Thursday, 6 December 2012
Financial Resolutions 2013 - Financial Resolution No. 15: General (Resumed)
Yesterday the Ministers, Deputies Noonan and Howlin, delivered the Government's second budget. This is not an easy budget for the people of Ireland nor could it have been, but it is a necessary step as part of our long-term plan for economic renewal. This budget is about supporting jobs, and about ensuring that the burden of the adjustment is fair. To fulfil our potential as an economy and as a country, we have to restore the public finances to a healthy condition. That is our real challenge as a country.
The budget will deliver the necessary fiscal adjustment, but it will also provide extra support for job creation and for small Irish businesses. Our role is to build the supportive environment so that the private sector can deliver the jobs that our people and our economy need.
I do not accept that we must be saddled indefinitely with current high rates of unemployment, slow growth and a squeeze on disposable incomes. These are neither inevitable nor tolerable. Our ambition is to move beyond the progress achieved to date, and to tackle these key issues head on.
Without the difficult action taken by the Government, the economy would not be on a solid pathway towards recovery and growth once again. Since taking office less than two years ago, the Government has worked to address the economic crisis we inherited from the previous Administration.
Some commentators attribute all of our economic difficulties to the banks and the enormous bailouts given to them by the previous Government. The reckless behaviour of banks and the equally reckless bank bailouts of the previous Government remain a major burden on the Irish people, and one which our European partners have now promised to reduce through renegotiation of the bailout deal, but reducing the burden of the bank bailouts will not, by itself, keep our economy on a sustainable path back to prosperity and full employment. This requires that we tackle with equal determination the two other economic legacies of recent Fianna Fáil-led Governments - the damage done to our export and foreign direct investment-led economic model during the credit-fuelled property boom and the massive underlying deficit we inherited in the public finances.
Even if the State had no banking-related debts whatsoever, we would still be dealing with an unprecedented gap between Government revenues and spending - the legacy of the reckless unfunded spending commitments of the previous Government and its "when we have it we spend it" philosophy. Even if the State had no banking-related debts whatsoever, we would still be dealing with the massive job-destruction legacy of the property and construction crash - the legacy of what one might call the "Galway tent" school of economics that left hundreds of thousands of our people without work and in need of re-skilling for the more sustainable, enterprise-led economy that we are trying to recreate.
Since taking office less than two years ago, the Government has worked hard to address the economic difficulties we inherited. We have prioritised fixing the public finances, restoring the banking system to some sense of normality, and supporting job creation and economic growth. Our economy finally returned to growth last year with GDP increasing by 1.4%, the first annual increase in GDP since 2007. We anticipate further modest growth this year. It proves that the Irish economy can grow even during a period of necessary and difficult budgetary consolidation and in a very challenging international environment.
The labour market has shown encouraging signs of stabilisation in recent months. While unemployment is still unacceptably high and its effects are felt far too wide, the most recent quarterly figures show that the employment situation has stabilised. The pro-job measures in the budget aim to build on these tentative steps to encourage greater job creation and investment.
Over the past year 20,000 new private sector jobs have been created following the loss of over 250,000 jobs in the private sector during the previous three years. The package of measures in the budget announced yesterday aimed at the small business sector will encourage businesses throughout the country to start expanding and hiring again. They will restore a much needed measure of confidence to the job creation sector.
The budget is a building block in the transition from the old failed economic plan based on property speculation and debt to a new competitive Irish economy based on enterprise, exports and innovation. That competitiveness is crucial for continued investment so that jobs can be created.
We have also seen signs of stabilisation in other parts of the economy, such as the property market. Residential property prices show a modest increase over the most recent three-month period, and the pace of annual decline is at its slowest since September 2008. While there is some way to go before the market returns to more normal levels, the latest surveys show the past quarter having the largest volume of mortgage loans issued since the end of 2010 - 3,983 for the third quarter of the year.
Budget 2013 also sees Ireland continue to face up to its economic challenges. Ireland and its people are recognised internationally for its sensible and pragmatic approach in dealing with our financial difficulties. This has greatly helped the Government in its important work of restoring Ireland's international reputation, which, as the House will be aware, had been badly damaged under the previous Administration. We continue to make very significant progress and there are many clear signs that Ireland's reputation has steadily improved.
In recent months the country has taken it first steps to restoring its economic independence by returning to the international markets for funding. Both pillar banks have raised money in the markets without State guarantee. Last year saw exports reach new heights of a record €173 billion - some 10% higher than in 2007, the highest pre-crisis figure. A good export performance is expected again this year. Nobody can deny the importance of that.
Budget 2013 will build on this progress by reducing the transport and export costs of small and medium sized businesses. Export transport is provided by hauliers, the majority of whom themselves are small businesses. I am pleased to note the introduction of a rebate on diesel with effect from the middle of next year.
This will also benefit the export orientated foreign multinational sector. Over the past year we have seen a strong line of investment decisions from new and existing multinationals creating thousands of new jobs.
Important job announcements from both indigenous and foreign companies include the Kerry Group, Voxpro, Paddy Power, EA Games and Arvato Finance, to name but a few. These are all strong signs of confidence in Ireland and show that our considerable efforts to rebuild our reputation are bearing fruit. A significant amount of work remains to be done and the challenges before us are great.
We will continue to work to enhance our international reputation. Our EU Presidency, starting in January, will give us another opportunity to demonstrate our strengths as a nation. The one thing that no money can buy, however, is a reputation for hard work, creativity, skill and strength of character. The Government is not complacent about the challenge ahead. We acknowledge and fully understand the hard work of the Irish people to get us to this position. They know that there are no easy answers to restoring this country’s prosperity and future progress. I thank them for their indulgence, understanding and patience.
Despite the many changes made as a country, we continue to spend more than we collect in revenue. This has to be addressed. Fixing our national finances and putting them back on a sound footing is an absolute prerequisite for job creation and economic growth. It is absolutely necessary for confidence and certainty in our economy. To this end, the Government remains fully committed to the 2013 deficit ceiling of 7.5% of GDP and to reducing our deficit to below 3% of GDP by 2015. For 2012, we will be well within our deficit target agreed with the troika.
In May, the Irish people voted overwhelmingly to ratify the fiscal stability treaty. This much needed reform will ensure that governments now and in the future will manage the public finances appropriately and sustainably, so that what happened in the past will never recur. In recognition of mistakes made by previous governments, this budget has broadened the tax base. For too long, successive governments have relied on a very narrow source of revenues. The introduction of a fair, progressive and proportionate property tax will help us to address the budget deficit and will help to avoid additional taxes on income. Increasing income taxes at this time would only serve to destroy jobs, hit working families and affect our competitiveness. These families and their futures are the central focus of this budget.
As the Minister for Finance reiterated in his speech, in order to underpin the high levels of foreign direct investment and sustain indigenous enterprise and job creation, we will maintain Ireland’s 12.5% rate of corporation tax, which is a long-standing and core element of our enterprise strategy. Ireland’s corporation tax regime is transparent, easy to navigate and very close to the effective rate of 11.9%. This is to provide certainty to Irish businesses so that they can plan for the future with clarity and confidence, and thereby create more jobs.
Obviously, the Government is not satisfied with the high level of unemployment throughout the country. For this reason we have deliberately focussed on job creation and are committed to ensuring that our policies support strong and sustainable employment growth. We are committed to adding 100,000 jobs to the economy by 2016 and to have 2 million people in employment by 2020. To achieve this, as I have said on many occasions, I want Ireland to be recognised as the best small country in the world in which to do business by 2016.
Earlier this year we launched a comprehensive and detailed action plan on jobs. That action plan is about taking incremental and necessary steps right across Government to support enterprises to grow, create and retain jobs - quarter by quarter, reform by reform and step by step. In tandem with our action plan, we launched Pathways to Work, which is a fundamental reform of the way we support, engage with and treat jobseekers. The recently launched new, integrated service Intreo transforms the way we support jobseekers back into jobs, treating people looking for work as real contributors to our society and not as mere statistics. This new service is already working well, offering new hope and new opportunities for the future.
We have sought to maximise private investment in much needed infrastructure. Last year, we announced the establishment of NewERA and the Strategic Investment Fund. NewERA is a key commitment in the programme for Government and is central to the Government’s plans for job creation, investment and reforming how the Government manages its semi-State companies. In August, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, published a national broadband plan which sets ambitious targets for the roll-out of high-speed broadband throughout the entire country. Some 200 secondary schools are currently being connected throughout the country as part of that plan, thus giving young people the opportunity to connect with the world.
To improve the availability of credit for business, the credit guarantee scheme commenced in October of this year. Initially, the scheme will facilitate up to €150 million of additional lending per annum to small and medium enterprises, in addition to the lending targets set for the pillar banks. It will provide a 75% State guarantee to banks against losses on qualifying loans to firms with growth and job creation potential. A microfinance scheme also opened for business in October. This will provide loans on a commercial basis for start-up businesses and micro-enterprises, which are very important for communities all over the country. Over a ten year period, it is expected that over €90 million in additional lending will be provided to 5,500 micro-enterprises with the potential to support the creation of an anticipated new 7,700 jobs. This drive is being led by the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Perry.
This budget is about building on the progress of the past 18 months to create more jobs and support small Irish businesses. It introduces further measures to support Irish business and sustain our economic recovery. As in our first budget, we have not raised income tax. We want to make work pay for families. We do not want to add extra taxes onto jobs and investment, which would be a step back on our path of national recovery.
Supporting small and medium-sized Irish businesses, which have a presence in every townland across the country, is absolutely essential if we are to get our country working again. Therein lies the key to Ireland’s future prosperity. The ten-point tax plan for small business is therefore a central feature of this year’s budget. The plan includes a series of measures that, taken together, will make a real difference to small and medium enterprises. New measures in that plan include, first, a 25% increase in the threshold for VAT cash receipts basis accounting, to improve cashflow for small and medium enterprises, which is so important and so often raised with us. The threshold will be increased from €1 million to €1.25 million. Second, a doubling of the amount of expenditure on research and development by small and medium enterprises eligible for tax credit, to support more innovation by businesses. The threshold has been increased from €100,000 to €200,000. I see evidence of this all over the country when I visit these small and medium enterprises. This issue means real progress for many such SMEs. Third, extending the employment investment and incentive scheme, which was due to run out in 2013, to 2020. This supports investment in businesses by providing tax relief of up to 41% on investments up to €10 million in companies. This extension gives clarity and definition to the horizon for planning and investment by these companies. Fourth, measures to reduce the burden of tax compliance for start-ups and small businesses, including an extension of the three-year corporation tax relief scheme and moves to look at ways of reducing costs of compliance for micro businesses. As Ministers are aware after engaging with so many businesses around the country, this is an issue that has been raised on many occasions. Fifth, an extension of the foreign earnings deduction scheme, to support companies putting personnel abroad - or “boots on the ground”, as they say - in eight more countries, which will help our agricultural sector in particular to export more. I am always enthused by the energy and ambition of so many young people to work abroad in promoting Ireland and selling the country's brand products. This extension of the foreign earnings deduction scheme to eight new countries offers opportunities for further trade, exports and therefore more jobs all over the country here in Ireland.
As we know, credit is the lifeblood of business and this is recognised in the budget.
The Government has provided for the delivery of a range of new and improved supports for companies in need of credit and is using resources to leverage funding from the private sector to provide credit for all business sectors. Among the new initiatives in this regard is a €700 million seed and venture capital scheme in which €175 million in Exchequer funding is expected to leverage a further €525 million in private sector funding. I strongly support this and expect that more than 100 innovative Irish companies will benefit with the potential for the creation of thousands of jobs and hundreds of millions of euro in additional exports expected as a consequence. An additional Exchequer allocation of €25 million under the development capital scheme will now provide a total of €225 million in funding to mid-sized indigenous firms to target the development of a really strong indigenous sector comprised of strong indigenous companies. The National Pensions Reserve Fund is also developing a range of support funds for the small and medium enterprise sector, initially ranging in size from €100 million to €400 million, to provide equity, credit and recovery investment.
Another area in which I perceive great potential for Irish business and especially the tourism sector is the extension and reform of the Irish film relief scheme. The decision to extend the film tax relief scheme to 2020 will put Ireland on the map and make us even more attractive for foreign film and television productions. This is an area the Government intends to pursue strongly in the new year and I note the hospitality sector also will gain from the retention of the lower level of VAT. I want Irish agencies to promote Ireland proactively in major production centres around the world. We have the talent and support services, as well as a land and cityscape, that should be attracting new business and productions.
The budget is fair because at its heart is a plan to create new opportunities for jobs and income growth for struggling low and middle-income families. There is no doubt that this is a difficult budget and it will have an impact on families across Ireland. However, it is as fair and equitable as possible. The Government has ensured that those who can afford to contribute most will do so. Primarily, it is supporting hard-working families struggling to make ends meet by not increasing income taxes. Moreover, it is providing an additional 6,000 after-school child care places to help hard-pressed working families balance working and family life. It is ensuring that everyone makes a contribution to the national effort by widening the tax base and introducing a property tax, including a higher rate for those who have houses worth more than €1 million.
While it is true that the Government wants to encourage those on average incomes to save for pensions, it can no longer allow pensions of the scale previously accepted to be accumulated at the expense of taxpayers. In this regard, tax relief on pension contributions will only serve to subsidise pension schemes that deliver incomes of up to €60,000 per annum. Tax relief on pension contributions will continue at the marginal rate of tax and the pension levy announced as part of the jobs initiative will not be renewed after 2014. In addition, while it will only contribute a modest amount to the total fiscal adjustment, the Government has introduced new reforms to political pay, expenses and allowances. It was an overdue step to introduce vouched expenses for politicians. It has also ended the practice of severance payments for officeholders and has introduced proper auditing of the leader's allowance following a cut of 10%. In the new year, I expect to appoint a referendum commission on a permanent basis. Next autumn will see the people decide on the future of Seanad Éireann by referendum and consideration will also being given to recommendations put forward by the Constitutional Convention.
This budget is a building block in the transition to a new enterprise-focused economy. It will ensure we reduce our deficit towards a more sustainable level. It has introduced a number of targeted measures to support business, job creation and growth across all sectors. The Government will do everything it can in 2013 to make sure its policies support job creation and growth. The measures announced in this budget are only the first steps in this effort. Work is well advanced on our action plan for jobs report for 2013, which will be published early in the new year. The Government will continue to work with our European partners to address banking debt issues, which are of such importance to us and I note Ireland's Presidency of the Council of the European Union commences formally in January.
