Wednesday, 16 October 2013
Financial Resolutions 2014 - Financial Resolution No. 8: General (Resumed)
This Government has just passed the half way point in its term of office. Yesterday's budget has advanced three vital goals for the Government in the remainder of its term: first, to continue to correct the public finances so that Ireland can successfully exit the bailout on 15 December, signalling the end of the bailout era; second, to continue to create more jobs and accelerate the reduction in unemployment by building on the 3,000 jobs currently being created every month; third, to support hard-working families on average incomes who have given a great deal since the crisis began.
The country is on track to achieve our commitment to the people to exit successfully the EU-IMF bailout on 15 December. The budget delivered yesterday by the Ministers for Finance and Public Expenditure and Reform was essential to reach this goal.
Some three years ago, on the eve of the bailout, it was a very different story for Ireland. We had a Government in denial, Ministers were misleading the public about the imminence of the bailout, the private sector had been losing 7,000 job a month in the previous three years and the banks had lurched from one crisis to the next. It was a time of despair for the people, the economy and the future. The new Government took office in March 2011 and was elected on the promise that it would sort out this crisis, ensure it could never happen again and bring a new and real prosperity to Ireland. In the past year we have made significant progress in undoing many of the mistakes made by the Fianna Fáil Party in government. In February we removed the millstone of the promissory notes from around the necks of the people and consigned the toxic Anglo Irish Bank to history. We all remember the €3.1 billion we borrowed for each of ten years to pay for Anglo Irish Bank. In lifting this unfair and invidious burden we provided breathing space for the economy to recover and grow. The deal reduced the State's cash borrowing requirement by €20 billion in the next ten crucial years. It also means that the adjustments to be made to meet our deficit targets will be less onerous than would otherwise have been the case.
In June, during a highly successful Irish Presidency of the European Union, we finalised arrangements with our partners to extend the maturity of the EU component of our programme loans, extending the weighted maturity of loans to Ireland by up to seven years. As we look to re-enter the markets fully, this will help to keep downward pressure on our borrowing costs which is important not only in regard to Government borrowing but also for our semi-State bodies, banks and large companies that raise capital on the financial markets. It will have a positive ripple effect across the economy and means an additional €9 billion in savings at a time when we need it most.
Securing these outcomes was possible thanks to skilful and painstaking negotiations by the Minister for Finance and his team, supported in his unceasing efforts by the Tánaiste and backed up with the creative energies of his officials and officials in my Department. It was a team effort. It was also a concrete reflection of the trust we have built with our partners and the extent to which we have been able to restore our reputation. People believe in the country again. After the huge sacrifices of the people, we are finally seeing light at the end of this economic tunnel.
It has not been an easy few years, nor could it have been owing to the economic calamity that hit the country. We still have much to do before it is back on solid foundations, but exiting the bailout in December will restore confidence in the country. It will not mean that our financial troubles will be over. We still have to get the public finances back in working order. The huge progress we have made in addressing the deficit is one of the reasons we have seen a return of confidence in Ireland. We will complete the job, as promised in 2011, to reduce the deficit to under 3% of GDP by 2015. The budget correction this year of €2.5 billion will leave us with a 4.8% deficit next year, ahead of the 5.1% required target, and within striking distance of our overall goal. Next year we will produce a small primary surplus, demonstrating that the national debt which has been rising for so many years is at last under control.
Restoring confidence in the economy will allow us to achieve our next vital goal, namely, to create more jobs and get Ireland working. As the Minister for Finance pointed out yesterday, this is the first budget since 2007 that has been delivered against a background of rising employment. The private sector is adding 3,000 new jobs every month. Irish exports have reached record levels and we can build further on this as the European economy starts to recover, some signs of which have begun to emerge in recent months. Previous budgets and capital plans were all designed to increase employment and it is encouraging that they are starting to show results, but more must be done if we are to reverse the crash pioneered by Fianna Fáil which saw 250,000 private sector jobs lost in the party's last three years in office. Budget 2014 is pro-jobs and pro-enterprise in its design. It avoided job destroying increases to income tax and corporation tax. In addition, the Government is introducing a €500 million jobs package, with 25 new tax measures to increase and accelerate job creation in the next year such as maintaining the 9% VAT rate for the tourism sector. It has already created 15,000 new jobs in all parts of the country since the introduction of the new rate and increased the number of incoming visitors to Ireland. An expanding and growing tourism industry has the capacity to create more jobs quickly. We have also reduced the air travel tax to zero from 1 April to encourage airlines to establish new routes into Ireland. I expect the airlines to respond to this incentive shortly.
The Government values the spirit of enterprise and entrepreneurship as we rebuild an economy based on exports, innovation and enterprise. To incentivise the unemployed to create their own jobs, we have established a new start-your-own business scheme for people who have been unemployed for 15 months or more by offering a two year income tax exemption for those who start their own unincorporated businesses. To promote entrepreneurship, from next year we are offering a capital gains tax relief to entrepreneurs who reinvest the proceeds from the disposal of assets in a new investment in productive enterprise. Some entrepreneurs might invest in one business and then in another. There is an incentive to continue to do so.
To help attract additional major film productions to Ireland, we are bringing forward the start date of the new film relief scheme to 2015 from 2016 and extending it to include non-EU talent. These productions can often involve thousands of temporary jobs and provide a significant boost for the tourism sector. The Minister for Arts, Heritage and the Gaeltacht, Deputy Jimmy Deenihan, raised this point on a number of occasions. I had the opportunity and privilege to speak to Mr. Steven Spielberg about it and the issue was non-EU talent being catered for in film production in Ireland. We are changing to allow it to happen where it can. Ireland holds enormous potential in this area.
To help small business, we are amending the cash receipts threshold for VAT from €1.25 million to €2 million with effect from 1 May 2014. This will assist cashflow and reduce administration in a larger number of SMEs. That is welcomed by business. Ireland has the best environment in the world for agriculture which is matched by an industry driven by world class standards. It has the potential to expand in the coming years and create even more jobs. The extension of capital gains tax retirement relief to disposals of long-term leased farmland in certain circumstances will encourage older generations to lease their farmland on long-term leases to new, younger farmers. This may apply in cases where farmers do not have children or do not have family members interested in continuing farming activities. To grow the industry, eligibility for young trained farmers relief is also being extended by adding three more qualifying courses to the list of relevant qualifications required for the 100% rate of stock relief and the stamp duty relief for the purchase of agricultural properties. This is becoming more important as we move towards abolition of quotas and fulfilling the potential of the agri-sector. Significantly for our capacity to create jobs, we are continuing the high support for the job agencies, IDA Ireland, Enterprise Ireland and the local enterprise offices, which have estimated that they will create nearly 50,000 new jobs in 2014.
In advancing efforts to get Ireland working again, the Government is acutely conscious that many of the 250,000 people who lost their jobs in the three years before it took office were working in the construction sector.
Just as the tourism sector fell below normal levels during the crash, so did the construction sector. Construction also requires attention to restore it to what one might call effective health. From having been wildly over-heated, where this was contributing 25% or 26% of GDP, the sector is now worth about 5% of GDP or half the European average, and clearly is much too low. In employment terms, we are significantly below the EU average of 7% of total employment and there is good reason to believe that the pendulum has swung too far.
We want to see a new and renewed construction sector, properly regulated and based on the highest international standards. Having met representatives of the Construction Industry Federation recently, it wants to have a sector that is built on integrity and trust and in which there will be no more Priory Hall type issues. This must be managed carefully. It must be done on a sustainable basis. We cannot go back to the boom-and-bust reckless approach, that went on previously and which had disastrous consequences for the country.
We recognise the importance of what good building contractors can do in a situation where the construction sector is right-sized and can play a strong supporting economic role in job creation in the country. Sustainable construction is a vital part of planning and providing for that future, whether in building vital economic telecommunications and energy networks, and educational infrastructure, including schools, or in providing the space for new commercial and industrial enterprises. I believe that the measures contained in the 2014 budget can be the catalyst for that recovery and spur on the wider economy.
Through the raising of additional funding from the sale of State assets, the Government has organised an additional €200 million capital programme for 2014. While supporting a reviving construction sector, the package will also support local economies nationwide. The package includes major developments, such as the Cork city events centre, restoring heritage buildings that are at risk, the national sports campus, additional sports capital grants, 5,700 housing adaptation grants for the elderly and the disabled, social housing construction recommencing for the first time in a number of years and maintaining the current network of local roads. In addition, the home renovation incentive and the extended living city initiative, in particular, will help the residential construction sector. The latter, in respect of the living city initiative for buildings that were constructed prior to 1914, many of which are in Dublin between the canals, the Synge Street area or wherever, will certainly stimulate much opportunity, and that is being extended to other cities where the take-up will be significant. In the home renovation incentive scheme for those who want to build little extensions and make repairs or improvement of their homes, provided that the contractors are registered, the tax relief is available on expenditure of up to €30,000 and will be reclaimed over two years. This should get many smaller contractors and smaller builders and tradespeople back into the business of assisting in the construction sector, that is effectively managed and properly controlled, and has trust and integrity about it.
However, there is absolutely no point in creating new jobs unless we can get people off the dole queues and into employment. We cannot rely on economic growth alone to reduce the dole queues, as might have been done in the past. We are in a dynamic labour market within the Union of 500 million citizens and we need to make every jobseeker as "work ready" as he or she can be. Through the Pathways to Work scheme, we are fighting back against long-term unemployment and youth unemployment. I have commended the Minister for Social Protection, Deputy Burton, on her efforts in this regard already. We cannot allow a situation where young people are incentivised to graduate from school onto welfare. To do so would to be to accept the massive long-term social and economic consequences of a generation of welfare dependants. We have too many jobless households in Ireland, away above the European average, and that is not good for society. We already have one fifth of households categorised as jobless, double the European average.
A whole new approach to work activation and welfare reform is required to break that cycle of welfare dependency. Our young people should have the opportunity to be in education and training, not languishing on dole queues. This is the context of yesterday's changes to the jobseeker's allowance rates. These budget changes will ensure that young people will be at least €60 per week better off in education, employment or training than in claiming welfare. For example, those under 26 years who participate in a back-to-education course will have their jobseeker's allowance increased to €160 per week. As I stated during Question Time here, if it is on JobBridge or other schemes, it is even higher than that. That means that, in addition to the enhanced career and job prospects from improving skills and education levels, there is a significant financial incentive for young people to participate in education, employment or training, and have the opportunity to get a real job. These actions are part of a much bigger strategy to address the problem and should not be viewed in isolation.
We are in the process of rolling out the youth guarantee, which was negotiated as part of the European Presidency and which will aim to provide adequate further training and education places for unemployed young people. Budget 2014 has allocated an additional €14 million to increase the number of places available for young people - specifically, 1,500 new places on the JobsPlus scheme and amending the criteria for under 25s to only six months unemployment to become eligible; and another 1,500 places under the JobBridge scheme for under 25s. A further minimum of 2,000 training places will be ring-fenced for under-25s who are out of work in 2014, at a cost of €6 million. These places will be provided under a follow-up to the successful scheme, which is called the Momentum programme, that operated in 2013. Next year, the Department of Social Protection will spend €1.08 billion on work, training and education places and related supports for jobseekers - an increase of almost €85 million on the projected spend this year. The changes relating to jobseeker's allowance for young people are being made in this context - to place a greater emphasis on work, training and education supports rather than merely income supports. At the end of the day, work must always be seen to pay and the Government will continue to implement its Pathways to Work strategy to ensure that our system supports work over welfare.
While Sinn Féin has been populist on this subject, the soundbite statements by the Fianna Fáil Party simply remind everybody of inactivity during that party's period in government and its lack of understanding of work activation policies. While in government, they operated a social welfare system that did not introduce any single reform related to work activation which saw Ireland fall further behind other countries.
In fact, they commonly introduced changes that were the polar opposite to best international practice which was cruelly exposed during times of so-called full employment when Ireland still had a jobless household rate higher than the European average. Following the crash, the problem became endemic. To those young people, I say that the issue will remain a priority for Government for the rest of our term in office and I believe that the budget yesterday and the youth guarantee initiatives will help get them started on a rewarding career, which, I am sure, everyone wants to see.
Better supporting younger people to help them find jobs is just one way the Government is helping hard working families on average incomes. This group has suffered much since the beginning of the crisis and deserves support as Ireland begins to recover. We reversed the Fianna Fáil plan to increase income tax by €500 million over two years. We have maintained income tax rates, bands and credits to ensure that work continues to pay for working families. Commuting families will benefit from keeping excise duty for fuels the same, which will also benefit home heating bills. In education, there are no further changes to the student grant scheme and no increase in class sizes. The Government will also provide for the recruitment of over 1,250 new classroom and extra resource teachers and introduce a new book-to-rent programme in primary schools to keep costs down.
To further help working families, we have introduced free GP care for all children under five years of age. Despite the scare-mongering of some Opposition Members who are trying to confuse this measure with other health related policies, the Minister for Health and the Government allocated additional separate funding for the introduction of this key reform following the settlement of the Health Estimate. Every parent will be aware that the early years of family life are very expensive - the high mortgage burden, creche fees where they apply, doctors' visits, etc. Hard working parents of over 240,000 children, who have enough to worry about, will now have the reassurance that they can bring their children to the doctor without having to pay for each appointment.
Working families have also been helped by the decision not to amend child benefit. This announcement is the first step on the path to this radical reform. Free GP care for all is the foundation stone of universal health insurance. I expect the White Paper on universal health insurance to be published later which will provide the direction and guidance on the next steps in the process. Universal health insurance will ensure everyone in Ireland is treated on the basis of his or her medical needs, not on ability to pay for care. This was a core part of the election manifestos of both Fine Gael and the Labour Party in 2011 and we are delivering on that promise. It is part of a much wider reform of the health system designed to achieve more with less and remove the waste and inefficiency that bedevilled the health system for years under Fianna Fáil.
The HSE budget has been reduced by a total of €3.3 billion and staff numbers have been reduced by 11,320 since their peak. During the same period the population has increased significantly, with increased demand for health services. Under the leadership of the Minister for Health, Deputy James Reilly, and despite the difficult financial environment, significant achievements have been made which have a positive impact daily on services provided for patients. Between January and August this year the number of patients waiting on trolleys was down 30% compared with the same period in 2011. This is a very great achievement of the special delivery unit which was personally pioneered by the Minister when in opposition and now in government. Construction of the national children's hospital is on track to commence in early 2015. Significant progress is being made in building primary care capacity and in chronic disease management. The HSE is delivering, on average, one primary care centre a month and 32 new primary care centres have been delivered since May 2011. Consultants will now see, treat and discharge patients 24 hours a day, seven days a week, thus saving the State hundreds of millions of euro. This is an issue which the previous Administration was afraid to tackle.
The biggest reorganisation of hospitals in the history of the State was announced in May. The six new hospital groups will have much greater freedom to run themselves. The future of smaller hospitals has been secured by the establishment of hospital groups. All of this has been pioneered and driven by the Minister, notwithstanding the difficult financial environment.
I recognise the financial challenges facing the health system are greater than ever. In order to protect services for those who need them most in the context of declining budgets and increasing demand, the Minister has set the health service achievable but highly ambitious targets for cost reduction. I know that these reforms cannot happen overnight. It will be a complex and major undertaking that requires careful planning and sequencing which will take time, patience, diligence and determination. It will also take and receive the full support of my own Department, as well as that of the Minister for Public Expenditure and Reform.
In presenting this budget the Government knows that many lives have been blighted by the economic carnage left behind by our predecessors. We appreciate the struggles and hardships so many have endured. The past few years have been painful and challenging and left no family untouched. Each one of us on these benches has heard at first-hand the stories of people desperate to get back to work; young families struggling to pay bills and meet mortgage payments, and those who, unfortunately, have left the country. However, this budget shows we are coming out at the other end of this crisis. While many may not see it in their communities, there is a sense of progress. Stability has returned; confidence is rising; investment is increasing; jobs are being created; and people are moving forward with their lives once again. The future is no longer something to be feared. The people own this recovery. It was their sacrifices that made it happen, that made Ireland stand apart on the world stage as a country that was dealing with and was capable of dealing with its problems and a country which remained a highly attractive place for job creation and commerce. Budget 2014 is another step on this road to recovery. It will deliver back our economic independence and sovereignty after years in an international bailout. It will create more jobs for the people and continue to support hard-working families. I commend it to the House.
