Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

The Government sees its main task as working to claim credit for recovery rather than actually doing anything to deliver it. It has delivered regressive budgets which have cut growth and employment and increased unfairness. It is only hitting overall fiscal targets because of developments in Europe.

From the very beginning this has been a Government obsessed with public relations. It puts immense amount of time into spinning every issue. No effort is spared when it comes to trying to manipulate headlines. Ministers are going around Leinster House in search of opportunities to present themselves as national heroes. Although those who are willing to live within the bubble may not have seen through this yet, the public have long since understood that nothing this Government says can be taken at face value. One cannot accept on good faith any claim members of this Government make because when one looks at the facts a very different reality will always appear.

This has happened yet again with this budget. Yesterday the two Ministers stood up and, in the short gaps between long passages praising themselves, they claimed they had put together a fair budget. It was a budget which would create jobs and leave people’s incomes intact; a budget that would deliver new and better public services. It was one of the most cynical presentations of a budget in our history - as well as the most leaked. The tradition of the Irish budget day is that Ministers are willing to take the good with the bad. They accept the responsibility of showing people exactly what they can expect in the next year and they present the figures in a straight way. Yesterday the Government decided to abandon this approach and tried to hide the facts of the budget behind bluster and misleading statements. The leaflets distributed in support of the budget are designed to misrepresent the impact it will have, not to explain it. In area after area claims have been made about improving things while the detail buried within the hundreds of pages published yesterday shows the opposite. Most areas where Ministers claim to be expanding support are in fact being cut. For example, third level funding is being cut yet the Minister failed to mention this in his speech. Families who were told that their incomes will be intact are actually being hammered. Every single area where an increased allocation is claimed is being funded because of an equal or greater cut in a related area.

This should be no surprise to anybody because it is now an iron law of this Government that when it is on shaky ground it goes on the attack. Both Ministers, Deputies Noonan and Howlin, included partisan political attacks in the first paragraphs of their speeches. When one's main message of the day is to compare one's opponents to the Famine and Oliver Cromwell it is clear one has no real story to tell. If this Government believed its own claims about the budget and its record people can rest assured it would be spending a lot less time talking about Fianna Fáil.

Unlike members of the Government when they were in opposition, we have been consistent in supporting reasonable fiscal consolidation. Our proposal for next year was for a slightly smaller overall reduction. However, we proposed a significantly different approach to reaching the overall target. It was entirely possible to produce a budget which would hit essential social supports less yet be substantially more progressive. The Government’s choice has been to give primacy not to the needs of the public but to the needs of the next election campaigns of the Labour Party and Fine Gael. Fine Gael in particular has decided it wants to claim to have not raised income tax – not even on the very wealthiest in society. This has forced an approach whereby the only way to achieve agreed targets is to raise money through taxes and charges that take no account of a person’s ability to pay.

This budget has marked a new development in respect of both the issue of fairness and the overall programme of fiscal consolidation. First, the budget documentation goes to great lengths to hide the impact of measures on individuals and their families. Nowhere is it shown what the impact of doubling the property tax or cutting reliefs and supports will be on people's financial situation; one just does not see this in any of the examples. The Government falsely claims that with the sole exception of a family with two children, comprising a stay at home father and self-employed mother earning over €150,000, whose health insurance relief is to be reduced, every other family type presented is due to sail happily through next year with their income unchanged. That is how it was presented yesterday. We heard more of this from the Tánaiste this morning when he claimed to have delivered a budget of which the Labour Party could be proud. He has steadfastly refused to acknowledge what anyone can see – this Government has a 100% record in delivering unfair and regressive budgets. One can massage the budget documentation all one wants but the public is not fooled.

Being even more cynical than it was in its attempt to hide the detail, the Government has now started to include in its list of claimed achievements measures adopted before it took office. Starting at the Fine Gael conference on Saturday, and continuing through a mounting number of media appearances, speeches and briefings, the Government has been praising itself for bringing the budget under control. Even for this Government, which puts self-praise into every minor press release, this is shameless. At the end of next year 70% of the total fiscal adjustment will trace solely to budgets passed by this House before March 2011. It takes a special level of cynicism to claim credit for measures one voted and campaigned against in opposition. That is what the parties opposite have been doing.

