Thursday, 8 December 2005
Financial Resolution No. 5: General (Resumed).
I welcome the opportunity to speak on the budget in this empty House. I will deal with some areas from a local perspective and some from a national perspective.
Transport 21 was emphasised in yesterday's budget, with more detail revealed on it. As I said when the plan was announced, while I support the gist of it, I am concerned that we will not see much action on it. I represent Laoighis-Offaly and live in County Offaly which has been all but ignored in Transport 21. We will benefit in a small way from the N6 Galway to Dublin road but a bypass for Tullamore has been ignored again. There was a brief reference to bypasses in the budget but no specific detail on which projects will be prioritised. I would like to see a start date for the Tullamore bypass. The monitoring committee reported recently to the Midland Regional Authority, stating clearly that there is no start date for the bypass and that it is to be determined within a ten-year plan. It was not clear what plan it was referring to because it is not part of Transport 21.
I find it difficult to raise the Edenderry to Enfield road any other way than when discussing the budget. It comes off the N6 at Enfield and continues for 18 km until it reaches Edenderry, which is the fastest growing town in County Offaly. That road is a series of potholes. Funding had been provided for it but it was never spent. It is a matter to be decided between local authorities but in this instance the only local authority involved is Kildare County Council. There should be a mechanism for roads that service a county other than the county it crosses. No body is responsible if a local authority will not invest funding. This road is crucial to the future of Offaly. The Enfield bypass is improving but that is not much comfort for those who have to turn off it because they are not going to Galway.
These issues should be prioritised when planning for Transport 21. I am disappointed that the budget yesterday did not mention the Tullamore bypass. I did not expect it to mention the Edenderry to Enfield road but both issues are vital for County Offaly and must be addressed.
I welcome the Minister for Finance's announcement on the third and fourth level sectors. It is important for the future of the State that we develop our third level sector better than has been the case to date. It is, however, making up for a lack of investment in recent years. We have treated the PRTLI programme and investment in science and technology at third level in a stop-go fashion. Thankfully, the matter has been addressed in the past two budgets but if foreigners are to be encouraged to attend third level in Ireland and if we want to attract researchers while encouraging our own to remain in the field, a definite funding stream must be provided. Yesterday's announcement was positive and I hope the Minister will ensure people compete for funding in this field. However, the proposal is weak in detail and perhaps the Minister for Education and Science will provide more information in the coming days. I would like to know what the Government intends to do to ensure this proposal is implemented.
The Minister for Finance referred to changes and improvements in universities, wider collaboration and drawing on collective strength, but it must be acknowledged that the third and fourth level sectors do not have the same critical mass as the US, in particular. The third level population in Ireland is small compared to individual universities in the US. Ireland is also competing globally and I hope the proposal will allow us to better compete.
I was extremely disappointed that the further education sector was completely ignored in the Estimates and the budget. As a man who was on the TUI protest outside the House yesterday wondered, what is it about the sector that the Government will not invest in it? It is the most responsive sector, given its ability to react to changes locally. When a new company is set up in a community, the further education college puts on courses quickly to satisfy need. A significant proportion of adults returning to education go through the further education sector and every county has a college of further education.
The McIver report made a number of good recommendations, which were bought into by all the stakeholders, but they have not been progressed over the past two or three years. The Minister for Education and Science stated earlier that she cannot do everything in one go. However, while she may have been in office for only 18 months, the Government parties have been in power for almost nine years and she cannot refer to anything being done in one go. The Government needs to address this issue. More people from disadvantaged backgrounds are entering the third level sector but the further education sector has been failed over recent years.
I welcome that, at last, something is happening in regard to child care. I am surprised the Government parties decided on a cut-off point of six years, especially given that it is their ninth year in office. Children who were born in their first four years in office will not benefit from the scheme and it is a pity the Government chose this cut-off point. I am glad the Government has finally woken up and decided to do something in this area. However, while child care is vital, I would like the Government to place greater emphasis on the establishment of pre-school facilities. Crèches are only one part of the equation and I would prefer if children aged three or four, who have not commenced primary school, went into pre-school education as distinct from attending a crèche or child minder. Unfortunately, that option is not available in many parts of the State.
Pre-school facilities were provided in disadvantaged areas following an initiative implemented a number of years ago but the initiative was not rolled out nationwide. Only 30 or 40 schools have the facilities. However, this sector has been ignored for years and it will take a long time to expand these facilities. The Government needs to address this now and the Minister for Finance needs to develop his child care proposals in the coming months by placing greater emphasis on the provision of appropriate pre-school education.
The decentralisation programme was announced in the Budget Statement two years ago. I would like more commitment and answers on the where, when and how of the programme. Five towns in my constituency expect to benefit. Civil servants have transferred to Portlaoise and Tullamore, which I welcome, but there are negative consequences for towns such as my home town of Birr when national newspapers carry reports that civil servants do not want to move there because they do not think the town has sufficient school and child care places. That results in a bad image of a good town. The town has excellent education facilities and I undertook all my schooling there. Birr also has excellent arts and sports facilities but they are not being promoted in the decentralisation programme. The announcement of the programme has had a negative impact.
The Government missed a significant opportunity yesterday to reintroduce roll-over relief for farmers. It is extremely unfair that a farmer whose land is compulsorily purchased by the State for the building of a road must pay 20% capital gains tax and if he wants to replace this land, he must also pay 9% stamp duty. He must pay 29% tax on a sale he does not want to undertake and that is extremely wrong. There was little point in the Government negotiating a good deal a number of years ago with the IFA only to come along a year later to wipe it out. Nobody wants to give up his land for a road project and this is compounded by having to pay 29% tax. Farmers should be allowed to invest in replacement land without having to pay tax on both transactions.
I am delighted to have an opportunity to contribute to the debate. There was a great air of expectation and anticipation prior to the budget. People expected a great deal because there was never as much in the coffers. As our spokesperson, Deputy Bruton, said yesterday, the Government is in receipt of €1 billion a week from the taxpayer and Exchequer receipts have increased under every heading. People expected something new and innovative in yesterday's budget. However, considering it in the cold light of day, the most charitable adjective to describe it is mediocre. A number of commentators said it was dull while others said it was a damp squib and was not innovative. I concur with these descriptions because the Minister had an opportunity to do something new but he allocated money here and there where he felt there was a demand for it.
At long last, the Government has recognised that child care had been badly neglected and something had to be done. It is a small step in the right direction but the Government admitted it will take five years to complete its plan. The elderly have also been neglected and the scandal of illegal nursing home charges went on for years. The patients and their relatives are entitled to compensation worth €1 billion and it is disappointing it has taken so long to do anything about that problem.
I welcome the significant increases in social welfare payments, which are three or four times the rate of inflation. However, when one considers the stealth taxes introduced by the Government and other expenses that must be paid by the elderly and other recipients, they will not be much better off this time next year. The social welfare system throws up a number of anomalies. If one is in receipt of a short-term benefit such as unemployment benefit and then takes up a community employment scheme, one is not entitled to other benefits such as free fuel and so on, but if one is in receipt of unemployment assistance, one qualifies. There is little difference between a short-term and a long-term payment. The same rate is paid and it is unfair that these people do not receive the ancillary benefits.
Being parochial, I ask the Minister what is in the budget for the people of Donegal. Two years ago, the then Minister for Finance announced the decentralisation programme and Donegal was promised 400 jobs. These Civil Service, permanent jobs are badly needed and they are not like the jobs we have had in some of the traditional industries which have been relocated to Europe, Central America, Asia and elsewhere. It is very disappointing that these jobs will not be decentralised to County Donegal until 2010 at the earliest. They were to have been decentralised by 2006 but it will be 2010 before accommodation is available to transfer these civil servants to County Donegal, if it ever happens.
Apart from unemployment, one of the biggest problems we face is the inadequacies of the health service in the county. I was disappointed there was no recognition of these inadequacies in yesterday's budget. Letterkenny General Hospital needs 60 or 70 additional beds. As I speak, there are people on trolleys in that hospital. Each day there are ten, 17 or 24 people on trolleys. These numbers are available on a daily basis. I was very disappointed little was said in yesterday's budget speech about making funds available to address this long running difficulty.
Ní raibh mórán sa cháinaisnéis faoi chúrsaí Gaeltachta. Ní raibh ach abairt amháin faoin Roinn agus tá na deacrachtaí céanna sa Ghaeltacht agus atá sa chuid eile den chondae agus den tír. Tá súil agam go mbeidh deis agam tuilleadh a rá faoin ábhar sin atá chomh tábhachtach do na daoine ina gcónaí sa Ghaeltacht. Tá dífhostaíocht ag cur isteach orthu cosúil le daoine eile ar fud na tíre.
My Department has a pivotal role to play in ensuring the fruits of our economic growth benefit the most vulnerable and that those who need support and encouragement get it. I have repeatedly stressed that as a country we can only really be proud of our booming economy and vibrant, modern country when it reaches down and lifts those who, for whatever reason, have been left behind or marginalised. For that reason, I am determined that the substantial resources available to my Department will be targeted at delivering a 21st century welfare service to the people.
It must be a service that responds in a way that is about more than allowances and benefits, important and all as those welfare and financial lifelines are to hundreds of thousands of citizens. It must be a service that blends recognition, compassion and support with encouragement, incentives and activation so as to ensure that the potential and contribution of each person is not overlooked or neglected by our system.
It was with this philosophy and direction in mind that I approached this budget with a number of key priorities in mind. I wanted to continue to improve the position of our older people and to recognise their valuable contribution to this country. They deserve to have a decent income that allows them to live out their later years with dignity and security without the threat of poverty or isolation. I wanted to take a decisive step towards the elimination of poverty and especially to intensify the confronting of the unacceptable blight of child poverty. I wanted budget 2006 to assist in the development of a programme of supports and opportunities for those parenting alone who, with their children, are in danger of falling into a cycle of deprivation and marginalisation. I wanted to improve income supports to, and recognition of, carers who perform a valued and valuable service for the whole of society. I wanted to ensure this budget reflected and underpinned with financial support, the evolving new social agenda I am pursuing and that has at its core a social welfare support system that is active instead of passive and that assists people to live with dignity and enables them to make a valuable contribution towards society. This budget has delivered on these objectives and by any standard, it is ground breaking. The facts speak for themselves.
The budget delivers the largest ever spend on social welfare of €1.12 billion. Total expenditure in 2006 will reach €13.5 billion. That is double what was spent in 2000 and will benefit 1.5 million people. Some €800 million of this is being spent in substantial increases in allowances, pensions and entitlements and a further €300 million specifically for a range of social policy reform measures. Social welfare payments have been increased by almost four times the expected rate of inflation. The lowest rates of social welfare have been increased by an unprecedented €17 per week to a new level of €165.80, with proportionate increases in the qualified adult allowance. Means tested old age pensions have been increased by €16 per week to €182 and contributory pensions by €14 to over €193 per week. A wide-ranging reform programme will boost the entitlements of older people, alleviate poverty, support activation and recognise carers. Fuel allowances are being increased by €5 per week as part of a major fuel poverty relief package costing over €42 million. Carers allowances are being increased by over €26 per week so that the top rate of carer's allowance will now stand at €200 per week. A range of measures costing €28 million will promote activation by improving income disregards and tapers for people with disabilities and many others. Maternity benefit is being increased to 80% of reckonable weekly earnings.
I wish to make a few points on the main features of the budget from my Department's point of view. The needs of older people have been a priority for this Government. We have delivered record increases in pensions since taking office. Pensions have increased by over 80% since 1997 which is well ahead of the increase in the consumer price index and gross earnings over the same period. The further increases in pensions announced in this budget reaffirm our commitment to providing decent social welfare pensions for people.
