Oireachtas Joint and Select Committees

Thursday, 12 September 2013

Joint Oireachtas Committee on Finance, Public Expenditure and Reform

Overview of 2014 Pre-Budget Submissions: Discussion (Resumed)

10:00 am

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I welcome Ms Orla Barry and Ms Caroline McGrath of Mental Health Reform; Dr. Matthew Sadlier and Ms Vanessa Hetherington of the Irish Medical Organisation; Ms Kathleen O'Meara of the Irish Cancer Society; and Mr. Chris Macey of the Irish Heart Foundation. Members have been circulated with the submissions received and a summary paper in advance of the meeting. Each group will make a brief introductory comment not exceeding three minutes.

I remind everyone that all mobile phones must be switched off. I advise the witnesses that, by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the Houses or any official by name or in such a way as to make him or her identifiable. I ask a representative of each of the four organisations to make some brief comments before we proceed to a question-and-answer session.

Ms Orla Barry:

I thank the Vice Chairman and the other members for inviting Mental Health Reform to make a presentation to the committee. Mental Health Reform is a national coalition of 37 organisations that are advocating for improved mental health services. The committee has received our pre-budget submission. I would like to address three key issues in my opening statement: the need for the Government to honour in full the mental health funding commitments it made in the programme for Government; the current shortfalls in staffing in mental health services; and the importance of supporting people in staying well in their communities.

The programme for Government included a welcome commitment to ring-fence €35 million for community mental health services in each of 2012, 2013 and 2014. We are concerned that the €35 million allocated for 2013 will be delayed. Our concern is based on the delay in the recruitment of staff in 2012. The real level of expenditure at the end of 2012 was €682 million, or €4 million less than the previous year. Just 58 of the 414 staff were in place at the end of 2012. We are continuing to monitor the appointment of the promised 414 staff for 2012 and the promised 477 staff for 2013.

Analysis of up to date HSE figures shows that between January and July 2013 the net increase in staff within mental health services was just 192. This is the case, despite reports that two thirds of the 891 posts have been filled. We are very concerned that the HSE is seeking an overall reduction of 2,400 wholetime equivalents in 2013 and that the moratorium on staff recruitment is not protecting posts committed to under the programme for government. Mental health staffing at July 2013 was 1,088 posts less than in March 2009.

There are three recommendations targeted at supporting people to recover their well-being and live a full life in their community. Keeping people out of hospital is a priority for cost effectiveness and quality of life. First, Supported Employment asks us to extend supported employment to people who desire to work, regardless of work readiness and for a removal of a time limit on support. With regard to housing, we ask for the provision of a dedicated funding stream for tenancy sustainment support for people with a mental health difficulty. There is a gap in this regard in the national housing strategy for people with a disability. Third, we call for no further cuts to rent supplement and no increase in rent contribution to be made as it is important to help people with a mental health difficulty to maintain their tenancies.

10:05 am

Ms Vanessa Hetherington:

The Irish Medical Organisation would like to thank the committee for the opportunity to discuss the IMO budget submission. In the submission, doctors in Ireland wish to highlight the negative effect of the economic downturn as well as the opportunities the recession can create to improve health and health care. A recession offers an opportunity for reform and the Government is embarking on a major reorganisation of our health services, to include reconfiguration of our hospital services and reform of the delivery model so that the majority of an individual's health care needs are met in primary care.

Since 2009, Government expenditure on health has fallen by 10% and there are 11,000 fewer people employed in our health services. Efficiencies have been made and more people are being treated with fewer resources. However, there are signs that the health system is under financial strain. Investment in our health services is needed now if the Government is to achieve its programme of reform. Specifically, the IMO recommends that capital funding must be provided to support the reconfiguration of hospital services. Under the money follows the patient policy, the Government must ensure that adequate financial and human resources are provided to address growing waiting lists for elective care and outpatient services. In order to ensure that patients are treated in the appropriate setting, money must follow the patient also in primary care. Chronic disease management and prevention must be adequately costed and resources must be forthcoming and the Government must ensure adequate investment in resources to support the development of primary care teams.

The IMO has highlighted over a number of years the significant inequalities that exist in the health area between wealthier and poorer socioeconomic groups in Ireland. Evidence shows that poorer socioeconomic groups have relatively high mortality rates, higher levels of ill health and fewer resources to adopt healthier lifestyles. Significant inequalities also exist in accessing health care in Ireland. Those who have neither medical card nor private health insurance and who are subject to significant out-of-pocket payments are most affected. The IMO welcomes the publication of Healthy Ireland and calls for the development of a detailed implementation plan, with appropriate multiannual ring-fenced funding to support actions and initiatives. Healthy Ireland also emphasises the importance of health impact assessments and the IMO believes that all public policy, including budgetary measures, should be subject to a health impact assessment. With regard to access to care, there should be no further increase in out-of-pocket payments for all public patients. The Government must identify and prioritise funding for universal access to primary care, in agreement with all the relevant stakeholders.

The IMO submission also discusses suicide prevention. A recent study by the National Office for Suicide Prevention found some association between recession and suicide and because of this link, there is a need to ensure adequate resources for suicide prevention during this time. The IMO recommends that ring-fenced funding be provided for the full implementation of the recommendations outlined in Reach Out, the national strategy for action on suicide prevention and the recommendations detailed in the report of the Oireachtas joint committee on the high level of suicide in Irish society. The IMO also recommends funding to ensure the availability of suicide intervention teams in all hospitals and to pilot the development of community-based 24-hour crisis mental health provision throughout Ireland.

Despite an increase in excise duty last year, alcohol remains cheap to purchase relative to the societal costs of problem alcohol use. Alcohol is associated with more than 60 acute and chronic health disorders, ranging from accidents and assaults to mental health problems, cardiovascular disease, liver cirrhosis and certain cancers. The overall cost to Irish society of problem alcohol use is estimated at €3.7 billion. There is a direct link between alcohol related harm and the volume and pattern of alcohol consumed. The IMO believes there is room to introduce a minimum alcohol pricing structure in order to reduce the burden of excessive alcohol consumption, by making alcohol more expensive for younger binge drinkers and excessive harmful drinkers, without necessarily penalising moderate drinkers.

Ms Kathleen O'Meara:

I thank the Vice Chairman and members for the opportunity to address them today on the joint submission being made to the Government by the Irish Cancer Society and the Irish Heart Foundation on this year's budget. Our submission concerns tobacco. We have four recommendations: the regulation of the tobacco industry in Ireland; ensuring tobacco tax increases benefit the Exchequer, not the tobacco industry; a price escalator for tobacco taxes; and a comprehensive tobacco smuggling strategy. I will comment on the first two recommendations and my colleague, Chris Macey, from the Irish Heart Foundation will address the remaining two.
Why are health charities appearing before a finance committee to talk about tobacco tax? It is because our objective, which is to continue to cut the smoking rate in Ireland, cannot be achieved unless the tobacco industry is controlled here, specifically with regard to how it operates in the market and the profits it makes. Three big international tobacco companies dominate the market in Ireland - British American Tobacco, Japan Tobacco International and Imperial Tobacco.
Dr. Robert Branston, an economist at the University of Bath, has conducted research which shows that these tobacco firms enjoy profits of 55%, after duties on sales in Ireland. He estimated that in 2011 their combined profits in Ireland were €104 million after tax. This is about three times the profits enjoyed by the food and alcohol industries. These are supernormal profits. We propose that the State intervenes in the tobacco market by appointing a tobacco regulator, with the purpose of curbing the excessive profits of the industry here in Ireland. This could yield up to €65 million to the Exchequer. In 2011, total tax receipts for tobacco here were €1.42 billion, while the cost of smoking-related illness to the Exchequer is estimated to have been approximately €2 billion. This figure comes from the chief medical officer of the Department of Health. Therefore, the tax collected from the industry does not meet the cost of caring for those people whose health has been ravaged by their addiction to tobacco.
Our second proposal is for the adjustment of the structure of tobacco tax to ensure that when tobacco tax is increased, it benefits the Exchequer, not the tobacco industry. What we seek is an increase in the specific tax on cigarettes, with a corresponding decrease in the ad valorem tax. Specific tax is levied on the volume of cigarettes sold, while ad valorem tax is calculated on the price of cigarettes. Currently, the specific tax is 65% of the total price of a cigarette. What we ask is that it be raised to its maximum possible level of 76.5%. What this will mean is that tobacco profits are squeezed, with more revenue to the Government.

Mr. Chris Macey:

The Irish Heart Foundation calls for an annual tobacco tax escalator, at least 5% above inflation, in tandem with a national anti-smuggling strategy. This would bring an extra 60 cent tax to a packet of cigarettes this year. We stress that the smuggling rate is not the 30% plus claimed by the tobacco industry in its front groups. The real rate is provided through Ipsos MRBI research for the Revenue Commissioners and last year the smuggling rate fell to 13% from 15% in 2011. This is still unacceptable. If high tax fuels smuggling, this has not been the experience in the UK, where the smuggling rate has fallen from 21% to 9% in the past decade, while tax increased by 77%, making UK cigarettes dearer than ours.
In Ireland, tobacco companies and their funded groups criticise tax increases, but over the past decade the rate of industry increases has been higher. We propose the tax escalator because regular high tax increases have been shown the world over always to reduce smoking rates, particularly among children.

That is a fact endorsed by organisations such as the WHO and the World Bank.

In tackling smuggling, it is important to note that the Revenue Commissioners estimates that 87% of smuggled tobacco is the product of the legal industry and just 6% is counterfeit, suggesting that supply chains are a key issue here. In the past, cheap tobacco jurisdictions have been knowingly flooded with cigarettes which are then smuggled into other European countries. Andorra is just one example. It was supplied with 3.1 billion packets of cigarettes in a single year by the official tobacco industry, equivalent to every Andorran smoking seven packets of cigarettes every day. Many of these cigarettes ended up in Ireland. We need extra detection equipment such as scanners in our ports, as well as extra manpower, given that Customs lost 600 staff in the three years to January 2012. We also need supply chain controls, including multi-million-euro fines for legal companies whose products are smuggled.

In addition to tackling supply-----

10:15 am

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I must interrupt you. I am keeping to the five-minute time slots.

Mr. Chris Macey:

I will finish in one sentence. We also wish to address demand issues, including through legislation that will make buying illegal tobacco a criminal offence.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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We are limited enough in the time we have left in this slot, due to the late start. I would like each party spokesperson to stick to seven minutes. I call first on Deputy Dooley.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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I welcome the groups and I thank them for their presentations. Their pre-budget submissions are helpful to us in formulating our policy.

I would like Ms Barry to provide some clarity on the figures. How many positions in the community mental health area have yet to be filled as of the end of July? What impact has that had?

Ms Orla Barry:

The HSE is reporting that approximately 500 of the posts are filled. Because of the posts that are being maintained, the reality is that there are only 192 extra posts within the HSE's mental health services in comparison to January. The moratorium on staff recruitment means that if people are given short-term contracts and they later move on the posts are not filled. Some of these positions were filled by people already employed within the HSE, and backfilling has not occurred. There have been serious problems in terms of recruitment and retention of those posts within the community mental health services.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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The metric, therefore, is the money and the fact that there is still €35 million unspent in providing that service. Is that correct?

Ms Orla Barry:

Thirty-five million euro was allocated in 2012, but very little was spent, so that has been brought forward into 2013 along with a further €35 million. In total, there are over 800 posts to be filled. There is a serious delay in the filling and retention of those posts.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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Ms Barry is confident that about 500 have been filled, so it looks as though around 300 positions are yet to be filled, including backfilling.

Ms Orla Barry:

Yes, but overall there have only been 192 additional posts within the mental health services.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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So, from Ms Barry's point of view, there is a significant problem.

Ms Orla Barry:

Yes.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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The IMO witnesses have given us a broad spectrum of the organisation's views. They have done the patient advocate piece, which is to spend more money, but they have not really got into what benefits their members. At the end of the day, they represent doctors. I would like to hear more on their relationship with the Government on negotiations for a new contract, or the issues they face on a day to day basis with regard to restructuring their organisation to face the economic crisis. We only tend to hear about that at a later stage, when there are issues between the organisation and the Government.

There are issues with regard to the reconfiguration of health services, of which the greater focus on primary care is certainly one. Can the witnesses give us some kind of ballpark figure for how charges to private patients have been reduced over the past three years?

Dr. Mathew Sadlier:

The Irish Medical Organisation represents 5,000 doctors across all specialties. Is there a specific area in respect to private patients-----

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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I was talking about primary care and general practice level.

Dr. Mathew Sadlier:

General practice is a broad spectrum. General practitioners fund their own fixed costs such as premises and other overheads. I am not a general practitioner myself, but the charge to private patients is calculated by each practice depending on its overhead costs. There is no one-size-fits-all answer that I can give to that question.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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What kind of percentage might it be? I am sure Dr. Sadlier would be aware of internal discussions within the IMO. I recognise that it is a competitive environment and that doctors can charge what they want, but has the general charge by a GP to a patient come down over the past three years?

Dr. Matthew Sadlier:

As the Deputy says, there is a competitive environment and there is an ongoing process regarding competition, so I really think that is a question to which we cannot give a specific answer. It is up to individual practitioners. General practitioners have seen difficulties with funding their practice and maintaining their fixed costs. I cannot be more specific on a figure, and I apologise for that.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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That is okay. I thank Dr. Sadlier for the presentation on the patient advocacy side of things. It is helpful for any policy on reorganisation and additional investment in infrastructure and especially for ensuring an appropriate primary care system that keeps people out of hospital.

Whether there is a budget or not, Ms O'Meara and Mr. Macey keep us updated throughout the year, which we welcome. Although Mr. Macey used the Ipsos MRBI statistics on smuggling tobacco, I am not taken by that particular argument. From the work I have done on it over the years, I feel that as the price goes up there is increased activity by smugglers. The witnesses mentioned increased activity in this area, but the transport committee is constantly putting pressure on the Government to get additional resources to deal with diesel laundering and so on. I like the idea of squeezing the profits of "Big Tobacco". There is a methodology for doing that, which Ms O'Meara has provided to us in the past, and this certainly reduces the profits and provides a greater contribution towards the cost to the health service. That is welcome. I would be concerned about anything that results in a price escalation, because I believe that will lead to a greater level of imports. Ms Hetherington's point about alcohol consumption is a given.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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The Deputy's time is up. I now call on Deputy McDonald.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I thank the witnesses for their submissions. They are extremely helpful and they raise matters of serious concern. Ms Barry set out clearly the staffing shortages that mental health services are experiencing.

The delegates have no doubt followed the ongoing debate about posts and whether they have been filled. The Oireachtas has been led to believe the additional posts are on track and that the strategy for mental health is on a positive footing. I would like the delegates to set out briefly the impact the staff shortage is making on service delivery. I am also taken with the fact that they have raised the issue of rent allowance and supports for housing and employment. There has been an ongoing whittling away of rent allowance which in my experience has had serious consequences for some. As mental health advocates, will the delegates set out for the committee and the record the impact of that stress on people with whom they work?

I have two questions for the IMO. I am interested that it has raised the issue of suicide prevention. It is extremely timely and important that medical professionals are to the fore in advocacy in this area. There is agreement across the political spectrum that we have a crisis in respect of death by suicide and that we need to act. Will the delegates put a bit more flesh on the bones and say what they are looking for in that respect? Will they also comment on junior doctors and the position in which they find themselves because if their disgraceful slave hours are to be changed, it will have financial and funding implications for the system? I would be curious to hear the IMO’s position on that issue.

To Ms O’Meara and Mr. Macey, everybody knows that smoking is not good for one and that prevention or reduction of smoking is a public health issue. I wonder sometimes whether the approaches the Irish Heart Foundation sets out will work. For instance, I am sympathetic to the delegates' argument which is moving in the right direction, but I wonder about the notion of making the purchase of contraband tobacco a criminal offence. Does that mean we would prosecute Mrs. Murphy or Mr. Kelly who buy cheap cigarettes? Is that what is envisaged? There are other ways to go about tobacco minimisation using education and so on. I am open to being convinced if the delegates could say more about the use of the carrot versus the stick to achieve their objective.

10:25 am

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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As there are only three and half minutes in this slot, I will start with Mr. Macey.

Mr. Chris Macey:

We are looking at a system of fining people to deter them from buying contraband. There are two reasons for this. On the 13% figure, the Government is losing €240 million in tax a year. That is money that could be used for health and education services, etc. On the other side, much of this money is going to criminal gangs and there is evidence that it is going to fund other illegal activity such as gun-running and people trafficking. It is being used to participate in criminality and in our view should be seen as such. Major sanctions would not be necessary, but a deterrent of a small number of euro would make it uneconomic to buy these smuggled goods.

Dr. Matthew Sadlier:

We absolutely agree that suicide is a crisis in this country. Ireland is relatively unusual in having a very high level of young male suicide. There is no one-size-fits-all intervention because there is not one type of suicide or set of problems that leads to it. This has to be a cross-platform intervention, medical, social and other. From the medical perspective, there was a recent study in The Lancet which showed that 24-hour provision of suicide crisis teams in the community setting had reduced the incidence of suicide in certain areas. We are looking for evidence-based interventions in self-harm which have been shown to be effective such as dialectic behavioural therapy being introduced in all community mental health services across the country. A recent study showed that 93% of young male suicides were associated with alcohol. I am not saying alcohol was the only cause, but it certainly was a contributory factor. That leads into our submissions regarding alcohol and minimum pricing. I am being brief because I realise there is a time constraint.

On the NCHD or junior doctor issue, as somebody who worked for 13 years as a junior doctor within the health service, I am amazed that there is a group of workers resorting to industrial action to demand what is actually the law of the land. This issue has been examined since the early 1990s. The Hanly report in 2003 offered a broad range of solutions to the problem, but it continues. It is a shocking indictment of the system that doctors are still working 24, 36 and 48-hour shifts and providing intensive care for patients in a highly complex environment. I know there is an evolving process and that talks are ongoing to reach a solution. A number of solutions have been considered, for example, by the NHS. We have been clear about publishing our proposed solutions to this evolving problem and negotiations are ongoing; therefore, we hope a solution can be found.

Ms Orla Barry:

In response to the question about the impact of staffing shortages on mental health services, the mental health services are about the relationships between staff and the people who use the services, families and carers. We see within hospital and community services that staff are under stress because there is huge pressure to deliver the service with reduced staff numbers. This is particularly evident in the liaison with schools and home visit supports to families. We hear from people that the support they would have had in the past from their community mental health teams is not being provided in the way that it should. The need to staff hospitals and develop community mental health teams at the same time is critical to the quality of mental health services.

The concern we hear from people about rent supplement is that many people with mental health difficulties are on very low incomes and having on top of this concerns about how one is going to pay rent and whether one will have the same landlord in a month’s time is causing huge distress. The message that has come through to us is, "Please put that forward". Utility bills are going up. Trying to maintain a very basic standard of living and keep one’s home is doubly difficult for someone with a mental health difficulty. There is no housing tenancy sustainment stream for people with a mental health difficulty to provide the support required to help people to maintain their homes. This gap has emerged in the national housing strategy for people with a disability and the Departments of Health and the Environment, Community and Local Government need to examine this.

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour)
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I shall be brief as many of the points I want to raise have been covered.

I agree with Ms Barry about tenancy sustainability. I represent a very large local authority area and this issue has an impact on the tenant and the wider community. The sustainability of the tenancy drops because HSE support falls off after six months. This also affects the wider community.

I have been advocating for a long time that the HSE and the Department of the Environment, Community and Local Government need to deal with this matter.

I welcome the submission from the IMO and its views on the need to provide patients with a better service. Usually I tend to be fighting with the IMO when in discussions with it. However, I recognise that many good GPs provide a very good service with proper office reception services and practice nurses, all of which incur costs. I have noted that GPs in urban areas all charge similar prices. It is the same price to go to a GP who does not employ a practice nurse or a receptionist or proper - what I would regard as reasonable - accommodation. General practitioners in the same geographical area are all charging €50 or €60. I suggest the IMO must deal with this issue. I am not saying there is price fixing but I am concerned and I have formed an impression. I am sure the IMO is aware of such accusations. The organisation has a funny set-up. I acknowledge the bona fides of the organisation's submission but I think it has issues to address within the organisation which need to be dealt with as quickly as possible.

I am viciously anti-smoking but I acknowledge it is an addiction which is difficult to overcome. However, an increase in the price of cigarettes results in people with very little money being driven to buying smuggled cigarettes. Therefore, the strategy of increasing the price needs to be adopted with caution. The real impact is seen in the community I represent, especially among those who live in the flat complexes. In some cases people will go without food to buy the packet of cigarettes. I am sure Deputy McDonald knows about this on the other side of the river. We need to be very careful about the methodology used. Money is very tight and people in the lower socioeconomic groups buy the John Player Blues at the top of Moore Street or wherever because they still want to buy their packet of cigarettes. I will support any mechanisms that will reduce smoking or even stop people taking up the habit in the first place, but we have a cohort of people who are addicted to cigarettes and we have to be careful that the steps we take do not have a negative social impact on the individual and also on the family, because it is an horrendous addiction.

10:35 am

Ms Orla Barry:

There are currently two gaps with regard to tenancy sustainment. There are 1,177 people with mental health difficulties who are currently housed in HSE community residences. The intention is that those people will move into some form of independent living and social housing. There is no funding in place to make that support. The difficulty arising is that there is a falling between stools between the HSE and the local authorities as to who is responsible for funding tenancy sustainment. Those houses are currently staffed by mental health nurses. It is intended that those posts will return to the mental health system, so there is a significant gap. That support has traditionally come from social housing providers. The Housing Association for Independent Living, HAIL, is a social housing provider specialising in housing people with mental health difficulties. The association's tenancy sustainment and visiting support services cost €6,000 per person per annum to maintain a support that can float in and float out for as long as that person needs it. This is a support that is needed within the mental health service but the discussion has to happen between the two Departments as to where that funding stream is to come from.

Ms Vanessa Hetherington:

In response to Deputy Humphreys, the IMO is a trade union and we maintain the right to represent our members when dealing with the Government. We support a universal health system. We have no role in how our members in private practice set their prices because that would be anti-competitive.

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour)
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My point is that there should not be anti-competitive practices within the sector but there is a perception that this is the case.

Ms Vanessa Hetherington:

That is not the function of our organisation.

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour)
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It should be the function of the organisation to guide its members to ensure they do not act in an uncompetitive manner.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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It might be the Competition Authority we need to speak to on this matter.

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour)
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The IMO normally defends its members when examples of anti-competitiveness are given. Perhaps there is a role for the IMO to educate its members.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I refer to the issue which Deputy Humphreys has raised this morning. Deputy Ó Ríordáin and I tabled an amendment to last year's Finance Bill on this issue. Deputy Timmy Dooley and Deputy Pearse Doherty also spoke on this during the debate on the Finance Bill. Ms Kathleen O'Meara subsequently met officials in the Department of Finance.

Ms Kathleen O'Meara:

We had a meeting with officials in the Department of Finance on the specific matter of the amendment we put forward last year. We are meeting the Minister next week. We understand those officials will have briefed the Minister in advance of that meeting. We would like to see more traction for the second proposal, the issue of the tax.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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It would be helpful if Ms O'Meara could provide the committee with a briefing note on the current position for circulation to committee members.

Ms Kathleen O'Meara:

I am happy to do so. Should I provide it in advance of or post our meeting with the Minister?

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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It would be more suitable in advance of the budget in any case.

Ms Kathleen O'Meara:

That can be done. On the issue raised by Deputy Humphreys and the related issue raised by Deputy McDonald and Deputy Dooley, it looks on the surface that it makes sense to raise prices. However, I refer to the example of the UK which was pointed out by my colleague. The UK has a specific anti-smuggling strategy in conjunction with an increase in the price of cigarettes. This is a health imperative. We all know that smoking is one of the biggest drivers of health inequality. A person is twice as likely to die of cancer if he or she lives in one of the communities to which the Deputy referred and is three times more likely to have heart disease and stroke. We do not advocate that smokers should be punished nor are we talking about driving them into the arms of the tobacco manufacturers. I remind the Deputy of where those illegal cigarettes are coming from. In many cases these illegal cigarettes are aimed at children in order to get them to start smoking and also at heavy smokers. Much needs to be done to support people in their attempt to quit and not enough is being done to support them. These measures might sound tough but they are necessary when dealing with a very tough problem. I ask the committee to consider carefully the other proposals in our submission which target tobacco industry profits rather than the smoker.

