Wednesday, 7 December 2005
Budget Statement 2005.
Before calling on the Minister for Finance, I remind Members that the budget documents being circulated remain confidential until the Minister has made his statement. They should not be taken from the House before its conclusion.
I am honoured to be in the House again to present the 2006 budget. This budget reflects the priorities of the Government, and I believe it reflects the needs and hopes of the Irish people also.
We are living in the midst of the longest and strongest era of sustained prosperity in our history. This did not happen by chance. It involved careful planning. It involved investment in infrastructure development where we had considerable ground to make up. It involved a commitment to educate our children so they could be a match for their peers across every discipline. It involved careful fiscal management and the creation of an economic environment that attracts investment. Furthermore, it represents the hard work of the Irish people themselves.
As a nation, we now enjoy a much enhanced quality of life. We are a more prosperous country. More of our citizens are in work than at any time in our history. More enjoy a decent quality of life than ever before. We are welcoming more and more new people to our shores — citizens of the new Europe — and we are providing for them also.
It is a new Ireland — prosperous but not without challenges. This budget is largely about two key objectives: the facilitation of sustained economic growth and improved equality and opportunity for all in society. We have made our choices in the light of a simple, but powerful principle: we cannot take prosperity for granted. We will not put at risk the prosperity the Irish people have achieved.
In last year's budget, I made one simple statement that is often taken for granted and perhaps fails to get the right resonance as a result. Let me restate it now. Economic prosperity is a means to an end and not an end in itself. We must strive for economic success but we must also insist on prudent fiscal management to achieve the establishment of a better society for all.
Supporting our economic success
We are right to focus on our economic success. It is correct, not to congratulate ourselves but because the better we understand it, the more we are likely to know how we can sustain it. The deeper our economic success and the longer it is sustained, the greater the challenge to keep the forward momentum. While we work to maintain it, we must carry out reforms that will introduce greater opportunity for even more people to become involved in our economy and to benefit from its success. This budget brings the Government closer to fulfilling the public promises we offered when the people gave us their mandate. We had first to build safeguards and act to sustain the economic growth and stability long into the future, and we had to work to find ways of sharing more evenly the benefits of our economic success.
My aims for this budget are straightforward. I want to improve equality and opportunity for all in our society. I want to help those on lower incomes and to support families at all levels. I want to develop our infrastructure so our firms and industries can compete better while helping to secure our environment and our heritage. I am also determined to pursue value for money for consumers and taxpayers. This budget is rooted in the belief that Irish people can continue to achieve extraordinary things provided the Government creates the right environment for them to do so. It is rooted in the need to make that environment more inclusive so that fewer of our people feel excluded.
Education is critical to this ambition. It is accepted that the quality of our educated young people has been at the heart of the economic success of the past 15 years. The world has not stood still in the meantime. We face new challenges in the education sphere. This is about access and about the strength of an offer to the young people coming through the system. I will be announcing a major new initiative in this budget to address that challenge.
Infrastructure continues to be a priority and while we have made considerable advances in recent years, there is still much to be done. The Transport 21 initiative is a major plank of our budgetary policy and correctly so.
Supporting the family
We are committed to supporting the family as the cornerstone of our society. The place of the child, mother and father within the family unit needs protection and support. The balance to be achieved between the need to work outside the home and the costs associated with the care of the youngest of our citizens needs attention by Government. Budget measures alone cannot achieve this balance but I have taken steps to deal with the issue.
Reaching full equality
We are committed to achieving fuller equality and opening the doors of opportunity for every citizen in Ireland. We want as many of them as possible to be within the workforce. That relates to respecting the minimum wage and to taxation. For those on social welfare, it relates to increased payments which can improve their quality of life. We are deeply committed to ensuring value for the hard earned money that millions of our citizens pay in taxes. Taxpayers have a right to a Government that spends their money for the right reasons and in the right way, which is wisely and efficiently. The choices we have made at every point in this budget and the protocols we have put in place reflect the deep responsibility that my colleagues and I feel when it comes to getting value for every euro that is spent.
I plan to achieve my aims in this budget by means of a series of measures, which involve investing much more in our future through enhanced capital spending, helping to care for older people through a package of measures, increasing social welfare rates well ahead of inflation, developing a five-year child care package to support families with young children, keeping those on the minimum wage out of the tax net, keeping those on the average industrial wage out of the higher tax rate, reforming tax reliefs so tax payments more fairly reflect one's ability to pay, freezing indirect taxes and reducing some others, introducing special reliefs designed to improve our environment, and relieving the tax and administrative burden on business, particularly on small business.
Budget and economic outlook
We have the resources to do these things because our economy is healthy. We have to ensure it remains healthy by pursuing the right policies. That will be a challenge in light of major external factors such as oil prices, higher interest rates and shifting exchange rates and trade patterns. We will be best placed to meet the challenge if we work to secure the competitiveness of the economy. We have additional resources available to us now because we have followed the correct tax path of lower rates yielding more revenue. It is the tax take that counts, not the tax rate, as this year's record capital gains tax yield shows.
Economic growth this year is projected by the Department of Finance at 4.6% in GDP terms, that is the value of all goods and services produced in the State. Growth of 4.8% is predicted in GNP terms, that is the income we earn from producing goods and services. The success story of 2005 has been the very strong growth in employment, which has resulted from to the correct policies which have been followed by the Government. The latest labour force data show that employment grew by 96,200, or 5%, in the past 12 months. Almost 71,000 of that increase represents additional full-time jobs. The number of people on the live register — 150,000 — is 14,500 lower than two years ago. Ireland's employment record, which is far ahead of the rest of the EU, is a testimony to the enterprise and effort of our workforce.
The Department of Finance is forecasting that next year the economy will grow by between 4.5% and 5%, unemployment will remain very low at approximately 4.3%, employment will grow by a further 60,000 and inflation will average 2.7%. This is a continued strong performance, especially in respect of employment. In money terms, it means a GDP of over €172 billion in 2006 and a GNP of just under €145 billion. If we are to maintain our levels of employment, it is particularly important that we play our part in securing the competitiveness of the economy.
As regards the Government's finances, we have set a target for a general government deficit next year of 0.6%, as measured by the EU, together with a debt ratio of 28% of GDP. This debt ratio is one of the lowest in the EU. Next year, total gross voted public spending will rise by over €5 billion, or just over 11%, to €50.6 billion, of which €43.8 billion is current day-to-day spending. Day-to-day spending next year will be 9.9% above the projected outturn for 2005, excluding the exceptional provision of €400 million to meet the cost of repaying nursing home charges. Spending on capital to provide roads, public transport, housing, hospitals and other major projects will come close to 5% of GNP, which is the highest rate of public investment in the EU.
Overall gross voted current public spending
Of the €43.8 billion in gross voted current spending, more than one in every four euro, or €12.2 billion, is spent on health. Expenditure on health amounts to €3,000 for every citizen in the State, or over €9,000 for every taxpayer. The other major current spending Departments are the Departments of Education and Science and Social and Family Affairs. Education expenditure accounts for one in every six euro spent. Expenditure on social and family affairs accounts for one in every three euro spent. Taken together, the Departments of Health and Children, Education and Science and Social and Family Affairs account for three in every four euro required to fund total day-to-day voted spending next year. It is a question not only of the quantity of spending, but also of the quality of expenditure. We need to consider whether expenditure meets current needs and provides for the future. We should determine whether we are getting full value for it and whether we could achieve the same for less. Such issues are rightly to the fore in the debate on public spending. The processes we use to secure value for money at all levels are vital elements in addressing these issues. I am determined to pursue the issue of the quality of public spending. I recently put in place a series of specific measures to that end, on which I intend to build. In particular, I plan to roll out new forms of construction contracts next year, aimed at providing greater cost certainty, better value in spending and more cost-effective delivery of capital works projects.
Building the nation's capital stock
In seeking value for money, we must build this country's capital stock to make the economy more competitive and to help it to develop and expand. This is vital if we want to lay the platform for future growth and jobs and good quality employment. I am providing €43.5 billion for capital investment over the 2006-10 period, of which €38 billion is Exchequer-funded and €5.5 billion is PPP-funded. This money will support strategic improvements in our education sector to deepen and widen our store of human capital, major improvements in health facilities, a very significant programme of social and affordable housing and important new initiatives in the arts, culture and leisure areas, reflecting our development as a mature economy and society.
Third level investment
I mentioned earlier that any budget represents a moment in time on where we stand economically and where our priorities should lie in light of the prevailing fiscal conditions. I referred to the particular focus I want to give to education. Many of those in Ireland and, particularly, externally who have commented on this country's economic success tend to attribute a disproportionate amount of the cause to our taxation policy, which is important and will be maintained. It is clear that such policies have been beneficial in attracting inward investment, but I believe the single biggest contributor to our economic success has been the exceptional wealth of intellectual capital available to native and overseas investors. Ireland has become synonymous with the quality of its graduates.
The investment in and reform of primary and post-primary education during the 1960s and 1970s, with the support of the third level sector, has been pivotal to what has been achieved in Ireland over the past 15 years. That job is continuing and we will continue to deal with the real needs at primary and post-primary levels. The basis for future growth in prosperity and jobs is investment in the knowledge, skills and innovation capacity that will drive economic and social development in an increasingly competitive global environment. The higher education system must deliver people who will expand knowledge-based business in Ireland. That will require substantial change and quality improvement in universities and centres of higher learning and the promotion of system-wide collaboration that can draw on the collective strengths of the institutions.
A major initiative in this budget is a commitment to the establishment of a new PhD level — a fourth level — of education. Earlier this year, the Minister for Education and Science, Deputy Hanafin, signalled the Government's intention to create a multi-annual strategic innovation fund for higher education. To achieve what we have to achieve will require a commitment to substantial change in our third level institutions. We must remove unnecessary duplication. There must be an appetite within the sector for greater collaboration. As Ireland is a small country, it is not sensible for its third level institutions to be pitched against each other across all key disciplines. We need to promote a system-wide form of collaboration that draws on the collective strengths of all our third level institutions.
I am confident that such a commitment will be forthcoming as it must be if we are to deliver the required complement of people with PhD level qualifications, in what I would like to call "fourth level Ireland". If we are to compete in a globalised world and to retain the strength of what we offer, we have to invest in the knowledge, skills and innovation capacity of this nation. Our edge in education is being challenged not only by the established sources of excellence but also by emerging economies throughout the world. The Government believes that the programme I have outlined is fundamental to our economic and social development. As it is a major plank of the Government's policy, I am announcing the allocation of €300 million to the strategic innovation fund for higher education over the next five years.
Competition for the new funds will stimulate excellence through collaboration and change. Details of the administration of the fund will be announced by the Minister for Education and Science over the coming days. In addition, it is essential that investment in modern facilities is maintained in university and institute of technology campuses around the country. As a result, we are committing €900 million to the third level sector over the next five years as part of the Department of Education and Science capital envelope. Of this, €630 million will be Exchequer capital funding and €270 million PPP funding. The physical development will need to reflect the changed approach where there must be greater co-operation between the institutions involved to give maximum benefit for the taxpayer.
This brings planned investment in capital spend and the strategic innovation fund for third level education to €1.2 billion over the period 2006 to 2010. These strands of planned investment in higher education form a core element of the Government's strategy for developing skills and competencies. They will form an important element of the investment strategy for the new National Development Plan 2007-2013 where third level and fourth level education——
——will form an intrinsic part of our central planning mechanism.
National Development Plan 2000-2006
Under the current national development plan ending next year there have been unprecedented levels of investment in our economic and social infrastructure. This investment is delivering real outputs improving the quality of life for our citizens. Investment in roads will see the completion of more than 70 major schemes by the end of the plan with a major focus on new motorway and dual carriageway roads linking key population centres. We have significantly enhanced public transport in the greater Dublin area through investment in suburban rail, DART, quality bus corridors and the Luas, a totally new fixed line system with a capacity of 20 million passengers per year. We have reversed years of neglect of our national rail system by investing €655 million in making our national network safe. Investment in social and affordable housing by the end of the plan will have delivered some 56,000 new units. Investment in child care under the plan will have created about 30,000 new places by end 2006. There have been other major enhancements in the quality of infrastructure in areas such as water services, broadband, education and health.
Transport 21 was launched a month ago with a ten-year roll-out horizon and a €34.4 billion investment cost, which I indicated I was prepared to consider when I delivered my first Budget Statement last year. This is an unprecedented commitment on the part of the Government and recognises the importance of a world-class public infrastructure in securing the competitiveness of the economy and enhancing the economic and social gains made here since we took office.
Today's budget underpins that commitment and sets out the capital funds allocated to transport over each of the next five years. Next year's allocation will get Transport 21 off to an excellent start. We will see the continued roll-out of the motorway programme and construction of more bypasses across the country. Work will begin on the building of a new docklands railway station and the Kildare rail route upgrade. New rolling stock will be delivered and there will be further investment in regional airports. Work will also commence on the Luas extension to Cherrywood. Planning and design work on the western rail corridor will get under way as the start of the process leading to its reopening. Planning of other major transport infrastructure projects will also be advanced. The new transport authority will be established to implement Transport 21 in the greater Dublin area and critically——
——to ensure joined up thinking and the delivery of projects on time and on budget.
National Development Plan 2007-2013
The next national development plan, which will cover the period 2007 to 2013, will set out a coherent and integrated strategy for investment in economic and social infrastructure. It will be done within a framework of budget sustainability and will be informed by key objectives of enhancing national competitiveness and promoting better balance in regional development. The Department of Finance will shortly commence a major consultation process on the next plan in the coming months.
Public service pay
To support this level of activity we need a professional and well-motivated public service. The numbers employed reflect that many of these services are labour intensive, particularly in areas such as health, education and the security forces. Some 40% of public spending goes in the form of pay. We have an obligation to ensure that value for money is central to how we reward our public officials. The provision for 2006 to fund public service pay and pensions is €16.4 billion, an increase of €1.1 billion or 7%. It makes full provision for the final phase of Sustaining Progress and includes €430 million for improvements in services and extra staff to deliver those services. I do not intend to prejudge the outcome of negotiations on a further public service pay agreement so I am not making any special provisions in the Estimates for public service pay in 2006 other than what is provided for in the current agreement.
Total employment in the public service this year is just over 290,000. We will continue to control and regulate numbers in the public service within agreed ceilings. We are allowing limited increases in staff in some key non-administrative areas particularly in health, education and the Garda to improve the delivery of important front line services to the public. This is the correct strategy to follow.
Helping families and those on low incomes — social welfare
A primary function of Government is to protect and support the weaker sections of our society. The sustained economic growth over recent years has led to a welcome increase in employment and general income levels. However, many people are not in a position to avail fully of the increased employment potential that now exists. At present, 970,000 people are in receipt of a weekly social welfare payment and many of these are on old age or related pensions. A further 490,000 people also benefit from these weekly payments.
The opportunity now exists to make substantial further progress in this area. Last year, I provided for significant increases in social welfare rates and I will build on that progress in this budget. I intend to target the following groups for particular improvement this year: the elderly, in particular those in receipt of a social assistance old age pension; people on the lowest rate of social welfare; people affected by child and family poverty; and carers. At the same time, recognising the value to individuals of being employed, in terms of not only income but also self-worth, the Government wishes to enhance the employment opportunities open to social welfare recipients in general. These themes form the basis for the improvements in the social welfare system I am announcing today, which will cost €1,120 million in a full year.
Old age pensions
The Government has a proud record of improving income support for pensioners. I am increasing the full personal rate of old age and related pensions by €14 per week, an increase of almost 8%.
This will bring the old age contributory pension to €193.30 per week, which means we will be well on the way to achieving the programme for government commitment to increase the State pension to €200 per week by 2007. We are increasing non-contributory pensions by €16 per week, an increase of 9.6% bringing the maximum rate to €182 per week. We recognise that many non-contributory pensioners want to work beyond retirement age but the means test system stops them doing so. We intend changing the non-contributory pension system so that earnings from employment up to €100 per week——
——will be disregarded for means test purposes.