The increase of €17 per week to the lowest social welfare rates, and to which I referred earlier, will apply to a wide range of schemes, including those paid to widows under 66 years of age, the unemployed, people unable to work due to disability or illness and lone parents. In framing these proposals, I was especially mindful of the fact many in these groups are at risk of consistent poverty and of the target in the programme for Government and Sustaining Progress to achieve a rate of €150 per week in 2002 terms by 2007 for the lowest social welfare rates. With the lowest rate at over €165 per week, we are now on course to complete that commitment in next year's budget.
Over the past year I, with the support of my Government colleagues, have been laying out a strong new social reform agenda and major funding of more than €300 million is being made available to underpin and give tangible effect to these important and necessary reforms. The reforms, while protecting those who are disadvantaged among us, must also strive, as I have said repeatedly, to get behind the welfare payments and tackle the social issues involved. It is a well established fact that the best route out of poverty is through employment. That is why, through these reforms, I want to create the changes and opportunities that will bring people from welfare dependency to financial independence by providing the stepping stones to a better standard of living and income.
I have identified child poverty as one of the Government's key challenges. National and international research confirms that children who grow up in disadvantaged households are more likely to do poorly at school, to struggle to find a job and to be unemployed, sick or disabled when they become adults, precipitating an inter-generational cycle of disadvantage and deprivation. The long-term cost of poverty in childhood for individual children, their families and communities and indeed for society at large, demands that we address this issue as a priority. Measures to address child poverty cannot be progressed in isolation from other aspects of our income support arrangements. In the context of budget 2006, I had a number of specific objectives in this regard. Specifically, I wanted to substantially increase total family income by giving unprecedented levels of increase to all the basic social welfare rates. I wanted to reform our current income support arrangements to maximise the benefits of work for low-income households. I wanted to meet the remaining Government commitments in relation to child benefit, to target additional resources at those most in need of additional support through those instruments that could be implemented immediately and to ensure these specific measures are congruent with a longer-term Government strategy on child income support. More than €100 million is being invested in increases that lift the child benefit payment rates to €150 for the first two children and €185 for the third and each subsequent child. The entitlement is paid to more than 540,000 families in respect of more than 1 million children.
With these new increases the Government has now fully honoured its commitment on child benefit. When taken together with the Government's child care package announced yesterday, this represents a significant contribution to the alleviation of child poverty and to support for children. All families with children of less than six years will benefit from the new child care payment. This will bring the total annual cash support, including child support to at least €2,800 per annum per child.
The family income supplement has an increasingly important role to play when it comes to practical, targeted and concentrated measures to tackle poverty. That is why I made major changes to the support scheme in yesterday's budget, making it particularly beneficial to larger families, and increased funding by a further €25 million. FIS is paid to parents in low income employment with the objective of directing more resources to larger families. Under the changes that are now being introduced, FIS payments will make further significant contributions to incomes in thousands of low income homes.
As a result of the improvements, it is estimated that more than 5,000 additional families will become eligible for the payment next year. Depending on the size of the family, weekly increases in FIS will range from more than €11 to €169 a week. For example, for a family with four children its weekly FIS payment could rise by €64.80 a week while FIS for a family with six children could rise by nearly €117 a week. FIS can contribute significantly to boosting child support incomes. For example, a family with earnings from employment of €20,000 with two children of less than six years would qualify for €3,900 in FIS annually. When one adds to that the child care payment of €2000 and €3,600 in child benefit this family would have an annual tax free child welfare income support of €9,500 a year. For a family on the same income of €20,000 but with four children, two of them aged less than six years, the annual FIS support would amount to €7,644, giving the family a total child support package of €17,684 a year. On an income of €30,000, the same family would still qualify for total child support income of €11,694 annually.
Another important support for thousands of families on low incomes is the back to school clothing and footwear payment. This payment is being substantially increased by €40 per child and entitlement to it is being further extended. I am also making a further €2 million available to the school meals programme which makes a valuable contribution to the quality of life and educational opportunities of children in low income families. More than €10 million is now earmarked for the various school meals initiatives next year. These measures are the first steps in a concerted programme of action for the next few years aimed at vastly improving our system of child income support.
Most Deputies will be aware that in 2005 the National Economic and Social Council has spent considerable time and effort analysing the issues and developing proposals in regard to child income support. It has been examining, in particular, the possibility of merging FIS and child dependant allowance into a second tier child income support, which would avoid the disincentives inherent in child dependant allowance. That report will set out the broad principles of such a payment rather than a detailed operational blueprint. My priorities for 2006 will include how best we can pursue the proposals arising from the report. In the meantime, my budget package addresses these broad principles by adjusting the FIS income thresholds in a way which makes a bigger contribution toward larger families than previously. This approach is a key feature of previous proposals for a second tier child income support payment.
I wish to comment specifically on lone parent families. Only about half of all lone parents are in paid jobs. This is one of the lowest participation rates in the OECD. Particularly worrying is the fact that more than 40% of one-parent families are categorised as at risk of poverty at a time when Ireland is continuing to enjoy strong economic growth. My Department provides income support to about 80,000 lone parents through the one-parent family payment at a total cost this year of more than €760 million. I have previously expressed concern about this situation. As colleagues will know, I have initiated a major review of the one-parent family payment to assess how best we can support lone parents in their efforts to improve their own lives and those of their children. That review is now being finalised and I will bring it to Government in January next with a view to publication and wide consultation. I very much look forward to hearing the views of the House, lone parent representative groups and others on these proposals.
In the normal course of events I would do nothing to the structure of the payment until the review is published and debated, but I have decided not to delay action on one important aspect of the payment. As many in this House may know, there has been no change in the income limits applying to the one-parent family payment since the scheme was introduced in 1997. I have said publicly on many occasions that I want to give lone parents an opportunity to continue to increase their earnings without raising their fears about losing their entitlement to the payment, which I know from speaking to many lone parents, represents their financial security. In recognition of this I am pleased, therefore, to increase the upper income limit for the one-parent family payment from €293 to €375 per week. This fairly substantial increase will encourage further employment and help to ensure a measure of financial security. Lone parents working more than 19 hours per week can also claim the family income supplement, of which I spoke earlier. While earnings thresholds have a major role to play, other important factors also affect the ability of lone parents to take up employment and the nature of that employment. These have been identified in the Government's discussion document which I will launch in the new year.
This is an appropriate juncture to mention that I am providing initial funding in the budget to the Family Support Agency and the money advice and budgeting service, MABS, so that they can further develop the services they provide to vulnerable families. The additional funding of €3 million to the Family Support Agency will enable the establishment of 12 new family resource centres around the country and increase the level of grant assistance the agency provides to marriage and family counselling agencies, among other initiatives. Since its inception 13 years ago, the MABS has developed into a nationwide network providing advice and support to people who find themselves at the end of their tether, coping with debt and the challenge of making ends meet. It is an excellent service and I am keen to put it on a sure legislative footing for the future. I am currently consulting widely with various stakeholders within MABS and I hope to be in a position to move forward with a money advice and budgeting services Bill next year. The additional funding I am providing for the service includes provision for its further development as well as specific funding for the establishment of a national helpline.
As I indicated on the publication of the Estimates, older people are a priority for my social reform agenda. We have a booming economy and it is only right that the people who laid the foundation for our current prosperity should be able to enjoy the fruits of the tremendous strides this country has made in the past decade or so. This budget makes provision for a number of important measures designed to target resources at particular groups of older people. In considering these measures I was anxious to target those who are at the greatest risk of poverty, to allow people to supplement their social welfare pension through employment, and to simplify the system of income support for older people who do not receive contributory pensions. In this regard, people aged 66 and over can be in receipt of six different non-contributory schemes depending on individual circumstances and each scheme has its own individual means test. This is an anachronism and has no place in a modern social protection system. Accordingly, I propose to combine all non-contributory payments for people over 66 years of age, other than carer's allowance, into one standard enhanced non-contributory pension scheme with a greatly improved means test. I am increasing the amount of weekly means disregard from €7.60 to €20 per week for this standard pension. I am also providing a special earnings disregard of €100 per week. I regard the latter measure as a first step of a process to provide incentives to older people to continue in employment. It is estimated that almost 34,000 people will benefit from these changes at a cost of €20 million.
When the standard pension is introduced next September, individual pensioners, currently on reduced rates of payment because of their means, will be better off by up to €12.50 per week and up to €20.80 where a qualified adult allowance is payable. I am also pleased to tell the House that under the new arrangements, a single pensioner with no other means will be able to have up to €35,000 in capital and still qualify for a pension at the maximum rate. This figure will be doubled to €70,000 in the case of a couple.
Research shows that the incomes of pensioners decline with age and that pensioners have a higher risk of poverty as they grow older. Accordingly, it is appropriate that we should target additional resources at this group and I have, therefore, increased the additional allowance paid to those over 80 years of age by €3.60 to €10 per week. This measure will benefit over 100,000 pensioners including 33,000 receiving widow's and widower's pensions.
When added to the increases in the basic pension which I announced earlier, a contributory pensioner over 80 years of age will now have a pension of €203.30 per week, while pensioner couples will receive additional increases ranging from €9.30 to €10.80 per week. By any standards, these are good increases and a further demonstration of our commitment to the elderly.
As the House will be aware, a key part of our overall pensions strategy is an increase in occupational and private pensions coverage. I have received a comprehensive report from the Pensions Board on the current situation and the measures we might take in the future. That report is before the Cabinet for consideration and should be published shortly.
In the run-up to the budget, I received many representations from colleagues and representative organisations seeking an increase in the level of allowance paid under the national fuel scheme. The issue of fuel poverty is an emotive one, touching on one of the most fundamental human needs. At present, a means tested allowance of €9 is paid to recipients of long-term social welfare payments for 29 weeks of the year. I tend to the view that it is better to channel Exchequer resources into increasing basic social welfare rates rather than diluting the impact by diverting resources into allowances which, by definition, are payable to a smaller number of people. However, on this occasion I was influenced by the fact that the allowance has not been increased since 2002 and that it is targeted at the most vulnerable households, including the elderly, those who are ill or with disabilities and households with young children. Accordingly, I am pleased to be able to increase the allowance to €5 a week.
I am also availing of the opportunity to remove the current anomaly whereby residents in some local authority flat complexes with communal heating systems are ineligible for the fuel allowance. Such residents will now be able to qualify for the allowance if they meet the other conditions of the scheme.
I now turn to the topic of those who care for older people and people with disabilities in their homes. Over the past nine years, the Government has placed increasing emphasis on the role of community care in supporting the vast majority of people who wish to remain in their own homes. Earlier this year, the Tánaiste and I established a working group on long-term care. We recently received a full report from the task force on that issue and will take proposals to Cabinet in the near future.
This year will see the biggest ever increase in the rate of payment to carers. The carer's benefit will increase by €17 to €180.70. The rate of carer's allowance will increase by €26.40, bringing it to €180 per week for a carer under the age of 66. Significantly, the rate for carers over the age of 66 will increase by €30, bringing it to €200 per week and making it the single largest welfare entitlement, apart from the pensioners of over 80 years of age who I mentioned earlier. This represents increases of more than 17% for recipients of carers' allowances and I hope it goes some way to acknowledge the great work they do.
In addition, we are increasing the rate of the respite care grant from €1,000 to €1,200 from next June. The number of hours which a person can work while still receiving carer's allowance, carer's benefit or respite care grant will increase from ten to 15 hours per week and the income disregards for the means test for carer's allowance will increase to €290 for a single person and €580 for a couple. This means that a couple with two children can earn up to €32,925, while the carer receives the maximum rate of carer's allowance. I am extending the duration of the carer's benefit scheme to two years per care recipient from May 2006. I understand that my colleague, the Minister for Enterprise, Trade and Employment, proposes to extend the carer's leave scheme, which allows for the protection of the carer's employment rights for the duration of the caring period to two years.