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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The Irish Medical Organisation submission gets it correct in the first sentence which refers to austerity and the ongoing recession having a detrimental impact on the health of the population and our health system. The submission further states that the IMO is also concerned about growing health inequalities and inequalities in access to care. These are all very serious issues arising from the disastrous austerity bailout policy which we cannot deal with in detail this morning. Prominent members of the medical profession - whether members of the IMO or not - accentuate this inequality by making a big business of sickness. Private hospitals and private clinics are accentuating inequality.

It is important to make the point that the people who invest in such facilities, etc., namely, the main movers, are probably much higher up the food chain than ordinary doctors.

It is quite incredible that the issue relating to junior doctors remains ongoing. Is this matter going to be brought to a head and is the IMO to put it up to the Government to resolve it? This is a running scandal and it has been allowed to continue for decades. Will the IMO, like other elements within the trade union movement, bottle it at the last minute and enter into a shabby compromise that will leave junior doctors in the mess in which they already find themselves? People depend on these young doctors, many of whom have graphically and quite correctly spelt out the risks involved in their working long hours. I urge the IMO to push this matter to a conclusion.

In the context of mental health, I fully agree with the sentiments expressed in the submission made by Mental Health Reform. Again, this matter comes down to resources. Unfortunately, it is necessary for those in the sector, particularly people who operate in the area of mental health, to continue to scream for resources. When it comes to mental health, many people cannot advocate on their own behalf. However, there is no doubt that advocacy is required.

I have never been convinced that the strategy of increasing prices is an effective mechanism for controlling and reducing alcohol and nicotine consumption. As everyone is aware, these are horrific addictions. In the context of low and middle-income households and those who are poor, the real danger is that, as prices rise, people will spend a higher percentage of their budgets in order to satisfy their addictions rather than decreasing their levels of consumption. I do not believe that continually increasing prices represents the way forward.

I completely agree with the representatives from the Irish Cancer Society and the Irish Heart Foundation that the tobacco companies should be hammered at every available opportunity and that every penny they possess should be taken from them. There should be no such thing as an ability to make profits from tobacco. It should be a publicly-owned enterprise and all moneys derived from it should be spent on campaigns aimed at reducing its use and ending people's addiction to it and on health care. Other strategies which I am sure our guests would also advocate include education, particularly in the context of children, and the banning of alcohol and tobacco advertising in every form. I am of the view that other societal issues give rise to the pressures of addiction but the crude mechanism of continually increasing prices is not the answer.

10:45 am

Mr. Chris Macey:

There is no doubt that it is a regressive tax. Everyone knows that. In the past five years, the number of smokers in Ireland has dropped from 29% to 22%. This means that there are 250,000 smokers. The high tax is the key driver of this. That is agreed throughout the world, particularly in the context of children not starting to smoke or of giving up if they are already smoking, and across all groups. We carried out research very recently which involved conducting focus groups among children. Every child's choice of cigarette is driven by the price. They all buy the cheapest cigarettes. One of the things we want to do is prevent the industry from selling cheap cigarettes. The price differential is very wide at present. Clearly, one must try to help people. Some 80% of smokers want to give up. We are not trying to penalise people, we are trying to help them. We want to help those to whom I refer to give up. Smokers' tax should be spent on helping them to give up. The Deputy is quite right. Tax is a crude instrument and on its own, it is not a solution to anything. However, in the context of a package of measures, evidence from around the world proves that it is the one thing that works best.

Dr. Matthew Sadlier:

I thank Deputy Higgins for his support in respect of the issue relating to junior doctors or NCHDs. I have already spoken about that matter. At present, there is a definite drive within the junior doctor group of our organisation to come to a solution to this problem. As already stated, it is an ongoing industrial relations issue and there is a process in train in respect of it. I will not, therefore, say too much about it.

Regarding Deputy Higgins's other comments, we can certainly furnish him with copies of policy papers the IMO has produced - one on universal health coverage and the other entitled "The Market Model of Health Care - Caveat Emptor". In the latter, we highlight the difficulty with the market model of health care provision. Both papers contain numerous different recommendations regarding seeking to abolish the two-tier system of health care which obtains here.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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Perhaps Dr. Sadlier might send copies to us.

Dr. Matthew Sadlier:

We will send copies to the committee and they can be distributed.

Ms Caroline McGrath:

Without doubt there is an issue in terms of resources being needed in the area of mental health. However, there is also an issue in the context of ensuring accountability for how the resources that are allocated are used. A consistent ask by Mental Health Reform in its pre-budget submissions has been that appropriate information systems should be introduced in order that we might effectively track inputs into mental health services, how resources are being used and what are the outcomes. The Inspector of Mental Health Services noted in his most recent report a stagnancy in the area of mental health and, perhaps, a movement backwards. It is critical that the resources being allocated are used appropriately for community-based mental health services and that we do not risk movement back to a more institutionalised version of mental health services. There is a real risk that this may happen.

The risk relating to the mental health budget is that it has been absorbed into other areas of health services when pressure is on partly because we do not have good information systems that can tell us immediately where mental health services are at risk on foot of the fact that we do not have trolleys in accident and emergency departments or the same type of waiting list figures. We have very divergent mental health services throughout the country and that is a feature of culture and leadership. Values underpinning all of those issues can be addressed within existing resources. While we clearly need more resources, we must also ensure that the requisite structures and systems are in place. One positive note in this regard has been the appointment of a director of mental health services. That is positive and it was advocated for on a consistent basis. We must ensure that the office of the director will have accountability and responsibility in respect of budgeting. This, in turn, will allow us to ensure that the resources allocated are being most effectively used in developing community mental health services.

Photo of Aodhán Ó RíordáinAodhán Ó Ríordáin (Dublin North Central, Labour)
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I wish to ask about the ring-fencing of funds. Many of the suggestions presented by our guests make a great deal of sense. We should try to support them in whatever way possible. However, the Department of Finance always reacts very badly to any suggestion of ring fencing, which is does not like. Bizarrely enough, however, it has no difficulty in ring-fencing funds for horse and greyhound racing through legislation. I refer to the Horse and Greyhound Racing Act 2001, by means of which money procured via a levy which applies to every bet placed throughout the country is immediately placed in the horse and greyhound racing fund. When it comes to ring-fencing funding relating to mental health, children or anti-poverty strategies, however, the Department does not like it. Will our guests indicate how practical or justifiable they consider ring-fencing to be, particularly in the context of the fact that it is considered fine for horses but not for poor, sick or vulnerable people?

Photo of Sean BarrettSean Barrett (Independent)
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I welcome our guests. I particularly welcome former Senator Kathleen O'Meara to one of her old haunts.

Ms Kathleen O'Meara:

I thank the Senator.

[Interruptions].

Photo of Sean BarrettSean Barrett (Independent)
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I share Deputy Ó Ríordáin's concern. When I last looked at the numbers, I discovered that the horses and dogs subsidy costs approximately 20 times as much as the Seanad.

As for tobacco, Senator Crown has made a proposal for a tobacco-free society, which I support. Moreover, I believe that as Minister, Deputy Micheál Martin did a lot as well. I am unsure whether tax was responsible for the entire improvement the witnesses have described and he deserves great credit for that because he acted before other countries. Members find the Minister, Deputy Reilly, to be very much of the same mentality. I believe having a crack at the tobacco industry may be the only popular thing the Minister for Health can do these days, and I support him with regard to the plain wrapping, the elimination of flavoured tobacco, in order that one actually gets the gunk and not menthol or peppermint or whatever they try to disguise it with. In the context of a tobacco-free society, one should give consideration to where it should be eliminated next. Members suggested sales of tobacco in garages because I support Senator Crown's contention that smoking in cars constitutes a danger to the passengers because it is a confined space. The Department has had that Bill for approximately two and a half years but has done nothing about it. If one cannot smoke in the car, they should not be sold in garages. Essentially, one must withdraw tobacco from society to have a tobacco-free society, which I support because the medical evidence is so overwhelming. Why do governments sell this commodity, which everyone knows is damaging, in duty free shops? Moreover, as such shops are the biggest discounters, why not pursue them? Moreover, a non-smoker discount in health insurance is worth considering, given the cost it imposes on the sector.

I am not so sure that drink and tobacco should be included in the same category as the vast majority of people consume drink sensibly. The income distribution aspects of minimum pricing, to which I believe Deputy Higgins referred, are horrendous and one is enriching the industry. If someone wishes to sell something for X but the State insists that it be sold at 2X, it is no wonder the industry supports minimum pricing. I believe it is also contrary to European law. There has been a certain amount of scaremongering because The Economist World in Figuresdoes not show Ireland as a nation of drunks. It is 23rd in respect of total alcohol sales expressed as litres per head of the population, with 63.5 litres in Ireland, whereas Australia is the leader at 99.4 litres. The Revenue Commissioners tell members that spirits consumption has fallen heavily, that of wine is increasing and pubs are shutting down. Consequently, I believe a change in the market from pubs to off-licences has annoyed the trade and the latter has aligned with people who have exaggerated the degree of consumption. I see that pubs are shutting and believe the younger generation is much more responsible in the use of alcohol than was mine and note the number of road deaths has fallen from approximately 650 per year to 150 per year. Consequently, I believe we have responsible people and I am not sure whether minimum pricing is the answer to that. Moreover, I believe it would have economic aspects that have not been considered properly.

As to where members should go regarding the health lobby people who are present, the Department of Health publishes the numbers and we are major expenders on health services. We doubled the number of staff between the last recession and the present one from 55,000 to 110,000, although I acknowledge it has come back a bit. When the troika discussed this with economists, it stated that the fee for a general practitioner, GP, in Ireland was twice what it was in Belgium. Moreover, one might ask where are GPs after 5:30 p.m. and at weekends? While we have 24-hour shops seven days a week, the number of consultants increased by 44.7% between 2002 and 2011. Similarly, the total number of hospital doctors was increased by 24.4%, and as for GP services, the number of people who had contracts with the Department rose by 48.1%.

Consequently, I believe there is a combination of factors, in that the sector always would like more money, has a voracious appetite for it and the Department appears to be particularly useless at controlling it. However, after the United States, Ireland spends one of the highest proportions of gross national income on the health service but its representatives are pretty good at claiming it is underfunded and, as a member of a finance committee, I would require serious proof of that. Our health service costs €3,781 per capita, whereas the comparable figure in the United Kingdom is €3,487, which is able to provide a full service. Consequently, I believe we have a problem of overmanning and high costs in the health service and the solution really is to look at how and why the staff doubled, up to 110,000 people, between the recession in the 1980s and this one, as well as at what those 110,000 people were doing. Moreover, one must ask the reason there is a combination of a very large spend and a lot of patient and customer dissatisfaction with what is being provided. Consequently, as a member of a finance committee, I share the concerns of the troika that Ireland does not get good value for money in health. As the witnesses are aware, it is one of the major Departments that it has targeted and, consequently, they must tell members a lot more then they did today for me to vote for any increase in the health budget.

10:55 am

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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Before I ask the witnesses to reply, I will add a few comments. First, I should have declared that I am a member of the Irish Medical Organisation, IMO, and have been for some time. While I am not a junior doctor, I must also state I agree fully with what is going on there. It is absolutely disgraceful that young doctors are working so hard. In my time, we worked those 100 hour shifts and it is significantly dangerous for patient care and should be stopped immediately. I am concerned by some of the witnesses' observations on how the mental health teams have not been developed in the manner envisaged. However, it also is of concern to me that the witnesses have stated there has been a regression towards more institutionalised care, which we have spent the past 50 years trying to get rid of while trying to get out of the mentality of people talking about mental health services. It is about delivering such services in the community, and from my own practical experience, it is fantastically better for patients when it is done correctly.

Finally, I agree with everything Ms Kathleen O'Meara has stated with regard to tobacco. I would welcome a more in-depth report that members could discuss themselves because this is the Joint Committee on Finance, Public Expenditure and Reform and this issue pertains to how finances are affected. The representatives from the IMO might comment on proposals such as giving free health care to the under-fives. I personally support this proposal and, from a health care perspective, it is important that parents come to the doctor with younger children more often because the latter cannot express themselves in the same way as can older children. I seek the witnesses' opinion on that as well.

Dr. Matthew Sadlier:

There are a number of points to address. First, on the question of the ring-fencing of funds, the IMO has just published a paper on alcohol, hot off the presses, that we can distribute to the joint committee in which we call for a health levy on alcohol manufacturing to contribute to the health care costs of alcohol related harm. At numerous conferences, we have called for the ring-fencing of funds and it is an issue with which I agree. I must admit the issue regarding greyhounds and horses is not something of which I had heard personally before today. It certainly is something we will consider seeking to utilise. As for the funding of the health service, to address Senator Barrett's questions, the health service in the 1980s was significantly underfunded. Consequently, the fact that we are catching up with the rest of the world certainly is a good thing and we welcome the increase in posts. However, we still are below the OECD average with regard to the number of specialists per head of population. The population of the country has increased by approximately 1 million people since the last recession in the 1980s, which also would contribute. In addition, however, the age profile of the population and the complexities of medical care have changed astronomically from what they were in the 1980s to the present. People are surviving illnesses that previously would have been terminal and people who have survived serious illness, be it mental or physical, require ongoing long-term chronic care. That level of ongoing chronic care management probably was not available or seen in the 1980s.

To address the Vice Chairman's final comment, the IMO would support a number of aspirational concepts towards the provision of care. The issue is the devil really is in the detail and it is about the negotiation and the ability with which, as health care workers, we are being asked to provide a safe and high quality service. While that is what we want to do, we seek to be provided with the tools to be able to so do. We have position papers on universal health coverage and it certainly is our aspiration to have a universal health service. However, it is a matter of being able to be provided with the tools to be able to deliver that at a high level of patient safety and a high level of quality. As I stated, the devil is in the detail and in the negotiation around that.

Ms Orla Barry:

On ring-fencing, in effect the Government has ring-fenced €35 million per year for mental health services and the development of community mental health services.

No doubt, in terms of the quality of service, the development of the adult and child and adolescent community mental health teams is the key to a quality service in the future. In terms of ring-fencing, there is the commitment to €35 million, but unless there is a ring-fencing of those posts, ensuring they are protected, and the moratorium is loosened to ensure a protection around those posts, we will never get to where we need to be in terms of a quality community mental health service.

11:05 am

Ms Kathleen O'Meara:

On the ring-fencing issue, there is a tobacco levy. It was introduced by the former Taoiseach, Mr. Brian Cowen, when he was Minister for Health. However, it disappears into the Exchequer. Obviously, we would like to see a budget put aside for quitting services, mass media campaigns and all the pieces that need to be done to reduce the smoking rate even further.

I thank Senator Barrett for his kind remarks. It needs to be said that political leadership makes the difference when it comes to the battle against tobacco. Tobacco is the single biggest cause of cancer and a driver of heart disease and it is a significant cost to the health budget as well, estimated at €2 billion every year. When one looks at the cost of the health budget and the cost of smoking, it clearly makes sense to bring that down.

We believe it is possible to see the end of smoking. Australia is ambitious towards it. Parts of America are ambitious towards it. It can happen. We believe that, in particular, the standardised packaging is a key part of that campaign. At this stage we can look at a future without tobacco.

Photo of Sean BarrettSean Barrett (Independent)
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Why has nobody sued the tobacco industry in Ireland, unlike in the United States? Would that be one way to put manners on tobacco companies, defeating them in court?

Ms Kathleen O'Meara:

I do not know the answer to that but some of the proposals that we have here today-----

Mr. Chris Macey:

I think there were some efforts but they did not amount to anything.

Ms Kathleen O'Meara:

Yes, there were some.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I will bring this session to an end, if everybody does not mind. I thank Ms Barry, Ms McGrath, Dr. Sadlier, Ms Hetherington, Ms O'Meara and Mr. Macey for their submissions and the discussion here today. It has been useful. We are the finance committee and even though we strayed into some other Departments during the discussion, it gives us a flavour of what we need to be talking about when it comes to the finances in the upcoming budget. I thank them for their opinions and for coming here this morning.

I propose that the committee suspend for ten minutes. Is that agreed? Agreed.

Sitting suspended at 11.25 a.m. and resumed at 11.35 a.m.

11:10 am

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I welcome Mr. Gerry Martin and Ms Gráinne McGettrick from the Alzheimer Society of Ireland, Mr. John Dunne from the Carers Association, Mr. John Bryan, Mr. Tom Doyle and Mr. Pat Smith from the Irish Farmers' Association, and Mr. Michael Harty from Home and Community Care Ireland. The submissions received and a summary paper were circulated to members in advance of the meeting. Each group will make brief introductory comments not exceeding three minutes and we will then proceed to the question and answer session.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. If they are directed by it to cease giving evidence on a particular matter and continue to do so, they will be entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person or an entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

I invite the Alzheimer Society of Ireland, the Carers Association, Home and Community Care Ireland and the Irish Farmers' Association to make brief comments in that order.

Mr. Gerry Martin:

I am from the Alzheimer Society of Ireland. I hope members have had the opportunity to review our submission. The title this year is, The Key to Cost Effective Dementia Care: Timely Diagnosis and Early Interventions. Our fundamental call is to make dementia a national priority. It is the single biggest health issue facing the country now and in the next ten or 20 years. Specifically, we are seeking three developments. First, we seek the publication of the national dementia strategy, as committed to. The working group is focusing on this issue. However, we are seeking more than just publication, we also desire an implementation plan in the strategy, with clearly defined leadership that will promote systemic change in the system and also lines of accountability and, importantly, a ring-fenced budget for implementation.

Second, as the title of our document suggests, we are seeking timely diagnosis and cost-effective post-diagnostic early interventions. International best practice has been outlined and the evidence is available. Timely diagnosis and cost-effective post-diagnostic early intervention need to constitute the core of the strategy. They have proved not only to be socially desirable but also to be cost-effective. The Alzheimer Society of Ireland believes a community-based response providing for a range of early interventions is an essential and critical component in moving towards cost-effective care. I will spend a moment outlining what early intervention is and what it will achieve. With timely diagnosis, early intervention can enable a person to live well and continue to have good quality of life. There is evidence for this and that early intervention will preserve function, reduce disability and delay cognitive decline. Obviously, it can sustain the carer in his or her role for much longer, which has a cost implication for the system. In this regard, it prevents crisis and unnecessary admission to acute care services. When this is the case, it can enable early discharge, which has a significant cost impact. These interventions, both medical and social, can prevent premature and unnecessary entry to long-term care services and the costs associated with it. These steps are not only right for the individual but also for the carer. They are also right in terms of the economics of dealing with dementia. For example, a person with dementia entering acute care services will spend, on average, 46 days in a hospital, which is double what a person without dementia will spend. If we could cut that number of 46 days in half, we would save €10 million per annum. There is a pure cost argument associated with our case. If we could reduce the number in long-term care by 10%, we would save €73 million per annum. There is a significant cost argument.

Third, I contend, without disrespect, that people accept that the health system is very difficult to navigate and find one’s way through. Sometimes even in the whole of one’s health, it is difficult to navigate. It is particularly difficult when there is dementia. There is an urgent need to co-ordinate the efficient delivery of all services in order that we can have greater access for patients and a continuum of care for individuals between community and hospital-based services. The Alzheimer Society of Ireland does not believe this is possible without a clinical care programme for patients with dementia within the HSE. It is critical that somebody in the system is responsible for dementia services and has the power to promote systemic change.

Mr. John Dunne:

I wish to make three introductory points. In last year’s budget income support for family carers was cut by an average figure of more than 5% compared to an average cut across all social protection income supports of less than 2%. Carers received a hit that was two and half times the national average. Leaving aside how unfair that was, we believe the cut was a significant step towards a tipping point at which community health care simply becomes unviable and collapses. In that context, the budget this year needs to focus on how creatively there might be some redress to adjust that impact.

Second, last year’s cut was all the more egregious because the Government is still not implementing other reforms that have the potential to reduce costs at the same time as improving services. Last year I flagged how the fair deal scheme was costing money. This is avoidable and producing a sub-optimal outcome.

I am happy to explore it again this year if the committee wishes but our core message for this year's budget is that we think it is critical to protect income support over all other social expenditure. The reason for that is very simple. Notwithstanding some early and very welcome reforms with regard to administration, particularly of health or environmental services around the country, the access to support systems for family carers remains a lottery based on geography and opaque decision-making. At least if carers get income, they retain some control over their own destiny.

11:20 am

Mr. Michael Harty:

Home and Community Care Ireland, HCCI, is the representative body for private home care providers providing roughly 100,000 hours of home care each year, employing roughly 6,000 staff, caring for around 8,500 clients and contributing roughly €36 million to the economy each year. In putting together our budget submission, we have been very cognisant of two background facts. They include our current economic difficulties and the imperative to ensure our limited resources are put to the best use possible. Due to our future demographic profile, any issues or difficulties we face will only be magnified in the years to come.

Our budget 2014 recommendations call on the Government to make better use of existing resources that will incur no extra cost to the Exchequer and follow the Government's own stated policy of money following the patient enabling older people to remain at home for as long as possible. I will set out our five principal proposals. In line with the Minister's often stated aim of getting money to follow the patient, we question the wisdom of ring-fencing €1 billion of the total older persons' budget of €1.4 billion for residential care through the fair deal scheme. We call on the Government to amalgamate budgets to allocate funding in accordance with patients' needs and wishes with potential savings for 2014 alone of €69 million.

In an effort to ensure we are providing the best quality care to the maximum number of older people, we call on the Government to ensure all home care provision that falls outside what is provided directly by the HSE is allocated in an open and transparent manner with quality provision being the focus of any outsourcing. This would entail stopping the use of section 39 funding for home care provision and instead redirecting those funds to the home care package scheme where there is more accountability and transparency. Indeed, well-publicised internal HSE reports have shown the gross inefficiencies of using section 39 funding for home care provision. Redirection could save a further €48 million in 2014.

Our remaining recommendations call on the Government to do the following: reform social welfare regulations to incentivise people to take on work in the home care sector, which is not currently the case; double the existing €50,000 ceiling for tax relief to €100,000 to allow more complex cases to be looked after at home and to avail of tax relief; and to extend the IT47 definition of incapacitation to include home care requirements as a result of old age or infirmity. I thank the committee and look forward to any questions in the question and answer session.

Mr. John Bryan:

The IFA's message is the importance of agriculture to the Irish economy and rural infrastructure. We are concentrating on jobs and exports. After several tough years and savage cuts in successive budgets, agriculture still maintains over 300,000 jobs spread throughout Ireland from Donegal to Wexford and every part of the country. Even after a tough year in 2012, exports grew by over €9 billion and are up 8% in the first six months of this year. There is significant pressure at farm level and farm incomes have dropped substantially. The farm household income survey shows that farm incomes were down 15% last year. This morning, the troika said the Government needs to focus more on unemployment and jobs. We are very much concerned with the cuts that have taken place in 2008, 2009, 2011 and 2012. They are hitting many low and medium-income farmers and pushing them to the stage where they will not be able to maintain production. Clearly, we can already see a substantial drop in sheep and suckler cow numbers. It is Government policy to hit Food Harvest 2020 targets which will create more jobs and exports. The Government must target investment in growth if we are to hit the targets over the next number of years. The figures clearly show that since 2008, agriculture has been hit disproportionately compared to other Government Departments. The agriculture budget has declined from 2008 to 2013 by 41.2% when it is down 12.6% across all other Departments. As a percentage of overall Government expenditure, in 2004 and 2005, agriculture got 3%. Today, it gets 2%. That serious cut in expenditure will have a knock-on effect on jobs and exports and cost the wider economy.

The IFA is prioritising a few areas in the upcoming budget. In particular, we say the schemes that are so vital to many small and medium-income farmers must be maintained. Environmental schemes, the disadvantaged areas scheme, the suckler welfare scheme and forestry payments must be protected. The cuts that have taken place over the past number of years are severely impacting on income.

Many farmers have very low incomes and the universal social charge and other costs have hit them substantially. The fact that farmers do not get the PAYE allowance means a farmer with an income of €20,000 pays double the level of income tax compared to a corresponding person in the PAYE sector. Low-income farmers have been hit very hard over the past number of years. In respect of capital taxes, the transfer of farms to the next generation is very important to bring young people into the sector. A few years ago, there were fewer than 600 people in agricultural colleges. Today, that figure is 1,600 so we must incentivise the transfer of farms. The retention of 90% agricultural relief is essential for this to happen.

Other areas are dealt with in our detailed submission, along with tables. For a small spend, many jobs can be protected in the agricultural sector but we are reaching the tipping point which is very clear from the figures for the drop in sheep and suckler cow numbers. Unless action is taken this year to reverse that, we will have a loss of jobs and a hit to the overall economy.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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We will now have ten-minute slots for each group. Does Deputy McGrath wish to share his slot?