This is the budget that will take us out of the troika bailout. It will underpin recovery and help to create more jobs. It does everything possible for hard-pressed families and is pointing the way to a better future. When the Government took office 31 months ago, the country was faced with the worst economic crisis in its history. Our economic sovereignty had been surrendered; 250,000 jobs had been lost and tens of thousands more were at risk if financial stability was not restored. Without the bailout loans, there was five months money left to pay for all public services and no means to borrow more. We literally would not have had the cash to open schools the following September.
Today that situation has been transformed. Financial stability has been restored. The State can borrow again at affordable rates and we are in a strong position to exit the programme at the end of the year. That is something which few predicted was possible in the spring of 2011. Financial instability destroys jobs and livelihoods but stability provides the platform for growth and job creation. This budget copperfastens the stability that has been so hard won. As a country, we have been through too much to put that stability at risk now. Just as we should not put stability at risk, neither should we put recovery at risk. As I have said many times, this budget does what is necessary to ensure we exit the programme but no more. The total adjustment of €2.5 billion is the minimum we need to do to ensure we exit the programme smoothly without doing undue damage to the emerging recovery in the economy. This budget strikes the right balance between hitting our deficit target of 3% by 2015 and protecting jobs and living standards. The 4.8% projected deficit gives us a prudent buffer to ensure we hit our European targets. Achieving a primary balance is an important milestone in keeping our debt sustainable. At the same time, keeping the adjustment to €2.5 billion is a clear sign to the people that there is light at the end of the tunnel. It is clear evidence that the economic nightmare inflicted on them by Fianna Fáil is coming to an end.
There are very real signs of hope in the economy. When we took office, 7,000 jobs a month were being destroyed. Now we are creating 3,000 a month. When we took office, the live register was heading for 500,000. This week I hope it will fall below 400,000 for the first time since 2009. When we took office, house prices were in freefall. Property prices are now rising again in Dublin and construction activity is returning. While GDP is being held back by the effects of the patent cliff, there are signs of recovery elsewhere. Exports are growing; retail sales are stabilising; and confidence is improving. The agrifood sector is performing strongly and the tourism sector had a very strong year. Ireland’s reputation has been restored and the flow of foreign investment into it is strong. Growth is forecast to accelerate to 2% next year. What the Government has to do now is to underpin that growth and make it as job-rich as possible. This is the right time to give a further boost to national recovery.
We all know that the construction sector will not return to the levels of the bubble period, nor should it. However, restoring construction activity is vital if we are to reduce unemployment and get people back to work. That is why the Government has established a construction sector consultation and co-ordination group to identify the blockages to recovery in construction and set out a strategy for the industry. That strategy should include the goal of achieving a major increase in residential building activity in the next three years. Meanwhile, we will assist construction with the tax incentive for renovations and extensions introduced in this budget and by extending the Living City initiative. The additional capital spending announced yesterday will also add to the existing €17 billion capital programme and the PPP stimulus programme which is coming on stream. These will provide an important stimulus for the building industry
The domestic economy is vital to the creation of jobs and improving living standards. However, the country can only survive by making and selling goods and services that people in other countries want to buy. That is why the budget contains a further package of measures to support small business and particularly innovative start-ups. The Minister for Finance is also working to enhance the availability of trade finance. The budget provides support for people who are long-term unemployed and want to become self-employed. This is additional to the reforms being undertaken as part of Pathways to Work which is to help people back into employment.
I am pleased that the Minister for Finance has been able to retain the 9% VAT rate for the hospitality sector. This measure has been an important part of the recent success of the tourism sector, which brings jobs to every corner of this island. It is a vital regional stimulus and I want to record my thanks to the everyone involved in The Gathering, led by the Minister for Transport, Tourism and Sport, Deputy Varadkar, and including the staff of my own Department who worked so hard to make it a success.
By reducing the adjustment by €600 million, we have made this a much less difficult budget than it might have been. Even so, Ministers still faced difficult decisions, and there are no easy options left in any Department. All the big spending Departments - Health, Social Protection, Justice and Equality and Education and Skills - have been through a long period of retrenchment. As in previous budgets, where it is possible we have linked expenditure reduction to reform. Without the reforms that have already been made, the reality is this budget would not have been possible. Without the Haddington Road agreement, in particular, we would not be in a position to open up recruitment in sensitive areas, including the recruitment of teachers and gardaí. The recruitment of extra staff is clear evidence of the reform dividend and I pay particular tribute to my colleague the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, for what he has achieved. I also pay tribute to the public service trade unions, which have made such an enormous contribution in the national interest.
There have been difficult decisions but there have also been important achievements. Education has always been a core priority, and for a third year in a row we have protected the pupil-teacher ratio. This year there have been no cuts to the budgets for schools, and an additional 1,250 teachers will be recruited next year. When we came to office there was no money left to run the schools, but in the past three years the Minister for Education and Skills has facilitated the building of more than 2,700 classrooms. This year, the Minister for Communications, Energy and Natural Resources will deliver the final part of a three-year programme to ensure that every second level school has a 100 Mbps broadband connection.
In the area of taxation, too, the raising of additional revenues is being linked to reform. Rather than imposing taxes on work, this Government has been broadening the tax base and protecting working people by increasing capital taxes. Under this Government, the rate of capital gains tax and capital acquisitions tax has increased from 25% to 33% and DIRT has increased to 41%. Under this Government, taxes on unearned incomes have increased and tax reliefs have been closed off, and in this budget we are introducing a bank levy so that the banks that have for so long been a burden on the taxpayer will make a contribution to ease the pressure on households.
The budget documents contain the latest information from the Revenue Commissioners on the implementation of the so-called horizontal measure, which restricts the use of tax reliefs by high earners. That measure was introduced after a long campaign by the Labour Party, led by my colleague Deputy Joan Burton. The report for 2011 vindicates the argument, indicating that the horizontal measure is working, that effective tax rates have been increased and that the tax take from high earners has increased by more than 100%. Under this Government, reliefs have been restricted further through a charge on section 23 reliefs, by capping pension relief and by curtailing health insurance relief. At the same time, in our first budget more than 300,000 people were lifted out of the USC net. As a result, Ireland now has one of the most progressive tax systems in the developed world, with the top 1% of earners now paying 19% of all income tax, the top 5% paying 41% of all income tax, and those on the lowest incomes paying little or no tax at all.
There must be some limit on the hypocrisy that we can listen to in this House. We are treated to pious lectures from Fianna Fáil on the need to protect the vulnerable, but it was Fianna Fáil that cut headline social welfare rates three times; this Government has protected core social welfare rates in all budgets.
It was Fianna Fáil that imposed unilateral wage cuts on public servants, but this Government negotiated an agreement with the public sector trade unions.
The budget we are introducing today requires €600 million less in cuts and taxes because this Government renegotiated the rate of interest on the programme loans, which Fianna Fáil argued could not be done. Fianna Fáil just want people to forget the past and ignore the reality that the difficulties of the last six years were brought down on the heads of the Irish people by their cosy cartel of bankers, property developers and political insiders.
They talk here about job creation when they destroyed hundreds of thousands of jobs and did nothing to help those coming onto the dole queues. This Government has never made any attempt to hide from the Irish people the scale of our problems, and we have never been in any doubt that the stability we have achieved has required measures which have been difficult for many families. Nobody in this Government has ever wanted to make false claims about how difficult the road ahead might be, but now, at last, we can dare to hope. The economy is recovering, growth is returning and the numbers on the live register are falling. The prospects for the international economy are brighter. I do not claim that there will be no further setbacks or difficult days ahead of us, but we must also have hope.
In this budget, we are making a down-payment on the future. We are committed not just to rescuing the economy from the abyss but to building a better and fairer post-crisis Ireland. That is why we have begun in this budget to lay the foundations for a better health service. By introducing free GP care for children aged five and under, we are not just introducing an important reform in the health service but providing support to hard-pressed families. The Government is committed to providing free GP care because we can only reform the health service by ensuring that, wherever possible, care is provided in a primary setting. By starting now, we are setting down a clear marker for the future, and we are determined to achieve far-reaching reform of the health service, led by the Minister for Health, Deputy James Reilly, and the Ministers of State, Deputies Alex White and Kathleen Lynch. People will oppose this measure, quibble at it and complain about it. Interest groups will feel discomfited by it and try to undermine it. This measure is not just good health care policy; it is an important statement about the kind of Ireland we should want to build. I do not believe that any parent of a child living in 21st century Ireland should have to worry about the cost of bringing a child to the doctor. No mother or father of a young child should be faced with the dilemma of wondering how sick a child is and what must be gone without by the end of the week if €50 is paid to the doctor. That should not happen in a civilised society. Despite hard times, this Government is building a new national children’s hospital, but no child should end up in that hospital because the parents could not afford to take the child to the doctor in the first place.
In the same way, parents should not have to worry about how to find the money to pay for school books, and we have always believed that literacy is a right.
Literacy and numeracy are the foundations of learning and freedom, which is why it is right to support families in meeting the costs of education.
There are other important social initiatives in this budget. We have provided the resources to restart the construction of social housing and there is funding to tackle some of the worst problems of the bubble era, including Priory Hall, the pyrite issue and ghost estates. There is a new mechanism of social impact bonds designed to allow for innovative social projects.
This Government took office 31 months ago after our country had been brought to the brink of ruin by Fianna Fáil. In the face of that crisis, Labour and Fine Gael took on the task of renegotiating the bailout and bringing our country back from the edge. This could only be done with the support of men and women of principle and patriotism, colleagues who had the courage and the character to put their country first. It is thanks to that commitment and to the patience and endurance of the Irish people that we are now poised to exit the bailout programme, that we are seeing the creation of new jobs, and that, at last, we can emerge from the dark night and see a new dawn for our country.
We have now come through the worst economic crisis in the history of this State. The people of Ireland have endured much, but we are now at last on the threshold of recovery. As a result of the work of this Labour Party and Fine Gael Government over the past two and a half years, we were able in this budget to ease the burden somewhat on hard-pressed families. The Ministers, Deputies Noonan and Howlin, have introduced a budget this year which is focused and directed at increasing employment opportunities, especially for the young. We have done enough in this budget to exit the bailout and end the national shame which Fianna Fáil brought to our shores.
Let nobody, especially no Member of these Houses, put that bailout exit and recovery at risk.
Once again the Taoiseach and the Tánaiste have delivered budget speeches full of empty self-praise and political soundbites which completely ignore the reality of what this Government has just proposed. This is a bad and damaging budget. Within the tight constraints there remained choices that could be made but once again this Government chose a mean-spirited and regressive approach. Groups already feeling the most pressure are again being targeted and the Government has failed to produce any credible approach to job creation. The health sector is to be driven deeper into crisis because of a mixture of chaotic policies and increased cuts, while older people are to lose supports they need at their most vulnerable moments, when they are sick, bereaved or living alone.
The presentation and content of this budget is a powerful demonstration of a Government which plays politics first in everything it does.
I listened to both the Deputies opposite and would appreciate the same courtesy. The Deputy can shout and heckle all he likes but this is meant to be a democratic Chamber where people are allowed to make speeches. I listened to the Taoiseach and the Tánaiste without interrupting and I would expect the same opportunity when I make my speech, even if the Deputy does not like the content of what I have to say.
The Government sees its main task as working to claim credit for recovery rather than actually doing anything to deliver it. It has delivered regressive budgets which have cut growth and employment and increased unfairness. It is only hitting overall fiscal targets because of developments in Europe.
From the very beginning this has been a Government obsessed with public relations. It puts immense amount of time into spinning every issue. No effort is spared when it comes to trying to manipulate headlines. Ministers are going around Leinster House in search of opportunities to present themselves as national heroes. Although those who are willing to live within the bubble may not have seen through this yet, the public have long since understood that nothing this Government says can be taken at face value. One cannot accept on good faith any claim members of this Government make because when one looks at the facts a very different reality will always appear.
This has happened yet again with this budget. Yesterday the two Ministers stood up and, in the short gaps between long passages praising themselves, they claimed they had put together a fair budget. It was a budget which would create jobs and leave people’s incomes intact; a budget that would deliver new and better public services. It was one of the most cynical presentations of a budget in our history - as well as the most leaked. The tradition of the Irish budget day is that Ministers are willing to take the good with the bad. They accept the responsibility of showing people exactly what they can expect in the next year and they present the figures in a straight way. Yesterday the Government decided to abandon this approach and tried to hide the facts of the budget behind bluster and misleading statements. The leaflets distributed in support of the budget are designed to misrepresent the impact it will have, not to explain it. In area after area claims have been made about improving things while the detail buried within the hundreds of pages published yesterday shows the opposite. Most areas where Ministers claim to be expanding support are in fact being cut. For example, third level funding is being cut yet the Minister failed to mention this in his speech. Families who were told that their incomes will be intact are actually being hammered. Every single area where an increased allocation is claimed is being funded because of an equal or greater cut in a related area.
This should be no surprise to anybody because it is now an iron law of this Government that when it is on shaky ground it goes on the attack. Both Ministers, Deputies Noonan and Howlin, included partisan political attacks in the first paragraphs of their speeches. When one's main message of the day is to compare one's opponents to the Famine and Oliver Cromwell it is clear one has no real story to tell. If this Government believed its own claims about the budget and its record people can rest assured it would be spending a lot less time talking about Fianna Fáil.
Unlike members of the Government when they were in opposition, we have been consistent in supporting reasonable fiscal consolidation. Our proposal for next year was for a slightly smaller overall reduction. However, we proposed a significantly different approach to reaching the overall target. It was entirely possible to produce a budget which would hit essential social supports less yet be substantially more progressive. The Government’s choice has been to give primacy not to the needs of the public but to the needs of the next election campaigns of the Labour Party and Fine Gael. Fine Gael in particular has decided it wants to claim to have not raised income tax – not even on the very wealthiest in society. This has forced an approach whereby the only way to achieve agreed targets is to raise money through taxes and charges that take no account of a person’s ability to pay.
This budget has marked a new development in respect of both the issue of fairness and the overall programme of fiscal consolidation. First, the budget documentation goes to great lengths to hide the impact of measures on individuals and their families. Nowhere is it shown what the impact of doubling the property tax or cutting reliefs and supports will be on people's financial situation; one just does not see this in any of the examples. The Government falsely claims that with the sole exception of a family with two children, comprising a stay at home father and self-employed mother earning over €150,000, whose health insurance relief is to be reduced, every other family type presented is due to sail happily through next year with their income unchanged. That is how it was presented yesterday. We heard more of this from the Tánaiste this morning when he claimed to have delivered a budget of which the Labour Party could be proud. He has steadfastly refused to acknowledge what anyone can see – this Government has a 100% record in delivering unfair and regressive budgets. One can massage the budget documentation all one wants but the public is not fooled.
Being even more cynical than it was in its attempt to hide the detail, the Government has now started to include in its list of claimed achievements measures adopted before it took office. Starting at the Fine Gael conference on Saturday, and continuing through a mounting number of media appearances, speeches and briefings, the Government has been praising itself for bringing the budget under control. Even for this Government, which puts self-praise into every minor press release, this is shameless. At the end of next year 70% of the total fiscal adjustment will trace solely to budgets passed by this House before March 2011. It takes a special level of cynicism to claim credit for measures one voted and campaigned against in opposition. That is what the parties opposite have been doing.