Other weekly welfare payments
All other personal weekly social welfare rates will be increased by €17 per week. This will bring the lowest full personal social welfare rate from €148.80 to €165.80 per week, an increase of 11%.
The increase also represents substantial progress towards the implementation of our commitments in the programme for Government and in Sustaining Progress.
In 2006, the monthly rate for the first and second child will increase to €150 and the rate for third and subsequent children will increase to €185.
This completes the transition to a higher rate of child benefit as promised last year. The monthly rate for the first and second child in 1997, when Deputy Jim O'Keeffe's party was in Government, was €38.
Social welfare recipients would like to hear the details of the budget and we should respect that. The budget summary contains a wide range of other social welfare improvements the full details of which will be announced by the Minister for Social and Family Affairs. In the light of my opening remarks on the social welfare package, I would like to highlight the following planned improvements: an increase in the rate of the national fuel scheme from €9 to €14 per week——
——and I will also announce cuts in home heating oil taxes later in my statement to address fuel deficits on a broader basis; an increase in the rate of respite care grant to €1,200; an enhanced carer's allowance rate of €200 per week for people aged 66 or over and €180 for those under the age of 66——
——and improvements in the terms of the disability allowance, back to work allowance and back to education allowance schemes to assist participation in the labour force. In addition, in line with commitments under Sustaining Progress, the rate of maternity benefit will be increased from 75% to 80% of reckonable earnings.
Caring for older people
This Government has always given high priority to supporting older people. Respect for older people and the dignity of older people are at the heart of our policies. That is as it should be. Many older people have active and fulfilled lives. Others have increasing needs for health care and support. Most older people and their families want to live and be cared for at home for as long as possible.
While previous Governments have aimed to support this desire, this Government has decided to make a step-change in the level of care and support service for older people in their home or community. The Tánaiste has discussed with me the need to take an important initiative in this area. The Government has decided to fund an additional package of measures at the level of €150 million in a full year to kick-start this programme.
This will include new home care packages, substantially more home help, more day care support and additional palliative care for the terminally ill. This will help people avoid unnecessary residential care and prolonged stays in acute hospitals. For people who need residential care in nursing homes, we are also improving nursing home subventions.
In passing, I might mention that I will also be examining issues relating to certain limited circumstances where adult individuals may require to be cared for outside their own homes because of particular care needs.
A new five-year child care strategy
The Government is very conscious of the difficulties faced by many parents and families in securing affordable child care. Our task is to assist all parents in the early years of child rearing by widening the options they have. Some parents like to use family care or informal arrangements while others prefer the formal child care setting. In addressing this issue, I have tried to take account of the following considerations. Where are the greatest pressure points for parents? How can I be fair to everyone, to both lower and middle income groups and to working parents, to those who are in the tax net and those who are not, to working parents as well as those who make their contribution to society through their work in the home? What is the administratively simplest and most user-friendly system? What is sustainable for the Exchequer?
Having carefully considered all the complex issues involved, the Government has developed a five-year strategy to tackle the problem.
We can only do so much in one budget. A complete solution will take time but the structured medium-term approach I am announcing will, I believe, increase the options for parents in a balanced way.
I hope it will be recognised as a constructive step forward in this area. In devising the strategy the Government was particularly anxious to develop further supply side measures to increase the number of child care places.
The Government is also very conscious of the importance of the first year in the life of a child and the strategy provides for a significant extension of maternity leave. The strategy also seeks to address the immediate cost pressures facing parents of young children by providing a new child care supplement for all children under the age of six years.
I am making a significant start in implementing the programme today by providing €317 million in the 2006 budget for this purpose. The cost will increase to more than €600 million a year by 2008.
I am providing for a number of measures which will increase the supply of child care places. As part of the overall child care strategy I am today announcing a major new five-year national child care investment programme which will run from 2006 to 2010 and will support the creation of an extra 50,000 child care places. This will be achieved through enhanced capital grant aid to private providers, the limit for which will double to €100,000——
This new investment programme will build on the success of the €500 million equal opportunities child care programme which has already been provided under the National Development Plan 2000-2006. I thank the Minister for Justice, Equality and Law Reform and the officials in the relevant areas for the roll-out of these programmes. So far this funding has generated more than 26,000 new places with a further 15,000 places due to come on stream before it ends in 2007. This means that, between now and 2010, some 65,000 additional places will be funded, including early childhood, pre-school and school-age places. Furthermore, we will continue to support the Department of Education and Science in targeting early childhood education in disadvantaged areas.
For the new programme, I am now providing a total allocation of €575 million over the next five years. This comprises additional capital spending of €357 million as well as increased funding for the continuation of staffing grants to community settings with a social inclusion focus. Added to the funding already committed to the final two years of the existing equal opportunities child care programme, this will bring total direct expenditure on supply creation to some €790 million for the period 2006 to 2010.
This planned roll-out of new places will be complemented by an intensification of training arrangements to support quality child care delivery. It is expected that 17,000 child care workers will be trained in the period. To help to improve the supply side further, I propose to exempt from income tax, PRSI and levies all income up to €10,000 per year from childminding where an individual minds up to three children who are not his or her own in his or her home. This will recognise the contribution of this sector to supporting supply. Such individuals will be required to notify their local county child care committee so that information on availability of child care places can be more readily co-ordinated. The county child care committees provide support, information and small grants to the sector.
The Government is particularly conscious of the importance of the first year of life to a child's development. This is also the time during which pressure on parents can be at its greatest, not least because the cost of caring for infants is higher than for older children. I have given careful consideration to the various calls for improved parental leave and I am now announcing significant extensions to the periods of paid and unpaid maternity leave over the next two years. From March next, mothers of new-born children will have an additional four weeks' paid maternity leave, extending the duration of such leave to 22 weeks.
This will cost a total of €35 million in 2006. I will be following this up with a further four weeks of paid maternity leave in 2007. Thus, by 2007, mothers of new-born children will be entitled to a full six months of paid maternity leave. Furthermore, unpaid maternity leave will be increased by four weeks in 2006 and a further four weeks in 2007, bringing total unpaid maternity leave to 16 weeks by 2007.
This is in addition to the existing 14 weeks' unpaid parental leave. In total, parents will be entitled to 56 weeks between paid and unpaid leave by 2007.
Early child care supplement
The increase in maternity leave and the additional measures I have just announced to improve supply will take time to have their full impact. In the meantime, working parents continue to need additional support to meet the cost of child care. It is only fair at this point to recall the huge investment which this Government has made over recent years in terms of direct financial support for families. This year, we will spend almost €2 billion on child benefit alone. This compares with a quarter of that amount five years ago. During that time child benefit rates have increased substantially to the point where, as I mentioned earlier, more than 1 million children in more than half a million families will next year receive monthly payments of €150 or €185.
There has also been a radical change in the personal tax system which has seen the tax burden on families significantly reduced across the board. To take just one example, a married two earner couple with a combined income of €60,000 per annum will pay, on average, just 11%, or €1 in €9, of their gross income in tax in 2005, which is down from more than €1 in €4 on the same amount in 1999. That is an annual saving of more than €10,000.
However, notwithstanding these very significant improvements in income, the Government acknowledges the continuing cost pressures on parents, especially those with young children, for whom I am today providing some additional financial support. I have had the benefit of examining a wide range of different views and proposals but it is clear that a broad consensus is hard to find.
Having looked in depth at all the issues, I have decided that the most effective response lies in introducing a new early child care supplement. This will be a direct payment of €1,000 per year available equally to all parents regardless of their labour force status for each child up to his or her sixth birthday.
These payments, which will be exempt from income tax and levies, will be made on a quarterly basis in respect of more than 350,000 children who are less than six years of age. The first payment will be made in mid-2006 and will cover the second quarter of 2006. This scheme will cost €265 million in 2006 and €353 million in a full year.
This will be an additional new payment separate from the existing child benefit scheme. This new early child care supplement and the existing child benefit will bring the amount a family will receive next year, for each of the first two children under six years, to €2,800 per year, equivalent to over €50 per week in direct financial support.
This will be even higher where a family has more than two children under six. By any standards, this is a significant contribution from the taxpayer towards the cost of child care in such circumstances.
New child care arrangements
Funding for the national child care strategy will be allocated in the Revised Estimates Volume. In that context, the Government will introduce new administrative arrangements——
——to streamline the functions relating to child care.
Helping those on the minimum wage and on average pay — Taxation
Tax revenue provides us with the resources to develop a fairer and more productive society.
Additional revenue affords us the opportunity to return some of this to those who earn it. The Government has radically restructured the tax system in the past eight years to ensure that much more income tax relief goes to the lower paid. As a result, more than one third of the workforce is completely outside the tax net in 2005. That represents 720,000 earners compared to 380,000 in 1997.
I intend to take more earners out of the tax net today. I am increasing the employee tax credit by €220 per year and the basic personal tax credit by €50 per year single and €100 per year for married couples. This will ensure that all those on the current minimum wage will remain completely outside the tax net in 2006. This will remove from the tax net nearly 52,000 low-income taxpayers who would otherwise be in the tax net next year.
I am also increasing the annual income tax exemption limit for persons aged 65 and over by €500 single and €1,000 married. This will remove a further 1,700 taxpayers from the tax net. These age exemption limits have approximately trebled since the Government came into office.
I am increasing the standard rate income tax band by €2,600 or approximately 9% per year, removing more than 90,000 taxpayers from the higher tax rate. This increase is aimed at ensuring that all those taxpayers earning around the projected average industrial wage in 2006 will pay tax at the lower rate of income tax. This is worth €11 per week in increased take-home pay for those on average incomes.
I am increasing the threshold for the payment of the 2% health levy from €400 per week to €440 per week. This will benefit 72,300 lower paid workers by an extra €8 per week on top of the other reliefs I have mentioned.
All these increases mean that a single person on €22,000 per year will benefit by €13.65 per week in net income in 2006 and a married one-earner couple on €40,000 per year will see their net income rise by €12.92 per week.
I am happy to tell the House that the tax credits for widowed persons, blind persons, incapacitated children, dependent relatives and those aged 65 and over are being further increased this year, by amounts ranging from more than 20% to 50%.
The tax relief for persons living in private rented accommodation is being increased by 10% to assist those faced with increased rental costs.
The tax allowance for those paying trade union subscriptions, which was introduced by the Government, is being increased from €200 per year to €300 per year. This allowance is available at the standard rate of income tax.
The total cost of all these increases in income tax credits, bands and reliefs is approximately €900 million in a full year.
A fairer tax system
Last year I announced a major review of tax reliefs in order to achieve a greater degree of equity in our tax system. This involved both internal reviews and the employment of outside consultants. It also included an extensive public consultation in which approximately 90 submissions were received from a wide range of persons. These submissions were reviewed by the Oireachtas Joint Committee on Finance and the Public Service and I had the benefit of that committee's discussions. At the end of the day, the decision on what to do rests with the Government, for which we can be held accountable by this House.
What we are seeking to achieve
My basic aim is to see that everybody pays an appropriate amount of income tax relative to their ability to do so. This is a cornerstone of tax equity. We must balance this with the need for effective tax reliefs to incentivise work, effort and enterprise so as to stimulate economic and social development. To achieve this balance I am announcing a range of specific measures. These reflect the recommendations of the reviews, a synopsis of which is set out in the Summary of Budget Measures. I propose to publish all the relevant reports reviewing these various tax reliefs in time for the Finance Bill.
First, the following reliefs either have achieved the objectives set for them or are no longer considered to be cost effective in terms of the objectives set for them and are therefore being terminated subject to certain transitional provisions: the urban renewal, town renewal and rural renewal schemes; and the special reliefs for hotels, holiday cottages, student accommodation, multi-storey car parks, third level educational buildings, sports injuries clinics, developments associated with park and ride facilities and the general rental refurbishment scheme.
The transitional measures take cognisance of the fact that there are more than 250,000 jobs in the construction sector and the building industry accounts for approximately 20% of the economy. We should not do anything that disrupts unnecessarily an industry that is such an important driver of jobs.
For this reason, for projects that are already in the pipeline, I am extending the date for which 100% relief for expenditure will apply by five months from the end of July 2006 to 31 December 2006. Thereafter, where 15% of the relevant expenditure on the project has been incurred by that date, the relief will apply to only 75% of the expenditure incurred in 2007 and to 50% for expenditure incurred up to the end of July 2008. The relief will then reduce to zero, and thus end, after 31 July 2008. Full details of these transitional arrangements are set out in the Summary of Budget Measures.
Both sets of external consultants dealt with the transitional issue and both recommended an extension of relief for such pipeline cases. One recommended a simple extension of 100% relief for 17 months beyond 31 July 2006. The other recommended an extension of five years but at only 50% relief. I have chosen a middle course.
This winding down of property based tax reliefs is consistent with the greater capacity of particular economic sectors nowadays to fund such investment from their own resources, and the sizable capital investment which the Government itself is making through the major new investments I referred to earlier.
In line with the recommendations of the consultants, I propose to continue the tax reliefs for nursing homes, child care facilities and private hospitals. Special arrangements will apply for park and ride facilities and the living-over-the-shop scheme as indicated in the Summary of Budget Measures.
The reviews also proposed that any new reliefs should be time-limited and should, where relevant, be subject to an assessment of costs and benefits prior to their introduction. They also proposed that recipients of these kinds of tax reliefs be required to supply full data to Revenue to assist in the costing and assessment of reliefs. I will be following this advice as far as appropriate.
A minimum and fair tax
It is necessary not only to eliminate some incentive reliefs but also to regulate the use that can be made of those that remain. We cannot stand over a situation in which some high-earning tax residents, through the use of incentive reliefs, can reduce their taxable income to nil.
This is simply not fair, although I should point out that high-earning non-payers are in a very small minority. Accordingly, I propose now to place an annual overall cap on the extent to which specific incentive reliefs can be availed of. The cap will apply to those with incomes over €250,000 per year.
It will operate by reducing by half the amount of income that can be relieved from tax by certain specified tax reliefs. This measure will help eliminate the phenomenon of tax free millionaires and increase the effective rate of tax on those with high income towards a minimum of 20%.
Further details of how this will work are set out in the Summary of Budget Measures. This will require some complex new legislative provisions and I propose accordingly that the new system will apply for all tax years from 1 January 2007.
This annual cap system will also apply to artist's relief from the same date. There is no change in the tax treatment of income now exempt under the artist's relief scheme where that income is less than €250,000 per year. The vast majority of people are under that bracket.
Tax equity applies not only to taxpayers' current income but also to how taxpayers provide for their income needs in retirement. Recent budgets and Finance Acts have made significant and innovative improvements in the nature and scope of tax reliefs for pension provision. This was done so as to encourage earlier and more substantive saving by the generality of individuals to meet the cost of providing themselves with a reasonable and affordable pension.
The Government is putting aside 1% of GNP each year to help fund future pensions. The National Pensions Reserve Fund is expected to amount to €15 billion or 11% of national output at the end of 2005. In addition, substantial tax costs in the order of €3 billion or more are incurred to incentivise pension saving through tax reliefs each year.
The cost of providing such reliefs is that high because the funds which a pension scheme must build up have to be a multiple of the annual pension to be provided. Thus, a fund of about €1 million is required to generate even a relatively moderate annual pension as a result.
We must continue to incentivise pension contributions if we are to meet the challenge of supporting an ageing population. To achieve this objective, I will be considering measures in the Finance Bill to assist those towards the lower end of the income scale and those who are not using their current full entitlements to provide themselves with reasonable retirement arrangements. The policy objective is to provide reasonable tax relief subject to limiting the amount the general taxpayer is required to finance. People will, of course, continue to be free to provide higher amounts for their retirement but without a subsidy from the general taxpayer.
