Michael Moynihan (Cork North West, Fianna Fail)

I move:

That Dáil Éireann:

— condemns the Government for introducing a series of budgetary measures that discriminate against those who can least afford it and particularly those in rural Ireland;

— objects to the overall policy direction introduced by the Government of progressively reducing and closing rural services;

— rejects the move by the Government to reduce and ultimately close small rural schools;

— further rejects the closure of rural Garda stations throughout the country;

— further objects to the increase in school bus costs that adversely affects rural families;

— opposes the cutbacks in community employment schemes that provide vital services to rural Ireland on a self-help basis;

— further opposes the abolition of the local improvement scheme;

— rejects the cuts to farm assist, third level grants for agricultural families, the rural environmental protection scheme and the disadvantaged areas scheme;

— strongly disagrees with the increase in charges for basic services, specifically aimed at rural areas, through septic tank upgrade costs and fees; and

— calls on the Government to abandon its anti-rural bias and adopt a fair and balanced approach to the budget.

I will share time with Deputies Brendan Smith and John Browne.

Fianna Fáil Deputies did not take lightly the decision to move this motion on services in rural areas. In recent years services provided in rural areas at little cost to the State have been steadily eroded. The budget announced last week contained a large amount of hidden detail on policies and measures that will chip away at the fabric of rural areas and generate considerable long-term costs to the State if they are not reversed.

The honeymoon for the Government has come to an abrupt end. The recent budget containing its choices has laid bare the reality of its incompetence and arrogance. In the course of the budget debate Ministers and other Government Members patted themselves on the back and spoke repeatedly about how the budget announced last year had succeeded in showing the world that Ireland was on the right track in consolidating its budget. They also pointed out how economic growth had returned while last year's budget was in operation. It takes a hard neck to make such statements, given that, having voted and campaigned against the budget introduced last year by the former Minister for Finance, the late Brian Lenihan, the coalition parties are now trying to take credit for this work. In some ways, this is a backhanded compliment to the achievements of the previous Government. At all times in the past nine months the Government had sufficient numbers to alter or reverse the previous budget introduced by the Fianna Fáil-led Government. Having played to the gallery, it chose not to do so because it knew our policies were bearing long-term fruit. In the past nine months it has taken few significant decisions and has instead coasted on the back of plans already in place or ready to go because Fianna Fáil did the heavy lifting in last year's budget.

Never before has a Government spent so much time praising itself while doing so little. In the past week its hypocrisy began to catch up with it, although in fairness it has proved itself adept at leaks, spin and distortion, as it sought to manage expectations, even if this meant scaring the living daylights out of hard pressed families across urban and rural Ireland. At the end of a long month of leaks and press conferences, we have finally seen how Fine Gael and the Labour Party intend to govern. They have moved from speaking in vague generalities to taking real decisions. We must no longer take them at their word and can see in the cold, hard facts what are their priorities. The Government has made its own choices, for which it is accountable. Through the mountain of detail and hours of announcements, what has emerged is a deeply unfair and damaging budget which will hit vulnerable citizens and rural areas particularly badly.

This is the most regressive budget in years. It will cost jobs, has broken an unprecedented number of promises made only months ago and may lead to a serious shortfall in Government revenues as soon as early next year. It will not promote recovery but will endanger the achievement of fiscal targets and shift an unfair burden onto groups which are least able to manage. The single most important element which will create jobs and ease fiscal pressures is overall economic growth. The Fianna Fáil Party supports the fiscal target set in the budget. It is a reasonable compromise between the need to achieve a sustainable deficit level and protect the potential for growth in the economy. My fear arises from the emergence, in the small print of the budget, of a deeply damaging and long-term attack on the sustainability of rural communities.