As part of my reform programme, I am delighted to be able to announce a number of further improvements to the means testing arrangements and the main employment support services in this budget, which are designed to ease the transition to work. I am introducing a tapered withdrawal rate for disability allowance and blind pension recipients who engage in rehabilitative employment or self-employment and have a weekly income over €120 and under €350, which will benefit approximately 2,600 people. The qualifying period for access to the self-employment strand of the back to work allowance will be reduced from three years to two years on the live register and in the qualifying period for the employee strand from five to two years. Furthermore, periods spent on supplementary welfare allowance and direct provision allowance will also count towards the calculation of the qualifying period. A 50% tapered relief of withdrawal of earnings between €60 and €90 per week will be introduced for persons in receipt of rent and mortgage interest supplement. Many organisations and individuals have asked me to examine that issue.
I will conclude at this stage, even though I have not commented on all the changes proposed in this budget. Full details are available in the budget fact sheet published by my Department. It is a generous and far-reaching budget which allocates a record breaking €800 million on increases to social welfare payments and initiates a new social reform agenda, including funding for targeted initiatives that further recognise and reward carers, increases in incomes for the most vulnerable older people, specific measures to tackle child poverty issues, introduction of supports that further empower lone parents and the promotion of activation through back to work, training and education supports which enhance choices for welfare recipients.
I would like to share my time with Deputies Broughan and O'Shea.
I intend to address issues relevant to my portfolio of agriculture and food. I was disturbed to find that the first line of the Minister for Agriculture and Food's budget press release reveals all that needs to be said about this Government's attitude to farmers, food consumers and producers. In that press release, the Minister, Deputy Coughlan, stated that farmers and the wider rural community in Ireland will benefit significantly from the "generous increases in social welfare payments". I had hoped that, instead of being on social welfare payments for the farming community, which is welcome and, in many cases, needed, the emphasis would have been on ways to promote, encourage and sustain agriculture. Recent reports indicate that, while farming is an important aspect of the economy, the industry will suffer in the future unless radical steps are taken to ensure its viability. Accordingly, I have concerns on the priority indicated by the inclusion of social welfare payments in the opening of the statement by the Minister.
Aside from social welfare payment increases, the Minister trumpets improvements to the rental income tax exemption for leasing of farmland. Again, the question arises of how much these improvements mean to our farmers. She estimates it at €2 million in a full year. Once again, this is reflective of the importance of agriculture today, as perceived by the Government.
The second best thing the Minister can say of this year's budget is that Irish farmers, who feed us all, are entitled to a tax break of €2 million a year. The Foresight report predicted that there would be only 10,000 full-time farmers by 2025. What the Minister should be doing is putting in place the provisions that will ensure that predictions do not come true. There are solutions proposed in that document and the Minister should be putting the emphasis on implementing them and the other recommendations rather than arguing against them and resisting them.
I welcome the extension of stamp duty relief for young trained farmers. The Minister said this will be worth about €19 million to Irish farmers. I welcome too the higher maximum "floating allowance" permitted for necessary pollution control facilities but once again I am aghast that the Minister should boast that is worth €1 million to Irish farmers.
Before I get on to biofuels, I emphasise to this House that the Minister for Agriculture and Food has proudly announced that the budget will, apart from social welfare payments, be worth around €24 million to Irish farmers. If that had been the amount of extra money in a budget in the 1950s provided to Irish farmers, we might have had some reason to be pleased, but these are not the 1950s. This is the 2006 budget and the Minister for Agriculture and Food is boasting that €24 million is being given to Irish farmers.
The year 2006 will be a time of unprecedented prosperity for most non-farming sectors of the economy but it will be a time of unprecedented pressures, financial and otherwise, being exerted upon Irish farmers. Next year will also be a time when certain parties will be absolutely determined to renege on the CAP reforms and do a deal in the context of the forthcoming WTO ministerial meeting in Hong Kong which will mean that Irish farmers, whose backs are already against the wall, will be put under even more pressure than they are currently under. The Government's response to this is a miserable €24 million.
If the Minister really cared about Irish farmers, she would probably have taken a strong stance against what was being offered in this budget on behalf of the portfolio she represents. The future of Irish farming is in doubt, not least because of this Government's refusal to offer real and effective support to the sector. For example, the prospect of biofuels and bio-ethanol farming offers a tantalisingly practical solution to many of the problems faced by Irish agriculture and the environment, yet this budget offers increased incentives only to the 100% biofuel products. Such products would require expensive vehicle conversions but the Minister can boast of nothing to support biofuels which are blended into existing fuels and do not require engines to be converted.
There is absolutely nothing in the budget for Irish food consumers or Irish food producers, or if there is, the Minister has been very silent and we have heard nothing about it. I have raised the issue of "food deserts" a number of times. It refers to people on low incomes, the elderly and the infirm, those who very often find it impossible to purchase healthy foods at a reasonable price. There are food deserts in our cities and in our countryside in which people are unable to travel to faraway supermarkets; food deserts in which pensioners who can only get to their local shops are being prevented from eating nutritious and appropriate food. The Minister for Agriculture and Food can find nothing in this year's budget to boast about which will help solve this problem, and the abolition of the groceries order is something with which we must concern ourselves. We must wait and see what will replace it, but Combat Poverty and the Society of St. Vincent de Paul have serious questions about the impact the abolition will have on the poorest and most vulnerable, and those furthest away from a cheap, reasonable and available source of nutritious food.
Apart from the agricultural and food aspects of this budget which are of some concern, there are other aspects which trouble me and my constituents. Already, constituents have pointed out to me that the gains to be made by old age pensioners and those on low incomes will be offset by the increases in the new year when Dublin City Council rents will increase. We welcome the extra allowances, but any gains made by people in that area will be rapidly offset. Those people will scarcely have time to evaluate the significance of the increase.
The budget does nothing for the homeless in my constituency. It does not provide for any increase in social housing, nor does it increase the cap on the capital assistance scheme for housing. Earlier during this Dáil term I was involved with homeless people trying to get back into third level education. As it turned out, they were able to get some funding, for which I am grateful, but it was a once-off payment given to them as a concession, and not written into the future. This is not what we want. This was a very unusual set of circumstances. I welcome the contribution and support given to those people but I would like assurances for the future that they do not have to go through the same worry which they did this year in order to access that third level college. At the best of times it is difficult for homeless people to get by. These people were particularly brave and enthusiastic enough to find their way into third level colleges. The idea that they then almost had to beg in order to access the meagre rent allowances and social welfare supports to keep them there is unacceptable. The last thing we need is for these people to be put in a situation where they have to drop out of the courses.
I appreciate the reinstatement of the fuel allowance for old age pensioners who live in local authority-provided accommodation with communal heating. Deputies Quinn, Broughan, I and other Dublin representatives raised that issue before. As it happened, a very small number of people found themselves in this particular bind. With some unacceptable enthusiasm, these people were deprived of their fuel allowance. I am glad to see that allowance reinstated and I acknowledge that the Minister for Social and Family Affairs, Deputy Brennan, has been generous in this respect. The reinstatement is very welcome. My concern is that it was ever removed from those people, who come to depend on what is a very meagre allowance, and that they had to endure the trauma. I also welcome the increases in the contributory and non-contributory pensions.
Turning again to matters which affect my constituents, Transport 21 was trumpeted with great acclaim, but there is a great big gap in the glitzy map which accompanies it, which I regret to say represents much of the Dublin South-Central area. This blank spot means our traffic jams will unfortunately persist beyond 2016.
I am also disappointed there is nothing in the budget with regard to educational disadvantage. I represent a constituency where there are some anomalous situations with regard to those who fall within the disadvantaged areas and who can access the benefits which go with the disadvantaged designation, and those who do not. For example, if one's school happens to be on a road which is not seen as disadvantaged, even though 80% of the pupils attending come from a disadvantaged area, the benefits and advantages are withheld. The Minister for Education and Science must look at this anomaly.
The PLCs seem to have been totally ignored in the budget. I welcome the investment and support for the third level and fourth level, as proposed. I am a great supporter of the importance of research and development in our very high educational standards and attainments, and appreciate the benefit of best quality graduates emerging from this country. However, there are other people in an educational bank, so to speak, who are not in the academic side of education and who do not wish to be. They should not be made to believe the academic route is the only one to take. There are people with other aspirations and other qualities and they should be given other career options.
My brief is agriculture and it is an area about which I am concerned. The budget is dismissive in regard to the major concerns that have been highlighted to my colleagues and me in recent months by the farming organisations and all those engaged in farming. Relatively little has been done for them in this budget.
I am sorry there has been a mix-up. I am aware Deputy Ring has a long journey to the north west.
After all the hype and promises, yesterday turned out to be a disappointing non-event. The Minister for Finance had more than €50 billion at his disposal, a massive amount of money, but the result is a bland and essentially neutral budget. There was expectation in the media yesterday morning that there would be a major and fundamental initiative on child care at least, and perhaps some major new surprise development that would have given a personal stamp to the Department of Finance. As we quickly read through the budget as the Minister spoke, we realised that nothing much had occurred. It lacked flair and did nothing serious about the grave situation facing young and hard-working parents travelling up to 50 miles to work every day.
The events of recent days have been overshadowed to a large extent. It is often said that the former Minister for Finance, Commissioner Charlie McCreevy, was a lucky punter who happened to be a lucky Minister for Finance for six and a half years.
In his six budgets, his "book of budgets" as he described them, he reshaped Ireland into a harsh, vicious, winner-takes-all society. That was his aim, as we now know. I hope the Minister for Social and Family Affairs, Deputy Brennan, was not one of those present in those dark days, 20 years ago, when the Progressive Democrats conspiracy was being hatched in rooms around this city. Sadly, one of the key conspirators was Mr. McCreevy. He was a classic class warrior who believed in class war. He delivered the worst excesses of United States capitalism to this State over those six and a half years. It is unfortunate that we had to live through those budgets in what the media liked to call the era of "good time Charlie". It was a great time for the plethora of wealthy developers, the auctioneering class, the racing industry and those engaged in all types of cute scams——
The Minister of State, Deputy Conor Lenihan, is aware that I have always been a member of the Labour Party.
Such people reaped wonderful rewards from the era of "good time Charlie". It is now clear, however, that the McCreevy luck has deserted Fianna Fáil. Every time, for example, the Government has tried to shape the agenda in the past seven or eight months, going back to spring and early summer, it has generally been completely overtaken by nasty events. One only has to recall August, a time when the Government is usually able to control the agenda on a daily basis. Thanks to the brilliant forensic analysis of Eddie Hobbs, however, the Government completely lost control of the agenda. Mr. Hobbs pointed out the nature of the society Mr. McCreevy delivered in the course of those six and a half years.
I will refer briefly to the economic outlook. There are some frightening straws in the wind as the economic climate changes. It is not just that the energy picture is much more problematic and that some of the serious issues in energy and climate change will have to be addressed in the coming years. I advise the Minister of State, Deputy Conor Lenihan, that this is not a laughing matter. One of the most significant straws in the wind is yesterday's development whereby the National Treasury Management Agency was given €20 million for the task of buying our carbon credits. We now know that in coming years, we will face a grave and growing bill, perhaps up to €100 million per year.
This issue was one of the responsibilities of the Minister for Foreign Affairs, Deputy Dermot Ahern, in his previous Department. Because he and his successor, Deputy Noel Dempsey, did not address the issue, we face a situation next year where we know additional employment will fall, perhaps significantly. Net job increase is projected to drop by more than 20,000 jobs in comparison with 2005. This is a disturbing statistic given that we have been used to dramatic increases of 150% in the economy and 100% in the number of jobs.
Perhaps the most disturbing straw in the wind for the economy generally is the interest rise of 25 business points instigated by Jean-Claude Trichet and his colleagues in Frankfurt. This is a small change but one that will affect young couples and those paying mortgages and personal loans, in particular, in terms of the additional costs they must face next year. Those who are on the margins may find this the straw that breaks the camel's back. Neither the Minister for Finance, Deputy Cowen, nor his successors will have control of monetary policy. We must put up with what happens in Frankfurt. The Minister correctly noted yesterday that we can expect a contraction next year in our largest industry, comprising those 250,000 construction workers who have turned out 200,000 units in recent years.
