped that will continue.
Deputy Mattie McGrath: I dislike speaking about absent Members, unlike Deputies Buttimer and Durkan who fired many criticisms of us across the floor of the House. There appears to be a competition between Deputies Buttimer and Durkan in terms of who can be the loudest heckler. While they insulted us for not being in the House, they have now run out themselves.
The Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, waxed eloquently this morning with his satirical tongue and poisonous pens. His former colleague, Séan Treacy, a former Ceann Comhairle of some renown, fadó, fadó, once said to me: “Poisonous pens and slanderous tongues shall not prevail against me.” Deputy Rabbitte called members of the Technical Group, elected Members of this House, a dolly mixture and a mix and match. How dare he. He is the folly Minister on that side of the House. He needs to cop on.
The Minister for Agriculture, Food and the Marine, Deputy Coveney, has succeeded in these serious times in ensuring that this is in the main a positive budget for farming. Included are research and development for small businesses, tax incentive schemes, the microfinance scheme and many other wonderful schemes that are badly needed. I welcome the start-up loan scheme of up to €25,000 and seed capital scheme which provides that income taxes paid over five years by unemployed people can be used as seed capital in setting up their own business. These are wonderful schemes, as is the stock relief, the reduction in stamp duty and the transfer of land from elderly parents to their sons and daughters. I welcome the exemption for those earning up to €10,000 from the universal social charge. Many people employed in farming earn under €10,000. The reduction in stamp duty is also a positive step.
The only negative is the attack on disadvantaged areas and the REP-AEO schemes, which have been beneficial. Agriculture saved us during the last recession. It was forgotten about during the silly days of the Celtic tiger but it is our bread and butter. It has massively increased our exports during recent years and has the potential to do so again. It is important we do not hit the most disadvantaged people in the uplands. I previously fought, along with some of my back bench colleagues, the late Minister for Finance, Brian Lenihan, and the Minister for Agriculture at the time, to retain REPS and to introduce the new AEO scheme. All of this money is spent locally on fencing, planting, reclamation, drainage and so on and the employment of local contractors. They are good schemes. Agriculture must be protected. I compliment the Minister for Agriculture, Food and the Marine, Deputy Coveney, and his colleagues in Government, as did Deputy Barry who has experience in business. Successive Governments failed to have a business person at the Cabinet table. While they had people from all walks of life, all whom were elected Members, they did not have business brains, which are required if we are to root out lazy officials who have taken over and cannot be shifted or managed. Successive Governments have failed to rein them in.
On social welfare cuts, the fuel allowance has been cut by six weeks, which is a mean cut. I recall being a member of the Fianna Fáil Party at the time the former Ministers McCreevy and Coughlan were criticised for their dirty dozen cuts. This budget is worse; it contains 14 dirty cuts. The 100th anniversary of our State is in 2016. These are the dirtiest ever cuts introduced. People are already living in fuel poverty. There has been no assessment of how people will manage following these cuts. We all know that currently people are buying oil in five gallon drums but elderly people who do not have transport cannot do so. People are cold in their homes. When elderly people get cold they get ill and become unhealthy, ending up in hospital. Our hospitals are facing cuts of €640 million. This cut will result in our having more ill, nervous and unhealthy people.
The reduction in capitation grants is a body blow. I have visitors in the Gallery this evening, a sponsor group of the meals on wheels in Cahir town who work tirelessly with a small committee. There are two CE staff and many volunteers involved in that group. The group receives €1,500 per annum to pay for utilities such as phone and electricity and to purchase materials. It provides massive services to people in the town and rural areas. They are our enablers, our community drivers, the people doing the work despite that they do not have to do it. I salute them. I do not salute the Minister who is imposing a €1,000 cut in this area. This will result in discontinuance of the scheme. There are many CE schemes throughout the country. I am chairperson of one scheme. They are keeping this country going. They care for graveyards, provide meals on wheels and laundry services, visit the elderly and so on. I could go on for the day outlining the type of work they do, including the drugs initiatives in Dublin.