Agriculture is a major growth sector of the economy and Government policy must reflect the central part it plays in job creation and food security, as well as its essential role at the heart of rural communities. These are outlined in the Food Harvest 2020 document produced by my colleague, Deputy Brendan Smith, and the previous Government. Food Harvest 2020 is the blueprint for agriculture and I am pleased it has been accepted as policy by the Government. These areas are intertwined and while last week's budget contains some positive measures, it fails to recognise the links between rural life and agriculture.

While the first budget produced by Fine Gael and the Labour Party contains some small positives, for example, on land transfer arrangements, its broad sweep has been harmful to rural areas. Cuts to the disadvantaged areas scheme and REPS 4 will impact on a wide range of farmers as a result of new criteria. Reductions under the farm assist scheme will affect the most vulnerable farmers, of whom 11,239 are in receipt of this vital assistance. Farm assist is a hard fought for scheme introduced more than ten years ago which focuses on farm families with small incomes. The cuts under the scheme are an especially miserable attack on their income. Taken together, I fear these changes will, on balance, damage the fabric of agriculture.

While agriculture is critical, it is not the only ingredient in sustainable rural communities. It is in the systematic undermining of these communities that the budget does most damage. For example, phased staffing adjustments in small schools with fewer than five teachers will be devastating in rural areas. Some 1,500 small schools will suffer from lower standards as a result of a higher pupil-teacher ratio or will be potentially forced to close. Garda station closures are another attack on primarily rural communities. Public safety in some 31 communities will be undermined as stations close, with obvious impacts on quality of life in the communities in question. Knocknagree Garda station in my constituency gives the community a focus on safety and security and covers a vast area.

Septic tank charges and upgrade costs are yet another area in which people living in rural areas are being asked to bear a disproportionate cost. By demanding that 475,000 septic tank owners pay for this most basic service, the Government has taken a decision to actively discriminate against citizens living in the countryside. If a charge were introduced for connection to sewerage services in urban areas, city dwellers would correctly protest. Let no one deny that the septic tank charges and other measures introduced in the budget constitute a serious attack on rural Ireland.

Everyone knows that VAT returns are the greatest concern to the Exchequer. They are well behind projections and underlying consumer confidence remains weak. The overall deficit target will not be met if VAT returns continue to underperform. The increase in the VAT rate will drive consumers away from already hard pressed shops and impact on jobs in rural areas in which retail outlets are an important source of job creation and sustainability. We are now in the bizarre position that the Government is making directly contradictory claims about VAT changes in different parts of its budget. When it was cutting VAT for selected industries in June, it claimed thousands of jobs would result and argued that cutting the VAT rate was the best way to create jobs. Now that it is front-loading VAT increases of 2% on a much wider range of goods and services, it claims the increase will not have an impact on the economy. It cannot have it both ways. This nonsense is undermining the retail sector which needs confidence and support rather than a sucker punch, which is what the increase in VAT will deliver. The decision to raise VAT is strategically the wrong call. It was made because Fine Gael was playing politics with the economy and wanted to be able to claim it had left income tax untouched. Instead of taking the much fairer option of targeting revenue measures at the highest earners, as Fianna Fáil had proposed, the Government decided to rely on increasing the most regressive tax, which is also the tax that is underperforming most. The measure has introduced a degree of uncertainty in the programme of fiscal consolidation which the Government may come to rue.

It does not give me any pleasure to point out that the unequivocal net effect of the budget will be the loss of more jobs in urban and rural areas. A contraction of net employment in 2012 is confirmed in the budget documentation. This is more of what we heard from the Government when it announced its downgraded jobs budget. The most recent Central Statistics Office figures, released yesterday, confirmed an annual decrease in employment of 2.5% or 46,000 up to the end of the third quarter of 2011. Furthermore, the seasonally adjusted unemployment rate increased from 14.2% to 14.4% in the most recent quarter. The raid on pensioners, which produced a net €250 million for the Government's so-called jobs initiative, is failing. The measures that have been announced to aid the export and construction sector are to be welcomed. Once again, however, they are being over-spun. The fact is they are not enough. The budget documentation shows that the action the Government has taken is so small that it is having no impact on growth or employment. It is accompanied by an accelerated cut in capital spending. The €750 million that is being cut is substantially bigger than any stimulus package that was announced in the budget.