We no longer control monetary policy. It is therefore incumbent on the Minister for Finance to bring forward a different type of budget. That is the point I wished to make if the Minister of State had only waited to hear it. To use Mr. McCreevy's parlance, the Government is turning the corner into the straight. It is approaching the end. It is the mass of PAYE workers and the approximately 1 million citizens living on social welfare benefits who inevitably will have to pick up the pieces from the Government's fiscal failures in the past eight years.
Many commentators have referred this week to the archaic nature of the presentation of the budget. Mr. Vincent Browne, among others, called for budget day in its current format to be abolished and I strongly support that position. As our party leader said this morning, we must finally become like other European democracies in terms of the budgetary process. During the course of 2006, we should discuss the Estimates in detail for every Department and make our suggestions. Deputies and Senators should take the primary role in this rather than well-intentioned interest groups outside the House. By autumn 2006 and in subsequent years, we should be able to make a presentation to the Minister which could become the format of the budget in the future.
Such a process has never happened. Both the Taoiseach and the Minister for Finance said they will lean in this direction next year but it is almost certain that the reforms proposed by the Committee of Public Accounts and other serious commentators will not happen. Most important, the budget day anachronism prevents a transparent, informed and reasonably lengthy debate on the grotesque unfairness of Irish society, which is as bad today, and will be tomorrow and next month, as it was yesterday and last month. Yesterday's budget did little or nothing for the 50,000 Irish citizens, 5,000 of whom are in my constituency, who are on the housing waiting list. It did little or nothing to resolve the crisis in accident and emergency services. It made no specific proposals to deal with the substantial problems in the health sector.
When the Minister for Finance gave the House some waffle about third level education yesterday, I was surprised that he had the brass neck to speak about PhDs in light of the recent debacle in respect of the chief science adviser to the Government. He spoke about the need to provide resources for fourth level education, but I remind him that just 10% of the children in many parishes in my constituency complete second level education and go on to third level education.
The Minister for Social and Family Affairs has left the Chamber before listening to the conclusion of my contribution. This country's meagre rates of social welfare continue to be a national disgrace. According to the forecasts of The Economist, Ireland will be the second wealthiest country in the world next year, with an average per capita income of €52,000. The Minister for Finance was thrilled with himself yesterday when he increased the level of unemployment assistance — the basic social welfare rate — to €165 per week, or a miserly €7,500 per annum. It is disgraceful that it is even lower —€5,000 — in the case of an adult dependant. Deputy Stagg was quite right to interrupt the Minister yesterday to ask him what he was talking about. It is an appalling disgrace that nothing is being done in this area. I note that a former Minister for Social and Family Affairs is in attendance.
He did not succeed in increasing the basic social welfare rates by €17 per week. Given the base rates we have, such an increase will do nothing anyway. Such a bland gesture will not help the development of any form of social justice.
The decisions made on taxation policy are the central instruments of any budget. Many pages of examples and tables have been published to illustrate how the changes in this budget will affect single workers on the average industrial wage, for example, or couples with one or two children. The gains which will accrue to such people as a result of the changes made to the tax code in this budget are of just 1%, 1.2% or1.3%. The people to whom I refer will benefit by a miserly couple of hundred of euro as a result of this bland and conservative budget, which lacked flair and a vision for this country. As the Government approaches the end of its term in office, I am aware that Ministers from Fianna Fáil and the Progressive Democrats are frantically looking to Opposition Members in the hope that we will somehow continue this era of prosperity after the next general election.
Tááthas orm seans a fháil cúpla focal a rá sa díospóireacht tábhachtach seo ar an gcáinfhaisnéis.
Yesterday's budget was a grave disappointment for those of us concerned about the development of cancer care. One in three people will be diagnosed with cancer and one in four people will die from cancer. In view of these facts, I asked the Tánaiste just over a month ago to outline the priority in the cancer services area that she would seek to pursue in budget 2006. I received my answer yesterday when cancer services were not even mentioned. The provision of radiotherapy services at Waterford Regional Hospital for the south-east region is a matter of great concern to the people of that region, including the people of Waterford. The Tánaiste announced last July that the Government's plan for a national network of radiation oncology services will be pursued by means of a public-private partnership. Under the plan, WRH will have an integrated satellite unit as part of the network. Most of the capital investment necessary to develop the unit will be drawn from the public-private partnership aspect of the network. The Tánaiste told me earlier this month, in response to a written parliamentary question that the necessary preparatory work is being done by the National Development Finance Agency and the Health Service Executive. Yesterday's budget added significantly to my increasing concern that nothing is really happening and that the Tánaiste's statement of last July amounts to a political stunt to get the Progressive Democrats-Fianna Fáil Government through the next general election. I challenge the Tánaiste to give the House a full progress report on what is really happening to the integrated satellite centre at WRH.
For many years, Fianna Fáil has prided itself on its aspirations of reuniting the country and restoring the Irish language. It was appalling, therefore, that there was not a single word of Irish in the Minister for Finance's speech yesterday.
There was no reference to the Irish language in yesterday's Budget Statement. I hope the Minister for Social and Family Affairs, Deputy Dermot Ahern, is concerned not only because no Irish was spoken by his colleague, Deputy Cowen, yesterday but because the Minister for Finance, who is the deputy leader of a party that has traded for a long time on its policy of restoring the Irish language, did not even mention that language and the possibility of its revival.
The proposed social finance initiative was the only aspect of yesterday's budget that related to the voluntary and community sectors, another matter that is part of my brief. The Minister for Finance said he will talk to the banks, which have indicated that they will talk to him, about seed capital and the availability of loans for the voluntary and community sectors. That is all that was offered to a sector that is central to the future quality of life of many people here.
Security issues were not mentioned by the Minister, Deputy Cowen, yesterday. The quality of life of many people in all parts of the country is in decline because they are worried about the security of their homes. The tendency of certain people to engage in anti-social behaviour is increasing, but that was not addressed by the Minister.
The scourge of cocaine use is another matter on which the Minister for Finance failed to reflect yesterday. It is estimated that cocaine worth approximately €110 million reached our streets in the first ten months of this year, but the Minister did not mention this worsening problem. The use of cocaine in Britain is increasing because it is more socially acceptable and it is becoming cheaper. There were 25 million cocaine users and 2 million cocaine addicts in the United States in the mid-1990s. The level of use of this dangerous drug has become a scourge. Cocaine use has become a middle-class activity in many ways. The snorting of cocaine by middle-class people at weekends is euphemistically referred to as the leisure use of the drug.
Yesterday's budget was a failure in many respects. Although a great deal of money could have been used to deal with problems in community life, such as the scourges which affect ordinary people, little or nothing was on offer yesterday.
I am due to call the Minister for Foreign Affairs, Deputy Dermot Ahern, at this point. As a result of an oversight in the notification and scheduling of speakers, Deputy Ring, who has been present in the House and offering to speak for some time, was not called as the last speaker. With the agreement of the Minister, Deputy Dermot Ahern, I propose to call Deputy Ring to speak for 15 minutes before the Minister speaks.
I was somewhat bemused to learn a couple of minutes ago that there was to be a change in the scheduling of speakers. The reason for the confusion was not really explained to me. The schedules of some Members on this side of the House have been put back all day because of the raucous behaviour of Opposition Members on the Order of Business this morning. Some of us are in some difficulty as a result. I will allow Deputy Ring to speak before me.
All right. I would like to hear what the Deputy has to say because he is always entertaining, particularly on social welfare issues. I would like to share time with Deputies O'Donoghue, Conor Lenihan and Parlon.
I had a long speech from the Department on the budget, mainly dealing with the Department of Foreign Affairs covering passports, biometrics and all the money involved in the Estimates etc. It also dealt with decentralisation and overseas development aid. However, having listened to Deputy Broughan who was his party's spokesperson on social welfare when I was Minister in that area, I decided to bin my printed speech and rise to the bait as I always loved to do when we were sparring partners.
I know the Minister of State, Deputy Conor Lenihan, will refer to overseas development aid later. Under the Government the largest increase ever in overseas development aid has been delivered.
Since the previous Government came to office, we have trebled overseas development aid and the increase this year alone is more than the allocation under the Fine Gael, Labour and Democratic Left Government in the budget for 1997.
Between now and 2012 we will again treble overseas development aid.
I wish to speak about social welfare and the improvements announced in the budget. It is like old times listening to Deputy Broughan. He will remember that when I was Minister for Social, Community and Family Affairs on successive budgets the Government delivered record amounts. Some £870 million was given in two successive years.
Social welfare in 2006 will be more than quadruple the level set when Labour and Fine Gael were last in Government. We reformed the social welfare area and Deputy Broughan must acknowledge that instead of getting payments late in the year they are now given on 1 January, in effect five months earlier.
The Government dramatically increased family income supplement. We introduced the respite care grant. Do you remember that, Deputy Broughan? Today it is at a level of €1,200 thanks to the increase.
Maternity benefit has been dramatically increased. The back to school, and clothing and footware allowances have been dramatically increased. The fuel allowance, as you remember, Deputy Broughan, increased again this year and is given for a longer period than when the Labour Party and Fine Gael were in Government.
The old-age contributory pension increased by only 10% over the lifetime of the rainbow Government. This year alone it has increased by 8%. Under Fianna Fáil-led Governments it has increased by more than 88% since 1997. Today it stands at €193.30, which represents——
The old-age non-contributory pension also increased by €16. I heard some lectures on child benefit. Dramatic increases in child benefit have been given by the Government in the past five or six years.
In its last year the rainbow coalition Government gave £1 per month per child and they criticise us for giving €8.40. A few years ago we increased it by €32. They gave £1 and we gave €32.
They gave £49 for subsequent children and we are giving €185. Need I say anything more about child care strategy? In recent years we have built the supply and demand. We have increased places dramatically and under the new five-year programme we will increase them by another 50,000 places in order to bring down the prices.
Our record on taxation speaks for itself as we have taken so many people out of the tax net. Some 52,000 taxpayers will be taken out of the tax net next year. During their time in Government Fine Gael and Labour only took 10,000 and 18,000 out of the tax net in the two budgets they introduced.
When this debate finishes we will issue the press releases to inform the people that Labour and Fine Gael have opposed the increases for old-age pensioners, children, families and the unemployed.
The capital allocations announced by the Minister for Finance, Deputy Cowen, in his Budget Statement included provisions for the most important package of capital investment in key elements of our national cultural infrastructure.
This package includes the redevelopment of the Abbey Theatre and the National Concert Hall, the complete remodelling of the Theatre Royal in Wexford and the substantial refurbishment of the Gaiety Theatre in Dublin. These are flagship projects which will greatly enhance the quality of our cultural infrastructure. The Abbey Theatre is at the centre of Ireland's theatrical and cultural life. It has been recognised for some time that its existing premises fall short of the requirements of a vibrant national theatre. A suitable site has now been made available for the redevelopment of the theatre by the Dublin Docklands Development Authority. The OPW has completed the necessary site investigations at George's Dock and has advised that it will be a suitable location for the national theatre.
The next stage is to examine options for procuring the theatre as a PPP including the incorporation of a separate international design competition. I will report back to Government on this aspect by the end of February 2006. I am pleased the capital envelope announced yesterday will enable me to proceed with the redevelopment of the National Concert Hall as a PPP. That provision is being made next year to enable the process of acquiring the site for a new state-of-the-art concert hall to get under way. The provision of a signature premises on a par with those in capital cities across Europe will enable the National Concert Hall to meet the current and expanding market demand for musical entertainment and cultural events. I have noted that the National Concert Hall, within its limited space at Earlsfort Terrace, is highly energetic and operates with a strong market focus. Seat occupancy consistently exceeds 80% with patrons being turned away from many house full events. The new facility incorporating a 2,000 seat auditorium will enable the National Concert Hall to meet public demand much more effectively, including the staging of key performances by top class world artists at reasonable ticket prices.