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Yes, I will address the Alzheimer Society of Ireland and the Carers Association while Deputy Dooley will address the IFA and Home and Community Care Ireland if that is acceptable.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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Is it agreed to have ten-minute slots? Agreed. This is the finance committee so we will confine it to pre-budget submissions. We are sometimes inclined to wander into discussions which are for other Departments.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I will try not to do that. I thank all of our guests for their detailed submissions which we had an opportunity to go through in advance. I will start with the Alzheimer Society of Ireland and welcome Mr. Martin and Ms McGettrick. Going through its submission, one thing that struck me was the dramatic increase in the number of people suffering from dementia that we are likely to see over the next 20 to 30 years. It seems we are woefully ill-equipped to deal with that. The submission put much emphasis on diagnosis and early intervention and says that €73 million could be saved if there was a 10% reduction in the number of people in long-stay facilities. What practical steps need to be implemented to bring about that reduction in the number of people in long-stay environments?

Mr. Gerry Martin:

The practical steps are included. First, we must get the diagnosis because as it advances, we are building up a crisis intervention down the road. There are many issues around getting diagnosed, not least GP awareness and education. From there, we believe we can intervene. The two areas are medical and social. We believe there are medical solutions that can be effective in some cases. Equally, there is evidence to show that if we can intervene and continue to include and engage people in their communities and keep them involved and, importantly, if we are able to support carers with training, practical help and navigation through the system for the services that may or may not be available, it can have a direct impact on sustaining carers and, therefore, sustaining people at home.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Is the Department open-minded with regard to a national dementia strategy? What kind of discussions has the association had so far? Is it pushing an open door or is it unlikely to happen?

Mr. Gerry Martin:

I do not want to say that. There have been three meetings of the national working group of which we are a member. Initially, we were a bit disappointed that there was no representation at that group for carers or people with dementia. We would have had a concern about that initially.

That said, however, we have tried to repair the problem in the last fortnight by facilitating groups representing carers and people with dementia who wish to make a direct input to the working group. The work is progressing and the document is being put together. We are on the cusp of discussing its implementation but we do not yet have a line of sight on the budget that will be made available for implementation. We make the case in our submission that we can release savings into the system provided an initial investment is made to release those savings down the line.

11:30 am

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I welcome the emphasis that Mr. John Dunne from the Carers Association has put on income support. Unfortunately, this will be another budget in which holding what one has becomes a worthy objective. Most of the groups coming before us hope at least to hold onto what they have, alongside trying to make progress on non-financial issues.

An issue I come across increasingly frequently is the lack of home support and support in the community. Families are coming to us in crisis with elderly relatives who are about to be discharged from their hospitals. These families do not have the capacity to care for their relatives in the home but there is a lack of facilities in the community. Often they are forced to make the harrowing decision to refuse to take their relatives out of hospital even though it may not be the most suitable environment. Mr. Dunne called for the criteria governing the allocation of those resources to be published. What is the current position?

Mr. John Dunne:

Families are not necessarily being given an option on hospital discharges. We have come across cases in which patients were bundled up with their suitcases packed and their families were told to collect them. People with dementia were told they would be going home without any discussion with their families. There is some pretty poor stuff happening in that regard. From a hospital's point of view, it must manage its budget. The patients represent a cost to the hospital and as soon as they leave they stop being the hospital's problem. The difficulty is that the existing structures do not include protocols stating that the State or the system has a responsibility for the individuals concerned. They may need to be moved out of the hospital but they also need to be moved somewhere else. That is the policy in theory but it simply is not working in practice.

In regard to the lack of clarity around criteria, one does not start with a blank sheet of paper. For historical reasons, the HSE employs thousands of people to provide home care services in certain parts of the country, whereas it does not directly employ anybody in other areas because it subcontracts these services. The latter model offers far more flexibility, even in terms of the point Mr. McGrath made on section 39 and home care packages. A coherent strategy has been put in place but the Croke Park and Haddington Road agreements create an enormous drag. This is not a party political point because the issue has existed for several years. The failure to address the legacy of staff structures and the commitment on staff costs has resulted in arbitrary situations. There is no difficulty accessing services in some parts of the country but it is virtually impossible to do so in others. That is not a criticism of managers in the HSE. They have been dealt an impossible hand of cards.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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The cut to the respite care grant last year had a real impact on thousands of families. In Mr. Dunne's opinion, based on the Carers Association with carers, what difference did it make and what message would he send to the Government as it frames this year's budget in regard to the carer's allowance, the half-rate allowance, respite care and the household benefits package?

Mr. John Dunne:

I realise that everybody is saying we cannot take any more cuts. The question we are asking, however, is why are we being cut more than anybody else. Carers are the only group in the social protection area required to work more than 40 hours per week in order to get benefits. At the same time, however, they are being cut disproportionately. I do not believe for one minute that anybody set out last year to hit carers disproportionately but the way in which the budget was framed meant it was a last minute decision and nobody recognised the implications. It followed from the principled decision not to cut the main schemes but it meant the ones on the edges are effectively being annihilated over time.

A carer at home incurs additional laundry bills in many cases because they have to deal with issues like incontinence. Water charges will make a difference and their ESB and heating bills are higher than average. They must cover the cost of life saving electric machinery such as dialysis machines. There is no recognition of the costs associated with such equipment and the household benefits package was cut without recognising that carers are a special group. They are, therefore, dealing with the dual burden of their costs increasing even as their income supports decrease.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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I will direct my questions at Mr. Harty and Mr. Bryan. Mr. Harty spoke about alleviating the difficulties in dispersing funding by moving away from ring-fencing under the fair deal scheme. My experience of the demand for the fair deal scheme suggests there is insufficient money in its budget to meet demand. I ask him to help me understand how more money can be made available by reducing ring-fencing. Home care packages are severely under-funded. As Mr. Dunne noted, supports vary depending on the part of the country in which they are administered.

I have read Mr. Bryan's various submissions. It appears he is approaching the issue from two vantage points. The first is the protection of schemes for environmental or subsistence farming and the second is reaching Food Harvest 2020. Does he think we are where we should be in terms of reaching our targets or are we ahead of or behind the curve?

Mr. Michael Harty:

In regard to the fair deal scheme, the problem is that the practice of ring-fencing funds means that people know where funds are available and, as a result, they are pushed towards these areas. One of my members in the Wexford area recently encountered an issue whereby a 93 year old lady went into hospital for a procedure and then wanted to go home. She was unsuccessful in her application for a home care package but she managed to access the fair deal scheme instead. She is now in a nursing home receiving 24-hour care that she neither wants nor needs. This represents a significant additional cost for the State.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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I ask Mr. Harty to provide more information on that case because I have found the opposite in that people are hanging on to a home care package when the medical assessment indicates that they should be in full-time care.

Mr. Michael Harty:

The Minister for Health stated to the Dáil that 29% of the people in the fair deal scheme were low dependency, in other words, they do not need 24-hour care, and a further 16% were medium dependency. That suggests approximately 30% of patients do not need 24-hour provision. Numerous international studies have shown that people's first preference is to remain at home. It is a political win-win for the Government. It would save money while also giving its constituents what they want.

Mr. John Bryan:

As the Deputy will be aware, the cuts to the schemes have impacted heavily on low and medium income farmers. REPS is no longer open, payments under agri-environmental options scheme have decreased and the cost of compliance has increased in respect of the disadvantaged area payments. The suckler welfare scheme, which was very useful in terms of maintaining suckler cow numbers, has also been hit. The changes to these payments have had a significant impact when considered collectively. Funding cuts are hitting vulnerable sectors.

Deputy Dooley asked about Food Harvest 2020. As world demand for food grows, there is increased demand for dairy, beef and pork products. We are on target for dairy and reasonably on target in respect of pork. Further investment could be made in welfare of poultry, however. The two groups about which I am exceptionally concerned, however, are the 65,000 farmers involved in the suckler cow herd and the 29,000 involved in sheep. They are at the tilting point because the cuts have hit them disproportionately. They tend to be on fragmented holdings and smaller farms. There are a large number of them in Deputy Dooley's part of the country but bad land is not confined to one area. They tend to be on more marginal farmers.

One of the positives is that the farming community are net beneficiaries to the tune of €1.7 billion in direct transfers from Brussels, which come into the Irish economy and create a multiplier effect of 4:1, according to Professor Alan Renwick of UCD. That creates activity in the economy. An extra €100 million will come through Pillar 2 direct supports to Ireland from Brussels in 2014 versus 2013. For the Government to take that extra money from Brussels, without adding any extra Exchequer funding, and target it at vulnerable sectors and regions could have a major multiplier effect on jobs and exports and prevent that tipping point from going the wrong way. It will be too late to leave it until 2015, when a review of the CAP will take place, with new schemes and payments accruing in 2016. If action is not taken in 2014 budget we will lose many suckler cows, sheep and jobs, whether in marts or the processing industry, and the overall loss to the economy will be huge.

11:40 am

Photo of Aodhán Ó RíordáinAodhán Ó Ríordáin (Dublin North Central, Labour)
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I welcome all the guests. There are two ways of looking at the budget. One is to say that it has to meet the deficit target set out, which should be €3.1 billion. The other is to say that we can meet the targets by having a much less austere budget. Do the witnesses have a general opinion on what budgetary measures should be taken, considering that the toughness of the budget will have a disproportionate effect on carers and those parts of our society which depend so much on direct payments from the State?

I get a sense from the IFA's submission and comments that there is a sense of hope or expectation that things might be turning or improving a little and that the agricultural sector can be a leader in the Irish economy to get us out of where we are. Could the IFA representatives expand on that a little as to how they feel matters are progressing?

I will ask a controversial question on maintenance and college grants. I want to tease it out without being adversarial. I understand the IFA's position - the self-employed have a similar view - on the proposal that productive assets be taken into consideration for maintenance grants. We spend approximately €300 million on third-level grants. The suggestion is that productive assets of €750,000 would be taken into consideration. If that figure is far too low for the IFA's estimation, is there a figure that could be worked around - €1 million, €2 million, €3 million, €5 million? Or does the IFA have an opinion on the level of savings an individual might have to suggest that he or she does not need a maintenance grant to send his or her child to college? Somebody who had €250,000 in his or her bank account was entitled to everything the Department of Education and Skills could give to send his or her child to college. I am not deliberately trying to cause a row, but the best thing we can do is to toss around these ideas and see what the IFA's thinking is on this.

Mr. Michael Harty:

We have gone through several years of austerity and the focus of this budget must be more on efficiencies and using existing resources better. There is no need for front-line health cuts. A recently published report from HCCI detailed immediate savings that could be achieved in 2014 totalling €117 million. That is roughly equivalent to the expected overspend by the HSE this year. The proposals in that report entail no cuts to front-line services. It gives patients what they want and makes significant savings for the Government. We must seek efficiencies and make our current budget go further. There is no need or room for front-line cuts to the health service.

Mr. John Dunne:

I agree with Mr. Harty. I suspect at the end of the day there will be a compromise between the two figures and we will be happy with that. The €440 million cut for social protection is unsustainable. The urgency of the existing reforms is inadequate. They are moving in the right direction but not quickly enough. That is why it is frustrating to be asked about further cuts. Because areas that need to be reformed are not being reformed far enough, the Government will subsidise that delay out of the front line, and it means we will take a hit. That is where we have a difficulty.

Mr. John Bryan:

We are well aware that there are budget targets that must be hit, but it has been obvious over the last number of years that soft targets are being picked, and agriculture is one such sector. I see hope in increased demand for food and expanded world markets, such as the Pacific Rim, China and Indonesia, but we will get into those markets only if primary production is maintained. We had the good news stories of Kerry Group investing several hundred million euro and creating 2,000 jobs in Maynooth, and Glanbia building big plant in south Kilkenny. Those are the positives, but alongside that there is a very low-income sector of farmers who live on approximately 50% of the average industrial wage. A huge number of farmers create significant added value, whether by keeping the local shop or mart open or by producing exports for the economy. Budgetary figures fall out if we lose growth, and one of the few sectors that has created a level of growth is agriculture. That is why it is critical that we examine these vulnerable sectors and maintain the jobs. The multiplier effect was demonstrated by a UCD report two and a half years ago and again this year by Professor Alan Renwick. It was found that €1 put into agriculture creates €4 worth of economic activity in the country. If we want growth we must put money into it.

The college grant question is almost a separate debate but it is intertwined with this one. There are ten speeds of agriculture. There is the farmer who has a well-developed business in which he or she has invested, and he or she can go to the bank manager to get a loan. My children got no maintenance grants because I was reasonably well developed. That was grand. I had an income. Income is the fair way to do it. There are thousands of farmers out there who want to change their tractors or upscale their dairying but the bank says "No." If the Government does away with the maintenance grant their children will be deprived of the right to go to college, because the banks work purely on a system of repayment capacity. They are not worried about whether one has €750,000 worth of land or €2 million worth of land. If one has no repayment capacity, one will not get a loan. If the Government introduces a means test based on asset value, that will mean 30,000 or 40,000 very low-income farmers will have two choices: sell a field, or allow their children to be discriminated against in Ireland. That would be totally wrong.

Cash on hand and shares, which are disposable, are a different kettle of fish. However, some farmers are struggling to maintain their farms. They may have kept them for a few generations hoping a young farmer will come in, or they may have to work off-farm to subsidise it. Several young farmers do that, subsidising those farms for years. It is unrealistic to tell a parent that the only way his or her child will get fair play is to sell a field. Irish banks are very conservative. Every day, applications for loans that I would regard as viable for farmers to increase their businesses are being turned down. During the week our Kerry chairman told me about farmers selling two cows to pay a bill. That is reducing farmers' stock, which creates economic activity.

If the Government wants to be fair to people, it must not take into account working assets such as land and stock. Otherwise, it will force a huge proportion of people to say the only way their children can go to college is if they wind up their farming activity. That will not be good for the economy or for rural Ireland. I agree with the assessment of income based on a three-year or five-year average. In all walks of life, picking one year's income is not the fairest way. One of the misconceptions was that one could purchase capital. It is not allowed.

Whether I built a shed or bought a combine harvester - I do not have tillage - is not taken into account. Any capital expenditure made or wages paid to family members are disregarded. It is a tighter criterion than the income tax criterion. I would hate to see a sector of our society deprived of education. We should take pride in the number of people who go into third level education.

11:50 am

Photo of Aodhán Ó RíordáinAodhán Ó Ríordáin (Dublin North Central, Labour)
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May I make a comment on that before the other speakers come in on the broader questions? We are completely in agreement - nobody should ever have to make a choice between education and their livelihood. Any changes should be on the basis that those who demonstrably can afford to pay for the maintenance of their children in college should be asked to do so. It is just a question of finding the mechanism. I appreciate the IFA's point of view on the matter. We all want the first person in generations of a family to have the opportunity to go to university. But if that person is drawing from the same €300 million as others, bearing in mind all the other strains on the budget, we need to find a mechanism. It is not an issue solely for the IFA; it is also an issue for self-employed people. I went to college with people who came from the same area of Dublin as I did. They got college grants that I did not get because I came from a family with a PAYE worker. It is unfairly suggested that it is an IFA or farming issue. We need to find a mechanism whereby those with the ability to pay do so, but I accept Mr. Bryan's comments.

Mr. John Bryan:

While it is not a fair comparison, a farm in Leitrim could be sold tomorrow for €750,000, but one could not buy a civil servant's pension for that amount. How can means be assessed? Income is the fairest way. I had the capacity to borrow to educate my children so I did not get it. However, it is unreasonable to expect a farmer with no borrowing capacity to sell a field which would reduce his income further and potentially push him to farm assist or, worse still, onto the dole. Cash is a different thing. That is why three-year or five-year averaging is preferable. There is no way to manipulate it, given how it is treated in farming - I do not know about it in other sectors. I believe three-year or five-year averaging would probably be fairer for everybody.

Mr. Tom Doyle:

I think there is a misconception - I do not know where it came from - that the farming community proportionately benefits more than any other sector in society. The Department of Education and Skills will confirm that farm families proportionately benefit exactly the same as those in any other sector, because there is also off-farm income on many farms. We should get rid of that misconception and the Department of Education and Skills can support that fact.

Mr. Gerry Martin:

I wish to echo my colleagues' comments on further cuts. Over the past four years in the ASI we have seen cumulative cuts of 25%. We have held the level of care relatively stable at about 1 million hours on the basis of efficiencies we have discovered, mainly through direct salary cuts. However, we have seen a significant growth in our waiting lists. Further cuts here will definitely reduce the number of hours we can deliver.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I thank the witnesses for their submissions. As ever, I probably have about 100 questions, but I will try to whittle it down. I will start with questions for Mr. Harty. In the last budget, as in previous budgets, carers were disproportionately hit. The cut to the respite care grant was particularly reprehensible. The Government should take the opportunity to reverse that decision. Mr. Harty made a very interesting point about incentivising care work. In light of that, what is his attitude to zero-hours contracts? I am sure the committee is familiar with this exploitative phenomenon. What is the position of Home and Community Care Ireland on this?

Mr. Michael Harty:

Because of the nature of care work, the majority of care workers work part-time. If we want to be able to provide care efficiently and affordably, zero-hours contracts serve part of the needs that are there.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I say this with all due respect to Mr. Harty and his organisation's members. I am taken by some of the points set out in its pre-budget submission. However, from my perspective it has zero credibility in making an argument for social inclusion or against exploitation or pressure on the front line if the organisation or any of its members supports the exploitative practice of zero-hours contracts, which disproportionately affect poor people and women in that sector. It is beyond a joke for Mr. Harty to argue for incentivising care work if he is prepared to stand over zero-hours contracts, which are a scandal in the system. My concern is as follows. This is the reality. I and the party I represent will back carers 200% because we know they have been the Cinderella of the health-care system. They have been ignored and put under unbearable and unacceptable pressure. Mr. Harty needs to be clear that under no circumstances will I or my party support any outfit providing any service that depends on such an exploitative regime. I want him to bring that message back to his members.

The Government has made a whole raft of cuts affecting carers, people with disabilities and so on. That screams that we have a society that talks a lot about care work but essentially does not value it and regards it as a second-class form of work which has traditionally been done by women. That is absolutely wrong. We need to put a premium on those services and on that work in our society. It is bizarre for representatives of Home and Community Care Ireland to come in and talk about incentivising that sector and make arguments for taxpayers' support for that sector through private operators who will exploit their workforce in turn. We will not agree on this point, but I cannot let this opportunity go to make it crystal clear to Mr. Harty and I hope he will bring the message back to his organisation.

If we have time, it would be very helpful for Mr. Dunne to rehearse the analysis of the fair deal scheme. Deputy Dooley raised a contrary scenario and I would be interested in teasing that out. I commend carers on the invaluable service they provide.

I will address the representatives of the IFA. I believe Mr. Doyle has very clearly burst the urban myth - literally - that the children of every farmer are supported by grants and are somehow fiddling the system. That is deeply inaccurate and insulting to the farming community, whose children are just as entitled to a crack at education as any of the rest of us. I am particularly interested in the taxation issues the IFA raised and how they disproportionately hit farmers. I ask Mr. Doyle to address that.

I am very well aware of the work of the Alzheimer Society of Ireland and the pressure its members are under. I ask Mr. Martin to outline what has happened to his society's members over the past three or four years. I apologise for being lengthy.

12:00 pm

Mr. Michael Harty:

The Deputy made some interesting points. With regard to zero hour contracts, it is not just private operators that use them; section 39 funded companies and home help organisations use them also.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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They are all wrong to do so.

Mr. Michael Harty:

The other side of saying we should not use zero hour contracts is that we will only be able to deliver fewer care services to fewer people. As I said in our submission, the issues and problems we have will only get worse because of our demographics. It is a simplistic lashing out-----

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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It is not simplistic. Nobody sitting in this committee room today is on a zero hour contract. If people are, they should put up their hand. I would like to know who they are. There is none. We are on proper, decent contractual arrangements in our respective forms of employment. I am not even seeking an explanation. I am highlighting the position and I am shocked to hear the delegate even attempt to defend the position, as he clearly is doing.

Mr. Michael Harty:

There is obviously a certain amount of disagreement in that regard. On the Deputy's point about incentivising carers in the industry, we certainly agree with it. We would like to see movement towards caring being viewed as a career, rather than just a job. However, that is dependent also on the amount of funding that can go into the sector.

It is also important to point out that there is a misconception that there is a difference between a home help organisation, a private operator or a section 39 funded company, be it the Alzheimer Society of Ireland or others. We all operate in the same cost structures. They have chief executives whom they pay and they pay their carers. They have administration and financial costs. There is no difference. There is a misconception that we are talking about voluntary organisations, but we are not. These are people who receive funding under section 39. In addition, section 39 funding is paid up front, without a need for an invoice, accountability or transparency. A total of €58 million is paid to home help organisations through section 39 funding to provide home care. Internal HSE reports indicated that €18 million of this was tainted. By tainted I mean serious mismanagement and actual fraud.

We must remember what we are discussing. We all have the same end game - we wish to deliver the best quality care to the maximum number of older people. Raising issues such as zero hour contracts is fine, but what is the Deputy's solution to ensure the many more older people who will come on stream in the next few years will be looked after? We are certainly open to any solution or suggestion she might have. However, let us not forget that the focus we require is to provide the best quality of care for the maximum number of people possible. That is done through accountability and transparency, which is not currently the case within the home help sector.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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This notion that putting people on that type of exploitative arrangement in any way improves the quality, prestige or standing of care work as a career is frankly farcical. We will not agree on this, but I thank Mr. Harty for his response. I profoundly disagree with him.

Mr. Michael Harty:

There is a misconception among the public that home help carers have a monopoly of empathy in caring. The carers who are-----

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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Excuse me, Mr. Harty, the Vice Chairman might have to intervene.

Mr. Michael Harty:

May I finish my point?

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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This was not an invitation to Mr. Harty to go off on some reverie in a series of distractions. I have made my point on the issue of the contracts. It might interest him to know it is a position shared by many of the workers who provide care. Please do not accuse anybody sitting on this side of the table of having misconceptions. There is no misconception. The reality is that zero hour contracts are used routinely and it is wrong. For anybody to come to this committee and talk about prestige or quality while participating in that practice is ludicrous.

Mr. Michael Harty:

It is not prestige; it is quality.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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The time in this slot is up. I ask the other delegates to respond briefly to the Deputy's questions.

Mr. John Bryan:

I am glad the Deputy asked that question. The example we include in our presentation shows that a low income, single farmer on an income of €20,000, owing to not having the advantage of the PAYE allowance, pays 19% of his or her income or €3,900 in PRSI, universal social charge and income tax. If that farmer was in the PAYE system, he or she would only pay 10% of his or her income because of that allowance. If the proposal from the Minister, Deputy Joan Burton, is introduced, he or she will pay a further €300. Instead of 10%, he or she is paying 19%. It is the discrimination that has developed during the years through the PAYE allowance. It particularly affects low income earners because as the income increases the effect is diluted. However, it has a high effect on low-income farmers, many of whom are caught by it. We believe it is an area the Government should take steps to address.

Mr. Gerry Martin:

Our organisation is dementia specific in that we only engage in dementia specific care. It is a nationwide organisation and has 51 day care centres across the country. It is to be found in every county in Ireland. We are engaged with about 1,200 families in direct home care. We have two respite care facilities, one in Blackrock and one in Killaloe.

The issue, as we state in our submission, is that there are 42,000 people in Ireland with dementia at various stages. That figure is projected to rise to 147,000 by 2041. With the cuts in the past four years we have seen waiting lists grow. We have just about managed to keep the services above water, largely due to the fund-raising efforts of our local people, but the waiting lists have grown. We are also unable to extend the care provided, particularly day care, for people as the disease progresses. The vast majority of people would be in day care for one day, for example, but the need might be a lot greater owing to carer stress. We believe the carer stress issue, with the greatest of respect to all carers, is particularly heightened in managing a person with dementia in the home.

There is a further issue. There is something of a lottery in how the HSE cuts are distributed. There are areas of the country where we experienced small cuts, while in others there are larger ones. It is quite difficult to manage from an equity point of view and obviously puts even further burdens on the local community to try to fill the gap.

Mr. John Dunne:

I will briefly make three points. To declare an interest, we receive section 39 funding. It is being reviewed and we believe that is appropriate, to respond to Mr. Harty's point.