The very same approach is also found in the two Ministers’ approach to taxation, regarding which we heard further today from the Tánaiste. The budget leaflets and briefing notes produced yesterday claim that the Government is delivering a “fair and progressive system” that is “one of the most progressive in the developed world”. The Government hopes that nobody will get around to looking at the details of budgets over the last six years to see from where this progressivity comes. Every single improvement in the progressivity of our tax system was put in place long before this Government took up office. At that time the three previous budgets had been weighted heavily towards making those who earn the most pay more, but the three Fine Gael-Labour Party budgets have reversed this trend by implementing all new taxes on a regressive basis. The Government states that net tax being paid by the top 1% is up significantly – a welcome fact - but what it does not state is that this is the case solely because of measures put in place quite a number of years ago. Yesterday the Ministers claimed to be hitting the highest earners but the reality shows that three out of three Labour Party-Fine Gael budgets have gone out of their way to protect the highest earners.
In the realm of rewriting history the Government is now trying the unique strategy of claiming things it voted against and attacking things it supported. The comments of the Minister, Deputy Noonan, concerning the bank guarantee sit ill with the fact that he and his party sought outside advice before coming into the Chamber and voting for it. Equally, both Fine Gael and the Labour Party like to ignore the fact that one of the first things they did in Government was to renew that guarantee. The House should also note how last week the Government sent lawyers into the High Court to argue that the promissory note deal was “essential to protect the financial stability of the country”. That is a far different cry from what we heard today and yesterday, namely, the usual rhetoric.
When the “Gilmore for Taoiseach” posters were only settling in to their new home in the shed of the Minister for Social Protection, Deputy Burton, Labour liked to talk about how they would refuse to pay the notes. Now that the party is in government it calls them “essential” and has paid them in full.
The key to sustainable growth in employment and secure public finances is a return to strong growth. To date, the Government has missed every one of its growth targets. Two years after the Taoiseach went on national television to declare that his Government had already restored confidence and growth, the economy is 5% smaller than he and his colleagues claimed it would be. The practical impact of that is fewer jobs and over €1.5 billion less in public revenue – equivalent to 80% of the spending cuts and tax increases announced yesterday. The most important reason these damaging budgets have not stopped us reaching the overall fiscal target is that the European Union and its institutions have adopted a range of dramatic changes to their policies. The interest rate changes negotiated for Greece and extended automatically to Ireland and Portugal have been vital. As is acknowledged by everyone except the Government, the availability of these policies in 2010 would have prevented either Ireland or Portugal from needing a bailout.
In their private briefings for journalists Ministers love to talk about how they implemented complex strategies to secure interest rate reductions. Of course, they ignore the embarrassing fact they were looking for less than was given – and it was other governments which drove the agreements. The promissory note changes implemented by the Central Bank and noted by the ECB have helped significantly in the budget. Those gains are not fully secured yet. If the ECB wishes, it can ask the Central Bank to sell the bonds it has acquired. That would immediately remove any benefit from the deal, because the interest we pay on the bonds comes straight back to the Exchequer. That is worth €1 billion per annum and it should be made more certain.
We must also start demanding that we get equal treatment with Greece on ECB holdings of our bonds. Greece had all ECB profits on its bonds returned to it. If that happened here it would be worth more than €500 million per annum, which would cover more than 80% of the cuts planned next year for the health sector. Instead of wasting time on self-congratulation the Government should start addressing the unfinished business which means that Ireland is not yet receiving fair treatment. Each of the Government’s budgets has undermined growth far beyond the direct impact of the overall fiscal consolidation. For example, the levy on pension funds has removed billions from private sector investment. While we have heard Ministers loudly claiming the return of growth as the result of their leadership, the same people were silent when the growth evident in 2011 was turned back into recession earlier this year. I hope that the new growth targets are met but it is also possible that with the right policies they could be exceeded. They are slightly above the consensus of forecasts both national and international, although well below what was predicted by the Government last year and the previous year.
The budget will be remembered for the mean-spirited way in which it has targeted particular groups and social services. As is now undeniably clear, the elderly will bear a major brunt of the Government’s choices. The list of cuts appears designed to make much worse the very moments when an elderly person is most vulnerable. A Government which is delivering leaflets talking about universal care for all has decided to take universal care from at least 35,000 people over 70. The elderly are also faced now with a fivefold increase in prescription charges since 2011. In their homes they will lose support which enables them to keep in contact with family or have personal security alarms. When their partner dies, the State will no longer be there to help them to hold a decent funeral. The Government is now reversing more than 40 years of progressive policy – and it is doing so in order to protect the very wealthiest in society. We have just been through a referendum campaign during which the Taoiseach talked about how important it is to him to keep promises. If he could put aside the empty spin of his speech for a moment he might remember the solemn promises he gave the elderly that if elected he would always give them priority. Protesting against cuts significantly less severe than these, and in a much tougher budget than this, he joined demonstrations on Kildare Street to reinforce his commitment to the elderly. Yesterday, he betrayed those people and broke the commitments he made.
As communities throughout the country have found out within weeks of the election, the solemn promises of the Taoiseach and his colleagues on their local health services counted for nothing. People in Roscommon know that only two well, in addition to many more areas. Since then the Minister for Health, Deputy Reilly, has spearheaded a health policy which is steadily dragging the sector into a deeper and deeper crisis. This budget threatens to turn 2014 into a year of chaos and declining service in the health system. The cynicism of yesterday’s speeches was on full display in the failure of the Minister, Deputy Howlin, to state to the House that he was imposing cuts of €666 million on the health system. He talked about a little extra here and a little less there, but covered up the reality which can only be found buried in the background documents.
In the lead up to the budget journalists were told that health was getting some extra flexibility and that there would even be good news. The Minister for Finance, Deputy Noonan, said we would be astounded by the good news. The Minister, Deputy Reilly, with the ever-present personal backing of the Taoiseach, was said to be one of the winners of the process. With a €666 million spending cut and €127 million extra to be taken out of health insurance – this is about as bad an outcome as the Minister, Deputy Reilly, could have achieved. Since his first day in office the Minister, Deputy Reilly, has claimed to be delivering improved health services. No matter what evidence has piled up around him he has kept to the mantra that we should not believe the facts, we should just listen to him. No one is listening any more; people are just shocked at how much damage can be done in so short a period.
Let no one be in any doubt – the budget and the structural changes proposed for next year mean that for the health service the worst is yet to come. The profoundly cynical attempt to cover up the massive heath cut with the announcement of GP cards for children aged five and under was a stroke too far even for this Government. It was expecting praise for allocating €37 million to a new scheme. While no implementation details are available and costs are unknown, it was something we were supposed to welcome as the first step towards universal GP care. Let us be clear; free GP care for children five years and under is in no way a “first instalment” of a new universal provision. It involves a fraction of the system, it is not insurance-based, as the Government says the entire system will be, and it is being funded through ending current provision for an even larger group of people.
Now we know the truth – this minor but welcome improvement is to be accompanied by the largest ever assault on support for primary health care in this country. More than 100,000 people are to lose access to a medical card and everyone is to face steep increases in prescription charges and have access to fewer treatments. The prescription charge increase is not just another broken pre-election promise; the first public announcement by the Minister, Deputy Reilly, in office was to say that he was about to abolish all prescription charges. Does the Taoiseach remember that? In total, €236 million is to be taken out of primary care. To produce leaflets looking for thanks for giving a small portion of that to a new scheme shows just how out of touch and cynical is the Government. It is obviously this mentality that had the Minister, Deputy Noonan, state last night that there really is not a problem at all for needy people who want medical cards.
Yesterday’s claim by the Minister, Deputy Howlin, that he is protecting front-line services is obvious nonsense. The services are already in crisis and that is due to get worse because of policies to be rolled out next year. The new funding model which the Government has announced means that many hospitals will begin to see a major fall in their revenue. That will immediately lead to services coming under pressure to close. A total of 577,000 people will also have to deal with more expensive health insurance. Many just will not be able to pay and will add to pressures on public funding.
In no way can the budget be described as a budget for jobs. The likely impact of all of the specific employment measures announced yesterday is not enough to merit any change whatsoever to the existing employment projections for next year. That is gleaned from the budget documentation itself. A total of €1 million for a start your own business scheme is more about claiming to be doing something than having an impact. The Government has now got strong form in terms of talking about job creation while costing jobs.
The jobs budget of two years ago had so little impact that Ministers stopped talking about it within months. It actually cost jobs because it took investment money out of the economy and failed to deliver key schemes. This budget does the same. It increases the jobs-destroying levy for next year and makes it permanent after that. It also cuts €15 million from the capital allocation of the job creation agencies. That means less support for investment projects and knowledge generation.
The Orwellian language of this Government is now getting out of hand, with Ministers yesterday presenting as investments programmes that were actually being cut. The small investment in GP cards for under-fives, accompanied by a massive cut in medical cards, is just one example of this.
We were told during the speeches that there would be extra investment in roads from the sale of the national lottery. Hidden in the background documents was a much larger cut of €46.5 million in roads funding. This is an extraordinary three-card trick. The Government stands over that kind of presentation. We were also told about increased funding for sport, but there was no mention of the large cut affecting the Sports Council. The tourism sector was, we were told, to be given a huge boost as an engine for employment growth. Again, however, there was no mention of the cut of almost €13 million to tourism support.
It is claimed that helping people into work is an absolute priority in this budget, yet benefits are being cut for people who move from unemployment into work. Next year was presented as the year that education is to be afforded priority, with its role in economic development being particularly noted. What the Government was silent on was the large and indiscriminate cut being imposed on the third-level sector and the entrenching of other regressive cuts. This will not just add another €250 to the student charge the Labour Party promised to abolish; it will lead to significant cutbacks throughout the sector.
The most consistent untruth in this budget is the claim that it will leave people’s incomes intact. It will do nothing of the sort. The budget pushes ahead with the doubling of the property tax. How does this not reduce family incomes? Could someone explain that to me? If one doubles a tax, one takes the money from people’s incomes. According to all the statements of the Taoiseach, the Tánaiste and Ministers yesterday, incomes will remain intact. The property tax continues to be a tax which is indiscriminate and ignores the real and deepening pressures faced by many families. It takes no account of ability to pay or even of whether a family is caught in a debt crisis. By failing to recognise this, or to provide any measures to help the more than 120,000 households in major arrears, the Government is making a tough situation even worse. The claim to have left incomes intact will also be felt by the 577,000 families claiming relief for health insurance, single-parent families and families paying into pension schemes.
In area after area, this is a budget that tries to hide its teeth. This is the budget in which Ministers were ready to hang out the "Mission Accomplished” banner and declare themselves the saviours of the nation. They even wanted people to praise them for supposedly helping out hard-pressed families. The truth shows a Government that has chosen yet again to over-spin and misrepresent a regressive and damaging budget. Within a tight framework, made tighter by a consistent failure to meet its own growth projections, the Government still had many choices to make. This is a budget that weights these choices against the most vulnerable in society and will do nothing significant to increase employment. Each positive measure is balanced by a greater negative measure. In the case of medical cards, five times more is being taken out of primary care than is being returned to fund the budget’s main supposed giveaway.
The Government is not shaping recovery; it is standing on the sidelines waiting to claim credit for whatever turns up. It continues to display new levels of cynicism in claiming credit for measures it opposed and attacking those it supported. It has not even put on the agenda full equity for Ireland for its bailout debts because it is spending so much time patting itself on the back for securing what was available to other countries.
By making this budget the third of three that have taken no account of people’s ability to pay, and by now targeting supports that are at the core of our social contract with the most vulnerable, the Government is further damaging public acceptance of necessary reductions in spending. This is a PR budget by a PR-obsessed government. It will cause unnecessary pain and do little to help our country to return to strong growth.
There is an old saying - a true one - that goes: "Oh, what a tangled web we weave/When first we practise to deceive!" This Fine Gael-Labour coalition has spun its way through budget 2014 but all its spinning cannot deceive the Irish people, who know the reality of austerity. Make no mistake: this was an austerity budget.
Behind the waffle and the spin that we got from the Minister for Finance, Deputy Michael Noonan, and the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, yesterday and from the Taoiseach and Tánaiste this morning are the hard facts, the details of the myriad of cuts imposed in budget 2014. In their speeches, they invoked William Butler Yeats and Mother Ireland and her stolen purse; they even invoked the starving victims of the Great Hunger. However, they set out very few of the real details of the budget, the full details that expose the fraudulent nature of this coalition’s public relations spin. Nowhere is this cynical spin exposed more starkly than in the area of health.
The public relations headline is, of course, the extension of free GP care to children of five and under. However, the reality is that spending on medical cards is being cut and tens of thousands of people who currently have medical cards or would have been entitled to them up to now are set to lose them. Some €37 million is to be spent on the under-fives GP card but €149 million is to be taken out of the medical card budget. That will mean that more people currently in need will lose their medical cards. We in Sinn Féin said the extension of free GP care to children under five would be a welcome start to universal access for all, which I acknowledge, but not at the expense of taking medical cards from other sections of the population who need them. This is not universality; quite simply, it is robbing Peter to pay Paul. In Sinn Féin’s comprehensive, fair and costed alternative budget, we provided for the extension of free GP care to all children under five without depriving anyone else of his or her medical card entitlement. This is not universal health care but a shameless attempt at the universal hoodwinking of the public. It is the Labour Party trying to appear to be the giving left hand while attempting to conceal the robbing right hand of Fine Gael. They behave like thieves. Clearly, through this budget and a third austerity budget, they are as thick as thieves.
There is no difference between them whatsoever.
This Government’s idea of universal health care is to give out GP-only cards with one hand and take back full medical cards with the other. Under the mysterious heading of "Medical Card Probity”, the Minister for Health, Deputy Reilly, and Minister of State Deputy Alex White have targeted a massive so-called saving of €113 million. When questioned at their press conference about this yesterday the two were unable to account for this figure. Where did it come from? How was it calculated? Nobody has been able to answer those very straight questions. The Minister of State suggested most of it would come from the cancellation or non-renewal of inappropriately held medical cards, but there is no evidence to support this. Therefore, we do not know where the figure came from, but we can safely assume it was cooked up to provide a sizeable chunk of the reduction in the health budget for 2014, at least €666 million.
The Minister for Health, Deputy Reilly, who in opposition raised the roof of this Chamber in protest at former Minister Mary Harney’s imposition of prescription charges for medical card holders, has now raised those charges again.
His increase this year amounts to a fivefold increase in Mary Harney's charge, to which he was so vehemently opposed, from 50 cent per item to €2.50 per item. For the second year in a row, he has substantially lowered the income threshold for the over 70s to receive a medical card. When the Fianna Fáil-Green Party Government introduced the current over 70s medical card scheme, based on an income limit, he said it was a "desperate climb-down" and that "tinkering with income limits is nowhere near good enough." What a change.
The Minister championed Fine Gael's fair care health policy, with its promise of universal primary care. Fine Gael and the Labour Party achieved their record mandate in the general election of 2011 on the basis of manifestos which promised to greatly extend and make universal entitlements to free primary care. In the Fine Gael-Labour Party programme for Government we were told universal free primary care would remove fees for GP care and be introduced within the Government's term of office. Of course, we were also told at the time:
Access to primary care without fees will be extended in the first year to claimants of free drugs under the Long-Term Illness Scheme at a cost of €17 million. Access to primary care without fees will be extended in the second year to claimants of free drugs under the High-Tech Drugs Scheme at a cost of €15 million. Access to subsidised care will be extended to all in the next phase. Access to care without fees will be extended to all in the final phase.That is a quotation from the agreed programme for Government. The Minister promised that the first phase, namely, the extension of free primary care to claimants of free drugs under the long-term illness scheme, would be in place in the summer of 2012. It was not and is still not in place. Supposedly, there were drafting difficulties because of the change from entitlement based on income to entitlement based on forms of illness. In the autumn of last year we were told by the Minister that it was still on track and that there would be a Bill, but now, clearly, the direction has switched once more and there is still no clear road ahead to universal access.
Time and again, in opposition, the Minister rightly pointed out that restricting access to primary care was penny wise and pound foolish because older people would suffer poorer health outcomes and require more hospital visits, in-patient care and residential nursing home care, yet now, in the very same manner as his Fianna Fáil predecessors, he brings forward further restrictions to medical card access, a so-called savings measure that will adversely affect the health of older citizens. That is an indisputable fact.