To help contain this subsidy, the current maximum amount of an individual's pension contributions that can be tax-relieved each year is already limited to a specified percentage of income, subject to an earnings limit of €254,000. This earnings limit affects less than 1% of income earners. It broadly translates into an accumulated pension fund of the order of €5 million, depending on a number of factors. There is currently no overall maximum limit, however, on the amount of the pension fund that can be tax-relieved.
It is reasonable to set such a cap at €5 million, or the existing value of a person's pension fund as of today, if that is greater. Under current rules the maximum tax free lump sum that can be taken by a person is one quarter of the fund. Therefore, a fund cap at €5 million means a €1.25 million cap on all tax-free lump sums. This cap will apply on and from today.
I am also proposing that for those with funds in an approved retirement fund, these funds will be subject to income tax as if not less than 3% of the fund were distributed each year. This should ensure that such funds are used to provide a retirement income and not as a device for tax deferral. As a transitional arrangement one third of this rate will apply in 2007, two thirds in 2008 and the full 3% in 2009 and following years. Further details are set out in the summary of budget measures.
I have examined a number of other tax reliefs such as the reliefs for expenditure on significant heritage houses and gardens, woodlands and donations and the tonnage tax and I have decided to make no significant changes in their operations for the present. In the case of horse and greyhound stud fee income this exemption will end on 31 July 2008.
A new regime appropriate to the industry will be discussed with the European Commission.
I also propose to disallow interest on personal loans taken out to acquire shares in, or provide loans to, rental income companies.
Keeping consumer prices down
Regarding indirect taxation, I am proposing, like last year, to leave the main excises and VAT rates as they are. This is a significant Government contribution to keeping inflation down and securing further value for money for the consumer. On top of this the consumer can look forward to lower retail prices for basic grocery items due to the forthcoming removal of the grocery prices order already announced by the Government. Our efforts to increase competition generally also help keep price increases to a minimum.
Home heating fuel
There is a sizable gap in the cost of certain heating oils between here and Northern Ireland. I plan to eliminate the excise difference between the two jurisdictions in the next two years, starting today.
I am beginning by halving the excise rate on kerosene and LPG used for home heating from midnight tonight. This measure will cost €46 million in a full year.
Earlier this year I initiated a review of betting duty. One of my prime concerns is how to protect the revenue base on a fair basis in view of the prevalence of effective tax-free betting on the Internet. With this in view, I am announcing today a reduction of betting duty from 2% to 1% from 1 July next with the intention that this duty will be borne by the industry and not the customer. This should ensure that tax-free betting is available in all betting offices and prevent betting offices competing on the basis of tax, sometimes to the detriment of small, locally-owned concerns. This reduction will cost up to €25 million in a full year but it is my intention to examine the potential for widening the tax base on which this 1% applies in the future.
In making this reduction, I am seeking to protect the betting tax base in the State and to secure at least some revenue by levying the duty on the bookmaker and not on the customer.
Securing our environment and our heritage
Farming is an integral part of this country's heritage. However it faces a significant challenge over the next few years for a variety of reasons. On the world scene, in the context of the ongoing WTO talks, there are pressures to reduce certain supports for agriculture and to throw open markets for agricultural produce to a greater extent, particularly those of the EU and the US.
On the other hand, there are opportunities too, particularly where land can be used in a sustainable and environmentally friendly way. I will be giving details in a moment of new incentives for the promotion of biofuels which offer not only a new opportunity for farmers, but environmental and economic benefits for the whole community.
Farming will continue to be one of the lynchpins of the economic, social and cultural life of this country, and I will ensure that policies that support farmer enterprise and good business practice will be maintained. The five-year investment framework I am announcing today includes over €1 billion to support on-farm investment, including forestry.
The Minister for Agriculture and Food and I agree there is a clear need for us to provide additional assistance to farmers, and particularly younger farmers, to help them adjust to the major changes that will take place. With this in view, I am proposing a package of significant tax reliefs for the farming community. These include the continuation of the stamp duty exemption for young trained farmers for a further three years, a significant increase in the tax exemption limits for income from farm leasing for over five years, an improvement in the farm pollution control relief and an extension of certain existing capital acquisitions tax, capital gains tax and stamp duty reliefs to cover the EU single farm payment entitlement in appropriate circumstances. Full details are set out in the summary of budget measures.
Alternative energy sources
Government concerns about the environment, our obligations under the Kyoto Protocol, the present level of oil prices and concerns about security of energy supplies over the medium to long term all suggest that Ireland should take further measures to support the provision of environmentally friendly energy alternatives and put in place structures to support this policy.
My budget today builds on the measures already in place to support the provision of alternative sources of energy, through the establishment of a carbon fund, further support for biofuels, flexible-fuel cars and renewable energy.
The Government is conscious that climate change is one of the most challenging environmental issues facing this and future generations.
To meet this challenge further, I am announcing today the establishment of a carbon fund to enable the State to purchase carbon credits. This fund will be financed on a multi-annual basis and I am providing €20 million in respect of 2006. The National Treasury Management Agency will be the carbon credit purchasing agency for the State.
More details on this initiative will be provided by the Minister for the Environment, Heritage and Local Government.
I have agreed with my colleague, the Minister for Communications, Marine and Natural Resources, that Ireland should set an initial target of 2% of the fuel market to be taken up by biofuels by 2008 and that we should achieve this through targeted excise relief measures. The level of excise relief will start at €20 million in 2006 and will be increased to €35 million in 2007 and to €50 million in each of the following three years. This relief, when fully operational, is expected to support the use and production in Ireland of some 163 million litres of biofuels per year. This is 20 times the current level of biofuels that is excise-relieved.
There are clear benefits to all from this initiative. The environment will benefit in terms of a reduction in CO2 emissions. It will enhance security of supply of fuels, and create jobs and outlets for agriculture production. It is estimated that the programme I am announcing could ultimately give rise to hundreds of extra full-time jobs in the State. This new relief will require EU approval as a State aid. I am also extending the VRT relief for hybrid fuel cars to flexible fuel vehicles for a trial period of two years.
Renewable energy grants
To help develop a better focus on renewable energy my colleague, the Minister for Communications, Marine and Natural Resources intends to launch several innovative grant schemes relating to biofuels, combined heat and power, biomass commercial heaters and domestic renewable heat grants. I am allocating up to €65 million to provide support for the implementation of these initiatives in the capital envelope for his Department for the period 2006-10.
I will be providing in the Finance Bill for a new scheme of tax relief for heritage property donated to the proposed heritage trust subject to a cap of €6 million per year on the level of overall relief. This will be modelled on the scheme already applying to gifts of heritage items to certain museums and galleries.
Helping business to develop
I am conscious of the enormous contribution made to our economy by the many small businesses in the State. To help develop business generally, and small business in particular, I am proposing the following measures.
VAT registration thresholds
The VAT registration thresholds for small businesses will be raised in the forthcoming Finance Bill from €25,500 to €27,500 in the case of services and from €51,000 to €55,000 in the case of goods. This will cost €12 million in a full year and remove almost 2,200 businesses from the VAT net.
PAYE-PRSI payment arrangements
The annual tax payment limit below which PAYE and PRSI can be paid on a quarterly, instead of the normal monthly basis, is being raised to €30,000 per year. This will assist 74,000 small firms at a cash flow cost of €102 million to the Exchequer in 2006.
Companies capital duty
I propose to abolish the 0.5% companies capital duty from today at a cost of €16 million in a full year to help firms, particularly those operating in the financial services sector. I will also be making changes in the Finance Bill to assist the leasing sector.
Closure of various tax loopholes
I am closing off two particular loopholes in the tax system relating to capital gains tax and interest relief in groups of companies. Details of these anti-avoidance measures are set out in the summary of budget measures.
Remittance basis of taxation
I propose to end the current arrangements whereby certain non-domiciled employees of non-resident firms can escape a large element of income tax by arranging their affairs so that much of their income from working here is paid outside the State. The ending of this scheme should save the State up to €100 million per year in lost income tax revenue. More importantly, it will place all employees and firms, irrespective of nationality or employer, on the same tax footing when working in the State. Further details are set out in the summary of budgetary measures.
Social finance initiative
Deputies will be aware of this Government's commitment to ensuring that our economic success continues to be mirrored in social and community development. I am encouraged by the initial reaction of the banking community to my invitation to participate in a social finance initiative to enhance the availability of loan finance for social and developmental projects in local communities. I am looking to the banks to contribute both seed funding and their expertise to support the practical delivery of this initiative.
I intend to keep the door open for other sectors and private individuals to participate. The banks have indicated they are willing to discuss with me how this initiative can be successfully advanced. I will be asking other interested parties to also assist in developing an effective model.
Reforming the budgetary process
Last year I indicated that the Government was open to reviewing the budgetary process to encourage a more constructive and relevant examination of how the nation's finances are run.
I also made it plain that any changes would have to allow for the clear right and duty of the Government to direct and manage the budgetary process itself. This Government has no problem in giving an account of its stewardship to this House and to the electorate in due course.
Such accountability can only reasonably take place on the basis of action that has been taken and not on the basis of proposals involving spending yet to happen. It is for the Government to decide and to act and for the Dáil to hold it to account, as provided for in the Constitution.
Having reviewed the matter and studied various relevant contributions from inside the House, the Government has decided that certain proposals should be made to the House.
These proposals would mean that from January 2006, I would meet the Oireachtas Committee on Finance and the Public Service to discuss the economic and fiscal background to this and the next two budgets. The following autumn, my Department would update these three year economic and fiscal projections and publish them in place of the existing economic review and outlook, which deals only with the current year.
From 2007, individual Ministers would publish an annual statement on the outputs and objectives of their Departments and from 2008, the actual outturns. These statements would be presented to the relevant Oireachtas committee along with the Departments' annual Estimates. After these individual examinations, the Oireachtas Committee on Finance and the Public Service would co-ordinate the preparation of a report to the Dáil on the deliberations.
These proposals go a long way to meet the desire on all sides of the House for better debate, better scrutiny and better results from the raising of tax and the spending of public money in the State. I intend to write to the Opposition spokespersons on finance and the party whips inviting them to a more detailed briefing on the principles and issues involved in implementing these reform proposals. These proposals, once bedded down, would lay the ground work for a more unified budget approach in the future.
The budget I have outlined will sustain our economic growth and generate the resources we need to drive on with our key infrastructural programmes and look after the more vulnerable groups in our society. It is a progressive budget. It will help Ireland build a fairer, more enterprising and more innovative society. We are reducing the tax burden, expanding services broadly and following a prudent budgetary policy all at the same time. Many countries would be happy to achieve just one of those goals in any one year.
I believe this budget embodies the active determination of this Government not to rest on Ireland's success but to push ahead so that prosperity too can be a gift that this generation gives to the next. We are continuing to push ahead in the strategically important area of infrastructure so that Ireland can compete in the new economy of a globalised world.
We are pushing ahead with investment in education which has been the oxygen of our economic success. We have taken stock of where we stand within the education environment today. Fourth level Ireland is a robust response on the part of the Government to protect our reputation for graduates of the highest calibre. We intend pursuing excellence, not preserving privilege.
We are pushing ahead with innovative proposals to finance high priorities like health care and social welfare because prosperity is not a collection of statistics, or just a level of GDP. It has to be a condition of life, a better life, for all Irish people. We are building a new environment for the care of our children in a modern and changing society.
We are driving forward in all the major policy areas because innovation is a test we must meet if we are to be faithful to the mandate we have been given and the future we envision. We are pushing ahead because we believe in Ireland, today and tomorrow. This budget advances our belief that the Irish people can continue to achieve extraordinary things if Government works with them and for them.
I commend the budget to the House.
Like the Ceann Comhairle, I am long enough in this House to recognise the nervous enthusiasm and giddy laughter that has greeted this budget. It is a bit like the gobbling of turkeys as Christmas approaches because the last time I heard this sort of enthusiasm was when the Minister's predecessor announced decentralisation.
That was to be a great new innovation. This budget throws open the door on the bulging fridge of revenue that the Government has enjoyed. Let us not forget, however, that the money the Minister is dishing out today is money that has been paid by the hard-pressed taxpayers, families and businesses throughout the country.
The test for this Government, as for every Government, is what it delivers with that money. A popular philosopher whom Deputy McDowell follows with a lot of interest is Homer Simpson. He said, and I am sure the Deputy knows the quote, "making promises makes me a good father". The worldly wise Lisa replied, however, "keeping promises is what would make you a good father". That is the test.
Today's budget undoubtedly passes the Homer Simpson test of being a good budget but the Irish people have grown sceptical, like Lisa Simpson. They want to see their money deliver results and the main result that this budget has an eye to, unfortunately, is the outcome of the next general election. That is the glittering prize that this budget, as we saw in 2001 and 2002 before the last election——
The Irish people have lost their trust in this Government and giving them back their own money is not going to change things. Families are fed up with being treated as a soft touch by this Government, to paper over every crack and to fund vanity projects of different Ministers.
That is not acceptable and people will no longer accept the style of Government to which we have grown used.
In its courtship of the voter, the Government has used a time-worn ploy, based on the belief that some suitors go for a person with a past, some for a person with a future, but every suitor goes for a person with a present. That is what we have today — presents that are carefully gift-wrapped and there is something there for everyone in the audience. Look beneath the surface and one will see that this is a sham.
What the Government is trying to do is to get us to forget the past, a past full of waste and disappointment. It wants us to overlook the future that it is seeking to build, full of pious aspirations and fantasy maps. Instead, it wants us to concentrate on today. Those who are tuning in today to listen to this budget are right to take whatever the Minister is offering but they should not be fooled. Today's budget marks the first step in attempting to buy the next election and what is more, the Government is going to try to do it with the taxpayers' own money. However, people have wised up to this ploy. An old Chinese proverb states: "Fool me once, shame on you; fool me twice, shame on me". Recent opinion polls suggest the public will not be fooled again.
This year the Minister for Finance has reached a remarkable milestone. For the first time he is collecting €1 billion in tax for every week of the year. In the 60 minutes he spent reading his speech to the House, €6 million was spent, but with disappointingly poor results throughout the country.
A sum of €1 billion a week is a large amount to get one's head around. A billion seconds ago it was 1973 and we were just about to join the EU. A billion minutes ago Jesus Christ was still a living memory on this earth. A billion hours ago our ancestors were in the Stone Age, but €1 billion ago was only this day last week in the way the Government spends money.
The Government has become spendthrift — spending money, not delivering value and overlooking waste, which is not acceptable. It is remarkable that after eight and a half years in office and now facing the judgment of voters, the Government seems to have suddenly woken up to problems people encounter in trying to work and look after their children and the problems older people experience seeking suitable support so that they can stay in their homes. Is it not remarkable that it takes the arrival of a general election to launch plans to address these needs? We have grown tired of hearing of plans from Government. We want results. The Minister for Transport, Deputy Cullen, produced beautifully colour-coded maps and lovely tables but it was a sham, another five-year plan.
Now we are to have a five-year plan for child care, a five-year plan for elderly care and a ten-year plan for transport.
We have travelled this road before. What about the two-year health plan to eliminate waiting lists? The only sense in which waiting lists have been eliminated is the Minister no longer publishes them. We were to have a three-year decentralisation programme. Now even the Government admits that by the end of next year, the third of those three years, it will only achieve 10% of the programme. We were to have a seven-year national development plan, but we now know that half the projects will not be delivered on time and they will come in at three times the cost.
We were to have a plan to reduce public service numbers by 5,000 but the latest figures published by the Minister show we have increased numbers by 15,000. We were to have a five-year Government programme with significant commitments such as 2,000 extra gardaí on the streets.
We were to see class sizes reduced so that no infant would be in a class of more than 20. We were to see the proportion of people paying tax at the top rate reduced to 20% but the figures today show none of these commitments will be honoured. They have become purely pious aspirations.