Again, I also must declare an interest on zero hour contracts. We operate such contracts. I accept what the Deputy says, but I argue that we try very hard to be a good employer within the constraints, of which I will give an example. The HSE might ring me to state, "We want you to have a carer get into their car, drive out and get somebody up out of bed, washed and dressed, after which the carer can return home. We are paying you for half an hour. Travel time does not count and we will give you €9 for that." The HSE might ring up to state it wants this to be done now or tomorrow. The agreement is that there should be 48 hours notice. We are filling in the gaps around the staff who are not on zero hour contracts who are employed by the HSE, paid a higher basic rate and travel and subsistence and who, by and large, deliver care between 9 a.m. and 4 p.m. I accept the sincerity of the Deputy's position, but I ask her to acknowledge that in the market in which we operate which is designed and operated by the State there is no other practical way of doing it. I would be delighted to sit down and work out if there is an alternative way. Ultimately, there is a big issue operationally about the flexibility of delivery required geographically. If one considers remote parts of the country, somebody might have to drive for half an hour to get to a house to provide half an hour of care and be paid €9.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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For the purpose of clarity in these proceedings, is Mr. Dunne's organisation a for-profit operation?

Mr. John Dunne:

No, it is not-for-profit.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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Are the members of Mr. Harty's organisation for-profit operators?

Mr. Michael Harty:

Yes.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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That is a key distinction. However, the practice of operating zero hour contracts is entirely wrong, regardless of whether it is in for-profit or not-for-profit environments.

Mr. John Dunne:

It is the State's funding mechanism that drives it. I have no difficulty with moving to a different type of contract, but we cannot afford to just hire people on a 40 hour week basis and then sit and wait for the State to give us business.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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That is not the proposition.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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We must move on.

12:10 pm

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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The figures given by Mr. Martin with regard to dementia are really stark. They have not been commented on so far, to my knowledge. According to his organisation's submission, some 41,700 people have dementia. That figure will increase to 67,500 by 2021 and over 140,000 by 2041. What are the implications of these striking figures for our society, Government policy and budgeting? We are all hoping to live longer and that is obviously a factor. The type of increase indicated in the Alzheimer Society of Ireland's submission cannot be attributed solely to this. Serious environmental factors must be playing a part also. While this might not be of immediate relevance to the subject of this meeting, it is relevant nonetheless. Mr. Martin might comment on it.

I have to say I fundamentally, absolutely, totally and utterly disagree with Mr. Harty's drive for wholesale privatisation of home help or care services in the home. The care of elderly people should not be a business. Mr. Harty is talking about making savings by giving the commercial organisations he represents much more of what he sees as the business. That implies a cut in the profits of the shareholders, investors and speculators involved in these organisations. How can that be achieved other than by squeezing the unfortunate people involved in providing care in the fundamentally repulsive already alluded to?

I was in the happy position of having an elderly relative cared for by part-time HSE staff for two years. They were not on a 40-hour week and were not on zero hour contracts. They came in for an hour or half an hour five days a week and sometimes at the weekend. The family tried to provide care the rest of the time. I agree with Mr. Dunne that extra funding is needed. It is a bigger picture than what he has come here to discuss. We will discuss the case for investing more money in the care of elderly people, rather than giving billions to bondholders, gamblers and speculators. If the investment in this area were increased, enough money might be available to offer an estimable, reasonable and just level of remuneration to carers and to make more care services available. I suggest Mr. Dunne's organisation, a not-for-profit body, should be bringing these issues to the forefront.

I would like to conclude by asking Mr. Bryan about a couple of issues that are not directly related to the immediate budgetary matters we are discussing. In recent times there has been an horrific increase in the number of fatal and horrible accidents on farms. Perhaps some incidents have received more media publicity than others. Surely the farming associations and all those interested in and concerned about farming - I am aware that many small farmers are struggling - should be saying something about this. Does any Department of State have a role in dealing with this issue? Perhaps Mr. Bryan might make a general comment on it.

Mr. Michael Harty:

I will begin by responding to Deputy Higgins. I realise that there is a certain difference in our positions and outlooks. We are not necessarily calling for privatisation. We are calling for transparency and accountability, regardless of who provides the care at the end of the day. We are asking the Government to ensure the organisations it funds are providing the best quality of care. We would have absolutely no problem if decisions were made purely on the basis of quality. The weighting for price was just 15%, which is very low, in the case of a recent HSE tender. We suggest the weighting for price should be 0%. In this case, the selection of approved providers was driven by quality. All of the home helps applied for it, but just one of them was successful. It was based on the internal standards of the HSE. This indicates that the quality of care being offered by some providers in receipt of section 39 funding is not what it should be. Private companies were not successful because their prices were lower. As I said, price received a weighting of just 15%. We are interested in transparency and accountability in how the funds are spent, rather than privatisation. If not-for-profit organisations end up providing the care, so be it. The decision should be based on quality.

I will return to the point I made in response to Deputy McDonald. There is a misconception that not-for-profit is good and private is bad. The only difference between not-for-profit and private is that I have transparency - people can see what my profit is - whereas the surplus in the not-for-profit sector is spent on salaries or administration costs. It is not money that is saved. It just goes under a different cost heading. It is important to ensure the organisation can provide the best quality care. We have to get away from this bashing of private provision. We are not saying it should be privatised. We are saying there is a need for transparency and accountability. The best quality providers must be allowed to rise to the top.

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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In the last paragraph of Mr. Harty's document the case is made for "phased outsourcing".

Mr. Michael Harty:

Outsourcing does not necessarily mean it has to go to a private provider. We are in favour of outsourcing to the best provider - the provider that can offer the best quality care to one's mother. I would think we are all in agreement with this. Why would somebody accept poorer quality care just because it is provided by a not-for-profit provider?

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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Should we not have a properly run, efficient and properly funded State service? It could be shaken up when needed. That is the real alternative.

Mr. Michael Harty:

We completely agree. We have absolutely no problem with genuine direct HSE provision by carers who are employed by the HSE. We fully understand such a system is needed. Our problem relates to the anomaly regarding section 39 funded companies not involved in internal HSE provision. They operate in the same way I do - they have zero hour contracts - but they do not provide quality care or give value for money. This was shown in the recent HSE tender, which was based on quality. I totally agree that we should ensure direct State provision by the HSE is properly funded and done correctly. This form of care cannot always be provided, however, as the capacity of the providers in question is not sufficient. We should bear in mind that there is a staff moratorium in the HSE and that demand for home care services is increasing. We are saying that when care is provided outside the HSE, there is a need to ensure it is transparent, based on quality and accountable. That is not the case with the €60 million spent on home help organisations. We think that anomaly in the market needs to be addressed. I totally agree that direct genuine HSE provision should be funded properly.

Mr. John Bryan:

Two aspects of the issue raised by the Deputy are of huge concern for all farmers and the IFA. I refer to fatal accidents on farms and the frightening number of suicides on farms. We have put a great deal of resources into both areas. The IFA's farm family committee works with the Health and Safety Authority and Pieta House. We try to hold information meetings. There have been nine fatal farm accidents so far this year, but the number is dropping. Every accident has significant consequences. I hear about fatal accidents almost on a monthly basis and of on-farm suicides almost on a daily basis. They are all tragic. The cutbacks in the health service are notable in this context. Frequently I receive a telephone call about someone's son who is suffering from stress. The son goes into hospital, only to be sent home and told to look after himself, and he commits suicide the day after. The cutbacks are affecting all sectors of society.

Suicide is a huge issue in rural Ireland. Suicide levels are much higher in rural Ireland than in urban Ireland. They are particularly high in most rural areas. The level of suicide among bachelor farmers and young farmers in their 20s is a huge concern for us. The IFA is a voluntary organisation and we collect voluntary subscriptions. We are using the resources available to us to deal with this issue. We are running projects in conjunction with Pieta House and the GAA to try to get older farmers out and make them aware of this issue. Both of these areas are of huge concern. The services available in this area, like others, have been reduced substantially as a result of cutbacks. However, there are people who need help. When we meet officials from the Departments of Agriculture, Food and the Marine and the Environment, Community and Local Government, we always try to point out that many farmers are sole traders.

They live in their own lane and have no one to talk to except a sheep dog all day. Sometimes when an aggressive inspector calls to them, whether from the Department of Agriculture, Food and the Marine or the Department of the Environment, Community and Local Government, they find it intimidating. This is stressful for them. In times of cutbacks, all Departments should be very conscious of the stress they put on people when they visit them. We are talking here about people who have zero contact. However nobody here is like that. Nobody here lives most of the week alone at home with the door closed in isolation. When these people get a visit from an officious person in a suit, the stress this causes can be huge. Therefore, across Departments there should be some understanding of the stress people are under and a particular approach should be taken. Notice of inspection, in particular, should be given. Farmers should not just become aware of an inspection when they look out the door and see somebody walking across their field. They should be given advance notice of an inspection.

We have entered negotiations with both the Department of Agriculture, Food and the Marine and the Department of the Environment, Community and Local Government to try to tidy up this practice, but it is still an area that causes serious and unnecessary stress for people. What difference will it make to the Department to give proper notice? Proper courtesy and the manner in which farmers are treated is very important. We are very concerned about the deaths on farms and about what can be done to reduce them.

12:20 pm

Mr. Gerry Martin:

The social and economic implications are massive. The numbers are massive and I daresay there is no one in this room who has not been affected by dementia, whether directly or indirectly, in his or her family. I am certain there is nobody in Ireland who will not be directly affected by this over the next ten, 15 or 20 years. It is a massive bubble coming down the track. No health system could ever deal with these sorts of numbers. Therefore, the only way to deal with the issue is based around the community and the home. This is where the majority of care must be based, because no health system could possibly afford it.

Dr. Suzanne Cahill's research in 2012 estimates that dementia already costs the economy €1.69 billion. Obviously, that is based on current numbers. The health systems huge and residential settings will not be able to deal with the issue and that is the reason for our campaign for early intervention. Age is the only known factor currently. Significant research is taking place worldwide, but the increasing demographic is the only known factor. Research is happening across the world and in Ireland. There is no cure for dementia. Medication has an effect, but only a limited effect. There may be preventative campaigns in which we could engage, mainly around cardiovascular fitness, which appear might have a preventative effect. The numbers are rising in any event, and we believe, therefore, that the only significant solution is to get in early, get it recognised and establish a programme of early intervention. While I do not wish to add to the gloom, we are behind the curve in Ireland and do not have a strategy. We are behind the curve in terms of other European countries, but we probably have a bigger issue in terms of the demographic and in terms of our younger population.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I wish to raise another issue with Mr. Bryan, the issue of the marked agricultural diesel. In his pre-budget submission, he reiterated the IFA's position that it wants to retain the current system. As Mr. Bryan is aware, the issue of illegal fuel laundering is a growing problem, and is a massive problem in the Border counties in particular, resulting in huge clean-up costs for many local authorities along the Border area. It is an issue the Government must examine seriously. It has tried all sorts of initiatives to combat the illegal dimension and I am aware the IFA welcomes the rebate system introduced for hauliers last year. From the State's point of view, would it not be better to have a system where everybody pays the same and then authorised users, like IFA members, could claim back the difference? Would it not be better to equalise the excise tax as such and for them to claim back the difference? While I agree there would be cashflow and administrative issues to be addressed, they could be addressed at the point of implementation. This would kill off the enormous amount of illegal activity which costs a significant amount for the State and local authorities. There are various estimates as to the amount involved, but it certainly amounts to tens of million, possibly between €100 million and €200 million. I would welcome Mr. Bryan's thoughts on that.

Mr. John Bryan:

The IFA holds a strong view on this. Take for example the tillage sector where the net margin return has collapsed. Return on tillage is down over 30% this year in comparison with last year. However, inputs are up 20% or 25% and agricultural contractors - people who cut silage and corn, do wrapping and provide necessary services - are struggling with a cashflow problem. They find it difficult to collect money and most of them would not even dream of trying to collect it until the middle of October when the first half of the single farm payment is issued. If these contractors have to borrow extra money - many silage contractors find it hard to get credit in garages - this could put huge pressure on them. However, even in this situation, there is no stop to fuel laundering.

I believe more money should be spent on enforcement. I cannot understand that at a time when we can track every animal movement, every calf or sheep on our farms, we cannot track the diesel and petrol sold by a garage. I cannot understand why some level of enforcement cannot work, such as a satellite monitor. I was in Australia in an area where there is a problem with water. There, every well had a satellite monitor linked to it which could tell how many gallons of water are consumed in a day. We are not reinventing the wheel here. The technology exists and is cheap. If some garage is selling five times the diesel it purchases, it should be put out of business and all its assets seized. I believe there should be proper enforcement through the use of modern technology.

I attended the Virginia Show in Cavan about three weeks ago where I talked to farmers. These farmers can tell us where illegal diesel laundering is going on. Therefore, I cannot understand how the Revenue Commissioners and the Garda Síochána do not clamp down much harder on it. This is not something that is done in a small place. Big tankers are involved. There must be more effort put into enforcement and substantial penalties should be applied. There is red diesel north of the Border, and I presume a substantial amount of illegal diesel comes from there. I am amazed by the amount of money involved, but I accept that some tens of millions are lost to the State. However, it amazes me that tankers of the size necessary to bring that across the Border or from somewhere else come here and nobody knows where the diesel is coming from. This indicates there is a serious breakdown in enforcement here. We are talking about a huge tonnage, not litres. We are talking about 15,000 gallon tankers. It should be possible to track these and to put significant pressure on them.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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We have a few minutes left so I shall ask a few brief questions. My first question is for Mr. Harty. In regard to the section 39 issue he raised in some internal HSE reports that outline inefficiencies and possible potential waste of money, will he highlight those reports for us? All we want is the name of the reports and the committee will request a more detailed breakdown from the HSE.

Mr. Martin commented that funding throughout the country for supports for people with dementia and Alzheimer's is unequal. Will he give us some further detail on this? Since the HSE was set up in 2004, we have always been told that, as a result, we would have equality of service right across the country. It is quite clear that, almost ten years later, all the same inequalities in services provided throughout the country exist as much today as they did under the old health board regions. Can Mr. Martin provide detail on this? While we cannot dictate to the HSE how to do its job, we can look at its budgets and if it is not getting around to doing what it should have been doing for the past ten years, we would like to highlight that for it. As this committee is responsible for examining public expenditure and reform, I would like to be able to highlight what is going on.

My next query is for Mr. Bryan. The most difficult part of the Common Agricultural Policy negotiations is about to start in so far as the people elected by the people of this country are concerned. There will be a huge problem in this area between productive farmers and others and the use of money we get and taxpayers' money for income support for small unproductive farms. Payments to these farmers are essentially income supports. This issue will create a certain amount of conflict. Many productive farmers will see their CAP payments reduced because of changes demanded by Europe.

Perhaps Mr. Bryan could comment on that.

12:30 pm

Mr. John Bryan:

Agriculture creates huge employment in the country and we see that as critical. It represents value for money for the European taxpayer and value for money for the Irish taxpayer. Whether one is a productive farmer or has a smaller-scale operation, one operates in Europe according to completely different regulations from those that operate in New Zealand, the US or South America. New Zealand has taken the free-for-all attitude that if a farmer milks 550 cows and owes €10 million to the bank, he can survive, but everyone else must go and get a job elsewhere. That is the New Zealand model, but the Irish and European model is the family farm model, based around a medium-sized operation, preferably with family labour, and trying to derive an income. Whether a farmer is from Germany or Ireland, he will not survive without that single farm payment because of environmental regulations that do not exist to the same extent in New Zealand or the US. We are talking about dairy expansion or the cost of maintaining a suckler cow. More than 50% of the cost comes from slurry storage. In the US or New Zealand, they just dig a hole in the ground and nobody worries about the environment. We do not have access to hormones, GM products or other technologies that are freely available to the commercial farmers of the Americas. If the European farmer is to compete and produce the food that the European consumer wants, with high environmental and animal welfare standards as well as full traceability from birth to death, there is a cost associated with that. That is where the single farm payments come in.

The payments were based on production. People invested that money. They built sheds, bought machinery and built up stock. The recent CAP reform was flawed from the start, because it failed to take into account that jobs and production must be supported. We have achieved a compromise whereby the Minister has the discretion to minimise that through the approximation model, variable greening and a 60% minimum payment. These are all areas in which we will be supporting the Minister. Within the overall budget, there are very productive farmers - several in Wexford - in lower income sectors such as sheep and suckler cows. We feel that a combination of Pillar 1 and Pillar 2, along with Government support, will have to be established to maintain production. Otherwise, the cost to the economy in lost jobs will be far greater. It is a matter of getting a balance, but at the same time using very tough objective criteria to minimise the cuts. We cannot pay people for doing nothing. There have to be stocking rates, and in particular we are talking about targeted payments. We want to minimise the cuts but maintain the maximum production. That must be our objective. There is no use in sitting here in three or four years and wondering why 20,000 jobs were lost in the agricultural sector because we took our eye off the ball.

We support the tackling of environmental problems, but targeting payments at vulnerable sectors delivers far better value for money. Moving the resources around to get better value for money will have to be a part of the reform, because otherwise there will be a loss of jobs. With the Irish economy under such pressure, nobody can design a programme that will not be about maximising jobs and exports. The end result must be targeting the payments as best as possible.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I thank Mr. Martin, Ms McGettrick, Mr. Dunne, Mr. Harty, Mr. Bryan and Mr. Smith for their submissions and presentations today. The discussion has been very useful. We have learned a few things that we will follow up as a committee.

Sitting suspended at 1 p.m. and resumed at 2 p.m.

12:35 pm

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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We are now back in public session. I welcome Dr. Peter Rigney and Dr. Tom Healy from the Irish Congress of Trade Unions, Ms Bríd O’Brien and Mr. John Steward from the Irish National Organisation of the Unemployed, Mr. James Doorley from the National Youth Council of Ireland and Ms Ann Irwin from the National Women’s Council of Ireland. Members were circulated with the submissions received and a summary paper in advance of this meeting. The format of the meeting will be that the four groups will make brief introductory comments not to exceed three minutes.

I remind everyone present that all mobile phones must be switched off. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if a witness is directed by the committee to cease giving evidence in regard to a particular matter and continues to do so, the witness is entitled thereafter only to a qualified privilege in respect of his evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I will now call on the ICTU to make brief comments, then the INOU, the NYCI and the NWCI in that order.

Dr. Peter Rigney:

A Chathaoirligh, Senators and Deputies, I thank the committee for this opportunity to address it in respect of budget 2014 and the measures put forward by the Irish Congress of Trade Unions in its pre-budget submission. In drawing up our submission Congress drew heavily on research conducted by the Nevin Economic Research Institute, particularly with regard to income tax, a wealth tax and a programme of investment to create jobs and stimulate demand. Dr. Tom Healy, director of the Nevin Economic Research Institute, is here with me.

Ireland is now in the sixth year of recession and stagnation and it is clear that a change of course is required if we are to have any hope of a sustainable recovery.

Current policy has taken a heavy toll and has left us with one in four people out of work, unemployed or emigrated, collapsed retail sales, flatlining domestic demand and public finances that are constrained by the cost of servicing the enormous private banking debt. We are in danger of a lost decade similar to that experienced by Japan in the 1990s after its property bubble burst. Congress believes that, as a matter of urgency, policy must now become more job focused and growth friendly. There is no contradiction between adopting this approach and achieving budgetary targets agreed with the troika. We believe it is possible to implement a different fiscal adjustment from that envisaged by the Government. By combining an alternative adjustment with an investment and jobs stimulus, we believe that Ireland actually stands a better chance of reaching the agreed budgetary targets.

There are four key elements to our alternative plan: using the proceeds of the promissory note deal to reduce the size of the budget adjustments planned for 2014 and 2015; an investment stimulus package of €4.5 billion over the next two years financed in a manner that will limit the cost to the taxpayer; targeted tax increases at the richest households, along with an increased contribution from the corporate sector; and no further cuts to non-pay, primary public spending along with greater efficiency in the delivery of public services.

We believe that adopting this alternative approach would have a positive impact on the economy and wider society. We believe it would result in the creation of 40,000 new jobs, while the deficit would be lower by approximately 0.3%. Consistency, seriousness and demonstrable progress are central to rebuilding trust and confidence over time. It is our belief that a key challenge for budget 2014 is to address the very real danger of prolonged economic stagnation and high, socially unsustainable levels of unemployment.

12:40 pm

Ms Bríd O'Brien:

I thank the committee for inviting us to speak to the members today. I will deal with the issues from the perspective of the individual unemployed person and our call to the State to put in place the correct supports to help people to manage their unemployment initially and preferably to find a sustainable job, and a decent one at that.

It is important that the Government stands by its commitment in the programme for Government to maintain social welfare rates. More than two thirds of those who are currently unemployed are surviving solely on the basic rate. It is vital that those supports are maintained. We are also conscious that, for many people, the additional and secondary supports are critical and that these also need to be maintained, given the degrees of poverty in which people are living.

Supports such as family income supplement, the reintroduction of the back to work allowance and the more proactive promotion of supports are critical in the journey from welfare to work. Clear, good information is needed to allow people to make an informed choice about moving from welfare to work. In particular, it is very important that the system moves to an hours-based social welfare system which will facilitate people to take up part-time work and maintain and develop their links in the labour market.

On the broader activation front, it is critical that the education training changes taking place and the changes taking place in social protection and activation are all learner centred and that people are supported to make good choices with regard to education and training to help them to find decent work. People should be offered choices so that they do not feel - as is currently feared - that they have to take the first offer. They must be enabled to make informed choices by a system which is designed to do so. It is critical that as part of the reform, these supports would be put in place to ensure front-line staff are well trained, well informed and can offer that good guidance to help people in accessing employment, education and reskilling.

Some unemployed people may wish to address their own unemployment and it is important that supports for enterprise are in place. I refer to the re-introduction of the longer back to work enterprise allowance, which would be welcome, as would any new developments. The local enterprise offices need to be inclusive of unemployed people and their needs.

The community and voluntary sector plays a key role in addressing unemployment. It is often the first port of call for services and frequently is the only employer in a locality. The role of the sector and its employment programmes needs to be acknowledged.

As Ireland moves out of the troika arrangement and into the post-troika period, the relentless pursuit of austerity will not get people back to work. We need to deal with these issues from a more constructive standpoint. We need to decide how to invest in Ireland's tomorrow and how to give hope to unemployed people, young people leaving school and education, and older unemployed people that they will find good work in this country.

Mr. James Doorley:

The National Youth Council of Ireland represents approximately 45 national voluntary youth organisations working with and for young people in Ireland. The title of our submission is Beyond Austerity. To echo my colleagues, we are looking for a vision of Ireland that looks beyond getting rid of the troika and the reduction of debt-to-GDP ratios. The OECD stated in its report published today that young people have been hit hard. We know that 177,000 young people have emigrated since 2008. Ireland has 28% youth unemployment and the fourth highest level in the EU of young people who are not in education, training or employment. Funding for vital services for young people such as youth work services has been cut by 30% since 2008.

Our submission covers five areas. Youth work services have seen a 30% cut since 2008. The majority of these services are working with young people in socially and economically disadvantaged communities. An analysis was carried out last year which showed that for every one euro invested in youth work by the State, over the long term there is a recoupment to the State of more than €2.20. A further €3 million cut in youth services is proposed for 2014. One of the key but modest requests in our pre-budget submission is to call for that cut to be cancelled. A cut of €3 million might seem small in the overall expenditure but it will have a major impact on the provision of youth services.

I refer to the significant issue of youth unemployment. Of particular concern to us are the long-term youth unemployed. Approximately 28,000 young people have been unemployed for more than a year and 9,000 have been on the live register for more than three years. We support the youth guarantee scheme because in our view it can make a contribution. However, we are concerned that the most disadvantaged young people will be left behind. We have a modest proposal in our pre-budget submission for a scheme to focus on the long-term youth unemployed who would be given a quality education training or work experience opportunity.

We published a report last May on the issue of emigration, although our priority is to keep young people in Ireland. However, we have to face the fact that many young people have no option. Our study showed that many young people are going abroad with very little support and advice. They are going to countries such as Canada only to realise that their qualifications are insufficient and they may be required to study for six months. We have asked for dedicated support for these young people in our pre-budget submission.

We have identified an initiative that actually raises money. The steering group on the national substance misuse strategy highlighted the very high cost of alcohol misuse in society, particularly with regard to young people. It has been estimated that the justice and health costs are €2.4 billion. The drinks industry should contribute to this cost, in our view. We estimate a very small 1% levy on the turnover of the drinks manufacturers would generate €25 million. This is a modest amount but it could potentially replace the funding provided by sports sponsorship and it could be used to provide activities to reduce or prevent alcohol-related harm among young people. I am happy to share some of the details of the submission with the committee.