In terms of its social impact, this is by far the most regressive budget for some time. The spending cuts and tax increases will fall directly and disproportionately on the weaker sections of society and the poorer sections of rural communities. As a republican party, Fianna Fáil opposes this lack of fairness vehemently. The disability cuts were hidden until we spotted them on this side of the House, at which point the Government made a U-turn. We are glad we forced the Government to think again. We are not clear on whether or how the Government will achieve the savings it claims it can achieve on expenditure on lone parents, child benefit, jobseeker's payments and widow's payments. In the past few days, it has become clear that those who receive carer's allowance will have their family income supplement cut. The Government has tweaked the eligibility criteria for this and many other welfare payments. We did not see any headlines about such choices.

Like an iceberg, the real danger in this budget is lurking below the waterline. We have not yet clearly seen the full extent of the Government's assault on the vulnerable. It will become more apparent as time moves on. No amount of spin or camouflage can keep the nature of these cuts under wraps forever. When the leader of the Labour Party was asked during a general election debate what would be his priority in the social justice area if he were elected to government, the current Tánaiste said:

I think it would be looking after people with disabilities ... The first area that Labour in government would address in terms of equality and in terms of giving decent supports to people would be people with disabilities. I think, as a country, we have to make that the priority.

The leader of Fine Gael, who is now the Taoiseach, responded quickly by saying "that is very laudable and I share that." Their words ring hollow in the aftermath of last week's budget.

In its pre-budget proposal, Fianna Fáil has shown how the Government can meet its targets while still delivering greater investment in capital projects to create jobs and invest in Ireland's future. We are proposing that pension funds, in addition to Government funding, should be invested in commercial projects in partnership with the State. This is a credible and workable alternative to the Government's pension levy. It is not too late for the Government to change its mind. Fianna Fáil has set out how budget targets can be met in a fairer way. The required savings can be delivered by speeding up agreed reforms, focusing tax increases on the highest incomes and driving further efficiencies.

One in every five Irish homes is experiencing real mortgage difficulty. It is time for more action to help people in such circumstances. We have introduced legislation to give practical help to families in debt. We ask the Government to take it on board. It should never be forgotten that the banks have a responsibility to our society. They should lend to businesses and pass on interest rate reductions to home owners. Many people in rural Ireland, in particular, are employed by small and medium sized companies. There are not many foreign direct investment companies in my constituency or elsewhere in rural Ireland. People farm the land or work in the local shop, school, district hospital or Garda station. None of these areas are safe under this Government.

The devil was truly in the detail in this budget. When the education proposals were announced, the cut in the pupil-teacher ratio was hidden deeply in a brief mention of cuts in career guidance counselling services. The cuts in education will overwhelmingly fall on rural schools. The disadvantaged schools that have been mentioned are inevitably those within rural schemes. Some teachers in my constituency have concluded that the needs of rural communities did not enter the Minister's thinking. All the cuts in the primary pupil-teacher ratio are being confined to schools of four teachers or fewer, most of which are in rural communities. The Minister, Deputy Quinn, has added insult to injury - in case people in rural areas do not feel sufficiently discriminated against - by doubling school transport charges, which apply to rural areas only. The cuts in postgraduate courses will also have an impact.

This Government is making a significant mistake by pursuing these policies. For many years, decisions have been taken that benefitted urban Ireland. We have seen what that has cost the State. The policies being pursued at farmgate level and across rural communities, such as the cut in the local improvement scheme, will damage the fabric of society in rural areas. Such areas are experiencing substantial depopulation because of the Government's inability to see the benefit of having people working and living in sustainable rural communities. The Government needs to support the small family farm, which has been the backbone of such communities for generations. I commend the motion to the House.

See this speech in context