I am also delighted that the Theatre Royal in Wexford will be refurbished and remodelled. The Theatre Royal is the venue for the world famous Wexford opera festival. For 50 years the festival has been a key event in the cultural life of Ireland and has won extensive international acclaim. The existing Theatre Royal has been at the centre of the festival's success but needs substantial upgrading to meet the festival's future needs. It is a worthwhile development of immense importance to the cultural life of Ireland and of particular significance to Wexford and its hinterland.
My one regret in confirming the redevelopment of the Theatre Royal is that Mr. Jerome Hynes, the former chief executive of the Wexford festival opera, cannot be with us to share the good news. Jerome should take much of the credit for this decision. He drove the project forward with his far-sighted planning, unlimited energy and focus and extraordinary persistence. His work has finally borne fruit and he will long be missed by us all.
The Gaiety Theatre is one of the few facilities in Dublin capable of staging large-scale opera productions. This refurbishment will enable the Gaiety to fulfil this key role into the future. This suite of investments represents an extremely important initiative by the Government in that it addresses key infrastructural deficiencies in our national cultural infrastructure which will make the arts more accessible to all our people. It will also enhance the quality of our cultural tourism offering to our overseas visitors.
I am delighted that the artists' tax exemption is being retained for qualified income up to €250,000. The level at which the exemption mechanism is pitched will continue to encourage artistic activity. There will be no flights of either activity or income. Furthermore, it will encourage other taxable activity by artists in this country as the effective rate of tax on those with high incomes in Ireland compares favourably internationally.
Under this Government considerable progress has been made to bring Ireland's sporting infrastructure into line with best international standards. In the area of major capital development we continue to provide important investment funding in partnership with sports governing bodies in large capital projects. During recent years the Exchequer has provided €110 million to the GAA as an input 3, the spending development that has been undertaken at Croke Park. More recently, grant aid of €191 million has been committed by the Exchequer towards the development of a stadium of Lansdowne Road in partnership with the IRFU and the FAI. A sum of €20 million will be provided in the Vote of my Department for this project in 2006. This project is progressing according to its challenging schedule and will be delivered over the next four years. I am pleased to say that the planning application is almost completed and should be ready for lodgment at the end of this month.
I am happy to confirm the commencement of the Abbotstown sports campus. In this budget the Government has agreed to provide funding of €9.5 million in 2006 to enable work to start on phase 1 of the project which has been costed at €119 million and will be delivered over a four to five year timeframe.
A considerable effort had been put into the discussion and planning stage of the project. These plans have been endorsed by the Government and the work will commence early next year.
Ireland is on track to provide state-of-the-art facilities for sports men and women to train and prepare for competition at the highest level. A range of facilities will also be available to the public and the training needs of more than 30 governing bodies of sport. Irish sport deserves no less. Looking forward to the run-up to the London Olympics of 2012, Ireland can become an attractive option as a training base for international Olympic teams. Irish Olympic hopefuls will have excellent training facilities available to them at home and they will benefit from the transfer of expertise through contact with their international competitors.
The sports capital programme, which is administered by my Department, plays a crucial role in the development of the quality sports infrastructure needed to enhance participation and improved performance in sport. Under the programme, funding is allocated towards the provision of sports facilities at national, regional and local level and is the primary vehicle for promoting the development of sports and recreational facilities in Ireland.
Since 1998 the Government has allocated funding amounting to €386 million under the programme to more than 4,900 projects to provide badly needed facilities and equipment in virtually every parish, village, town and city throughout Ireland. We have an ambitious swimming pool programme in conjunction with the local authorities whereby 18 new pools have been built and seven are under construction while a further 30 are moving through various stages of planning, leading to construction.
The unprecedented level of funding for sport, which will continue in 2006, has increased the quantity and transformed the quality of sports facilities available countrywide. Important facilities, such as swimming pools, dressing rooms, pitches, floodlighting, modern sports equipment and so on, have allowed schemes to be developed to get people of all ages and from all backgrounds more involved in sport.
The budget for 2006, together with increased Estimate allocations for next year, will benefit the tourism sector. The major issue facing Irish tourism is competitiveness. The budget for 2006, with an emphasis on sustaining order in the public finances, minimising inflation and avoiding increases in direct taxes and excise duties, will support the Irish tourism industry in developing value for money and meeting international competition. I welcome a number of measures in the budget which impact favourably on tourism. The availability of accelerated capital allowance in the past has been of critical importance in encouraging investment and the provision of tourism accommodation in particular in hotels. The number of hotel rooms has almost doubled from 26,000 in 1996 to approximately 45,000 at present. Our hotel stock is among the most modern in Europe.
The extension announced by the Minister for Finance, Deputy Cowen, in the cut-off date for investment in hotel projects in the pipeline to benefit under the generous accelerated capital allowances will facilitate the orderly progression of projects and help to ensure that any further additions to stock are warranted by clear and identified market potential.
The increase in the VAT exemption limit for small service businesses will benefit small accommodation providers, including those in the bed and breakfast sector who are under some pressure owing to changes in consumer demand and tastes, as will the change from monthly to quarterly filing of PAYE forms.
Tourism is no longer a Cinderella industry. It is very much centre stage and the Government has shown its unrelenting commitment to it by resourcing our tourism agencies as never before. For 2006 I have secured an unprecedented level of Exchequer resources for tourism development, €134 million, representing an increase of 7% on 2005. The investment will enable the tourism agencies, Fáilte Ireland and Tourism Ireland, to deliver in full their ambitious marketing and development plans for 2006 which were unveiled to the industry's major promotional event earlier in the week. The increased marketing fund will enable both agencies to step up significantly their gain on the marketing front in 2006. In securing the largest ever allocation of €40 million for the tourism marketing fund, I have specifically asked the agencies to focus on stimulating regional spread, promoting greater use of special interest products, in particular golf, to benefit from our hosting of the Ryder Cup next September, capitalising on air access developments and enhancing our e-marketing capabilities.
I wish to acknowledge publicly, after 14 months in the position of Minister of State, the great gratitude I feel towards the Minister for Finance and the wider Cabinet and Government colleagues for the enormous contribution and the passion with which they are prepared to make commitments to overseas aid. Since Deputy Bertie Ahern became Taoiseach in 1997——
I wish to say a few words about that programme. It is the envy of the world and is one the most highly regarded programmes in the world because we focus all our efforts on the poorest of the poor. Some 80% of what we spend on the bilateral programme goes to the poorest countries, the least developed countries of sub-Saharan Africa. I am proud of that programme which has been built and tripled in size since 1997. Under this budget the highest percentage increase in any area of spending has occurred in the area of overseas aid. We have achieved a 24% increase in our spending budget line. That is an enormous increase and poses enormous challenges for the future.
The increase we achieved this year was higher than the entire aid programme in 1995. Those opposite who seek to replace us as a Government will not be able to deliver on those increases. When in Government they did virtually nothing in this area.
As we discuss the budget, it is noticeable what are the Opposition's priorities. When given the opportunity to discuss the substantive issue of the budget and the allocation of resources, it chose instead to pander to the tawdry tabloid values and political correctness that swirls around this House.
They prefer to pander to tawdry values and political correctness rather than discuss the substantive issue of a budget that will transform the livelihoods of the people we serve. It is extraordinary that the Opposition has nothing better to do——
They are not interested in nonsense about whether a Minister should be forced to speak and the old combined fascist communist tactic of forcing somebody who does not want to speak in this House.
——that deliver for our people. The child care package we announced here and the social spending measures the Minister for Social and Family Affairs announced are record packages for their time and circumstance.
A social order is built on the back of a successful transformation of the tax code and the working possibilities of the Irish people. That is what happened during the past seven or eight years. Fianna Fáil and, I am glad to say, our partners in Government, the Progressive Democrats, have transformed the tax code.
We are now moving to consolidate on the success we achieved during the past seven or eight years. We are building the social infrastructure our people need to move up the value chain——
——and produce more and more quality jobs. Fine Gael and Labour were never able to achieve this in government, no matter what patchwork coalition they put together. They never did this. Every time a coalition Government in this country——
The construction industry amounts to 20% of our vibrant and growing economy. Everybody working in that sector knows that as soon as Fine Gael and Labour come in they close down, move abroad and give up because they know they cannot achieve and build a future for our country.
I would love to see an opposition in this House that focused on the issues instead of the tawdry tabloid values that Members display day in and day out. They pander to that culture. I can tell them that type of newspaper will not stay with them long.
While Ireland is now a prosperous country, we cannot afford to take prosperity for granted. It is on this principle that the choices in the budget were based. We must strive for economic success and insist on prudent fiscal management to achieve the establishment of a better society for all. We must prioritise infrastructural investment so that firms can compete and we must ensure that even more people can become involved in our economy and benefit from its success.
The Government is committed to helping those on low incomes and supporting family life. This budget will help to create a more inclusive society for all of us. To this end social welfare measures, costing €1.12 billion, will be implemented. These changes will improve the living standards of 970,000 social welfare recipients. It is important to state again the specific improvements announced. For the elderly, old age and related pensions will rise by €14 per week or 8%, bringing the old age contributory pension to €193.30.
The non-contributory pension will rise by €16 per week, or 9.6%, and the first €100 of income earned will be disregarded for means test purposes to facilitate pensioners who want to work beyond retirement age without being penalised. Elderly persons will also benefit from the new home care packages, additional day care support and palliative care, helping elderly people to avoid unnecessary and prolonged stays in residential care hospitals.
Those on the lowest rates of social welfare will all receive an increase of €17 per week, bringing the lowest full personal social welfare payment to €165.80 per week, which is an increase of 11%. The monthly rate of child benefit will rise to €150 for the first and second child and to €185 for the third child and subsequent children. This year we will spend approximately €2 billion on child benefit alone compared with just €500 million five years ago.
A major theme of this budget was the very pressing issue of child care. The Government is conscious of the difficulties faced by families in this regard. Our task is to assist all parents, in particular during the early years of child rearing. To this end we have developed a five year child care strategy to tackle the problem by increasing options for parents in a balanced manner. This package will cost €317 million, rising to €600 million a year by 2008. On the supply side a major new national child care investment programme will run from 2006 to 2010 and will support the creation of 50,000 new child care places through capital grants to private child care operators. Income earned by child minders caring for children in the minders' own homes will be exempt from income tax and PRSI up to €10,000.
The Government is mindful of the importance of the first year of life in a child's development. Consequently, significant extensions to maternity leave are being made over the next two years. From March next, mothers of new-born children will have four additional weeks paid maternity leave, extending such leave to 22 weeks. This leave will be further extended by four weeks in 2007, so that mothers of new-born children will be entitled to a full six months paid maternity leave.
A new early child care supplement will be introduced which acknowledges the costs parents face, particularly those with pre-school children. This will be a direct payment available to all parents of pre-school children regardless of the parents' labour force status. The payment will be worth €1,000 per year for each child up to their sixth birthday. This supplement will be exempt from income tax, PRSI and levies and will be paid quarterly to parents of approximately 350,000 children under the age of six, costing €353 million in a full year. This new payment with child benefit will mean that in 2006 a family with two children under six will receive more than €5,000. This is a significant step forward in assisting families to meet child care costs.
The Government has radically restructured the taxation system. As a result more than one third of the work force are now outside the tax net completely. Yesterday's budget will mean that even more workers are taken out of the tax net and all those on the minimum wage will be exempt from paying income tax. The total cost of the income tax package is €900 million in a full year. Among the personal taxation measures contained in the budget were the employee tax credit, which will rise by €220 per year and personal tax credits which will rise by €50 per year. The tax exemption limit for persons aged 65 and over will increase by €500 single and €1,000 married, removing 1,700 elderly income earners from the tax net. The standard rate band will rise by €2,600 per year, just less than 9%, removing more than 90,000 taxpayers from the top rate of tax, ensuring that all those earning close to the projected average industrial wage will pay no more than the lower rate of income tax. To assist lower paid workers, the health levy threshold is increased to €440 per week, benefiting 72,300 lower paid workers.
