Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

This has been a very difficult budget to frame. Every Department has had to make hard decisions. Nevertheless, I have been able to protect spending on vital areas like marine safety and the Coast Guard. I have also been able to safeguard spending in some areas of tourism and sport by ameliorating the reduction in spending agreed in the comprehensive review of expenditure published last year.

The Department’s total allocation for 2013 is €1.7 billion, representing a reduction in spending of €387 million or 20%. This is a significant cut in spending, the single biggest cut in any Government Department in terms of capital spending, and the biggest cut of any Government Department in terms of overall spending after the Departments of Health and Social Protection. Capital spending drops by €314 million to €900 million in 2013, a cut of around 26%. This accounts for three quarters of the total €419 million cut in overall Government capital spending for 2013. I am satisfied to make this contribution and in doing so, I know that I am allowing the Government to avoid deeper cuts in education, health, and children’s services and even more taxes on people and business.

The current expenditure provision for my Department for 2013 is €758 million, a reduction of €73 million, or 9%, on the Estimate for 2012. This €73 million in savings includes a base saving of €38 million on the original current expenditure provision for 2012, plus €35 million for the once-off payment of €36 million to CIE, which brought the subvention paid to the group to its fifth highest level ever. Nevertheless, there are welcome measures in this budget for hauliers, for tourism, the aviation sector and job creation in the broader economy, in particular the diesel rebate, the aviation package and the increased VAT threshold.

Hauliers have sought a fuel rebate for some time and I have long been sympathetic to their cause. The Government has now announced a rebate on diesel which will come into effect next July. This will be crucial for hauliers who have felt the impact of the rising global cost of fuel. It will also benefit exporters by helping to control transport costs. Excise duty on diesel and petrol remain unchanged by the budget, although carbon tax will rise next May.

This week, the Government announced plans to restructure the State-owned airports. We have identified that Shannon and other airports have the potential for significant job creation. This potential has been acknowledged in the budget through a package of aviation measures. New incentives will be put in place to facilitate the construction of hangars and other assets at airports to attract aviation business to Ireland. The package could benefit Shannon Airport when it becomes independent in the near future, as well as all airports across Ireland whether in public or private ownership, as all airports may avail of it. The Government will also consider the feasibility of new funding sources for airlines, and for aircraft financing and leasing companies. More details will be announced in the finance Bill.

In 2013, we will see an additional reduction of €16 million or 6% in subsidies for public transport PSO services on the 2012 base, or 19% taking account of the once-off provision of an additional €36 million to CIE in 2012. CIE is currently preparing a revised five-year business plan to address its financial situation. It will have to take a range of steps, including the realisation of non-core assets; the reduction of its cost base, including payroll reductions; multi-annual fare increases; and the curtailment of its own-funded capital programme. The emergency bailout of 2012 cannot be repeated next year - I just do not have the money. However, it has provided some breathing space to the CIE group to implement its recovery plan by selling assets, rationalising services, securing new borrowing facilities and reducing labour and other costs. Good progress has been made in the past few weeks. It is essential that management and staff in the CIE companies use this window of opportunity to address the group’s serious financial position. There is no time to waste.

Current spending on national road maintenance will fall by 1%, from €42.3 million to €41.6 million, a drop of €633,000. Current spending for grants on regional and local roads will fall from €96 million to €82 million, a cut of €14.5 million, or 15%. The main programmes affected are the restoration maintenance grant and the urban block grant. As a result, regional and local road maintenance will have to be reduced by 500 km. The Department’s grants are not, and never were, intended to cover the full maintenance cost of regional and local roads. Local authorities have other revenue sources to assist with the funding of such works, including the new local property tax.

Maintenance of the national road and motorway network will be reduced by over 1%, saving €634,000, and €13 million will be saved in reduced operational payments for PPP roads. A reduction of over 7% will be applied to rural transport, saving €637,000 by reducing spending from €9.7 million in 2012 to €9.1 in 2013. Almost €3 million, or 4.5%, will be saved from reductions to the administrative budgets of the NRA, RPA, Railway Safety Commission and MBRS. Funding for the Green Schools programme will be maintained at the current level of €1.9 million.

The allocation for the Road Safety Authority will be reduced by €5.9 million, or 42%. The reduction in the RSA allocation for 2013 is possible due to the impending increase to the RSA’s revenue stream following the transfer of the driver licensing function from local authorities to the RSA in 2013. The RSA is expected to become self-funding in the longer term. The new plastic card driver licence will be introduced from 19 January. From that date all driving licences and learner permits issued will be in the new plastic card format, replacing the current paper licences. This is an EU initiative to introduce a secure, compact style of licence in all member states. Anyone who applies for a licence or learner permit after 12 January will receive the new version.