A Cheann Comhairle, I wish to acknowledge the severe and damaging impact on Ireland as a result of the economic crisis of recent years. The scale of the cumulative budgetary adjustments to date, though necessary, has been painful and challenging and is very difficult. Every day, I speak to people who share their experiences of hardship, whether through losing a job or as a result of the impact of changes to valued public services. The Government is committed to making sure it does everything in its power to restore this country’s economic prosperity in everyone's interests. Just as I expect our country to emerge from the troika programme next year, so too do I intend to put an end to austerity budgets and while this will not be easy, it is achievable. One must not forget or neglect the many strengths of this country. We have faced a very serious and destabilising economic crash, unprecedented in its scale and have done what has been necessary.
I see a bright future ahead for our people. We have already seen many positive signs including renewed private sector job creation, sustained and significant foreign investment, strong exports and restored access to international funding markets. I acknowledge these developments may not yet translate into visible improvements at the local and community level. We are on a difficult journey but we are travelling with a sense of purpose, a clear objective and a clear goal. My vision of Ireland is one where those who are unemployed can find jobs, where rising incomes reward hard work, where the most vulnerable in our society are supported by reformed and reinvigorated public services and where we can grow old with a sense of dignity. This is a fair, equitable, and pro-jobs budget. The Government has set the country on the path to recovery and will get Ireland working again. I commend the budget to the House.
This is a difficult and hard budget that will hit many people’s pockets. However, it also is a necessary, honest and fair budget. This budget is not an end in itself but is a step that, as a country, we must take on the road to recovery. This is the budget that takes us 85% of the way and it is a bridge to the future. For weeks, all one has heard from the Opposition is fairytale economics. As for Fianna Fáil, there is no such thing as BC or AD as history begins in March 2011. As for Sinn Féin, what it does in government in Northern Ireland has absolutely no bearing on what its Members say down here and for the Technical Group, arithmetic is an imperialist plot.
We would all love to go back in time and to start again from a different and more favourable place. We would all like to undo and roll back the damage that was done to the people by the greed of the few. While it would be wonderful if a small group of other people could pay for everything, the Irish people know that is not possible. What we can and must do is repair the damage, pursue the guilty and then wipe our feet on the mat and move on. This budget is a bridge to the future, because it is necessary to get us from where we are to where we need to be. The mission of the Government is simple, namely, to fix the economy in order that it works for the people and delivers for the needs of the many, not the greed of a few. Moreover, the Government's means of doing that is not by shouting at the problem but by taking the difficult yet necessary decisions that must be taken.
There are many in this House whose favourite word is "austerity" and the word is bandied around at every possibility. However, the Government is not engaged in a policy of austerity. It is engaged in a policy of solvency. Our country is in an EU-IMF programme because the last Government reached a point where no-one would lend money to Ireland. After 14 years of misgovernment and after the fatal mistake of the bank guarantee that Sinn Féin supported, the point was reached at which no-one would lend Ireland money at any price.
That is the key point as a country that cannot fund itself cannot function, and the economy of that country cannot function either. Once the creditworthiness of the State is undermined, there are profound implications for the rest of the economy, for firms large and small and for families young and old.
The first step on the route to recovery is to restore financial stability and rebuild the creditworthiness of the economy. This budget is part of that process. Such was the extent of the property bubble that this year, even after all the consolidation we have done, the Government will take in €12.6 billion less than it will spend. We will borrow €42 million per day to finance the State. That is simply not sustainable or just, as we are passing on debt to the next generation. This budget takes us another step closer to bridging that gap and bringing our deficit down to a sustainable level.
The Government has been clear that fiscal consolidation on its own will not solve our problems. We have a three-dimensional crisis and we need a three-dimensional solution involving restructuring the banks, dealing with the budget deficit and doing everything possible to promote employment. Our employment strategy is itself built on a number of pillars, each of which involves major programmes of change and reform. During the summer, we launched a major stimulus package, progress on which was reported in the statement by the Minister for Public Expenditure and Reform, Deputy Howlin, yesterday. Pathways to Work is nothing less than a transformation of the way in which we think about and deliver social welfare services. Yesterday, my colleague, the Minister for Social Protection, Deputy Joan Burton, was able to announce a further 10,000 activation places to assist people on the live register. The Minister for Jobs, Enterprise and Innovation, Deputy Bruton, is driving the implementation of a suite of supply side and competitiveness measures and working with other colleagues to develop a plus-one initiative to tackle long-term unemployment. The Minister for Finance, Deputy Noonan, yesterday announced a suite of measures to assist small business and the agrifood sector, including funding for enterprise from the strategic investment fund, to add to measures taken last year.
The domestic economy, which is still a major challenge, is beginning to stabilise. The budget measures announced last year assisted the normalisation of the property market that is taking place, and further measures on commercial and residential property are contained in this year’s budget. Allowing early withdrawal of additional voluntary contributions, AVCs, which has the potential to stimulate domestic activity, will be provided for in the new finance Act. The Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, is bringing forward a major programme to promote construction activity in the retrofit area.
The biggest drain on the domestic economy is the uncertainty and fear that surrounds the problem of household debt. Before the end of the year, the Personal Insolvency Bill, a massive undertaking, will pass all Stages in the House, and the personal insolvency service will go live on 1 February. As families begin to sort out their debt issues and as others see there is light at the end of the tunnel, we will begin to see an impact on consumer confidence and investment.
In my own portfolio, the Minister for Finance, Deputy Noonan, announced the extension of the foreign earnings deduction for companies that are sending key personnel to develop new trade opportunities in developing countries and emerging markets. We are expanding support for exporters so that the foreign earnings deduction will now include Africa, a continent home to seven of the world’s ten fastest growing economies. In particular, we are targeting Algeria, the Democratic Republic of Congo, Egypt, Ghana, Kenya, Nigeria, Senegal, and Tanzania.
Nobody in this Government is under any illusion about the scale of the challenge we face. The problem of unemployment and the tragedy of forced emigration are a significant loss of human and economic potential to our country. We all know that the export sector is performing well but the domestic economy is still a major issue. Nonetheless, where there are signs of progress, we should acknowledge them.
The notional cost of borrowing as expressed in the bond yield has fallen to new low levels. The National Treasury Management Agency is making a phased return to the market and yield on long-dated paper is today approximately 4.5%. Several major Irish banks and companies have been able to borrow money on international markets, our bank deleveraging programme is on target, and we are progressively reducing our reliance on European Central Bank funding. In the last quarterly national household survey, there were modest signs of recovery in private sector employment. Export performance remains strong. The economy is growing again and our balance of payments surplus for this year is expected to reach 3.4% of GDP in a sign that our economy can reduce debt and grow at the same time.
To sustain that progress, there is no alternative to getting our public finances under control. A deficit of 8.2% of GDP, while falling, is still extraordinarily high and we must reduce it; there is no good or painless way to do that. The measures contained in this budget will affect many people but we can say the budget is fair. We have protected weekly rates of social welfare because we believe that as a people we must look to the needs of those on the lowest incomes. To achieve this end, both Ministers, Deputies Howlin and Noonan, have found resources to reduce the quantum of measures needed in social protection from €540 million to €390 million. Although difficult measures are being taken, we have also found resources to take a number of positive steps, including 6,000 additional after-school child care places for low income parents and an additional €2 million for school meals.
We have also made an important commitment to an area-based child poverty strategy, which will build on a number of highly successful pilot projects that were jointly resourced by the State and Atlantic Philanthropies. I pay tribute to Atlantic Philanthropies for the vision it has shown and the results that have been achieved in developing these schemes. I am hopeful that our partnership will continue, and I congratulate Deputy John Lyons in particular on the work he has done in promoting this cause.
Despite the immensely difficult financial circumstances, we have managed to find resources to continue providing new social housing units and to maintain the effort in urban regeneration. This fairness agenda was only possible because we found additional resources from a tax package which is manifestly fair and which asks most of those who have most. The tax measures in this budget are reforming and progressive. The budget measures contain a wealth tax package that amounts to over €500 million in full-year terms. Several of these measures will take time to introduce precisely because they are fundamental changes to the structure of the tax system.
The wealth tax package includes the reduction in the standard fund threshold so that the State will no longer subsidise pensions of more than €60,000 per annum. There is a progressive structure in the property tax so that houses valued at more than €1 million will pay a higher rate of 0.25%. Changes to PRSI will mean that unearned incomes will also be liable to social insurance contributions and there will be a higher rate of universal social charge on pensions over €60,000 and a €200,000 cap on top-slicing relief. There will be increases in the rates of capital taxes, which bring all rates to 33%, and a 10% reduction in the thresholds for capital acquisitions tax. These rates now mean there is a far greater parity between taxes on capital and taxes on labour, ending a distortion introduced by Fianna Fáil. The vast bulk of these taxes will be borne by those who are better able to bear them. This is a real wealth tax package, in contrast to the make-believe fairy tale figures that every Sinn Féin Deputy is ordered to parrot.
The reform of pensions policy comes after years of debate and analysis that highlighted the inequity of what was once some €3 billion in tax reliefs. By capping relief rather than standard rating, we are maintaining an incentive for people on middle incomes to contribute to their pensions while removing the biggest tax shelter in the Irish tax code. The scale of this reform is such that it will bring some €250 million into the Exchequer and affect some 30,000 higher earners.
The introduction of a property tax will impact significantly on households across the country. I do not expect people to be happy about paying a property tax but it must be recognised that this is a major reform that will provide a stream of revenue to local authorities without taxing work and will enhance the quality of local democracy.
Those who oppose the property tax will have to explain to their electorates how they intend to provide services on the very same streets they are canvassing. When combined with the changes to local government announced by the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, we are driving the most fundamental modernisation and reform of local government since 1898.
This budget is not only about deficit reduction but also about reform. It is not only about building a financial bridge to a more stable future but also about shaping that same future. While this financial crisis imposes real constraints on what the Government can do, it is also the case that we are not wasting the crisis. This budget has prioritised education by reducing to a minimum the expenditure reduction measures in the Department of Education and Skills. There is an increase in capital spending to provide schools to serve demographic needs. We are driving ahead with fundamental reforms of what happens in the classroom, including junior certificate reform, the national literacy and numeracy strategy and a sensitive reappraisal of the position on patronage.
In social protection, we are developing a system that is far better suited to the needs of a modern open economy, in line with principles similar to the "flexicurity" approach driven by social democrats in Scandinavia. While social protection needs to provide income support for those who lose jobs or suffer illness, we are moving to a system whereby one's first day on the live register is also one's first day on the route back to education, training and a job.
In health, we are driving ahead with our primary care strategy and have published a roadmap setting out the steps towards universal health insurance. Despite all the financial problems and the planning issue thrown up by the mistakes of the previous Government, we will begin construction of a national children’s hospital.
Notwithstanding the many financial constraints we face, the Minister for Justice and Equality, Deputy Alan Shatter, has been one of the most reforming justice Ministers of the modern era and has made real strides on penal reform with limited resources. In addition, the Minister for Children and Youth Affairs, Deputy Frances Fitzgerald, is working to end the practice of committing 17 year olds to St. Patrick’s Institution.
After a series of hard budgets, we now have an income tax code which is among the most progressive in the developed world. This budget makes the system even fairer. The challenge we face, however, is to ensure that when people pay their taxes, the State makes the best possible use of their money. The work the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, is doing in driving reform in the public service is driven by that principle. I am committed to ensuring we have the best quality, service driven public services. To achieve this objective we need to make the best possible use of public funds. Such is our commitment to better schools, hospitals and local services that we are determined to take back control of our financial destiny.
We are also bringing transparency and reform to the system of political funding. I note that no single measure caused as much outrage among members of the Technical Group yesterday as the suggestion that they be required to audit their leader’s allowance in the same way as political parties.
For the people of Ireland, what this budget does is bring the end into sight. No one can understate the sacrifices and no one should overstate what has been achieved. However, we can see progress and it is being made with a purpose. Even in these most difficult times, we have the resources to drive important reforms and we have protected those who most need to be protected.
This is the centenary year of the Labour Party. The men and women whom I have the honour to lead in this House know full well the cost this budget will bring to the families and communities they represent. However, they also know this budget is not about today or tomorrow but is a bridge to the future. Delivering it is part of our commitment to bringing our country back from the abyss to a stronger better future. While none of this is easy, it is necessary. In the future, people will look back and ask the following three questions of the Members and parties who were in this House at this time. Did they take responsibility for solving the problem or seek to exploit it? Did they act with fairness? Did they think of the future? In respect of all three questions, the Labour Party and this Government will be able to answer "Yes", which is something of which I, for one, am proud.
Irish people have shown time and again that they are willing to accept hard choices. They understand there is no easy way out of an unprecedented crisis which has engulfed Ireland and much of Europe and the world in recent years. However, their support is based on measures meeting two core principles. They want budgets which are both fair and make a clear contribution to returning growth and job creation. This budget fails on both measures.
Last year, having won a mandate from the people promising a radical and progressive Government, Fine Gael and the Labour Party chose to abandon their promises and introduced by far the most regressive and unfair budget in many years, as shown in independent assessments. This year they have done it again. In some cases, Ministers appear to have sat down to find new ways of making sure the most vulnerable suffered more. To take only one example, how else can one explain first cutting home help and then cutting respite care?
In the ever growing mountain of documents and press releases which have accompanied this year’s budget one thing is already clear. This is a deeply unfair budget presented by a Government that has no strategy for growth and job creation other than hoping something will turn up. Driven purely by the short-term political tactics of competing parties, it systematically betrays election promises and places the heaviest burden on those who are least able to bear it. Its budget will further damage the confidence that is essential for recovery.
Yet again, the Labour Party and Fine Gael used true, half true and completely false leaks during negotiations. Their growing band of Malcolm Tucker wannabees were constantly on the telephone to journalists briefing for and against different Ministers and talking up the resolve of their parties. Now we know that for all the tough talk from the Labour Party, ongoing muttering from its Backbench Deputies and soothing words of its Ministers, the party has once again been shafted. On the other hand, the Fine Gael Party used every tactic it could muster in an ultimately successful move to protect the highest earners from taking more of the load. It was a direct trade-off. Every one of the regressive welfare cuts could have been avoided with an increase in the universal social charge for the highest earners, a proposal which enjoys widespread political and public support. Fine Gael should have the honesty to explain the reason it demanded that supports for the poorest families be cut rather than hitting those who earn the most.
For all of its smug sense of having prevailed over its coalition partner, the Fine Gael Party must also explain the reason it did not lift a finger to try to stop a family home tax, which the Taoiseach once described as "unjust, immoral and illegal."
