Dáil debates

Wednesday, 7 December 2005

6:00 pm

Photo of Dan BoyleDan Boyle (Cork South Central, Green Party)

I would like to praise the Minister for Finance before I seek to bury his budget. Last year's Cabinet reshuffle happened too late in the day for the budget for 2005 to be truly considered as the full property of the Minister, Deputy Cowen, although he succeeded in making his mark on it. He has been involved in budget 2006 since the start of the process, up to today's announcement, and he deserves congratulations on that. It is fair to point out that before the 2002 election, the previous Minister for Finance, Mr. McCreevy, who is now a European Commissioner, embarked on a public spending programme at this stage of the electoral process. The level of public expenditure increased by 20% in the two years prior to the 2002 general election. The first two years of the present Administration were spent rolling back the effects of that reckless expenditure. I welcome the modest levels of increase sanctioned by the Minister for Finance in this budget. It is an indication of a prudence that he probably shares with his UK counterpart, Mr. Gordon Brown.

Comparisons between the Minister for Finance and his predecessors, other than the comparison I have already made, might be invidious and perhaps unfair. We should not compare the former Minister, Mr. McCreevy, who was associated with racing stallions and the Curragh of Kildare, with the Minister, Deputy Cowen, who is associated with "Pure Mule" and the Bog of Allen. The reality is that the attitudes of the Minister and his immediate predecessor are remarkably different. The Minister, Deputy Cowen, tends to keep his counsel. I hope he will maintain his prudent approach to economic management if there is to be a further budget before the next general election. If he engages a total loosening of the purse strings on that occasion, a future Government will have to deal with the effects of such recklessness.

When the Minister spoke about education in his speech today, he did not refer to any particular initiatives other than those relating to third level education. While such initiatives are badly needed, the Minister's failure to provide for the much-needed investment in pre-school, primary and secondary education means that the real educational disadvantages in our society, which are being deepened every day by the policies of the Government, will not be addressed. It is not something of which the Government can be proud. The Government has shown its indifference to the findings of the McIver report, which relates to areas of education for life such as adult and continuing and further education, by failing to take action in that regard. It would cost €48 million, which is a mere drop in the ocean, to improve standards and facilities in this valuable sector of the education system in line with the recommendations of the report, which is three years old.

The Minister for Finance highlighted what he considers to be the success of the current national development plan and promised a future plan to run from 2007 to 2013. The people of this country will not be particularly impressed with the roads element of the new plan if it is along the lines of the current plan. Under the 2000-06 plan, expenditure on the road network increased from €6 billion to €18 billion, without any additional value for money accruing to the Irish taxpayer. When one considers that the roads programme is being pursued by the Minister for Transport, Deputy "Give me a billion" Cullen, and his soon-to-be-departed colleague, Deputy "Give me a job" Callely, it is unlikely that the level of public confidence is about to be enhanced in any way. Like most of the public, most Deputies on this side of the House thought that the announcement and launch of the Transport 21 initiative by the Minister, Deputy Cullen, was a black joke on the part of the Government. The Government cannot be serious about allowing this infrastructural programme to be delivered by the most profligate of the Ministers who have been in office since 1997.

I welcome the social welfare package in this budget because the overall rates are moving in the right direction. We will probably not be made aware of the minutiae of the package until the forthcoming social welfare Bill is published. I suspect that the Government is continuing to get some things wrong, however. The fuel allowance payment should have been doubled to €18 per week, especially when one considers the effect of inflation on the cost of fuel since 2002, when the payment was frozen. Those who rely on the allowance have found themselves worse off when they try to meet their fuel needs and the incidence of fuel poverty has increased as a result.

The Government is sending out mixed messages in respect of pensions. The pensions rates in this country continue to be among the lowest in Europe as a proportion of average incomes, despite the increases in wealth in recent years. The approach of the Government has been to introduce tax relief for private pensions. While today's attempts to balance that playing field by allowing everyone to avail of the 42% relief are to be welcomed, we need a broader debate on why we are giving as much away in tax foregone as we are paying in State pensions. The gap between the amount paid as tax relief and the amount paid as pensions will widen as a result of the Minister's measures. Surely we should aim to introduce a proper and effective State pension. The Government seems to be running away from this issue.

In recent years, the Government has provided for marginal increases in the rates of payment made to carers, for example under the respite care grant. However, the Government has not addressed the central issue, the Victorian rules in the Department of Social and Family Affairs which preclude people from receiving carers' payments if they are in receipt of other social welfare payments. If we are serious about acknowledging and rewarding the extent to which the State's duty to provide a service is being subsidised by the work of individual carers, we should provide for a refundable tax credit for carers, given the work they do, as proposed by the Green Party.

The centrepiece of this budget is supposed to be the five-year child care strategy. Despite the Taoiseach's socialist tendencies and inclinations, I suspect that the Government used the word "strategy" as it did not want to use the term "five-year plan" in case it would remind people of post-revolutionary Russia or current-day China. I accept that the Taoiseach seems to be enamoured with current-day China. The child care strategy that has been proposed, like many of the Government's long-fingering policy initiatives, is aimed at getting the Government over the hump of the next election. This budget has been drawn up with one eye firmly fixed on the next election, but the other eye is blind to the forthcoming economic realities and threats, unfortunately.