12:50 pm

Ms Ann Irwin:

Gabhaim buíochas leis an coiste, Teachtaí Dála agus Seanadóirí, as ucht an deis an cur i láthair seo a dhéanamh. The National Women's Council of Ireland is delighted to be making this presentation. We hope that some of what we say will make it into the design of budget 2014. As might be expected from an organisation such as the National Women's Council of Ireland, our submission is quite wide-ranging and refers to eight priority areas. I will try to touch on as many of those areas as possible in the three minutes available to me.

The National Women's Council of Ireland is acutely aware that budget 2014 is being designed in the context of an ongoing economic crisis. However, we firmly believe that a different approach is now needed. I absolutely concur with some of what my colleagues said in this regard. We have considered some of the evidence which indicates that austerity does not work and we are of the view that it is absolutely not working for women, children and families, many of whom are really struggling. Cuts to public expenditure affect those on low and middle incomes and women most. The National Women's Council of Ireland is advocating a move away from this policy direction. We are examining the proportionality between raising taxes and making cuts and we believe the Government has a choice in this regard. What we are advocating is that the burden of that proportionality be assigned to an increase in taxes on the highest income earners.

We have taken a real interest in the budgeting process itself because we believe it to be important, particularly as the priorities of Government are set out as part of it and it also involves decisions as to who will be positively and negatively affected. Reports from TASC, the ESRI and the Department of Social Protection show that recent budgets have had a disproportionate effect on women, lone parents and children. We are recommending that budget options and future budgets must be proofed in order to ensure that they will not negatively affect those - including women - who are already struggling. The latter is the norm in many countries and we would certainly welcome an initiative in this regard. Earlier today I read a newspaper article by Professor Pat Dolan on Welfare Watch, which was introduced in Iceland. We could certainly consider introducing something similar here.

All of the EU and international literature states that the need to support more women in the context of their entering and remaining in employment is crucial to economic recovery. We are seeking that the eligibility in respect of labour market activation be extended to all those who are currently jobless and who want to avail of it. Such activation should not just be available to those on the live register. In addition, we are of the view that young unemployed women must be specifically targeted. In order to support women in entering and remaining in work one of the most crucial prerequisites is accessible and affordable child care. This is one of the two reasons emphasis must be placed on early childhood care and education. The other reason is that which relates to the development of child. At present and regardless of what measure one uses, Ireland is generally at the bottom of the league when it comes to the provision of high-quality accessible child care provision. Public spending on child care in Ireland, as a percentage of GDP, is among the lowest in the OECD. Consequently, child care costs are very high.

It is clear that the current provision is not working to facilitate parents, particularly women, to combine work and family life. Everyone has seen the recent media coverage of the quality of child care facilities here and we are of the view that something concerted must be done about this matter. We are seeking a multi-annual investment in the quality of provision of early childhood care and education, including a package to train and upskill staff; increased investment in the quantity of early childhood care provision, including a second free preschool year; and a designated budget for out-of-school-hours child care.

In the context of income adequacy, we are of the view that work must pay. As a result, pay rates - and particularly those at the lower levels - must be protected. It is a false economy to say that cutting wages at the lowest levels will save money in the long term. We are certainly seeking that wage rates at the lowest levels should at least be protected. We are also seeking that the Department of Social Protection should recognise atypical working patterns by calculating unemployment on the basis of hours rather than days per week.

On child income supports, we would strongly argue that child benefit in particular has been cut enough and that it should, in fact, be increased again. We would also say that the universality of child benefit needs to be maintained. We acknowledge that there has been some provision for people on social welfare to offset the reductions in child benefit and we are of the view that these top-up benefits must be extended to others on low incomes, particularly those who are in receipt of family income supplement and who possess medical or GP-only cards.

We are of the view that women have historically been restricted from pensions and that there is a need to overhaul the pension system. There is also a need to address the discrimination caused by the impact of the marriage bar on women's pension entitlements. That impact is being experienced by many of our members at present.

In the context of protecting vulnerable women, lone parents have been absolutely decimated in recent budgets. This is a section of society which really must be protected. Traveller, Roma and migrant women also need to be protected.

When it comes to health, we have made recommendations in respect of BreastCheck, women and smoking and women and osteoporosis. I also take this opportunity to refer to services relating to domestic violence and the need to protect the voice of women and women's organisations in the community and voluntary sector. The organisations to which I refer are the backbone of much of the work that is done in this country and they must be protected.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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If Deputy Sean Fleming does not object, I will give everyone an opening slot of ten minutes.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I thank our guests for coming before us and for making very professional and concise presentations. When time is limited, it is sometimes easier to get into discussing the detail of a particular matter rather than rambling on. That is probably a lesson for us, as politicians.

My first question is directed to the Irish Congress of Trade Unions. Reference was made to maintaining primary spending, particularly in the non-pay area of public spending. However, no mention is made of pay, which is by far the biggest area. I accept that the Haddington Road agreement was recently put in place but ICTU's submission document glides over the targeted redundancy programme promised for the public services during the next 12 months or so in order to reduce numbers by between 6,000 to 7,000. I would have thought that the issue of employment should have figured in the presentation. A targeted redundancy package was not included in the Haddington Road agreement because the ICTU's members would never have voted in favour of such. However, I would have hoped - in the context of the budget and next year's public sector pay bill - the Irish Congress of Trade Unions would have commented on this matter. Does the fact that it has not remarked upon the published plan to reduce numbers indicate that congress has acquiesced to said plan before the budget has even been introduced? Perhaps Dr. Healy might comment on that matter.

I wish to raise a couple of issues with the Irish National Organisation of the Unemployed, INOU. In the context of family income supplement, the issue of minimum hours is important and must be dealt with. This ties in to the issue relating to jobseeker's payments being based on the number of hours worked rather than the number of days per week worked. I refer in this regard to those - mainly women - who are employed as cleaners. These women work three hours or perhaps a little more each day, meaning they are employed for between 15 to 17 hours per week. As a result of the fact that they work every day, they are not eligible to sign on and claim jobseeker's allowance or to obtain family income supplement. This is an important issue and perhaps the representatives from the INOU will comment on it.

I wonder whether something of a trick is being used in order to massage the figures relating to community employment. Many people are placed on community employment schemes for one year. This removes them from the statistics relating to the long-term unemployment for 12 months. They then go back on jobseeker's allowance the following year and are no longer classed as being long-term unemployed. This seems to be a way of moving people out of the category relating to long-term unemployment when it comes to official statistics. Will the representatives from the INOU indicate whether they see a trend in this regard?

I was shocked to discover from Mr. Doorley of the National Youth Council of Ireland that within the EU we have the fourth highest percentage of young people who are not in education or training. Will he explain why that is the case? I thought the figure stood at somewhere between 70% to 80%. I fully support what was said in respect of funding for youth work. Members are all meeting representatives from organisations which do not have funds. I support the proposal from the National Youth Council of Ireland regarding the sponsorship of large sporting and cultural events by the drinks industry should be brought to an end and that some other mechanism should be found in this regard.

The main point made by Ms Irwin on behalf of the National Women's Council of Ireland merits a full Dáil debate. The past couple of budgets were not gender proofed. This year's budget included the most savage attacks on women, in particular, that I have witnessed during my 15 years as a Member of the Oireachtas. Child benefit was cut. In the context of one-parent family payments, the age limit entered the reckoning in July and people lost out as a result. The latter were then transferred to jobseeker's allowance in respect of which a lower income disregard applies. This all means that they have lost approximately €50 per week and has resulted in many of them being obliged to give up their jobs because it was not worth their while to remain in employment. A tax on maternity benefit was also introduced this year. Between 80% and 90% of carers in this country are women and the cut relating to respite services certainly had an impact on them. There is a need for a special Dáil debate on this matter in order to ensure that something similar will not happen on this occasion.

Dr. Tom Healy:

The document ICTU submitted to the committee is based on research carried out by the Nevin Economic Research Institute.

On the Deputy's question on public sector pay, it is true that public sector pay comprises a highly significant chunk of current spending, in the region of €18 billion per annum. Various adjustments and agreements over the years have seen a significant reduction in discretionary expenditure on public sector pay through both wage rates and public sector numbers. What was done in the research underlying this document was simply to take the working figures and assumptions underlying the most recent agreement - the Haddington Road agreement, as it is referred to - and incorporate them into the discretionary expenditure cuts that are identified in the document. Consequently, for example, it factors in a reduction of approximately €350 million in expenditure on public sector pay next year. I should emphasise that is the only area of public expenditure reductions that are foreseen in the document. Elsewhere, the proposal is that there should be no further discretionary cuts in overall spending in the areas of non-pay current expenditure and capital expenditure. As a consequence, other interventions and adjustments both on the revenue side and in the promotion of investment would actually help to reduce the Government deficit somewhat more than is actually planned at present by the Government.

I should add one further comment in respect of public sector pay. It is important to be aware of the evidence, such as it is, from work by the ESRI and by my own colleagues in the Nevin Economic Research Institute-----

1:00 pm

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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Sorry Dr. Healy or someone near him might have a telephone in his or her pocket. There is strong interference affecting the speaker system.

Dr. Tom Healy:

No, it is off. To conclude, an important consideration in this regard is how much of an impact any cut in public sector pay would have on the Government deficit, because the latter is the primary public concern with regard to the continuing fiscal adjustments. In fact, given the way in which some of these changes are taking place, they are likely to have a relatively limited impact on the deficit, when allowance is made for the impact on revenue and other adjustments through tax, as well as the indirect impact on unemployment and more generally on domestic demand. In fact, some evidence I have reviewed from the ESRI would suggest, based on its long-term economic modelling impacts using its HERMES model, that reductions in public sector employment may actually increase public debt in the long run. A perverse result, but that is based, obviously, on many qualifications and limitations of economic modelling. Such is the complexity of what we are doing here that any given cut certainly does not translate into an equal saving, and in some cases the result could actually be perverse.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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As Dr. Healy did not comment on the targeted redundancy programme, I take it that the Irish Congress of Trade Unions has no comment to make on the Government's plans to reduce public sector numbers. That was the main question I put to its representatives.

Dr. Tom Healy:

Yes.

Dr. Peter Rigney:

The Haddington Road agreement sets out the principles under which this will be dealt with, and one key underlying principle is there will be no compulsory redundancies.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Is the Irish Congress of Trade Unions satisfied with the numbers otherwise? We all agree there should be no compulsory redundancy, and I do not believe anyone in these Houses would suggest that. Is the Irish Congress of Trade Unions happy with the targeted redundancy programme as announced?

Dr. Peter Rigney:

It is there.

Mr. John Stewart:

The Deputy has identified two important aspects in respect of the submission from the Irish National Organisation of the Unemployed, INOU. First, family income supplement, FIS, is a really important support for unemployed people with families in the context of taking up work. Moreover, it is a support that is under-used by the State, and its availability must be much more significantly publicised. However, there are aspects of it that clearly need to be reviewed, particularly concerning how it is paid. We believe it must be paid automatically and the entire application process must be simplified. Clearly, there are issues with regard to hours, and that is the reason we are calling for this aspect, as well as the working week in particular, to be reviewed. That issue obviously goes beyond family income supplement and the Deputy has touched on something that is really important. The feedback we receive all the time from unemployed people often pertains to the type of work that is available, to how those hours are distributed during the week and to how the social welfare system treats one hour's work as a day's work for which no welfare payments is made. This is a real issue for people that definitely must be addressed.

The community employment scheme is an important programme for unemployed people. With regard to the duration of people's participation in community employment schemes, a year might be sufficient for a particular person - depending on his or her pre-existing level of skills, work experience, etc., as well as the availability of work in areas in which he or she may actually be qualified to work - but that certainly is not the case in most respects. There is a need for a programme that recognises that in many cases, particularly for people who are longer-term unemployed, people can be quite distant from the labour market and need supports and the requisite amount of time to get them back to a point at which they can more equally compete for jobs. Consequently, I believe the Deputy has touched on two important issues. As for the counting, Ms Bríd O'Brien will correct me if I am mistaken, but a person on a community employment programme is not counted on the live register but is counted under the quarterly national household survey figures because unemployed people in programmes are included in those statistics.

Mr. James Doorley:

Deputy Sean Fleming raised three issues. On youth work services, the analysis shows that more than 380,000 young people, which is not a small number, access youth services in Ireland. Our members have been cut by 30% and we feel this is a soft target because many of these young people do not have a vote or a voice. As most schemes are run by community and voluntary organisations, they have tried to lessen the impact on the young people through fund-raising, cutting hours here and supports there, or whatever. However, one gets to a stage at which it becomes almost impossible to run any activity with reduced funding. There were protests last year regarding the cuts but our concern is the further €3 million in cuts that are anticipated. While this may not seem like much in the overall scheme of things, taken on top of the current cuts, when it filters down it will have a major impact on many services. Our essential point is that while we obviously would prefer if the 30% reduction did not happen, at least for 2014 we seek a commitment that the aforementioned €3 million will not be cut.

I agree with the Deputy regarding young people not in employment, education or training. We were a bit astounded when we saw that figure because we had thought that while things are relatively bad here, when compared with some other countries we were not as bad. There are three areas that pertain to those figures. It does identify the young people who are unemployed, are on the live register and are not actually in education, training or unemployment. Then there is a group of early school leavers who are not signing on. I met a group of youth workers a few months ago who work in Dublin and they told me there are young people in particular parts of Dublin who either are encouraged to leave school early or fall out of the school system, and they are just out there. They are not counted anywhere and are not being followed. This is an entire cohort about which we are particularly concerned. Some of them hope to get onto Youthreach or another scheme at some stage, but since 2008 Youthreach has been capped at 6,000 places and consequently there is not much capacity there. There also is another cohort we believe is not being counted at all, namely, young people between 18 and 25 who are living at home, do not qualify for an unemployment benefit and consequently do not sign on. We do not actually know the number involved. As a result, while the current live register figures show approximately 60,000 - obviously this figure fluctuates depending on the time of year - that group is not counted. They are still unemployed, inactive and out there but they are not eligible for any support because as far as the system is concerned, one must be signing on. Some can sign for credits but they do not see the value of doing that. This is the reason we have such high levels and that something like a youth guarantee has great potential. However, there also are many pitfalls and it depends on how it is implemented. Nevertheless, I agree that it does not reflect very well on Ireland that we have such high levels of unemployment.

Finally, we perceive the social responsibility levy to be a no-brainer. It is not our idea but came from the national substance misuse strategy group.

They felt it was a way for the big alcohol companies which are making vast profits from the sale of alcohol in this country to contribute even a small fraction. I suppose we are saying that in this budget it would at least be a step along the way for them to contribute. One might argue that they should contribute more. They are paying their taxes, but alcohol is not an ordinary commodity; it has always been licensed. This is a way to contribute to the justice and health costs of alcohol.

There is also the issue, which we have raised with the Department of Finance previously, that a large multiple selling millions of euro worth of alcohol pays the same excise licence - that is, €500 - as a small outlet or pub that may sell a fraction of the amount. Similarly, there are large multinationals which are making significant profits but paying the same as a small corner shop or whatever. Potentially, there are revenue-raising issues in that regard and we are disappointed that so far they have not been taken up. We really would like to see them taken up.

1:10 pm

Photo of Ciarán LynchCiarán Lynch (Cork South Central, Labour)
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I am sorry; I must finish this section. I will let Ms Irwin contribute first on the next segment, if she does not mind. I will move on to Senator Hayden.

Photo of Aideen HaydenAideen Hayden (Labour)
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I welcome all the organisations, many of which we met during the year when they came in to give presentations. As many of them mentioned in their submissions, it is really a question of choices. We are faced with a choice in this budget, perhaps to a greater extent than in any of the previous budgets with which we have dealt so far in this Government.

I ask the witnesses to comment briefly on some of the emerging data, such as what today's OECD report stated about Ireland. It would be useful for the committee if the panel responded to some of the points that have been made in that report. I will start with ICTU. It is difficult to disagree with anything ICTU states in its pre-budget submission. There is a commonality in many of the positions that we as a committee had presented to us yesterday and many of the positions that are being presented today, to the point that we are really seeing two sides of the coin. One side of the coin is that the Government should not do anything that will reduce spending in areas of vulnerability, and the other is that it should not do anything that will increase taxation, as we heard yesterday from the Small Firms Association, IBEC and some of the other organisations dealing with employment creation. I am trying to square the circle between the two perspectives. I note that the OECD in its report today urged the Government to persevere with the conditions and targets of the EU-IMF programme and to continue to reduce the budget deficit to below 3% of GDP for 2015 - in other words, that the Government should stay on track. They suggest that if we do so, in the next budget the Government will have available to it somewhere between €600 million and €700 million to ease back next year. In other words, they seem to be suggesting that the Government stay on track and restore international confidence, after which it will be in a position to ease back on the deficits next year. I ask ICTU to comment on that. First, is it a choice? What is ICTU's view of the OECD analysis? If there is a choice for the Government to take the pain now and have more to give back next year, is that what we should do, or is it ICTU's continued belief that austerity has gone so far that the OECD analysis is wrong and we need to start injecting demand back into the economy at this stage?

I was particularly struck by one of the comments the OECD made in its report, because it is an analysis I have seen previously. I wonder whether the INOU has any comment on it. In its wider criticism of the welfare and labour market system in Ireland, the OECD noted that we have the highest proportion of jobless households in the European Union, but what is more stark is the fact that prior to the recession we had the second highest proportion. They are saying - forget the recession and forget what has happened since 2007-2008 - that prior to 2007, we had a real structural problem in this country relating to employment. How can we factor that into our analysis? Specifically, in its analysis of some of our programmes, the OECD is deeply critical of the community employment, CE, scheme and states that it should be reserved for those who are most marginal and have the least possible access to the labour market. I wonder whether the panel would have any comment to make on that. The OECD states we have spent far too much time on income supports and not enough time on labour market activation, and I doubt anyone on the panel will disagree with that perspective.

On the National Youth Council of Ireland, it has certainly struck me that over the past number of budgets - not only those of this Government - our definition of a young person has risen from 18 years to 25 years when it comes to income supports. It is offensive to young people in Ireland that those over the age of 18 are deemed to be different from others who are unemployed in the labour market. Does Mr. Doorley have any comment on that? It is also of great concern that in other areas, such as rent supplement and local authority social housing, it is being suggested, for example, that young people can share and are not entitled to live independently if they happen to be under the age of 25. In fact, that ceiling is rising to 35 in the United Kingdom. Is this a trend for which we should be watching here?

I have been struck by the extent to which the youth budget has suffered disproportionately in comparison with the rest of the budget for children and youth affairs. The youth affairs section of that budget has taken a massive hit. Perhaps that reflects the priorities of Government with regard to the referendum on children, etc., but is there a case to be made for splitting that Department and ring-fencing the budget for youth affairs to protect it from being further eroded? One does not like to drive a wedge between children and youth affairs as issues, but there is such a case to be made.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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Senator Hayden is seven minutes into her contribution.

Photo of Aideen HaydenAideen Hayden (Labour)
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The Vice Chairman suggested we had plenty of time.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I suggested we would have plenty of time afterwards. We are running short of it as we speak.

Photo of Aideen HaydenAideen Hayden (Labour)
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I will make two quick points and maybe we will get a chance to address them later.

A compelling case was made yesterday by Social Justice Ireland and TASC for what is loosely a bad nutrition tax. I put the question of whether the proceeds of such a tax could be ring-fenced, particularly for the provision of food to children in the school system. What would the panel feel about that?

On labour market activation, going back to some of the overall comments, it seems that we need to move outside the box completely. Perhaps what we should be considering is something like a minimum income system that does not deflect from those who are either making a choice to stay at home - for the sake of argument, if they wish to be with their children - or re-entering the work force. In this way, everybody, irrespective of where he or she is, would be guaranteed a basic minimum income. Maybe the panel would comment on that.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I will ask Ms Irwin to start because I have a feeling I will be cutting some others short on this as well.

Ms Ann Irwin:

Returning to Deputy Sean Fleming's point on Dáil debate on budget issues, we would welcome that. It is high time we started translating the rhetoric of protecting the vulnerable into reality, because we certainly have not done that in the past number of budgets.

I will make a quick comment on what Senator Hayden stated about two sides of the coin - whether the Government persists with cuts or increases tax. The Senator is correct. The Government is faced with a clear choice in this budget. It should look at the social cost of continuing down the road on which the country is currently. For us in the women's council, it is as though the parent is paying back the debt but the children are going hungry.

We can see that in the year-on-year increase in the poverty statistics, particularly in regard to deprivation. Over half of lone-parent households, or 56%, face deprivation day in, day out. The minimum income system represents a really good idea. We would welcome that. The Department of Social Protection is doing its utmost to protect the very basic rates but secondary benefits are coming more and more into question. These are the types of benefits that keep families going. In the National Women's Council of Ireland, we note many women on the ground turning to illegal moneylenders. This occurs in many areas, from inner-city Dublin to Sligo, for example. It occurs on occasions such as Christmas and communions. Allowances such as the back-to-school allowance have been cut. With regard to the idea on the two sides of the coin and the making of a choice, we really encourage the Government to make the right choices.

1:20 pm

Mr. James Doorley:

Let me address Senator Hayden's point about the OECD saying there is a choice and the question of whether we should stay on track and hope for gains in the longer term. The reality is that if we stay on track, the young person who has been unemployed for a year or two will have a very bleak outlook if told he or she might get a job in five or ten years if he or she hangs on. That is the reality of making the big macroeconomic decisions. If we keep doing the same thing while expecting different results, it will not work. We have had five years of cuts and young people and a range of other groups have been the victims. That is the reality and we cannot get away from it. We must face up to it. If we are to continue down the current track, we must accept that another 35,000 young people between 18 and 25, or perhaps more, will emigrate next year.

The latest employment figures were positive in the sense that the overall employment rate increased. However, it actually decreased among young people to the tune of 1.57%. The number of young people under 25 employed in Ireland is half what it was in 2008. Many young people have been shut out of the labour market.

I agree with the points made on the youth budget. It has been cut disproportionately in recent years. This probably relates in particular to the fact that many of the services are provided by the community and voluntary sector. It is easier to cut. This is the reality of Departments trying to ascertain where they can get funding. Some of our member organisations work with young people of eight, nine, ten and 11, who are children in the legal sense. I am not sure about spinning but certainly it is a matter of recognising the value of the work that has been done.

With regard to the junk food tax, I agree with such targeted taxation. From what I know, the Department of Finance does not like hypothecated tax. It does not like to say a pot of money is for a specific purpose because it may not have money to do certain things if something happens to it down the road. Targeted taxes that bring in revenue in the current environment, particularly taxes that make a social contribution as well as an economic one, should be borne in mind. We have not been radical enough. That is why we proposed the levy in regard to alcohol. If the food levy could be used to address some of the income issues that families are facing, we should not shy away from it.

Ms Bríd O'Brien:

In response to Senator Hayden's questions, the reason the issue of joblessness is so prominent is because we have failed to put social inclusion and equality at the heart of our labour market policies and social protection policies. I refer to both the design and the delivery. Particularly with regard to job creation and access to jobs, during the Celtic tiger years we really did not ensure people who were marginalised in the labour market were given access to employment. The proper structures were not put in place. It was left to schemes such as the community employment scheme to provide the only access to the labour market that existed. For many people, that is still the case. Should our economy and employment pick up at a level we would all love to see, what I describe will again be the reality unless we put equality and social inclusion principles at the heart of policy-making and, in particular, its implementation on the ground. I am very concerned that this is not happening. It has not been acknowledged and, therefore, the issue of joblessness will remain with us even if we manage to get the unemployment figures looking more respectable than they currently do.

It is critical that employment services, which are playing an increasing role in determining who gets on schemes such as the community employment scheme, take responsibility for supporting people in gaining access to employment in the wider labour market. That requires the Department to do a serious sales job with the wider labour market so a wider cross-section of employers can see who has participated in a particular programme and start to make connections. Otherwise, it will be very difficult for schemes such as the community employment scheme to ever pass the active labour market tests because they are dealing with such a range of issues associated with social and economic exclusion. That is often not acknowledged when the scheme is assessed because usually it is assessed only against active labour market criteria. We need to acknowledge that, in many communities, community employment is a key part of the local community and voluntary sector infrastructure. Without it, many services that people regard as public services would not exist.. This role is often not acknowledged.

With regard to income and activation supports, income supports are critical to many households. It is a question of how we design the activation supports that are meaningful and offer people a real choice and support people in progressing.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I must cut Ms O’Brien short. I hope that in doing so members will ask questions in their contributions.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I thank the representatives for attending. I very much welcome the emphasis they all placed on the need to break from the policies of austerity that have been pursued, to my mind and, I suspect, theirs, pretty disastrously over the past five years. Their comments echo the points made by quite a few of the organisations, such as Barnardos, Focus Ireland, Threshold and Social Justice Ireland. I refer to the need to break from austerity, focus on protecting the vulnerable, shift the tax burden to the wealthy, invest to create jobs and get people back to work, which is absolutely right.