The Government has been putting its trust in the idea that people will not compare the claims it is making with the substance of what it has decided to do. Most Ministers have been making claims which are the direct opposite of the truth and have been using unprecedented gimmicks to try to cover up the hard reality of their choices. In the next few weeks, they will have to explain exactly what is involved in many of the general adjustments in their allocations. At that point, there is no doubt we will find many more unfair, damaging and avoidable cuts. However, from what is already known there is more than enough to see the mean spirit and lack of direction which lie at the heart of this budget.
The overall fiscal framework for next year is widely accepted and we believe it to be correct. It did not originate from the troika but is a required next step in bringing the deficit to a sustainable level. As the budget documentation points out, the major part of the fiscal adjustment was done in previous years, with next year and the year thereafter being easier than previous years in relative terms.
We are all somewhat amused by the Tánaiste's use of the phrase that we are 85% there, given the fact that, year after year, the Taoiseach, the Tánaiste and their parties voted against 80% of that journey and every single measure involved.
Labour and Fine Gael made reckless commitments and promises before the election that they could not fulfil.
While the targets are correct, there is reason to believe that they might not be met and that public support for them has been undermined by the crass and growing inequity of the decisions being taken by the Government. A new concern is that these targets may not be met because of a combination of overspending and reduced revenue. In spite of Government claims about having an iron hand on spending, including the repeated claims by the Minster for Public Expenditure and Reform, Deputy Howlin, that everyone would stay within budget, the two largest Departments are showing major overruns this year. The inclusion of large amounts of unspecified savings in these Departments for next year suggests that exactly the same situation will obtain.
On the revenue side, last week's figures showed a serious undershooting of key taxes, particularly the €300 million deficit in income tax receipts. For 2012, the combination of overspending and lower receipts has been covered up by a number of one-off measures and the benefit of the Greek interest rate deal being automatically passed on to all countries. These will not be available next year and there is no reason to believe that this year's problems have been effectively tackled.
One of the most striking elements of the budget is how little it has to say about the economy. Beyond empty generalities, there is no analysis of the direction of growth or employment or discussion of the budget's impact on any economic indicator. There is no attempt to set out anything that updates plans made two years ago. In a major departure from tradition, most economic projections were relegated to appendices that the Ministers did not mention. It is in these that one finds the detail of a Government that has already missed every one of its targets for broad economic indicators.
This year, targeted growth of 2.5% will actually be less than 1%. The target of 3% growth for next year has been halved. These are not cold, irrelevant statistics. They have a real impact on people’s lives, particularly in terms of employment. It is for this reason that they were not mentioned in the Ministers' speeches.
Last year, the Government claimed that it was all about jobs. It had a jobs budget, which it downgraded to an initiative, and the Budget Statement was almost entirely given over to claims of jobs being on the way. The Minister for Finance, Deputy Noonan, predicted a growth in employment of 0.5% for this year. The reality is minus 1.2%. He predicted a fall in unemployment to 13.7%, but it will be nearly 15%. Yesterday, all that he had to say about the failure to hit any major economic target was that everything is Europe's fault. While the Taoiseach was speaking with the Minister of State, Deputy White, I outlined all of the budgetary targets for this year that have been missed by the Government. To blame Europe for everything is untrue. The Government's policies have had a direct impact on reducing growth and employment. Front-loading a major VAT increase, removing investment funds from the economy through a significant levy on pension funds and threatening employers with extra costs for every employee were among the measures that helped to drive down domestic demand and confidence, the two elements that our economy needs most if it is to recover.
In this debate last year, the Government was told that implementing these policies would damage the economy, but it went ahead with the measures anyway. Let no one be in any doubt - the policies of this Government have directly damaged domestic confidence and thereby reduced growth and employment this year. They will do so again next year unless there is significant external growth that drags us up with it.
What is also striking is that the Government is silent on the vital issue of debt sustainability. We are apparently seeking a deal to make our debt sustainable, but no member of the Government has yet said what he or she believes we need our debt to be for it to be sustainable.
Domestic demand and confidence are the most important elements that we require to build a strong recovery, but the situation in Europe is also important. To date, the Government's approach to Europe has been to hope that others can win concessions that will be automatically extended to us. Every development has been overspun and underdelivered. Getting a substantial deal to reschedule the promissory notes would provide significant extra resources. Ireland's case is strong. As the Taoiseach finally admitted in October, "Ireland was the first and only country which had a European position imposed upon it in the sense that there was not the opportunity, if the Government so wished, to do it their way by burning bondholders."
In spite of the claims made since June, nothing was agreed in respect of Ireland's debts and the news this week from Brussels marks a significant setback. The German Minister explicitly stated that he did not intend to support Ireland and Portugal getting major concessions and that the banking union, which was supposed to be operating from January and which is essential for our banks, has been delayed to some unspecified time. Given how important Europe is, after nearly two years in office it is time for the Government to set out a policy on Europe that goes beyond hoping that something turns up that can be claimed as a great victory.
The number of promises broken by both parties in this budget is even larger than anyone imagined. The defence being trotted out is the usual one, in that they are being forced to break their promises because circumstances changed. In reality, the only element that has changed is that Fine Gael and Labour are in government and their reckless campaigns to win votes has left them needing to justify the systematic abandonment of pre-election promises. The budgetary constraints faced by this Government were fully known to Fine Gael and Labour before they made their promises. In fact, last year the situation was ahead of what was targeted. No one forced them to make these promises and no one is forcing them to break them.
The overpowering cynicism of their campaigns is summed up by Labour's "Every Little Hurts" advertisement. In the closing days of the campaign and as the Taoiseach well remembers, Labour decided that it needed to attack Fine Gael. Labour drew up a list of cuts and extra charges it said would be implemented if Fine Gael got in without Labour there to stop it.
At a press conference, the Minister had journalists rolling in the aisles as he found new and creative ways to dismiss Labour's warnings as empty scaremongering. How right he was about Labour's capacity to stop any of this from coming about.
Less than two years later, we know that every little does hurt. Labour has implemented everything it claimed it would never do.
Due to the mounting wave of negative commentary about the Government's regressive policies and lack of any real innovation in almost two years, it yesterday unveiled a new tactic. This involved changing the baselines wherever doing so might give a better result. As the Government believes that it can claim success in some areas, it refers to what has happened since March 2011. In most areas, however, it has started using earlier dates to present a better picture.
Yesterday, there was messing with the presentation of figures in a range of areas from fiscal adjustments to the reduction in public service numbers. However, the brass neck award must go to the attempt to claim that budget policy has been progressive. The Minister, Deputy Noonan, referred to how we had one of the most progressive tax systems in the developed world and stated that the role of recent budgets in this was contained in an annexe to his speech.
When one takes the time to read the annexe, one discovers that our tax system is progressive only because of two budgets against which every member of the current Cabinet voted.
If one includes just the budgetary decisions of Fine Gael and Labour, one finds a deeply regressive impact.
The backing away from a real reform of the political and budgetary process has been obvious to anyone paying attention. Last year’s budget fortnight has been abandoned and a traditional budget day restored. In the Oireachtas, discussion was allowed in advance of the Estimates, but there is nothing in what has been published which even slightly reflects Oireachtas input. Within Government, the increasingly ineffective Economic Management Council has destroyed collective responsibility with Ministers actively distancing themselves from unpopular decisions on the basis that they were not properly consulted. Sitting around doing nothing for hours and ordering in pizza might be okay for teenagers with a few days off, but it is not what you expect from a Cabinet.
What the final budget decisions reveal is a Government that holds many meetings with outside groups but rarely ever listens to what is being said. How else could one explain all the meetings with children’s organisations which were followed by the targeting in this budget of families with children?
Yesterday’s announcement that 100 Garda stations will be closed will rightly lead to demonstrations throughout the country. When closing stations the Government repeatedly said they were only marginal stations, which were more trouble than benefit. In seeking to close 100 stations this excuse is irrelevant. It is a programme to change policing in Ireland radically by making it more distant from the community and exposing large sections of the country to significantly reduced coverage. If one believes the Garda make a difference to keeping us safe - I have no doubt that is the case - then one must accept that this radical and dangerous proposal must be stopped before it goes any further.
Each one of the welfare cuts imposed in the budget could have been avoided if the proposal to target the highest income earners had been adopted. Instead, Fine Gael insisted that social welfare must feel the pain and the Minister for Social Protection, Deputy Burton, went about designing a set of cuts which is deeply mean spirited. Families with children have been singled out for major cuts in their income. Last year the Government told us that Scandinavian child care was on the way. This year the Fine Gael and Labour vision of Scandinavian child care is being implemented, with cuts to child benefit, taxing of maternity benefit, cuts to clothing and footwear allowances and a handful of extra child care places. When she was in opposition the Minister, Deputy Burton, liked nothing more than to find ways of attacking welfare packages no matter how generous they were. She was particularly happy to have coined the term "savage 16" and said of the Minister concerned, “her actions make Margaret Thatcher look like a socialist.” Today, the conscience of the Labour Party in government-----
-----is justifying cuts which are dramatically more severe and targeted against the most vulnerable. When challenged about cutting basic support for clothing and footwear, her callous response is to tell people “there is a lot of good value in shops”.
Even other Cabinet Ministers are saying that the Minister for Health, Deputy Reilly, is turning tough conditions into a crisis. In this budget we see more about the truth of a regressive and cynical health policy. The move by the Government to restrict the over-70s medical card is especially shameless given its past campaigning on this issue.
-----“Those are the people who made this country what it is today....They raised us, nursed us when we were sick, protected us from violence, grew our food”. That is what the Minister said not so long ago in this House about medical cards for over-70s. The Taoiseach joined in that debate with great gusto.
The Minister's speech might well rate in history alongside the visit by the Minister for Education and Skills, Deputy Quinn, to the front gate of Trinity College for breathtaking cynicism.
That was the breaking of a promise made before the election, the trebling of prescription charges does that and adds to it the breaking of a post-election announcement.
One should remember that the Minister, Deputy Reilly, was only days in office when he summoned journalists to hear that he intended not just cutting, but abolishing prescription charges.
The prescription charge is €1.50. Many pensioners are on medication and use six to nine items a month. The Government might not have cut the old age pension but through this measure alone it is taking approximately €20 off them - €19.50 - as a result of the prescription charge. The Government fulfils its election rhetoric by saying that core rates will not be changed but it gets people in other ways. It is a completely cynical approach.
The cut in the respite care grant is callous when added on top of the cut to home help. How could the Government distribute thousands of leaflets claiming to have delivered a fair budget when it has done that? I heard people on the radio this morning-----
We fought a campaign against that and the Government eventually reversed the cuts to DEIS schools. The Minister for Education and Skills, Deputy Quinn, came to the House and apologised for what he did.
If I might continue, €26 million is involved. People watching are not interested in that kind of tomfoolery, they are interested in whether anything can be done about the respite grant.
I plead with the Taoiseach on the matter today. This is what the debate is about; for people to listen to what we are saying and to take on board some of it, at least a bit of it. Of all the things that have been done, I urge the Government to restore the respite grant because it is paid to people who care on a 24/7 basis for relatives, people with severe disabilities and for people with special needs. We must do that if we respect the caring ethos, which is fundamental to how we look after the elderly in this country, and those with special needs. In many instances the State is not doing all it would like for carers and people who need care. Given what people across the floor are saying, the Government has time to do so in the context of the social welfare Bill. We will table amendments to secure the reversal of the decision and the restoration of the grant. We brought the grant up to the current level because it can be helpful to people, even those who are not in receipt of carer's allowance. Most of the people contacting offices this morning say the payment is used for basic things such as heating, transport and to keep the household going. It is important that the Taoiseach would examine the issue again.
In the third-largest Department, Education and Skills, cuts are once again being targeted at disadvantaged families and communities. The increases in third level fees will continue and now an effort is being made to ensure that more and more families have to pay the fees. Combining an increase in fees with a reduction in eligibility for grants means that the reversal of advances in equal access will be accelerated. I do not understand why such a sneaky, underhand move was made on the means threshold for third level grants because education will be central to coming out of this crisis. We want young people to continue on to third level and fourth level. Due to the mess caused by SUSI for the first time in a long time I have met students on the street who said they were contemplating leaving college.
Deputy Martin should not be so silly. When he was Minister for Education and Science we got a number of complaints about grants and he never did anything about them. Grants were not available until after Christmas.
I was in Castlebar three weeks ago and a young student doing biomedical engineering in UCG said he was contemplating leaving because the grant had not come through and he had no information about it. I do not like saying that.
The only image that is embedded in the minds of students is the Minister for Education and Skills on the steps of Trinity College, Dublin, swearing blind and signing on the dotted line that he would reverse the student contribution charge and not increase it. Yesterday, we discovered the student charge will now be over €1,000. That is what students are saying about the Minister. The Government should not tell us it is trying to improve the situation for students because it is not.
The Minister is talking about the past 14 years. The most important statistic to come out in the past three weeks about Irish education is that we now have a 90% completion rate in second level. That is because of the strategic decisions we took about second level completion and investment.
Our second level participation rates have moved from 78% to 90% in a decade. We want to do the same with third level. We have one of the highest participation rates of second level students going into third level of any European Union country. This is because of a sustained and agreed approach to third level education. It cannot be thrown away now because it will undermine a key strategic intervention in getting the country out of its crisis.
Yesterday, there was a bit of delegation going on with the budget. The Higher Education Authority was given a €25 million cut but it was claimed no services would be impacted, which is simply not credible. Again, the Minister will be at one remove when these cuts are introduced.
I will acknowledge we have had to use freedom of information requests much more frequently because of the reluctance of the Government to give information to the House.
This year's shambolic introduction of a household charge proved there is no public acceptance of a family home charge. As the troika has repeatedly said, it is up to the Government to decide how to raise its money. No one is forcing it to introduce a family home tax.
Before the election, Fine Gael said such a tax is unfair and would not be introduced. Labour said nothing should be done before 2014 and that it must, under no circumstances, be a flat tax.
The Government's proposal is for an unjust tax which is weighted against urban areas. It does not have and will not earn public support because of its unfairness and it could cause much wider problems. It is even more unfair to introduce such a tax before the rising social and economic impact of mortgage and household debt in the economy is tackled where one in five mortgages are actually in arrears. The lack of any major initiative in this area yesterday was striking.
As Fianna Fáil set out in its pre-budget document, the measures announced yesterday are not inevitable. They are the product of political choices between parties manoeuvring for position and they are bad choices. They will increase the already rising sense of unfairness about who is bearing the load of reducing our deficit. They will damage the confidence which is vital for a return to growth in our domestic economy. They will make our country less safe by withdrawing community policing from large sections of the country. They are being introduced without any overall strategy for growth or job creation other than hoping that something will turn up in Europe.