We know that the HSE has been tightening up in the issuing of discretionary medical cards. This issue was debated in the Dáil last week and every Deputy has experience from his or her constituency of the reality of these restrictions. With the further €113 million cut targeted at medical card spending under the so-called "probity" heading, it is safe to say that in 2014 discretionary medical cards will become as rare as hen's teeth.
The Government's claimed commitment to transforming mental health services under A Vision for Change is belied by its allocation of a meagre €20 million in 2014, down from €35 million in 2013. The Oireachtas all-party mental health group, of which I am proud to be a member, working alongside party colleagues of the Taoiseach and the Tánaiste and working well on this very important issue, called unanimously for an allocation of €35 million in 2014 and for this figure to be ring-fenced after the poaching of the additional mental health budget in 2012. Frankly, the Minister of State, Deputy Kathleen Lynch, has failed to deliver once again in this area.
We heard the usual waffle yesterday about reform from the three Ministers at the Department of Health, but they have still not published their long-promised White Paper on the financing of universal health insurance. Where stands that promise? Instead we have the same piecemeal approach to our inequitable two-tier health system and the now perennial cuts to the health budget, again damaging hard-pressed public health services. In the weeks ahead we will see the full extent of these cuts as the HSE service plan for 2014 is put together.
The Government's cut of at least €660 million to the health budget in 2014 will leave huge gaps in services on top of the billions more cut from the health budget in recent years. Rather than make the wealthy pay their fair share to fund better access to health care and other social services, the Government robs pensioners, unemployed young people and a huge swathe of people on low incomes. Those over 70 years who have been affected by medical card cuts will also be among the pensioners losing out with the abolition of the free telephone allowance. This is not a small measure. No Government that claims to be serious about tackling the isolation of many older citizens, especially in rural areas, and that claims to want to support older people in their own homes would have imposed such a cut. It was a shameful measure to include in the budget. This petty-minded measure, for that is what it is, will, I fear, have serious consequences for some older and more vulnerable citizens. This will be shown in time.
This budget also is unquestionably anti-young people. The further cut to jobseeker's allowance and supplementary welfare allowance for 18 to 25 year olds is a disgrace. It gives the lie to the Government's claim that core social welfare rates have been protected. They have not and no such thing has happened. A cut from €144 per week to €100 per week for under 25s and from €188 to €144 for those aged 25 can only be described as savage. There is no other word to describe it. When Fianna Fáil first cut the jobseeker's allowance rate for the under 25s in the budget of 2010 the Labour Party, rightly, opposed the cut and called it for what it was. Back then it stated, "It is abundantly clear that the real purpose of these reforms is to promote emigration". It rightly accused the Government of hypocrisy for using the brain drain excuse not to tax high earners, while cutting back for those under 25 years. That is what the record shows. Now the Labour Party and Fine Gael are kicking young people in the teeth once again and this time they are kicking them even harder, giving them the choice of suffering even more hardship and poverty at home or taking the boat or aeroplane.
The social welfare cuts do not, however, stop there. The Government is cutting social insurance benefits, including maternity benefit, illness benefit, invalidity pension and the bereavement grant, with a view to saving €74 million. These are people's hard earned benefits. I must emphasis the fact that they have contributed towards these funds in order to protect themselves in situations that could arise in their lifetime. In the context of entitlement to the bereavement grant, they have contributed towards something that is inevitable for us all. The Government did not have to do this. These cuts were entirely avoidable. The Government could have shored up the social insurance fund with a small increase in contributions from those employers who could afford to pay more. Sinn Féin's proposal to introduce a new employer's rate of PRSI of 15.75% on wages in excess of €100,000 would raise €119.1 million. By cutting maternity benefit and abolishing the bereavement grant the Government is picking people's pockets from the cradle to the grave. The latest cut to maternity benefit comes on the back of an already reduced benefit from July this year when it was subjected to tax.
The bereavement grant is a small assistance towards the cost of funerals for workers with a solid contributions record. The cut to invalidity pension means 65 year old disabled pensioners are looking at a cut of €36.80 per week. Has the Taoiseach even considered this impact or is he ignoring it?
The Government continues to insist it has protected core weekly payments. As I have demonstrated, this is simply not true. The Government talks about “discontinuing rates and introducing new rates’”. By any standard of English usage, how can one say that is not a rate cut? The language may be played about with but the net effect is exactly the same.
Mortgage interest supplement is being abolished in the absence of effective action to tackle the mortgage arrears crisis. The contribution of rent supplement recipients is being hiked with no sign of the long promised housing assistance payment. Once again the Minister responsible makes lazy and mean cuts instead of reforming the system. Rent supplement will remain the long acknowledged poverty trap it has come to be. The rent supplement changes will only make the housing crisis worse for people dependent on this payment. All Members know of people being squeezed between increasing rents and rent supplement restrictions. That is a reality for so many ordinary citizens. How can the Government ignore their circumstances?
In another prime example of spin, the Minister for Public Expenditure and Reform, Deputy Howlin, announced what he claimed a €30 million allocation for recommencing the development of social and affordable housing. What he did not tell us was that the local authority housing budget is being cut from €55.336 million in 2013 to €40 million in 2014. He did not tell us that voluntary and co-operative housing is cut from €55.5 million in 2013 to €40.92 million in 2014. He also held back on the news that regeneration and private housing grants are cut as well. Housing has been cut by €1 billion in the past five years. There are 112,000 people on housing waiting lists and homelessness is at an all-time high, especially in the capital.
Into this ocean of housing need, the two Ministers, Deputies Howlin and Hogan, drop their pathetic little promise of 500 social housing units. It will not even look at the problem. The overall 10% cut to housing in budget 2014 represents €58 million. These moneys are desperately needed not just to build new homes but to maintain social housing already in place. Instead of providing actual housing, the Government restates stale promises of housing yet undelivered while moving funding around to cover up its cuts. The massive shortage in affordable, appropriate housing will not be solved with empty rhetoric or headline grabbing gimmicks which do nothing for the people who are suffering in overcrowded, unsafe and insecure housing – or no housing at all - every day.
Like the Minister for the Environment, Community and Local Government, Deputy Hogan last weekend, the Minister for Public Expenditure and Reform, Deputy Howlin in his budget speech, had the gall to claim credit for what we hope will be the final resolution of the Priory Hall scandal. Neither he nor Deputy Hogan admitted that the resolution process now arrived at could have been put in place by the Government two years ago when the residents were evacuated. It took the tragic death of one of the residents, a television interview with his grieving partner and her direct appeal to the Taoiseach to finally shame the intransigent Minister, Deputy Hogan, and the intransigent banks into doing what they should have done in the first place. It is also a perfect illustration of how the banks can be confronted and forced to back down if the political will is there, something the Taoiseach should have demonstrated a long time ago. Of course the political will to confront the banks as well as the other privileged sections of society is not present in the Government. Budget 2014 is a further illustration of that.
We are repeatedly told by this coalition that jobs are the number one priority. We have endless spin from the Government about job creation. However, the reality is that the Government has cut both the current and capital budget of the Department of Jobs, Enterprise and Innovation by €28.5 million. A recent report into Enterprise Ireland found the staff had been cut so far as to undermine the ability of the body to fully achieve its objectives. We have the ludicrous position of the Minister for Jobs, Enterprise and Innovation claiming this is a pro-jobs and pro-enterprise budget yet failing to acknowledge that his own budget has been cut and the key agency for indigenous companies, Enterprise Ireland, is under severe stress.
We hear much of activation measures to encourage people into work. What then are we to make of the decision that when people with a medical card return to work they will not retain the full medical card for up to three years as heretofore but will receive the GP-only card instead? This is supposed to yield a paltry saving of €11 million but at what cost in terms of helping people out of poverty and into jobs? The loss of a medical card is significant, particularly if the person affected has dependent children. The GP-only card will make no difference. This is a poorly considered proposal and is beyond my comprehension. The measure is a contradiction of the Government’s stated position of encouraging and facilitating people moving out of unemployment into work. It simply does not stack up.
Another anti-young people measure is the decision to cut the €20 per week bonus for people who have been out of work for more than a year and who enrol in FÁS, VTOS, vocational training opportunities scheme, and Youthreach courses. Young people are hit again as the student contribution fee will rise by €250 to €2,750 next year and then to €3,000 the following year while apprentices will now be required to make a student contribution.
Ag am nuair ba chóir go mbeifí ag infheistiú breis airgid maidir le cruthú fostaíochta sa Ghaeltacht, tá gearradh siar eile déanta ar chistí Údarás na Gaeltachta chuige sin. Tá an maoiniú atá ag an údarás le fostaíocht a chruthú gearrtha le roinnt blianta anuas, ó €26 milliún go dtí €5.8 milliún i mbliana. De réir tuairisc Indecon tamall siar, theastaigh ar a laghad €12 milliún in aghaidh na bliana leis na jabanna atá ann a chaomhnú, gan trácht ar jabanna nua a chruthú. Tá €1.3 milliún le gearradh ó na heagrais Ghaeilge agus na scéimeanna a riarann siad, chomh maith le €2.1 milliún gearrtha ó na heagrais Thuaidh-Theas freisin. Is maith an rud go bhfuil €500,000 curtha i leataobh don straitéis 20 bliain. Le ciorrú ginearálta de 5% sa Roinn, cé as a dtarraingeofar an t-airgead sin agus cé bheidh thíos leis?
Ba mhór an náire don Rialtas é nár cuireadh leagan Gaeilge de na cáipéisí buiséid ar fáil ag an am céanna leis na cinn i mBéarla agus freisin gur dhiúltaigh Páirtí an Lucht Oibre urlabhraí le Gaeilge a chur ar fáil ar chlár anailíse Raidió na Gaeltachta ar an gcáinaisnéis. Is léíriú eile é seo ar an drochmheas atá ag an Rialtas seo ar an nGaeilge agus ar an bpobal a labhrann í.
The Minister for Public Expenditure and Reform, Deputy Howlin, invoked what he called “the Famine victims of old” who had to seek aid overseas. This was in his effort to excuse the Labour Party for its shameful role in continuing the failed and futile austerity regime begun by Fianna Fáil and continued by this Government over its three-budget rule so far. If he must cite the Great Hunger, let the Minister and his colleagues remember this: millions in this country were sacrificed on the altar of a doctrine called laissez-fairecapitalism, which dictated that nothing must be done to interfere with the almighty market, even at the cost of mass starvation. The same mentality lies behind the austerity regimes that have increased poverty and unemployment and deepened social divisions not only in Ireland but across Europe and the world. This philosophy demands that bondholders, banks, multinational corporations and the super-rich must be protected, whatever the cost to the mass of the people. That is what the Labour Party signed up to when it went into government with Fine Gael. That is what austerity means and that is what they have given us in three consecutive budgets.
The Labour Party has long abandoned the principles it once claimed to hold and that it claimed to honour in this centenary year of the great Lock-out: solidarity, social justice and the belief that "an injury to one is the concern of all." The Ministers, Deputies Noonan and Howlin, spoke much about exiting the bailout. There is an exit sign over this budget but, sadly, it is the exit sign I have mentioned previously in this contribution, the exit sign to the airport and sea ports, and emigration for tens of thousands of our young people continuing through this and next year.
The Minister, Deputy Noonan, spoke about reinforcing policies that cause the economy to grow. The opposite is the case. The Government is reinforcing policies that have paralysed the Irish economy. Ask the 415,000 people on the live register, the 300,000 people who have emigrated in the past four years, the 180,000 households in mortgage distress, the 110,000 people on the housing waiting lists, the full-time workers whose jobs have been lost and the part-time workers on low pay and punitive contracts.
I deny in the strongest terms the contention of the Labour Party and Fine Gael Ministers in this Government that there was no other way. Nobody is buying that mantra. There is another way, a fairer way, which some of them have recognised and privately acknowledge. There is a fairer way to address the budget deficit, protect the vulnerable, give back to those who have suffered pain, stimulate the economy and foster job creation. This was set out in costed detail in Sinn Féin's alternative budget, the only real alternative budget produced by any party in the Oireachtas. Sinn Féin will continue to advocate fearlessly for fairness, stand shoulder to shoulder with those who are suffering under austerity and build a political force across this land that will sweep aside the Government's austerity regime and bring about genuine democratic change and a truly new republic at the earliest possible date.
I wish to share my time with Deputies Ross and Higgins.
Last night somebody joked to me that instead of cutting the dole for the under-25s it might have been cheaper for the Government to give young people a one-way plane ticket out of the country and be done with them. With the air travel tax scrapped, perhaps the Government could get a good deal from its friend Michael O'Leary. A lot of window-dressing measures and spin have been applied to this budget. When one peels back this embellishment one quickly sees how out of touch the Government is with the people. This budget takes no account of current circumstances, of the day-to-day reality of already marginalised groups such as the young, the old and the sick.
Like many other Deputies, last night and this morning I was contacted by a number of people of all demographics who were genuinely in despair over some of the proposals. They posed some questions to me which I was at a loss to explain. Perhaps the Taoiseach can do so. What would he say, for example, to a mother caring for three sick children twenty-four-seven, 365 days a year, who can claim carer's allowance for only two of them? She wants to know why she only qualifies to have two disabled people in her home, and she cannot cope with the thought of another review of her medical card - we all agree such reviews are happening. What would he say to the single father who, despite losing his single father tax credit, will continue to make a 300 km round trip every weekend to see his son, costing him nearly €50 per week on top of his maintenance payments? What would he say to the father who works ten-hour days to support his family and pay for his negative-equity home, bought at the height of the boom, which is now too small for his family? He only sees his youngest child at the weekend despite living under the same roof, and he cannot understand why nothing has been done to help struggling mortgage holders, 16% of whom are in arrears.
This morning I spoke to an 86-year-old woman living on my road whose personal alarm system is connected to her phone. Both of her neighbours have been burgled in the past year and she is terrified that she will be next. That telephone allowance is her lifeline. Energy prices have risen as much as 34% since the last income gain for pensioners in 2008 and the Government's targeting of them is going to cause serious hardship. This woman, who is from a generation that believed in owing nobody a penny, has the added anxiety of worrying about the scrapping of the bereavement grant, a nasty cut.
Reductions in the medical card threshold for those aged over 70 must surely discriminate against elderly couples. So too has the five-fold increase in prescription charges over the last two years disproportionately hit elderly people. Do we realise that 57% of older people suffer from chronic illness and one third have a disability, meaning the health changes will have a major impact on them? Last night I spoke to a GP friend who said he had no doubt elderly people would end up having to be hospitalised because they would not be able to afford the medicines they needed after yesterday's budget. This false economy will ultimately result in higher health-care costs for the State.
Swingeing cuts in social welfare payments to young unemployed people are cruel and ignorant and, once again, sorely display the Government's lack of understanding of the reality in Ireland today, such as the fact that so many young people, for various reasons, are not residing in their family homes. Did we take that into consideration? Comments to the media that young people are caught in a "welfare trap" where work is unattractive are appallingly insensitive to more than 177,000 young people who have emigrated since 2008. Youth unemployment today is at almost 29%, compared to just over 13% in 2008, while Ireland also has the fourth highest rate of young people not in education, employment or training in the EU.
I agree with the Minister for Public Expenditure and Reform, Deputy Howlin, that young people should be in education and training, but it is an insult to a young qualified teacher, a graduate who has already spent at least €30,000 on his or her education, to be told that he or she needs further education or training. What these people need is a proper job. If the Government had any faith in its job creation programme, it would not be targeting young graduates. I would like somebody from the Government to explain to me what this budget says to the hundreds of unemployed young teachers in Ireland who are under 25 years of age. Is it saying they do not want to work, so it will cut their dole to make them work or make them continue in education? This is an appallingly insensitive and ignorant approach.