As a relevant aside, I must state every day presents a new case that sums up what is happening in this country. I had to leave this meeting earlier because I received a call from a disabled man in Tallaght who has been told that if he, his wife and daughter do not pay their television licence fee, which they cannot afford, they will go to jail for four to six days. They will be in court tomorrow. The man told me his daughter is a lone parent, that he is disabled and that his wife is a Magdalen survivor. He also told me that, in the past two weeks at Tallaght Garda station, 24 people who cannot afford to pay a licence fee have been told to pay or go to jail. This is where we have come to. The message that the representatives are bringing in here is so important. In framing a budget, the Government should start with effects on people, just as the delegates do, rather than starting with deficits and macroeconomic imperatives and trying to squash people in order to address them.

Given that this is the position, do the representatives believe that, after five years, anybody is listening to what they are saying? My feeling is that the authorities are utterly deaf. From what I can see, the IMF is just keen to push for more repossessions of people's homes. The emphasis of Fine Gael, the major party in Government, seems to be entirely on tax reductions to incentivise the private sector, the wealthy, etc. This has not worked for 20 years, yet the party believes it will help us chart a way out of the crisis. Given that is the case, what hopes have the delegates that we can break through the official consensus?

I do not think it is the public consensus by any means. I think the delegation is expressing the public view, but the official consensus seems to be that we must pursue this austerity agenda in an utterly blinkered way even if it takes our society over a desperate cliff. What does the delegation propose we do to put forward and popularise the progressive alternative to austerity in a way that can begin to mobilise people and really put pressure on the powers that be to listen to the eminently sensible points the delegation is making this year, as it did last year and prior to that?

I understand the logic of saying "Let us work within the confines of the troika programme," because the delegation probably thinks that is all the Government will listen to and there is no point in saying anything else. One thing that strikes me very forcibly is the fact that by the autumn of this year - I would particularly like to hear what Dr. Healy and the others have to say about this - we will enter a situation in which the State will have a primary budget surplus. The narrative that we are spending more than we are taking in will not be true this year. The main reason we continue to have a substantial deficit is that this year we will pay out approximately €8 billion in interest on loans that are largely not ours. Does the delegation not think it is time for us to say that this is not on and that we should not have to beggar our economy yet again to pay interest on loans that were taken out to bail out banks? Should we begin to make the call to say we are not doing it and are freezing or putting a moratorium on it?

I am delighted that corporate tax and wealth tax were raised. ICTU is being quite cautious in talking about €250 million as a possible take from reducing some of the write-offs that the big corporates are getting. Given that the figures suggest that the big multinationals in particular made in the region of €70 billion in profits last year and paid only €4 billion in tax, which works out at about 6%, should we be a bit more radical and say they should pay a minimum effective rate of 12.5%? Everybody else is paying far more than that. Should they not be paying 12.5% when the rest of the country is being beggared? Similarly, should we not be a bit more adventurous in what we are looking for from a wealth tax in percentage terms and play that off against the urgent need to reduce or remove the universal social charge for low and middle-income earners?

Could the National Women's Council talk about women's refuges? Domestic violence is rising quite scarily. It seems there is an urgent need for a major programme of investment in providing women's refuges. I had a question about youth issues, but I will leave it at that.

1:30 pm

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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The witnesses would have no time to answer it. I ask Dr. Healy to give brief replies, because time is against us.

Dr. Tom Healy:

The Senator mentioned the economic survey of Ireland by the OECD. I have not had an opportunity to examine it yet. We met with its representatives. It is not surprising that various international organisations, including the OECD, have tended to endorse the approach of fiscal austerity and generally have not endorsed any easing up. There is not enough time to go into the detail of that. The IMF has endorsed it more recently even though some of its own research indicates serious questions about the efficacy of fiscal austerity in a number of European countries. The Senator raised a very good question that needs to be highlighted here. We cannot bridge the gap between a position that says we can have no further tax increases in this country and one that says we can have no further cuts in public expenditure. It is not as simple as that, but it is almost as simple as that. It comes down to a fundamental choice even when, hopefully, we gradually recover from this recession over the next few years. Unfortunately, it will take some time. We will still be faced with those fundamental choices in terms of the balance of public spending and the composition of revenue and how we will fund public services, particularly for young people and an aging population.

I will provide some concrete figures, although I will not take up undue time. In respect of what the Government is proposing, Senator Hayden wondered about taking the pain up-front and then easing off next year. If the Government goes ahead with the full consolidation - we are talking about €1.9 billion on current spending, of which probably about €1.6 billion is on non-pay current spending - that is about 4% of total current expenditure across the whole of Government. If the Government chooses to go ahead with that scale of adjustment in expenditure, inevitably there will be very significant cuts in social welfare, health and education. In the latter two cases, they will be on the non-pay side, bearing in mind that the education budget is 20% non-pay while health is about 30% non-pay. That raises very serious questions about the quality of public services, so there are no easy choices. It brings us back to a consideration of the options for taxation, particularly in respect of wealthy and high-income households and corporations.

I will now turn to some questions raised by Deputy Boyd Barrett. In this particular proposal, we were very cautious and conservative in respect of wealth tax estimates, deliberately so because there is a view out there that a wealth tax would not be worth doing, administration costs would be high, there is not that much wealth in the country and not much money was collected when it was last done in the 1970s. I understand Dr. Tom McDonnell spoke here yesterday morning. Together with TASC, we will publish a significant report on the distribution of wealth and its taxation later this month. It will review all the different options in respect of tax rates and thresholds and the very limited knowledge we have about the distribution of wealth in this country. We think about €150 million is the lower-bound estimate of a much wider range which could go as high as half a billion euro. In this case, we have definitely erred on the side of caution.

Similarly, without any change to the headline rate of corporation tax of 12.5%, I estimate that the effective rate is probably about half that. We know we collect about €3.5 billion in corporation tax each year. According to the latest CSO figures, total profitability in the corporate sector is about €46 billion, so that gives one an average effective rate of about 7% to 8% maximum. It could be a bit lower than that, depending on how profits are measured. We propose a very modest increase of a fraction of 1% - approximately €250 million - through a tightening of reliefs for corporate tax or an insistence on a minimum effective payable rate by corporations. For example, every corporation could be required to pay 1% of its corporate profits. Obviously, we do not know the distribution of profits and the profitability of any individual enterprise but I suspect €250 million may be small change in the pockets of one corporation. These are choices and when one puts it in the context of the human stories, concerns about inequality, the way this is affecting families and communities and the data I have cited on public expenditure, we are talking about marginal changes in respect of revenue that do not necessarily have any damaging economic and social effects, but would redress some of the sense of inequality and unfairness that is there in respect of five years of fiscal adjustment. I hope I have answered those questions as best I can in the time available.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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Would Mr. Stewart like to make some brief comments?

1:40 pm

Mr. John Stewart:

Further to Dr. Healy's comments, we should also consider the choices and decisions the State makes in regard to tax expenditure, that is, what it does not collect. Work has been done on reducing some of those expenditures, but there are significant opportunities to look more closely at some of the reliefs and the rationale behind them.

From an unemployment perspective, how can someone who is trying to exist on a weekly payment of €188, or less in many cases, take another hit? Many people who are unemployed receive no payments because they do not meet the criteria for the means test. Our submission reflects what unemployed people are saying to us as much as what the organisation is saying to the wider world. We set out a range of proposals which do not require a significant investment of financial resources and would provide choices in terms of how schemes are structured, the qualifying criteria for programmes and how Departments and agencies do their work and, from our perspective, could better support unemployed people. These are fundamental issues that need to be addressed.

It is difficult to answer the question of whether these arguments are being heard. It is something we reflect on in the context of the significant amount of work that goes into preparing a pre-budget submission. However, we approach the question from another direction. We will not do a service to unemployed people if we do not make these arguments. We will continue to make our case, and whether people are listening is another matter entirely.

Photo of Sean BarrettSean Barrett (Independent)
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I welcome the witnesses, some of whom I know from Kenmare and others from the National Economic and Social Council. One of the observations I think we will agree on from the discussions of recent days is that we have a banking system and an accountancy sector that are not fit for purpose. They are at the core of the collapse of the economy five years ago. The submissions deal with the consequences rather than the causes of that collapse. I had hoped that ICTU would develop proposals on how to deal with the problem of moral hazard. Judging by the performance we saw last week, we will probably have to put a total of €90 billion into the banks. Nothing appears to have been reformed. The representatives from ICTU did not deal with the problems of debt and negative equity, which are parts of the misery they are trying to address.

On fiscal termites, yesterday we had discussions on research and development, of which everybody is in favour. Until last year, companies had to spend 75% of their time on research and development but it has now been reduced to 50%. This is yet another tax loophole. The accountants made proposals on more lenient treatment of offshore bank accounts, which shocked a number of members in light of all the problems we encountered in that regard. It was also proposed that the tax allowances introduced in respect of exports to the BRIC countries and subsequently to certain African countries should be extended to Switzerland, Japan and the United States on the basis that it took longer to travel there, the languages are different and the hotels are not as good. This is going on all the time and it will continue unless ICTU, in particular, begins to look for a different kind of banking system. We have introduced a Bill in the Seanad preventing mortgages above a loan-to-value ratio of 80% or 2.5 times income. Unless the sectors which crashed the economy are dealt with, we will continue to face these difficulties. Five years is a long time to wait. It becomes a question of whether to borrow €1 billion or less per month. Moral hazard is a huge issue, but we are dealing with the consequences rather than the causes.

The old social partners need to address the sectors that caused the problem. I give as an example ICTU's proposal on a smart public expenditure programme. What is smart? Our public capital programme is now about level with the OECD average. Previously it was double the average, with the result that it created a considerable number of assets that have now become part of the debt. Should we get rid of all NAMA's assets, including the ghost estates and empty houses, to bring down the cost of housing and make the economy competitive? We have to tackle the causes. ICTU has addressed the consequences.

We proposed that the evaluation of projects should be referred to the fiscal advisory council. Approximately 7% of the staff of the Department of Finance are qualified in economics to Dr. Healy's level. We are not yet addressing the causes of the problem, and the instruments available to us to do so are inefficient. Left to themselves, they will not reform the efficiency of public spending, we will not get a proper banking system and the stimulus package could leave the economy worse off because it will be given to the same lobby groups which got us into trouble in the first place. The fiscal advisory council has warned that a small open economy will get limited bang for the buck from a stimulus package. We have spent a lot of bucks without getting much of a bang. What do we do about NAMA, the banks, the accountancy people and the fiscal termites?

I agree with Ms O'Brien about family income supplement but it got amazingly short shrift in the Mangan report. The Mangan proposals would have left most people on FIS worse off. It is important to help low income workers and I was surprised that it was not treated favourably.

In regard to Mr. Doorley's comments, I am surprised that the number of those neither in education or training is so high. The rate of third level participation is 70%. Where is the hole in the system? I would like to help to fill it, if that can be done. Mr. Doorley also referred to bad experiences among young people who went to Canada. I was an immigrant in Canada and I thought it was a most careful country in regard to qualifications. Those of us on this side of the table encounter the problem of people smuggling themselves into the United States and subsequently looking for our assistance, but we do not encounter the same problems in respect of Canada because it has a sensible immigration policy. Perhaps we could speak later on about how to prevent the problems to which Mr. Doorley referred.

Why do we combine a high rate of unemployment with a high cost of child care? It seems there is something wrong in the system if people who could do this work are unemployed while customers are charged large sums for child care. Is there any way people could be trained for this task? Are the planning restrictions too difficult? Should HIQA do more? It seems strange that women are outside the labour force and they want this product which is for the most part provided by women.

Ms Ann Irwin:

I will respond to Senator Barrett's last question about the contradiction between a high rate of unemployment and a need for child care.

In Ireland we have a very low level of investment across our child-care and early education systems, one of the lowest among OECD countries. The consequence of this is the high cost of these services. Any investment we have made has been a dual type of investment, partly in private and less so in public services. When one refers to private child care services, one refers to for-profit enterprises. In Ireland we were very late coming to investment in child care. Instead of taking the opportunity to provide for and invest in a world-class, publicly funded system, we put at least half of our funding into privatised, for-profit services. That is the system we are left with, on which the "Prime Time" programme began to shine a light, and we need to roll it back. The NWCI seeks a public system with a level of investment that allows for it to be high quality but also accessible and affordable. The Deputy is right about the high rate of unemployment and people seeking work and opportunities; that could be an area to be examined.

On Deputy Boyd Barrett's point about women's refuges, year on year we are seeing an increase in the levels of domestic violence and violence against women. I am a voluntary director of a small domestic violence organisation and we see it day in, day out. There are areas around the country that have no refuge, for example, Sligo, which is a large area in which to have no refuge. It is extraordinary. We need to flip the coin and put the emphasis on the perpetrator, not the women and children, leaving the home, but that would require legislative reform and real political will because currently the emphasis is on women and children making changes. In the absence of this, we must reverse the cuts to the services that are now protecting women. We need to ensure services are available for them as they move from the situation in which they find themselves because we know women can be left in refuges for six months while they search for a place to stay. We need a concerted effort to ensure women and children are protected, while keeping in mind that we need to reform the whole area.

1:50 pm

Mr. James Doorley:

Senator Barrett mentioned changes in finance Bills. We are always amused when organisations with which we work receive a small grant and have to prove that the work they do is valuable and impactive. We agree with this; it is public money. However, I am always surprised when small changes in a finance Bill which might cost the State millions of euro are slipped through without great scrutiny. We would support some reform in that area.

Senator Barrett talked about young people in a niche. We have very high levels of third level participation and during the boom times the young people who did not want or could not afford to go to third level got jobs. We had 8,000 or 9,000 apprenticeships, for example, during the construction boom. When the recession hit, it collapsed to 1,000 or less. Many of the people concerned who wanted to go to work after school had opportunities, but now many people who do not want or cannot afford to go to college have very few opportunities to pursue education, training or work. That is one of the reasons we have very high levels.

In certain areas in particular we have young people who, for a variety of reasons such as family issues, problems with school or school policies, are cast adrift between the ages of 13 and 16 years. Many of the organisations with which we work are working with young people in that category who are engaged with no other public service, apart from youth services. They find it very difficult to get anything to meet their needs. It is a major issue, which is why we support the youth guarantee because for the first time the State has to respond and treat all young people equally.

Ms Bríd O'Brien:

On Senator Barrett's points about allowances, it is very important that the Department of Finance report annually on what is and is not allowable, its purpose and outcome, and, from our perspective, the employment outcomes. The social welfare Bill is rammed through the Houses of the Oireachtas at extraordinary speed, while the Finance Bill wanders through and looks very different by the time it comes out the far end as the Finance Act. These issues of inequity must be addressed.

The Mangan report examined child income supports. Poor children do not exist in a vacuum. They will now be looking at working age income supports and it will be interesting to see what the take is on family income supplement when one examines it in the broader context. It is very important that when trying to target resources, we do not create additional poverty traps. There is a danger with some of the recommendations that we might create additional poverty traps at very low incomes. It is about trying to support people to take up and maintain work, ensure the income supports are provided and design things without cut-off points where people will be caught but with better tapering. That is important.

On investment, a number of us do not necessarily mean the type of investment that leaks out of Ireland but investment within Ireland, particularly in education, training and employment programmes for the unemployed. Likewise with public sector reform, if the investment is not made, we will not see outcomes. From our perspective, it is about ensuring education, training and employment services are what they ought to be. For some of the broader questions the Deputy raised, it is about ensuring there are the competencies in the various Departments to provide good public services, that they are provided regardless of who is delivering them and that all of them are as accountable as they ought to be. As Mr Doorley said, often the smaller projects are accountable for every cent, while the bigger ones seem to be like cauldrons.

Dr. Tom Healy:

There is not much of a focus on banking in this submission which, perhaps, raises a question about how long-term issues need to be considered alongside year-to-year budgetary plans and discussions. The banking issue is very significant. It weighs on households in terms of debt and the balance sheets of banks, with implications for the Exchequer in the next few years. The solution is going to take many years. Unfortunately, we are in a situation, five years after the events of September 2008, where there is the prospect of unemployment remaining at over 10%, with an overhang of private household debt well in excess of GDP each year to the end of this decade. It has been correctly described as a lost decade. Much of it has been exacerbated by unfortunate policy decisions, including continuing fiscal austerity through the mirage of the front-loading of measures to get the public finances out from underneath quickly. This was the view in 2010; it did not work in 2011 and 2012 and it is very much open to question whether it will work now if the adjustment is as much as €3 billion this autumn.

Banking is also a long-term issue that must be researched further. I am glad that we will be able to undertake further research in that area in the coming months. Some element of a negotiated settlement and debt write-down in a number of cases is unavoidable and the difficulty in facing up to this must be tackled before the entire banking system is brought into a more sustainable, solvent position. We also need to examine the structure of banking and develop new ways of banking, both retail and investment, and learn from the disastrous corporate governance mistakes and failures of regulation in the past.

Regarding the implications for debt, Deputy Boyd Barrett wondered whether we were in primary surplus. We probably will be next year, meaning that the cost of servicing debt at approximately 5% of GDP will be more or less equal to the Government deficit next year.

Could we default on that? That is an option, but it is not one I would countenance because the kickback and uncertainties from defaulting on debt are huge. However, there was an agreement in February that the interest on the promissory notes would be saved, that the promissory notes would be converted into Government bonds, as they have been in most cases, for 20, 30 or 40 years, depending on the maturity. We have scope. We have fiscal space of about €1 billion from next year onwards. We argue that that should simply be used to promote growth and jobs, and protect the most vulnerable members of our society. That was very much the agreement and understanding on that Friday morning after the deal around 6 and 7 February. Based on the initial reactions and ministerial statements, the understanding very clearly was that this would be used in its entirety to ease back on fiscal consolidation. It seems there has been a certain rowing back from that position in part or in whole since then.

I agree entirely that it is very important that any investment, whether in the public or private domain, is properly assessed and evaluated from a cost-benefit point of view. It is important to bear in mind that our investment levels from public and private sources are running at about 10% of GDP. That is the lowest it has been since the 1950s when CSO data commenced. It is the lowest in the EU 28 and will be the lowest in 2018 if the current IMF forecasts are borne out. From a public policy point of view, that is extremely worrying given the need to invest in renewable energy, broadband, water facilities and a range of social infrastructure. Mention has been made of early childhood education. It is not just about creating jobs. It will create jobs and we can produce research estimates of the policy impact on jobs and growth. More crucially, it will protect and equip us for economic recovery in the future. I am not talking solely about public investment, but public, private and European investment. That is why we have put so much emphasis on that as a form of fiscal consolidation.

When we talk about consolidation, we often think in terms of raising tax or cutting spending. While of course it can mean that, it can also mean investing in young people, infrastructure and green technology, with economic and social benefits and revenue buoyancy impacts on the public finance. That is one of the reasons investment is a key component of an alternative fiscal adjustment strategy and one that is of interest to the private sector that recognises the need for this to be competitive and to develop Irish businesses and jobs in the future.

2:00 pm

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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Based on what I have heard from the representatives of the many organisations who have appeared before the committee yesterday and today, there appears to be a sense that we are all living in silos with our own concerns. Politically speaking, there is a bit of that in that we all seem to have our own viewpoint. Deputy Boyd Barrett spoke about austerity. I believe we have come a long way in many respects in the four or five years since the crisis started.

Dr. Healy has asked if we have reached a tipping point. He pointed out that household debt is greater than GDP and that much of the money we borrowed in recent years was not so much to bail out the banks but to run public services - paying for gardaí, teachers and nurses. If we had taken a different tack four years ago and decided not to repay our debts and let our banks go bust, who can say what would have happened? The only country that did something along those lines was Argentina and it decimated people's lives for a period of time. Dr. Healy spoke about the lost generation. Argentina also had a lost decade which was very detrimental to households. While that country subsequently recovered, nobody would want to put the people of Ireland through what happened to Argentina at that time. There is a need to discuss that.

As we are now talking about the future, some interesting comments have been made this week. For instance, Dr. Healy spoke about how the labour market has managed and how social inclusion is organised. He is right in pointing out that it is a discussion that does not happen. I was taken by comments that were made by representatives of the housing agencies who appeared before the committee in the past two days. They maintain that about 15% or 16% of all housing stock should be social housing which would help to develop a national housing policy that might keep housing prices down while also ensuring we do not have large numbers of people going on housing lists or what has been described as being at the mercy of unscrupulous landlords. Some landlords are poor; many landlords are actually very good. We have not developed that policy as has been done in countries such as Germany where some people rent for their entire lives and there is no issue with it. It is not as if home ownership is the gold standard. We can move away from that. Even though the ICTU representatives have mentioned it, we have not really had that discussion. While I know this is a pre-budget submission, it could focus this committee on talking about it.

The following matter is almost verging on the ridiculous and is attracting considerable discussion. I am sure I will be called to many public meetings on it in coming weeks. The teacher unions are coming together calling for no more cuts to education when 92% of what is being spent on primary education goes on salaries. We are asked to balance budgets on a very minor proportion of the spending while people who are working it are organising for us to attend public meetings as if their salaries are disconnected from the discussion. Some sections of society have not faced up to what we have gone through in the past four years. Submissions in the past two days have demonstrated how very vulnerable sections of society have been left out of the discussion completely. I would have thought we would have heard more about it.

The ICTU representatives talked about the bank capitalisation and what will happen to mortgage arrears. From the committee's discussions with the banks last week, it is clear that all the banks will be looking for more taxpayers' money for further recapitalisation. Some of the major banks were hinting that dealing with the mortgage arrears will put them back into the position they were in a few years ago and they may seek more capitalisation. Do the witnesses agree? I presume they are watching these issues and that will have a major impact on the people ICTU represents. I feel it is an issue that needs to be discussed because it will have a huge impact on what happens in the country in coming years.

I believe there have been some reductions in certain reliefs. It is always good to highlight to the committee the negative effect tax reliefs have. I do not necessarily agree with Deputy Boyd Barrett that my party has a fixation with giving tax reliefs. Tax reliefs have been reduced considerably in recent years and we could accelerate that process. If people have concerns, they should be raised at this committee. It should not just be mentioned as an aside but we should be given the real information on it.

I would like people to give us as much information as possible. Yesterday and today, many of the groups have simply told us what they wanted. To be honest, some of it sounded like a wish list. I sat on this committee between 2002 and 2007 during the height of the Celtic tiger and witnessed such wish list presentations. The then Minister, Mr. Charlie McCreevy, used to appear like Santa Claus at the end of it to fill everybody's goody bag. It was a complete joke and, of course, we are now paying the consequence of that.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I do not think he was ever Santa Claus.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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The Deputy should have been here when he was the Minister for Finance. I think there may be a little more realism now.

I ask that when addressing the committee the witnesses be as robust as possible with us, not just about their own organisations but about others too because we have a long way to travel in this country before we get this right. If anybody has any concluding remarks to make I would be delighted to hear them.

2:10 pm

Mr. James Doorley:

I realise I did not answer Senator Barrett's question about Canada. Our research showed that he is right that it has a very good visa system and many young people who emigrate there do very well. Some young people were advised that they did not need any further qualifications but when they arrived in Canada were told that they did need them.

Our organisation supports the idea that young people should be given opportunities to gain skills and qualifications through an activation policy. We feel sometimes that the debate here is false because the issue is not whether people are activated. The system in Ireland is quite poor because many young people go in expecting real engagement and sometimes they are given only one or two minutes through a hatch. They are being asked in that time to make big decisions about their future. We need to move to a system which takes on board the needs of the people who need the service. I know some people have campaigned for many years on this.

I am concerned about what the OECD said because in certain circumstances it is easy to come from outside and look at schemes and say that X% from one progressed into jobs and Y% from another and use that to increase one scheme or reduce the other. Sometimes they are not comparing like with like. The people on some schemes are highly qualified or have had huge experience and will progress much more quickly into jobs while other schemes might be designed to help young people who had difficulties in education or have limited qualifications and will take longer to progress. We are in favour of evaluating programmes to see if we can do better with what is there. We all need to do that but I am concerned that they are judging apples and oranges and have a limited understanding of how the schemes work. CE is a very good example. It is all very well to look at figures but have they spoken to CE participants or gone out to see how a CE scheme works? I am sure the committee members know that this scheme is very different from other schemes because they engage with the participants every day.