One of the most unmistakable traits of this budget is how it is lacking in new ideas or a major initiative. Many small things are being done in order that claims can be made to visionary leadership, but the difference between the rhetoric and the reality is growing every day. The only significant departure in this budget is that the Government has doubled-down on its policy of implementing profoundly regressive cuts. No matter how often the Taoiseach claims he is about fairness and job creation, the public will simply not buy it.
The Government could have brought forward a fair budget. This, however, was not a fair budget. Tá a fhios ag an Taoiseach nach raibh sé deacair na roghanna cearta a dhéanamh. Rinne an Rialtas na roghanna míchearta arís, áfach. Cén fáth? Sinn Féin has shown how in our fully costed alternative budget, yet the Taoiseach chose to ignore this. Instead, yesterday, he produced a regressive, anti-family, cruel budget, one that is neither fair nor just. The Tánaiste and Minister for Foreign Affairs and Trade spoke about a fairness agenda. However, fairness demands equality and justice. Fairness means increasing taxes for those who can afford to pay more while protecting working families, citizens on low and middle incomes and those struggling to make ends meet. It means protecting front-line services. This budget does none of this. There is not even a whisper of a jobs plan.
Neither can we pretend it imposes any real burden on the wealthy. That is a sham argument by a Labour leadership desperate to escape criticism for introducing an anti-working class, anti-children and anti-jobs budget. Yesterday, the Labour Party leadership abandoned all pretence of leading at being the party of James Connolly. The truth is that this budget disproportionately targets hard-pressed families and will slash front-line services.
This budget will undermine any possibility of growth in the economy. Hundreds of thousands of families have been hit by a family home tax, more PRSI payments, cuts to child benefit, hikes in college registration fees and increases in motor tax. Sinn Féin is opposed to the Government's tax on the family home. It calls it a property tax. It is a tax on the family home, sin é. It is clear the Government is prepared to use all means to take this tax from struggling families.
A Leas-Cheann Comhairle, I sat here in complete silence and listened to the Taoiseach, the Tánaiste and the Leader of Fianna Fáil. The other Deputies may not like what I am saying but they should at least listen. I can say as someone who comes from the North that there is no property tax there. Sin é. The Deputy is telling fibs.
Many families in the State will not be able to pay this tax. I am putting the Taoiseach on notice that from today, Sinn Féin will be actively campaigning to resist the introduction of this unfair tax on the family home. It is not yet law and it can be stopped. Sinn Féin has an alternative that is fair, namely, a wealth tax that is levied on the property of the wealthy. The so-called mansions tax is little more than a gimmick and a poor one at that. The Government had the option of a real wealth tax and chose not to take it. Instead, it chose to impose a punitive tax on the family home.
Sinn Féin is calling on every citizen to make a stand and resist the imposition of this unfair home tax. There is time for the Government to reverse this decision. This home tax is the brainchild of Fianna Fáil. If the Government is allowed to legislate for it, it will be the tipping point for many families across the State. The limits imposed for those allowed a deferral are pitiful. A deferral of tax is not an exemption and the fact the Government plans to charge 4% interest on deferrals will only add insult to injury for hard-pressed home owners. While I welcome the three-year property tax exemption for first-time buyers, the fact is the thousands of people in severe mortgage distress will have to pay this family home tax, if the Government is allowed to bring in the relevant legislation.
The Government is continuing to place the burden on low and middle income families, on the coping classes and the working poor. Despite the Government's promises not to increase income taxes, the amount of PRSI that citizens must pay has been increased, including for the lowest earners.
The decision to abolish the weekly PRSI threshold of €127 will mean an increase of €264 a year for those earning over the minimum wage. On top of the family home tax, this will cause great distress. The Government also increased PRSI for the self-employed but they will get nothing for it. Sinn Féin would have introduced a third rate of tax for people earning over €100,000, which would have raised €365 million. Instead the Government has targeted the low paid and levied additional taxes on those earning €18,000 and over. These are people on the minimum wage. Was the Taoiseach ever on the minimum wage? One must spend every cent in the local economy. Taxing them has the dual effect of hurting them, their families and the local economy. More small shops and businesses close and more jobs are lost.
The high earners on over €100,000 will not feel the impact of the extra €264 a year but those on the minimum wage will definitely feel the loss of €264 out of their pockets. No matter how the Government spins it, the budget means a family of two parents and two children with an income of €55,000 will lose, on average, over €500 a year. A lone parent earning €35,000 with two children will also lose just over €500 a year. That is not fair.
For many, particularly in rural Ireland, a car is a necessity. While there is no increase in excise duty on petrol or diesel, the price will increase as a result of the increase in carbon tax. The vehicle registration tax rate and motor tax rates will also increase from 1 January through flat rate increases. The fuel hikes, the motor tax hikes and the VRT change will make it more costly for many families. Between the universal social charge, the septic tank charges, the household charge and cuts to the agriculture budget, the Government has abandoned rural Ireland and its people and the people of rural Ireland know it.
The Government could have implemented Sinn Féin’s proposals. We called on the Government to standardise pension and other tax reliefs. It has been revealed time and time again that the top 20% of income earners avail of 80% of the tax reliefs paid. These are the people the Government is protecting, not the poor but the wealthy. No other issue reveals the depths to which the Government has sunk than its decision to cut child benefit. Shame on the Taoiseach, the Tánaiste, the Fine Gael Party and the Labour Party. I now have the attention of the Taoiseach because the word shame gets him to focus.
During the last election campaign, the Labour Party called on the public to protect child benefit by voting Labour. The Labour Party leader told the electorate it was a red line issue. Adverts defending child benefit and warning of Fine Gael’s intentions were placed in newspapers. Labour put up posters across the State. Yesterday, and not for the first time, the Labour Party leadership, at least, abandoned its core values.
This means a family of four children will be down €58 per month in child benefit cuts alone and a family of 6 children will be down €98. That is a lot of money and will have a crippling effect on families dependent on it. Children and the young families have borne the brunt of the budget.
Less than one month since the passage of the children’s referendum, the reality of the Government’s commitment to children is exposed. I warned the Taoiseach before the referendum that people saw the difference between the Government's rhetoric and the reality of its policies on children. The number of children at risk of poverty and deprivation will rise as a consequence of this budget. A recent report revealed that 10% of households suffer from food poverty. It is a new buzzword that means hunger. I come from a community where mothers and grandmothers have been taken to hospital with malnutrition because they are feeding their children. I am sure it is the same in the Taoiseach's constituency. This budget will make matters worse. Basics such as food, clothing and shelter will become unaffordable for thousands of families. The crisis for families will be exacerbated by the decision to cut the back-to-school clothing and footwear allowance by 50%. Does the Taoiseach know what it is like to clothe three or four children going back to school when one is earning the minimum wage? The mark of this Government is the defence of the despicable cut by Deputy Joan Burton, the Minister for Social Protection – mar dhea – who told journalists there is a lot of good value in shops in relation to clothing and footwear. It is easy for the Minister to say that, with a take home pay of €169,000. It shows how the Government is living in a bubble and how its ivory towers are removed from the reality of life of most families.
Our leas-uachtaráin, Deputy McDonald, raised the following point this morning. One of the most despicable decisions of the Government parties is the cut to respite care for children with severe disabilities. An féidir leis an Taoiseach éisteacht liom ar feadh bomaite agus gan a bheith ag caint?
Bhuel, éist agus foghlaim. The Taoiseach has cut €325 from more than 77,000 families. Some 20,000 of those families receive no other support from the State for providing full-time care for a family member. How low can one get? That is scandalous and shameful and certainly not a fair measure in a budget that was trumpeted as fair. Before the last general election, Labour and Fine Gael vehemently opposed prescription charges for medical card holders imposed by Mary Harney. In this budget, the Government has trebled the charges and increased the monthly maximum payment from €10 per month to €19.50 per month. It is only the tip of the iceberg and is building up for working people. The health system, under the millionaire Minister, Deputy James Reilly, has staggered from one crisis to another, with each more damaging than the last. The Minister has failed to deliver promised reductions in the price of medicines. Instead, he is passing the cost on to patients with higher prescription charges and the increase of the threshold for the drugs payment scheme. Older people, in particular, are attacked in this budget. People over 70 with an income of €600 to €700 per week will lose their medical card and will receive the GP-only card. They will have to bear the full cost of medication.
The Taoiseach keeps talking about the North and it is heartening for the people in the North to hear about what Sinn Féin is doing in government. Sinn Féin insisted that prescriptions would be free in the North. The Taoiseach can trumpet that. In response to questions tabled by me, we were told there would be no supplementary health budget but, because the Government completely mismanaged the health budget, which is almost €400 million in deficit, on Tuesday the Government was forced to bring in an emergency supplementary health budget. Yesterday, the Government announced further cuts of over €1 billion in health. The health service cannot bear this. How could it? One day, extra funding is allocated, the next day there are more cuts. It is a recipe for disaster and for deeper poverty and poorer health care, especially for low to middle income families with children, and for older people. It will mean job losses in the health service and greater risk to patient care. Leaving aside the philosophy that underpins these decisions, it is bad economics.
While the cuts in education are less severe their impact is nonetheless significant.
The €23 million cut in the education budget will have a disproportionate impact on learners from the more disadvantaged sections of Irish society. The millions of euro to be cut from higher education will seriously impede opportunities for people to upskill and diversify. Funding for higher education institutions has taken a significant hit with a €25 million reduction being imposed in 2013 and a €13.2 reduction in the allocations of the VECs. The reduction of income thresholds for eligibility for student grants by 3% is a continuation of Fianna Fáil's policy and will prevent even more students from low and middle income families from pursuing higher level courses. The cut being imposed by the Department of Social Protection in relation to the back-to-education allowance and the estimated saving of €17 million will impact greatest on the less well-off who wish to return to education.
Do we remember the Minister, Deputy Ruairí Quinn’s public flourish before the last election in signing up to opposition to any increase in student fees? It is another U-turn. Yesterday, the same Minister announced another increase of €250 to the third level contribution. Students will now have to pay €2,500 in fees. So much for the claim that third level education is free.
The negative impact of Government policy imposes the greatest burden on those who have least and can least afford further burdens being imposed on them. There is also a negative impact on the economy. This is evident in the 20,000 net job losses and the 14.6% of citizens on the live register. We can see it in the overworked voluntary sector where organisations like the Society of St. Vincent de Paul cannot cope with the demands being made on it. Demands are, incidentally, being made on the society by Government Departments. The Government is asking a voluntary charity to help it.
The Government claims that after this budget we are 85% of the way there, but it does not tell us to where. We hear it parroted that we will be the best small country in which to do business. What about being the best small State to live in?
Where, exactly, is the Government taking us and what are the social consequences of the Government's austerity policies?
The Irish League of Credit Unions revealed several months ago that the number of people who are left with €100 or less at the end of each month has risen to over 1.8 million. Where will these citizens find the money for the Taoiseach's family home tax or to deal with his decision on PRSI? What of the tens of thousands of our young Irish people who are already in Australia, Canada, the US or Britain?
While the Minister tells us the economy is growing, the reality is that growth forecasts are being continually revised downwards. It gives me no pleasure to say the domestic economy is on the floor. Retail sales have fallen by over 30% since the start of the recession and thousands of jobs have been lost. The budget will do nothing to restore confidence in the domestic economy.
What really galls people is that, in a parody of what passed before, the Taoiseach tells people to tighten their belts. He tells us we are all in this together and patronises people by saying he understands how this hurts them. Meanwhile, the fat cats in the banks’ headquarters continue to cream it at the expense of taxpayers. The Government borrowed €67 billion from the troika and gave €64 billion of it to the banks.
How has that money been spent? Just last month Sinn Féin revealed that nearly 3,000 staff at banks that have been bailed out are still paid over €100,000 every year. The Government takes away the carer's respite allowance while allowing this to continue, despite the mess the banks have created. There are 326 bankers who receive more than €200,000, 104 receive more than €300,000, 48 receive more than €400,000 and 27 receive more than half a million euro a year. These are salaries ordinary people can only dream of.
The banking system shows no compassion for its customers or the taxpayers who bailed them out. Instead of passing on rate cuts from the ECB to mortgage holders, they hike up their fees. They massage their figures on lending to small and medium enterprises. The Government had an opportunity to tackle this in the budget. The Minister for Finance could have used the tax system to claw back some of the pay-outs and pay-offs to the bankers and politicians who wrecked our economy.
The Government has announced a 3% increase in the universal social charge on pension income over €60,000 per year for people over 70 years of age. I have no doubt that some in the Labour Party will try to spin this measure as a meaningful tax on the very wealthy in our society. It is not in the least.
What of the former Ministers who bailed out these bankers? Former taoisigh are living the high life on lavish pensions while ordinary people bear the brunt of the crisis they created.
There was no impediment to cutting the pay of bankers, Ministers, special advisers or the Taoiseach himself in the budget. The Government did not do that. There was no impediment to cutting bankers' pay.
Go raibh maith agat, a Leas-Cheann Comhairle. Fine Gael and Fianna Fáil have much to talk about but this is my time to say something.
Sinn Féin presented the Government with legislation last month that would enable the State to claw back a large amount of the money paid to bankers without breaking any contracts, merely by applying a levy on excess payments. The Taoiseach did not do it, but he has no problem making demands of the Irish people, telling them they have to give more and live on less. Why does he not make those demands of the bankers, politicians and those who have retired from the banking industry? The reason is that he does not have the stomach for it. It is easier to take on those who are less powerful.
So, what is it all about? What is this institution, this Parliament, Teachtaí Dála and Seanadóirí about? What is the Government doing? Labour went into Government claiming they would rein in Fine Gael. The Greens said the same thing about Fianna Fáil and, before that, the Progressive Democrats claimed they were here to keep Fianna Fáil honest. They all failed. What is the purpose of Labour remaining in the Government? Next year, Labour will celebrate the centenary of the 1913 Lock-out. In 2013, the rich will be rich and the poor will be slaves. Labour has very little to celebrate, but perhaps they can celebrate bums on ministerial seats, flashy cars and big wages and pensions.
I know there are decent people in every party and among the Independents. Probably everyone comes into the Dáil with good intentions, but we are here to serve the citizens, all the citizens and not the elites. Equality should be our watchword. We should be servants of our people. That is to whom we owe our allegiance. After last year's budget I quoted Luke Kelly. People of a certain age will have fond memories of Luke Kelly. I will quote him again - he says it better than I do:
For What Died the Sons and daughters of Róisín, was it greed
Was it greed that drove Wolfe Tone to a pauper's death in a cell of cold wet stone?