As Deputies will be aware, a major review of tax reliefs was undertaken with the aim of achieving a fairer, more equitable tax system.
I will conclude because I could talk about the good news from this budget for a long time. It contains many other measures I did not have time to discuss. Importantly, I believe this budget will sustain our economic growth and create a more equitable society for all by cutting taxes, increasing social welfare payments, assisting parents with child care costs, investing in infrastructure and following a balanced budgetary policy.
I wish to share time with Deputies Kehoe and Pat Breen. I note that the senior Minister, Deputy Dermot Ahern, discarded his script which included a piece on decentralisation. Then the Minister of State, Deputy Parlon, who has responsibility for decentralisation, spoke but did not refer to decentralisation. The word "decentralisation" was great and I remember the Fianna Fáil choir playing the music and clapping former Minister for Finance, Charlie McCreevy, out the door. Little did he know that they were getting rid of him, sending him to Europe.
The word "decentralisation" was a buzz word and this week the Minister decentralised 100 jobs from Mayo, the county I represent. I thought decentralisation involved moving jobs and people out of Dublin to rural Ireland. I am disappointed the west of Ireland Minister of State, Deputy Treacy, allowed 100 jobs to be move from the Department of Agriculture and Food in Castlebar to Portlaoise. What kind of west of Ireland man is Deputy Treacy? That is the kind of decentralisation we have in Ireland, moving jobs from the west of Ireland to the midlands.
The Government tried to push him out of the Cabinet as well. He was the reluctant Minister who needed Deputy Walsh's support to remain in office. I have time for Deputy Brennan because he is not as arrogant as the rest of them. I have listened to arrogance all day and the people are waiting for Fianna Fáil. People expect arrogance from the Progressive Democrats. This budget was a wasted opportunity.
I see Deputy Parlon is leaving the Chamber. Perhaps he is being decentralised.
We will decentralise Deputy Parlon when we replace him with Mr. Charlie Flanagan after the next election.
The budget was announced yesterday and I hope that next week we do not have increases in fuel prices and by the ESB as we had on three occasions in the past year. It is no wonder the Government sought to protect people on low incomes by giving them €17 yesterday. Does Deputy Conor Lenihan know the price of a bag of coal, a litre of diesel, or a loaf of bread? He is used to being driven around in State cars but I could tell him the price of these items.
Deputy Conor Lenihan hates the truth. The people are waiting for him. I spoke to Deputy O'Connor, who could be a Minister of State tomorrow. We could have two Ministers of State in the constituency to try to save Deputy Conor Lenihan. Deputy O'Connor has such a strong vote that he will try to bring Deputy Lenihan in, but that will not happen because Senator Brian Hayes will take a seat.
This budget was a wasted opportunity but there is such a crowd of wasters on the Government side that it does not surprise me. The people have been feeling the pinch for the past few years. We have seen rip-off Ireland, in which the poor get poorer, the rich, whom the Government loves, get richer and the middle class gets squeezed. This budget has done nothing for the poor and the middle class. When it attempts to put its child care package into operation I can see nothing but difficulties for the Government. I hope this will not be so, as I know of people who find it difficult to live because of child care costs. I thought the Government would announce positive measures for these people but instead they received a pittance.
Today, constituents informed me that child care facilities and crèches had already raised prices before the budget was announced. Although a bonanza was expected, it did not materialise.
All voluntary groups agree the best way to target poverty is through child benefit. A measly increase was announced and the Government decided it was more important to remove 1% from betting tax. What control does the betting industry have over the Government? Why does the Government look after the betting industry in every budget?
The only positive measure in yesterday's budget was that people in the blood industry will have to pay tax. It was outrageous that people on low incomes paid tax but people such as Mr. Magner and Sir Alex Ferguson nearly brought down Manchester United and their business over the bloodstock industry and the famous horse, Rock of Gibralter.
People on low incomes should be treated better. I listened to the Minister for Social and Family Affairs, Deputy Brennan, a man who is not as aggressive as many of the Ministers. At a committee meeting we asked him to deal with widows and widowers and I was disappointed no initiative was announced to assist them. These people find themselves in a difficult position when they lose a loved one.
People with child dependants are at the same rate for the past ten years. Has a loaf of bread, a pint of milk or a pair of shoes stayed at the same price for the past ten years? I am sick of the Government referring to a time when Fine Gael was in Government. It is so long since we were in Government that it will not be long more until we are back in Government after the next election. Fianna Fáil has been in Government for ten years so it should blame itself for the way it has let down the poor.
We see between 200 and 300 billionaires not paying any tax in this State. They fly into this country for All-Ireland matches and race meetings and this is a disgrace. I call on the Minister for Social and Family Affairs to protect the increases received yesterday so that they are not wiped out by price increases on phones, ESB bills or food bills or by the county councils taking €4 of €5 from the €17 poor people got yesterday.
I have listened to debates about health in this country. The Government Deputies have spoken about elderly people and the package for them in the budget. The greatest scandal in the last two years has been the cutbacks in home help. Government Deputies are talking about the €150 million package but every day I am contacted by people in my constituency who have received letters from the health board informing them that it is cutting back on their home help. Is that not hypocrisy? Deputies on the opposite side are talking about a home care package, which is something I suggested two years ago, but they have done nothing to bring it about.
Most people want to live, die and care for their loved ones at home. There are no places for elderly people in State nursing homes or in private nursing homes, which they often cannot afford anyway. They are being left in bed and are not looked after because this Government does not care about them. All it cares about is the super rich. We had an opportunity in the last five or six years to improve the situation, with so much money in the country, but that money has been squandered by every single Minister in every Department. We see the over-runs and how much programme managers and special advisers are being paid while the people on low incomes have been let down.
I call on the Minister to ensure that whatever increases people on social welfare received in the budget will be protected and not clawed back by stealth taxes. There were 27 stealth taxes in operation last year. In the next few weeks county councils will finalise their estimates and we will see increases in refuse, water and other charges to pay for benchmark increases for the officials.
Deputy Ring is a difficult act to follow. Some of the Deputies opposite are also very hard to follow because they really believe in their own rhetoric. It will be very hard to convince some of them that this was not such a great budget. It was a headline-grabbing, cautious, pre-election budget. I welcome the elements of the budget that look after people on social welfare but overall, it is a missed opportunity for this Government.
There is much expectation before budgets but not so much afterwards. What difference will this budget make to those sitting in traffic, on hospital waiting lists, waiting for orthodontic treatment and sitting in prefabricated school buildings? Will their situation change tomorrow or in two or three years' time? I do not think so. Will the homeless be looked after following this budget? I do not think so.
This Government has made endless promises. It came to power in June 1997 and will be in Government for ten years by June 2007.
If the Minister of State conducted a poll this evening, most people would say that Mr. Ivan Yates was one of the most-liked and strongest Ministers for Agriculture this State ever had. He did a lot for agriculture, unlike the current Minister. One only has to look at the beet industry — for the first time in the history of the State, an agricultural crop has totally disappeared. I would like to hear the Minister of State's comments on that but he will not say anything because he knows it is an absolute disaster. One of the best cash crops in Cork, Carlow and Wexford has been wiped out by the Government.
Let us examine the promised by-passes at Enniscorthy, New Ross and Gorey. The latter has, admittedly, started but will take a long time to be completed. These were promised in 2002 and earlier, but the promises were empty. Problems at St. John's Hospital have been ongoing for 20 years. Phase one of the hospital has been built and we are still awaiting phase two, which I cannot understand. This is yet another promise made for County Wexford that has not been delivered.
Yesterday, the Minister for Finance spoke about third and fourth level education. I welcome the allocation of moneys to that area and also the Minister's plan for its development. I note that it is another five-year plan and I would like to know how many plans the Government actually has because it will run out soon.
Every time there is an announcement, it involves a five-year plan or a ten-year plan. I cannot understand this.
The Minister for Finance has drawn up another plan for third and fourth level education, which I welcome. However, the Government should focus on primary and secondary education in the first instance. I presume it drew up a plan for those sectors years ago but it has not been completed yet.
In the context of education, I wish to focus on two specific schools. The first is Gorey community school, which is totally overcrowded, with 1,500 students under one roof. The safety standards are so low they are horrifying. The principal is in absolute turmoil. More Fianna Fáil Ministers have visited the school than I have had hot dinners. The second school is the gaelscoil in Enniscorthy. The most recent announcement for that school was the allocation of eight brand new prefabricated classrooms. No doubt, they will be left there for another 20 years, until they are dilapidated and in disrepair.
This budget has not been so perfect for this Government. I welcome certain elements of it, for example, the provisions for younger farmers. However, there are fewer younger farmers now than in the past. They are not opting to go on to the land because the Government has made it very difficult for them. Young farmers see there is no living to be made from farming.
I welcome the reduction in excise duty on kerosene but the Minister of Finance forgot about the hauliers, who are paying over the odds for diesel. We are totally dependent on roads for freight transport because the Government has not invested sufficiently in the rail infrastructure. The cost of road transport has gone through the roof. In that context, I reiterate that this is not such a good budget.
Almost every Deputy on this side of the House has mentioned decentralisation but it is notable that none of the Government Deputies has done so. Deputy Dermot Ahern referred to it in his written script, but he scrapped the script and chose to ad-lib instead. I do not blame him for doing that. Under the decentralisation programme, 85 jobs were earmarked for Enniscorthy, 130 for New Ross and 325 for Wexford town. There was great fanfare in 2003 when decentralisation was announced. There was such a rush out through the door of the House, I thought the Government Deputies were going to bring it and the walls down with them. They dashed out to speak to their local radio stations and newspapers and there was great fanfare. Senior Fianna Fáil members told people in Wexford that the Department of the Environment, Heritage and Local Government, An Bord Glas and Bord Bia would be located in Enniscorthy, but there is no site.
Ivan Yates brought that about. What would we do without him? What would we do if Fine Gael had not been in Government from 1994 to 1997 to ensure Wexford was not neglected? I am glad the Minister of State raised Johnstown Castle and said that a Fine Gael Government located it there.
It was a Fine Gael Government that set up Teagasc in Johnstown Castle. I thank the Minister of State for reminding the House of that. I do not wish to blow our trumpet too much about what we have done for County Wexford because it makes the other side of the House look bad.
We handed the present Government a healthy economy in 1997 but it has squandered it and neglected this country.
I am delighted to have an opportunity to speak on the budget. It was an attempt to try to please everybody but it has pleased nobody. It was extremely unimaginative.
The child care provisions were a knee-jerk reaction to voters' concerns on the doorsteps of the commuter belts of Meath and Kildare. Most of these people, and homeowners everywhere, will still be reeling from the extortionate stamp duty rates on their homes. As the reality of their slightly improved circumstances sinks in, they will quickly face the challenge of rising child care costs. As my colleague, Deputy Bruton, said yesterday, this was a blatant attempt at a give-back to overtaxed and long-suffering middle and low income earners who have seen their salaries attacked from all sides by stealth taxes. In reality this budget has failed to tackle the many key problems of modern living, not just in the congested, overcrowded gridlock of the east coast but in all regions of the country where the centralised policies of the past nine years of this Government have left a legacy of under-investment, economic imbalance and rural decline.
Much has been made of the €150 million package to old age pensioners, but that is less than the amount spent on the PPARS wastage. As some of my colleagues pointed out yesterday, the benefits of this will not emerge immediately in 2006 but over an unspecified period. In my constituency many pensioners will give a qualified welcome to the pension increases of between €14 and €16 per week but will know that the value of such an amount will quickly vanish with the price increases of rip-off Ireland. The increase is a miserly nod to the very people who built up this State and have contributed over the decades as taxpayers. The Minister said that this increase puts his Government well on target for reaching the €200 per week mark by 2007. Obviously that is the election year but it would be much more welcome if the Government had reached its target in 2006 to help the many vulnerable people cope with rip-off Ireland.