We have been down the road of five-year plans before and if the hot air at these launches could be harnessed, we would have no problem generating electricity. It would be renewable electricity because the plans would be relaunched every few years. These multi-year plans come with no prices, no warranty, no manufacturer's guarantee, no recourse for misleading descriptions and when they are not honoured, no one takes the rap. People have grown weary and sceptical of them.
The Minister for Finance announced he will reduce the amount people will pay in tax by €20 per week. That is the sum total of his boast. Let us not forget where this came from. Compared with this time last year, the Minister will collect €3,750 more from every household in the country.
He has raised an extra €9,000 since the general election in 2002 from every household in the country. I am sure the Minister for Justice, Equality and Law Reform, Deputy McDowell, would be interested in the pledge that only 20% of people would be on the top rate of tax. A year from the end of the term, what figure is it? According to the Minister's announcement it is 32.6%.
The Government has reneged on its commitment. Far from reducing the number of people paying tax at the top rate the number is increasing every year and the Minister knows that because it is in his own tables today.
The Minister has taken a number of people on the minimum wage out of the tax net by raising the threshold to €15,600, approximately €300 over the minimum wage for the year. By April of next year every one of those people will be back in the tax net, because the minimum income by then will be over €16,000. It is a sham commitment, honoured in name but not in substance.
The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, told us the billions in waste the Government has committed to was just as nought. The Minister should concentrate on his own area of responsibility. The billions in waste were just small change as far as he is concerned.
This approach to Government spending has meant that the Government has not been able to index allowances and bands over the years since the general election and this has hurt ordinary families. An ordinary married couple with one earner has lost, through the failure to index tax bands and credits, €1,300 since 2002. How much of that is restored today? It is €20 per week, less than €1,000 per annum. Even more cruelly the Minister for Finance has tightened the screw again on those families, giving them a tax band on a par with a single person with no dependants. That is not fair.
How can the Minister for Finance present this budget as meeting the needs of families when he does that to people trying to cope on one income?
The Government deserves no credit for very belatedly closing down various tax reliefs and capping others.
Indeed, it is a phased, delayed approach. In truth I have been trying for the past three years to persuade the Minister and his predecessor to accept the need to cap these allowances and bring an end to a system where some people pay no tax. Some 80 people earning more than €250,000 paid no tax this year. Where is the justice in that?
Where is the justice in the fact that 116 people derive €1 million a year each from these credits and will continue to do so because most of them will continue for 13 or 14 years to come? They are not closed because all those people with the big rent books will just move on to private hospitals or private nursing homes. The Minister has closed one door but opened another and that is not equity. There is no commitment to a proper assessment of reliefs for private hospitals and nursing homes, as every commentator urged, so that we can judge whether they represent value for money before we give open-ended tax relief for them.
——this Government has been screwing families who find it hard to get by because of the tax take and we do not need Eddie Hobbs to tell us the reality. The Government's tax take on an ordinary house costing €300,000 is almost €100,000. The Government's tax take on a car that costs €22,000 is €8,500 and its take from €40 of petrol is €25.
There is no suggestion of abolishing them but why has the Government asked every household in the country to pay €4,000 extra in taxation? Why has the Government only been able to give €20 a week to people who have had to pay such money in extra tax? The Government has become soft and comfortable, it does not heed waste or value for money in public spending and that is why people have to pay these huge sums.
The major problem in today's budget is that is does not face up to the deeper challenges we all face. We must make real changes to deliver improvements at the front line in public services. The Minister for Finance said today that we will not see any performance indicators on the vast sums of money he spends every year until 2007, but that is too late. The Government will be in office for ten years before it starts to publish performance indicators for the money people must pay.
We have not addressed the needs of the competitive business sector that is finding it difficult to survive at the cutting edge. Exports and manufacturing are falling. These should have been the subject of today's budget but we have remained silent on them.
I welcome the fact that we are talking about plans for children and older people, but should we not be looking back on a decade of achievement in the needs of children and older people instead of coming belatedly to the issue?
He wasted €300 million, a drop in the ocean in Government terms, but it could have funded medical cards for children under five, subsidised 20,000 new child care places, put in place 5 million extra home help hours or carried out 20,000 extra inpatient operations.
The Minister announced a concession of €19.20 a week to parents who need child care. To pay for child care in Dublin, a working mother must earn €300 a week, €15,500 per year, even after the Minister's concession in today's budget. How does she have a second child when she needs €30,000 a year in pre-tax income before she gets a penny for herself? That is the reality facing parents.
In December 2000, the Minister committed to doubling the real value of child benefit. He has only started to do that today and even now, after this budget, with the extra €1.94 a week in child benefit for those with children over six, he will not have achieved that commitment. How is that for squaring up to the needs of children in our country?
Every Deputy was canvassed by Barnardos to deal with child poverty and there was a legitimate expectation this budget would address the issue. I am alarmed that nothing has been done to get to grips with child poverty. Over 100,000 live in consistent poverty but nothing has been done to increase the child dependant allowance, the lowest rate of payment for people in serious hardship on welfare. They are expected to survive on this €1.94 and deal with the problems of child poverty. That does not address this need.
Children are not at the heart of this budget. There was no talk of allowances for paternity and no effort to integrate child care services and child policies. We need a modern policy for child welfare that is joined up and that promotes the welfare of children by anticipating problems, one that does not react too late in the day and at a time when nothing useful can be done. That is the child policy the Government continues to pursue.
I welcome any initiative designed to help older people remain independent in their homes but the announcement today of €150 million for this purpose is less than the amount lost in PPARS in the Department of Health and Children. Older people will get less to support their independence than was lost in PPARS.
The 150,000 carers will get the same amount of money in support as was conceded in a cut in betting tax. Where is the sense of values when the needs of carers are compared to the needs of those wanting to cut betting tax? For far too long, for the Government, older people have been out of sight, out of mind. We saw that in the illegal deduction of money from people in nursing homes and the failure to provide an adequate inspection system, something the Taoiseach and Tánaiste promised months ago. We continue to see appalling discrimination against people in nursing homes. Some people go into nursing homes and make a contribution while others must sell their homes, draining every last penny before they get a brass farthing from the Government to support their needs.
Where is the justice for older people, who have served this country so well for so many years, when the Government treats them in this despicable way? There has been nothing but disappointment for the old in this country. I wish the Tánaiste well in attempting to address this. She told us some years ago that all of the saving on the SSIAs —€600 million — would go towards the development of elder care services, but that has not happened. The Tánaiste lost that debate at Cabinet with her Fianna Fáil colleagues.
After nine years of golden opportunity we have not delivered enough to those people who really need it. Too little has changed for those caught in the cycle of disadvantage. Early school leaving is at the same level now as it was eight and a half years ago. More children now fail to make the transition from primary to secondary school than was the case then. How can we say we are serving the country and families under stress fairly when we fail to address those issues?
Thousands are still going without basic necessities and housing injustice is rampant. Many are trapped in the rented sector; if they are on supplementary allowance and go out to work, they lose everything. Where is the justice in that? The Minister announced he would increase tax relief for those in rented accommodation by 57 cent per week. That is the sum total of largesse for those under pressure in the private rented sector. That is the reality these people face. They have been disappointed by the social housing programme, the affordable housing programme and every other programme, and then the Minister comes up with 57 cent a week, which does not address the need.
There is another, hidden need that has not been addressed. One in four people will need psychiatric intervention to cope with their mental health problems at some stage in their lives. The Government has signally failed to develop a service capable of meeting that pressure and the opportunity for early intervention, which is critically important in the treatment of many, is lost in the case of thousands with mental health illnesses. Targets should have been set for these people the day the Government parties took up office and we should be looking back and reflecting on a decade of achievement, but that has not happened.
I welcome social welfare increases of €17 per week generally and €14 per week for pensioners, but the reality should not be forgotten. The Government will take back at least €4 in indirect taxes. Increasing rents will take another €2 and fuel costs have increased by 50% since the fuel allowance was last increased. The allowance should have been increased by at least €8 or €9 per week instead of the measly €5 that has been granted. Pressure is maintained through increased health charges, including an increase in the cost of doctors' visits, many of which must be borne by those on welfare. Where a person in the household of a social welfare recipient has an income, the recipient does not qualify for a medical card. Despite a decade of significant economic success, the Government is saying a person on the minimum wage is too wealthy to have a medical card.
The Taoiseach is correct in detecting that a new partnership with the community is needed but sensing the need for change does not deliver it. The Minister for Finance has delivered the old approach, which is focused narrowly. Too many families are struggling with problems he is not addressing, including separation, substance abuse, mental illness and caring. A more modern welfare system is needed, which recognises these pressures and which not only focuses on issues such as unemployment and illness but supports families through difficult periods. New models of co-operation with the many voluntary agencies working in the field without whose help these deep-seated problems cannot be addressed are needed. However, the budget does not provide for a new departure in welfare and community policy.
I refer again to the old problem of Government efficiency. If the Government was efficient, more could be done in the State. Unfortunately, the Government has become the core of rip-off. It is at the heart of what it should be defending and championing the consumer against. Every time Eddie Hobbs turned over a stone, the fattest worm to come wriggling out had been put there by the Government. Whether one is buying a car, using credit cards, driving on tolled roads or eating out, the Government's hand is stretching deep into one's pocket to make it dearer here than anywhere else in Europe. Ireland has become the most expensive country in Europe, but food, clothing, furniture and equipment prices are not driving up the cost of living because they are all falling relative to the rest of Europe. Government sponsored services are driving up the cost of living in Ireland.
Since the 2002 election, the Government has increased various charges by 86%, which has cost the average household almost €1,500. Government-run utilities have increased their charges by more than 40%, costing the average household €950. These stealth taxes amount to €50 per week, which wipes out entirely the €20 a week concession offered to most people in the budget by the Minister for Finance.
The Minister has not rolled back the tide. I am disappointed that at a time householders and businesses have doubled their borrowings and are exposed to significant pressure from increasing interest rates, more has not been done to address the serious financial issues against which the State must protect. The SSIAs should have been used to copperfasten the financial soundness of ordinary households. The budget should have provided incentives so that people could put this money to good uses such as investing in pensions. A small concession in this regard would have been a win-win scenario because the danger of going the route the Minister has is there will be a major frothy consumer boom over the next 24 months, at the end of which a great deal of money will have been spent, the cost of living will have been driven up and there will be little to show for it in the long term in copperfastening a sound financial base for the State. People have doubled their borrowings since the last election. An increase of only 0.25% in the cost of living will cost ordinary householders approximately €70 per month while an increase of 0.75% will cost €210 per month. That will wipe out everything the Minister has done.
We need to examine what needs to be done to proof ourselves against changing and hardening external environments. No one can have illusions about the change that has happened in the external environment in which Ireland seeks to compete. There is a sharp contrast between the economy Deputy Quinn handed over to Fianna Fáil and the Progressive Democrats in 1997 and the economy the Minister will soon hand back to the rainbow coalition. Superficially, there are many similarities. Employment is increasing rapidly and the budget surplus is healthy, but there are also signs of fragility which cannot be ignored. Approximately 40% of jobs in companies supported by the industrial agencies has been lost since 2000. Many have been replaced but not enough to prevent a sharp decline. Ireland has lost share in its export markets three years in a row. Our export performance is at its worst since 1974 and it is less than a quarter of what is was in the late 1990s.
The problem is that while the construction sector can absorb people and conceal problems in underlying trading sectors, that cannot go on forever. As a small, open economy, we need to survive on the basis of competitive businesses and that is not happening. Ireland's enterprise strategy was once the envy of emerging countries but it is feeling the strain and the cracks are showing. The budget presented an opportunity to address this. Ireland needs a far-reaching reform agenda both in public spending and public policy to deliver value for money. Only 12 months ago, Ministers presented their Estimates to the House with a great flourish. According to the Tánaiste, 230,000 extra medical or doctor cards would be provided but, at best, 10,000 will be provided. A total of 1,000 extra gardaí were to be provided but the latest figure from the Minister for Justice, Equality and Law Reform for November is 90. The accident and emergency department crisis was supposed to be wiped out but latest figures for November highlighted that 360 people were still on trolleys in such departments. Integrated ticketing was to be introduced in Dublin but that still has not happened. While none of these actions was taken, no Minister has taken it on the chin. No one owned up and said, "I got it wrong, I was fooling you this time last year".
It is time Ministers who make commitments become accountable for them. Since 2002 the Minister for Health and Children has demanded a 54% increase in the health budget but fewer people have access to primary care and there is greater chaos in our accident and emergency departments. During the same period, the Minister for Justice, Equality and Law Reform demanded a 43% increase in his budget, but there is a greater risk of being assaulted on the street and detection rates have fallen dramatically. Criminal gangs that are supposed to be "stinging, dying wasps" are still stalking the streets. The Minister for Transport has received a 79% increase in his budget but, in that time, the number of people using public transport has only increased by 3% and nothing has happened regarding long promised reforms. Is that good value for money? This spending has cost every household an extra €3,000 over the past four years. There is no value in it.
I welcome the Minister's proposal to make the Estimates procedure more open. However, he should examine the indicators he said would drive performance. Under the heading, Making it Happen in the Fianna Fáil election manifesto, the Taoiseach pledged: "We will put in place a streamlined process of public expenditure reviews; we will publish a timetable of reviews within six months". The idea was great.
Every three years we were to have a rolling programme where every item of public spending and every programme would be evaluated.
What might one expect for 2005? We should have seen one third examined but that could not happen because the Tánaiste and Minister for Health and Children declared she was too busy reforming to have any assessment of her spending done. Her colleague, the Minister of State at the Department of Finance with responsibility for the Office of Public Works, said he was too busy with decentralisation to have any assessment of value for money in his Department. We are whittled back to what is left, perhaps 75%, so we could have expected 25% of spending to be scrutinised. The Minister for Education and Science did nothing. No study was completed by the Ministers for the Environment, Heritage and Local Government, Transport, Finance, Communications, Marine and Natural Resources, Defence or Community, Rural and Gaeltacht Affairs, so we are back to just 8%. However, even 8% was too much. The sum total of completed scrutinies by this Government under its expenditure review came to 0.5% of Government spending. The Taoiseach has certainly made it happen as far as expenditure review is concerned.
One cannot expect us to greet with great delight the promise we will see performance indictors in two years' time. It is not good enough. What the Government should do is honour commitments it already made to the public several years ago.
Unfortunately, one will not find "The X Factor" in this budget. All we have is the same old faces reassembled warbling a cover version of that jaded 2002 hit, a lot done, more to do. It is a bit like the relaunch of Take That, only it is probably a relaunch of Take That, pay later because that is really what the public has got used to. The cheeky lead singer has gone off to pursue a solo career in Europe and we are left with an alternative which is perhaps less Robbie Williams and more Ozzy Osbourne. The champagne and party time has gone. There a few modern lyrics, including lyrics on child care, but the truth is the Government is not up to it. "The X Factor" is not there. It is time to vote the Government out.
For those who like baked Alaska, this budget is a bit like a bad one. It looks lovely on the outside, is full of hot air, is cold in the middle and it is very tough when one tries to eat it. People stuck on the West Link as they go home might feel this House could do with a coat of paint. Perhaps the Minister of State, Deputy Callely, might get in the contractors.
The Minister is increasing spending by 9.9%, yet there is nothing in the Estimates for a national pay agreement which is due sometime next year. Basically, the budget is about helping to buy votes at the next general election. We will have to hope that extra money is, as far as possible, well spent.
The budget is a kind of Fianna Fáil fairy-tale. I do not know if the Minister is familiar with Narnia but this is a bit like Lucy in The Lion, The Witch and The Wardrobe. The Minister is telling us it is all true, that there is a country to which one can get through the wardrobe. Rather than look at its true record, once more Fianna Fáil want people to close their eyes to the truth and make a wish that it will all be okay. We are to believe the promises on child care, transport and the health strategy and to believe false promises on fair taxation.