There is a distinct lack of job activation measures in the budget. The majority of young unemployed people I know are desperately anxious to get work. The issue is a lack of jobs, not a refusal to take up employment. It is shameful of the Government to hide behind recent decreases in the live register. Let me present some facts. The live register statistics show that less than half of the 407,000 people who left the live register in the past year did so because they had found employment. Just one third of the people who left the register had found work. These are Government statistics. Almost 36% of those who left the register were placed on another welfare scheme, while a huge proportion left the country to seek work elsewhere. These facts undermine the statements made regarding the budget proposals and the attack on the young and the demonisation of young people whom the Government says do not want to work.
There is little to help struggling working families in the budget. It is incorrect to say that child benefit will not be cut, as cuts to the payment for the fourth child in a family announced last year are due to come into effect this January. The Government failed to mention this in the literature it sent out to everyone. That cut, combined with the attack on maternity benefit, will deter many young couples from increasing their families, but perhaps that is the intention of the Government.
Some 80,000 patients - many of whom are people with cancer or children with severe disabilities - had discretionary medical cards in 2011. That figure has now dropped to 54,000. Despite earning a wage, many of those who lost their medical cards have huge outgoings. The Taoiseach has claimed that the reason for the reduction is that individuals who were previously recorded as qualifying for a discretionary card now get one because they meet the income eligibility requirements. I would not boast about this, because the Government has impoverished those people to such an extent that they now get medical cards as of right. However, the medical card review will bring further worry to their doors.
The Government's patent and continuing attack on communities through the targeting of youth funding, family support, intervention programmes and sports organisations is a clear indication that it has no interest in investing in the country's future. Youth work services that support 380,000 young people have already been cut by 30%, from €73.1 million in 2008 to €51.4 million in 2013. The €2 million reduction in this area will force youth organisations working on the ground to reduce services and supports available to young people from disadvantaged areas further, at a time when the need for these services has greatly increased. Funding for sport has also been rolled back to 2006 levels, which will have a crippling impact on grassroots clubs.
I would like to have more time to discuss these issues, but my time is up. The figures I have cited today are the Government's figures. Once again, the budget is an attack on those in society who are less well off, from middle income groups down. The Government cannot possibly say this budget is for the betterment of society or will help increase a sustainable economy. All this budget will do is to deplete the country's resources. Inevitably, we will have to put more funding into health and social welfare to help those in greatest need in the years to come. This is a reactionary budget, reactionary against those who can ill afford to pay and against the many groups who do not have trade unions or big parties standing by them. That is the reason it is the most vulnerable sections of society that are being attacked.
It would be very churlish of those of us on the Opposition benches not to recognise that some elements of the budget should be approved and applauded or not to admit that we recognise the difficult situation in which the Government has found itself in the past three or four years or that it is working within certain constraints. While we disagree with regard to some of those constraints, the Government has decided to work within them. Although I do not accept those constraints, I will talk within them, because some of the ships we have championed in the past have already sailed.
I welcome the retention of the 9% VAT rate in the tourism and hospitality sector. I welcome this not because the lobby groups, which are right and which have been extraordinarily successful, have succeeded, but because there is an implicit recognition in this retention that reducing tax and VAT has brought tangible benefits. What has happened in this case is that the Government has recognised that its reduction of VAT from 13.5% to 9% in an effort to create jobs and create a buzz in the hospitality, hotel and restaurant sectors has been one of its most successful financial moves during its term of office. I applaud the Government on this wonderful achievement and I see its recognition that it should not raise the VAT rate again as another great achievement.
I regret, however, that the Government does not recognise that this achievement means something more fundamental. It means that there is great merit in cutting tax and VAT for small businesses because this creates jobs. I regret also that having recognised that in what it has done, the Government did not extend this principle to other businesses in the small and medium enterprise sector. It should say it will cut taxes in this area and others and will reduce VAT for other industries. Other small business areas are crying out for help and want to employ more people, but they do not receive the sort of support that has been given to the hospitality sector. The retail industry is on its back and would welcome such support and create more jobs if it got it. The printing, transport, fishing, small manufacturing and other industries could be assisted in this way. The dividend from tax cutting, while not a panacea for all ills, has been recognised by the Government in this budget. I applaud it on that, but I deeply regret that this was not included among the approximately 25 measures in the package for entrepreneurs, because the spin-off and the benefits have already been proven and recognised by both the Government and the Opposition.
It is self-evident also that the low 12.5% corporate tax rate creates huge employment in this country and has brought significant spin-off benefits in taking people off the live register. I urge the Government not just to concede to lobby groups when this happens and not just to make this a once-off, but to look in future at the benefits of tax cutting in key industries where employment can be created, which it has so successfully done here.
I regret also the fact that the money to fund this and an extension of it appears to have come once again from the pension levy. When the levy was announced a year and a half or two years ago, I asked the Taoiseach why not take the 0.6% from the industry, not from the members of pension schemes. The figure of 0.6% was set in stone for four years. We were promised that it was a once-off and that we would be out of the woods in four years. Now, well disguised in the Minister's speech in incomprehensible language which had to be translated and interpreted by others, a 0.15% levy will be added to the figure of 0.6%. Not only is there this extra amount which is a breach of the Government's promise - this is not a new experience for many in the House - but next year we also will have a 0.15% levy and the year after that ad infinitum.
That is correct, but it is a breach of the pledge to pensioners and members of pension funds. It is not necessary to go back to this pot to deprive people of their savings, scare them in this way and break solemn promises made in the House. If money is to be taken from the pensions industry, the answer is to take it from the fund managers and those taking out enormous sums for putting in an appalling performance, to put it at its mildest. That day the Taoiseach promised me that this would be examined, but not one word has been heard about it since.
It has been a very successful budget for many lobby groups. I was taken by some of the words of the Leader of the Opposition, Deputy Micheál Martin, which I heard on the monitor, when he spoke about a budget introduced by stealth and spin. He stated the Government's statement that there were no income tax increases was somewhat dishonest and deceptive. It is true that there are no income tax increases, but instead money will be taken from people's incomes. It is a very simple equation and the stealth is straightforward. Property tax is, in effect, an income tax. The figure of €250 million which will be raised to €500 million this year and which does not have to be discussed in the budget because it was so cleverly introduced last year is not anything except a confiscation of income at source. Everybody knows the money must be paid out of people's incomes if it is not paid voluntarily. Pay cheques will suffer.
The increase in DIRT is an appalling attack on income for those who have, in many cases, saved very little. It is being raised to 41%. This morning the Minister conceded the tax would actually be 45% when the add-ons were included. This is an enormous tax, particularly for pensioners and those with small savings. These people must pay. It is not voluntary. They must also pay prescription charges unless the Government wants them to die. They must pay for their burials. Their medical cards will be withdrawn which will result in enormous payments for them, while the telephone allowance is also gone. These are all, in effect, reductions in income, even if they are not technically income tax increases.
The headline figure and message is one which is in keeping with a great deal of the messages, including a message which came from a Minister of State, that the coping classes were being looked after. This was not agreed to by the Minister for Transport, Tourism and Sport who stated it was neutral for the coping classes. It is worse than that.
The €2.5 billion in cuts and increases in tax announced in the budget yesterday must be seen as a further tier built on the platform of savage austerity put in place in this country in the past five years. Budget 2014 is, therefore, a further twist of the austerity knife which is already buried deep in the gut of the working class, low and middle-income workers, pensioners, the unemployed and the youth.
The Fianna Fáil-Green Party Government launched an economic war of attrition against the people at the diktat of the troika to salvage the speculator, the gambling bondholder and the European financial market system from their disastrous foray into the Irish property bubble. Fine Gael and the Labour Party have continued this war for the past two and a half years. Yesterday, like mercenaries on the battlefield, they mugged the dazed survivors of their austerity war, the pensioners, the youth and even young pregnant women, for what little they had left.
In the past week we have been subjected to an Orwellian tide of propaganda from the Government and sections of the billionaire-owned media that the corner has been turned with the economy, that the austerity agenda has worked and that we are now on the cusp of the transformation of this island into a land flowing with milk and honey for the people. This is a cruel fiction coming towards the end of the year when the economy scrapes along the bottom with growth of barely 0.2%, 1,000 young and other workers leaving the country each week, while more than 400,000 are unemployed or underemployed. The €2.5 billion extra will be a further drag on an already sick domestic economy.
Savaging the maternity allowance at a time of great stress for young women is mean in the extreme. The snatching of the telephone allowance from the elderly is absolutely shameful, and threatening to take medical cards from those over 70 years in their tens of thousands is cruel and heartless. The pauperisation of the young unemployed with the savage cut to the jobseeker's allowance is an economic body blow to them, but to attempt to camouflage this cut as an employment-friendly measure insults our intelligence. The attacks on the elderly and the young reflect the brutality of the ongoing austerity agenda promoted by the Fine Gael Government. "Die off," is the callous message to the elderly, "you are an inconvenience." "Get out of the country," is the callous message to the youth, "we have no place for you here because our policies are failing."
For the past two and a half years the Minister for Social Protection, Deputy Joan Burton, has trailed her major unhappiness around the country's media at having the elderly, the unemployed and the poor landed at her feet. She should have been Minister for Finance or Minister for Public Expenditure and Reform announcing the macro cuts, rather than being forced to look her victims in the eye as she snatches a significant portion of maternity allowance and the telephone allowance from the elderly or savages the jobseeker's allowance for the young.
She wanted to carry out the macro cuts and did not want to be seen to be carrying out the savagery involved, although, of course, she signed up for all of this two and a half years ago. For two and a half years, through endless briefings with selected journalists, she has tried to portray herself as a doughty Joan of Arc, battling against those bad men in the Cabinet who would cut her budget and make her look bad and implement the very cuts for which she had signed up. Today, far from being a Joan of Arc, this hapless Minister stands in the same gallery of political rogues as children's milk snatcher, the late Margaret Thatcher, as she puts the bondholder before the pensioner and the banker and the financial market system before the youth of the country. She used the working class of Dublin West to launch her political career in the past 21 years and then betrays them most callously to continue that career.
It is particularly shameful that, in this 100th anniversary year of the 1913 Lock-out, the Labour Party should support the abomination of austerity and this budget. It is a party that was created from the struggles and sacrifices of working class people for justice against the bosses, yet it now lines up with the bosses' system and capitalism against the workers it was supposed to represent. Of course, it is now a party of the right - lock, stock and barrel.
Any budget based on continuing the policy of bailing out banks and bondholders and the paying of odious debt can only result in the continuation of savage austerity. Within the straitjacket of this system, it is simply not possible to meet the needs of the people. Yes, a radical socialist alternative is possible, for which I stand, but that would mean putting the interests of the majority first and bringing the banks and the major resources into public ownership and democratic control. Even allowing for the right-wing nature of the Government, the Socialist Party's budget statement points out that, based on the level of household wealth in this country, a 1% wealth tax on the top 1% would yield €583 million, or an emergency 5% tax on them would yield €2.9 billion. Every increase of 1% in corporation tax would yield €525 million. Repudiation of the odious debt forced on the people would yield many billions. On that basis, massive job creation programmes with public investment in infrastructure and so forth could have been created and begin the process of re-booting and re-making this broken economy. Working class people, the young and the elderly have to stand and fight now. Unfortunately, the trade union leadership which should be giving a lead has been in hiding for the past five years.
Working class people have to organise and fight back against the Government in order that the disastrous policies of austerity are changed.
Tá éagóir nua á dhéanamh ar ghnáth-lucht oibre na tíre - go mórmhór daoine aosta agus daoine óga - i mbuiséad na bliana 2014. Tá ionsaithe nua fiachmhara i gceist sna polasaithe déine atá á gcur i bhfeidhm ar mhaithe le lucht na speiciléireachta, lucht na mbannaí, na baincéirí móra agus córas na margaí airgeadais le cúig bliana anois. Tá sé náireach faoi mar a dhírigh an Rialtas sé ar dhaoine aosta le gearradh an liúntas teileafóin agus leis na mílte cartaí leighis a chur ar ceal. Is uafásach an ionsaí atá á dhéanamh ar dhaoine óga atá gan obair de bharr na géarchéime. Tá sé scannalach go bhfuil islú mór á dhéanamh ar an liúntas cuardaitheora poist. Is comhartha é seo nach bhfuil leigheas ná freagra ar bith ag an Rialtas seo ar fadhbanna móra eacnamaíochta na tíre seo. Tá sé sin soiléir sna polasaithe atá curtha chun cinn. Dá bhrí sin, tá malairt bunúsach ag teastáil chun an saibhreas atá ann a infheistiú ar mhaithe le tromlach na ndaoine. Caithfidh daoine óga, an lucht oibre agus daoine aosta seasamh anois agus troid in aghaidh na polasaithe déine seo chun malairt amach is amach a chur i bhfeidhm in eacnamaíocht na tíre seo agus muintir na tíre a chur ar ais ar a gcosa.
There are significant signs that Ireland is emerging from the very damaging fiscal crisis that we inherited when we came into office in 2011. Thankfully, we are about to exit the bailout programme and will soon regain entry to the club of nations that can control their own fiscal destinies. The financial markets are confident in their belief that we can manage our own fiscal affairs. We can now in a real way consider how we as a country can restore confidence to our people and create the work opportunities that so many crave.
When the Government came to office we inherited the fall-out from the multiple policy failures that had built up during Fianna Fáil's disastrous decade and a half of misgovernment. Much has been written about how Fianna Fáil's reign of incompetence destroyed our banking system and public finances. However, Fianna Fáil had an equal-opportunities approach to ineptitude, making sure that its policy disasters rippled out across all areas of government. In my area of social protection and labour market policy, Fianna Fáil's utter failure to introduce any meaningful reforms to the social welfare system to encourage work have been highlighted repeatedly by the ESRI, the IMF and the OECD, the latter pointing out that we would have entered the recession with 100,000 more people in work if the party opposite had lifted its finger to introduce the job activation reforms that are taken for granted in modern European welfare states.
For me, Fianna Fáil's epitaph is not simply Anglo Irish Bank or the bank guarantee, but the less well-known but still extraordinary fact that between 2004 and 2007 - at the height of the boom - the share of households defined as jobless recorded a double digit increase, reaching 15% of the total, by far the highest in the EU. It is clear that the welfare system played some role in these changes. I refuse to listen to any lectures from Fianna Fáil about its progressive approach to social welfare and income distribution. For Fianna Fáil, progressiveness meant taking a slice from its property tax pyramid scheme and using it to increase welfare rates without making any effort to improve the prospects of people on social welfare in the jobs market through development of skills and training opportunities. If that is what Fianna Fáil means when it says it is progressive, then I do not agree. There is nothing progressive about just writing someone a cheque. From its comments on the budget, it is clear that Sinn Féin has inherited that handout mentality.
I have greater ambition for people who are unfortunate enough to be unemployed, to lose their jobs or to see the firms in which they work close. I view every individual on the live register as an untapped resource and a future employee, self-employed person or business person who will participate in the rebuilding of this country and its economic recovery. That ambition is why we are moving from a passive to an active welfare system. That is why I have focused on transforming the Department from the passive benefits provider of old to an active, engaged and focused organisation that provides employment services for jobseekers and also, importantly, for employers. Employers have an enormous role to play in getting people back to work, particularly young people. In addition to providing income support, we now help jobseekers find the work, training and education they need. I have secured additional capital funding next year which will allow my Department to complete the roll-out of its Intreo service in all of the Department's offices nationwide.
With the economy stabilising and business sentiment improving - factors which will no doubt be helped by this budget - and with the private sector now creating 3,000 new jobs every month, many more jobs will be created in our economy next year.
When we took office during 2011, the economic outlook was so bad that the live register looked certain at that stage to exceed 500,000 people. I am glad to report that the live register last Friday was at 400,807 and should go below 400,000 next week. This will see the live register at its lowest level since May 2009. It is still far too high, of course, but we are making firm, visible and tangible progress and will continue to make more progress due to our sound management of the economy over the next number of years. Bear in mind that the live register includes anybody who gets a jobseeker's payment and that at any single time there are between 75,000 and 85,000 people who work part-time. It is a very significant statement about people in the Irish economy getting back to work. The Central Statistics Office, CSO, figures for the end of June show that there were 33,800 extra people in employment in the first half of the year.