The very same approach is also found in the two Ministers’ approach to taxation, regarding which we heard further today from the Tánaiste. The budget leaflets and briefing notes produced yesterday claim that the Government is delivering a “fair and progressive system” that is “one of the most progressive in the developed world”. The Government hopes that nobody will get around to looking at the details of budgets over the last six years to see from where this progressivity comes. Every single improvement in the progressivity of our tax system was put in place long before this Government took up office. At that time the three previous budgets had been weighted heavily towards making those who earn the most pay more, but the three Fine Gael-Labour Party budgets have reversed this trend by implementing all new taxes on a regressive basis. The Government states that net tax being paid by the top 1% is up significantly – a welcome fact - but what it does not state is that this is the case solely because of measures put in place quite a number of years ago. Yesterday the Ministers claimed to be hitting the highest earners but the reality shows that three out of three Labour Party-Fine Gael budgets have gone out of their way to protect the highest earners.

In the realm of rewriting history the Government is now trying the unique strategy of claiming things it voted against and attacking things it supported. The comments of the Minister, Deputy Noonan, concerning the bank guarantee sit ill with the fact that he and his party sought outside advice before coming into the Chamber and voting for it. Equally, both Fine Gael and the Labour Party like to ignore the fact that one of the first things they did in Government was to renew that guarantee. The House should also note how last week the Government sent lawyers into the High Court to argue that the promissory note deal was “essential to protect the financial stability of the country”. That is a far different cry from what we heard today and yesterday, namely, the usual rhetoric.

When the “Gilmore for Taoiseach” posters were only settling in to their new home in the shed of the Minister for Social Protection, Deputy Burton, Labour liked to talk about how they would refuse to pay the notes. Now that the party is in government it calls them “essential” and has paid them in full.

The key to sustainable growth in employment and secure public finances is a return to strong growth. To date, the Government has missed every one of its growth targets. Two years after the Taoiseach went on national television to declare that his Government had already restored confidence and growth, the economy is 5% smaller than he and his colleagues claimed it would be. The practical impact of that is fewer jobs and over €1.5 billion less in public revenue – equivalent to 80% of the spending cuts and tax increases announced yesterday. The most important reason these damaging budgets have not stopped us reaching the overall fiscal target is that the European Union and its institutions have adopted a range of dramatic changes to their policies. The interest rate changes negotiated for Greece and extended automatically to Ireland and Portugal have been vital. As is acknowledged by everyone except the Government, the availability of these policies in 2010 would have prevented either Ireland or Portugal from needing a bailout.

In their private briefings for journalists Ministers love to talk about how they implemented complex strategies to secure interest rate reductions. Of course, they ignore the embarrassing fact they were looking for less than was given – and it was other governments which drove the agreements. The promissory note changes implemented by the Central Bank and noted by the ECB have helped significantly in the budget. Those gains are not fully secured yet. If the ECB wishes, it can ask the Central Bank to sell the bonds it has acquired. That would immediately remove any benefit from the deal, because the interest we pay on the bonds comes straight back to the Exchequer. That is worth €1 billion per annum and it should be made more certain.

We must also start demanding that we get equal treatment with Greece on ECB holdings of our bonds. Greece had all ECB profits on its bonds returned to it. If that happened here it would be worth more than €500 million per annum, which would cover more than 80% of the cuts planned next year for the health sector. Instead of wasting time on self-congratulation the Government should start addressing the unfinished business which means that Ireland is not yet receiving fair treatment. Each of the Government’s budgets has undermined growth far beyond the direct impact of the overall fiscal consolidation. For example, the levy on pension funds has removed billions from private sector investment. While we have heard Ministers loudly claiming the return of growth as the result of their leadership, the same people were silent when the growth evident in 2011 was turned back into recession earlier this year. I hope that the new growth targets are met but it is also possible that with the right policies they could be exceeded. They are slightly above the consensus of forecasts both national and international, although well below what was predicted by the Government last year and the previous year.