The budget was, in many ways, to be billed as a budget for children, but like so much this Government does, it is riddled with half measures. Our children are not a problem; they are our greatest resource. In the run-up to the budget, some of the debate lost focus on the fact that we do not simply want to live in a great economy but in a great society which is child and family focused for all situations. That is the test of what we expect in a child-centred budget.
Today's measures show all the signs of a rush job dictated by a political rather than a child welfare agenda. It is based on the needs of a desperate political party and not particularly on the needs of children and families. Today's measures offer a modest and welcome relief for parents from some of the financial burden in arranging for their children to be cared for while they are at work. It offers limited financial supports. In this year's Book of Estimates, child benefit, with no changes, will cost just under €2 billion. If the Minister were to improve that by 25%, the package would come in at approximately €500 million, but instead it comes in at €317 million. The increase in child benefit for all children up to 19 years of age, if they attend school, is very modest. The €20 per week is a lot less than I had expected. I really thought the Minister might have given €50 per week for children under six years of age, something the Labour Party sought.
I do not want to sound churlish but if a family with two children have a bad bout of winter 'flu or asthma and it does not have a full or a "yellow pack" medical card, it will cost €50 in this town to visit a doctor, even on the north side. A bout of 'flu or asthma in a family is likely to end up costing it around €500 between two adults and two children. Therefore, while the €20 per week will be welcome, it is not as much as one would have expected from the hype generated.
The budget needed to set out a strategy for children's welfare. Instead, the Minister is spreading the jam very thinly over the bread, so thinly in parts that one cannot even notice it. There are many half measures. I am glad the Minister announced a tax disregard for child care. He and I discussed this during the debate on the Finance Bill. Childminders and home arrangements are the choice of approximately half the parents whose children are minded for some or all of the day and I am glad the disregard is being brought in. The Labour Party wants it subject to a register so that we ensure these childminders, who have been in the black economy, who by and large have no pension or PRSI provision and who are almost all women aged between 40 and 50 and over, are registered. It is important younger childminders in the home are given opportunities to train. The Minister referred to a notification system but I am not sure if that is the same as a full register. I am sure he will give us more details later.
A startling fact of which the Minister might not be aware is that child development tests used to be routinely done at nine months of age. In many parts of this country, for example, Dún Laoghaire, a wealthy area of this city, child development tests have gone back to one and a half years of age. Anybody who is a parent knows the importance of these development tests to see if everything is okay and to catch as early as possible anything which has gone wrong. That is a measure of what has happened in terms of slippage and provision for children in this society.
I am very disappointed there has been almost no mention of early childhood education. This is another key element of a child-centred programme. This is extraordinary because all of the international research, particularly from the United States, shows that investment in pre-school and early childhood education pays dividends. Most of our European counterparts have had écoles maternelles for a long time. Even 40 years later, the children who got a head start with early childhood education still have higher rates of employment, more success in their personal lives and less contact with the law in the sense of their lives going disastrously wrong, yet the Minister only made a vague reference to this issue. It is terrible to have missed this opportunity. The programme introduced by the former Minister, Niamh Bhreathnach, into selected schools is still only a pilot project. Children only get one chance at childhood and another year has gone by with no attempt to introduce a pre-school and early childhood education system. I know the Minister has tried to spread the jam but I would have thought he would have attempted to do something in this regard following the NESF report and the big conference that was attended, particularly by the Minister for Education and Science, in Kilmainham.
The Minister for Education and Science, Deputy Hanafin, does not acknowledge the problem we have with the numbers of students dropping out of second level education, particularly in big cities and towns. It is especially true of boys and is very marked, as the Taoiseach is aware, in the Dublin area. Only a third of Dublin schools are achieving a retention rate to leaving certificate of above 80% and as many as one school in six does not achieve a retention rate of 50%. This means that in those schools 50% of boys leave school just after the junior certificate. We know the prediction for these boys who have no training or qualifications. I accept they can get jobs in shopping centres and in distribution but by the time they are in their mid-20s, they will be stuck and unable to compete in the knowledge economy we have talked about building. They will either be unemployed or stuck in the lowest of low paid jobs.
I deplore the lack of vision in regard to primary education and the lack of reference to secondary education. The McIver report produced by the various second level teaching unions, does not merit a mention either. There are problems with the National Educational Welfare Board, which is not mentioned either. The Minister's lack of vision in regard to education at all levels is a great pity. I am pleased with the money being provided for the third level sector but we will have to wait to see the detail of this proposal. I hope the institutes of technology and not just the universities will share in that dividend. The institutes of technology are critical in terms of participation rates for middle income and less well-off families and give a much needed opportunity to the latter group.
The Government has been topping up its coffers by fairly nasty stealth taxes in the past three years and by pushing more and more taxpayers into paying tax at the 42% rate. When the Government came into office in 2002, the standard rate band for a single person was €28,000. In other words, any income earned above that amount was taxed at 42%. Unless this band is increased in line with annual wage rises, people pay more and more of their income at 42%. The Government did not increase the band for two budgets after the last election, the two last budgets of the former Minister, Mr. McCreevy. While wages have increased on average by 15%, the standard rate band has only expanded by5%. The Minister referred to an increase of 9%. We would have needed to see an increase of 15% to bring people anywhere near to what they have missed out on in recent years.
The programme for Government contains a commitment that only 20% of taxpayers will pay tax at the top rate. The table on page C.22 of the Budget Statement that sets out the Minister's hopes for next year, without taking into account changes in regard to wage agreements, states that just over 658,000 taxpayers will pay tax at the top rate next year. That means the Minister has only taken 8,400 taxpayers out of the 42% band. Contrary to the little bit of verbal dexterity we heard from him, that is the reality. The Minister is nodding his head. I do not know whether it is in agreement or disagreement.
Page C.7 and the following pages give examples of changes affecting taxpayers. I notice that Nuala, Seán, Aoife and Paul, all the people who used to live at the back of the budget, have been ditched. I suppose the Minister was fed up disappointing them. They have lost their names but they live on in tabular form. The gain for a single person earning €30,000 is €6 per week or 1.2%. Who does the Minister think he is codding? The gain for a married couple with children who have one income is also exceptionally low; it is 1.2% on an income of €30,000 and even on €60,000 it is only 1.9%. That is the continued effect of individualisation. It is still biting very deeply on many families who have three children or more. In such cases, one of the spouses almost certainly cannot afford to work unless he or she is in a very high income bracket. In example 3, the gain for a married couple with two children and two incomes earning €30,000 is 6%, while it is 5.4% on an income of €60,000. Married couples with two incomes gain at something like five times the rate of a married couple with only one income——
——because of the distortion of individualisation. This is important for people at or close to the minimum wage.
In recent weeks I was delighted to hear both the Minister and the Taoiseach singing my song about the super rich who pay no taxes. At one stage I thought it sounded like the game was up. Last year, the Taoiseach promised this budget would set things right on the tax shelter front. I am a bit disappointed because it is a half measure again. The Taoiseach and the Minister for Finance appear to have forgotten the words. They have lost the rhythm and they are a bit out of tune. I am not sure it will make the No. 1 slot this year. Members may recall the prayer of St. Augustine. Robbie Williams, of whom I think the Taoiseach is a fan, has a new CD with the following song. I will not sing it but will quote it because I cannot sing.
This is Robbie:
So I sing a song . . .
. . .It's a song I sung before,
And a song I'm gonna sing again,
I mean every word,
I don't mean a single one of them,
Oh Lord, make me pure,
But not yet.
That is just about it on the tax shelters. Some of the more obvious tax shelters are to be closed down. They have outlived their usefulness and were causing serious harm and distortion. The notorious exemption for the stallion tax has to go but not for another two years. Lord, make me pure but not just yet. That will give the lads plenty of time to set their affairs in order.
The Lord does not close one door for the super rich but he opens another. Can we say that? Both parties in Government are addicted to tax shelters. It is interesting that, according to the documentation we will only see in great detail with the Finance Bill, the tax shelters will not really start closing until 2008. It is unclear what the Minister is proposing to do because he claims that, with regard to hospital relief, he will front load it. Again, in the small print of the budget, hospital relief will cost an extra €3 million next year and €2 million the following year. Savings will only be anticipated thereafter. It is hard to work out why it will cost more. It is because it is being front loaded and, I presume, will be an advertisement to the super rich to get into hospitals. The redoubtable Government backbencher, Deputy Ned O'Keeffe, said that hospitals are the new hotels. They are a new avenue for tax breaks.
The Harney plan to promote private hospitals is one of the most misguided proposals ever presented, even by a Government as full of misguided schemes as this one. The Harney plan will provide tax incentives to private investors to promote the building of private hospitals on the grounds of existing voluntary and public hospitals. It will almost certainly, after today's announcements, result in an avalanche of private medical facilities as investors race each other to find the most profitable locations and sectors to serve. It will lead to longer waiting lists and a more stretched service in the public system as scarce resources, such as consultants, are drawn out of the public system. Remember that there is worldwide shortage of doctors. Private hospitals will cream off the less complicated cases and distort decisions on who should receive treatment in hospitals.
We have to build capacity in the health system but the creation of a parallel private system is wrong in principle, expensive and likely to be inefficient. It creates a two-track system, with one speed for private services and another for public ones. Rather than designing the roll-out of additional hospital bed capacity around the needs of patients, the needs of investors will instead have precedence. When the private sector has cherry picked the most profitable elements of health care provision, the public hospitals will be expected to take responsibility for what is left. The Harney plan involves a significant level of hidden public subsidy for the so called private sector. Valuable sites in public hospitals will be made available to private concerns.
The changes announced by the Minister involve time based limitations, so they are welcome. However, a private hospital that costs €100 million will still attract tax breaks for single high net worth investors of approximately €42 million. The described changes will mean that the taking up of those reliefs, bar the front loading, which will bring them forward for the first two years but will later extend them out, will cost the taxpayers exactly the same. It will simply spread the relief over a longer period after the initial period of fast forwarding the relief.
With regard to the promoters of tax breaks for private investors, some brochures, which I am sure the Minister has seen, promise a return of €62,760 for every €75,000 invested. Obviously, a great deal of that profit comes from the tax break in terms of sheltering income from taxes but the private hospitals must also deliver profit for investors. How is that profit is to be obtained? If patient care is not to be compromised, it has to come from higher charges to the Exchequer and to private insurers. The inevitable result will be higher VHI, BUPA and VIVAS bills. The Harney plan will deliver high cost health care at considerable public expense. For the ordinary taxpayer, it will be a double whammy. A lucrative tax shelter will siphon off income that ought to bear a fair portion of taxation, while the imperative to deliver profit will ratchet up insurance costs for all of us. I am very disappointed.
The Government is addicted to stealth taxes and, for the first time ever, it is taking substantially more income this year in VAT than it is in income tax, particularly if from the special investigations by the Revenue Commissioners are subtracted from income tax returns. If an old age pensioner buys a new television, he or she pays VAT at 21%, as does a millionaire. The fact that VAT is such a significant element and the main generator of taxes is an indication of how regressive our tax system is.
We have seen programmes about rip-off Ireland, central to which is the kind of indirect tax rates and VAT rates and charges this Government has introduced year after year. Charges are higher again this year for accident and emergency visits. Over the life of the Government, there have been increases in charges for drugs, registration fees for college students and costs on a range of services that hit hard on the pockets of young families. There is little point in the Minister telling us how much he is doing for children while at the same time levying a range of stealth taxes on families. I am sure he knows how much bin charges have increased and what a cost and necessity they are for families with small children.
I welcome the Government's announcement of an increase in social welfare benefits. It is the least that could have been expected of the Government in light of the commitments made under the revised national anti-poverty strategy. They broadly meet the suggestions made by Fr. Seán Healy, particularly with regard to the €17 increase. However, it is disappointing that the Minister did not take the opportunity to reform the structure of social welfare. In particular, dependants — usually women — of pensioners or dependants where a family is unemployed still only account for 70% to 75% of the full adult rate. With all the money at his disposal, he could introduce reform. He individualised the tax system but there is no individualisation of social welfare.
It is disappointing that he has not addressed that issue. I am very disappointed with the fuel allowance. Since the rise in fuel prices, the Government has made a windfall gain, which the Minister acknowledged, of about €100 million from VAT and excise increases caused by the rise in petrol, gas and electricity prices. The basic fuel allowance for senior citizens has remained at just €9 per week since 2002. In the same period, domestic electricity prices have increased by44%. Gas prices were recently increased by 25% and home heating oil is approximately 20% more expensive now than it was this time last year. The current fuel allowance of €9 barely covers the cost of half a bag of coal. In Cork city, it costs €16 to deliver a bag of coal to an old age pensioner's house. The Minister increased the fuel allowance from €9 to €14, an increase of €5. A fuel allowance of €14 will pay to have a bag of coal delivered for an old age pensioner in Cork city. The Minister could have doubled the fuel allowance to €18. That would have cost him something like €80 million, which he could have afforded, given the money he has at his disposal.
Reports from the Combat Poverty Agency and other bodies have found that Ireland has one of the worst records in Europe in terms of people being able to heat their homes. A Combat Poverty Agency report published in 2004 suggested that up to 2000 deaths annually in this country could be attributed to fuel poverty. The Government had a clear opportunity to address the issue. The weather this winter has already been more severe than usual and it is unacceptable that elderly people in modern Ireland should be afraid to heat their homes properly in case they get a bill they cannot afford to pay.
For years, social welfare policy has been devoid of imagination or innovation. It is not enough to address the issue of income adequacy. Social welfare policy must also focus on how to offer opportunity to everyone in our society who can avail of it, in particular, opportunity for people on welfare to get back to work, education and training. The darker side of the booming Irish economy is without doubt the number of families existing exclusively on social welfare and locked out of employment, education and training.
I am not sure if the Government is aware of the extent to which a whole new set of poverty and unemployment traps has developed in recent years, which in effect prevents people getting off social welfare and back to work. Currently, a family with two children, on social welfare, receiving housing rent allowance, would probably need an income of €30,000 to €40,000 to make it worth their while to go back to work. In the Dublin area, for a family with two children, rent allowance is now €1,200 monthly. If one goes back to work, one loses that €1,200 almost immediately, which means that one needs to make more than €14,000 to have a job which pays. That means one really needs to earn at least €30,000.
Since the then Minister for Social and Family Affairs, Deputy Coughlan, introduced the "savage 16" welfare cuts a couple of years ago, we have created a new and ever-higher set of poverty traps for people who wish to move from welfare to work. Because the Government has all but abandoned social housing for families on the waiting list, the majority of such families are now catered for by private landlords who get a rent allowance subsidy paid for by community welfare officers. That allowance for a single adult with one child is a maximum of €954, and is €1,200 for a family with two children. The Minister should think of how much one needs to gain in a low-wage economy to meet that.
The Government is condemning these families and in particular the children to a limbo of lost opportunity and permanent social welfare dependency. They are our people. They are the people dropping out of school early, and lone parents with children. Most of them are desperate to get out of the poverty trap in which the Minister is leaving them. Just as the Vatican has abolished limbo, our Government is reserving it for social welfare recipients on housing benefits.
Given that many young men drop out of school early, they and young lone parents are the people most at risk from this poverty and unemployment trap. The other people affected are families including a disabled person, or families headed by a person with a disability.
Disability was the big story in the budget last year, another five-year rolling annual programme. Unless I missed some of the speech, I did not hear any mention today of disability. People on disability allowances are among the worst sufferers in this poverty trap. We want participation for everyone in the economy. The Minister should listen to the following before he goes. Research published by OPEN, an organisation which deals with one-parent families, shows that a lone parent with one child can drop 42% of his or her net income on social welfare, rent allowances and other benefits by moving to a 40-hour minimum-wage job.
Just because people are unemployed does not mean they cannot do the maths with regard to how taking a job will affect their incomes. Work along with education is the greatest thing a government can offer in terms of opportunity. The Government is becoming an opportunity blocker. The report published some time ago by the industrial strategy group talked of how we used to have an agile government and how Irish government is becoming sclerotic, and freezing up. We need agility with regard to social welfare, educational and work opportunities for our own people who have been left out of the loop.