The reduction in the disability allowance must be the meanest and most shameful cut of all. How could the Government do this? The late Minister, Brian Lenihan, included this in his budget in 2009. Following discussion with him by former Deputy Connick, who is in a wheelchair, and five other Members, including myself, it was removed prior to the budget being presented. He must have left the proposal in the office, unfortunately, only for it to be picked up by a civil servant who placed it in this budget. It is a drastic and savage cut. I respect that some Fine Gael and Labour Party backbenchers have since seen sense.
Deputy Mattie McGrath: Comhghairdeas libh. The Taoiseach explained this morning that he had listened to people. It must be removed. It should not have gotten through in the first instance. This is supposed to be a social, caring Government. Had the Government gone ahead with this, it would have had disastrous consequences.
The one-parent family allowance is also hit. I accept we had to take some hits. Education has also been hit. Free education, introduced by the late Donogh O’Malley, is long gone. We need educated young people if we are to regain confidence and pride, to grow our businesses and get our country back on its feet. Closing small schools is a retrograde step. Many of those who are Members of this House longer than me know what happens when small schools are closed. It is bad. Big is not wonderful or beautiful. Smaller intimate schools are better. They are also vital for farming communities as it keeps children in the area.
Carbon tax and home heating oil have been increased. The VAT rate was increased by 0.5% two years ago. That increase had to be withdrawn as it was a futile mistake. We are trying to grow our economy. I am a small businessman, as is a friend of mine in the Visitors Gallery. We know that this will not work. It will not result in raising €570 million. Business people will be hit hard by this.
Deputy Mattie McGrath: It is on the record if the Deputy would like to check it. His attack on Deputy Wallace in regard to why he was speaking on behalf of our group was disgraceful. We are an Independent Group. We pick people to speak on particular topics. Deputy Wallace and I have as much right to speak as has the Minister, Deputy Rabbitte. As I stated last week, the Fianna Fáil Government became arrogant after ten years. This Government has become arrogant after ten months. The arrogance of some Ministers is shameless. I am surprised at the Minister, Deputy Rabbitte, who is a good Minister and who I like but he should have more respect for all the Members who are elected to this House. No matter from where they come, they have been elected and they represent the people. While I am unsure of the exact words in my case, he also stated something to the effect that the people had elected extraordinary people. Were the election held today, the Government would experience some extraordinary change. The Labour Party already has lost Deputy Nulty in a case of last in and first out. The Government should be careful and make haste slowly. It should not insult the electorate for electing the Members of this House.
Deputy Luke ‘Ming’ Flanagan: Fair enough. I hope no one minds if I disagree with the budget because if I have a problem with some of its provisions, that is what the Opposition is meant to do. While Fianna Fáil undoubtedly destroyed this country and has made life hell for people, another thing that destroyed the country was a lack of a decent Opposition in the last Dáil. The present Administration’s dislike of an Opposition is proof that it does not understand what opposition is.
Deputy Luke ‘Ming’ Flanagan: The Government has made choices, although it has reversed some of them because they did not sound too good. Nevertheless, it made those decisions and Members now know what it feels about certain matters. The Government had a choice between increases in VAT or in income tax. It is undeniable that people on low income spend a far greater proportion of their money on VAT-rated items than do those in higher income brackets. The poorest 10% pay 14.9%, while the richest 10% only pay 7%. Social Justice Ireland produced an excellent document that explained the effective tax rates following the budgets for the years 2000, 2008 and 2012. It demonstrated that there was room for manoeuvre to increase income tax on the richest in our society. This is something I would have expected the Labour Party to do but it has decided not to. As Sinn Féin managed to put together proposals and found this money, I would have thought the socialists in government also would have been able to do it.
The Government had a choice as to the items on which to apply the additional VAT. It had a choice between concert tickets and toothpaste and a choice between caviar and children’s toys. It decided to apply the tax to toothpaste rather than to caviar and to children’s toys, rather than to concert tickets.
