Michael Harty (Clare, Independent) | Oireachtas source

The budget is an extensive document and it is difficult to deal with each issue comprehensively, so I will only address a number of them.

One topic three quarters of the way through the Budget Statement related to a VAT compensation scheme for charities. I am delighted that this has finally been introduced. Last year, the then Minister for Finance undertook to review this matter. I am happy that it has been included in this year's budget. A review group was set up in 2015 to examine it. The current Minister has decided on a Danish model of VAT compensation involving a budgetary fund. He has placed €5 million in that fund, which will be made available for charities to reclaim VAT on funds that they have raised through public donations. Charities have consistently raised funds by selling flags, holding street collections, selling lines and organising public events, so paying 23% VAT on those raised funds seemed quite wrong. It was a tax collection system in respect of charities. It reduced the amount of money that they could spend on their services, which were often delivered on behalf of the Government. As such, introducing a VAT compensation scheme in the budget is a positive measure. It will give certainty to charities over the funds that they raise in future. I hope the fund of €5 million will be built up year on year so that charities that claim VAT will get most, if not all, of their VAT back. Unfortunately, €5 million will not be sufficient to allow all charities to claim their VAT back, but it is a start and I welcome the Minister's introduction of this scheme. Many people have worked on this matter over the years. I thank the Minister for listening to my representations on the scheme over the past year. It is an important component of the budget.

Budgets are set pieces and we want to know how much money will be allocated in them, but it is more important to consider how the allocated money is spent. In this regard, I will refer in particular to our health spending. The Minister has announced a €685 million increase in the health budget, representing a 5% increase in health spending. However, when one takes the demographic changes into account - a growing population, the increasing age of that population and the growth in demand that these two factors place on our health budget - that 5% increase is rapidly whittled away. The entire 5% will be taken up by demographic considerations in the budget. The increase is just keeping pace with spending.

The increase does not address the legacy issues that have built up in our health service over the years either. We have a large waiting list for elective care, with almost 100,000 patients awaiting elective hospital procedures. Some of these are serious procedures. We have a list of more than 500,000 people waiting for outpatient appointments. We have a bed shortage in our hospitals, given that more than 1,500 beds have been removed from the system in spite of a growing population. We need to view the increase of €685 million in that context. We need a large increase in bed capacity, including ICU beds, which play a critical role in allowing patients to have surgical procedures.

We need to consider how we are funding our health service. Each day, almost 500 people are on trolleys. A trolley count has become institutionalised. It peaks every winter. Last year, it peaked at 612. This year, it will peak above that.

None of the €685 million will address these issues. We need health reform. The Sláintecare report was published last May, but there was not one mention of it in the Minister's speech. The report contained a reference to transitional funding, which we need to build into our health service over and above our current spending. The budget makes no mention of transitional funding to deal with the legacy issues in our health service.

We need to consider how we are spending our money and not just the gross amount offered in the budget. The budget mentions employing 1,800 staff. We all know the difficulty in recruiting and retaining staff in our health service. To recruit 1,800 staff will be a mammoth task and significant challenge for our health service.

The budget makes reference to a €90 million access plan.

That includes €55 million to be spent on the National Treatment Purchase Fund, the importance of which we all recognise. However, it is actually giving money to the private hospital system. The money should be invested in the public hospital system to allow those patients to be treated in public hospitals. We need to have health reform to allow this to happen. Sláintecare gives direction to that health reform. It points to the elements that are needed to reform our health service. There is very little reference, if any, in this budget to how health reform will be introduced. There are only vague references to a GP contract. Sláintecare recommends there should be a transfer of emphasis from hospital care to GP-led primary care in the health service. That has to be underpinned by a new GP contract but little or no reference is made to that in the budget. Having a 24-7 contract where a GP pays for everything and takes all the responsibility is no longer a viable or sustainable method of supplying a health service. It has knock-on effects in our health service because it is not good for GPs, patients or the health system because more and more of our patients are ending up unnecessarily in our acute hospital system. The GP was traditionally a gatekeeper to our hospital services. That is no longer the case because the number of GPs is diminishing. The number of GPs in rural areas is certainly diminishing. That gatekeeper role, once it is removed, means patients now go to the next level of service. They are ending up unnecessarily in the acute services, in accident and emergency departments and in outpatient departments. By funding and resourcing primary care, one will prevent that from happening. That is the key to health spending. If hospital avoidance measures can be put in place whereby patients are treated within their community, general practice and primary care in order that they do not unnecessarily end up in hospital care, we will save a huge amount of money. That is how the health service should be reformed. Talking about adding €685 million to the very inefficient and ineffective health service is not the best way to spend our money. We need to reform our health service first so that €685 million will have far greater effect and there will be far better outcomes for patients. The purpose of our health service is to have better outcomes for our patients.

