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

Erik Pevernagie has observed that: "When politicians bury their head in the sand, ignorance rules the country."

We are now 22 days away from the possibility of a no-deal Brexit, and everyone in the country knows the dangers and challenges we face. We are forewarned and our objective in budget 2020 is to make sure we are forearmed. It is an economic vision to provide security at a time of uncertainty and because it is grounded in reality it offers real hope, not false hope.

It is our economic strategy to channel our growth and prosperity to prepare for an uncertain future while at the same time continuing to grow and prosper, albeit more cautiously. We will invest in the future by investing in infrastructure and climate action and will do what we can to make life easier for families and the elderly.

During times of certainty, the economic watchword of this Government was prudence. Now, at a time of uncertainty, our core aim and belief is action. We must act to continue our investment in balanced regional development because we know it is the best way of ensuring that all parts of the country can grow and prosper. We must also act to protect our planet and help families.

Budget 2020 is about shielding our citizens as best we can from the worst of a no-deal Brexit, ramping up investment in our economic and social infrastructure, protecting the environment and making life a little bit easier for families, the elderly and the most poor.

Budget 2020 is explicitly designed around the risk of a no-deal Brexit, where we project 0.7% growth next year in contrast to 5.5% growth this year. That does not necessarily mean that we think a no-deal Brexit will happen but as a Government we believe it is the best thing to get ready for one. That way we will not need an emergency budget because this is the budget that will protect us from the worst of no deal.

Budget 2020 contains a billion euro plus no-deal package. This is new money and comes on top of grants and loans for business and farmers announced in the last budget and is exclusive of any support that might come from the European Union. Some €355 million is being spent on ongoing Brexit preparedness, compliance and activation supports. Of this, €185 million will ensure compliance conditions are met and trade disruption is minimised at ports and airports, including staffing and support services and €170 million will ensure the continuation of existing Brexit programmes already in place.

There will be €650 million for the agriculture, enterprise and tourism sectors and to assist most affected workers and regions. Of this, €220 million will be immediately deployed in the event of a no-deal Brexit, with €110 million for agriculture and fisheries and €110 million for enterprise from the start of November. Some €40 million will be available for tourism and this will target the worst affected regions. There will be new marketing initiatives and additional immediate funding of €7 million this year.

There will also be funding to secure new routes to regional airports including Shannon and Cork, Brexit or no Brexit, at a cost of approximately €10 million over three years, to enable those airports to secure new routes.

Some €365 million is also being provided for extra social protection expenditure for income replacement, training and activation for people who lose their jobs, while €45 million is provided to help workers in adversely affected parts of the country, especially the Border region should that prove necessary.

We are ramping up investment in our economic and social infrastructure. This is not an austerity budget. We do not need to take that journey again. In fact, spending will rise by €3.3 billion, which amounts to about 4% overall and 11% on capital.

An extra €800 million will be invested in our public infrastructure, bringing total infrastructure spending to €8.1 billion per year. That will be an 11% increase in 2020, on top of a 25% increase this year. That means new schools, primary care centres, housing, roads, buses and broadband. This is part of the delivery of Project Ireland 2040, driving economic activity and jobs across the country. There is never a better time to invest in our infrastructure than when the economy is slowing down. This investment will help create new jobs all over Ireland.

In housing, for example, 11,000 homes will be added to the social housing stock in 2020, more than any other year this century.

This is also a climate and environment budget. We are using budget 2020 to step up climate action. The increase in the carbon tax is modest but meaningful. It puts us on a trajectory to get it to €80 per tonne by 2030. This means people know now what the carbon tax will be in 2030, so that when someone replaces their home heating system, they will see the value in moving away from home heating oil because it will be more expensive in ten years' time. It means it makes sense to invest in insulating one's home and to live close to where one works, if one can afford to do so. When someone is looking at replacing their car, as 1 million people will over the next decade, they will be encouraged to go with a hybrid or electric model because that is what makes long-term sense.

We know that this change will not be easy and that it cannot be done overnight or even in one year. It will take ten years. Instead of there being big hikes in the carbon tax in any one year, we have planned a series of small and planned annual increases between now and 2030. Furthermore, we are ring-fencing all new revenue raised from carbon tax to fund new climate action and just transition to protect those most exposed to higher fuel and energy costs and for whom new jobs must be found. The increase in the fuel and energy allowance ensures that the poorest 20% of households in Ireland will actually be slightly better off as a result of the carbon tax being used to fund this increase.

Between now and 2030, the carbon tax will raise an extra €6.5 billion and it is our policy to ring fence all of this for climate action and just transition. That will be on top of the €22 billion allocated towards climate action in Project Ireland 2040.

Let me give some examples of what this ring-fenced fund will be used for in 2020. There will be a €6 million just transition fund targeted at the midlands. There will be €5 million more for bog restoration and rehabilitation which will restore bogs to their natural habitat and become sinks that absorb carbon. This is on top of an existing €2 million allocation and will create over a hundred jobs. There will be €20 million to deliver a new model to group housing upgrades together as set out in the climate action plan and targeted at the midlands. It will sustain an estimated 400 jobs directly and indirectly, as well as significantly upgrading the social housing stock in the region during 2020.

