Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

This is a disastrous budget. It is an anti-people, anti-democratic budget, which is clearly the product of a sell-out of Irish sovereignty to the International Monetary Fund and European Central Bank. It is an effort by a totally discredited Government with no mandate and in its dying days to impose a Thatcherite economic strategy on the people. The result of this cruel strategy will be to heap even more poverty, unemployment and social misery on our people. It is an attack on the mass of people who are on low to middle incomes, with those most vulnerable to be injured most. The wealthy are to escape yet again. All of this has been done to bail out bank bondholders and do the bidding of the European Central Bank, European Commission and International Monetary Fund.

The basis of the budget, IMF-EU deal and four year plan is the belief that taking €15 billion out of the economy between now and 2015 will bring us out of recession. By the Taoiseach's own admission, €15 billion has been taken out of the economy since 2008. With what result? If there is growth in the economy, as the Minister for Finance, Deputy Brian Lenihan, claimed in his Budget Statement, the budget will stem it and suck the oxygen out of the economy.

The recession is not over but continuing and deepening. For month after month, we have consistently had more than 400,000 people unemployed. There was nothing in the budget to sustain existing jobs, not to speak of creating new jobs, because the Government does not have an employment strategy. In desperation it tries to portray any marginal reduction in the live register figures as a sign of recovery when such reductions reflect the growing numbers of young people taking the option of leaving the country for opportunities overseas.

In his Budget Statement last December, the Minister for Finance stated we were on the road to economic recovery. "The worst is over", he declared, adding that "we are turning the corner". In his speech introducing the 2011 budget, the Minister spoke of "clear signs of hope" and "returning to growth after a deep and prolonged recession". His words are even less credible this year than they were in December 2009.

In his budget speech the Minister served up a large dollop of historical revisionism. With a straight face, he stated that the €19 billion budget deficit was created because the Government, during the boom, was "seeking, with the full support of those opposite, to spread the benefits of the boom across every section of the population". The reality was that the Government refused to spread the benefits of the boom across society and refused to share the wealth. Sinn Féin stood alone among the parties in this House in arguing against any reduction in tax levels or bands in a succession of general elections, including in 2007.

The Minister stated, "households and businesses continue to work off the excesses of the boom". This is to suggest that every household grew fat during the boom or, as the Minister stated last week, we all "partied". That is a parody of the truth and an insult to thousands of households which are struggling to make ends meet and survive week on week, even before yesterday's budgetary measures take effect.

Last year, I described as reminiscent of Margaret Thatcher the Minister's argument that the social welfare system can trap people in joblessness. The only thing trapping people in joblessness is this Government, which has wrecked the economy and failed to present a strategy to create real jobs and sustain existing employment. At that time, I also warned that, after the attacks on people on social welfare and low income in budget 2010, the minimum wage would be next in line. That is precisely what occurred 12 months later. My prediction came to pass in this budget, which launched a further all out attack on people dependent on social welfare, with the slashing of the minimum wage scheduled to follow in March.

The result of this cruel budget will be poverty, unemployment and social misery. The cuts to social welfare are savage - there is no other way to describe them. They are absolutely savage and it is people on social welfare who will bear the brunt of this budget. The Minister, Deputy Lenihan, tried to justify these cuts by claiming there was low inflation. That was a pathetic effort to defend the indefensible. The very budget that cuts social welfare also raises a whole range of costs that will be borne by people on social welfare and other low to middle income families. According to the consumer price index, prices rose by 2% in 2010.

The real effect is that the basic social welfare rate is being cut by €416 per annum. A couple dependent on social welfare will be down €691 per annum. When child benefit cuts are added an unemployed family with three children will be down over €1,000 in actual cash available to meet the family's needs each year. Most social welfare recipients will have €8 per week, or €416 per year, taken out of their pockets by this budget. Jobseeker's allowance has been reduced by €8 to €188 per week for those aged over 25. For people between 22 and 25 years of age the rate drops by €6 per week to €144. In a budget with no jobs strategy the Government's message to the unemployed, especially the young unemployed, is very clear - subsist on less or emigrate. That is the message this Government is delivering to the young people of Ireland today.