The Government also had a choice in respect of rent allowance. Just as much money could have been saved by making the landlord take 100% of this cut. Instead, the Government has made the financially weak bear equal pain. Rents in rural Ireland are being kept artificially high because of rent allowance and this issue must be tackled. In another version of this phenomenon, namely, the rental accommodation scheme, or as I like to call it, the rental accommodation scam, some landlords in Roscommon are in receipt of double the current market value. The Government should tackle this issue before hitting the poor and vulnerable.
The Government also had choices in respect of health. For example, it could have hit consultants’ pay. A maximum cap on consultants’ pay of €150,000 would release €100 million to the Exchequer. The Government could have taken €7 million out of that €100 million, instead of taking it from young people with disabilities. I apologise: the Government now has changed its mind about that proposal. However, the problem is that it changed its mind because it got bad publicity about it and not because it cares tuppence about someone with a disability. If it did, it would not have proposed this measure in the first place.
I have called for the legalisation of cannabis and will continue to so do. This is not very popular but just because I hear it is not popular does not mean I will change my mind. Moreover, the research department has done some investigation on that issue for me and has estimated the legalisation of cannabis would be worth approximately €470 million to the economy. Would that not be better than hitting the poor?
As for education, the Government had a choice, particularly with regard to third level education. It had a choice of hitting the lecturers, who yet again are in receipt of exorbitant pay, or the families who already are in a living hell when trying to pay the bills. The Government chose to hit families with an additional charge of €250. Why did the socialists not hit the well-paid lecturers? I cannot work it out and do not know the reason.
As for road tax, I believe car tax should be scrapped altogether. I do not suggest this should be done in the same way that Jack Lynch got rid of certain taxes. He even induced my mother, a sworn Fine Gaeler, to vote for him.
Deputy Luke ‘Ming’ Flanagan: I propose getting rid of it and replacing it in another way by placing the tax directly on the fuel. This would effect savings in two ways. First, it would lead to savings in the paper-pushing associated with operating the current scheme. In addition, it would mean that tourists would be able to contribute to the cost of our roads, as they also buy petrol when visiting. For anyone who makes the argument that this measure would put off tourists, why not use the money raised from the proposed increase in road tax, which the Government intends to give to bankers, by putting it towards a reduction in airport taxes? That would increase the number of tourists.
On fuel allowance, the Government had an option whereby it would have cost them no more than the reduction from 34 to 26 weeks of giving people a block or single payment. People could then buy their fuel in bulk. In other words, instead of buying approximately 80 bales of briquettes, they could buy two loads of turf. If one paid the allowance to them all at once, one would make the same saving.
Deputy Luke ‘Ming’ Flanagan: I asked a question in the Dáil as to the reason this could not be done. I was given the lazy answer that if they got a job, they would have the money and one would never get it back from them. However, if the Government really wanted to do it, it would work out a way to do it.
This budget was meant to be about reform but where is it? I spent six years on Roscommon County Council and while good people work there, the problem is that there is no accountability. Billions of euro are spent between roads and all the other services provided by local government but there is no accountability. I was mayor of Roscommon County Council last year and the director of services with responsibility for finance threatened to leave the room if I sought further information on the budget while attempting to save money. The reason he could do this is that county councillors have no power. I am delighted to see the Minister of State nod in agreement because that gives me some hope. Accountability should be brought to local government. The introduction of directly elected mayors would achieve two things. First, a great deal of money would be saved and second, the Government would get me out of here because I would run for that position. I would love to get County Roscommon off its knees.
Deputy Luke ‘Ming’ Flanagan: Approximately 450,000 people are unemployed and although the Minister, Deputy Burton, talks about forcing people off the dole, one does not need to do this. Perhaps one needs to do it to a certain extent, but I note one would force people into taking jobs ahead of other people who want them. Moreover, they probably would not do a good job. One does not need to force people off the dole. Unfortunately, not alone are people being forced off the dole but they are being forced to engage in schemes that no longer are sustainable because of the reduction in material budgets. How does this help employment?