Will German, French or Dutch inscribe the epitaph of Emmet?
When we have sold enough of Ireland to be but strangers in it.
To whom do we owe our allegiance today
To those brave men and women who fought and died that Róisín live again with pride?
Or the faceless men who for mark and dollar,
Betray her to the highest bidder?
The Taoiseach made his choice, he has decided what side he is on. His Government's vision is narrow and selfish; it is Fianna Fáil light. There is, however, an alternative vision. It is a vision of a new Ireland, a new republic that embraces all the citizens of this island, a republic that is democratic and inclusive and based on equality, freedom and social solidarity, a republic that shares its wealth more equitably, looks after its aged and young, provides full rights for people with disabilities, liberates women, and delivers the highest standards of public services. In the here and now, it is about providing a real effective and alternative Opposition to the Government and to Fianna Fáil. It is about articulating an economic approach that is realistic, viable and doable.
This morning Sinn Féin launched our campaign against the family home tax. I am appealing to citizens and families to make a stand and resist the imposition of this unfair tax. I appeal to Teachtaí Dála and Seanadóirí in every party who still believe in the core values of republicanism, and Sinn Féin has no monopoly on this, and to those in this Oireachtas who believe in equality to vote against these regressive measures and the social welfare and other cuts.
This is a bankers' budget; it is a budget for the elites. It is a budget for austerity and against the interests of the majority of citizens. The Taoiseach and the leader of the Labour Party should be ashamed of it.
The Minister for Finance is a kindly, avuncular man who is popular on all sides of the House. It was surprising, therefore, in the last two days to hear him growling in interviews when he was asked about the property tax. He has said at least twice that it is being left to the Revenue Commissioners to collect it and that the Revenue Commissioners are very good at collecting taxes. I find those words ominous and somewhat threatening but above all they are an admission of the fact the property tax will be extraordinarily difficult to collect.
The reason for this is not that there will necessarily be, despite what the last speaker said, some sort of property strike on the same lines as the household charge strike, it is because some people simply cannot afford to pay it. I heard the Minister say the reason the Revenue Commissioners may use attachment orders to people's pay to collect this tax is because people cannot afford to pay. It would not be necessary otherwise. We are a tax compliant nation now. People will pay their taxes, particularly if they are self-assessed and if they can do so. It is obvious, however, in the Government's thinking that it has been forced to provide for the fact that people will not just be unwilling to pay, they will be unable to pay. This is a tyrannical attitude the Government should rethink.
The prospect of this tax being deducted from people's pay means one thing. If it is taken at source, there will be less bread on the table because that is where discretionary money goes. I appeal to the Taoiseach to think again about this and to be more sympathetic to middle Ireland, those people who have some earnings but who simply will not be able to meet this infliction on them. Middle Ireland is not a large body that can be placed in a box, but many people will not be able to pay what the Government is asking of them.
There has been a lot of talk about this budget broadening the base. It is a lovely phrase, it sounds right and Ministers can say that nearly every country in Europe has this and we must broaden the tax base. To me this is not broadening the base. Saying that people have property and it can therefore be taxed is not broadening the base. The source of this tax will be the same source for so many other taxes. In some ways this narrows the tax base because the people who will be forced to pay property tax are the same people who will be hit by PRSI, third level fees, reductions in child benefit and increases in DIRT and motor tax. The base does not broaden because the Government taxes another commodity.
There has been an attempt to confuse the issue by holding a flag and saying a tax will be imposed on mansions, which has very cleverly entered the lexicon already and is a brilliant piece of spin, but it does not deceive anyone because there are only a couple of thousand houses in that category. It will not raise much money. It might be a bone to be thrown to the Labour Party, but it is the thick middle that will suffer, some of whom will be unable to pay.
The proposal to increase capital gains tax, with which I have no problem, will generate very little revenue. Hands up anyone who has had a capital gain in recent years. It simply has not happened. It is something to throw to the Labour Party as an ideological bone, and it has succeeded.
Pensioners, property owners and families have been hit very hard by this. They are the same struggling people who are earning a little money but who increasingly cannot cope. These are the people Deputy Adams referred to as the coping classes. There will not be any coping classes if we continue to take so much out of their pay packets that they cannot pay. The property tax is built on a false assumption that people have an illiquid asset from which they can produce liquidity. It does not happen like that. There is no liquidity in owning a house. The Government is trying to squeeze apple juice from an orange. It cannot say that because a person owns a house, it will take cash from him.
I note what the Government has done in giving deferrals, but deferrals are a cop-out. They are not a waiver, they are not even a relief, and they simply create another debt. The Government is saying to those who cannot pay that they can defer but they must pay some time. There is no reason to believe those who defer today, who are mostly on very small incomes of €15,000 for a single person and €25,000 for a couple, will be able to pay tomorrow. Why would anyone believe that? It is a political cop-out to soften the blow, but at the end of the day it is to postpone evictions or something equally unpalatable. The idea those who defer because they cannot pay should then be loaded with a 4% interest rate is utterly unacceptable; it is penal. The Government is loading them with a debt they cannot pay and it is increasing it every year.
While I know it is only simple interest, it is also adding 4% per annum. There is no earthly hope of these people paying this money. So, what will happen? They will have a debt and will live in these houses for as long as they live. They will be condemned and immobilised by this. It also has social consequences. It is cruel and unthinking. Regardless of what the Government spokesmen say, 4% is a very high interest rate for people who have no money and cannot pay back. It is also considerably beyond the rate of inflation. I do not know where this 4% came from, but some genius in the Department of Finance came up with the idea. It is simply a paper transaction that will never come to completion because those deferrals will be on the individual's balance sheets for the rest of their lives.
Approximately 18 months ago the Taoiseach promised that he would look into the pensions industry. That industry is staffed by people who are very rich who are making an enormous amount of money. It is full of the pension contributions of people who are very poor and much more impoverished than others. Nothing has ever happened to that investigation but I believe the industry reaps approximately €800 million a year. From all the surveys and research that has been done, I believe it would be possible to get €400 million out of it overnight. Nothing happened. Instead the Government goes back to the pensioners, makes them convert their medical cards to GP-only cards, raises the drugs payment scheme threshold, and trebles the medical card prescription charge.
What on earth is going on when the Government has to take food out of the mouths of children by reducing child benefit? I am tired of hearing people saying that the rate of child benefit is excessive and that people use it for foreign holidays. Of course that may happen but on the whole, those with three or four children need that benefit. No one has explained why people are being docked €20 for the fourth child, €18 for the third and €10 for the first two children. Massive amounts are coming out of the family budget of someone with four children. That is utterly unacceptable. Middle Ireland is being crucified by this budget.
Budget 2013 constitutes a savage new twist to the pernicious austerity agenda relentlessly pursued so far by the Fine Gael and Labour Party coalition Government, but at huge cost to ordinary people and to society. It is all simply to rescue the European financial market system together with Irish bankers and speculators from their reckless super profit-seeking gambles in the Irish property bubble. Budget 2013 means that virtually every ordinary family will be hammered for at least €1,000 next year. The mantra from the Government that the budget is "tough, but fair" reeks of the most acute cynicism. It put intolerable new burdens and acute suffering onto low and middle-income workers, and social welfare recipients. However, because it imposed a few minor demands on very high-income earners, it supposedly makes it all right. It beats the living standards of working class people to a pulp and because it throws a few perfunctory shapes in the direction of the wealthy it is supposed to make the assault fair and justifiable. What cynicism. This is the logic of a government which lives in a bubble, which is being dictated to by a troika representing the interest, not of the people of Europe, but of European finance capitalism. It is a government whose moral compass is driven by the immorality that informs the European capitalist financial markets and driven by the influences of those who created first the massive orgy of speculation, liberalisation and deregulation on the world financial markets and then crashed the system at huge cost to poor and working class people throughout the world.
Budget 2013 represents a grotesque betrayal by the Labour Party in particular of working class people to whom it made utterly cynical false promises to protect them from what it termed "Fine Gael excess". Do Labour Party Deputies remember this advertisement, published in their name in every national newspaper during the general election campaign which stated, "Look what Fine Gael have in store for you!"
The end of the advertisement stated, "Fine Gael: every little hurts!". Is the Labour Party suffering such delusion that it believes the savage cuts by Fine Gael hurt, but, when Labour blesses those cuts, somehow they do not? Is the Labour Party suffering from delusion that savage cuts in the living standards administered by Fine Gael might hurt badly, but when supported by the Labour Party, those cuts come with a miracle anaesthetic that working-class people miraculously will not feel the pain?
The property tax - a home tax in reality - constitutes one of the most vicious impositions of the budget, designed to gouge anything from €200 to €600 a year from the majority of low and middle-income homeowners. With water tax following, the cost will quickly become €1,000 and beyond. The administrative procedures outlined for the attempted collection of the property tax give the lie to and blow out of existence the propaganda of Government that it is, first, a broadening of the tax base and, second, a local tax. The myth that a property tax broadens the tax base is a transparent ruse to pretend that because it is called a property tax, it does not come out of incomes but from some other mysterious source. It is, therefore, allegedly not a tax on work. However, what is proposed in the budget? According to what we were told yesterday the Revenue Commissioners can instruct an employer, a pension provider or the Department of Social Protection to deduct the amount of property tax from wages. So much for the property tax not being a tax on work or on incomes.
Hopefully we will hear no more of this ruse. Calling it a local property tax is another cynical ploy. If it is a local property tax, why is its collection centralised in the Revenue agency, which is, itself, highly centralised at national level? That of course arises from a recognition that the imposition of the household tax last year was resisted bitterly by an active boycott. To this day 50% of single-home owners have refused to register for that tax or pay it in a massive show of opposition and civil disobedience to an injustice and an immorality that was being imposed upon them as part of the bailout of bondholders and bankers.
If, however, the Government thinks that people will be cowed next year into paying their property, which they cannot afford, it should think again. There will be massive and organised resistance, an intensified boycott and massive mobilisations. When the Revenue Commissioners sends out demands in March left, right and centre to every home seeking this nefarious new home tax, as we are told it will, there will be a massive revolt.
The property tax is a vicious imposition. What we know of the coming legislation would mark it out as draconian. What is the Government proposing? Next Friday, it is proposing to lash through all of Second Stage, guillotine it after a few hours' debate and ram it through all Stages the following week. What we have is a Fine Gael-Labour Government that is now moving from routinely implementing savage austerity to verging on a financial dictatorship over home owners.
Next year is 2013 - 100 years after the historic 1913 Lock-out when the working-class people of Dublin with significant support from around the country rose in rebellion against impositions and injustices by the employer and capitalist class of the day. They found leaders worthy of them in James Connolly and Jim Larkin and other men and women who gave courageous leadership against the injustices of their day. How ashamed they would be that the injustices are now being imposed by the party they founded. The Labour Party, like William Martin Murphy and the Irish Independent in 1913, will be surprised by the massive opposition and revolt they will face next year.
Capitalism is now a sick system and European capitalism is particularly sick and getting sicker. A total of €3 trillion of accumulated profits is lying uninvested by eurozone big business in banks and speculation while 25 million Europeans languish in enforced idleness through unemployment. That is a sick system and to look to it or to try to tweak or manage it for the benefit of society is futile and destructive. We on the left propose instead a socialist alternative by which the resources of society are freed from that system and from the grips of the bondholders and bankers and utilised for the benefit of society and the majority. In this way, we will remake our society into a place where people can live with dignity, jobs and happiness rather than this nightmare that continues to be criminally imposed by Fine Gael and the Labour Party in budget 2013.
The Government commemorated the 90th anniversary of the enactment of the first Constitution of modern Ireland yesterday in a very ironic manner. The Constitution recognised the inalienable rights of the family as superior to all positive law, but what the Government did was to hang out the ordinary man and woman to dry. Our debt is growing more than our growth rate and this budget will do nothing to move us in any other direction. We have done this for wealthy foreign speculators who have bankrupted this State.
We must be the only country in the world where a Labour Party pursues right-wing policies. I know of no Labour Party in any other country that would pursue the policies that the party is pursuing. This is a Labour Party that can suggest that it is fair that the low paid pay the same PRSI increases at the rich, that child benefit be cut, that carers sustain a significant reduction in respite care and that those who cannot afford to pay their mortgages now have to find money to pay the property tax. How can it stand over a budget that will reduce the average family's income by €120 per month but makes no mention of cutting the salaries and pensions of Deputies, culling or merging ineffective quangos, cutting the private education subsidy, abolishing the Seanad or cutting the bloated pay or pensions of top civil servants?
It is inevitable that the reduction in spending power brought about by this budget will once again result in the loss of thousands of jobs. The Government has insulted the people by failing to increase tax on high earners and instead increasing tax on people earning just over the minimum wage by €250. It simply does not make sense that a person earning over €100,000 also faces this same increase of €250. There is much more in this budget.
I addressed a meeting in Waterford on Monday night that was attended by about 500 people. For the first time in the history of the State, the Society of St Vincent de Paul addressed a political meeting, as did a GP, and the stories they told were horrendous. The people at the meeting were from all walks of life - small businesses, the unemployed, middle-income earners, those on low pay and single mothers - and were all stressed and in a state of turmoil. What is offensive is that the Government refused to meet the Society of St Vincent de Paul and read its pre-budget submission. This is an organisation at the coalface in dealing with the problems of the less well-off. We are not talking about few hundred or a few thousand people. We are talking about 700,000 people on or below the poverty line and 250,000 children who will go to school hungry or without proper clothing. The Society of St Vincent de Paul used the term "malnutrition" for the first time in its history. Did the Labour Party think it would hear that terminology in 2012 because this is what is happening? It is out of touch with the reality. There are people going hungry and people who do not have a cent to spend and the Government wants more from them. It wants more from people who have no income and rely on the State and middle-income groups. It wants to take more off those 700,000 people on or below the poverty line. Shame on it.
It wants to take a property tax off 170,000 people in mortgage arrears. They cannot pay their mortgages so how can they pay the property tax? The Government is out of touch with reality. When it will not listen to the Society of St. Vincent de Paul and Social Justice Ireland, it will listen to no one.
Within a number of years, perhaps before the three remaining years of the Government are up, the Labour Party Deputies will be put out of office and reduced to having a paltry number of seats, and rightly so.
During our lives we all make personal and individual choices, and there are choices to be made in every given situation. A swathe of people in the country rely on others to make choices for them because they are economically unsound through no fault of their own. They have been buried in bad debt and have lost their jobs through no fault of their own. All of these people are put on social welfare and bring with them mortgage, car and credit union arrears. They all rely on someone to make choices for them and they need compassion when these choices are being made. They need people to tell them they will show compassion and help them, and not leave them go hungry, send a child to school without proper footwear, sit in a house with no heating or wonder on Thursday whether they will have money to buy food at the weekend. This is when governments, and those of us on the left, when we have the opportunity to do so, are supposed to step up to the plate and look after those who need our help. What has the Government done? It has abandoned them, and this will never be forgiven.
