Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

As the Minister for Finance said yesterday, the previous few budgets have been hard, but they have made it possible for Ireland to exit the bailout programme, move the economy and society into a real recovery and to get our country to a point where we are reducing the amount of debt and the need for us to borrow year after year.

The overwhelming priority of this year’s budget, which is ambitious but is also sensible, is to sustain the recovery and keep things going in such a way that more communities and people across the country can participate in it and benefit from it. That is the reason for the introduction of measures such as the reduction in the universal social charge, investment in important public services such as the employment of more nurses and doctors and more staff in classrooms. One important measure in particular that was taken yesterday was to provide further support for one of the backbones of the economy, namely, the self employed. All of the measures are sensible, affordable and will sustain the recovery that is under way and give more people the ability and opportunity to benefit from it.

Just as was the case with the recent capital plan published by my Department, the budget contained many measures people supported but there were many more things absent from it that people wanted. The Government was not in a position to meet all expectations. The reason for that is we can only spend the money we have at the moment or the money we sensibly expect to have in the future. We cannot spend money that we do not or will not have. If we do so, we will end up in the kind of difficulty we are all working to get away from. It is clear that we can only spend in line with our capacity to pay for the spending. I am still conscious that while our borrowing requirements are reducing, we are still borrowing. That is the reason the Government's target to balance our books by 2018 is such an important objective.

My Department seeks to make a further contribution to the positive change under way in the country. The budget for 2016 will allow for a total expenditure by the Department of Transport, Tourism and Sport of €1.74 billion. That is an increase of 8%, or €125 million on 2015. It marks the first year the allocation for capital spending for my Department has exceeded €1 billion. That is important progress as it allows us to make more of a contribution to the maintenance of existing roads and railways while beginning work on the kind of projects we know are vital to sustain future recovery.

There will be an increase of €47 million in current funding to bring the total current spend to just under €722 million. This increase in funding includes an additional €28 million or a 14% increase in public service obligation, PSO, subvention. This is being provided to support increased and improved public transport services, including those operated under the rural transport programme. The priorities for this funding will be to reduce congestion by responding to passenger demand on key Dublin Bus and Bus Éireann services, the opening of the Phoenix Park tunnel next summer and improving the services currently available on the DART. As a result of this extra funding the National Transport Authority, NTA, will now finalise its plans for 2016. An additional €2 million will be provided to support co-operative overseas marketing to support important initiatives such as the Wild Atlantic Way, Ireland’s Ancient East and the work pertaining to the Rugby World Cup 2023 bid. An additional €3 million also will be made available to support important sporting and physical activity initiatives, such as the new national physical activity action plan, and to help the sporting bodies and national governing bodies, NGBs, of sport to continue in their important work in preparing for the Olympic and Paralympic Games at the end of next year.

As for capital expenditure, there will be an increase of €78 million to provide funding for the maintenance of the existing road and rail network and to allow for an increase in capital funding to deliver the construction of the national indoor arena, which is to open by the end of 2016. This will be an incredibly important and positive development for Irish sport in that it will provide an indoor facility in which up to 20 different disciplines will be able to participate, as well as an arena that will further allow Ireland to compete for major international sporting events that currently are being held elsewhere.

On taxation, yesterday the Minister for Finance announced a €43 million plan with regard to the commercial motor tax system for heavy goods vehicles. This will reduce, and have a positive effect on, motor tax levels for 29,000 goods vehicles. I wish to acknowledge in the Chamber that the work this sector performs for the economy is vital to its effective performance. Earlier today, while preparing for work in respect of this sector, I was struck by how, due to the fact we have an island economy, transport costs absorb an extremely high portion of the total cost base a company must face when it is selling its goods and services abroad or when it seeks to sell its goods and services into Ireland. Consequently, while this measure is important for the sector and is a recognition of the vital work it does to allow the economy to perform and to allow goods and services to circulate, even more importantly this measure seeks to contribute to the cost-effectiveness of the economy and to the competitiveness of manufacturing, in particular. I look forward to continuing to work with the sector to support it in its measures to employ more people and to allow others to employ more people as a result of this measure. Of itself, this measure is an interim one put in place pending the replacement of the current commercial motor tax regime with a fairer basis for calculating motor tax, which will be based on the design gross vehicle weight of goods vehicles and will promote more efficient and less polluting vehicles. In addition to the importance of that measure, other plans confirmed in the capital plan also will allow the haulage sector to do its work in a more efficient way by upgrading important roads it requires, as well as investing in connectivity and access into important ports.

Yesterday's budget also included a freeze in the special tourism-related VAT rate of 9%. As with previous years, this will be subject to review to ensure that visitors to Ireland continue to benefit in terms of value for money from this lower rate. I recognise this is an important measure that has played an important role in the creation or retention of 30,000 jobs nationwide. However, I also emphasise this measure is conditional on not witnessing a return to the kind of pricing that caused such damage to Irish tourism in the past. In particular, I recognise that outside Dublin and some of the larger cities, the hotel sector continues to grapple with legacy debt issues and is working hard to get back on its own feet. It is in particular recognition of the speed of that recovery across many parts of Ireland that the Government has decided to maintain the rate at this level for next year.

Turning to spending, I will outline a few important priorities. I already have outlined the increase of €28 million to support increased public transport services. This is a significant development in the funding of public transport within Ireland. It represents the restoration of approximately 25% of the total cuts since 2008 and comes after many years of decline. When I took office more than a year ago, I indicated that an important priority for me was to stabilise the level of PSO funding and to ensure it was not cut further. I did so in recognition of the fact that for the first time in a number of years, the number of journeys on the public transport network increased after many years of decline. If one considers the case of Bus Éireann alone, last year that company carried almost 1 million additional passengers. It now is important to begin the work to invest further to allow more services to be provided. However, I emphasise this cannot be at the expense of losing the efficiency gains generated by the public transport companies because such further investment should have a tangible and noticeable effect for commuters who need better trains and a more reliable service and who, in many cases, experience bus services that do not meet their needs. This is why I am making this investment.

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