The budget will be remembered for the mean-spirited way in which it has targeted particular groups and social services. As is now undeniably clear, the elderly will bear a major brunt of the Government’s choices. The list of cuts appears designed to make much worse the very moments when an elderly person is most vulnerable. A Government which is delivering leaflets talking about universal care for all has decided to take universal care from at least 35,000 people over 70. The elderly are also faced now with a fivefold increase in prescription charges since 2011. In their homes they will lose support which enables them to keep in contact with family or have personal security alarms. When their partner dies, the State will no longer be there to help them to hold a decent funeral. The Government is now reversing more than 40 years of progressive policy – and it is doing so in order to protect the very wealthiest in society. We have just been through a referendum campaign during which the Taoiseach talked about how important it is to him to keep promises. If he could put aside the empty spin of his speech for a moment he might remember the solemn promises he gave the elderly that if elected he would always give them priority. Protesting against cuts significantly less severe than these, and in a much tougher budget than this, he joined demonstrations on Kildare Street to reinforce his commitment to the elderly. Yesterday, he betrayed those people and broke the commitments he made.

As communities throughout the country have found out within weeks of the election, the solemn promises of the Taoiseach and his colleagues on their local health services counted for nothing. People in Roscommon know that only two well, in addition to many more areas. Since then the Minister for Health, Deputy Reilly, has spearheaded a health policy which is steadily dragging the sector into a deeper and deeper crisis. This budget threatens to turn 2014 into a year of chaos and declining service in the health system. The cynicism of yesterday’s speeches was on full display in the failure of the Minister, Deputy Howlin, to state to the House that he was imposing cuts of €666 million on the health system. He talked about a little extra here and a little less there, but covered up the reality which can only be found buried in the background documents.

In the lead up to the budget journalists were told that health was getting some extra flexibility and that there would even be good news. The Minister for Finance, Deputy Noonan, said we would be astounded by the good news. The Minister, Deputy Reilly, with the ever-present personal backing of the Taoiseach, was said to be one of the winners of the process. With a €666 million spending cut and €127 million extra to be taken out of health insurance – this is about as bad an outcome as the Minister, Deputy Reilly, could have achieved. Since his first day in office the Minister, Deputy Reilly, has claimed to be delivering improved health services. No matter what evidence has piled up around him he has kept to the mantra that we should not believe the facts, we should just listen to him. No one is listening any more; people are just shocked at how much damage can be done in so short a period.

Let no one be in any doubt – the budget and the structural changes proposed for next year mean that for the health service the worst is yet to come. The profoundly cynical attempt to cover up the massive heath cut with the announcement of GP cards for children aged five and under was a stroke too far even for this Government. It was expecting praise for allocating €37 million to a new scheme. While no implementation details are available and costs are unknown, it was something we were supposed to welcome as the first step towards universal GP care. Let us be clear; free GP care for children five years and under is in no way a “first instalment” of a new universal provision. It involves a fraction of the system, it is not insurance-based, as the Government says the entire system will be, and it is being funded through ending current provision for an even larger group of people.

Now we know the truth – this minor but welcome improvement is to be accompanied by the largest ever assault on support for primary health care in this country. More than 100,000 people are to lose access to a medical card and everyone is to face steep increases in prescription charges and have access to fewer treatments. The prescription charge increase is not just another broken pre-election promise; the first public announcement by the Minister, Deputy Reilly, in office was to say that he was about to abolish all prescription charges. Does the Taoiseach remember that? In total, €236 million is to be taken out of primary care. To produce leaflets looking for thanks for giving a small portion of that to a new scheme shows just how out of touch and cynical is the Government. It is obviously this mentality that had the Minister, Deputy Noonan, state last night that there really is not a problem at all for needy people who want medical cards.

Yesterday’s claim by the Minister, Deputy Howlin, that he is protecting front-line services is obvious nonsense. The services are already in crisis and that is due to get worse because of policies to be rolled out next year. The new funding model which the Government has announced means that many hospitals will begin to see a major fall in their revenue. That will immediately lead to services coming under pressure to close. A total of 577,000 people will also have to deal with more expensive health insurance. Many just will not be able to pay and will add to pressures on public funding.