The Labour Party Deputies have fallen into a false sense of security if they think things will get better in time for the budget after next. By then they will have done irreparable damage to hundreds of thousands of people in the State. They will have been complicit with the bankers who have sent people to their deaths and to absolute despair. A total of 450,000 people in the country suffer from depression, which is one of the highest percentages per population in Europe. The Government is complicit with this, and shame on it. These are not my words, they are those of a GP who spoke at my meeting on Monday about people who have attended his constituency office and clinic, some of whom have killed themselves. The Government is complicit in this. It has let down the ordinary everyday average people who wanted it to make a choice for them because they cannot do so. The Government Deputies will pay a heavy price for this.
This morning I received an e-mail from a girl called Jean who stated she could have cried when she heard the details of the budget because the Government is bringing our people to their knees. She is a lone parent with a mortgage who works part-time but also attends college part-time, for which she pays. This year she approached the Society of St. Vincent De Paul to help her with her college fees, having never thought she would be in such a situation. She stated she does not know where she will find the money to put food on the table from week to week or to bring her children to the doctor if they get sick. She stated she is embarrassed to find herself in this position as she has always kept her head above water and tried to pay her bills, but she is slowly sinking. This sums up what the Government is doing to people in Ireland. All of these people will remember what the Government has done and they will make the Deputies pay for it.
I am pleased to have this opportunity to outline to the Dáil the principal features of the 2013 Estimates for the Department of Arts, Heritage and the Gaeltacht. I echo the comments of my colleagues, the Minister for Finance, Deputy Noonan, and the Minister for Public Expenditure and Reform, Deputy Howlin, who outlined the full package of budgetary measures yesterday. Ireland is making steady progress, but we still have a long way to go. The Government is prepared to travel the distance that remains to reach a sound and stable economic position. The Department will play its part in making that journey.
In this context, gross funding for the Department of Arts, Heritage and the Gaeltacht will be €252.4 million in 2013 with an allocation for current expenditure of €215.3 million and a capital allocation of €37.095 million. A further €8.1 million, comprising €7.183 million in current funding and €905,000 in capital funding, is provided through Vote 34 for the National Gallery. This brings total funding for 2013 to €222.4 million in current spending and €38 million in capital. Within this funding allocation, the Department will oversee the conservation, preservation, protection, development and presentation of Ireland's heritage and culture. The Department will also promote the Irish language, support the Gaeltacht and assist the sustainable development of island communities.
Funding for 2013 will be reduced by approximately €10 million in current and €6 million in capital on the 2012 figures. As Members will appreciate, as a consequence of the significant fiscal deficit facing the country, we just do not have the same level of resources available to fund this work as we had in previous years. However, the Department will work hard to ensure the best possible use is made of the available funding.
Approximately €125.4 million, or 50% of the Department's resources, will be allocated to the Department's arts, culture and film programmes in 2013. Funding for the arts, culture and film represents a significant contribution not only to sustaining the arts and national cultural institutions but also to the economically important cultural tourism sector. My key focus for the arts and culture is to protect jobs and stimulate creativity. Of this total, €60.7 million will be allocated for the Arts Council for 2013 from current, capital and European Presidency funding. This is the maximum possible funding I can allocate to the Arts Council for next year, and is below the average reduction I have had to apply across the board in the Department. This will allow the council to continue to support arts organisations of varying sizes - from national bodies such as the Abbey Theatre to small, locally based groups - across a broad range of individual art forms and arts practices.
It is worth noting that between 2007 and 2011, funding to the Arts Council declined by almost 22%, from €83 million to more than €65 million. Since becoming Minister I have also had to reduce funding to the council, but I have worked to slow this decline as much as possible. This year, funding to the Arts Council was 2.9% lower than in 2011, the smallest year on year reduction since 2008. Next year, the reduction will be approximately 4% below the average reduction I have had to apply in other areas of the Department.
The 2013 allocation is also an acknowledgement by the Government of the contribution of the arts in the generation of employment in communities. The arts are the bedrock of many communities and also play a real role in Ireland's cultural tourism offering. I have worked hard to minimise the level of reduction in funding to the Arts Council for 2013.
Within the arts and culture envelope, I will hold current funding to the National Archives at its 2012 level of €1 million. This is to assist in the ongoing work of the archives, which is of great importance, and also to recognise the role of the archives in the current commemorative programme. With regard to national cultural institutions, the priority in 2013 will be to keep venues open and to maintain as far as possible front of house services to the public to ensure what they offer to the public continues to draw large numbers of people, including overseas and domestic tourists. Funding of approximately €11.3 million will be allocated to the group of cultural institutions comprising IMMA, the Chester Beatty Library, the National Concert Hall and the Crawford Gallery. Approximately €3.9 million will be allocated to regional museums, galleries and cultural centres. Approximately €11.9 million will be allocated to the National Museum of Ireland and €6.7 million allocated to the National Library of Ireland.
The rate of reduction in the core funding for the Department's Culture Ireland programme has been arrested.
Including the EU Presidency culture programme funding, the total allocated to the culture Ireland programme in 2013 will increase compared to the current year.
A provision of over €18 million is being made available in respect of capital expenditure. The bulk of this capital funding will be channelled toward the Irish Film Board, in recognition of its importance from both a cultural and employment perspective. One of the key reasons Ireland continues to be chosen as a film location is the work the Irish Film Board does to promote Ireland at international film and television markets. The positive impact of this work is threefold, in terms of creating jobs in Ireland, creating spend on local goods and services, and promoting Ireland on the big and small screens to audiences of millions internationally.
I also welcome the decision by the Minister for Finance, Deputy Noonan, to extend the section 481 film tax relief scheme until the end of 2020. This will give a great deal of certainty to the Irish audiovisual sector to the end of the decade. Moving to a tax-credit model will be a significant change, but there is an extended lead-in period to the new arrangements to enable the sector to adapt. This year alone a number of significant productions are filming in Ireland, including "Vikings", with a spend in Ireland of €25 million, and "Ripper Street", with a spend of almost €11 million. The extension of the scheme is important for Ireland, for both the jobs that are supported by this sector and our location as a place for film and audiovisual investment.
Funding of some €44.3 million has been made available in the context of my Department's heritage programme. A provision of almost €37.6 million has been allocated for current expenditure with a further €6.8 million in capital funding. A further €1.2 million in capital funding will be carried over into 2013 giving an overall reduction in funding for heritage of approximately 6% next year.
Exchequer funding of around €4.4 million will be made available to support the work of the Heritage Council. My Department will be working with the council over the coming months to implement the findings of the recent review which recognised the council's particular strengths in supporting and building links with local communities and local government in the promotion of our heritage.
With regard to natural heritage, the key outputs in 2013 will focus on meeting our obligations under EU directives. Turf-cutting and the protection of designated raised bogs remains a key concern for my Department and I remain determined to address this issue in a way that is fair, balanced and supportive of those affected. My Department and the Peatlands Council will continue to work closely with turf-cutters who are required to cease cutting turf on Ireland's 53 special area of conservation raised bogs so as to ensure that their needs are met through relocation to a new bog or through compensation. A national plan will be progressed for the management of these protected habitats together with an overarching peatlands strategy to set out national policy on the future of all of Ireland's peatlands.
Heritage functions in my Department will also continue to be supported through the Environment Fund in 2013. The level of allocation from that fund will be decided in due course.
I am committed to developing North-South co-operation within the broader arts, heritage and commemorative activities of my Department as well as through the funding of North-South bodies. An indicative provision of €40.3 million is being made available to support the two North-South implementation bodies, An Foras Teanga comprising Foras na Gaeilge and the Ulster-Scots Agency, and Waterways Ireland. These allocations will fall to be agreed by the North-South Ministerial Council in due course.
My Department makes a significant contribution to supporting economic activity and employment across the country, both in the sectors that it directly supports and, equally, in the context of cultural tourism. My primary concern is to make every effort to ensure that, within the provision available to me, I can continue to support the agencies that are contributing to job creation while also maintaining front-line services to the public. In addition, for 2013 every saving that can be made from cutting down on overheads, and through the public service reform plan, will continue to be pursued. The Government has reaffirmed its commitment to fairness, jobs and reform in the budget. My Department will continue to play its part to help move Ireland to a sound and sustainable economic position.
Tá áthas orm an deis seo a fháil labhairt sa Teach inniu maidir leis an soláthar do mo Roinn i dtaca le cúrsaí Gaeilge, Gaeltachta agus Oileán. I dtús báire, ní miste a rá gur figiúirí tascacha iad na figiúirí a bheidh á lua agam, faoi réir na Meastachán a bheith foilsithe agus faofa i Feabhra 2013.
Is léir go bhfuil acmhainní an Stait thar a bheith tearc faoi láthair agus go raibh cinntí crua le tógáil dá réir ag an Rialtas maidir le leithdháileadh na n-acmhainní sin sa cháinaisnéis a cuireadh i láthair an Tí seo inné. I bhfianaise an tsoláthair laghdaithe atá curtha ar fáil do ghnothaí Gaeilge, Gaeltachta agus Oileán, is léir go mbeidh cinntí crua le tógáil ag mo Roinnse fosta. É sin ráite, tá sé i gceist againn na seirbhísí túslíne a chosaint oiread agus is féidir.
San iomlán, beidh beagnach €57 milliún le caitheamh ag mo Roinnse in 2013 ar ghnóthaí Gaeilge, Gaeltachta agus Oileán, lena n-airítear an Foras Teanga. Áirítear anseo beagnach €42.4 milliún atá le caitheamh ar ghnothaí Gaeilge, Gaeltachta agus Oileán agus tuairim is €14.6 milliún ata le caitheamh ar an Fhoras Teanga thuaidh agus theas, faoi réir chomhaontú na Comhairle Aireachta Thuaidh Theas.
Ní miste a rá go bhfuil laghdú idir 4% agus 5% tagtha ar an bhuiséad reatha agus go bhfuil laghdú 10% tagtha ar an bhuiséad caipitil sna réimsi a thagann faoi mo chúram. Ach é sin ráite, tá mise dóchasach go mbeimid in ann aghaidh a thabhairt ar ár gcuid tosaíochtai a chomhlíonadh taobh istigh den tsoláthar a bheidh againn.
Mar is eol don Teach, tá cur i bhfeidhm na Straitéise 20 Bliain don Ghaeilge ar an chloch is mo ar phaidrín mo Roinne ón uair gur tháinig sí i bhfeidhm i mí na Nollag 2010. Agus Acht na Gaeltachta 2012 ina dhlí anois, táimid ag tabhairt tús áite don phróiseas pleanála teanga agus muid ag treabhadh ar aghaidh le cur i bhfeidhm na straiteise.
Má bhreathnaítear ar an chaiteachas reatha i dtosach, tá me an-shásta a fhógairt go mbeidh tuairim is €3.4 milliún ag Údaras na Gaeltachta a bheidh le caitheamh ar chur i bhfeidhm na straitéise sa Ghaeltacht agus, ach go hairithe, chun an próiseas pleanála teanga a fheidhmiú i gcomhar leis na heagraíochtaí pobalbhunaithe sa Ghaeltacht. Is díol suntais atá ann gur éirigh linn buiséad reatha an údaráis a mheadú agus is féidir liom a rá gur tógadh an cinneadh sin mar gheall ar thábhacht an phróisis, pleanála teanga. Ina theannta sin, beidh tuairim is €9.2 milliún ag Údaraá na Gaeltachta dá bhuiséad riaracháin.
Chomh fada is a bhaineann sé le caiteachas reatha mo Roinne, meastar go mbeidh tuairim is €6.7 milliún againn le caitheamh ar na scéimeanna tacaíochta Gaeltachta agus tuairim is €4.1 milliún againn le caitheamh ar na scéimeanna tacaíochta Gaeilge taobh amuigh den Ghaeltacht. Cé go bhfuil laghdú tagtha ar na figiúirí seo ón bhliain seo caite, tá mé ag súil go mbeimid in ann na seirbhísí túslíne a chosaint sna réimsí seo, ar nós na mná tí agus na coláistí Gaeilge, oiread agus is féidir.
Ní miste a rá go bhfuil mé an-shásta a fhógairt go mbeidh an t-allúntas céanna, is é sin €5.9 milliún, ann do na seirbhísí iompair do na hoileáin. Arís, is díol suntais atá ann gur éirigh linn an t-allúntas seo a choinneáil ag an leibhéal céanna, i bhfianaise na laghduithe atá curtha i bhfeidhm beagnach trasna an bhoird i mo Roinn.
Ar an taobh caipitil, tá mé an-shásta a fhógairt go bhfuil méadú tagtha ar an allúntas d'Údarás na Gaeltachta go tuairim is €6 mhilliún. Tógadh an cinneadh seo i bhfianaise tábhacht an allúntais seo do chruthú fostaíochta agus d'fhorbairt fiontraíochta sa Ghaeltacht. Idir allúntas an Státchiste agus acmhainní an Údaráis féin, tá mé ag súil go mbeidh an t-údarás in ann leanúint orthu ag cruthú post nua sa Ghaeltacht agus ag cosaint na bpost atá ann faoi láthair.
Maidir leis an allúntas caipitil a bheidh le caitheamh ag mo Roinn, beidh tuairim is €1.2 milliún le caitheamh ar na scéimeanna tacaíochta Gaeltachta agus beidh allúntas de thuairim is €680,000 ar thaobh na n-oileán.
Maidir leis na háisíneachtaí a thagann faoi scáth mo Roinne, creidim go mbeidh soláthar dóthanach acu in 2013 chun leanúint orthu lena gcuid feidhmeanna reachtúla a chur i gcrích. Beidh allúntas iomlán de thuairim is €18.6 milliún ag Údarás na Gaeltachta chomh maith le maoiniú breise óna gcuid foinsí féin. Beidh allúntas de €615,000 curtha ar fáil d'Oifig an Choimisinéara Teanga in 2013.
Ina theannta sin, beidh tuairim is €14.6 milliún ag an bhForas Teanga thuaidh theas, faoi réir chomhaontú na Comhairle Aireachta Thuaidh Theas in am trátha.