I want to talk about the overall strength of the economy. In today's budget and in the public spending plans announced two weeks ago, the Minister has increased spending by more than €5 billion, but to what effect? It is surprising that after collecting so much tax revenue from taxpayers there are still so many gaps and shortfalls in our public services. As I said, the Government also collects large amounts through stealth taxes. The conclusion is that this Government is not capable of managing public services efficiently and providing good value for taxpayers' hard-earned money.
The key failures in this budget have become depressingly familiar in the recent budgets of the Government — the missed opportunities, bad value for taxpayers' money and the short-term focus, which is now on winning the next general election and buying people's votes with their own money.
We want the Government to address the key infrastructural deficits in this economy. I spoke earlier about fairy stories, in particular about Narnia. Nothing produced by the Government in regard to capital spending and infrastructure has been anything more than a fairy story. The national development plan is now little more than a national joke. Capital envelopes are an excuse not to spend money. Over a couple of years, Fianna Fáil has moved from the brown envelope to calculations done on the back of an envelope to multi-annual envelopes.
Clearly, Fianna Fáil is preoccupied with envelopes, but is not doing much in terms of delivering infrastructure.
In the Estimates, many Ministers, including the Tánaiste, were not spending up to 20% of their capital budgets. The hand-back and roll-over with regard to capital budgets in the Book of Estimates is €285 million. That is astonishing when one thinks of the roads and public transport we have not got. The Minister for Health and Children, Deputy Harney, rolled over €56 million in capital on the health Estimate, which is extraordinary.
This year we had the tragedy in the hospital in Cavan-Monaghan. Last year we talked at this time on "Morning Ireland" about the trolley watch. As my colleague, Deputy Bruton said, it is very sad — and gives me no pleasure to say — that this week, the Irish Nurses Organisation has reported that the number of people on trolleys is unfortunately somewhat higher than it was at the budget weekend this time last year. In this past weekend, there were 359 people on trolleys.
The delivery record of the Government in terms of infrastructure is truly pathetic. Transport 21 consists of five pages, two of which are maps. Another page is a wish list in which we are told many new services will be available in ten years' time, in 2015, presumably just in time for the 100th anniversary of the Easter Rising. The floor of the Taoiseach's office must be littered with brave new world strategies launched with bravado over the years, something akin to the great leaps forward that used to take place in Russia. We have decentralisation, the national spatial strategy, the health strategy, the road safety strategy, the suicide prevention strategy, the national climate change strategy and so on. I do not know whether there was a strategy on electronic voting — I cannot recall whether that was called a strategy.
Today, we have another strategy, the child care strategy. Most of the earlier strategies are in ruins because they could not go beyond the promise and rhetoric to the point of delivery.
The Exchequer returns for any month for the past two years tell the same story. In general, there is an underspend in regard to capital funds. How can the Government credibly claim to have a €35 billion public transport plan when it cannot spend its allocation on transport six years into a seven-year national development plan? The idea that the Government will be able to ramp up spending to the level suggested in the transport plan is nothing short of ludicrous. All the large strategy documents and slick presentations will not hide the fact that the Government is incapable of delivering capital projects on time and within budget. The Government, through this budget, asks people to make a leap of faith. We are expected to believe it can now get to grips with problems it has failed to overcome for years, and that it will do it all in a year or even six months. To believe this, one would need to enter Narnia through Bertie's magic wardrobe and seek the help of Aslan the lion to break the spell of failure and deceit that hangs over the Government.
There are many workers on their way home as we speak, stuck in the circle of hell that surrounds Dublin called the West Link Bridge. Billions of euro are allocated to the national transport plan but it does not even mention the West Link Bridge. We pay some of the most expensive road tolls in Europe for the largest traffic jam in Europe. No help is at hand in this regard. The national transport strategy did not even mention the humble bus. The Government is too elevated for buses.
It is absolutely unbelievable.
On 10 December, the Government will announce, for the sixth time, three extra half-trains on the Maynooth line. A normal train has eight carriages but these trains will be only four carriages in length. CIE had the option of one and a half trains but decided to opt for three half-trains. Furthermore, they will make a half-journey. Instead of going from Maynooth all the way through to the south side, they will stop at Connolly Station and passengers will hop off and wait for a DART. This is the only new service pencilled in for the north west side of the city, including Maynooth and the surrounding areas, until after 2008. It is extraordinary.
The Government signed up to commitments under the Kyoto Protocol and launched its national climate change strategy in 2000. However, very little has been done. There are reliable estimates that we will be obliged to pay annual forfeits of €50 million within two years. The measures in this area are welcome but are very limited. It is a pity that in all the travelling that Ministers have done, they have not spent much time in Denmark. That country has a wind energy industry that has generated tens of thousands of high-tech jobs. We in Ireland talk constantly about a knowledge economy. We could develop alternative energy and help to build and expand the knowledge economy if we were to look at the examples of other countries. The Government, unfortunately, has failed to address the issue.
There were two more announcements today of profitable manufacturing companies in Wicklow and Galway closing down because labour was available at €3 or €4 per hour elsewhere in Europe. The situation at Irish Ferries is not a once-off but rather it is symptomatic of the shift that is taking place. We should bear in mind that the move to a low-wage economy is a disaster for this country in strategic terms. We should look to the Scandinavian countries rather than Hong Kong for inspiration in building a high-wage, high-knowledge economy with high levels of public service. The continuous falls in manufacturing are disappointing. Ireland has been shedding jobs in traditional manufacturing sectors at an extraordinary rate since the Government took office. This is in contrast to the record of its predecessor. The main problem is that much of the job replacement is at low-pay levels. This is borne out by the income tax returns, which show high levels of part-time working and employment at the minimum wage. There are many more people at work but the underlying trends are deeply worrying.
I wish to mention decentralisation, particularly as the Taoiseach is here. All parties in this House agree that decentralisation is appropriate. Past Governments have overseen instances of extensive, planned and successful decentralisation. The current decentralisation programme, however, started life as a political stroke by the former Minister for Finance, Mr. Charlie McCreevy. In the end, like many strokes, it backfired and probably cost him his job. It has been mired ever since by a fatal combination of arrogance, cost escalation and staff resistance. It has not been helped by the extraordinary incompetence of the supervising Minister of State who seems intent on a personal mission to destroy any public or staff confidence in the project.
It is still just about possible for the Government to rescue some part of its plans and to salvage any residual reputation for competence but only if each part of the programme is subject to a thorough review and an acceptance of some basic controls and ground rules that protect the integrity of sound public administration. As matters stand, the major additional cost burden to headquarters for many specialist organisations, with the advent of one office in the decentralised location and another in Dublin, will cause money to be diverted from hospital beds and school places. The Taoiseach must be aware of the foreboding now widespread in many public service divisions about the loss of professional staff and the disruption this will entail.
For example, the overseas aid division of the Department of Foreign Affairs is set to move to Limerick. Senior staff there, following discussions with Mr. Chris Flood, chairman of the aid advisory committee, estimates that this section will lose 85% of its most experienced staff as a direct result of the move. This is madness. We are embarking on a major expansion of the aid programme, involving expenditure of an extra €100 million per year at least. We all welcome that. Next year, the programme will spend more than €600 million. How can this be administered properly if all the most experienced staff leave and are replaced by others who are no doubt qualified but have no direct knowledge of the issues the programme must handle and the regions in which it operates. Planned decentralisation has worked in the past but this project is descending into a pathetic fiasco on a par with electronic voting.
Today's Ireland has many examples of extraordinary wealth alongside desperate poverty. The broad public sympathy for the staff of Irish Ferries comes from the naked display of self-serving greed from the company owners and their acolytes. This is the return to the Great Gatsby society. Blatant and vulgar displays of wealth and extreme inequality have a corrosive effect on society as a whole, especially when those who benefit most are so reluctant to contribute that they make themselves non-resident or else go to enormous lengths to avoid taxes that ordinary people must pay. We need to start talking about this issue, however unfashionable it may be to do so in these days of worship of celebrity and wealth. People talk about the problem of the poor, but instead we need to think about the problem of our country's wealth and how it should be shared in a fair society. Sadly, we saw little of that in today's budget. We needed a budget that was about pure gold rather than "bling bling", but "bling bling" was what we got.
I would like to praise the Minister for Finance before I seek to bury his budget. Last year's Cabinet reshuffle happened too late in the day for the budget for 2005 to be truly considered as the full property of the Minister, Deputy Cowen, although he succeeded in making his mark on it. He has been involved in budget 2006 since the start of the process, up to today's announcement, and he deserves congratulations on that. It is fair to point out that before the 2002 election, the previous Minister for Finance, Mr. McCreevy, who is now a European Commissioner, embarked on a public spending programme at this stage of the electoral process. The level of public expenditure increased by 20% in the two years prior to the 2002 general election. The first two years of the present Administration were spent rolling back the effects of that reckless expenditure. I welcome the modest levels of increase sanctioned by the Minister for Finance in this budget. It is an indication of a prudence that he probably shares with his UK counterpart, Mr. Gordon Brown.
Comparisons between the Minister for Finance and his predecessors, other than the comparison I have already made, might be invidious and perhaps unfair. We should not compare the former Minister, Mr. McCreevy, who was associated with racing stallions and the Curragh of Kildare, with the Minister, Deputy Cowen, who is associated with "Pure Mule" and the Bog of Allen. The reality is that the attitudes of the Minister and his immediate predecessor are remarkably different. The Minister, Deputy Cowen, tends to keep his counsel. I hope he will maintain his prudent approach to economic management if there is to be a further budget before the next general election. If he engages a total loosening of the purse strings on that occasion, a future Government will have to deal with the effects of such recklessness.
When the Minister spoke about education in his speech today, he did not refer to any particular initiatives other than those relating to third level education. While such initiatives are badly needed, the Minister's failure to provide for the much-needed investment in pre-school, primary and secondary education means that the real educational disadvantages in our society, which are being deepened every day by the policies of the Government, will not be addressed. It is not something of which the Government can be proud. The Government has shown its indifference to the findings of the McIver report, which relates to areas of education for life such as adult and continuing and further education, by failing to take action in that regard. It would cost €48 million, which is a mere drop in the ocean, to improve standards and facilities in this valuable sector of the education system in line with the recommendations of the report, which is three years old.
The Minister for Finance highlighted what he considers to be the success of the current national development plan and promised a future plan to run from 2007 to 2013. The people of this country will not be particularly impressed with the roads element of the new plan if it is along the lines of the current plan. Under the 2000-06 plan, expenditure on the road network increased from €6 billion to €18 billion, without any additional value for money accruing to the Irish taxpayer. When one considers that the roads programme is being pursued by the Minister for Transport, Deputy "Give me a billion" Cullen, and his soon-to-be-departed colleague, Deputy "Give me a job" Callely, it is unlikely that the level of public confidence is about to be enhanced in any way. Like most of the public, most Deputies on this side of the House thought that the announcement and launch of the Transport 21 initiative by the Minister, Deputy Cullen, was a black joke on the part of the Government. The Government cannot be serious about allowing this infrastructural programme to be delivered by the most profligate of the Ministers who have been in office since 1997.
I welcome the social welfare package in this budget because the overall rates are moving in the right direction. We will probably not be made aware of the minutiae of the package until the forthcoming social welfare Bill is published. I suspect that the Government is continuing to get some things wrong, however. The fuel allowance payment should have been doubled to €18 per week, especially when one considers the effect of inflation on the cost of fuel since 2002, when the payment was frozen. Those who rely on the allowance have found themselves worse off when they try to meet their fuel needs and the incidence of fuel poverty has increased as a result.
The Government is sending out mixed messages in respect of pensions. The pensions rates in this country continue to be among the lowest in Europe as a proportion of average incomes, despite the increases in wealth in recent years. The approach of the Government has been to introduce tax relief for private pensions. While today's attempts to balance that playing field by allowing everyone to avail of the 42% relief are to be welcomed, we need a broader debate on why we are giving as much away in tax foregone as we are paying in State pensions. The gap between the amount paid as tax relief and the amount paid as pensions will widen as a result of the Minister's measures. Surely we should aim to introduce a proper and effective State pension. The Government seems to be running away from this issue.
In recent years, the Government has provided for marginal increases in the rates of payment made to carers, for example under the respite care grant. However, the Government has not addressed the central issue, the Victorian rules in the Department of Social and Family Affairs which preclude people from receiving carers' payments if they are in receipt of other social welfare payments. If we are serious about acknowledging and rewarding the extent to which the State's duty to provide a service is being subsidised by the work of individual carers, we should provide for a refundable tax credit for carers, given the work they do, as proposed by the Green Party.
The centrepiece of this budget is supposed to be the five-year child care strategy. Despite the Taoiseach's socialist tendencies and inclinations, I suspect that the Government used the word "strategy" as it did not want to use the term "five-year plan" in case it would remind people of post-revolutionary Russia or current-day China. I accept that the Taoiseach seems to be enamoured with current-day China. The child care strategy that has been proposed, like many of the Government's long-fingering policy initiatives, is aimed at getting the Government over the hump of the next election. This budget has been drawn up with one eye firmly fixed on the next election, but the other eye is blind to the forthcoming economic realities and threats, unfortunately.
It has to be underlined that this budget is the first of those introduced in the era of the Celtic tiger to be preceded by an increase in interest rates at European Central Bank level. While the increase was of just 0.25%, it is possible that it was the first of many such increases. When we gather for the Budget Statement this time next year, perhaps there will have been a 1% increase in interest rates on the base rate for all lending across the economy. Such an increase would have significant effects in Ireland, where the average debt per person is 160% of the average income. This country has borrowed €270 billion. When we were in the midst of our deepest economic crisis, we spoke about what the Government owed in the form of the national debt, which was 120% of the national income. Current Government policy seems to have transferred the debt of the State and the Government to individual citizens, who have even greater debts. When those bills have to be paid, Deputies on this side of the House should not be shy about reminding citizens that the Government created the circumstances in which such debts accrued.
I would like to focus on some of the child care measures in this budget. Like much of what is welcome in the budget, the measures in question do not go as far as they need to go. Why has the Minister decided to stop the child care payments at the age of six? The Green Party has proposed that staggered payments should be made for children under the age of five, and for children between the ages of six and 12. I suspect that the Government's attitude is that the child care needs of a child who has entered the primary school system are being looked after. The real purpose of primary education, which is not mentioned anywhere else in the budget, is to look after the children of this country and acknowledge them for the resource they are. We must build them into the citizens we need for the future, not only for our economy but also for the well-being of our society.
The Government has gone down the road of allowing a number of additional weeks of maternity leave. It has not gone as far as we would have wanted and it is taking its time getting there. It has not introduced a concept of paternity payments or paid paternal leave. The sop to the Progressive Democrats regarding the income disregard for some childminders needs to be spelt out further, not just by acknowledging and registering such childminders but also by making ongoing training available to childminders. We need to turn the informal childminding economy into a formal economy. I have no faith in the figures for additional child care places the Minister for Finance has said can and will be produced. I put that in the category of the waiting list that still has not been resolved.
The Government is now reluctantly going down the road we have advocated for many years of recognising that many tax relief measures were unnecessary and iniquitous. However, somehow they seem to have a life that goes beyond the next general election. If by whatever hand of fortune the Government parties find themselves back with their hands on the tiller, I am sure they would change their minds again about such reliefs and would reward those who support them so generously.
The so-called scrapping of the stallion tax relief, which seems to have a life up to 2008, is very much a nod and wink measure. This is a nod to the European Commission that we are getting rid of a tax that all recognise should not exist. However, it is a wink to those who avail of the tax, the Galway races fraternity, that if after the next general election Fianna Fáil finds itself still in Government, a tax relief in some form or other could remain. If the Minister had the courage of his convictions, this tax would have gone not today but three years ago.