I also intend to transfer responsibility for the driver licence service to the Road Safety Authority from 12 January. Last year, the Government decided that the RSA should take over the operation of the driving licence service. The RSA already oversees the driver theory test and driver testing. Customers will now have a one-stop-shop for all matters related to the driving licence. Although the RSA will have responsibility for the service from 12 January, the new structures will be developed over a number of months. Local authorities will continue to operate the applications during the change-over, including front-line desk operations. This means that applications for licences and learner permits can still be submitted to local authorities during the first half of 2013.

As part of this change-over, new licence fees will be brought in to cover the cost of the service, and to reduce the RSA dependency on Exchequer funding. The cost of a ten year licence will rise to €55 from 1 January. A three-year licence fee will be €35 and a one-year licence will be €25. Under the terms of the EU directive, the three-year licences will only be available to those over 60. This new price for a full licence compares favourably to the €85 cost for a full licence in Spain, €62 in Britain and more than €100 in Australia. It is also better value than a ten-year Irish passport, which costs €80. The new fees represent the first licence fee increase since 2001. In recognition that older citizens must change their licences regularly and often must pay for eye tests, the current exemption from paying any fees for the licence for the over 70s will remain in place.

I intend to maintain funding for civil aviation at the 2012 level of €22.2 million for 2013. This includes a small increase in funding to the Air Accident Investigation Unit in 2013.

The final allocation for maritime activities in 2012 was €46 million, but this will increase to €65 million in 2013, a rise of 41%. The Irish Coast Guard responds to 2,000 incidents annually and assists around 3,500 people. Around 160 of these could have died without Coast Guard intervention. Our waters are being used more and more for leisure purposes by the public, with the Coast Guard responding to around 600 pleasure craft incidents a year, involving the use of helicopters, lifeboats and coastal rescue units. Current funding for the Coast Guard will increase substantially next year from €38 million to €58 million, an increase of €20 million or over 50%. This increase is largely due to the provision of a new fleet of search and rescue helicopters. As a result, the capital budget for the Coast Guard rises from €4.9 million in 2012 to €18.4 million in 2013, an increase of 276%.

Although it is considerably more expensive, the S92 is a modern, safer aircraft with a significantly greater capacity, range, and speed. It is configured for search and rescue operations with a range of 270 nautical miles. The Coast Guard also launched a new helicopter emergency medical service, HEMS, last July and has completed almost 100 missions. This service will expand further in 2013.

The Coast Guard is fortunate to have an extensive voluntary service at its disposal, with 900 Coast Guard, 2,000 Royal National Lifeboat Institute, 300 community rescue boats and 500 mountain and cave rescue volunteers providing a 24 hour on-call service to respond to emergencies at sea, on our cliffs or on our coasts. Without these volunteers, it would not be possible to provide the same level of emergency response. Similarly, funding for the RNLI, mountain rescue, weather buoys and the Marine Casualty Investigation Board will be maintained at current levels through to 2016. These are essential services and much of the cost is met by volunteers. I cannot justify any cut in these budget lines.

The boxers, Paralympians and individual athletes, along with our national teams and local and county sports people, lifted the nation’s spirits throughout the year, and we are grateful for that as a nation. Moreover, rising levels of participation in sport suggest that our policies are working and investment in sport is producing a real return. In recognition of this, I am reducing the planned cut in funding to the Irish Sports Council from 5% to 2.9% for 2013, representing a marginal decrease in funding from €44.4 million to €43.1. Funding for the National Sports Campus will be maintained at €1.5 million per annum, leaving aside the provision of an additional €300,000 on an exceptional basis. The Minister of State, Deputy Ring, will expand further on funding for sports in his contribution.

The 2013 allocation includes €7 million in funding for The Gathering Ireland 2013. In 2012, I allocated €5 million to The Gathering, and it is important to increase resources next year when the events and festivals are being held. The budget for Fáilte Ireland will be reduced slightly from €65 million to €63.3 million, saving just over €1 million, with a further reduction to €53.2 million planned for 2014 and 2015. However, plans are under way to merge Shannon Development’s tourism functions with Fáilte Ireland's in 2013, and their combined spend on tourism will amount to €65.3 million, representing a small increase in current spending on domestic tourism. The tourism marketing fund will be reduced by 5% or €2 million to €37.2 million. The Minister of State, Deputy Ring, will provide further details.

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