The broad message is that while we have a duty to represent the 17 organisations in the community and voluntary pillar, and the young people engaging with our organisations, we are not saying we will do this for only one group because young people are in families and communities. To continue saying we must stay on this hard road to earn rewards eventually is not a very positive message for the 18 or 22 year olds who are unemployed and considering emigration. They have heard that for five years. We need to take that into account. I agree that we need to do more and work more together. Organisations in the community and voluntary sector have made a concerted effort to collaborate and reduce costs and there have been huge reductions in salaries and overheads in the sector. We have all had to take huge cuts. I thank the committee for the opportunity to speak to it.

Ms Ann Irwin:

I note the debate about the principles that should inform society and the National Women’s Council would really welcome a debate on principles such as equality, gender equality and social inclusion. There are other countries to which we can look as examples, not just Argentina. When Iceland, for example, was coming out of its recession, it prioritised equality and social inclusion. I absolutely understand that its currency situation, etc., was different from here. If, however, one studies Iceland’s figures, as we have done, and compares the deciles with Ireland, here those with least have lost most whereas in Iceland it was the opposite, those with most lost most. There is a way of doing this and we would encourage that debate as the starting point of recovery in Ireland.

When Iceland was coming out of recession the Prime Minister was a woman and half of the cabinet were women. I will let the committee make what it will of that fact.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I will pass those comments on to the Ministers.

Mr. John Stewart:

I echo the thanks for the opportunity to make these presentations and have these discussions. I would like to reinforce the point made earlier that the options and priorities that the INOU has set out are very much those that unemployed people have identified as being useful for them. Getting a job, moving from unemployment into employment can absolutely transform people’s lives just as, unfortunately, losing a job and moving into unemployment can transform their lives in a negative way. We, and unemployed people, are calling for appropriate measures and we would like to see as much of this as possible reflected in the forthcoming budget announcement. Once again, I thank the Vice Chairman for the opportunity to talk to the committee today.

Dr. Tom Healy:

In previous years the Irish Congress of Trade Unions adopted the idea of there being an alternative to austerity, saying that there is a better, fairer way and this is it, in our submission. It is based on research and working papers, all of which are, or will be, available on the NERI website. I invite anyone, members of the general public and the Oireachtas and other researchers and colleagues in the economics community to pull it apart and tell us what is wrong. They can engage the debate with the analysis because until now the message has been “I agree with you but there is no alternative." We are told either that the troika is making us do this or that ours is a small open economy and we have such high levels of debt that there is no alternative. That is very much the point being contested here.

We should bear in mind that social welfare has been and will be cut in real terms. A point that is very often forgotten here is that we have price inflation, running at 2% a year, a bit more for energy, which means that the real value of nominal social welfare payments, even when they are not cut in nominal terms, is declining and when that accumulates over four to five years it has a significant impact on households. It is little wonder that poverty and deprivation measures are increasing, according to the EU-SILC data, and real wages are either stagnant or declining in many occupations and sectors. That also weighs on the economy. Let me answer the question about bank recapitalisation this way, if we do not kick-start the economy, if the domestic economy in particular remains stagnant through continuing unemployment and high levels of personal debt, we will for sure need further bank recapitalisation. To some extent the key to resolving the mortgage crisis is to put the brakes on fiscal austerity and give some breathing space for the domestic economy. It is ironic that many commentators, agencies, respected research colleagues in the ESRI and the fiscal council, have taken the view that we should have a "no regrets" policy and go for the full fiscal consolidation this year just in case growth might flag next year or beyond. The irony of this is that each time the Government takes €2 billion, €3 billion or more out of the economy it depresses domestic demand and probably increases the long-term likelihood of further assistance or further adjustments and programmes of assistance. Even if we are out of the current troika programme there will be continuing oversight and vigilance for the indefinite future, as the committee is aware. In that context the best "no regrets" policy is to ease off on the pedal and give the Irish economy a chance. Finally, that puts us into the same territory on this question as IBEC, which is calling for easier fiscal consolidation.

Photo of Aideen HaydenAideen Hayden (Labour)
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We noticed that.

Dr. Tom Healy:

Let us agree on that.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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We will take that on board.

I thank Dr. Rigney, Dr. Healy, Ms O'Brien, Mr. Stewart, Mr. Doorley and Ms Irwin for their submissions and discussions here today. It has been informative and useful for us. I hope we can build on some of the points they made and that it can genuinely add to what we are doing in this committee. I certainly found it informative and there will be some points I will be taking away with me for the future. I thank them for their time.

Sitting suspended at 3.50 p.m. and resumed at 4.25 p.m.

2:25 pm

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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I welcome Mr. John Dolan from the Disability Federation of Ireland, DFI; Mr. Pat McCormack and Mr. John Enright from the Irish Creamery Milk Suppliers Association, ICMSA; and Ms Yvonne Woods and Ms Yvonne O'Sullivan from Free Legal Advice Centres Limited, FLAC. Submissions received by the committee and a summary paper were circulated to members in advance of the meeting. The format of the meeting will comprise brief introductory comments from the witnesses, after which we will proceed directly to questions and answers.

I remind everyone present that all mobile phones must be switched off. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if a witness is directed by the committee to cease giving evidence in regard to a particular matter and continues to do so, the witness is entitled thereafter only to a qualified privilege in respect of his evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.
On behalf of the committee, I apologise for the small number of members present for this session. We have been holding these meetings for the past several days and it is the way life works that members have been dragged away to deal with numerous other matters. It is important, however, that the witnesses have an opportunity to set out their pre-budget submissions for the committee because they will form part of the submission we are making to the Minister for Finance. I invite the representatives of the DFI to address the committee, followed by the ICMSA and FLAC.

Mr. John Dolan:

I appreciate the opportunity to address the committee. I am aware that many groups would like to be here and I hope to make good use of this opportunity.

People with disabilities and their families are exposed to attrition in two areas. The first involves the specific services and supports that they receive, which are vulnerable to being cut, and the second is that, like anybody else in the community, they are affected by the general problems of austerity. Disability and disabling conditions in a broad sense are a major lifelong risk for every person and family. I do not think any of us escape completely because nobody can insure him or herself or hedge against the effects. The only entity capable of underwriting confidence that services will be made available is the Government. That is both a challenge and an opportunity for the Government in terms of leading and supporting community mobilisation. The Disability Federation of Ireland and the wider sector are keen to respond to that kind of leadership. We have a developed a system of multi-annual planning for our national income and expenditure under the troika. However, we have not developed a plan for sustaining public and social services. This is a worrying omission and it means there is little or no confidence in the possibility of sustaining public and social services that are up to the mark.

Incomes and the availability of public and social services are directly connected. People crave higher incomes if they cannot depend on the necessary basic services. Forget about the bells and whistles; they need to have confidence that the services will be available when they need them. The widespread uncertainty in respect of social infrastructure is damaging to the country's economic and social fabric. Without a reduction in the cost base - which largely involves people when it comes to human services - and the general cost of living, there should be no more cuts to services and incomes. Significant improvements in value for money can be achieved across the system through better whole-of-government engagement.

I welcome the publication in July of the Government's implementation plan for the national disability strategy. A senior Minister should be given responsibility for disability inclusion and tying the threads together. We have a Minister for Children and Youth Affairs and that is the direction in which modern governments should be moving.

Mr. Pat McCormack:

The president of the ICMSA, Mr. John Comer, apologises for being unable to attend. As his deputy, I agreed to stand in at short notice. I am accompanied by our general secretary, Mr. John Enright. We appreciate the opportunity to address the committee as we face into a budget that is perhaps earlier in the year than any of its predecessors.

Our concerns are about the farm schemes and how the Department's spending on agriculture has been cut by 12% over the last number of years. In particular, on-farm schemes have been cut by up to 18%, with the remainder of the budget cut by 8%. With Ireland's Presidency of the European Council, we have had many issues over the last six to eight months with a new rural development programme coming into play in 2014 under the CAP reform. The EU has made €313 million of funding available and it is imperative that the Government match that to maximise what is brought into the Republic. The various different schemes such as the disadvantaged areas scheme, the agri-environmental scheme and incentives for on-farm investment have been important not alone to agriculture but to the other citizens of rural Ireland who have benefited as a result of the spur that was put in the rural economy in the past. To maximise that €313 million we urge that this would be a top priority.

We are entering a period of change with the abolition of quotas in 2015. We predominantly represent dairy farmers and the abolition of quotas will bring major changes and challenges. Regarding tax, it is very necessary. While we appreciate what was done in last year's budget to face up to land fragmentation, the main tenet of 1% stamp duty is very important as we move forward because there is an issue with the age profile of Irish farmers. We need to get that right for various reasons including health and safety and the ability of the young farmer to adapt to modern needs, increase output, etc.

Since 2008 we have seen a 65% reduction in capital gains tax and there is a need for indexation. The capital acquisitions tax and the agricultural relief must be maintained at its current level of 90% given that thresholds have fallen by 58%. To burden a young farmer taking over the family farm with a significant level of debt would be very negative. As we move to life post-quota it will be imperative that the tax relief incentives remain there for the five-year and seven-year leases and that they be expanded to include family members. A parent may be hesitant about giving the farm over completely to the younger generation, but these leases would incorporate the child to maximise output and give the young farmer a sense of responsibility and the opportunity before the total handing over of the asset.

Another issue is PRSI going from 4% to 4.5%. There would be greater benefits in situations of sickness but, as an association representing sole traders, we feel this should be voluntary for the self-employed sector. Mr. Enright might add to this. Younger farmers are needed to maximise Ireland's output. We are an exporting nation and a significant 85% of our produce is exported. That percentage will grow as we approach 2020 and the food harvest ambitions that are set for us, and that can only benefit our national economy. The Government must take every step possible to maximise the moneys coming into the country via the various different schemes and to afford the Irish farmer the opportunity to maximise the outputs for the nation.

2:35 pm

Ms Yvonne O'Sullivan:

I thank the Chairman and committee members for inviting us to talk about the Free Legal Advice Centres, FLAC, pre-budget submission for 2014. One of FLAC's key priority areas is reform of social welfare law, especially concentrating on ensuring the State complies with its international human rights obligations. There are three main points that FLAC wishes to communicate today. First, budgeting choices should be based on Ireland's commitments to human rights law. Second, budgets should ensure the right to an adequate standard of living. Third, the social welfare appeals office should be reformed.

Austerity budgets have affected the Department of Social Protection's budget mainly since 2010. Meanwhile more people are relying on social welfare payments in a time of consistently high unemployment. Some 2.3 million people benefit from a social welfare payment in this State. How do we ensure the Government respects these people's rights with limited resources? FLAC argues the Government should put human rights at the core of its budgeting considerations. Such human rights budgeting has not been carried out by the Government to date but FLAC believes it would help to avoid disproportionately impacting on the most vulnerable people in our society and ensure fair and open budgeting decisions. For example, social impact assessments should be done pre-budget to evaluate the potential impact of any proposed cuts on different groups in society before any damage could be done.

While once-off consultations, such as the social inclusion forum, allow organisations to feed into policies affecting the most marginalised groups in society once a year, FLAC considers it would be of better use to have regular inputs from people working directly with these groups and the wider public to ensure the budget decisions are well-informed, realistic and effective. Another useful measure FLAC, along with the Council of Europe Commissioner for Human Rights, recommends is for governments to refer budgetary proposals to the national human rights structures as another way of meeting our human rights obligations.

Second, FLAC calls on the Government to guarantee the right to an adequate standard of living, so that every person has the right to live in dignity. Earlier this year the UN passed a resolution on the key role of social protection systems establishing a minimum standard of living, which can tackle poverty and social exclusion. As an example of guidelines on minimum income which a person needs to live in basic dignity, one could examine the recent reasonable living expenses now used by the Insolvency Service of Ireland to set social welfare standards. FLAC calls on the Government to ensure nobody is reduced to destitution through an action by the State.

Third, at a time when more and more people are depending on social welfare payments, FLAC is singling out the social welfare appeals office as a body for reform. In a report published by FLAC last year we found the appeals system lacked transparency, independence and fairness. FLAC's experience is that many people need help when making social welfare appeals because the system is too complex and very confusing. For example, FLAC assisted one woman who had waited two years for the outcome of a social welfare appeal. This led to her resorting to eating out of bins, and this after eventually getting her payment, and she suffered greatly in the meantime. She got her payment, but she had always been entitled to it, even at the beginning of two years.

We acknowledge that the social welfare appeals office is under much pressure with limited resources and increased workloads, but FLAC's basic and practical proposals would be to improve the appeals office's effectiveness and ensure we meet our human rights duties. Ultimately, our line is that the Government cannot plead limited resources as a way of not honouring the State's human rights commitments in its budgetary decisions. I thank the members of their attention.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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We will have ten-minute slots for discussion with time for supplementary questions at the end.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I thank the witnesses for their attendance and concise, professional presentations. We received their full documentation in advance. Special needs assistance in schools is becoming more difficult, and for children with autism, with pressures on the education budget. The witnesses might comment on that. I am beginning with the younger people. Getting people with disabilities who are leaving school at the age of 18 into some work placement is becoming increasingly difficult. There are restricted budgets in the HSE regions for that.

On the issue of housing, people need modifications to their houses owing to disability. For example, a person who has had a stroke might no longer be able to go up the stairs. Obviously the Department of the Environment, Community and Local Government grants through the local authorities have been reduced. It is getting harder to get payments and councils have to ration them. Instead of giving the maximum grant they are trying to give a bit of a grant to more people. While this assists more people, those people might not be getting what the occupational therapist has agreed is necessary.

I have come across many cases of people who were on disability or illness benefit for two years. Their health has deteriorated in the two-year period, at the end of which they are informed they are fit for work. The Department of Social Protection does not need to touch headline rates to reach its budget targets this year and next year; it just needs to continue cutting people off entirely, with which I totally disagree. Some 90% of people have no cut in their payments but 10% will have a 100% cut in payment. The most common issue I have faced is that of people on a disability or illness benefit who find themselves being cut off. Suddenly someone at a desk has decided that they are miraculously fit for work, although they have not been fit for work for the previous two years and in many cases their health has deteriorated. I ask the witnesses to comment on the matter as I am finding it an epidemic. I can well understand how the Minister might meet her budget reduction by continuing to cut people off, if my constituency is anything to go by.

I thank the representatives of the ICMSA for their presentation. Coming from a rural constituency, I appreciate all the points they make. They referred to the young trained farmers stamp duty relief and said that a person should not have to spend 50% of his or her normal time working. I would be concerned that that could be extended to part-time and hobby farmers if it were overdone. That is not the purpose of the scheme and I would not like to see that happening.

I agree with the ICMSA on the need for tax relief on the purchase of milk quota. It will be essential in the period ahead and for investment in processing facilities. Everybody understands the change in circumstances.

Mr. McCormack said the new rural development programme needed to be adequately funded. Is he talking about the funding that goes through the Leader companies at the moment? Some of the local authorities, with the county enterprise boards, are taking these over and they will end up being subsumed into council activities, which is my main concern on the issue.

On the local property tax, Mr. McCormack is right to be concerned that by September 2014 individual local authorities can decide to increase the rate by up to 15% in the following January. That is of concern and we hope that in advance of the local elections all parties will make a commitment not to do that. However, I cannot agree with the ICMSA proposal that self-employed individuals should be provided with an additional option for paying the local property tax with their preliminary tax returns in October. There is not a chance of that. If everyone needs to pay it in March, no sector should be allowed an extra six months. That kind of provision for the self-employed has caused problems in the past. Self-employed people, including farmers, had accounts one year in arrears. They were then required to pay preliminary tax. I would not subscribe to allowing the self-employed to pay their property tax at a later date. While it might be populist within the ICMSA, it cannot expect those on PAYE and social welfare to pay it while farmers and other self-employed people are not required to pay it for another six months.

My final comments are for the representatives of the Free Legal Advice Centres. I ask them to give some detail on the Equality and Human Rights Commission. Earlier today representatives of the National Women's Council of Ireland appeared before the committee. The budget in the past two years specifically targeted women and children and I ask the witnesses to outline how that comes into it.

Ms O'Sullivan mentioned not recovering money from people below a minimum subsistence level. What weekly figure does she have in mind? She mentioned the reasonable living expenses now used by the Insolvency Service of Ireland. At the moment someone on jobseeker's allowance of €188 might for some reason owe the Department money for a previous overpayment. While the Department is right to recoup the money, the figure for recoupment has increased to 15%, which is approximately €30. That amount can be deducted from the person's payment without his or her consent, although he or she can agree to a greater deduction if he or she is able to pay. That brings the person's income down to €158. How does that tally with FLAC's figure? While I accept that people who may have over-claimed must pay that money back - I am not suggesting otherwise - €30 can be a significant amount.

2:45 pm

Mr. John Dolan:

I thank Deputy Fleming for his comments. He spoke about the SNAs, autism, school-leavers, housing and reclassification. I will make a few general comments and Ms Grogan might be able to give more detail on it. The Deputy is meeting people who are dealing with unemployment, loss of income, mortgages and all the rest of it. School leavers with a disability are an example of the demographic pressure. More than 700 people are in that category this year. The figures will be similar for next year and the following year. Given that they were born 17 years ago, it is an issue not just to do with school leavers but also to do with planning and looking at the simple sums. In saying that, I am not doing justice to the problems and the pressure on people. I have been contacted by some people with one son leaving this year and another next year. There is no sense that we are collecting information and trying to plan for future years. It is as if this comes from nowhere every year.

The Health Research Board produces statistics every year. There are as many people waiting to get personal assistants as there are people who have them. There are as many people waiting for home supports as those who have them. We could start beating each other up over these problems affecting real people, but we will be at it every year unless we start doing some spreadsheet work on it. We must all get involved. We are up for working to some kind of template or plan and moving beyond just the austerity mode. As a nation we need to start to analyse these issues and work in whatever ways we must.

All the examples the Deputy has given demonstrate - I will not call it an attack - a withering of community infrastructure. In two or three years, when we come out of the cutbacks, we will find a bit of a wasteland before us and there will be no plan for moving forward. That will be a time of greater hopelessness for people than the present. The logic will be that everything is coming right, but that will not happen unless the planning is done in the next couple of years.

The Deputy mentioned the biggest issue, that of reclassification or redefinition, which is a problem of major concern. While the classification can be changed, if there are real needs and problems they do not go away. They will fester and come back. Those are the challenges. Housing is another issue in this regard.

2:55 pm

Ms Jacqueline Grogan:

I will be brief as I understand other people also wish to contribute. In terms of education support, in 2011, the time when the cap on special needs assistants was introduced, the budget for the National Council for Special Education was €2.3 million. Given Government policy around mainstreaming, more children with disabilities are entering mainstream education. As there are currently only the same number of special needs assistants in place as there were two years ago, this means a large number of children will not be receiving the support they need to thrive in mainstream education, which at the end of the day can push them back to the special schools. I use the term "special schools" for want of a better phrase.

On the housing adaptation grants, it was reported in July this year that Dublin City Council had at that time spent its yearly allocation for the housing adaptation grants scheme. This also pushes people with disabilities back into residential services or results in their not being discharged from hospitals because the setting to which they are returning is not suitable or adequate for their needs. This goes against Government mainstreaming policy going forward.

On social protection issues, the Department of Social Protection recently introduced a number of labour market activation programmes, which when initially introduced were not accessible to people with disabilities. For example, a person in receipt of disability allowance was not allowed to access JobBridge. This has since been changed. However, as an organisation, we do not believe there are enough labour market activation programmes in place to support people with disabilities getting back into mainstream employment.

Mr. John Enright:

I will try to respond some of the issues raised by Deputy Fleming. On training for young farmers, our concern is how this is measured by Revenue. In other words, how does Revenue know how many hours per week a farmer spends farming? We believe there is a need for a more practical way of measuring farmers' activity. We believe not that hobby farmers should get the allowance but that young farmers who have had an off-farm job for a number of years in order to develop their businesses should be facilitated.

On the milk quota tax relief, the point we are making in this regard is that this relief must be retained until 2015. There was a suggestion in previous reports that it should be abolished. We believe it is necessary that it be retained until 2015.

On the rural development budget, from our perspective this is more important than Leader. While Leader is important for farmers, the other big issues from a farming perspective are the former REPs scheme, disadvantaged areas scheme and on-farm investment schemes. The next CAP rural development plan will be from 2014 to 2020. The funding provided for that scheme next year will be hugely important. We have the European funding but there must be co-funding in order for that funding to be drawn down. That is a hugely important issue from our point of view.

On the property tax and payment of preliminary tax, this is a cashflow issue from the point of view of farmers and others involved in the agricultural sector. The vast majority of their income is obtained during the autumn. The single farm payment is made on 15 October. Typically, cattle sales are also conducted during this time. It is a practical issue that is of concern to farmers. I hope I have addressed the Deputy's questions.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Yes. Thank you.

Ms Yvonne Woods:

I will respond to the first part of Deputy Fleming's questions. I thank him for raising this issue. There is huge expertise in the human rights bodies. It would be of huge benefit to Government to make full use of that expertise, particularly when held by a State body. This is working in Scotland, in the sense that the equality and budget advisory group there equality-proofs its budgets. The Equality and Human Rights Commission forms part of that group and flags issues that arise in any proposals. We would fully support that. On the new body to be established, we have some concerns about it and believe it should be independent and fully resourced in order that it can carry out its work. In essence, it should be able to identify whether a group is being disproportionately affected by any measure, which in our view can only be useful.

Ms Yvonne O'Sullivan:

On the question of what we would consider as a minimum income standard, as an organisation we do not have a specific figure in that regard. There is currently no consistency within Departments. Mention was made earlier of the guidelines introduced under the Personal Insolvency Act which will be used by the insolvency service. The Department of Social Protection minimum income payment is the supplementary welfare allowance of €186. This amount varies depending on the person's entitlement. This allowance is seen by the Department of Social Protection as basic minimum income.

On overpayments and how the Department recovers them from individuals on such basic payments, we would argue that the amendment to the Social Welfare Consolidation Act 2005 which provides the Department with powers to recover up to 15% of overpayments with or without the consent of the individual leads to people facing destitution. We are not saying that an overpayment should not be repaid. Some overpayments are the result of fraud. Others are the result of errors by civil servants and deciding officers and lead to hardship for individuals. We believe the Department of Social Protection should use valuable research such as that of the Vincentian Partnership for Social Justice on minimum income standards and the cost of food, rent, education and so on when looking at how current payments compare in the context of inflation and standard of living costs. The Department needs to set guidelines in this area. There are already many useful tools and resources available to inform it in this regard.

Photo of Aideen HaydenAideen Hayden (Labour)
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I thank the witnesses for attending today's meeting. I am somewhat surprised at the attendance at today's meeting of the ICMSA. It should perhaps have attended yesterday's meeting on business matters. However, I have a general question which I will put to all the organisations and will then deal with some specific issues.

All the witnesses will be aware that the OECD produced its report on Ireland today in which it urges the Government to persevere with the conditions and targets of the EU-IMF programme and to reduce the budget deficit to below 3% of GDP by 2015. It is suggested by the OECD that if we proceed with the programme, we will be in a position to ease back in next year's budget, with the caveat that growth lives up to expectations, and so on. What are the organisations' views? We appear to be faced with stark choices. Many of the submissions which this committee has received are focused on two particular aspects, including the need for an easing up on austerity and for investment in terms of improving domestic demand. Other submissions, in particular from the Small Firms Association, call on the Government not to increase taxes for businesses in order to assist them in creating jobs and so on. I would welcome if each of the organisations would comment on these two diverging perspectives which are being put to the committee.

On the presentation by the Disability Federation of Ireland, it is hard to disagree that recent years have been very tough on the disability sector. There is no doubt about that. Might some of the more general reforms proposed be of assistance, including, for example, the introduction of universal means testing for all benefits rather than means testing of people on each occasion they apply for a benefit? I agree with the suggestion made by my colleague. I cannot help feeling that an awful lot of current cuts are cuts by stealth.

It reminds me of years ago when I worked in a law firm and I was trying to get a visa for somebody who was opening a very prestigious pharmaceutical plant in Ireland. In those days the aliens department opened for an hour a day for phone calls, and that was it. It was never open at any other time. I have also noticed in my experience of dealing with the Department of Social Protection that we have reached the point where more frequently there is nobody at the end of the phone. One is communicating with a post office box or an answering machine. It is a well known fact that when one is dealing with difficult individual circumstances one must deal with an individual who has discretion on those issues. To what extent should we be seeking in the basic features of the social welfare system, whether it relates to disability or any other payment, that there should be some form of general statement about the rights people should have when they are interfacing with those systems? Do the witnesses wish to comment on that?