In budget 2010 the Government's cruellest cut was to carers. People on carer's allowance lost €8.50 per week and those on carer's benefit lost €8.20. It is reckoned that more than 160,000 family carers provide over 3.7 million hours of care each week. On top of the heartless cuts in 2010 budget 2011 now takes another €8 per week from the carer's allowance and carer's benefit, or a weekly cut of €16.50 and €16.20, respectively, in the space of just over a year. It is an absolute disgrace. This budget cannot be taken in isolation from the series of austerity budgets introduced by this Government during a period of almost three years

The weekly €8 cut slashes the invalidity pension, one-parent family payment, disability allowance, widows' and widowers' pensions, disability pension and the blind pension. As Inclusion Ireland has pointed out, these cuts are completely at variance with the national disability strategy which is often cited by Government as evidence of its commitment to people with disabilities. This is an anti-children budget and undoubtedly will increase child poverty. The €10 reduction to child benefit for the first and second child, €20 for the third and another €10 for the fourth child will penalise poorer families most. That is obvious and is also shameless.

As the European anti-poverty network has pointed out, statistics for 2009 released last week by the Central Statistics Office show that levels of consistent poverty in this State rose from 4.2% in 2008 to 5.5%, while the numbers unable to afford basic requirements went up by 25%. These figures reflect a situation even before the impact of the budget cuts of last year, let alone of the budget introduced yesterday, are taken into account. Let us make no mistake - the situation is very serious and the poverty trap is deepening.

Cutting social welfare should be the last thing a Government does in a time of economic difficulty. Cutting social welfare payments will have a detrimental effect on the economy and society because those payments are always returned to the economy. They are not salted away in savings or invested overseas but are spent on rent, mortgages, food, utilities and all the other essentials people need in life's daily requirements. Cutting welfare is a false economy, the only tangible result of which is misery for those on the receiving end. If less money is spent, the economy will contract, businesses will struggle and more jobs will be lost. More people will be reliant on social welfare. Local economies will suffer especially badly and communities struggling out of poverty and marginalisation will be pushed back.

Last month a survey conducted by Sinn Féin with 278 social welfare recipients demonstrated that families on welfare simply cannot afford to take this hit. On the current welfare rates almost 90% of those surveyed will go without something essential this Christmas, be that food, home heating fuel or Christmas presents. Respondents also confirmed that more than half of welfare recipients may borrow money to see themselves through Christmas. Ultimately, the only stimulus in this budget is for loan sharks and money lenders.

I stated that this is an anti-children budget and this is carried through into the cuts to education. Education has taken a disproportionate hit. I am glad that the leader of the Green Party, the Minister for the Environment, Heritage and Local Government, Deputy Gormley, is present. In times of recession education could and should be used as a tool for economic recovery. It should be the gateway to growth and revival. Of course, the Government's approach is the exact opposite. Instead of investing in and growing the education sector this Government has reduced education spending year after year. It seems intent on making education a preserve of the rich. Gone are the days of free education, in are the days of under-funded schools and exorbitant fees. There isan overall reduction of 21% in capital expenditure for education in the coming year; 9% for primary schools and a whopping 20% for secondary schools. This is inexcusable and makes a laughing stock of the Government's claim to be building a knowledge economy. Children will continue to go to school in prefabs rented from private concerns at exorbitant long-term costs. Classes will be unable to cope with more children and less room. A Government with a sound education strategy and a job creation strategy would have invested in school buildings, creating much-needed employment in the construction sector and providing long-term upgrading of our educational infrastructure. The 5% cut in capitation funding for primary schools will penalise all schools but especially the most disadvantaged which depend more on Government funding. Schools are already struggling with high class sizes and limited resources. Children and families in rural Ireland will be worst affected by the new €50 primary school transport charge. Add to that the €50 increase in the secondary school transport fee to €350 per child per year and the impact on families with children is very substantial. In addition, rural farming families have been hit again with the €36 million reduction in the REP scheme.

No-one can accuse the Government of lacking imagination or innovation in this budget. It has come up with another innovative barrier to education. Which member of Government was responsible for authoring a new €200 per annum fee for post leaving certificate courses? This anti-education Government has increased third-level registration fees by €500 to €2000 and has reduced student grants. It has cut grants to secondary schools by 9% and taken 3% from the vocational education sector. A cruel Government has again cut support for children with special educational needs. Sixty per cent is to be cut from educational disadvantage funding.

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