Mar fhocal scoir, creidimse go bhfuil tiomantas an Rialtais don Ghaeilge, don Ghaeltacht agus do na hoileáin le feiceáil go soiléir sa leithdháileadh atá beartaithe do mo Roinn don bhliain 2013. Ciallaíonn an soláthar seo go mbeidh mo Roinn in ann leanúint uirthi ag tabhairt tosaíochta do chur i bhfeidhm na Straitéise 20 BIiain don Ghaeilge, chomh maith le tacaíocht a thabhairt do phobal na Gaeilge, na hUltaise, na Gaeltachta agus na n-oileán tríd an réimse leathan gníomhaíochtaí a mhaoiníonn mo Roinn agus áisíneachtaí mo Roinne.
This budget is first and foremost an arithmetical exercise, as all budgets are, designed to bring in a certain amount of tax, spend a certain amount of money and come to a final result at the end of the day. A budget also needs to be more than just an exercise in mathematics, but the problem is that this one is not. A budget needs to be part of an overall strategy and must have a certain strategic element. It must be obvious where it fits into that strategy. I can see no evidence of any overall or coherent strategy in this budget. It lacks direction and is aimless. Quite honestly, I have seen more coherence in a bunch of fireworks. There is no direction or plan involved.
Before the most recent general election, the Labour Party favoured a 50-50 split between tax and expenditure, while Fine Gael's position was 3:1 in favour of expenditure. When both parties got together to write a programme for Government, they compromised on 2:1. I can understand that but in a compromise at that level when budgeting, especially in a time of crisis when one is trying to close a yawning fiscal gap, one must introduce measures that basically pass two tests. First, they will necessarily take money out of the economy, which will reduce activity, but they must also be geared to do minimal damage and create opportunities for the country to begin to grow back to prosperity. The second criterion is that a budget must be fair in order that those with the broadest shoulders take the hardest hit. There is no evidence that this budget has either direction or fairness. This budget is simply a compromise, consisting of a mishmash of measures to which both Government parties, or at least one of them in particular, could be persuaded to sign up, rather than having any coherent strategy.
That is underlined by the much publicised row over the universal social charge. Apparently, the Labour Party's Cabinet members went into various meetings on the basis that they wanted to increase the universal social charge for people earning more than €100,000 per annum. That was also part of our policy proposals. Fine Gael said the only way it would agree to that would be if the Labour Party agreed to let it punish the poor by reducing social welfare. Fine Gael apparently proved to be particularly unyielding on that, so both party leaders had a side meeting and what emerged was something called a mansion tax. What a nonsense.
The mansion tax is a phantom, a chimera and a shameless fig leaf to conceal the naked capitulation of the Labour Party to the demands of Fine Gael. How can a party that calls itself Labour and claims descent from Connolly and Larkin sign up to consecutive cuts to the clothing and footwear allowance? In addition, there have been cuts to the back-to-education allowance, respite care grant, jobseeker's benefit, household benefits for the poor and elderly and a trebling of prescription charges.
The latter is an invention of the Minister for Health, Deputy James Reilly. He was the man who proved that not only could Fine Gael not keep its pre-election promises, it could not keep its post-election promises either. After the election, I well recall Deputy Reilly saying that he intended to abolish the prescription charge. I do not take anything he says particularly seriously. He has proven that he is the man with the un-Midas touch. Everything Midas touched turned to gold, but everything Deputy Reilly touches turns to mould.
The discussions on how this matter was played out between both parties, which got a lot of coverage in the national newspapers, is most interesting. In last Monday's Irish Independent, a Labour source - and Labour was part of the Government the last time I checked - said: "We feel Fine Gael are out of touch and decided to throw welfare cuts into the pot ... It reveals the priority of our coalition partners about who they want to protect and who they want to target." That is from a Labour source and is well said. I could not have put it better myself.
In the same edition of the Irish Independent, a Labour Party Deputy - somebody who is keeping the Government in office and will probably vote for this budget also - said: "They [Fine Gael] don't care about the ordinary punter ... We're furious." Not furious enough obviously, although we will see next week. I notice that a lot of them are wrestling with their consciences. I have been here a long time and I have often witnessed the spectacle of Labour wrestling with its conscience; it usually wins. Let us hope the trend changes on this occasion.
The old guard in the Labour Party, what some political journalists like to refer to as the grumpy old men, the leadership who are coming up to retirement on massive pensions, seem to be dictating the pace. Their policy can be summed up in one sentence - pensions before principle.
There was an extraordinary story in the Irish Independent on Tuesday, from a Fine Gael source this time.
It said that the Minister for Social Protection, Deputy Joan Burton, wanted to have even more savage cuts. He said: "We were ... irked that she [Deputy Burton] put herself out as the protector of the oppressed when she had put forward this package." She actually had to be talked out of a couple of cuts, including to the bereavement grant and some other aspects of social welfare. It is difficult enough to live in this country under this Government, but if the Minister for Social Protection had her way, it would be equally difficult to die under it.
That is where we stand. I am looking forward to see how that contest between the various Labour Party members and their consciences plays out next week when we have to face up to it and vote on these social protection measures. I can assure the House that, as my party's spokesman on social protection, I will give them every opportunity to vote against any of those measures they wish.
The greatest social and economic problem facing this country, and from which many other problems stem, is the scandal of unemployment. In his budget speech yesterday, the Minister for Finance, Deputy Noonan, told us that "Unemployment fell by 3,600 on an annual basis in the third quarter of this year". In the name of God, what planet is this man living on?
Last week in Limerick city, a small businessman advertised for two full-time jobs and one part-time job. They were not highly paid jobs and were pretty difficult. He got 700 replies, 80% of which were from people who were massively overqualified for the work in question. There are 50 applicants for every job vacancy. That is the reality of unemployment in every quarter, not just the third.
In his budget speech last year, the Minister for Finance said "The core [mission] of this Government is to get Ireland working again". Therefore the core mission and unifying aim of the Government was to bring down unemployment.
As the Minister has set the yardstick, Members should consider how he measures up to it. When the Government took office, the unemployment rate was 14.1% and it now stands at 14.8%. However, that does not even begin to tell the story. It does not relate how almost two out of three of those who are unemployed have been unemployed for at least 12 months and more than one in three of them have been so for at least two years.
It does not reveal that many people are leaving the workforce. As Dan O'Brien noted in an article in The Irish Times last Monday, one measures the participation rate, which is the true measure of unemployment. Moreover, it does not take into account the fact that people are hiding out in the education system and in all the training schemes and nor does it take into account that, if my arithmetic is correct, 200 people per day are emigrating from this country. They are not doing so from a desire to view the Seven Wonders of the World, as the Minister for Finance, Deputy Noonan, once suggested, but simply because they have no job and they wish to get one. Moreover, many of them are taking with them skills expensively acquired at the expense of the Irish taxpayer, that is, those very skills needed to get the country going again.
If one measures this in another way, the Government published a stability programme update in April 2011, which is fair enough. It projected that the numbers at work would grow by 102,000 over the period from 2011 to 2015. However, if one fast-forwards to April 2012, when the famous jobs initiative was published, that figure of 102,000 had fallen to 67,000. Moreover, if one fast-forwards a further six months to last month when the Government published its medium-term fiscal statement, the number by which employment will grow in the period from 2011 to 2015 had now fallen to 18,000. In its projections last year, the Government expected employment to grow for the past 12 months but instead, it has fallen by 24,000. Consequently, the net result of all these bamboozling figures is that at present, 1.81 million people are at work and the Government expects that figure to be 1.828 million, or 18,000 more, by 2015. What does this make of the Taoiseach's promise that he will take 100,000 long-term unemployed people from the live register during the lifetime of the present Government? There is as much chance of this happening as the man had of finding El Dorado or the people had of finding the Holy Grail, when they all became lost, suffered from disease and illness or were destroyed. That objective has disappeared and the Government's own policies have helped to create this situation.
I refer to lack of investment, regressive taxation and cuts in capital expenditure etc., as well as an excessive and almost exclusive concentration on the supply side of the economy when a large part of the problem is on the demand side. How much time have I left?
-----Ireland now is a tale of two countries. On the one hand, there are the rich and the exempted, whose privileges are protected and preserved intact, while on the other hand, 750,000 people are living below the internationally-recognised poverty line in a population of slightly more than 4 million. In other words, 750,000 people are living below what is regarded as the international threshold of decency, of whom 250,000 are children. As Deputy Halligan who preceded me remarked, for the first time in perhaps half a century, children, the unemployed, those with special needs and, increasingly, those on the margin are going without. Members will deal with the issue of social welfare next week and I have recorded carefully everything all those Labour Party Members who have been wrestling with their consciences have said and I will hold them to account next week.
From the outset of this budgetary process, the Government was determined to build on the progress achieved in recent years in developing the agrifood sector and in particular to further contribute to the future growth and prosperity the sector can achieve for Ireland in expanding its revenue base through growth in export earnings. The Exchequer contribution to the Vote of my Department in 2013 will amount to approximately €1.25 billion. Although constrained by tight budgetary disciplines imposed right across the economy, which originally demanded a reduction of €114 million for next year, the Government was determined to minimise the impact of the scale of the reduction in order that the most important schemes and programmes upon which the sector relies most were protected to the greatest extent possible. I am pleased to state that through re-orientating and re-scheduling payments, the Department of Agriculture, Food and the Marine has managed to fund new schemes and programmes, while also reducing the scale of savings to a lower amount of €89 million compared with 2012, while protecting farm incomes.
The 2013 budget reflects a significant Exchequer commitment of support for the agrifood sector and is recognition of the contribution the sector can make to economic recovery and future growth. The voted expenditure for 2013 of €1.25 billion is comprised of approximately €1.057 billion in current expenditure and €193 million in capital expenditure. The downward budgetary movement between 2012 and 2013 of €89 million reflects lower budget requirements for a number of measures. The Department was particularly pleased to secure an increased capital allocation in 2013 of approximately €25 million from the Department of Finance in a period of very scarce resources. This enables a meaningful capital programme to be undertaken, including funding for approximately 7,000 ha of new forest planting.
As for the key priorities, this year’s budget is consistent with that of last year with regard to the Government’s priorities for the agrifood, marine and forestry sectors, namely, the protection of incomes for family farms, support for small farm holdings in disadvantaged areas, taxation measures to restructure, modernise and promote growth in the agrifood and farming sectors, the provision of support programmes in line with the targets of the Food Harvest 2020 strategy, particularly concerning job creation, the provision of support for the future of the sector through new research and development funding and through investment in food safety and animal health and welfare controls and a continued programme of reform within the Department aimed at continued improvement in service delivery and reducing costs.
I refer to taxation measures in respect of restructuring and modernising the agrifood sector In addition to and together with direct financial support for the agrifood sector, the Department has secured agreement for a range of taxation reliefs that will link in with the key measures being pursued in the Food Harvest 2020 strategy for the growth and development of the agriculture, food and marine sectors. The main taxation measures in the budget which will benefit the sector are the retention of the general 25% rate of stock relief for all farmers and 100% stock relief for young trained farmers, a new farm restructuring initiative to allow consolidation of land parcels with the aim of improving the overall efficiency of the combined holdings, an expansion of the foreign earnings deduction scheme, which benefits SMEs, to apply where an individual spends 60 days a year developing opportunities for Ireland in certain key markets, the extension of the farm partnership scheme to sectors other than milk production partnerships, subject to State aid approval and relief from excise duty on auto-diesel for licensed road hauliers. These taxation measures reflect the Government’s commitment to the agrifood industry and in particular to the expansion planned in the Food Harvest 2020 strategy. They are designed specifically to address key constraints in the sector and ensure the growth potential of the sector is fully realised.
In respect of beef, I note the €25 million of continued investment in suckler beef. The Department was anxious to build on the success of the suckler cow scheme that operated from 2008 to 2012 and accordingly, has allocated €10 million in 2013, financed from unspent single farm payment funds, for a new support programme for suckler beef farmers to participate in a new beef data programme. When taken together with residual payments of €10 million under the suckler cow welfare scheme, this will amount to €20 million in direct payments to suckler farmers in 2013. This programme will assist farmers in improving the genetic quality of Irish cattle and will maintain the data flow into the Irish Cattle Breeding Federation, ICBF, to build further knowledge and more rapid progress in breeding and ultimately in profitability for farmers.
In addition, the sum of €5 million has been set aside to support the continuation for another year of the beef technology adaptation programme, a scheme that provides beef farmers with better information and improved skills to increase profitability on farms.
The dairy sector continues to perform very well on international markets. New growth projections arising from the abolition of quotas in 2015 will allow Ireland to increase milk output by up to 50% in line with the industry target set out in Food Harvest 2020. My Department is anxious to continue to support this growth and has provided some €10 million under the targeted agriculture modernisation scheme in support of dairy farm modernisation, providing grant assistance of up to 40% for investment in dairy farm facilities. Although the dairy discussion group programme has come to an end and has achieved its objectives, an additional sum of €1 million has been provided to allow a further opportunity to new entrants to participate in this valuable programme, which builds organically a level of knowledge of best farming practice, tutored by peers, and which has proven extremely popular and beneficial in building greater levels of on farm efficiency.
I am thankful for the opportunity to contribute to the debate, as I have a number of points to make. It is inevitable, when €3.5 billion is taken through tax rises and expenditure reduction, that it will be difficult for our people. That is on top of the fact that since 2008, €24.5 billion in tax rises and expenditure cuts have occurred. We must focus on the remarks of the Minister for Finance, the Taoiseach and the Tánaiste. When this budget is in play next year through a finance Act and social welfare Act, some 85% of the adjustment required to get the deficit to 3% by 2015 will have occurred. The House must be clear about that.
I wish to say to the Irish people that there is light at the end of the tunnel and we are getting to the last furlong of this race. It has been a torturous process for our citizens, whether they live on their own or as part of a family. The most difficult part of the race is for the 300,000 people who have lost their jobs since the collapse of this economy under Fianna Fáil, and that is where we must focus. We must get back to a state of creating and sustaining jobs.
The comments of my colleague, Deputy McEntee, have highlighted the very progressive and innovative ideas now taking root in agriculture that will spur the agricultural food industry. The ten-point action plan announced by the Minister for Finance, Deputy Noonan, and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, has made the cornerstone of this budget the small and medium enterprise sector, which employs 70% of all workers within the country. The only way out of this is getting employment back to previous levels, and that is the only way to provide the funds needed for public services.
I will speak to the taxation system in the short time I have today. Despite the polemics, Punch and Judy antics and hyped comment made on all sides of the House, I ask Members to read annexe F in the budget documents submitted to the House by the Minister for Finance yesterday. Within annexe F, it can be seen that the Irish tax system is the most progressive taxation system of the 27 member states of the European Union; I am making that claim in the House today. A European Commission study indicates that since the adjustment process began in 2008, 30% of the overall adjustment has been borne by the richest 10% in this society, with 70% borne by the richest four income groups within the society. The ESRI report highlights that from 2008 to 2012, the greatest losses in the period were for those with higher incomes, with the smallest losses for those on low incomes. An OECD report on taxing wedges indicates that from 164 countries, Ireland has the second most progressive taxation system.