As for the GP contract, there was no mention in the budget of financial emergency measures in the public interest that were introduced in times of austerity. Every worker had to absorb the measures introduced by the Financial Emergency Measures in the Public Interest Act. As those financial emergency measures are being unwound, they are not being unwound for contract holders. They are being unwound for employees but not for contract holders. That is a huge issue with regard to how our health services are being developed. Unless that issue is dealt within primary care, health reform will be stagnated.

There was no mention in the budget of home care packages or home care hours and perhaps this will become more evident when the Minister comes in to outline the detail of the health budget. It is extremely important that home care packages and home care hours are an essential part of health reform because they are the measures that will help to keep patients from ending up in our casualty departments and on trolleys.

I am happy that some sin taxes have been introduced in the budget. The increase of 50 cent in the excise duty on cigarettes is too small. It was too small last year and it is too small this year. At least €1 should have been added to the excise duty on cigarettes. There is no increased excise duty on alcohol. Increased excise duties on cigarette and alcohol could have been used to find our disability services. The disability allowance increase of €5 is too small because those with disabilities who require support are in far greater need than other sections of society. Disability societies sought an increase of €20 but got €5. They are a very vulnerable group. Sin taxes on smoking and alcohol could have been increased to support disability services.

I welcome the tax on sugar. I am not sure if it is the most appropriate way to go about it. Encouraging companies to reduce the sugar content of their drinks would have been a far better way than taxing the sugar content but nevertheless, it is a very positive move. If we are going to attack obesity, with which we have huge problems in Ireland, we need to start with education in our primary schools to encourage people to eat healthily and to avoid snack foods and high-sugar foods. The tax on sugar is welcome.

The increase in VAT on sunbeds goes some way to reducing the use of sunbeds. A far more effective method would be to ban sunbeds altogether because of the increased incidence of skin cancer. Putting a tax on it will not really solve the problem. Sun beds should be banned.

I had hoped the income credits, which have been improved for self-employed people in an increase of €200 from €950 to €1,150, would have been increased to €1,650 in this budget because that is what the PAYE tax credit is. It is welcome but I had hoped it would go to a higher rate.

I will refer to the budget in the context of balanced regional development. There is very little in the budget to encourage balanced regional development. The greater Dublin area is attracting a huge amount of investment and a huge number of jobs. The city is bursting at its seams. It does not have the housing capacity to cater for those who are in Dublin already yet more and more investment is pouring into the greater Dublin region. We need to have balanced regional development. We need to have infrastructural development coming to our regional cities and county towns. If we had balanced regional development it would solve many of the problems we see today in urban transport and housing. It is very important.

With regard to the fair deal scheme and farmers, we had hoped there would be a reference in the budget to the measures the Minister of State, Deputy Jim Daly, had undertaken to include to relieve the burden of the fair deal scheme on the farming community. I am disappointed it is not mentioned specifically in the budget.

Our rural post office network needs to be supported. There is no reference to it in the budget. Perhaps the Minister for Rural and Community Development will come to that when he goes into the detail of his budget.

Flooding protection is very important but there was no specific reference to the funding of flooding protection.

We must wait for many of the details I have outlined until the different Ministers come into the Chamber. I broadly welcome the budget and sincerely thank the Minister for introducing the VAT compensation scheme for charities.

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