While we make these changes, we must also protect the most vulnerable in our society. A total of €52.8 million is being made available to retrofit the homes of people living in or at risk of energy poverty through the warmer homes scheme.

This represents the biggest ever allocation for the scheme, more than double the initial allocation for 2019. Thirteen million euro of this funding is ring-fenced revenue arising from the increase in the carbon tax. The ring-fenced fund will also be used to fund climate actions such as new greenways and urban cycling paths, pilots for sustainable agricultural measures, and extra investment in the charging network and grants for electric vehicles. This is extra investment over and above investment in Project Ireland 2040 for items such as cycling, greenways and charging networks, all of which runs to many hundreds of millions of euro. Every budget from now on has to be a climate and environment budget.

Budget 2020 is also about making life easier for families, building on what we have been doing for the past three years. Last year, we reduced the monthly drugs payment scheme threshold for those who do not have medical cards the second year running and we will do it again next year. We increased all GP visit card weekly income thresholds by 10% last year, having extended them to carers the year before. We reduced prescription charges for all medical card holders over 70 years.

In the coming year, we will extend free GP care on a phased basis to all children aged between six and 12 years, starting with the extension of free GP care to children aged six and seven, no later than September 2020. That requires primary legislation and negotiation with doctors on fees. However, as doctors will not be required to opt in, it will happen.

Budget 2020 enables us to continue the good progress made in making life easier for families, while ensuring that young people from all walks of life can have the best possible start. The cost of childcare is a significant financial burden on families. For many it is equivalent to a second mortgage payment and can act as a barrier to parents who want to return to work. The national childcare scheme will commence in November. Its primary aim is to assist parents with the cost of childcare through universal and income-linked subsidies and an improvement in quality care. Those who receive subsidies will receive increased subsidies and approximately 10,000 families who do not yet qualify for subsidies will do so for the first time. This new initiative will streamline the current mix of childcare schemes to a single, user-friendly scheme. This will improve children's outcomes, reduce child poverty, and help with the cost of quality childcare for thousands of families across Ireland. The thresholds are €60,000 net or up to €100,000 gross and an estimated extra 7,500 additional children from middle income families will benefit as a result. From September 2020, working parents will get an increase in the hours for the national childcare scheme from 40 to 45 hours. There will also be an increase in the hours available to children whose parents are not in work or study, from 15 to 20 hours per week.

The budget will also help reduce the cost of healthcare. From July, prescription charges for all medical card holders will be reduced by 50 cent per item and the monthly threshold for the drugs payment scheme for those who do not have medical cards will be reduced by a further €10 per month. Approximately 56,000 people aged over 70 will benefit from increased income limits for the medical card. Some will criticise us for favouring better off pensioners through this action but this brings the income limit to €26,000 or €27,000 for a single pensioner and €53,000 or €54,000 for a pensioner couple. That is not a significant amount but these are pensioners who do not receive a full medical card precisely because they did pay taxes all their lives and because they paid into a pension fund. It is only right that we should restore medical cards to them.

We are increasing the earnings disregard for one-parent family payment and jobseeker's transition by €15, from €150 to €165 per week. This will assist lone parents who are at work. We are increasing the working family payment income threshold for families with up to three children by €10. For the poorest families, the weekly rate of the qualified child increase for children under 12 years is also being increased by €2 per week to €36 per week. For children over 12 it is increased by €3 per week to €40 per week. These actions will further reduce poverty, child poverty and deprivation, which have all been falling for four years in a row. We have also broadened eligibility for the household benefits package by changing the under 70 household composition criteria to allow for an adult son or daughter to reside in the household.

The family should be at the centre of our society. Budget 2020 allows us expand free GP care to the those aged under eight and provide free dental care to those aged under six. It provides each parent with two weeks of paid parental leave and increases childcare subsidies. It cuts prescription charges and provides more medical cards to those who need them. It extends the help-to-buy scheme for first-time buyers, which has helped more than 15,000 first-time buyers to purchase a home since it was launched. We hope that as many will benefit over the next two years.

We will honour the commitments we have made to restore and increase pay for hard-working public servants. Approximately €400 million will be set aside next year for teachers, gardaí, the Defence Forces, nurses and other civil and public servants.

Budget 2020 is also about creating safer communities. Since I became Taoiseach in 2017, more than 1,500 new Gardaí have been attested, meaning our Garda strength is now in excess 14,000. The Government is committed to reaching 15,000 gardaí by 2020 and we are on course to meet this target. Budget 2020 makes a funding allocation for 700 additional gardaí.

Some are critical that there are no tax cuts, and no pension or welfare increases. I understand the criticism and take it on board but I remind the Dáil of what was done under the Fine Gael-Independent Alliance Government in the past three budgets. In all three budgets, we reduced the universal social charge, USC, and income tax and increased the pension and weekly social welfare payments at twice to three times the rate of inflation. That is worth approximately €1,500 to the average family every year. We cannot do it again this year because of Brexit but in a five-year term, we can do better again, putting even more money in people's pockets. We will put our proposal to do so to the public at the next general election.