Those opposite have put the charge to this Government that we have not introduced progressive taxation measures during the course of budgets. Those with the biggest incomes have borne the most, and the top 10% of income earners in this society pay 60% of all tax. Some 70% of people in our country have incomes of €50,000 or less and they pay 19% of all income tax. That is the way it should be. Yesterday's measures included increases in capital taxation, deposit interest retention tax, capital gains tax and capital acquisitions tax. There was an extension of PRSI to unearned income, including consultancy, rent and the like. There was also the extension of the universal social charge to older citizens with very substantial pensions.
These are examples of the continuation of a progressive budget where those who have more would pay more. Ultimately, this budget will only be determined on the ability of our Government and the country to get people back to work. It can sometimes be appalling to listen to the Opposition as every time the Taoiseach makes a positive jobs announcement, such as recent announcements about PayPal, Paddy Power or Google, the heads of those opposite drop because they do not want to hear about it. For them, the perpetual Punch and Judy Ballymagash politics continues, where good news for this country about foreign direct investment can be pilloried.
I ask the Opposition to work with the Government as we attempt to get Ireland out of a hole and the legacy in which we were landed by the previous Administration. In that regard I believe the measures obtained in this budget will once again highlight the progressive nature of our taxation system and the fairness through which adjustments are being borne.
Is dóigh liom go bhfuil an buiséad seo féaráilte, cé nach bhfuil aon dabht ach go bhfuil sé crua ar a lán daoine. Táimid ag troid ar feadh blianta anois chun fostaíocht a chruthú agus chun postanna a chur ar fáil, go háirithe do dhaoine óga. Tá sé an-tábhachtach go leanfar leis an obair seo agus go dtiocfaidh críoch leis. It is very important to note, as my colleagues have said, that although this is a tough budget, it is part of a series from the past number of years. There is light at the end of the tunnel and we know where we are going. We have made very significant progress economically, and by the end of next year 85% of the heavy lifting of decisions and burdens to be borne proportionately will be done. The more people have, the more they will pay, as that is the only way forward.
In many ways this budget is the watershed for really tough decisions. With every euro coming to the tax coffers, approximately 82 cent is spent by three different Departments. The Department of Social Protection has a budget of €20 billion, the Department of Health has a budget of €13.8 billion and the Department of Education and Skills has a budget of approximately €8.6 billion. In most Departments, a significant proportion of money goes to paying people who work in the areas so the amount left is critical when we are discussing cuts. People will judge the equity and fairness of the budget.
We are looking to the future and the creation of jobs. In my constituency we have been lucky in the past number of years and this year in particular because we have created jobs. In my home town over 600 jobs have been created this year from foreign direct investment. Why is that investment coming and why have 10,000 jobs been created this year by IDA Ireland? It is because the economy is competitive and our costs have decreased. Internationally, we are much more competitive than we have been, and people wish to invest in a country with a young, talented and educated work force. We have modern communications with broadband and road and rail networks. People are coming to Ireland because they can do business with our country.
One of the key points about the budget is that there is no change in corporation tax, which remains at 12.5%.
Long may that be the case.
As my colleagues noted, the burden of the budget is falling on people in a manner proportionate to their income. In other words, the greater one's salary, the more tax one pays. Speakers have referred to equity in the context of the property tax and I accept it will be difficult to pay the tax. North of the Border, however, people pay a property charge whether they live in a terraced house on the Falls Road or in a semi-detached house on the Malone Road. The average annual charge equates to €1,200 and every improvement a person makes to his or her home results in an increase in the tax. Moreover, councils may impose an additional amount and I note with interest that members of Sinn Féin on Belfast City Council and other local authorities in the North have proposed raising funds locally for local issues.
The property tax will deliver greater accountability and democracy in local government because from 2015 onwards local authorities will have the power to levy local charges to improve their local areas. While some will argue that 1977 was a long time ago, the most damaging political decision taken in our lifetime was made in that year. I refer to the ridiculous decision to abolish property charges and road taxes. This proposal was used to buy the 1977 election and the country suffered as a result.
This Government did not create the current appalling financial mess but was elected to deal with it. Our role is not to be popular but to do a job. We are fighting to get out of the current mess and taking tough decisions. There is, however, light at the end of the tunnel as it is clear from conversations I have with people involved in commercial life, whether business or property, that a change is coming. The tough decisions being made and the burdens being imposed on people, proportionate as they are, will deliver success and the Government will stay the course.
The members of the coalition Government and all who support it in the Oireachtas should hang their heads in shame at the disgraceful budget introduced yesterday. For members of the Labour Party in particular, yesterday was a day of shame. Where now are the claims of their party to be the protectors of the vulnerable? A leading member of the Labour Party, who was previously a member of both Democratic Left and the Workers Party, once famously had a bonfire of documents in his back garden, as I am sure some of the Deputies opposite will remember.
Today, members of the Labour Party must be regretting that they did not burn every one of the posters they put up all over the country in the final week of the 2011 general election campaign featuring the slogan, "Protect Child Benefit - Vote Labour".
Even the political opponents of Fine Gael and the Labour Party are shocked at the extent of their attacks on children, the poor, the sick, the old and financially struggling families. The Minister for Finance, Deputy Noonan, with his talent for stating the blindingly obvious, indicated the financial crisis could be summed up in one word, namely, "debt", before proceeding to pile more debt on household budgets that have already been pushed beyond breaking point. The cuts to child benefit are the single worst assault in decades on the incomes of families with children. They hit low to middle income families worst and come in the wake of the children’s referendum when Fine Gael and the Labour Party claimed to be defenders of children’s rights.
I deplore the cynical spin from the Government, repeated by many media outlets, that the cut to child benefit is €10 per month. The position is much worse than that. The cut of €10 per month applies to the first and second children, while the cut for the third child is €18 and it is €20 for the fourth and subsequent children. This equates to a €58 monthly cut for a family with four children and €98 for a family with six children. Do members of the Government have any conception of the impact of such cuts on struggling families? Tens of thousands of families rely on child benefit payments to pay monthly bills that keep their children fed, clothed, in school and with a roof over their heads.
Among the cruellest cuts was the Government's decision to impose a reduction in the back-to-school clothing and footwear allowance, which severely punishes the most needy families. Need I remind the House that it was a children’s footwear tax that brought down a previous Fine Gael-led coalition. Are there any brave souls among the Fine Gael and Labour Party Deputies who will stand against these cuts?
Families will also be hit by the so-called property tax. This is not a property tax but a family home tax that will result in unsustainable debt being piled on unsustainable debt for families across the State. The family home tax will be resisted and opposed even more strongly than the household charge. It is clear that some Government voices are very uncomfortable with this measure and I call on the Government, even now, to step back from the brink by not proceeding with it. I urge maximum opposition across the State to this cruel measure. Let there no doubt that the choice is to tax wealth as opposed to family homes.
A cynical but futile attempt at deception is being made about the true impact of this budget. It began with the withholding of the budget documents during the speech of the Minister for Finance, Deputy Noonan, and is being maintained across all Departments, none more farcical than the Department of Health. The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, tried to give the impression that spending on health would increase when the truth is that cuts of €781 million are to be imposed in 2013. Fine Gael and the Labour Party are destroying our health services. When they cut more than €750 million from the health budget for 2012, in addition to the €1 billion cut in 2011, we said the cut was unsustainable and would cause significant damage to the health services. They then cut a further €130 million last August and only this week the Minister for Health, Deputy James Reilly, had to ask the Dáil for an additional €360 million Supplementary Estimate to prevent services from collapsing before the end of 2012. Next week, we will have the bizarre spectacle of the Minister coming before the Select Sub-Committee on Health to address his Supplementary Estimate for 2012, just as he is planning to impose further unsustainable cuts for 2013.
The Minister for Health and his Cabinet colleagues are imposing massive cuts that are unsustainable and will deliver further hammer blows to our public health services. The Government promised free general practitioner care for all, yet it is planning to impose further restrictions on access to the medical card in 2013 in order that fewer of even the most needy will have access to free GP care. So much for the trumpeted so-called health reforms of Fine Gael and the Labour Party.
The Government’s failed austerity programme has resulted in the savage cutting of 950,000 home help hours in 2012. Far from restoring these vitally needed hours to some of our most vulnerable citizens, Fine Gael-Labour Party spending cuts in 2013 will mean more home help cuts, notwithstanding the vague claim by junior Minister, Deputy Kathleen Lynch, that there is a commitment to "restore" these services. Anyone relying on a Labour Party junior Minister to deliver on that promise after this budget is living in cloud cuckoo land.
I will describe the reality of the cuts in home help hours using some examples I cited to the Minister in committee last week. Last Saturday, people with disabilities and older people met in Cavan town in my constituency to protest at these cuts. One local example they gave me related to a 94 year old man whose home help hours have been halved from 11 to five hours per week. I have also received a representation on behalf of a 99 year old man in County Mayo who is living alone and has had his three hours home help per week cut to two. I could provide several more examples but will instead conclude by reflecting on the fact that, despite vehemently opposing prescription charges for medical card holders imposed by the former Minister, Ms Mary Harney, the Labour Party and Fine Gael have trebled these charges to €1.50 per item and increased the monthly maximum payment from €10 to €19.50.
The Minister for Health, Deputy Reilly, has failed to deliver the promised reductions in the exorbitant prices of medicines. Instead, he is passing on the cost to patients through higher prescription charges and the increase in the threshold for the drugs payment scheme from €132 to €144 per month.
I could go on ad infinitum, there are so many serious fault lines in this budget package, but I will conclude. We reject this budget, we stand shoulder to shoulder with those who bear the brunt of its attacks and we will campaign and work even more vigorously for a real alternative.
This budget is cowardly and indefensible. In particular, the cuts in social welfare target the most vulnerable in society. So much for the pre-election promises and programme for Government's commitments. By design, the Government has set out to target children and the parents on whom they depend. Also by design, it has set out to target the disabled again.
Only one month ago, the Government campaigned on children's rights, promising the Earth, moon and stars, but we can see today the colour of its commitment to children. The number of children at risk of poverty and the numbers experiencing acute deprivation will increase as a consequence of this budget. Basics such as food, clothing and shelter will become unaffordable for thousands of families. Without hesitation, I condemn the cuts to the child benefit, the back to school allowance, the respite care grant and the maternity benefit in particular, although there are many others.
Yesterday, the Labour-Fine Gael Government dipped its hand into families' pockets and ripped out €10 for each child. In the case of a family of four, the Minister for Social Protection has taken €58 in child benefit per month, some €696 per year. The parents of twins and triplets will struggle in particular, having been targeted by the Government last year.
If all of that was not low enough, the Government has decided to tax the unborn. The decision to start taxing maternity benefit could see some mothers losing more than €1,300 at an expensive time in their lives.
If it was not already bad enough for mothers and their young children, the Government has once again targeted them by cutting the back to school allowance by €50. This annual payment assists the country's poorest children and their families when children return to school each September. Combined with last year's cut of approximately €50, €100 has been cut across two Labour Party and Fine Gael budgets. This is supposed to be a fairness agenda. So much for fairness.
Struggling families should fear not, however. The Minister, Deputy Bruton, and her colleagues have included some measures to "compensate" for the cuts. The Minister for Public Expenditure and Reform, Deputy Howlin, has been all over the place claiming that there is a "suite" of 14 measures to tackle wealth. However, he announced a suite of measures yesterday that will push more people into poverty, target the low paid and the vulnerable and dig further into their pockets. The Minister, Deputy Howlin's wealth suite also targets the poor and the low paid.
The Minister for Social Protection, Deputy Burton, has a solution for the majority of families, one that is taken out of Ms Mary Harney's book. Do Deputies remember Mary Harney of the Progressive Democrats? She told people to shop around. This is the answer that the Minister, Deputy Burton, has for parents whose back to school clothing allowance she has slashed.
I will address one of the meanest cuts of all. The annual respite care grant for children and others with severe disabilities is being cut by €325 at a time when respite services are being steadily reduced because of the Government cuts of recent years to the health service. We need only recall the issue of home help. The respite care grant is invaluable to the financial and mental well-being of family carers. This morning, the Tánaiste referred to its recipients as members of the caring profession. That is a joke. The State has never fully recognised the cost of disability, let alone the value of caring. Using a phrase that incites the rage of many of the carers whom I have met, the Minister, Deputy Burton, has regularly referred to them as unsung heroes. They do not want her patronising praise. They want the cuts reversed and the Government to give them a break.
When people are at their lowest having just lost their jobs, what is the Government's response? The response of the Labour Party, which supposedly represents the working class - at least that lie is in tatters - to jobseekers is to walk all over them and to kick them when they are down. The Government proposes to cut jobseeker's benefit entitlements by three months, amounting to 25% and 33%, respectively. The Government is removing people's insurance repayments, as jobseeker's benefit is a payment due to them from their PRSI contributions. Claimants paid their premiums while working and are entitled to expect that they be repaid to them once they lose their jobs. Since 2007, 300,000 people have lost their jobs. In the past three months alone, the total number of people employed has decreased by 5,800.
The Government has done nothing in this budget to live up to its promise not to cut social welfare core rates. The changes to the jobseeker's benefit is proof of this, were any needed. Just as workers, trade unions, Sinn Féin and members of the Labour Party agree that allowances in the public sector form part of core pay, social welfare allowances and secondary benefits are core social welfare payments. Has the Government no shame in trying to represent this manifestly unfair budget as fair? Shame on it.
The next speaker is the Minister of State, Deputy Sherlock, but the House is due to suspend at 3 p.m. As it is now 2.58 p.m., the Minister of State can use the remainder of his time when the debate resumes.
There are two Sinn Féins on this island - Sinn Féin in the Six Counties and Sinn Féin in the Twenty-six Counties. They preach one message in the South and another in the North. I do not understand Sinn Féin's vehement opposition to a property tax in the South, as it does not appear to oppose it in the North where it is in government and where the average household pays approximately £1,000 per annum. If Sinn Féin is so vehemently opposed to property tax, why has it not rolled back on that tax in the North?
In October, Sinn Féin nodded through the Welfare Reform Bill in the North, which will have the effect of permanently reducing the North's £5.1 billion benefits bill.
I do not understand why Sinn Féin did not block that in the North, as it is in the Executive.