Seán Haughey (Dublin Bay North, Fianna Fail) | Oireachtas source

In May, Fianna Fáil and Fine Gael came to an agreement to enable the formation of a Fine Gael-led minority Government. As part of this arrangement, Fianna Fáil committed to facilitating the passage of three budgets, subject to progress being achieved on a number of our core policy priorities. In taking a responsible approach to government formation, Fianna Fáil, unlike many other political parties in the Dáil, has sought to ensure that the needs of the people who voted for us last February are reflected in the annual budget.

The budgets of the previous Fine Gael-Labour Government were repeatedly found by the ESRI to be regressive. A core objective of Fianna Fáil in entering into the current confidence-and-supply arrangement was to ensure that budgetary policy was reshaped in the direction of fairness. Under this agreement, we secured a commitment that available resources would be allocated on the basis of at least a 2-1 split in favour of public spending over tax cuts. This has been exceeded in budget 2017 with a 3-1 split between spending on services and investing in our citizens at every stage of the life cycle and reduced taxation.

Despite these improvements, this is not a Fianna Fáil budget and we did not get everything we wanted. However, we have secured a major departure from the policies of the previous Fine Gael-Labour Government and considerable progress on a number of our core policy objectives. The confidence and supply agreement has underpinned a shift in budgetary policy by moving away from a policy of tax cuts that result in the greatest gains going to the well-off in favour of a greater emphasis on investment in key public services, increases in social welfare payments and helping families with the cost of living.

Despite the relatively limited scope for increased public spending and reduced taxes, this budget will bring some relief to hard-pressed families. The reduction in the first three rates of USC by 0.5% is consistent with Fianna Fáil's pre-election commitment to reduce the burden of this tax on low and middle-income earners. This will ensure that working people will see some of the benefits of a growing economy reflected in a modest improvement in their disposable incomes.

Self-employed people often find themselves paying more in tax than a PAYE worker earning the same amount in income. The increase in the earned income tax credit for the self-employed to €950 represents an important move towards the eventual equalisation of the tax treatment of the self-employed with PAYE workers. It is to be hoped that further progress towards full equalisation will be realised in future budgets.

Securing greater investment in third level education was a key objective for Fianna Fáil in the budget negotiations. Therefore, we welcome the increase of €36.5 million in funding for higher education in 2017. However, the increased resources provided in the budget can only be seen as first step, particularly as many of those involved in the sector have stated that third level requires an additional €100 million per year in investment and in light of the long-term funding challenges set out in the recent Cassells report.

While the additional funding for social housing announced in the budget is to be welcomed, there is a need to develop a concrete strategy to underpin the significant and necessary expansion in social housing provision. There is a concern as to whether local authorities have the capacity to deliver on social housing targets. In light of the limited output on the part of local authorities in recent years, additional staffing and expertise may be required to drive the substantial increase in output.

The low level of investment in public transport is disappointing, especially in view of the increase in passenger numbers on bus, rail and Luas services owing to increasing numbers of people returning to employment as the economy continues to improve. My colleague, Deputy Lawless, referred to this matter. It is regrettable that budget 2017 does not provide any capital investment to progress key public transport projects such as metro north and the DART expansion programme.

The level of investment in public transport in Dublin must be increased significantly, particularly when we consider that per capitaspending on transport here is considerably below that enjoyed by London and Manchester, cities we compete with for foreign direct investment and jobs.

Fianna Fáil does not agree with every measure contained in the budget. Home ownership is an important objective of public policy. As such, we included in our election manifesto a proposal for a deposit saving scheme to assist first-time buyers to reach the deposit needed to purchase a home. Several experts have given their view that the first-time buyer's tax rebate announced in the budget will do little to stimulate the much-needed increase in supply but will, instead, serve only to drive up house prices further. Given the uncertainty surrounding the impact of this measure, it is necessary to carry out an independent assessment of the likely implications of the tax rebate on the housing market. I understood a number of changes in the scheme have already been agreed for implementation in the Finance Bill.

The budget will see an increase of €5 per week in core welfare payments. Under the confidence and supply arrangement, Fianna Fáil secured agreement on increases to the State pension. We also welcome the increases in weekly welfare payments to carers, the disabled and the unemployed. Excluding the State pension, these represent the first increases in weekly welfare rates since 2009 and will go some way to ensuring the social welfare payments these groups depend on to maintain their income keep pace with the modest inflation that has occurred over the past seven years.

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