With regard to the ICMSA submission, I have no expertise in agriculture apart from the fact that my father was a farmer and I have worked on buying and selling land over the years as a solicitor. However, it appears to be a wish list on the taxation front. I can understand the position put forward by other organisations that appeared before the committee such as the Small Firms Association, IBEC and so forth who argued there should be different tax treatment on, for example, capital gains that are made from business investments where it is a business as opposed to non-productive gain, in other words, if I just dabbled in the stock market and I was lucky enough to have made a serious amount of money. I cannot understand why the ICMSA is opposed to any further increase in the capital gains tax rate. Does it mean purely on farm gains or just generally? Similarly, why should there be no further reductions in the CAT tax free thresholds for gifts and inheritances? Irish society has been very unfair in that somebody who works an extra day in a supermarket will pay the marginal rate of tax on every cent of income, whereas somebody who engages in non-productive earning, for example by buying and selling stocks and shares, pays a significantly lower rate. I could not possibly accept that unless a really good argument was made in terms of it being a business expense.

Agricultural land is a valuable asset and farming is a business. Presumably, the ICMSA is arguing to the committee that it should be treated as a business, in the way that any other business is treated. There is no reason to support agriculture purely for the sake of hobby farmers, or however one wishes to describe them. I believe a sufficient amount of damage has been done to the farming community over the years by paying people basically to be non-productive. On the property tax issue, there is no reason that one cannot pay it by direct debit throughout the year like everybody else.

On the proposals in FLAC's submission, I agree that we must value-proof any changes we make from both a human rights and an equality perspective. Would FLAC support the inclusion of economic, social and cultural rights in the Constitution in order to protect those rights? What is FLAC's view on re-instigating the Combat Poverty Agency, for example, as an organisation that is independent in that context?

Finally, FLAC has been very vocal on the issue of people in mortgage arrears, and I am personally very much involved in that area. One of the biggest problems people face is that they have no access to an expert independent service when they find themselves faced with banks on the other side of the table. The Money Advice & Budgeting Service, MABS, is totally over-stretched and in many areas of the country it does not have that expertise. What is FLAC's view on that issue?

3:05 pm

Mr. John Dolan:

Senator Hayden asked both a general question and a more specific one. The OECD report advises that we keep going and get to the 3% by 2015. There is great frustration. We hear that the troika told us to do something so we must do it. The message from the OECD is that we keep this going. The Government is faced with stark choices. Disability is a universal risk among the people of this country. There is a great deal of it around, but it is a risk for everybody. People and families are faced with the result of decisions. Before this Government took office both the Taoiseach and the Tánaiste said, in their last pre-election television debate, that disability was their first social justice priority. That is the choice that was made and other things must fit in behind that. I believe it was a good choice because it affects every stratum of society. It is a risk everybody carries and they cannot carry it regardless of how much money they have. The Government must do it. The Government must make its choices and the choice it has made is that what is taken out next year and the year after will be two thirds from services and one third will come from the tax take. They are choices. I would not like to be the Government. It is very difficult, but the choices have been outlined and must be followed through. There is also the question of whether the patient will be killed by the cure, to use the old cliché. We are genuinely concerned there will be so much erosion that it will be a massive problem afterwards.

On the universal means testing, the Senator seemed to be saying that people get sliced and diced through different means tests in different places. Is that not a simple, no-brainer suggestion on how to join things up? We have all these machines whereby we can know who has been in one place or another. We have all the technology but we still cannot do a first fix means test on people. I will not go into how delightful means tests are and so forth, but it is unbelievable that we cannot join up systems properly between Departments and that people, on top of all the hassle, keep getting asked the same questions. Of course, if it is for a particular area, the second stage questions must be different, but the basic stuff about one's means is the same, regardless of whether one is dealing with the Department of Agriculture, Food and the Marine, the Department of Social Protection or the Department of Education and Skills. That is a very practical, basic step in respect of cross-departmental areas.

A bulwark or protective screen around disability, chronic illness and disabling conditions is a protection for everybody, not just for one sector of society. People are not queuing up to be disabled no more than we would queue up to have car accidents, but we pay our insurance. This would be an insurance for everybody.

I hope my comments are helpful.

Mr. John Enright:

Our concerns about stamp duty, capital gains tax and capital acquisitions tax relate to the farm business. Where there is a young farmer taking over a farm or where a farmer wishes to re-invest in his business we must allow them to do that in as tax efficient a way as possible. On a daily basis we encounter members who raise issues about the taxation system. They might want to do something such as reduce farm fragmentation, and report after report has said that farmers should reduce fragmentation, or they might wish to make investments, but they find that the structure of the taxation system prevents them from doing so. Our concern is that the taxation system in respect of those three taxes be examined to allow sensible investments to go ahead.

Photo of Aideen HaydenAideen Hayden (Labour)
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Basically, Mr. Enright means in the context of the business.

Mr. John Enright:

Yes.

Ms Yvonne O'Sullivan:

I will comment on the first comments Senator Hayden made before referring to my colleague, Ms Yvonne Woods. The Senator referred to the conflicting issues the Government must deal with.

Austerity is not necessarily the answer, particularly regarding the Department of Social Protection's budget. Austerity is viewed as counterproductive by lots of individuals. Even the former IMF official, Mr Ashoka Mody, said austerity was counterproductive. The Department of Social Protection's budget is coming more into play because the higher unemployment is, the more people must rely upon on that budget. A disproportionate cut in its budget would have a detrimental impact on many individuals who survive on basic payments.

With regard to the question of rights for the individual attending, for example, at a social welfare office, and whether one should be informed of certain rights, there are numerous human rights involved. Individuals should be informed, and that view was expressed in the report that we published last year. We made similar recommendations for local social welfare offices. For example, persons should be informed of their right to an effective remedy, to information, to lodge a freedom of information request and to legal representation and legal advice, especially at the appeals stage when people are in difficult financial situations. All of these rights should be clearly explained. It should be the responsibility of the officer concerned to let people know their exact human rights and thus ensure that we live up to our legal obligations as a State.

There was a question on economic, social and cultural rights. We believe they should be included in the Constitution but progressively realised, as opposed to an immediate transposition into legislation. At the moment, FLAC is part of a larger group of NGOs, along with Amnesty International, the INOU and numerous other organisations, that are getting economic, social and cultural rights on the agenda for the Constitutional Convention. The initiative is part of FLAC's agenda and we hope it will be included in the future.

3:15 pm

Ms Yvonne Woods:

I shall briefly answer the other two points made by the Senator. She mentioned the Combat Poverty Agency. Obviously FLAC opposed its abolition because the agency specifically catered to poverty in society and carried out some very valuable report work. Its work was supposed to be carried on by the Department but unfortunately that has not happened. FLAC would support its return as soon as possible, if that could happen. Failing that, we want to see its work carried on. Perhaps it is too much to hope that the new Irish Human Rights and Equality Commission could be a merger of Combat Poverty and the NCCRI, which was also an extremely valuable group.

I shall make a quick comment on mortgage arrears. FLAC has extremely serious concerns about the lack of independent information and advice available to people experiencing troubles. FLAC's information services are swamped with such queries and we are trying, very hard, to make policy proposals that will help. For example, our director general, Ms Noeline Blackwell, proposed that an independent service might be cobbled together from various sources, but so far her proposal has yielded very little response by the Departments that she contacted.

FLAC is doing its best and tries to inform its volunteer advisers in its centres on how to deal with such queries more comprehensively. Lots of other groups are doing the same but in a voluntary capacity. I refer to voluntary groups who do such work. The State should-----

Photo of Aideen HaydenAideen Hayden (Labour)
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Does FLAC favour a budget telephone line to provide such help?

Ms Yvonne Woods:

Yes, it is essential. It is all very well to say that the matter is being dealt with. There are bodies who provide advice but they need more resources to deal with a spiralling problem. As FLAC has consistently stated for many years, the problem will not go away and will continue to increase unless we address it now.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Let me say to FLAC and the DFI that I have a sympathetic ear for their critique of the austerity agenda and how it impacts on the most vulnerable in society. I could not agree with them more about the need to say enough is enough and to reverse some of the damage that has been done, which was catalogued extremely well by them, particularly in the DFI's submission, which shows the extent of the assault. I know that one of the group said he did not want to use the word "assault", but I shall. It is an assault on one of the most vulnerable sectors in our society. The submission shows that the cuts are part of a general assault but it is the most vulnerable who feel them the most. Many of the cuts affect the wider layers of society but they are felt deeply and doubly, trebly or quadruply by some of the most vulnerable.

I wish to ask DFI two things. First, I ask them to elaborate on the important point about not cutting pay and numbers in disability services. There is a narrative that was echoed in an earlier contribution which says that 90% of the cost of public services is spent on salaries. Its subtext is that we need to cut workers' pay to leave more room to manoeuvre when providing services. I think, and Mr. Dolan seemed to hint at the same, that we need to reject such logic. It seems to me nowhere is it more obvious than in the area of disability that providing services means providing human beings who, in turn, provide services. The service is providing a human being who will care for somebody, look after him or her and provide the necessary health care, support and so on. I would like to hear Mr. Dolan's view on this and I ask him to elaborate because the issue is important.

Second, has Mr. Dolan anything to say about the creeping privatisation of some of these areas? As public service numbers and public services are rolled back in a range of areas the private sector moves in, but it views it as a chance to make money. It is deeply worrying to see that development, particularly in areas such as disability and care of the elderly. Perhaps Mr. Dolan will comment.

I am delighted that FLAC raised the issue of social welfare appeals because the situation is alarming. Does FLAC agree that entitlements have been culled as part of budget cuts? People who previously had certain entitlements are now being refused, reviewed and so on and must endure the long process of appeal. I wish to outline one of the extraordinary features of this scenario and ask FLAC to confirm whether it has experienced the same. A consultant, counsellor or GP testifies to the Department of Social Protection that a person is entitled, or should be entitled, to a disability or invalidity benefit, but the person's claim is still refused by a person who, I can only assume, is in most cases not a doctor, a consultant or a counsellor. As a result, the person must go through the humiliation, ignominy and cruelty of appealing his or her case, and the process takes a long time. The appeal may not succeed despite strong medical evidence to back up the person's entitlement.

I agree with FLAC's comments on rights. The problem is how one translates human rights budgeting into practical policy. Let us take housing as an example. I am sick to my back teeth of the appalling housing crisis. How can one make a right to housing in law specific enough to make it truly binding and force action to resolve the housing crisis? We should put it in law that the State is obliged to provide permanent, secure and adequate housing within two years - I mean an absolute legal requirement, whereby the State would be open to legal action if it did not provide social housing for people who need and cannot afford housing.

My last question is for the ICMSA. It has a slightly different set of issues that I do not know as much about. However, I shall outline my perspective.

The impact of the current crisis is felt disproportionately by those on low and middle incomes, whereas those who are pretty wealthy are largely insulated from it. That is my view, with which the witnesses may or may not agree. I am slightly worried about the fact that the witnesses have spoken about no increases in capital gains or capital acquisitions taxes and no decrease in subsidies and other measures designed to assist farmers and to allow them to survive and invest in their businesses. I am not sure that business is always the best word to use because farming is a way of life which needs to be protected. It deserves special treatment for that reason, but I would draw the line at big, wealthy farmers, who should actually be taxed more, frankly. What do the witnesses think about having a differential approach? Would they be in favour of maintaining some of the protections and reliefs for the low and middle-income farmers who might be threatened by various tax changes but not for those farmers at the top who are making a lot of money? How would the witnesses feel about such a progressive or differential approach?

3:25 pm

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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I wish to make a number of comments before calling on the witnesses to respond. Representatives from FLAC made a statement earlier concerning social impact assessments of our budgets, which is something that certain Departments have attempted to do in the past. We must acknowledge that sometimes they got it right but other times they got it drastically wrong. I am hoping the changes announced today regarding how we will manage committee debates in the budgetary processes will have a positive impact on that in the coming years and I ask the witnesses to comment on that point.

It is not just because I come from a rural community that I have very different views to those of Senator Hayden. The agricultural industry must be supported and when it is supported, it demonstrates that it can provide employment and a return to the Exchequer. Of the 34,000 new jobs that were created in the last year, 9,000 were in the agricultural industry. The industry has proven that when it is supported by Government it can excel. In the context of the Harvest 2020 targets and given the fact that we all have to eat, that is to be applauded.

I have a number of specific questions for Mr. Dolan, arising from my interest in education provision for children with disabilities. The NCSE review announced a number of months ago will take place over the course of the next six to 12 months. What is Mr. Dolan's view on it? Has the Disability Federation had any input into the review? Does Mr. Dolan think it will genuinely replace the general allocation model and fund disability services in a better way than the current system? Mr. Dolan spoke earlier about spreadsheet planning for the provision of services, particularly for adults, and I totally appreciate the point he made. Does he feel that the strategy announced earlier this year will provide a road map, or are we still floundering around with regard to genuine provision of services? Finally, does Mr. Dolan believe that we should change how we deliver the services and actually ensure that individual services users own the particular budget or grant, as opposed to our giving the funds to the service providers? If we were to allow individuals to decide where to spend their money in accessing particular services, would that radically overhaul how services are delivered in this country? Would such a change be for the better or for the worse?

Mr. John Dolan:

I thank Deputy Boyd Barrett for his compliments and will address his questions first. He raised three main issues. On the question of not cutting pay and numbers, I was being a bit agnostic. I was just making the point that these are human services and 80% or 90% of them involve paying folk. In other words, it is not a small part of one's cost base but actually is one's cost base. I was simply saying that if there is no reduction there and there is no reduction in the cost of living then we cannot have more cuts to services and people's incomes. That equation can be turned around, but that is the basic point I was making.

The Deputy also raised the issue of creeping privatisation. The organisations in the voluntary disability sector are all registered charities. There are two tests for registered charity status: organisations must have a charitable purpose, and they must be of public benefit. We would see ourselves as brothers and sisters of the public service. One cannot look at the figures in our annual reports in the same way as one would for a private business. If one is numerate, one can tell whether a private business is working or not. However, when one looks at a not-for-profit charity, the figures only tell one whether the organisation has enough money to provide services. The real issues are the activities, the outcomes and the changes made to people's lives. These are the key issues.

The question of who is providing care, support and development for people is not incidental but is core, as is the development of real relationships. If people are viewed as units to be processed rather than as individuals with needs, their human rights are debased and their dignity is undermined. That is a quandary and a major issue across the public service. On questions like "Do the buses arrive on time?" or "Are the roads good enough?", it is simple enough to work out standards and assess outcomes, but it is much more difficult in the human arena. We have a long way to go as a country in terms of working out how we benchmark outcomes on a human level.

Deputy Boyd Barrett made reference to the most vulnerable sector and I would have to agree and disagree with him on that point. Disability strikes wherever and while well-off people might have an edge over others for a while, they will very quickly find that they cannot buy their way out of it. At some point they will have to go into the public system, whether that be through their children starting school or through the health care system. Disability services, like the fire service, are either there or not there. One cannot ring the fire service unless its there. That is an enormous challenge.

The Deputy also asked some questions about housing. In the context of the discussions around the disabled person's grant, we cannot have people waiting for a year or more for those grants, lying in hospital beds, costing the State more money. The cost is incidental, actually. The main point is that it is not right that people's lives are put on hold. To say to people that the money has run out halfway through the year is an obscenity, particularly in the context of once-off capital spending rather than ongoing spending on care. I do not want to rant on but I cannot understand how these issues, which have been plaguing us for decades, cannot be resolved. Surely we can sort out small capital projects, particularly given that Irish workers are employed to complete them, in the main. Such issues are a major source of frustration for people.

I will now deal with Deputy Doherty's questions. First, to be honest, I am not in a position to deal with the question about social impact assessments because I do not know enough about it. However, I will get back to the Deputy on it at some point in the future.

I am not clear as to what strategy the Deputy was referring to in her comments.

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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The disability strategy that was launched-----

Mr. John Dolan:

Okay. What was the Deputy's question on that?

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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It was mentioned earlier that we do not do a spreadsheet analysis of the services that we need every September and every year we find ourselves in exactly the same mess.

Mr. John Dolan:

Now that the disability strategy has been announced, which I welcome, the real issue for the Government is not the strategy but the spreadsheet and who is responsible for it. The Taoiseach is responsible for it in an overall sense, but who is he delegating responsibility to? There was talk about a Cabinet reshuffle halfway through the Government's term, score cards and so forth, but a very good practical step which could be taken at the halfway stage is to install a man or woman in Cabinet with responsibility for disability inclusion. That would pull in issues from a wide area and would also serve the whole public service reform programme. Means testing is one area that must be tackled, for example. How do we serve the person rather than the system, in education, housing and other areas?

It is through education, housing, accessible buses, accessible buildings and income supports. With disability, we have an excuse to examine where the public service system does or does not work in rural Ireland and elsewhere.

Personal budgeting is part of the answer. It does not, however, deal with situations where there are no accessible public transport systems. Money in one's pocket does not solve the transport issue outside of built-up areas. There are certain things that can only be provided by a government. How a government does this, whether directly, through a public service licence or through a suite of ways, is important. Personal assistants, which we have had for 15 or 20 years, were provided through a personal budget, but this provision came under pressure last year. Mobility allowance goes back 40 years and it, too, is provided through a personal budget, although it is not called a personal budget. The motorised transport grant was also a personal budget. Ironically, these provisions were picked out in the past year. Fingers crossed, they seem to be back on track. This is almost like a social impact issue, but it is strange that it was as if it was decided a few bob could be saved in this area, but nobody was watching the overall impact. Personal budgets which give people and families choices are not new and have existed in the past. They were not called personal budgets and were not valued, but they must be part of the future. There is significant work going on now to put in micro supports.

In the old days, we had the big house - the institution. Then we came into the community with rehabilitation and various groups and organisations. That model is now being refined and we must decide how to provide a support structure around an individual, with IT support, HR support and help in decision making. We are trying to refine the process. Once one needed to be in an office, but now all one needs is a mobile telephone. We are trying to do the same for people. This will serve disabled people, but it will also serve many others and give them more autonomy and choice. This is the way to go, and while it is revolutionary, we should not forget we have already done it in an old-fashioned way. We can emancipate many through the harnessing of new technology. We can also harness good old-fashioned, as it were, neighbours who want to help. For example, an accountant might want to help a person with budgeting, another person might want to help with managing personal assistants and an electrician might want to help sort out problems with wheelchairs. There are many ways we can bring people in without having to define new grades and employment. However, we will still need core people employed to manage and broker the system.

3:35 pm

Mr. Pat McCormack:

I wish to respond to Deputy Boyd Barrett. The Irish Creamery Milk Suppliers Association is a family farm organisation and we welcome the fact that the Deputy sees farming as a way of life rather than as a business. Inevitably, farming must be juggled to keep it afloat, but it is our heritage. The majority of our members are in the low to middle income bracket. In March of this year, when the Council of Ministers agreed in Europe on a cap for individual farmers' budgets, ours was the only organisation to express disappointment that the cap was not more meaningful to the Irish set-up.

The critical areas of our pre-budget submission relate to stamp duty and capital acquisitions. These are a burden that family farms cannot bridge viably to ensure a smooth transition from one generation to the next. With regard to schemes, traditionally such schemes as REPS or AEOS have been targeted at smaller family farms, the people we represent. These two areas are the cornerstones of our submission.

Photo of Aideen HaydenAideen Hayden (Labour)
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I would like to make a clarification in terms of the interpretation of my comments. My remarks were not intended to indicate a lack of support for farming. My point was that income is income and should be taxed equitably, irrespective of how it is earned.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I have a brief supplementary question for the ICMSA. Does it recognise the difficulty we have in distinguishing between the strong case for defending a heritage and way of life and protecting the right of families to carry on their farming tradition, and the case for capital acquisitions tax or capital gains tax? I see the logic from the association's point of view. However, from the point of view of those of us in urban areas, there is a real problem about large numbers of very wealthy people getting away with not paying that much tax at a time when we want to shift the tax burden away from those on low and middle incomes towards those who can afford to pay. Does Mr. Dolan get my point? Is there a case for distinguishing between small and larger farmers in a way that can bridge that gap? Otherwise, we end up in a position where the city is played off against the countryside and resentment builds up between farmers and city dwellers. This does not help anybody. This is something to think about, but perhaps there is no response to it.

Photo of Aideen HaydenAideen Hayden (Labour)
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Those people are possibly members of the IFA.

Mr. Pat McCormack:

I am sure they will make their own submission.

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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I expect the ICMSA would be loath to respond and indicate how to tax them more.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I am not saying tax them, but those who can afford it.

Mr. Pat McCormack:

Tax returns must be made and they are based on income. Some people can afford to do different things, but others cannot. The majority of the people we represent are not in a position, capital wise, to do what is alleged is done.

Mr. John Enright:

Another factor is that the farm sector is extremely diverse. We have full-time farmers and part-time farmers, both of whom are legitimate and in solving a problem in one area, we could create ten problems in another.

Mr. Pat McCormack:

Farming depends on mother nature and we have seen the issues this has created over the past 18 months. Also, we are entering a period of massive market volatility. A farmer may have an income now that falls into the medium category, but could fall into a low or negative category in the next 12 months. It is very difficult to run or plan a business in that scenario.

Ms Yvonne O'Sullivan:

I thank Deputy Boyd Barrett for his questions and comments. With regard to his question on the culling of payments and entitlements, in the social welfare area FLAC works mainly on appeals on a strategic case base. Therefore, at that stage we do not necessarily see a huge number of cases where the opinions of doctors and other practitioners are not taken on board . However, we have heard of this happening quite often. Sometimes such cases are concerned with the revision of a decision or sometimes it is a case of a person just being annoyed. We suggest that better first instance decisions would reduce this and would probably also reduce costs in the social welfare appeals office. We carried out a survey on social welfare appeals among practitioners which indicates there is a huge inconsistency in decision making within the social welfare appeals office. It is quite difficult to know what exactly is happening in some cases or to establish a trend. For that reason, we call for a more widespread publication of social welfare decisions to make the system more transparent.

With regard to economic, social and cultural rights and whether they should be included in legislation so as to have a legal footing, we believe there is more than one way of ensuring these rights are realised. We believe more practical steps should be taken, such as the inclusion of civil society in policymaking and budgetary decisions.

Ms Woods mentioned the example of the inclusion of the Scottish version of the Human Rights Commission in that country, contributing to mapping the pathway between evidence policy and spending. Other examples from Scotland include improving the presentation of equality and human rights information, and improved commitment to and awareness of mainstreaming of equality and human rights into policy and budgeting processes. There are other mechanisms if we want to go down the legal route. South Africa would be an example of how we go about ensuring the right to housing as a legal obligation of the State. There could be financial and legal repercussions for the State. A government does not necessarily want to go to court all the time over the right to housing because it is something to which it has legally committed itself. In a way, it pushes a government to realise these rights. We see it as a practical measure along the lines of economic, social and cultural rights, although a legal footing would also be welcomed because legal rights are just as important as civil and political rights.

3:45 pm

Ms Yvonne Woods:

I thank Deputy Boyd Barrett for his comments. We have seen many of the points that he made. The Acting Chairman pointed out that social impact assessments have been tried before in various Departments, and we are aware of that. We are just asking that this be stepped up. We hope our proposals will be useful. The proposals of our colleagues are conducive to this. Whether it is on poverty, human rights, equality or whatever, impact assessments will stop mistakes from being made and will stop time and resources being wasted. It will also stop people from being put in a position of destitution, with all sorts of horrendous outcomes for them and their dependants. We have seen chains of people being affected by the ongoing mortgage arrears crisis. We are thankful for the opportunity to be here and we hope it has been useful for the committee.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I would like to make a final comment. We have had 36 groups in here over the last two days, which is a phenomenal workload. I would like to thank the representatives of all the organisations that came before the committee. They were very concise and to the point. I would also like to thank the secretariat staff who produced a summary of each of the 36 submissions. That was outstanding work. I am on many committees so it was great to go through the summaries. In truth, we could not read every submission out of the 36, but we got a very comprehensive summary of each submission which included all of the main points.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I would like to add my thanks to that. Those in the secretariat deserve great credit for their tremendous work. I hope they get a bit of rest this evening. I thank all the groups for coming in as well.

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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I will echo the praise and the thanks to our committee staff. I thank Ms Grogan, Mr. Dolan, Mr. McCormack, Mr. Enright, Ms Woods and Ms O'Sullivan for all of their submissions and discussions this afternoon. I know I found it very insightful and I am sure my colleagues did as well. We look forward to seeing you all in the near future.

The joint committee adjourned at 5.45 p.m. until 2 p.m. on Wednesday, 25 September 2013.