The issue of mental health supposedly was the good news story of the budget, in that the promise of €35 million was met. I am delighted by this but one should consider the causes of mental illness and depression. One major cause is environmental factors or in other words, the world in which a person lives. In addition, there are genetic reasons. However, with this budget the Government has just increased the environmental dangers of increasing mental health problems to a phenomenal extent. Despair is abroad as a result of the budget. The previous Taoiseach, Tánaiste and the others who now are retired had their pensions cut by less than some of those in receipt of social welfare. How the hell can the Government agree with that?
I got a letter from a lady today who wanted to say the following to the Members opposite and she asked me if I would pass on her message. She said she would like to raise the issue on behalf of lone parents who also have children with special needs and disabilities. She said the cut in the lone parent’s allowance and the age of her kids means it will affect her in a really bad way. She also said that since she is a lone parent of a child with autism, she already has to fight to retain the special needs assistant for the school and everything else that goes hand in hand with raising a child with a disability living in rural Ireland. She wrote that she had to give up work in September as her son was sick and she cannot afford to pay someone €21 an hour so she cannot go to work. She wrote that her parents are in their seventies and her mum helps her out but she cannot do so for much longer because she is getting older and she is no longer able to help her. She also wrote: “What, Luke ‘Ming’ Flanagan, are you going to do for me on this one?”
All I can do is appeal to and beg the Members opposite not to hit the poorest in this society. It will not help anyone. The Government says the rich will leave the country if it taxes them more. The rich are far more likely to leave this country if the Government goes down the road it is going down because it will not be safe for its members to leave their houses because society will fall apart and, as a result, this country will go to hell. Do not let this happen.
Deputy Dominic Hannigan: There is no denying that this is a difficult budget. Taking €3.8 billion out of the economy is a challenge and a balancing act. The Government must promote growth and stimulate jobs while reducing the deficit. We must do this to put the public finances on a stable footing. Getting there will not be easy. It will take time, dedication and commitment, but the Government has the commitment to create a roadmap out of the mess we are in. We have published a medium-term fiscal statement. This sets out a clear plan for how we will reduce the budget deficit. We have also published a €17 billion capital programme. This is focused on health, education and job creation. We published only last month a robust and progressive programme for reform of the public sector. This will see savings in excess of €2.5 billion by 2015. We are creating a more stable environment that will lead to job creation over the short and the medium term.
The legacy of 14 years of Fianna Fáil Governments here is that we have an economic mess, the bailout agreement, more than 440,000 unemployed people, a national debt of approximately €150 billion and a €16 billion current spending deficit. The Labour Party in government has delivered in the first budget of this Government. Let us focus on what this budget means in five key areas — job creation, taxation, education, unemployment and health. This is a positive budget for jobs. Over the next two years the Department of Enterprise, Jobs and Innovation will commit nearly €1 billion in enterprise capital supports and this will see a 4% increase in Enterprise Ireland’s capital budget. The IDA and county enterprise boards will see their capital budgets remain the same. The Irish venture capital industry will see an extra €18 million available and we will see a 20% increase in the number of innovation partnerships. This is alongside targeted measures to boost exports. We are encouraging small and medium enterprises to develop their markets in the BRIC countries — Brazil, Russia, India, China — and in South Africa and these markets have a growing middle class who have shown a desire for Irish products. SMEs will be able to invest more heavily in those markets and we have brought in research and development grants which will make it more easy for them to gain access to capital and to get their money back. This will have a real effect on job creation across the country. People’s take-home pay will be the same in one month’s time as it is today. There have been no changes in tax bands, tax rates or tax free allowances. Some 330,000 people, low paid workers, have been taken out of the tax net, as it were, because of the change in the application of the universal social charge, so they will see an increase in their take-home pay.