Only this morning a constituent rang me at my office in Clare welcoming the increase in the carer's allowance from €153 to €180 but wondering where the job security was for this undervalued service. It keeps elderly people in their homes, provides them with company and comfort, frees up essential spaces in our nursing homes, contributes to a sense of local community and provides a modest measure of local employment. I had no answer for that person. He must soldier on, providing his essential service while the Government makes other noises in the House. Meanwhile rural Ireland continues to suffer. Just last week "Prime Time" highlighted the anti-social behaviour in rural towns. What has happened to the 2,000 extra gardaí promised by this Government? As usual, they are just a promise.
What has happened to the budget for fighting crime? Why can the extra gardaí I sought in this House from the Minister for Justice, Equality and Law Reform not be deployed to Kilrush to fight the problem there with anti-social behaviour?
A decent level of public transport for rural areas in the west would also have arrested decline. Transport 21 seems already to be gathering dust in the office of the Minister for Transport, Deputy Cullen. My colleague, Deputy Olivia Mitchell, pointed out that just €1.5 billion a year has been put aside for Transport 21, a plan that has been estimated to cost €35 billion. Meanwhile the Minister remains coy about the cost of upgrading the western rail corridor. It is generally believed that it will cost well over €300 million, less than 1% of the €34 billion promised by the Government to be spent on projects in the west. What provision has been made for applying meaningful transport policies to the west and what will the projected spend be? I tabled a number of parliamentary questions on this but have received very little in the way of answers.
I see that the Minister for Enterprise, Trade and Employment has joined us. I hope there will be meaningful change for people in small enterprises which are important and are the way forward for this country. We should have put more emphasis on small enterprises to boost not just the west but the whole of the country. A colleague from County Clare tabled a question on the number of new jobs created by IDA Ireland in the county in the past seven years. The answer was seven. The Government's commitment to job creation in the small business sector is disappointing in the extreme. It has failed to provide the incentive to boost indigenous business, the backbone of our rural economy, or to provide the training or educational opportunities for employees. The VAT threshold increases fall far short of what was sought by the lobby groups and well short of what the UK provides.
Overall, the broadening of the PAYE tax bands is welcome, but yet again a Fianna Fáil Minister for Finance has failed to tackle the issue of indexing the tax bands. The benefits will again be eroded by inflation and price increases as wage rises meet these costs.
Much has been said on the creation of fourth level education but where is the investment in our primary sector to reduce the pupil-teacher ratio? Only two weeks ago in Ennis, 600 people turned out to protest at the pupil-teacher ratio in schools throughout County Clare. We need to bring our schools up to a decent modern standard to give our children a decent start in life. Those over six might well be concerned after yesterday's budget because without a voice, they have failed once again to receive their due. Will their parents remember this come election time?
Accident and emergency services are under extreme pressure throughout the country. The accident and emergency services in Ennis General Hospital were promised €20 million over recent years but nothing will happen for maybe two years yet. Only last week I tabled a question on a CAT scanner, which is an essential part of a modern hospital, but was told once again it would depend on funding and budgets.
Most speakers have referred to decentralisation. We know that very few people want to go to Shannon with Enterprise Ireland. Kilrush is oversubscribed — 66 people have put their names down to transfer — but they are not from the Revenue Commissioners. However I welcome the fact that they want to live in Kilrush because it will boost the town at a time when it has developed something of a bad name.
From what we could gather yesterday, the budget was predictable and bears the hallmark of a Government that has run out of fresh ideas and is limping on until the next election in 2007. The Minister for Finance, Deputy Cowen, will have another attempt to fool the people but he will not succeed because they are tired of this Government and want change.
As Minister for Enterprise, Trade and Employment I warmly welcome the budget for 2006 presented to this House yesterday by my colleague, the Minister for Finance. I am confident the budget is good for business, work and the economy. It puts in place the essential strategies that will ensure Ireland's competitiveness in future. In the space of less than 15 years we have built a new, robust and successful economy, underpinned over the past eight years by the sound policies of the Government, which have ensured that the fruits of our success have been cultivated carefully, used wisely and distributed fairly. We have generated an economy that is the envy of many and a model that others are seeking to follow.
At the root of this exceptional performance is a deeply embedded commitment to pursue policies in a joined-up way across Government that boosts our competitiveness, a competitiveness that provides us with the means to improve equality and opportunity for all in society.
Budget 2006 represents a continuation of those policies and it will prove to be a watershed in terms of investment in our human capital, helping those on low income and social welfare payments, ensuring a business friendly yet fair tax system and in providing significant supports for child care, employment and entrepreneurship.
The Government's policies in the areas of employment and the labour market have delivered unprecedented success for our people. Employment increased by 96,000 in the 12 months to August 2005, bringing the total number of people at work to just under 2 million and we expect to create a further 60,000 jobs in 2006. Unemployment continues to be maintained at a low level of 4.3%, which is half the EU average. Long-term unemployment stands at 1.4%, which again is well below the EU average. Building on this exceptional performance, budget 2006 will support the continued growth of business and jobs in the economy.
While we now have record numbers in employment, upskilling the workforce is area which needs to be addressed if Ireland is to maintain its position as a leading-edge, knowledge-based economy. The 6% increase in funding from the national training fund for 2006 announced in the Book of Estimates a few weeks ago reflects my Department's commitment to the promotion of lifelong learning as a means of supporting the knowledge-based economy. Combined with a 9% increase in Exchequer funding for FÁS's training and integration supports, a total of €429 million will be available in my Department's Vote in 2006 for up-skilling people in and for employment.
I strongly support the budget announcement of €1.2 billion over the next five years to support change, innovation and infrastructure in higher education. This investment is a vital component in responding to the needs of our increasingly knowledge based economy and society. This investment and the development of the PhD fourth level of education has perfect synergy with my Department's investments through our enterprise agencies and Science Foundation Ireland and focus on driving investment in knowledge, research and development as a fundamental component of future competitiveness.
The substantial tax relief package in this budget has been widely welcomed by business and it reinforces the Government commitment to a low tax economy, it further incentivises employment, reduces pressure on labour costs and rewards workers. I particularly welcome the benefits to the average industrial earner, who will pay tax at the lower rate in 2006. The removal of those on the minimum wage from the tax net will assist those who are unemployed to transfer to the active labour market.
The Minister for Finance's decision to increase the VAT thresholds for small businesses will remove 2,200 businesses from the VAT net and will support small business development into the future. Last July, I established the small business forum to examine whether the strategies being followed supported and developed the spirit of entrepreneurship in Ireland. One of the issues that came out of the forum's deliberations was the fact that the current VAT registration thresholds were too low and had not been revised since 1994. The forum noted that an increase in the VAT registration thresholds would reduce compliance costs of accounting for VAT and would encourage early stage entrepreneurial activity.
In the Finance Act 2004, we reduced the capital duty on shares from 1% to 0.5%. The Minister, in budget 2006, has eliminated this tax which was an additional cost incurred by Irish companies raising capital by means of issuing shares. Now that we have eliminated this tax, it will further enhance Ireland's reputation as a place from which to do business, it will assist those businesses operating in the financial services sector and reduce the cost incurred by Irish companies raising capital by means of issuing shares.
Similarly, the major investment by the Minister in a new national child care investment programme will help to promote increased participation in the labour market, with the creation of an extra 50,000 child care places up to 2010. This initiative responds to the European employment recommendations which have been made to Ireland calling for the provision of a greater number of affordable child care places to support the needs of those in, or wishing to join, the labour force. I wholeheartedly support the Minister for Finance's decision to make a significant investment in this area, one that will continue to be built upon over a five year period.
The capital allocation to my Department for the five years 2006-10 amounts to just under €2.5 billion. This represents an increase of €271 million on the five year envelope for the period 2005-09 and reflects commitment to significant on-going investment in science and technology development, capital support for indigenous and foreign firms and upgrading FÁS training capacity to improve the skills of apprentices and other new entrants to the labour market.
With the increased capital envelop, my Department's allocation for science and technology will amount to €257 million, a €39 million increase on 2005 and a reflection of the continuation of the significant investment in science and technology which has been underway now for a number of years. The extra funding announced in the budget will be used to increase in-company research and development and to strengthen collaboration between industry and the education sector and will follow through to the subsequent years of the five year capital envelope.
Science and technology remain at the forefront of the Government's priorities. To sustain economic growth and prosperity, we must achieve a globally competitive knowledge-based economy with high levels of research, development and innovation. The Government's goal is that by 2013, Ireland will be internationally renowned for the excellence of its research and will be at the forefront in generating and using new knowledge for economic and social progress within an innovation-driven culture. The commitment to investing heavily in science and technology, as demonstrated in the budget, will enhance Ireland's reputation as an ideal location for research and development.
Budget 2006 will put more money into the pockets of workers, particularly the lower paid. The Government is committed to keeping inflation down and ensuring that consumers get value for money. As Minister for Enterprise, Trade and Employment, I am determined that consumers will not be taken advantage of because of their increased spending power. My Department's spending on consumer affairs will increase by 76% in 2006 to €7.2 million. As well as continuing to fund the work of the Office of the Director of Consumer Affairs, the increased allocation will support the activities of the interim board of the new national consumer agency which I appointed last June. A total of €3 million of new funding will be allocated to the interim board to carry out some initial work in the area of consumer awareness, advocacy and targeted research and to prepare for the establishment of the statutorily-based agency.
The allocation for the Competition Authority for 2006 has also been increased by 15%, to €5.831 million. This will provide the authority with the opportunity to double resources in its cartel enforcement division and enable it to substantially increase the number of investigations that it can carry out into criminal breaches of the Competition Act. These increases will help to demonstrate to consumers that real change is underway and that their interests are being supported.
This is a budget which strikes the right balance between addressing the needs of the economy by helping it to prosper, the needs of those in work, especially those on lower pay, and the needs of those in society who require our support, such as the elderly, the unemployed and young children. It is a budget that reinforces Ireland's position as a leading location in which to do business, a leading location in which to work, and a leading location in which to live and, as I said at the outset, it will prove to be a watershed in the development of our economy and Irish society.
I am pleased to contribute to this very important debate. This is the ninth consecutive budget presented to the people of Ireland by this Fianna Fáil-Progressive Democrats Government and is, as I was glad to hear Deputy Kenny admit today, a budget that the Irish people deserve. Over these nine budgets, a clear and focused strategy has been followed, which has positioned this modern republic of ours as a country that is looked up to all over the world. This has all the more significance, as Deputies will be aware, because it is not that long ago that the opposite was the case.
Now we can hold our heads up proudly, as this nation and its people have a better place to live than ever before, due in no small measure to a Government which has taken the right decisions and created an economic and social climate of promise and opportunity. For the brave men and women who won our independence 85 years ago, such progress would have been hoped for but, in reality, scarcely thought possible. We have come to where we are not by chance but because policies have been implemented which have allowed the Irish people to achieve extraordinary things.
This is undoubtedly the longest era of sustained prosperity in our history. We were criticised for it but careful fiscal management has created an economic environment that has attracted investment, practically eliminated unemployment and for the first time in a generation given our people a choice to remain in their own country.
In my position as Minister of State with responsibility for European affairs, I am continually struck by the extraordinary journey which our country has travelled over the past few years. Less than two decades ago, we were one of the Cinderellas of the EU. Today we are at the top of the 25 and even as traditionally powerful states, such as France and Germany, experience sluggish economic growth, Ireland continues to power forward. For the new member states and for those close to EU accession, we are a perfect role model and a template which they all seek to emulate.
This budget is a generous, responsible and focused set of provisions which will sustain economic progress while improving the quality of life of all our people. Underlying all that this Government does is a genuine desire to spread our continuing prosperity as evenly as possible and to ensure that policies of fairness and equality, are always pursued.