The Government is sending mixed messages that while property-based tax reliefs may be a bad thing, it will let them linger a bit longer and will kill them with kindness. At the same time the Government is seeking to introduce additional property tax reliefs, especially in the area of health care. The extension of tax relief for private hospitals will create a two-tier or three-tier health system so beloved of the Tánaiste and Minister for Health and Children. The more insidious measure of introducing tax relief on private psychiatric hospitals seems to be introducing the concept that for the first time somehow we could put a price on sanity. If that were open for discussion many of us on this side of the House would be quite prepared to do that as regards the price and sanity of many members of the Government.
Ultimately any type of public service ethos seems to be dwindling away. Trying to solve our many social problems by giving tax incentives and hoping that with enough money those problems will not exist in the future will not work. It has not worked to date and our experience is that this approach will make things worse.
After eight years of indifference on environmental matters, the Government's so-called environmental measures add insult to injury. The graduated relief on biofuels should have been a bolder measure involving a direct derogation. The Government hopes to have 2% of the fuel market taken up by biofuels by 2008. European directives oblige us to be at that level now and to be at 5% by 2010. The Government cannot hide behind any phoney concern that it claims to have about the environment as it is lagging behind with scores of environmental judgments being registered against it at the European Court of Justice each week.
The ultimate insult is the establishment of a carbon fund that is somehow supposed to meet our obligations under the Kyoto Protocol. In addition to the amount set aside being too small, the principle still appears to be that the taxpayers, regardless of whether they have contributed to our environmental problems of carbon build-up, are expected to meet the bill and those who quite obviously have caused the build-up are not being asked to contribute to the extent they should. On road safety we seek to improve road conditions, improve education and try to limit the number of deaths. Applying the principle of a carbon fund to road safety would mean that rather than dealing with the problems, we would merely pay for the funerals. Ultimately we will not be better off with such an approach.
The public has lost confidence in the Government and its sponge-like way of taking ideas from elsewhere and regurgitating them as being initiatives of its own. We have had a series of three budgets with the big ideas of child care this year, disability last year — of which this year's budget makes no mention — and the farce of decentralisation two years ago. If the Government is serious about winning public confidence, it must take into account that its promises and track record do not bear up to proper scrutiny. It has had the opportunity afforded by the best set of economic circumstances in the history of the State. It promised to end waiting lists, homelessness and child poverty. It has achieved none of these aims and many indicators in these matters have worsened. How many multiples of these good economic circumstances would the Government need to achieve any or all of those targets? I suspect the Government would not get any of these matters right in 1,000 years because it lacks the capacity, imagination and honesty. Ultimately the verdict on the Government will be that it was the most wasteful and achieved least. The Government that will follow must be a better Government that will deal with these circumstances in a more humane and fairer way.
Like the student who wasted his or her college years, the Government is trying to cram in leading up to the big final test, the next general election. With this budget Fianna Fáil is attempting to erase the memory of all those budgets that champagne Charlie McCreevy introduced which rewarded the very wealthy and allowed the gap between rich and poor in our society to widen ever more. The Government is attempting to be seen to address inequality. If that effort results in some positive and long overdue measures, it is welcome. All credit is due to those who have campaigned long and hard for social justice and economic equality. We in Sinn Féin are proud of our consistent campaigning in these areas.
I welcome the Government's attempt to catch up and make up for the lost time and all the wasted public money. However, I avail of this opportunity to encourage it to do much more. We believe this new and emerging pattern will continue in the closing months of current Dáil as the general election looms ever closer, be it in 2006 or, much more likely, having examined the detail of this budget, in early 2007.
Published in 2005, the EU survey on income and living conditions shows that one in seven children in the Twenty-six counties, almost a staggering 150,000 children, lives in consistent poverty. These children suffer weekly economic hardship that excludes them from the quality of life and the opportunities enjoyed by the majority of children. A further significant number of children, an estimated 242,000 or 23.9% of young people in the State, are at risk from poverty. They live in households which have less than 60% of the State-wide median income. The national anti-poverty strategy set 2007 as the target date for consistent child poverty to be reduced to below 2% or eliminated altogether, if possible. Clearly, with some 14% of children in consistent poverty, the target is far from being reached in 2007. This target should have been reached ahead of time in an economy which has seen growth almost unparalleled anywhere else in the world.
What have we got? What has the Minister for Finance, Deputy Cowen, provided for us to address child poverty and the needs of children today? If we look at the figures for child benefit, it is clear that the increases the Minister has announced fall far short of that which has been identified by the End Child Poverty Coalition as necessary to help bring those children out of poverty. For first and second children there is an increase of €8.40. It was estimated, conservatively, that what was needed was an increase of €14.32, bringing the rate up to €155.92, not €150. For third and subsequent children there is an increase of €7.70 instead of the estimated €15.55, a shortfall of €7.85 on that which was identified as required. At a time of such resources being available to Government, that in itself is a damning indication of its failures.
Let us look at the child dependant allowance, an issue that few ever mention. It has never been mentioned by the Ministers for Finance of these Governments since 1997. Going back further to 1994, the child dependant allowance was frozen and has remained at that level ever since with the result that the figure then applying, as a result of inflation, has lessened in value considerably over the period. Is there any mention in the budget of the child dependant allowance? There is no provision whatsoever.
Despite the unprecedented prosperity in the economy, it is one of the most inequitable in the developed world. The failure of the Minister, Deputy Cowen, to address the inequalities, particularly in the area of the needs of children, will perpetuate that disgraceful claim. In the United Nations human development index for 2005 this State comes third last in the league of 18 OECD countries in terms of poverty. Only the United States and Italy, among the developed countries, have worse levels of poverty and inequality. It should be noted that the so-called United Kingdom is fourth from the bottom of this league. Included in its figures are the Six Counties where child poverty levels are worse than in this area of our island, adding to the total of avoidable — I emphasise avoidable — hardship for children on the island of Ireland. This level of poverty is inexcusable given the affluent Irish economy of the 21st century.
Record budget surpluses have been achieved year after year, yet the opportunity to move Ireland towards a society of equals has been squandered. Very belatedly, some positive measures are being undertaken, some reflected in this budget, but these should have begun in 1997 when this coalition took office and when real opportunity presented. I and many others contend there is sufficient wealth in society to ensure that no child should want for any of the basics of life and all should be able to look forward to a full and rewarding future. The lack of vision, the incompetence and the conservatism of successive Governments in the State have robbed generations of children of their birthright.
What greater basic of life is there than the right to unrestricted access to health care? What is the position in respect of budget measures to extend the medical card to all under 18 years, a call Sinn Féin has made in recent years in pointing out the importance of the extension of full medical card cover to all children under 18 years of age? At a collectively estimated cost by the Departments of Health and Children and Finance of some €223 million in a single year, that would have been small change for a measure that would have greatly assisted in addressing child poverty in society. Shame on the Government and the Minister for Finance, Deputy Cowen, for failing to introduce the extension of the medical card to all children under 18 years of age, thus perpetuating inequality, hardship and grief.
Reversing all the years of neglect and the continued neglect of today's budget will mean a change in policy and a shift in emphasis towards social need and equality. As we in Sinn Féin have repeatedly pointed out, such a change would include moving away from this outdated model of annual budgeting and the budget day ritual towards multi-annual budgeting based on medium to long-term planning. It will require participatory democracy with the people and the Oireachtas having a real say in policy and spending plans, Department by Department, Minister by Minister.
In the preamble to the Budget Statement, the Minister for Finance, Deputy Cowen, said that he intends to engage with the Joint Committee on Finance and the Public Service early in the new year. I welcome that but we will have to wait and see what that translates into in real terms before we can measure its real worth and purpose. Certainly as a member of that committee I will not participate in a charade or a smokescreen exercise. It is inadequate already in its stated outline but if it is only the first step, we will wait and see.
In November 2004, Sinn Féin tabled a motion in the Dáil calling for the development of a comprehensive and accessible child care infrastructure and a wide range of measures to assist parents, whether caring for children full-time in the home or working outside the home and using child care services. I again thank the 50 Deputies who supported that motion in the Dáil division. Prior to the budget for 2005, last year's budget, Sinn Féin published its proposals in its budget priorities document, Putting Children First. In doing so we consulted widely with the child care sector. Our budget 2006 priorities which I submitted to the Minister, Deputy Cowen, in advance of today's budget updated and reiterated those proposals. The Dáil debate on the Sinn Féin motion last year heard Government commitments to develop child care in the State but the subsequent budget in early December 2004 was a major disappointment and further fuelled the national debate and the demand for action.
It was widely recognised that the greatest omission from the first budget of the Minister for Finance, Deputy Cowen, was early childhood care and education. The budget of 2005 was followed by a national debate on the need for society to care better for our children. The debate recognised the intense pressure placed on parents, children and family life in an economy with high demand for labour from employers. The nature of work itself was also addressed in the debate and the demand has been raised as never before. The work of people caring for children in the home must be fully recognised and supported. The same applies to other carers in the home.
The National Economic and Social Forum, NESF, published a landmark report in September of this year entitled Early Childhood Care and Education. In 2000, the national child care strategy stated that child care provision was, "uncoordinated, variable in quality and in short supply". That this is still the case in 2005 was confirmed by the NESF in its September report which pointed to the very inadequate implementation of policy on child care in Ireland and the markedly insufficient financial investment in the education and care of our younger citizens. The NESF report set the benchmark which this Government must reach. The measures announced by the Minister today fall far short of that benchmark. They cannot make up for almost a decade of neglect in the area of early childhood care and education.
Let us note some of the measures. We see that we must wait until March of the coming year before paid maternity leave will be raised to 22 weeks, increasing only in March 2007 to the 26 weeks for which most commentators argue. Even then, we will see 16 weeks' unpaid leave provided rather that the 26 weeks consistently sought. Is any mention made in this budget of paid paternity leave of two weeks per child? There is no mention of it whatsoever.
What of the need to provide quality child care throughout the State? In our pre-budget submission, we argued for the provision of universal pre-school sessions of 3.5 hours per day, five days per week for all children in the year before they attend school. What did we get in the Minister's budget? We see the equal opportunities child care programme, EOCP, is to peter out at the end of its term and a new national child care investment programme will be introduced.
The EOCP created 26,000 places and we are told a further 15,000 places are in the pipeline. The Minister stated 50,000 new places will be created in the new programme up to 2010. Who will be the providers? It appears the Government's solitary commitment is in the area of training. I must describe the level of support for those providing child care as paltry. The early child care supplement, a direct payment of €250 per quarter, or €1,000 per annum, is less than €20 per week. Does anybody have any idea what child care costs families and single parents in society today? What type of nonsense are these figures? They do not reflect the reality that people are dealing with.
Will the Government provide child care places? Not at all. Who will deal with the issue of supply? The attitude is to throw some money at it and others will take up the responsibility. We consistently argue that the responsibility is on the State to make provision. While we wish well those providing private care or care in the community well, the responsibility in the first instance lies with the State. I recommend again that the Government examine better and best practice in other jurisdictions. The Scandinavian model, and particularly the Swedish model which is in place for more that 30 years, is one from which the Government could learn quite an amount.
We also point out that no reference is made to the importance of making child care a viable option for young men and women as a career choice. There is no indication of a national pay scale for child care workers, which is essential if we are to bring that area into the mainstream where it belongs.
If there is a fatal flaw in all that we heard today, it is in the biggest-spending Department, which is in the hands of the Progressive Democrats — the Department of Health and Children. The Government may hope the measures announced today will take the heat out of child care as an election issue. They will not and it is wrong because the issue will continue to be a major focus for Sinn Féin, other voices in this House and, I have no doubt, for those beyond this House campaigning on this. More significantly, the fundamentally flawed approach to our health service by this Government will come back to haunt it as surely as that approach has caused so much misery to so many people and prevented the development of what should be the best health service in Europe.
Look at the contradictions at the heart of this Government. Prior to the last general election, Fianna Fáil stated it wanted to end the two-tier health system. The Tánaiste denies a two-tier system exists. She goes further. Exactly a year ago she stated: "I believe in a minimalist role for the State in all our lives, including health care." I can tell the Ministers for Finance and Health and Children that she had no need to state that to the people of Cavan and Monaghan where her abject neglect in the provision of hospital services and of the health care needs of the people of those two Border counties is known and experienced and suffered daily.
Sadly, the Taoiseach need not think for one moment he is excused from responsibility. The Taoiseach and Fianna Fáil stand in exactly the same shoes as the Tánaiste and the Progressive Democrats on this issue. The Government must face up to its responsibilities.
In June this year, the Tánaiste stated the fact that an increasing number of people are getting private health care is good and is a sign of increasing disposable income. There is complete incoherence on the part of the Government in this key area of social provision. The Minister for Finance carried that contradiction into the budget when he extended tax breaks for the developers of private hospitals. The tax forgone in this way should instead be spent on the provision of primary care centres which were promised but were shelved by the Tánaiste last year.
What is the situation on health? No mention, let alone commitment, was made of introducing and staffing the 3,000 promised additional beds to relieve our overworked accident and emergency units. Despite this, tax reliefs or capital allowances for private hospitals will continue.
On other measures, I already stated no mention was made of extending the medical card to children under 18 years of age. Neither was there any mention of increased funding for those 3,000 acute hospital beds. Again, no mention was made of increased funding to roll out primary care centres as promised but postponed last year by the Tánaiste, Deputy Harney. Estimates fell short in funding for cancer services. Increases were needed but there was no mention of them. The only thing we see is the continuation of tax reliefs for private hospital providers. The message is very clear: there is nothing in this budget for the health needs of our people, and in particular for the 325 people languishing on trolleys and chairs in our accident and emergency units today. Accident and emergency is only the tip of the iceberg of the crisis in our health services. Health is the big omission from budget 2006. I believe this omission will be a major factor in this Government's demise when the general election takes place. Let us hope the day is hastened.
I welcome the removal of a range of property-based tax reliefs but the Government deserves no credit for this. We did not know what most of those reliefs cost but we know speculators made a massive sum of money from them. The Government and the speculators who benefited from these measures are like fraudsters who know the game is up and who must move on to another scam.
The Minister spoke of a significant package of social and affordable housing but we heard nothing to provide for the 73,000 social housing units required by 2012, as recommended by the National Economic and Social Council. Like the issue of health, this budget has been a major disappointment to people with disabilities. For years we have sought a cost of disability payment that recognises the additional costs and burdens borne by people with disabilities. The Disability Federation of Ireland made a case for a payment of €40 per week. Shame on the Government.
The Minister used the budget to reannounce the Transport 21 package, itself a recycled package. Like so much else in the Government's record, that package does not measure up to scrutiny. No mention is made of a continuation or a reintroduction of the bank levy. Great lobbying work must have been done in that regard. Instead, we see the abolition of the 0.5% companies capital duty. The measure is effective from today while others must wait until 2006 for increases in the social welfare code. The abolition is to assist firms in the financial services sector.
What about the hard-pressed motorist? Do we see any measures to relieve the pressures they are under? We do not and although we see the extension of VRT relief to flexible fuel vehicles it is only for a trial period of two years. Surely much more could have been done.
Buying carbon credits is what the United States has been doing and what we have condemned time and again. We should face up to our Kyoto Protocol responsibilities. Does the Minister intend to address this area of public concern by buying carbon credits?
There is undoubtedly a general election in the offing and the Minister has his plans set out to win the general election for Fianna Fáil in 2007 or perhaps sooner. I assure him that plan and this Government will perish on the rock of health and the failure of the Government to address the needs of ordinary, decent people.
I thank the Leas-Cheann Comhairle for the opportunity to address the House on the budget. It is a great honour and privilege to put forward the views of Independent Deputies on our current financial situation and the announcements in today's budget. It is a missed opportunity to develop further strategies to solve poverty once and for all and to wipe out waiting lists for people with disabilities.