Getting people back to work is the most effective way of reducing social welfare spending, and we are doing that. That is the reason my Department has an ever-increasing focus on more engagement with employers. We have established a dedicated employer engagement section which will liaise with employers to help with their recruitment needs. We are developing, and will enhance further, bespoke recruitment and training arrangements for employers in each of the social welfare regions.
We will continue to arrange jobs fairs around Ireland and arrange for on-the-spot interviewing for employers who are recruiting. It is also worth noting that the Estimate for the family income supplement scheme will increase by more than €52 million over the Estimate provided for that scheme in 2013. This is testament to the increasing number of people availing of this scheme and gaining a firm foothold in employment as a result.
This is additional money paid on a week-to-week basis to families with children in relatively low-paid employment. It is a very important assistance for people getting back to work and for employers. During Ireland's Presidency of the EU Council, I brokered agreement on the EU-wide youth guarantee which, once implemented from next year, will offer all job seekers under 25 good quality employment, training or educational opportunities. As part of this, the Department of Social Protection is currently developing the range of opportunities on offer to young people in the form of internships, participation in employment schemes, subsidised private sector recruitment, and supports for self-employment. The full range of youth employment initiatives will be set out in the Government's plan for the implementation of the guarantee, which is to be submitted to the EU by the end of the year. Measures will include incentivising employers to offer more job opportunities to young people by reducing eligibility for the JobsPlus scheme for those under 25. In the case of JobsPlus, the employer who takes on a person who is more than six months and less than two years unemployed will receive €300 a month as a cash subsidy, paid on a monthly basis. In the case of a young jobseeker more than two years unemployed, the employer receives €400 as a cash subsidy paid on a monthly basis for the first two years of the young person's employment. That will make a significant opportunity available to people under 25 and a significant opportunity for employers. It is necessary that employers partner with the State and the education system to offer work opportunities to young people. We are providing for an additional intake of 1,500 young people to the JobBridge national internship scheme and we are ensuring that 1,000 places on the Department's Tús community work placement scheme are targeted at young people. In a further measure to support young adults, a minimum of 2,000 training places will be ring-fenced by the Department of Education and Skills for those under 25 years. These places will be provided under a follow-up to the successful Momentum programme that operated in 2013. In addition, my Department will provide income supports to an estimated 2,000 people availing of Momentum courses provided by the Department of Education and Skills at an estimated cost of €15 million per year. Furthermore, the Department of Jobs, Enterprise and Innovation will invest approximately €2.5 million next year in making funds available to young entrepreneurs via Microfinance Ireland and other business start-up schemes.
In parallel, we are introducing changes to income support for young people. With effect from January 2014, people without children aged 18 to 24 years in receipt of jobseeker's allowance will receive €100 per week unless they are an existing claimant on a higher rate, in which case the rate will not change. This is for new people coming into the system. People without children aged 25 years in receipt of jobseeker's allowance will receive €144 a week unless they are an existing claimant on a higher rate, in which case the rate will not change. This weekly €144 rate will increase to €188 when they reach 26 years of age.
However, people under 26 who participate in a back to education course will have their jobseeker's allowance increased to €160 per week. These changes are about emphasising the importance of services over simply income support. Young people face a difficult jobs market and need assistance in the shape of work, training and education services. That is why we are fully reinvesting the savings from these measures and millions more in an initial €46 million investment in youth employment initiatives. We are investing far more in young people willing to take the opportunity to get involved in further education, training, work experience and employment, particularly through JobsPlus, than we are saving in the measures to which I referred. I want to ensure that, in addition to the enhanced career and job prospects from improving skills and education levels, young people are financially better off in education, employment or training than claiming. Signing on for jobseeker's allowance on a person's 18th birthday is not the start to adult life that parents want for their children. We have to be more ambitious for our young people. No village, town, suburb or community in Ireland wants to see a significant number of young people walking down to the social welfare office to sign on at 18 years and still being in the same situation at 25 or 26 years of age. Our young people are too talented for that to be an acceptable future.
There is no doubt the social protection system has played a key role in protecting the most vulnerable and minimising poverty throughout the economic crisis. The fact that this Government has abided by its commitment to protect core weekly social welfare rates has achieved that outcome. Next year, my Department will provide an additional €100 million in funding for the payment of State pensions. This is the context in which some of the changes to secondary pensioner benefits must be seen. All the pensioners I have met in the past year have told me that the protection of their weekly pensions was paramount and I am satisfied to have done that.
I have said many times and I will state it again that the contribution social welfare spending makes to the overall economy is a significant lever in stabilising demand in our economy. This was particularly true in the recent economic downturn. This is why a strong and responsive welfare provision will continue to be an important part of stimulating our economy, even as employment thankfully grows. It is critical that we continue to provide for increasing financial allocations for our pensioners as they grow in number and for those unable to work due to illness or invalidity. We will spend more than €500 million on household benefits packages on people who are retired, carers and those with a disabilities who care for the qualified for the package despite international financial pressure to reduce expenditure.
When negotiations on the budget began, the Department of Social Protection was initially requested to make new expenditure reductions of €440 million. Today, however, I have been able to lower that amount to €226 million. An additional €30 million in savings will be made through additional fraud and control measures in 2014, while €34 million will be saved through increased efficiencies and lower than expected demand on some schemes as people go back to work, bringing the Department's cumulative adjustment to €290 million. I am keenly aware that reductions of €226 million will still have an impact on, and cause difficulties for, social welfare recipients. However, the lower adjustment means I have protected the State pension, the carer's allowance, the half-rate carer's allowance, the disability allowance and all other core weekly payments upon which people depend. I have also protected crucial supplementary supports for pensioners, carers and people with disabilities, such as the fuel allowance, the electricity and gas allowance, free travel, the half-rate carer's allowance and the respite care grant.
Child benefit has also been protected in this budget and will remain a vital universal support for all families and children. Reducing the adjustment from €440 million to €226 million has allowed me to again preserve the core weekly payment rates for all 1.4 million current beneficiaries while at the same time providing for the increasing number of pensioners, who represent a real demographic bonus to Ireland.
Providing a safety net for those in need and a pathway back to work for jobseekers are two of the three core functions of the Department. The third is rooting out welfare fraud. In that respect, my Department will raise a further €30 million next year through additional fraud and control measures. For instance, we have extensive co-operation now with the Garda. We will take a number of gardaí into the employment of the Department for a period and deploy their skills and resources at the airport and Border regions on fraud control and fraud deterrence. It is important that taxpayers and those who pay PRSI be aware that as far as possible we do all in our power to limit any abuse of the social welfare system. I make no apologies for a zero-tolerance approach to welfare fraud. We must ensure that every cent of the welfare budget goes to those who need it most.
I have always been of the conviction, since I first entered politics, that the strongest protection against poverty is decent, secure and fairly paid work, and the changes that have been made in the social welfare budget are in keeping with that conviction. This budget will help the unemployed get back to work, reduce the overall welfare spend as part of a sustained effort to repair the public finances, and ensure the safety net of social welfare bears comparison with that of countries throughout Europe with good social welfare systems. Of course, our social welfare payments are infinitely higher than those paid across the Irish Sea and north of the Border. We want social welfare as a safety net, but also as a trampoline that catches people, lifts them up again and gets them to where they want to be - that is, particularly in the case of young people, back to work, training or education.
This will only work through partnership between the Government and local authorities, the public education and training services and, above all, employers in both the public and private sectors, to create opportunities for young people. Austria, a small country similar to ours, has a youth unemployment rate of less than 7%, which was achieved by blending education and work experience so that nobody comes out of secondary school without having had some experience of work. Equally, nobody does three or four years of training, whether at a higher degree level or at an apprenticeship or trainee level, without being able to go out into the wider world of work with serious work experience on their CVs. One of the problems for the young people, many of whom are brilliantly qualified, who came out of education during the height of the crisis has been that there were no jobs available for them and they ended up with CVs with large blank spaces of months or years. As a consequence, the jobs tend to go to the new ones coming out or to those in existing jobs. We must break that trend so that, for those who are unfortunate enough not to be able to get a job in the way that was the experience during the Celtic tiger, we provide a pathway back to work and make work experience, in co-operation with employers, an integral feature of the Irish system.
I wish to share time with Deputy Dooley.
I listened with interest to the speech of the Minister. With regard to fraud, one of the issues I have become aware of across my constituency desk is an aspect of the respite care grant that she is targeting. I refer to respite care grants paid in 2007 to 2010, inclusive. In particular, the Department is targeting farmers' wives, a number of whom have come to me. These women, in partnership with their spouses, are caring for elderly relatives in their own homes. It has always been the tradition that the elderly relative lives in the home and is looked after by a member of the family. The Department is writing to these women stating that, because they are showing up on the PRSI system as having paid PRSI in a particular year, they must have been in paid employment or must be self-employed, so they could not have been providing the full-time care and assistance to qualify for the respite care grant. It is seeking the return of three, four or five years of the respite care grant. I ask the Minister to look at that because it is unfair. I understand where she is coming from on fraud measures. Everybody welcomes them for those who deserve them, but the Minister is incorrectly targeting these women just because they are on the PRSI system as they are in partnership with their spouses on family farms. They certainly are not working in excess of the 15 hours applicable. This carte blanche letter has been sent out to them stating that the Department now has information that they were on the PRSI system and, therefore, they cannot qualify for the respite care grant. Enclosed is a self-addressed envelope in which to return the cheque in respect of the respite care grants for 2007 to 2011 with immediate haste. The Minister might take that up when she returns to her Department. It grossly contravenes the spirit of respite care and the effort to keep the elderly in their own homes as long as is humanly possible. I suppose the optimum would be for them to see out their lives in their own homes.
There are a number of aspects to the budget and where policy is going over the years. While we have rushed to balance the books, yesterday there was an extremely cynical attempt to hide the bad news from the general public, get through budget day and state that everything is rosy in the garden. There are a number of cuts coming through but we will deal with them as they come.
On the bereavement grant, I suppose every politician in this House and beyond has dealt with people who were in a vulnerable position after a bereavement and were trying to cope with the costs, particularly in cities, where the costs are a multiple of what they are in the countryside. What the people are saying to me this morning is that they have paid their PRSI for this. It is not as if it was a grant for nothing. PRSI has been paid; they have made contributed towards it and they cannot see how this grant can be cut. This is one of the measures with which I take major issue.
Last week we held a debate on medical cards here and there were Leaders' Questions on medical cards. There was complete denial from Government about what was happening in the medical card section. Any fair assessment of the evidence that was put before the House last week and that is continuing to flow shows that there has been a change in policy in this regard. One can dissect the English language with a dictionary and ask what exactly is a change in policy, what it takes for something to represent a change in policy and whether the Minister needs to bring statutory instruments or regulations on the matter before the Dáil, all of which is technical, but the bottom line is that there are people in significant hardship who have been targeted by the section and who are getting letters on a weekly basis in an effort to reduce the number of medical cards and to frustrate those who apply for medical cards. What was discussed here last week was a true and meaningful reflection of what is happening.
The issue to which I will refer in the few minutes remaining to me is affecting rural communities and provincial towns.
The retail sector has been on the floor during the past couple of years. Every speaker has said that different decisions should have been made during the height of the property bubble. Rural communities, provincial towns and the countryside as a whole have been suffering depopulation and this must be addressed. The assessment of Government policy and State spending is that these communities cost less to run. Government policies in the 1950s and 1960s resulted in an urbanisation of Irish society and we are still paying and will continue to pay a very great price for those policies.
The best way to service our rural communities is to have targeted policies and one of the most proactive ways over the past 20 years has been how EU Leader funding was distributed. Leader has funded meaningful employment in communities and it should be used as a model for providing significant value for money.
There is no justification for the reduction in the telephone allowance. The spin on the story says that there has been no cut in income for pensioners. The telephone allowance is factored into the weekly budget of pensioners and it will mean they will need to spend an extra €9.50 a month. That is a cut in their income. Ministers may argue that the pension was not cut. However, everything else around it has been cut and people will see through this spin. My constituents have told me that they can see what the Government is doing.
I refer to the issue of medical cards for elderly people and the moving of funding from one cohort of the population to another to give the impression that no cut has been made. The Government wants to give the impression that this will not have a significant impact, but this is beyond credibility.
I wish to deal with a number of other issues. The Minister for Education and Skills made an announcement with great fanfare about his success in education. Everyone knows that the education sector has taken a very great hammering over the past number of years and that it is suffering a funding crisis. Every school and board of management is fund-raising in order to maintain services.
Last Friday a constituent described to me how the case of her child has fallen between the Department of Health and the Department of Education and Skills. Funding for a personal assistant was given and subsequently withdrawn because the parents decided to enrol the child in a mainstream preschool rather than a specific preschool. This would, in the long run, have cost the Department and the Exchequer less money.
I refer to the CABAS project in Cork city and I have noted the beneficial aspects of that early intervention programme for children with autism. In the past autism and the autistic spectrum were not fully understood but this project has helped children significantly so much so that some have progressed to mainstream education. The services have decided that the four year old child to whom I referred has fallen between two Departments. The Department of Education and Skills and the Department of Health are unable to discuss the case of the child and this will be at a significant cost to the State in the future. They should adopt a common sense approach and decide what is the best solution for this child to ensure that he can reach his full potential and which will also be of benefit to the State.
The Government has done a reasonably good job at presenting the budget in a manner that seems to indicate there is no pain, no cuts, no new taxes, that it is all very amicable. We were told the need for an adjustment was a tough decision but subsequent detail was very scant. We were informed by the Minister for Social Protection that the general scheme remained the same with no increases on the top line items. We were told that diesel and petrol would not be affected. Some of the spin was even evident in the media. We were informed about measures that were not included in the Budget Statement. The statements from both Ministers were very light on detail as to how the adjustment was arrived at. It is not the most up-front way of doing it.
I see no reference in the statements to the property tax. It is the case that every owner and occupier of a residence in the State will be hit with the full property tax rate in 2014. Those individuals who believe they are not affected or that no additional tax will be imposed in 2014 are misguided because the full effect of the property tax will be felt at a time when the economy is in a very fragile state but is beginning to show some positive signs of recovery. In my view and that of my party, this is not a sound footing for the levying of such a penal tax.
The Minister for Social Protection informed the House how she has saved the standard social welfare payment. It would be more preferable if the Government decided to take a small slice from everyone rather than nailing a few particular groups in order to be able to say that it lived by its promise not to cut social welfare base rates or increase taxes. However, taxes are being increased every year - as must happen - and social welfare rates are being reduced.
Yes. In order to be fair and honest, the pain must be shared. However, for the past number of budgets this Government has been targeting a cohort that is not the centre of media attention and these individuals are being affected in a dramatic way. I refer in particular to young mothers. The combined cut has a very significant hit on the income of mothers. Giving them free GP care is a bit like an employer refusing to pay his workers and giving them food and butter vouchers instead. It is a regressive approach by this Government for dealing with an obvious need. Ministers have spoken about extending free GP care for children under five. Children who require this care do not suddenly get better on their sixth birthday. An expectation is created which the Government is not in a position to continue with. I have a problem with schemes which are universal in nature. For example, the Minister's children and my children under five years of age have the same benefits as the children of people who are not working, have no income or are in difficult circumstances.
That is not the way to run a modern democracy. I accept the Minister has a plan and a view regarding universal health care through an insurance scheme, but people will pay into that. This is a little carrot being dangled in front of every parent in the State, regardless of means. At the same time the Department of Health and the HSE are eliminating the discretionary medical cards at a rate of approximately 1,100 per month, and the people affected are going in and out of my office the same as everywhere else. It has always been recognised that on occasion the strict guidelines based on means are overly burdensome for some families, and particularly those with exceptional circumstances or where the medical need is of such an acute or critical nature that there must be some discretion. That is sensible, but introducing a universal scheme of free access to GPs is nearly going back to 1977, when the party of which I am a member gave everybody free tax on their cars. It is well recognised by all sides that it was daft act, but this Government has done something similar when it is heading into local elections.