It has to be underlined that this budget is the first of those introduced in the era of the Celtic tiger to be preceded by an increase in interest rates at European Central Bank level. While the increase was of just 0.25%, it is possible that it was the first of many such increases. When we gather for the Budget Statement this time next year, perhaps there will have been a 1% increase in interest rates on the base rate for all lending across the economy. Such an increase would have significant effects in Ireland, where the average debt per person is 160% of the average income. This country has borrowed €270 billion. When we were in the midst of our deepest economic crisis, we spoke about what the Government owed in the form of the national debt, which was 120% of the national income. Current Government policy seems to have transferred the debt of the State and the Government to individual citizens, who have even greater debts. When those bills have to be paid, Deputies on this side of the House should not be shy about reminding citizens that the Government created the circumstances in which such debts accrued.

I would like to focus on some of the child care measures in this budget. Like much of what is welcome in the budget, the measures in question do not go as far as they need to go. Why has the Minister decided to stop the child care payments at the age of six? The Green Party has proposed that staggered payments should be made for children under the age of five, and for children between the ages of six and 12. I suspect that the Government's attitude is that the child care needs of a child who has entered the primary school system are being looked after. The real purpose of primary education, which is not mentioned anywhere else in the budget, is to look after the children of this country and acknowledge them for the resource they are. We must build them into the citizens we need for the future, not only for our economy but also for the well-being of our society.

The Government has gone down the road of allowing a number of additional weeks of maternity leave. It has not gone as far as we would have wanted and it is taking its time getting there. It has not introduced a concept of paternity payments or paid paternal leave. The sop to the Progressive Democrats regarding the income disregard for some childminders needs to be spelt out further, not just by acknowledging and registering such childminders but also by making ongoing training available to childminders. We need to turn the informal childminding economy into a formal economy. I have no faith in the figures for additional child care places the Minister for Finance has said can and will be produced. I put that in the category of the waiting list that still has not been resolved.

The Government is now reluctantly going down the road we have advocated for many years of recognising that many tax relief measures were unnecessary and iniquitous. However, somehow they seem to have a life that goes beyond the next general election. If by whatever hand of fortune the Government parties find themselves back with their hands on the tiller, I am sure they would change their minds again about such reliefs and would reward those who support them so generously.

The so-called scrapping of the stallion tax relief, which seems to have a life up to 2008, is very much a nod and wink measure. This is a nod to the European Commission that we are getting rid of a tax that all recognise should not exist. However, it is a wink to those who avail of the tax, the Galway races fraternity, that if after the next general election Fianna Fáil finds itself still in Government, a tax relief in some form or other could remain. If the Minister had the courage of his convictions, this tax would have gone not today but three years ago.

The Government is sending mixed messages that while property-based tax reliefs may be a bad thing, it will let them linger a bit longer and will kill them with kindness. At the same time the Government is seeking to introduce additional property tax reliefs, especially in the area of health care. The extension of tax relief for private hospitals will create a two-tier or three-tier health system so beloved of the Tánaiste and Minister for Health and Children. The more insidious measure of introducing tax relief on private psychiatric hospitals seems to be introducing the concept that for the first time somehow we could put a price on sanity. If that were open for discussion many of us on this side of the House would be quite prepared to do that as regards the price and sanity of many members of the Government.

Ultimately any type of public service ethos seems to be dwindling away. Trying to solve our many social problems by giving tax incentives and hoping that with enough money those problems will not exist in the future will not work. It has not worked to date and our experience is that this approach will make things worse.

After eight years of indifference on environmental matters, the Government's so-called environmental measures add insult to injury. The graduated relief on biofuels should have been a bolder measure involving a direct derogation. The Government hopes to have 2% of the fuel market taken up by biofuels by 2008. European directives oblige us to be at that level now and to be at 5% by 2010. The Government cannot hide behind any phoney concern that it claims to have about the environment as it is lagging behind with scores of environmental judgments being registered against it at the European Court of Justice each week.

The ultimate insult is the establishment of a carbon fund that is somehow supposed to meet our obligations under the Kyoto Protocol. In addition to the amount set aside being too small, the principle still appears to be that the taxpayers, regardless of whether they have contributed to our environmental problems of carbon build-up, are expected to meet the bill and those who quite obviously have caused the build-up are not being asked to contribute to the extent they should. On road safety we seek to improve road conditions, improve education and try to limit the number of deaths. Applying the principle of a carbon fund to road safety would mean that rather than dealing with the problems, we would merely pay for the funerals. Ultimately we will not be better off with such an approach.

The public has lost confidence in the Government and its sponge-like way of taking ideas from elsewhere and regurgitating them as being initiatives of its own. We have had a series of three budgets with the big ideas of child care this year, disability last year — of which this year's budget makes no mention — and the farce of decentralisation two years ago. If the Government is serious about winning public confidence, it must take into account that its promises and track record do not bear up to proper scrutiny. It has had the opportunity afforded by the best set of economic circumstances in the history of the State. It promised to end waiting lists, homelessness and child poverty. It has achieved none of these aims and many indicators in these matters have worsened. How many multiples of these good economic circumstances would the Government need to achieve any or all of those targets? I suspect the Government would not get any of these matters right in 1,000 years because it lacks the capacity, imagination and honesty. Ultimately the verdict on the Government will be that it was the most wasteful and achieved least. The Government that will follow must be a better Government that will deal with these circumstances in a more humane and fairer way.

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