By protecting and growing the economy through investment in infrastructure, low corporation tax and increased levels of funding for education and training, we have generated the means to target resources where they are most needed. There is no doubt that this is one of the fairest and most socially progressive budgets ever produced by an Irish Government. We have generated the means through prudent economic management and now we are setting about using them.
We have ticked all the relevant boxes because that is what good and accountable Government is elected to do. We are investing far more in our future, through enhanced capital spending in education at all levels, including a new package to promote innovation in our universities.
Budget 2006 introduced a truly innovative package of measures for child care and a big increase in the old age pension, fuel allowance and carer's allowance. It increased social welfare rates well ahead of inflation. It will keep those on the minimum wage out of the tax net — a record 740,000 people. It will keep those on the average industrial wage out of the higher tax rate. It will reform tax reliefs so tax payments more fairly reflect ability to pay. It will freeze indirect taxes and reduce other taxes. It will introduce special reliefs designed to improve our environment and it will relieve the tax and administrative burden on business and on small business in particular.
Budgets are now generally a challenge for the Opposition. Holes must be found and weaknesses probed. Sometimes these are found and exploited but no amount of verbal ingenuity can mask the frustration of this Opposition, which has been undoubtedly stumped. The best it can come up with in muted response is that it is an election budget. Speaking of elections, it is once again worth reminding the House what things were like when the main Opposition parties, Fine Gael and the Labour Party, were last elected to Government. This was a time when the economy was on its knees, a real basket case or the poorest of Europe's rich, as we were famously described in 1987. Thankfully, my party, Fianna Fáil, returned to Government that year and set about pulling the country out of the doldrums of the previous five years. Due to utter mismanagement and incompetence, Fine Gael and the Labour Party had presided over a situation where taxes had gone through the roof and inflation was rampant. People were being taxed at 65%. This week Deputy Rabbitte said the highest tax rate was too high——
——and that more people should be taken out of the top tax band. That is what the social and morally proper party is looking for. It is bankrupt of ideas.
Industrial unrest was widespread while our young people were leaving in search of jobs in numbers not seen since the 1950s.
The facts of history also show that in 1987, faced by an economic wasteland of incompetence and mismanagement, the Taoiseach, the then Minister for Labour, crafted our first social partnership agreement. This first agreement became the template on which stability and prosperity was built and continues to be a crucial aspect of economic and social policy.
In my 23 years as a Member of this House, I have never heard an Opposition so at sea in its response to a budget. It has been wrong-footed and responded accordingly. We have one more budget to go before we put ourselves before the people and I am confident that when the time arrives, the people will recognise what has been achieved over the previous ten years. It is my great pleasure to commend this budget to this House for its approval.
The package of increased capital expenditure and tax initiatives announced by my colleague, the Minister for Finance, yesterday once again demonstrates the Government's success in delivering improved social services and key infrastructure. The announcement of an additional capital provision of €130 million for 2006 and revised capital envelopes for 2006 to 2010 for programmes within the remit of the Department of the Environment, Heritage and Local Government are very welcome. The Revised Estimate of €2.729 billion for the Department is the biggest ever Government spend on local government, up by 7.9% on the provision for 2005. The total funding available to the Department next year will be €3.608 billion when account is taken of the local government fund, the environment fund and a PPP provision of €20 million, that is, an increase of €236 million or 7%.
In my area of responsibility, housing, I very much welcome the additional provision of €54 million which, together with the additional €53 million announced in the Abridged Estimates Volume, brings the Exchequer capital provision for housing next year to almost €1.25 billion. This is up 9% on this year's Estimate and is almost double the level of spend five years ago in 2000. The total Exchequer provision between current and capital in the housing budget is €1.37 billion.
These additional resources will allow us to start 6,000 new units of local authority accommodation, to continue to develop the voluntary and co-operative housing sector and advance affordable housing. New five-year action plans in place at local authority level provide the basis for delivering accelerated programmes in a coherent and integrated fashion.
Building on our achievements to date, we will outline a new statement of housing policy over the coming days, which will place this investment in a broader housing context. Our focus is on making best use of the resources available to respond to the maximum number of households in need of accommodation. By the end of this year, almost 100,000 households will have been assisted through various housing measures since 1997. Many more will benefit from the increased funding under multi-annual capital programmes announced yesterday. This is further demonstration of our strong commitment to meeting the needs of low income households.
The Government attaches great importance to social inclusion. While the social and affordable housing programme is the most significant measure available to the Department in this area, the Government has also demonstrated its commitment in recent years through the development of other supporting policies and programmes and the allocation of resources both at national and local level to tackle social exclusion in a real way.
As part of the local government modernisation programme, local authorities have been expanding their role in social inclusion and community development. In recognition of this and to give further impetus to support and strengthen their work in this area, an additional provision of €6 million for social capital is being made available to local authorities. This funding, together with other local authority social inclusion initiatives, means that a total of €20 million will be provided by my Department to support initiatives and programmes in this area in 2006. The Minister, Deputy Roche, will make further announcements in this regard shortly. This €20 million is on top of the €1.25 billion for local authority housing.
I welcome the establishment of a national carbon fund in the Budget Statement with an initial allocation of €20 million. I also welcome the nomination of the National Treasury Management Agency as the purchasing agent for carbon credits on behalf of the State.
Major important heritage properties will benefit as a result of the additional €5 million capital and the tax relief announced in the budget for the Irish Heritage Trust. This is on top of the amount provided in the Abridged Estimates Volume for the establishment and initial running costs of this trust.
From the point of view of the Departments of the Environment, Heritage and Local Government and Community, Rural and Gaeltacht Affairs, there were many good features in yesterday's budget. I look forward, as I am sure the Government does, to delivering on many items which, unfortunately, time does not permit me to go through.
I welcome the opportunity to speak on budget 2006. What would the main Opposition parties have done differently? What would they have changed if given the opportunity? I listened to Deputy Kehoe rail against lack of planning in education. I remind him and others who are interested that when Senator O'Rourke was Minister for Education, Fianna Fáil introduced legislation to recognise the institutes of technology which were then RTCs, while the Dublin Institute of Technology was underpinned with legislation. The former Minister for Education and Science, Deputy Martin, was involved in setting up the National Qualifications Authority. This has grown through the research and development fund which was set up. This budget introduced the strategic innovation fund — the fourth level about which we speak.
Deputy Kehoe also talked about primary level. I remind Deputies opposite that they handed over the national finances in good stead but it is very easy to do that when their Minister for Social Welfare gave almost the lowest social welfare increases in the history of the State in his last budget in 1997. That Government had seven school building projects in the country. This year there will 1,200 school building projects.
I remind Deputies opposite that teacher training had been cut back and those of us who were at the coalface talked about something dreamed up by civil servants whereby we could get the odd extra teacher through something called the "demographic dividend". The reason was that no teachers were being trained. I will not even attempt to remind the House how many additional teachers are now in our schools as well as special needs assistants and resource teachers. There will be 500 additional primary teachers in our schools in the next two years.
It will not wash for anybody to talk about the Government's inability to plan.
This budget sets out to improve people's lives by helping the most vulnerable groups in our society. Families, children, the less well-off, the sick and the elderly will benefit significantly from this budget. Surely, that is welcome. I hope no Government of any composition would do different.
Deputy English and I had the honour of being involved in drawing up what I believe is the template for the major initiative on early education and child care, which I greatly welcome. Deputy Jim O'Keeffe was the rapporteur. As long as I am in this House, I will ensure the programme laid out in this document by the National Economic and Social Forum is implemented to the letter and in full over ten years. I compliment Dr. Maureen Gaffney, Professor John Coolahan and the other people in the National Economic and Social Forum.
In his submission to the Oireachtas committee, Professor Coolahan said the report was realistic and feasible and that a wish list of unrealistic aspirations could have been provided, but that would not have been helpful. He said the proposals are gradual, built on sustained progress, and that the idea is to maintain a sustained pattern reflected in the use of a ten-year plan comprising two five-year slots — 2005 to 2010 — with adjustments made to circumstances for the second five years. He said it is believed this target is needed to bring about significant changes.
I welcome the Government's announcement today that an executive agency will be set up under the aegis of the Minister of State with responsibility for children, Deputy Brian Lenihan, to co-ordinate the initiatives in this area. To those who say the additional payment for children under six years of age is not enough, I say this is year one. I read an article today outlining how child care and early education grew in the Reggio-Amelia area of Italy. It started in 1963 and it was only by taking incremental steps in 1971, 1973 and 1980 that it grew the sector of early childhood care and education. It is a pity some of those Members who say they are left-leaning are not around to hear that it is now the envy of countries such as Cuba, Venezuela, Brazil, France and Sweden. This initiative will go down in history as a hugely significant one.
Over-regulation must be avoided and that is why I welcome the €10,000 income tax and PRSI disregard for those who wish to look after children, other than their own, in their homes. We must ensure quality and provide enhanced standards but that is not the same hidebound regulation. The package announced by the Minister for Finance and the resources allocated to the strategy are also very welcome. As I said, the €10,000 income tax and PRSI disregard is hugely important.
Child benefit has been transformed and is now four to five times the value it was in 1997. The new child care cash payment of €1,000 per year for children under six years of age is the equivalent of a €5,000 tax allowance at the standard rate per child. Some €2,800 per child under six years of age will be paid this year. I fully expect this will be built on incrementally. I have no doubt this is feasible and is what families want.
While experts helped us to understand it, we are putting the child at the centre at long last and are moving away from the notion that we are responding to an economic situation which, of course, we are also doing. However, we are primarily putting children at the centre and ensuring they are given the opportunity to develop. American research has shown that for every dollar invested in early childhood care and education, the rewards reaped are a factor of seven, and 14 in terms of the reduction in costs such as the costs associated with early school leaving, ill health, imprisonment and so on.
I strongly support the move towards opportunities for parents to remain at home in the first year of their child's life. I warmly compliment the Minister on the way he has grasped the opportunity to extend maternity benefit. He proposes to do in two years what we spoke about doing in four. The extension of parental leave is also hugely important. The mix of such initiatives will make a huge difference.
Co-ordinating the whole area of child care and early education in one Department will make a difference. That call has been made for some time, including by the Oireachtas committee. I look forward to the day when we have an early education and child care sector which is the envy of the rest of Europe.
The balanced and thorough approach is in response to one obvious fact about child care, that is, that there is no quick-fix, one-size-fits-all solution. If we attempted to tackle the issue in that type of blinkered fashion, we would only insult parents and their children as well as head down the road to failure. This country has been bedevilled by the pilot project syndrome. I am pleased we are adopting a long-term strategy for early childhood education and care in the same way as we adopted a multi-annual, long-term strategy for the disability sector last year and in the same way my colleague, the Minister of State, Deputy Noel Ahern, spoke about the long-term strategy for housing. That is how this country should develop.
This strategy recognises that parents have differing views about the best type of child care for their children. Some people wish to provide care in the home for a period of time after the birth of a child or for the pre-school years while others wish to use part-time nurseries and crèches while working in the home. Many will wish to place children in the family home setting using the service of family members and neighbours.
The story underpinning budget 2006 demonstrates once again that the public finances remain strong. This strength has been hard earned and this budget shows that we will maintain a responsible approach to ensure our economy continues to bring real and sustainable improvements in public services, social provision and infrastructure.
I was also pleased to see the package dealing with the care of the elderly. There have been significant increases in social welfare pension payments. Naturally, it is gratifying to hear people like Sean Healy of CORI welcome this year's package of measures as going a long way towards meeting targets set out in the national anti-poverty strategy. Older people, like the young, are best cared for in their own home. With the package of measures provided in the budget, that is more possible than ever before. In this budget, we have confirmed our commitment to social inclusion by helping in a real way those who are less well off while at the same time underpinning a very strong economy.