Kieran O'Donnell (Limerick East, Fine Gael)

In the speech of the Tánaiste and Minister for Finance, motor tax was included under the heading of climate change and environmental matters. We were given the impression that changes were revenue neutral yet clearly the Government is collecting €83 million extra a year. Effectively these are increases in taxes, primarily on second hand cars and new cars up to 1 July. It is a bit rich to include it under climate change when it has nothing to do with climate change. It is a revenue collecting exercise, nothing more.

I see nothing in yesterday's budget or the carbon tax announcement by the Minister for the Environment, Heritage and Local Government, Deputy Gormley, today to suggest that the extra tax collected on motor tax will be ring-fenced for environmental matters at local authority level. It is regrettable that the Minister is not in the Chamber to address these points.

The budget is deceptive, it provides many increases but they are not of real benefit to anyone. The increases do not match increases in inflation. For lower income people inflation increases are upwards of 15% for foodstuffs. The increases in tax bands and credits do not keep pace with wage inflation.

The Minister laid down a number of fundamental planks. He referred to boosting the economy. If there is a €2.3 billion surplus at the end of 2006 that has reduced by €7.2 billion to an Exchequer deficit of €4.9 billion, one must question if that boosts the economy or if it is good management. The Minister's capitulation on various issues, particularly stamp duty, means there will be a major fall in taxes. Stamp duty receipts will reduce by €600 million, corporation tax receipts by €250 million and VAT receipts by €400 million. The Government is not responsible for everything but in terms of policy issues, of which stamp duty is one, it must take responsibility.

Regarding public sector reform; since 1997 Government public expenditure has increased threefold, from €17 billion to €53 billion. The increased funding does not show up in increased services at consumer level. Spending on health has increased fivefold in the past ten years, from €3.2 billion to €16.2 billion. Fine Gael made a practical proposal that, similar to the UK, the Government would seek a 3% saving per annum. This year, such a proposal would have yielded €3 billion extra funding, giving rise to a surplus of the general Government balance. The Budget Statement includes a blanket increase of 8% to all HSE areas except the midlands at 7%. A breakdown on administration is not provided, whereas for other Departments a breakdown is given. This is a fundamental flaw in the way the HSE is funded. It should be funded through the Department of Health and Children. At least the Minister could then be held accountable. In this situation we do not know how the money is spent or how efficient the HSE areas are.

Two measures were addressed to home buyers. Mortgage interest relief only provides €33 extra per month for a single person and €66 extra for a married person. Mortgage interest payments for the average person have increased by €200 per month this year alone. This measure does not address the extra amounts to be repaid.

Regarding stamp duty, I asked the Minister to change stamp duty to make it more equitable on 26 June, during a debate on the Finance Bill, and on 20 November, during Question Time. On both occasions he refused. The public made up its mind that stamp duty was inequitable and stopped buying houses. The public sought a change in stamp duty but the Government was not forthcoming. People are experiencing negative equity and some 45,000 jobs will be lost in the construction sector. Fine Gael welcomes the measure since Fianna Fáil has stolen our clothes. The only difference is the rates Fine Gael proposed, which are more equitable. In the Finance Bill the Minister should consider providing relief for those purchasing residential sites, apart from the children of the landowner. This would make the system more equitable.

People are not buying houses, they are renting. In the private rented accommodation credit the Minister gave an additional €40 per year or €3.33 per month. Rents have increased by 20% in the past six months, €200 extra per month. It makes no sense.

Regarding the Government protecting the income of the vulnerable and supporting working families, the Government proposed that the inflation rate would be 2.4%, nowhere near what ordinary people deal with. The vulnerable will see a 15% increase in the price of milk, bread and eggs. The Minister gave €2 extra per day to the contributory pension and €1.71 to the non-contributory pension. The fuel allowance has increased by 3%, the family income supplement has increased by €10 per week and other social welfare benefits have increased by €12 to €14 per week yet the Minister will receive a €700 per week increase.

Nothing of substance was done with regard to child care. An additional €1.92 per week was given to early child care support, giving €1,100 per year, just over €20 per week but child care costs €215 per week for the average person, a shortfall of almost €200.

It is not correct to say that people on the low and standard rates of income tax will remain outside the higher taxation rate. The rate has not kept pace with wage inflation. Personal credit and PAYE credits have increased by only 4%, the bands increased by 4% for single people and in the case of a family with one earner, by 3%. Individualisation is militating against cases where the husband or wife wishes to give up work and remain at home with the children.

Stealth taxes have increased by €150 million and motor tax by 9.5%. On health, it was not mentioned in the Minister's budget speech but the cost of attending an accident and emergency department has increased by 10%. In addition, the cost of the DPS scheme has risen by 12%. Stamp duty for old age pensioners, in the context of writing cheques, has increased twofold from 15 cent to 30 cent. The Minister did not really refer to people with disabilities and provided only a €12 increase in respect of the disability allowance. Decentralisation was not even mentioned. To date, only 1,300 of the 10,300 jobs relating to the decentralisation programme have been delivered.

In the context of Limerick, I welcome the €10 million provided in respect of the regeneration project relating to both the north and south sides of the city. I wish Mr. Kenny all the best in the work he is doing in that regard. There was, however, no reference to the €53 million tourism and economic development plan, particularly in light of the discontinuation of the Shannon-Heathrow route. In addition, the Shannon-Limerick rail link was not mentioned.

I call on the Government to support the public service obligation relating to Shannon. The Taoiseach should approach his counterpart in Britain, Gordon Brown, and ask him to secure the requisite slots in order to preserve the Shannon-Heathrow route. The Government needs to stop paying lip-service to Shannon and take positive action instead. It has given nothing to Shannon. Where is the €53 million funding to which I refer? Will the Government support the PSO relating to the Shannon-Heathrow route?

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