In no way can the budget be described as a budget for jobs. The likely impact of all of the specific employment measures announced yesterday is not enough to merit any change whatsoever to the existing employment projections for next year. That is gleaned from the budget documentation itself. A total of €1 million for a start your own business scheme is more about claiming to be doing something than having an impact. The Government has now got strong form in terms of talking about job creation while costing jobs.

The jobs budget of two years ago had so little impact that Ministers stopped talking about it within months. It actually cost jobs because it took investment money out of the economy and failed to deliver key schemes. This budget does the same. It increases the jobs-destroying levy for next year and makes it permanent after that. It also cuts €15 million from the capital allocation of the job creation agencies. That means less support for investment projects and knowledge generation.

The Orwellian language of this Government is now getting out of hand, with Ministers yesterday presenting as investments programmes that were actually being cut. The small investment in GP cards for under-fives, accompanied by a massive cut in medical cards, is just one example of this.

We were told during the speeches that there would be extra investment in roads from the sale of the national lottery. Hidden in the background documents was a much larger cut of €46.5 million in roads funding. This is an extraordinary three-card trick. The Government stands over that kind of presentation. We were also told about increased funding for sport, but there was no mention of the large cut affecting the Sports Council. The tourism sector was, we were told, to be given a huge boost as an engine for employment growth. Again, however, there was no mention of the cut of almost €13 million to tourism support.

It is claimed that helping people into work is an absolute priority in this budget, yet benefits are being cut for people who move from unemployment into work. Next year was presented as the year that education is to be afforded priority, with its role in economic development being particularly noted. What the Government was silent on was the large and indiscriminate cut being imposed on the third-level sector and the entrenching of other regressive cuts. This will not just add another €250 to the student charge the Labour Party promised to abolish; it will lead to significant cutbacks throughout the sector.

The most consistent untruth in this budget is the claim that it will leave people’s incomes intact. It will do nothing of the sort. The budget pushes ahead with the doubling of the property tax. How does this not reduce family incomes? Could someone explain that to me? If one doubles a tax, one takes the money from people’s incomes. According to all the statements of the Taoiseach, the Tánaiste and Ministers yesterday, incomes will remain intact. The property tax continues to be a tax which is indiscriminate and ignores the real and deepening pressures faced by many families. It takes no account of ability to pay or even of whether a family is caught in a debt crisis. By failing to recognise this, or to provide any measures to help the more than 120,000 households in major arrears, the Government is making a tough situation even worse. The claim to have left incomes intact will also be felt by the 577,000 families claiming relief for health insurance, single-parent families and families paying into pension schemes.

In area after area, this is a budget that tries to hide its teeth. This is the budget in which Ministers were ready to hang out the "Mission Accomplished” banner and declare themselves the saviours of the nation. They even wanted people to praise them for supposedly helping out hard-pressed families. The truth shows a Government that has chosen yet again to over-spin and misrepresent a regressive and damaging budget. Within a tight framework, made tighter by a consistent failure to meet its own growth projections, the Government still had many choices to make. This is a budget that weights these choices against the most vulnerable in society and will do nothing significant to increase employment. Each positive measure is balanced by a greater negative measure. In the case of medical cards, five times more is being taken out of primary care than is being returned to fund the budget’s main supposed giveaway.

The Government is not shaping recovery; it is standing on the sidelines waiting to claim credit for whatever turns up. It continues to display new levels of cynicism in claiming credit for measures it opposed and attacking those it supported. It has not even put on the agenda full equity for Ireland for its bailout debts because it is spending so much time patting itself on the back for securing what was available to other countries.

By making this budget the third of three that have taken no account of people’s ability to pay, and by now targeting supports that are at the core of our social contract with the most vulnerable, the Government is further damaging public acceptance of necessary reductions in spending. This is a PR budget by a PR-obsessed government. It will cause unnecessary pain and do little to help our country to return to strong growth.

See this speech in context