There is an interesting approach to transport. In the Estimates there is mention of a reduction of something like €45 million in the roads budget. For example, funds will be set aside for surface dressing, road maintenance and the continuation of some public-private partnership projects. On the other hand, there is a spare €200 million in capital expenditure that comes as a result of the privatisation of the national lottery. Hey presto, that is to be the goody bag, and the Government can target the electorate by constituency, with money for roads or the sports capital programme. The sale of the national lottery will effectively end the source of funding for the next 20 years for sports capital programmes. The licence was dealt with over three to five years but it was not disposed of. The Government has disposed of it now and got a chunk of cash.
The money was supposed to be used on an annual basis for the sports capital programme, but for the past couple of years the Government has taken the money from the national lottery and put it into the Exchequer fund. The Government is proposing to have a new sports capital fund with the up-front payment but it will not come on an annual basis. I fail to see the sense in what is being done.
The retention of the 9% VAT rate is helpful and interesting but the €13 million provided to Tourism Ireland to support and promote this country abroad is being taken away. I accept that the Government has reduced the travel tax, but for three years it has robbed the private pension funds of elderly people in the State to fund that measure. It pocketed the cash and never applied it to a reduction in the travel tax. It is a classic bait and switch or three-card trick, as the Government got the money but did not spend it. The reduction is being introduced in April, but this comes at the same time as it is extending a raid on the private pension funds. I accept that the reduction in the travel tax is a good idea, but that money has already been taken from the pensioners over the past three years. The Government is making it seem great and is using it as a carrot.
I am deeply concerned about the proposal to reduce the Department of Health's budget by approximately €660 million, and particularly the plan to eliminate 70,000 medical cards. I fail to see who could end up with a medical card in the end. What state will a person have to be in to qualify for a medical card?
There are approximately 2 million. I am in touch with my constituents and I know people who are under immense pressure. There is a belief that there are 70,000 medical cards sitting on mantlepieces waiting to be used in the event that somebody becomes ill. Much of that fat has been taken from the system over the last number of years.
If the litmus test of the difficulties faced by citizens of this State is my constituency office or that of a colleague, I assure the Minister that the saving of €135 million that is being talked about by the Minister for Health cannot be achieved through efficiencies.
Nobody on this side of the House is pretending that decisions that were made in yesterday's budget will not have a negative impact on people. This is the seventh difficult budget in five years and some of the decisions taken will have an effect on income and put some people under more pressure. I attended the meetings and we spent hours going through the options, trying to limit the pain and difficulty for people in the decisions we had to make, while at the same time looking to do positive things such as creating a stimulus for jobs and ultimately encouraging growth, which will solve our problem. That is as opposed to continuing cutbacks.
I hope this is the last significantly difficult budget that the country will face. People have demonstrated patience with the burden they have carried over the past five years because of a disastrous Government that collapsed and almost brought the country with it. At last the rebuilding process is now well under way, despite the difficult decisions that have been forced on us. I hope we will soon enter a new era of increased expenditure rather than continuing reductions year after year.
My job is to give political leadership to the agrifood, agriculture, fisheries and seafood sectors. My objective in this budgetary process is 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 that the sector can achieve for Ireland, expanding its revenue base through growth in export earnings. In particular I am pleased to announce, in spite of the very difficult budgetary arithmetic, the introduction of the world's first national beef genomics scheme, which will result in further progress on the genetic quality of Irish beef and deliver world best practice in beef traceability.
The Exchequer contribution to the Vote of my Department will amount to €1.203 billion in 2014, which is comprised of some €1.0192 billion in current expenditure and €183.7 million in capital expenditure, although the figure will increase going into next year because we will have some carry-over from this year. This represents a modest fall in overall terms in 2014, reflecting the reality of macro-level budgetary constraints, but it is also worth noting that some agriculture schemes are coming to the end of their natural lives and, separately, my Department continues to reduce the administrative cost of delivering its programmes for farmers and the agrifood sector as part of its reform programme.
This year's budget is consistent with last year's in terms of priorities, which include supporting vulnerable sectors and protecting the incomes of family farms; supporting small farm holdings in disadvantaged areas; introducing taxation measures to restructure, modernise and promote growth in the agrifood and farming sectors; and providing support programmes in line with the targets of Food Harvest 2020. To the credit of the Fianna Fáil Party, that was designed during the last Government. A particular concern within that policy direction is job creation, but we are also looking to support the future of the sector through new research and development funding as well as investment in food safety and animal health and welfare controls. We also seek a continuing programme of reform within the Department and its agencies aimed at continued improvement in service delivery and reduced costs.
The agrifood and fishing industry is enjoying a period of strong success and all signs point to continuous growth for the sector, in spite of the difficulties in the marketplace. In 2012 food and drink exports exceeded €9 billion for the first time, which means that in the past three years these exports have risen by 28%, or €2 billion, in total. This trend is continuing; the latest CSO figures for food and beverage exports show a 7% rise in the first half of 2013 compared to the same period in 2012. That means that by the end of this year we will be close to exporting €10 billion worth of food and drink when less than three years ago that figure was considerably below €8 billion.
There is a parallel upturn in employment figures in the food and drink sector in the past two years, with Forfás estimating that job numbers grew by more than 1,300 in 2012. Some element of this trend can be attributed to the work being done by the Government and the Food Harvest implementation committee in supporting this growth in the sector which is the most important part of the indigenous economy, as any commentator may judge.
In regard to supporting vulnerable sectors, I am maintaining the current level of payments under the disadvantaged areas scheme, a key priority for which I have allocated €195 million in 2014. I have also increased the allocation for the grassland sheep scheme to €15 million in 2014. Although direct funding of €1.21 billion representing the single farm payment is not provided for in the Exchequer Voted expenditure in 2014, the associated administrative cost of implementing this important payment to farmers is funded through the Vote. The first instalment of the single farm payment is being paid to farmers from today, with some 108,000 farmers getting more than €500 million in the coming days.
Building on existing measures in the beef sector, I am announcing a budget package worth €40 million for the sector, comprising €23 million for a new beef genomics scheme which, when taken together with the beef data programme worth €10 million, will allow farmers to claim an equivalent payment of €60 per calf for an estimated 32,000 herds covering up to 550,000 suckler calves. In addition, I am continuing my commitment to the sector through the continuation of the €5 million beef technology adoption programme, or beef discussion groups as farmers will know them. Almost 5,500 farmers received an annual payment of €925 each under the 2012 programme. Separately, €2 million is being provided to cover remaining payments under the suckler welfare scheme. I am delighted we are in a position to fund these measures which together will result in an investment of €40 million in the beef sector next year.
The suckler cow herd is the seed bed for a quality beef industry, involving more than 100,000 farm families, employing almost 8,000 people in processing, sales and marketing, and driving exports valued at approximately €1.8 billion per annum. Harnessing technology in a way that improves efficiency at farm level and, ultimately, profitability is key and I am convinced the combination of measures announced today can make a major contribution to the expansion of beef output and greater market penetration. The establishment of a national beef genomics scheme is a world first for Ireland. It is no coincidence that this initiative which I announced yesterday dovetails very nicely with the aims of Food Harvest 2020, increasing output and the value added quotient from the beef sector, as well as offering traceability, improving animal health and welfare and further reducing the carbon intensity of the beef produced in Ireland.
I welcome the retention of key existing tax reliefs for agriculture and the food industry and the introduction of new incentives which will contribute to the implementation of the Food Harvest 2020 strategy. I am pleased to have secured agreement to the following changes to agri-taxation measures. Until now, retirement relief from capital gains tax was only available where a person had farmed the land for the previous ten years, except in the case of transfer to a child, in which case a long-term lease was permitted prior to transfer. This new measure extends CGT retirement relief to include farmers who lease their land on a long-term basis, namely, a minimum lease of five years, in the period prior to retirement and intend transferring their land to a person other than a child. The main purpose of the measure is to encourage older farmers who have no children to lease their farmland in the long term to younger farmers. This change builds on a number of measures introduced in the last two budgets to improve land access for younger farmers, including the reduction in stamp duty rates, improved incentives for long-term leasing and the restructuring relief from capital gains tax introduced last year in order to address the issue of farm fragmentation.
The farmers' flat-rate addition in VAT is being increased from 4.8% to 5%, with effect from 1 January 2014. The flat-rate scheme compensates unregistered farmers - that is, practically every farmer in the country - for VAT incurred on their farming inputs and is reviewed annually in accordance with the EU VAT directive. This is a very positive development as it puts money back into farmers' pockets. We estimated this measure will be worth approximately €10 million directly to farmers in terms of the rebate they will receive.
In addition to the new measures outlined, I have secured the retention of the key agricultural relief from CAT and retirement relief from CGT. The retention of these reliefs reflects the Government's commitment to generational change in agriculture. Taken together with the existing 100% relief available for young farmers in respect of stamp duty and stock relief, this means that almost all family farms can be transferred to young, trained farmers, with no tax liability arising. The 100% reliefs for young trained farmers in stock relief and stamp duty relief have been maintained and three new courses have been added to the list of qualifying courses for these reliefs.
I welcome yesterday's announcement by the Minister for Finance that there would be an independent cost-benefit analysis of existing tax reliefs in the agriculture sector - this will happen next year. The objective of the review is to redirect the existing level of tax expenditure towards activities of maximum benefit to the sector and the economy. In other words, like any sensible business, we will re-evaluate how we are spending money, how reliefs are working and what we might do to to change and improve. This will not be a cost-saving exercise, rather it will be about transferring reliefs across the sector to ensure we are consistent with our objectives under the Food Harvest plan.
The new capital gains tax relief for entrepreneurs will also be of benefit to start-up food businesses. This measure will complement Food Works, the inter-agency programme which was developed in line with Food Harvest 2020 specifically to target and accelerate the development of a new generation of high potential start-up food companies. The extension of the 9% VAT rate for the tourism and hospitality sectors will also greatly benefit rural tourism and food hospitality enterprises. Other announcements in the budget which will benefit existing food companies and encourage food and on-farm diversification start-ups include:a start-your-own-business employment activation measure and improvements in the research and development tax credit systems.
I have a strong commitment to supporting a capital programme across the agrifood, fisheries and forestry sectors again in 2014. In the marine sector I have provided an increased capital allocation of €10 million to maintain the infrastructure at the Department's fishery harbour centres and local authority fishery harbours which make a valuable contribution to Ireland's marine sector. That €10 million represents a significant increase on this year's budget.
The capital allocation to the Marine Institute is being increased to €10 million to cover the cost of its ongoing research programme, as well as to upgrade its research vessels, while capital funding to BIM will be increased to €6.5 million to assist in the implementation of the new Common Fisheries Policy which is challenging but exciting for the sector. Significant capital funds will be allocated again in 2014 to the forestry sector, which will allow us to maintain the forestry planting programme of approximately 7,000 hectares per year and the premiums at the current rate.
A provision of €4.2 million has been made for the horticulture sector, which is approximately a 25% increase in terms of capital investment in the sector. The sector has the capacity for significant growth in the short term, but it needs capital investment to do this.
I have continued to provide capital funds in support of on-farm modernisation, most specifically in 2014 in favour of the investment needed to support the dairy sector through its expansion plans ahead of the removal of milk quotas in 2015. The ending of quotas provides the best ever opportunity for dairy farmers to rapidly increase output volumes and enhance the earning potential of the sector. As the final year ahead of quota abolition progresses, I expect to see an increasing level of investment in farm level infrastructure in line with investment already commenced at processing level. The latter half of this year has been a very good period for dairy farmers. They are making money and now is the time for them to consider capital investment in their yards to prepare for the expansion opportunities in a few years time. We wish to support them in that regard next year, which is why we have €15 million in capital funding allocated to the targeted agricultural modernisation, TAM, scheme for next year, on which I hope we will build.
In terms of public sector reform, I am committed to a continuation of an active programme of reductions in the cost of running the Department and State agencies which has fallen by more than €100 million since 2008. Enormous reform has taken place in recent years as my Department's staffing level has fallen by some 1,600 since 2005, from 4,800 to 3,200, a reduction of 33%. Since 2010 there has been a 22% reduction in the staff of non-commercial State bodies, down to 1,463 from 1,865 at the beginning of 2010. The total Department spend on non-commercial State agencies, NCSAs, has fallen from €247 million in 2008 to an estimated €190 million in 2014, a reduction of 24%. I acknowledge the work of my Department and its civil and public servants, and also the State agencies linked with my Department. If anything, their workload has increased in recent years and they are dealing with it with a significant reduction in staff numbers. Many staff are also on less pay. It is important to recognise, in particular, the job they did in the first half of this year in terms of securing both the Common Fisheries Policy, CFP, deal and the Common Agricultural Policy, CAP, deal during the Irish Presidency. I am very lucky to be working in a Department and with State agencies that have phenomenal people working in them. The salary cost of running my Department and the State agencies will be some €8.5 million less in 2014 and I intend to continue to drive a change management programme across the Department and its agencies, while ensuring the proper resourcing of front-line services, in particular, those directly responsible for food safety, animal welfare and programme delivery.
The outlook for the agrifood sector remains very bright and the sector will continue to contribute strongly to national economic recovery. There is a new awareness of the vital economic importance of the sector and a strong recognition that it has a fundamental role in the broader rebuilding of the economy. We will continue to pursue the objectives and targets in the Food Harvest 2020 plan. I chair an implementation group every month where stakeholders meet to assess progress on a monthly basis. I am confident that the measures introduced yesterday for next year will allow the Food Harvest plan to develop and grow. I am also confident that our budget for next year will complement the new Common Agricultural Policy and the new Common Fisheries Policy which will also be finalised before the end of the year for implementation from the start of 2015 in the case of the CAP and from the start of next year in the case of the CFP. I look forward to working with all stakeholders to ensure we maximise the potential of both the seafood and agriculture sectors as we are at the start of what I have described as a golden period of growth and expansion in both sectors. The food industry was taken for granted for many years, which is not the case anymore. We have much work to do to deliver on the extraordinary potential for the growth and expansion of these sectors. The budget we announced yesterday is a reasonable start.
I listened earlier to the Minister for Social Protection. It is a pity the debates are not organised in such a way that one could respond directly in the presence of the Minister. I will respond to the Minister for Agriculture, food and the Marine, Deputy Simon Coveney, in his capacity as a member of the Government which has just introduced a budget that unfairly targets young people.
The Minister for Social Protection claimed that the core weekly rates were protected in this budget. Just because one repeats something 100 times, it does not make it true. If it is not true, it is an untruth and in another forum I would be allowed to call it a lie. I am not allowed to do so in the Chamber. In fact, it is an untruth and a porky. It is wrong to suggest weekly rates are not being cut. Young people will be down by €44 each week. If nothing else, that is a core rate cut. It is not only young people who are affected; 65 year olds who can no longer work owing to a disability will be in receipt of €36.80 less per week for one year. That is also a cut in the core rate and there were cuts to the core rate in the previous budget also. It is referred to in the documentation as “discontinuing rates and introducing new rates”, but that does not change the fact that it is a cut in core rates. All the propaganda and bullshite heard outside the Chamber to the effect that there are no changes to social welfare rates is wrong. I hope that will be exposed in the newspapers.
The vast majority of the 1,700 emigrating each week are young people. Since the Government came to power, there are 18,000 fewer young people working in the economy. The number of long-term unemployed young people on jobseeker’s allowance has risen from 39% of the total in January 2011 to 49% in October 2012.
They are the latest figures available. Whose fault is it that 80,000 people left these shores last year, 80,000 the previous year and potentially many more? It is not my fault; it is the fault of the Government. The Minister, Deputy Simon Coveney, and his colleagues are the ones at the steering wheel. The Minister is taking such decisions. While Fianna Fáil caused the economic crash, the Government has done nothing to protect or create jobs for young people or the young people who had to flee the country.
