Séamus Kirk (Louth, Fianna Fail)

I have limited time to contribute to the debate. I will begin by identifying the principal features of budget 2012, which are child benefit cuts, an attack on higher education, rural Ireland being hit hard by covert cuts, cuts to the lone parent allowance, fuel allowance cuts, lack of employment measures, the fact that front-line health services are to suffer, an increase in motor tax and VAT levels, the introduction of a carbon tax, a U-turn on rent reviews, the introduction of a property tax, disability allowance cuts - I accept that the latter is to be reconsidered - and redundancy rebate reductions. There may be other issues that I have not listed.

The rate of child benefit for third and subsequent children will be standardised over the next two years at €140. For a five child family that will mean a monthly loss of more than €100. That makes a mockery of Labour's red-line approach on child benefit reductions. Only last February the Tánaiste, Deputy Eamon Gilmore said: "[Things] like not cutting child benefit any further. Enough is enough. Families can take no more," were a fundamental prerequisite of entering into government with Fine Gael. That is just one of many broken promises on social welfare rates, fuel allowance and one-parent families.

The programme for Government stated that it would "maintain social welfare rates" and that "over time, One Parent Family Payment will be replaced with a parental allowance that does not discourage marriage, cohabitation or work". Now the Government is introducing an age limit for the lone parent allowance. The current limit of age is 14. Next year it will be 12 and by 2014 it will be reduced to seven.

The Government is trying to avoid headline changes while cynically introducing cutbacks through the back door by changing criteria. Because of changes to criteria and income eligibility, the Government has cut welfare payments to one of the most vulnerable sections of society. These reductions come at a time when one-parent families are at a significantly higher risk of poverty.

The programme for Government outlined, "We will complete and publish a strategy to tackle fuel-poverty." No strategy has emerged, only cuts. The Government has reduced the fuel allowance period from 32 weeks to 26 weeks. Only last year the Tánaiste, Deputy Eamon Gilmore, bitterly criticised a rationalisation of the fuel allowance period declaring:

What will happen to the pensioners who will be left in the cold until October? Is the Taoiseach going to leave them in the cold?

These cuts leave old age pensioners and welfare recipients increasingly exposed to poor weather conditions and heating cost increases. The previous Government gave those in fuel poverty an additional €40 for the cold weather.

The Labour Party said only nine months ago that it would, "reverse the €500 increase in the Student Services Charge" and that it was "opposed to third-level fees by either the front or back doors". They were promises made in full knowledge of the fiscal situation. Now the Government has made four decisions that will significantly restrict the ability of young people and the unemployed to get into third level: increasing the student contribution fee by €250 in 2012; abolishing supports for postgraduate students entering college next year, apart from some limited circumstances; cutting student maintenance grants by 3%: and the introduction of a capital asset test in 2013, thus making it more difficult for farming families and the self-employed to qualify for any student support.

The increase in VAT from 21% to 23% will have a serious impact on the livelihoods and prospects of many businesses in County Louth. A cursory glance at some of the items that will increase in price as a result of this anti-business move shows how out of touch the Government parties are becoming. The list includes toilet rolls, toothpaste, towels, soap, shampoo, detergents, pet food, children's toys, examination papers, cooking foil, fruit juices, spectacles, false teeth and coffins. Which of these does the Government consider a luxury? That these basic essentials are being described as discretionary spending by Ministers and backbenchers gives a clue to the level of thought being put into the plight of many of the most vulnerable citizens.

This decision will stretch the already limited budgets of families, forcing them to shop elsewhere, and will have a disastrous impact on towns, villages and businesses across the Border counties and further afield.

I am long enough in politics to remember the ebb and flow of trade North and South. The challenge for the Government at any given time is to ensure the trading equilibrium is reasonably balanced between North and South. This increase in VAT will seriously distort that trading balance and will force many shoppers to go northwards to shop for those essentials I have just mentioned. That will have an impact on the domestic economy. Most commentators, and most Members of this House, agree that the domestic economy is the area where, with stimulation and re-invigoration, we can create much needed employment. This measure will be counterproductive in terms of cost competitiveness and employment creation potential.

Rural Ireland will be hit hard by these covert cuts. Changes to the income criteria for the farm assist scheme will hit farmers struggling to make a living, as will changes to the disadvantaged area scheme, DAS, and the rural environmental protection scheme, REPS. Farmers across County Louth, but particularly those who are living on the least profitable land in the northern part of the county, will be hit hard by these changes which will have the effect of damaging the agricultural industry as a whole.

The Government will double the school transport charge from €50 to €100 and double the primary maximum family payment to €220. Phased staffing cuts in small schools with fewer than five teachers will also have a direct impact on these rural areas. Rural Ireland will be also affected by the decision to close 31 Garda stations. The abolition of the local improvement scheme for rural roads will further hit isolated communities and households.

Drivers who bought low emission cars on the basis of the tax regime in place at the time will be angry and disappointed today. Vehicle registration tax on band A is being increased from €104 to €160 and on band B it is being ramped up from €156 to €225. These massive €56 and €69 hits on drivers who bought low emission cars is a further indication of the lack of appreciation of the importance of these areas and of the impact they will have on transport costs, whether for social travelling or for the movement of goods and services around the country.

Deputies on this side of the House accept that the austerity programme must, unfortunately, continue. Simultaneous to an austerity programme, we must look at those areas of the economy where there is potential to develop and stimulate economic activity and employment opportunities. There are such opportunities. It is good to see the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, in the House. There is potential for development in areas under the aegis of his Department. I am sure the Minister appreciates that. I hope the necessary proposals will be brought forward to ensure the development potential of that industry, the primary industry in the country, is stimulated and will realise its full potential.

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