In terms of education, it is easy to forget the large size of our education system. We have more than 1 million people in our education system with more than 100,000 staff and we are protecting education while still making the necessary savings. It is important to point out that SNA numbers will remain the same in our schools. The primary school pupil-teacher ratio will remain untouched and we are making sure there will be no change to the number of resource teachers. High speed broadband will be rolled out to every second level school in the country by 2014. People on the dole will not see a reduction in their core payment. People who have been unemployed for more than a year who are finding it difficult to get back to work will have the benefit of the new labour market activation fund, which will see an investment of €20 million aimed at those who are long-term unemployed.
Major reform of the Department of Health will take place over the next four years and this budget is one step along the path to reform of the health sector. We have started the ball rolling on the provision of universal health care. Some 56,000 people on the long-term illness scheme will be entitled to free GP care. Funding of €35 million has been ring-fenced for mental health services. The programme for Government is committed to a Vision for Change and provision for it is also ring-fenced. That is a further commitment to reform of health care provision. The Labour Party’s involvement in the budget has brought all of that about.
It is important also not to forget what the Labour Party’s involvement has meant in terms of what has been left off this budget. There are not cuts of €4.4 billion, as many commentators said there would have to be only a few weeks ago. This is not an unbalanced approach to cutting versus tax increases. We have managed to deliver on that. No medical card charges, which some people said would have to be brought in, were introduced. There are measures in the budget that are very good for the country but there are also things that have been left out as a result of my party’s involvement. There are things we are not pleased about doing, but overall these measures are necessary to make sure that we get the country back to work and regain our sovereignty in the process.
Deputy Arthur Spring: Labour Party backbenchers felt very strongly about the cut in disability allowance on the appearance of the budget and it was the Minister, Deputy Burton, who commenced a review of it immediately. I am glad we have a resolution of the matter at this point in time.
Deputy Arthur Spring: I advise the Deputy opposite that the reaction of everybody on the Government benches to this measure was that it was something we needed to review immediately and we have come to the right conclusion. The Deputy should commend us on that.
This is the first budget on which I have contributed and I wish I had been here in better times. I would like to state the position of the country, the strengths of the budget, the commitments made by the Government in the programme for Government and my view on where the future lies for this country within our own economy and within the eurozone.
The position of the country is stark. We borrow €375 million a week to pay the Members of this House, teachers, gardaí, social welfare recipients and everybody else. That money filters down into small businesses and it contributes to making the society in which we live. Some people have advocated that we should go elsewhere and stop borrowing money from the ECB. Viewing this realistically, we would not strip €3.8 billion out of the economy but would take the whole chunk of the deficit, nearly €20 billion, out of the economy. I appeal to people to recognise that.
We all have an obligation to communicate to all the people who voted for us that we are facing the gravest time on the Continent since World War II. When we hear the German Chancellor saying that, we should sit up and listen. We have the highest personal debt ratio of any country in Europe and when we have junk bond status as well, we are in a pretty dire situation. Trying to get out of it is very difficult, but we put our hand up over here and said we were willing to go into government, take the heavy load, take the bull by the horns and do what has to be done.
There are many good measures in the budget. I am particularly glad of the mortgage interest relief measure because I come from a generation that is generation jinxed. I am one of the people who pay more than 50% of their wages, even though we are paid very well in here, towards their mortgage, and I have many friends who are in the same position.
This is a good budget for farming and tourism. My acronym for recovery for my area in Kerry is TEAM. It is a mind set whereby we bring everybody into the trenches with us and we do what we can to make the country better. T stands for tourism and we have made great inroads in that sector. With the introduction of the 9% VAT rate, matters are improving in Killarney, Tralee and Listowel. The country received enormous coverage with the visits of the Queen of England and the American President, and value from that coverage is being created again. There are a few benefits in the budget for the energy sector, including that VAT can be reclaimed in respect of turbines. Our product can only go forward and it has growth potential. In terms of agribusiness, we all know how good our product is and the Minister is doing a fine job on developing it. With regard to micro-enterprise, research and development grants and compensation measures are available. I commend the Minister of State, Deputy Sherlock, on his hard work and the foresight he has shown on this. I ask the Ceann Comhairle to note that I will be in possession when the debate on the financial resolution next resumes.
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