I will refer to the positive aspects of the budget but also to the way forward for the citizens of our State. In all financial matters it is important to keep our eye on the ball. Our money, taxpayers' money, should be spent wisely and should go to the most needy in our society. By that I mean the elderly, the sick, the disabled and the disadvantaged. The debate is no longer about having the necessary resources and finances but about the distribution of these resources. It is important to have vision and courage to make decisions that will assist those most in need. This budget has a long way to go in assisting our citizens.
The Independent Deputies in this House will always side with working people and the disadvantaged people in society. That is our position on this budget and we set down clear markers to make a better country for all our citizens. Those of us elected to this House will stick by our mandate and at all times our priorities will be the rights of our citizens. I stress the words "rights" as there are many in society whose rights are not being respected: the child that does not have a warm and safe home, the elderly woman on a trolley in Beaumont Hospital, disabled people who do not have back-up services, young families on housing waiting lists and the elderly man who has to bolt his doors every night at 7 p.m. because of fear and intimidation.
The Independent Deputies in this House are standing by these people and standing up for their rights in a fair and just society. These are the key issues in this budget debate today. I welcome all investment in this budget to the key areas of health, education, disabilities, child care and the elderly, but I must also highlight the difficulties and needs in these areas. Despite much hype our people still have major needs and the Independent Deputies in this House are united in supporting these needs.
We must face the reality of supporting all people with disabilities and this means services on the ground for all people with disabilities. It is unacceptable to have people with disabilities on residential, day care and respite waiting lists. We must see support for core funding of community employment project staff who serve 3,000 people weekly. It is unacceptable to have people on waiting lists in a strong and healthy economy. This is the bottom line and the broader vision of Independent Deputies. We want to make inclusion a reality for our citizens. We have had enough guff over the past eight years.
The Minister claims to be giving priority to education in this budget. In a time of a considerable budgetary surplus, why are small disadvantaged inner-city schools being undermined by the Government and resource teachers for children with special needs being taken from these schools? This is occurring in the Taoiseach's constituency.
In this House last week, Deputy Gregory stated that if the Government cared about educational disadvantage, these inner city schools would get more resources rather than less. Putting resources into disadvantaged primary education would be a real investment in the future. The Government also claims to be tackling the drugs crisis yet the community representative on the Government's national drug strategy committee was forced to resign this week. As Deputy Gregory stated in this House, the Government refuses to recognise the scale of the drug problem and has cut the emerging needs fund from €4 million to a miserable €1 million. Hopes for a strategic, planned approach to the drug problem are now in a shambles.
Many of my Independent colleagues were elected in rural constituencies along the west coast. Such constituencies have been neglected by successive Governments with the result that the infrastructure is lagging behind and an injection of funding is urgently required to address the imbalance. My Independent colleague, Deputy McHugh, comes from Galway East, a constituency that has been particularly badly affected. The recent decision to reopen part of the western rail corridor, which will link his constituency from Tuam to Gort, is welcome, but the long drawn-out timeframe for its completion is totally unacceptable. Deputy McHugh has made the case in this House for expediting this project and I am pleased to put it on the record today.
Deputy McHugh has also campaigned for the provision of a community hospital and an ambulance base in Tuam, County Galway, to serve north-east Galway, south Mayo and west Roscommon. No less a person than the Taoiseach, Deputy Bertie Ahern, promised in 2002 that when his party returned to Government it would provide the hospital. That was three and a half years ago and the Taoiseach has not yet honoured his commitment. I call on the Taoiseach to do so now and, in consultation with the Tánaiste, approve the Tuam Hospital project that Deputy McHugh feels so strongly about and to which the people of Galway are entitled.
I ask that I be allowed to continue and that the Minister of State, Deputy Treacy, stop heckling me.
My colleague from County Clare, Deputy James Breen, has pointed out that €20.8 million or £15 million promised by former Minister for Health and Children, Deputy Martin, in 2000, for the upgrading of Ennis General Hospital has not been delivered. This is the same promise made by the Taoiseach and the same Minister before the previous general election and at the European and local elections. Ennis does not even have a CT scanner. A few days ago there was a power cut in the hospital while a surgeon was attempting to perform an appendix operation. The emergency generator failed, resulting in the operation being postponed.
This could easily have resulted in the loss of life. This is the type of health service to which the people of Clare are subjected.
My colleague, Deputy Connolly, has informed me that the Royal College of Surgeons in Ireland has recently recommended that Monaghan General Hospital be deprived of all acute surgical services and that such services be based in Cavan instead. This recommendation ignores and flies in the face of recent unanimously expressed demands of all the local consultant surgeons at both Cavan and Monaghan hospitals that Monaghan General Hospital be restored to full acute surgical on-call status. Deputy Connolly has also called for the Monaghan General Hospital to be restored to full on-call status for both surgical and medical emergencies since Cavan General Hospital has as many as 30 patients on trolleys, often for lengthy periods. Deputy Connolly has insisted repeatedly that the people of Monaghan have a basic right to acute hospital services convenient to home rather than the current Russian roulette practice of shuttling people between Monaghan and Cavan on poor quality, twisting and bumpy country roads.
I welcome any extra investment in child care but I remind Deputies that it is the Independent Deputy, Catherine Murphy, who put child care on the political agenda during the by-election in Kildare North, and I commend her on that. She has demanded that a portion of child care facilities built in large residential developments be handed over to local authorities as a condition of planning permission being granted. Her intention is that local authorities would involve non-profit community groups in running multi-use child care facilities to cut down on the cost of child care provision while continuing to provide a high level of service in a child-centred environment.
According to Deputy Murphy, Part V of the Planning and Development Act 2000 has yielded a disappointing number of housing units, with financial settlements being made to local authorities in lieu of the development of social and affordable housing, so her suggested provision would offer a viable alternative. Community-run child care facilities are few and far between because purpose-built accommodation is only available at commercial rents, which makes it an unrealistic proposition. Should such facilities be transferred to the local authority, a lease arrangement to qualifying groups would open up key community supports that would be community-run and community-based. Once again, I commend Deputy Catherine Murphy on highlighting this issue.
A sum of €1,000 was given to families today for child care. That would not even provide a place in many of the services in Dublin——
Furthermore, the Government has excluded children over six in its child care provisions.
The budget for 2006 comes at a testing time for homeless people and those in need of housing. My test for the budget is clear: deliver decent homes, not temporary beds, and end homelessness and housing need in Ireland. Being homeless or in need of housing means living in damp, cold and infested housing, at the whim of landlords who threaten or neglect, under the cloud of eviction and debt, and in insecure and inappropriate accommodation in hostels and shelters or, literally, homeless on the streets. As a former full-time voluntary worker with the Simon Community, I know the reality of homelessness and I demand action on this issue.
Homelessness and unmet housing needs make people sick, interrupt their education, lessen their chances of securing a good job and put an enormous strain on individuals and families, especially children. The budget for 2006 must respond by investing to deliver a greater number of decent homes in the social rented sector because bad housing wrecks lives. Housing standards for the socially excluded are deteriorating. Demand exceeds supply for social and affordable housing. It is time to invest in all our housing futures, both in this budget and in the future.
The 2002 census of population states that there are 150,000 family carers in Ireland. According to the census criteria, a full-time carer is someone who provides more than 42 hours care in the home per week and consequently is prevented from engaging in full time employment outside the home. Family carers save the State more than €1.5 billion per year. Today, the carer's allowance was increased to €200 per week for those aged 66 and over. Every week, 3 million hours are worked by 150,000 carers. In 2005, fewer than one in six carers is in receipt of the carer's allowance, which is €153.60 per week, even though each carer saves the State approximately €600 per week, the cost of alternative residential care. In fact, depending on the level of care required, alternative care by the State could cost in excess of €1,300 per week. Carers save the State at least €1.5 billion per year.
My colleague, Deputy Healy, has pointed out that this budget does nothing for job creation in towns like Carrick-on-Suir, County Tipperary, where the unemployment rate is 20.6%, almost five times the national average. Furthermore, the budget does not provide funding for the vital emergency ambulance service for the same town. I commend Deputy Healy on his work in Tipperary and I know that he will continue to push his agenda strongly.
I commend Deputy Harkin and thank her for her dedicated service to the people of the west. She has stuck with them, campaigned for investment and highlighted their plight in Europe. We wish her well and all the Independent Deputies will continue to support her.
It is scandalous that while the Government has so much money which it could have used to good effect in this budget, people will continue to die unnecessarily because of the failure of the Government to address basic medical needs. My Independent colleague who represents Mayo, Deputy Cowley, hoped the Government would address the special needs of his county which he has highlighted in the Dáil. In Mayo, people must wait much too long for an ambulance and the delay can be fatal. It is a minimum requirement by international standards to have an ambulance available in an emergency within the so-called golden hour. Delay beyond that time greatly increases a person's chances of dying or being severely disabled for life.
International minimum standards dictate that there should be an ambulance base within 20 miles of a population, yet there are no fewer than three areas in the Health Service Executive western region where there are no ambulance bases within this radius. Therefore, people have no hope of obtaining an emergency ambulance service within the clinical critical timeframe. One such area is the Achill, Mulranny and Ballycroy region of west Mayo, where people can wait for up to two hours for an emergency ambulance. After today's budget, the situation is no better in Mayo. It is the fault of the Government, in this and past budgets, for not providing funds for such an ambulance base to be provided.
Deputy Cowley has raised this matter on 13 occasions in the Dáil since 11 February 2004. A person who is not considered to be a major emergency when a general practitioner calls an ambulance often is one by the time the ambulance arrives two hours later. Deputy Cowley has also highlighted a recent case where a GP in Mayo had difficulty in getting an ambulance for a man who had burned his eyes in an accident with acid. The ambulance service told the GP that only two emergency vehicles were available that night. Only two ambulances available for a county the size of Mayo with 120,000 people, and this in a country that is so wealthy. It is a disgrace.
Deputy Cowley has also spearheaded the campaign for a helicopter emergency medical service for this country for several years. As an experienced rural GP he knows of too many families robbed of their loved ones owing to the lack of such a service which is available in every other country in Europe. Deputy Cowley began speaking of the need for a helicopter emergency medical service when Deputy Noonan was Minister for Health and has continued to do so up to the present day. He travelled to Northern Ireland to meet the then Minister for Health there, Ms Bairbre de Brún, and the North-South emergency care body set up under the Good Friday Agreement.
The Government still uses helicopters for emergency missions which are not dedicated to the cause. This means that the aircraft are not always available when needed and the equipment they carry is insufficient because of the multi-purpose role the helicopters perform. As a result, people die because they do not receive specialised treatment in time. People will continue to die after today's budget because the Government has once again ignored the need to provide money for a helicopter emergency medical service.
Independent Members address the real and important issues that big business, big political parties and the Government choose to ignore. The case of the Rossport five is a good example where people saw how an independent TD in Mayo, Deputy Cowley, stood up fearlessly for those people's rights to stay at home while other Mayo TDs said nothing, colluded with Government, played games like the hypocrites they are and only pretended to support them. Independent Members are the people's best advocates.
I welcome the fact that the reference in the Budget Statement to the artists' tax exemption does not amount to a major attack on artists. The figure given by the Minister today was €250,000 per annum but let us look at the real world of the artist in Ireland in 2005. In their support, I will highlight some simple facts about the exemption. Most Irish artists are still poor. Of the 1,300 artists who benefited in 2001, more than 50% earned less than €10,000 and the average income for 87% of them was below €11,000, less than the average industrial wage. Artists pay tax. The exemption applies strictly to an artist's creative earnings, so a job an artist takes to make ends meet is fully taxed. So too are performance and merchandise earnings and the earnings of musical artists, whose only exempt earnings are those from composing their work.
Artists are in no way unique in getting an exemption on one stream of income. Numerous tax incentive schemes exist in Ireland. Of the tax forgone by the State under all tax relief schemes, the artists' tax exemption accounts for just 0.38% of the total. High earning artists still pay a great deal of tax. The few big earners pay full tax on their non-creative earnings. Typically these earnings are at least twice the amount they get tax-free. The artists' tax exemption keeps them in this country and ensures they pay tax in Ireland rather than anywhere else. The value of the artists' tax exemption to Ireland is immense. It has been in place for 36 years, is simple to administer and has been incredibly successful. A state that does not look after its artists is a state without a soul.
Many people think the Government is spending money wisely, but some statistics paint a different picture. A project in my constituency, the Dublin Port tunnel is €200 million over budget so far and might go up to €400 million or €500 million in the next few days. The Government squandered €52 million on electronic voting and spent €30 million on a farm that was valued at €4 million. The Battle of the Boyne site, which could have been bought for €2.7 million, was bought instead by a private business and then sold to the Office of Public Works 18 months later for €7.8 million.
——a waste of taxpayers' money. The amount involved could have ended the scandal of patients on trolleys forever, bought all the new schools we wanted, made a major dent on our housing waiting lists, developed child care services, even for those over six, and assisted the elderly.
Poverty among people with disabilities has not been dealt with in this budget. The fact that 38% of people with disabilities officially live in poverty is a national scandal after ten years of massive economic growth and wealth. This debate is no longer about the shortage of resources or finances but how we distribute those resources. Since our election in 2002, the Independent Deputies have pushed this agenda in the Dáil. At the top of the list are always the old, the sick and disabled people.
I spoke on all Stages of the Disability Bill and tabled 93 amendments demanding rights and quality services for all people with disabilities. Some were accepted and I commend the Government on that. I also hope I was of some small benefit to the affected families but I commend my Independent colleagues and thank them for their massive support in this House and outside for all people with disabilities.
The National Disability Authority published statistics that indicate three out of four households headed by a disabled person live on the poverty line. Their figures reveal that these families are trying to manage on €126 per week, half the national average. These statistics are unforgivable in today's buoyant economic climate, especially when people with disabilities must also contend with the problem of being denied access to many forms of employment and not because of their own lack of initiative or ability.
Despite legislation, too many companies have simply failed to provide facilities which would enable disabled persons to contribute and enjoy the subsequent self-worth that most of us take for granted. The NDA estimates that unemployment rates among people with disabilities are much higher than among the general population, with some estimates as high as 70%. Many disabled people are faced with extra costs that would make the rest of society balk if they had to accommodate them in their budgets, such as customised transport, medicine, special diets and education, all taking their toll on already inadequate incomes. One of the worst things about persistent poverty is that it can create a particular mindset, a climate of hopelessness and despair which can ultimately result in people giving up in what seems to be an entirely unequal struggle.
This is not acceptable and there is no excuse for this situation. I also challenge those who say enough is being done in today's budget. I reject that misinformation. In my area of north Dublin, there are 312 people with intellectual disabilities on the St Michael's House waiting list for residential places. We now have a major crisis in some areas and the Government needs to focus its finance and efforts on early intervention schemes. In some disadvantaged areas 52% of children are not even ready for primary school. Some children live in homes where heating and dampness are still problems and 26% of children display significant problems with their conduct before they start school. Some 20% have eating difficulties and 31% consistently miss school. We have a wealthy society but these children are being left behind. I welcome any provisions today to assist the elderly but we have a long way to go in that regard.
This debate deals with all the important issues in people's lives and the Independent Deputies in our group stand up for working people and the most vulnerable in society. Our vision is about equality, justice and getting services to our people in a caring and professional way. I thank my Independent colleagues, Deputies Gregory, James Breen, McHugh, Harkin, Connolly, Cowley, Healy and Catherine Murphy for allowing me to represent our response to this budget. I also thank my colleague, Deputy Joe Higgins, for his co-operation and also for the co-operation and support of the Technical Group in the Dáil. I urge people to take a closer look at this budget and, with my Independent colleagues here and all the independent councillors throughout the country, help build a modern, progressive and caring new Ireland. Together we can do it. We have the finances, resources, ability and, above all, energy and people to deliver a more humane and compassionate society.