Budget 2020 provides for demographic changes with our growing and ageing population. We are providing for increased demand for health, education and disability service. The increase for health is €1.165 billion year-on-year or 6.8%; education, €417 million or just under 4%; childcare, just under €93 million or 6.2%; gardaí, €121 million or 6.9%; and the Department of Transport, Tourism and Sport, €384 million or 16.4%. These are all considerable increases in public spending.

The nursing home support scheme, or fair deal, will continue to provide residential care services for older people. One million additional home care hours will provide residential care services to enable older people live independently for as long as they can. The new GP contract will see additional investment in 2020 to enhance GP services and enhanced management of chronic disease. We are investing in community services to provide for additional 1,000 therapists, nurses and other professionals in the community between now and 2021. This really is Sláintecare in action.

An additional investment of €25 million for the National Treatment Purchase Fund, NTPF, will further reduce waiting times for operations and procedures. In July 2017, 57,000 people were waiting more than three months for a hospital operation or procedure such as hip or knee replacements, cataracts, angiograms, varicose veins, and tonsillectomies. We expect that number to fall to 39,000 within weeks and with more money for the NTPF, we can drive it clown further.

More than 740,000 people will benefit from the Christmas bonus in 2019, which will be paid early in December. The living alone allowance will increase by €5 per week and this will benefit more than 200,000 people. We are increasing the hours that carers can work or study outside the home from 15 to 18.5 hours per week. We also have a substantial package to help business and jobs that are viable into the future but vulnerable because of a hard Brexit, especially in sectors such as tourism and agrifood.

There were some criticisms yesterday that the Government has not been prudent in its handling of our country's finances, but the counter-evidence is here. We ran a budget surplus in 2018 and 2019 and were one of the few countries in the developed world to do so. The Irish Fiscal Advisory Council, IFAC, said it would not be achieved but it has been. We will do it again in 2020 if we secure a Brexit deal.

Supplementary budgets are required this year again. In 2019, we will spend approximately €500 million more that the €66.6 billion we budgeted for. That should be put in context. It is a total overspend of approximately 0.75%. For every €100 we said we would spend this time last year, we spent €100.70.

There were good reasons to do so. It has meant extra pay for nurses and our Defence Forces, essential additional Garda overtime, more home care packages and approving new expensive medicines that came on stream. It was necessary extra spending, not waste, and I stand over it.

To help unlock the entrepreneurial potential for SMEs, we have introduced several targeted initiatives. As well as loosening the rules governing the key employee engagement programme, KEEP, companies will now be able to get full income tax relief in the year of investment rather than it being spread as before through the employee incentive and investment scheme. We are also adjusting the research and development tax credit to make it easier for micro and small businesses and SMEs to undertake innovation. The research and development credit is being increased from 25% to 30% for micro and small companies, which will also now be able to claim the credit before they commence trade.

Education will also be enhanced as a result of budget 2020. More than 1,600 new posts will be funded, including an additional 1,000 additional special needs assistants, more than 150 extra teachers to meet demographic pressures and 400 additional teachers for children with special educational needs.

The standard capitation rate is being increased by 2.5% per pupil. For small schools, particularly in rural Ireland, there will be a reduction in the staffing schedule of one point in small primary schools with less than four teachers ensuring by that more of them remain viable into the future. We will also provide an enhanced school meals programme, providing hot meals for 30,000 children. A sum of €1 million will be provided for a free primary schools books scheme, a pilot for primary schools throughout the country. I look forward to working with the Minister, Deputy McHugh, on the design of this scheme for implementation in September and to make it mainstream if it works.

We are also investing in culture. Since I was elected as Taoiseach, spending on culture, heritage and the Gaeltacht has increased by 25% to about €70 million. Given the challenge of Brexit we were not able to increase the spending on culture as much as we would have liked to this year, but we have increased its budget by €15.4 million, that is, about 4.5%. We have made solid progress over the past three budgets towards the commitment of doubling the spend on culture, heritage and the Gaeltacht by 2025.

Our mission is to share our culture with the world, through our people, our music, our sport, and especially through our stories. We are investing in our artists and culture, and increasing our investment in Gaeltacht areas and our language, including Údarás na Gaeltachta, and our islands.

A Cheann Comhairle, with the real risk of a no-deal Brexit on the horizon, the Government’s priority must be to shield the country from the worst of no deal and budget 2020 seeks to do that. Brexit is our focus but is not our only focus. In budget 2020, we have been able to ensure continued investment in public services and infrastructure. We have made this a priority because we recognise that even in a no-deal Brexit scenario, we must prepare for the challenges and opportunities ahead. Budget 2020 enables us to plan for the future to protect the progress and our prosperity, ramping up investing in our economic and social infrastructure, protecting the environment, and doing some small things to make life a little bit easier for families, the elderly and the poorest in our society.

I commend it to the House.

See this speech in context