Youth unemployment does not even feature in the latest Government Action Plan for Jobs. The Minister should read it and perhaps he might see what is happening with his own eyes. Fianna Fáil was the first party to cut jobseeker's allowance for young people. At the time the Labour Party opposed the cuts vehemently and on principle. Responding to Fianna Fáil's budget 2010, the Labour Party spokesperson on social protection said:
The impact on young jobseekers is particularly harsh. This loss of income is bad enough, but it is the intention of these measures that is particularly offensive. It is abundantly clear that the real purpose of these reforms is to promote emigration. [The Labour Party Minister of State, Deputy JOe Costello, has just emigrated from the Chamber, but I will continue.] It is profoundly hypocritical that the Government continually uses the “brain drain” excuse for not increasing income tax on very high earners, yet it is introducing a series of cutbacks for those aged under 25 that actively promotes such a brain drain.
She also stated:
This measure is a kick in the teeth to our young people who have worked hard through school and college to get good degrees. The Government is telling them that there is no place in Ireland for them at the moment and that they would be better off emigrating. That is the wrong message for us to be sending out to our young people, which is why the Labour Party is rejecting this proposal.That is what the current Minister who holds the social welfare brief, Deputy Burton, said three years ago, yet she is making cuts and changes to the social welfare code. Her party vehemently rejected such measures only three short years ago. What she said three years ago about the Fianna Fáil Government holds true today. This is a budget about emigration and forcing young people out of the country. Shame on the Government.
The Minister reportedly indicated that the cuts are expected to affect only approximately 14,000. I believe that figure will be much higher. Far from discouraging social welfare dependence, the Minister is creating a new welfare trap. What young person in his right mind would risk taking up insecure work that might last between eight and ten weeks only to face a €44 drop in his allowance on returning to social welfare? What of those people who have a history of work but who are on jobseeker's benefit? Now, at the end of the six or nine months, they will face a substantial drop.
SIPTU has said this cut is an attempt to drive young people into jobs with low pay, no pay or out of the country. I agree with it.
Funding for the youth guarantee, which some Ministers and backbenchers will quote, is just €14 million. This specific provision will take out €32 million. Where is the truth in it? It is a grab from the pockets of the young people of Ireland, and it will be seen as such by them. I hope they will not emigrate and that they will stand up to the Government, but I believe many of them decided from last night to look to the bád bán and emigrate from our shores. More is the pity.
Relaxing JobsPlus criteria to allow the entry of people who have been just six months on the dole will not result in many more opportunities, as the Minister has disingenuously suggested. The subsidies for employers rise with the duration spent on the dole with a higher subsidy for those 24 months on jobseeker's allowance.
At the same time as the Minister is cutting payments to the young jobseekers, she is making a sneaky cut to the financial supports available to poor families seeking to send their children to college or to keep them in college. With this budget, the Minister proposes to cut the back-to-school clothing and footwear allowance scheme. Under the scheme, families had been able to apply for a payment of €200 towards the cost of sending their 18 to 22 year olds to college. In 2014, this is to be restricted to secondary school only. That is another sneaky cut. Once again, the slyness of the Labour Party knows no bounds.
The Government is cutting social insurance benefits, including maternity benefits, illness benefits, the invalidity pension and bereavement benefits, with a view to saving €74 million. These are hard-earned benefits that have been paid for through the PRSI system. They were committed to over the years and people grew to expect them. That is why they put up with making major PRSI payments. The Government does not have to do what it is doing. These cuts are totally avoidable. The Government could instead have shored up the social insurance fund or made up the money with a small increase in contributions from employers that can afford to pay more. I refer to those large companies that are making increased profit at this time of austerity. Sinn Féin's proposal to introduce a new employer's rate of PRSI of 15.75% on wages in excess of €100,000 would raise €119.1 million. The saving of €74 million represents a sleazy, slimy cut that the Minister is introducing. The Minister would be making a profit if she listened to Sinn Féin. By cutting maternity benefit and abolishing the bereavement grant, this Government is picking pockets from the cradle to the grave.
The latest cut to maternity benefit comes on the back of reduced maternity benefits from July of this year when the benefit was subjected to tax. The majority of maternity benefit recipients will now see their weekly payment cut by €32. This is a cut of €832 over the course of mothers' six-month period of leave. For many new mothers, maternity benefit is their only income. For those mothers who are fortunate enough to have their maternity benefit supplemented by their employers, the cumulative impact of this Government's cut and tax measure could see their benefit shrink by up to €126, down as far as €135.70. That is a potential loss to a woman on maternity benefit of €3,276. Shame on the Government.
The bereavement grant is a small assistance towards the cost of funerals for workers with a solid contributions record. It is just €850 towards the crippling costs of burials. The Irish Association of Funeral Directors said yesterday that the average cost of a funeral is €4,000, and significantly higher in Dublin. Even without all the trimmings, a funeral costs substantially more than the grant of €850 that the Government is cutting. The director of Massey undertakers said more than 70% of people using its services are currently supported by the grant and suggested the cost of a funeral could be as much as €10,000 in Dublin.
The cut to the invalidity pension means 65-year-old disabled pensioners are facing a cut of €36.80 per week, or €1,914 over the year. Invalidity pension is paid to people with the requisite contributions record who cannot work due to long-term illness or disability. Most will have been receiving illness benefit for the previous year or years. The rate of invalidity pension for the under-65s is €193.50 and for those aged 65 it is currently €230. Therefore, recipients would have anticipated that they would move to the higher rate on reaching the age of 65. The higher rate is discontinued for people who turn 65 from January. Thus, they will have to wait a full year, until they are 66, when their state pension kicks in, to achieve the higher rate. This cut is like the abolition of the State transitionary pension, already provided for by the Government in a previous budget whose provisions also kick in from January. We opposed that also as it will force many 65 year olds into becoming jobseekers for a year. This is a pointless change. The individuals could have been protected and the payment should have been left as it was. It did not cost anything.
Abolishing the telephone allowance will increase fear and isolation among older people. The mobility of older people is often more limited and many live in rural areas. The families of an increasing number have emigrated. Even in this city, they are often isolated and depend on the telephone for communication. Worse, personal alarm pendants depend on the maintenance of a landline.
One of the key lines in the speech of the Minister for Finance yesterday was a quotation from Yeats's poem Easter 1916: "Too long a sacrifice can make a stone of the heart." My colleague Deputy Pearse Doherty aptly responded by quoting Yeats's poem September 1913:
What need you, being come to sense,This is apt because the very mentality that Yeats despised and excoriated in his poem appears to be alive and well in this Government.
But fumble in a greasy till,
And add the halfpence to the pence,
And prayer to shivering prayer, until
You have dried the marrow from the bone;
For men were born to pray and save;
The miserly attitude, the cynicism, the narrow-mindedness and disregard for the less well off are clear as the Government fumbles in its greasy till. It is a cold-hearted and callous frame of mind that allows the Government to take the telephone from the elderly and the coffin from the bereaved. The poem asks us:
Was it for this the wild geese spreadand indeed, well may our current generation of wild geese wonder what value the Irish State places upon them as the grey wing upon the tide brings them to Melbourne, Perth, Toronto, London or Boston. The poem is also apt because this is a Government that has shown itself to have no regard for all that adds colour and vitality to our lives. This year, yet again, we have seen an attack on all that makes us unique as Irish people - our heritage, sport and language. Funding for the heritage subhead is down 5%, following on from a 9% cut last year. This will affect our ability to preserve and promote our heritage and to educate the next generation in it. Tá dúchas fíor-láidir againn. Is mór an trua nach bhfuil an Rialtas ag tabhairt tacaíochta dó mar ba chóir.
The grey wing upon every tide;
The Government has attempted to portray itself as one that is kind to and supportive of the arts, but the reality of this budget betrays that depiction. We see a reduction of €9.2 million in arts spending, while culture and film have suffered an 8% reduction on top of a 5% reduction in funding last year. This means less funding for the Arts Council, less support for the arts in local communities and, more specifically, fewer plays and exhibitions and less support for young people getting involved in the arts. This means that the arts will become something that is available to the few rather than being the property of the people.
Tá an tAire tar éis ionsaí uafásach a dhéanamh ar an nGaeltacht don tríú bliain as a chéile. The Government and the Taoiseach like to create the impression that they are pro-Gaeilge, with a cúpla focail now and then, but the reality is far different. Funding for Údarás na Gaeltachta has been cut yet again, this time by 13%. The authority's current budget is down to €3 million, while its capital budget is down to €5.7 million, hampering its ability to promote employment in the Gaeltacht and to advance the 20-year strategy for the Irish language. The Minister has announced a specific fund of €500,000 for the promotion of the 20-year strategy, but this is more than accounted for by the other reductions in spending and is totally inadequate in any case. Another €1.3 million is expected to come from Irish language and Gaeltacht structures. The Government is also cutting €2.1 million in excess of an agreed 3% efficiency saving for the North-South head. This will mean a cut in funding for Foras na Gaeilge and the key bodies that deliver Irish language supports throughout the island. By contrast, the Sinn Féin Minister in Northern Ireland, Carál Ní Chuilín, has maintained funding at its current level. Tá an-bhrú ar an nGaeilge faoi láthair. Ba chóir don Aire tacaíocht a thabhairt don teanga, in ionad maoiniú a bhaint as.
We want to promote our heritage and culture and share them with the rest of the world. The Government has tried to create the impression that this is a tourism-friendly budget, but it has not considered the ramifications of the €16 million cut in tourism expenditure. I am pleased that the 9% VAT rate has been retained; I lobbied, with industry groups, for its retention. However, the aforementioned cut of €16 million could cancel out the benefit of the 9% VAT rate. Marketing and promotion are essential to attracting tourists to Ireland and heightening awareness of Ireland as a destination. The Government was very keen to play up the benefits to Irish tourism created by The Gathering but yesterday's decision seems to indicate a complacency which will allow its benefits to dissipate.
We have much to share and enjoy in terms of our heritage and culture but we are not supporting and promoting it as we should. While I would not accept that romantic Ireland is dead and gone, there is certainly no sign of it on the benches opposite.
I am glad to have the opportunity to talk about the budget and how it affects the Department of Transport, Tourism and Sport. As Deputies will be aware, my Department has a budget of €1.188 billion, which was due to be reduced by approximately €76 million. My Vote has been reduced by that amount, but as a result of the additional funds provided to my Department as part of the capital stimulus programme, I expect to see a small increase in 2014, which is a reflection of the fact that the Department has taken very severe cuts, particularly to the roads budget, in recent years. The increase is entirely on the capital side and not on the current side, where reductions remain, as I will explain further later.
With regard to the roads budget, the extra €50 million is extremely welcome but it still means a slight net reduction in the roads budget for next year as things stand. Therefore, my priority will be maintenance and repair of local and regional roads in particular, but also of national roads. The additional money does not, unfortunately, provide any scope for any additional road improvements beyond those that were already planned or committed to.
The planned reduction in the subvention to CIE will go ahead but we have requested that there be no further reduction in 2015 or 2016. This will be the last cut to the subvention for the public transport companies. However, the long-overdue and long-delayed savings that we need in Bus Éireann and Irish Rail are still required. The planned increase in spending on public transport investment under the capital programme will go ahead next year.
With regard to sports, contrary to some commentary in the press and from certain quarters, the total sports budget is actually increasing next year. The sports budget will go up from €74.6 million to €93.5 million, which is a substantial increase. However, the increase is very heavily on the capital side. Work will begin on the indoor arena at the National Sports Campus, which is the missing piece of sporting infrastructure in this country. The increase will also allow the Minister of State, Deputy Ring, to initiate a new sports capital programme, providing grants for local and regional facilities around the country. We will have to go ahead with a cut in current spending through a cut to the Sports Council budget. That cut currently stands at around €3.5 million but I hope to be able to alleviate that somewhat through some adjustments within my own Vote. However, I will have to see the details of the council's plans before doing so and get approval from others.
In the area of tourism, the budget is also going up on the capital side but down on the current side. Overall, the budget for tourism next year will be €131 million, as against €139 million last year. The investment in the Wild Atlantic Way is extremely welcome. The route will be fully signposted by March and we will be able to put in a lot of the viewing points and give the route a lot of additionality this year, which is very positive. The development has been very well received already and features on the front cover of the German travel agent DerTour's brochure for next year.
On the current side, we are looking at a €12.9 million cut in the budget for Fáilte Ireland and Tourism Ireland. A good chunk of that is because The Gathering is not happening next year. A special allocation of €7 million was made for The Gathering, but the cut is still more than that. Again, I hope to be able to alleviate that to some degree from within my own Vote, but that will depend on the spending plans of Fáilte Ireland.
One of the big successes in the budget from the point of view of my sector is the retention of the 9% VAT rate, which has been broadly welcomed and has been very positive. I thank the Minister for Finance, Deputy Noonan, the Minister for Public Expenditure and Reform, Deputy Howlin, and the Taoiseach for their involvement in that. They are people who understand tourism and its benefits and I am very pleased they made that decision. I would also like to acknowledge the tourism team, for want of a better term, involving groups such as the Restaurants Association of Ireland, the Irish Hotels Federation and the Irish Tourist Industry Confederation, which organised a very effective but measured and evidence-based lobby on the issue, which made a huge difference. I hope the 9% rate will remain in place for the duration of this Government.
A decision has been made to suspend the travel tax starting in April. The travel tax was originally €10 but this was subsequently reduced to €3. It will now be reduced to zero, but the legislative provision for the tax remains in place. The tax is not being abolished; it is just being reduced to zero. We will carefully monitor the response of the airlines over the summer period.
Ryanair announced today at 3 p.m. that it will increase the number of passengers travelling into Irish airports by 1 million next year. I look forward to seeing the details of this and analysing closely to see whether they are inbound tourists coming to Ireland and, therefore, helping to create employment here. I will also be eagerly awaiting the response from the other airlines to this decision. It is open to the Minister for Finance to re-introduce the travel tax at €3, €5 or even €10 next October should the response not be satisfactory. The increase of the VAT cash threshold from €1.25 million to €2 million will assist cash flow for businesses in the tourism sector.
The current budget for regional airports will be reduced from €10 million to €9 million and the capital budget from €4 million to €3 million. This was all previously planned. We still have to deliver a reduction in the roads budget. This means the focus will be on maintenance and repair, not new projects other than those already planned. We have made some savings in PPP, public private partnerships, operational payments but more will have to be spent on the new Coast Guard helicopters which will all have arrived within a few months. While they are expensive, they are providing an excellent, much faster and wider-ranging service. They are also able to do much more including hospital and emergency transport which was not done before. The cost of these helicopters will rise from €51.48 million for last year to €58.9 million in the year ahead. I am not reducing the Coast Guard budget which will remain at €4.36 million. This budget will not be reduced at all during my term in office. The same goes for the grants my Department pays to the RNLI, Royal National Lifeboat Institution, mountain rescue teams and the Commissioners of Irish Lights.
There is a €9 million increase in the budget for the NTA, National Transport Authority, for public transport infrastructure provision in the greater Dublin area and a €15 million increase in the public transport safety and development programme which mostly goes to Irish Rail for improving line speeds, taking out level crossings and repairing the railways. The planned reduction in smarter travel and carbon reduction programmes will go ahead with a budget of €11.1 million rather than €17.4 million.
The public transport works that will go ahead as planned include the Luas works in Dublin which are already under way. The Bus Éireann and Dublin Bus fleets will continue to be updated and modernised. The active travel towns will go ahead, as well as the national cycle network, green schools and smarter travel areas in Dungarvan, Westport and Limerick. We expect to see the completion of the Belturbet- Ballaghaderreen bypass scheme in the next several months and the continuing work on N11 Arklow-Rathnew and Newlands Cross. We still expect to begin work on the N17-N18 Gort to Tuam road next year, as well as the completion of the R402, the Enfield to Edenderry scheme.
As can be expected, the inevitable focus has been on the individual budget measures and how they impact on people. This is a tough budget and it does impact on people and their pockets. However, there is a bigger picture. It is the first budget in seven years that will record a primary surplus which means we are once again paying our way in the world. It is also the budget which will allow our national debt to peak next year and start falling. There is nothing we can do that would be of more benefit to future generations than getting on top of that debt which almost crushed us.
This budget is pro-growth. For the first time since the crisis began, capital budgets are increasing again, a significant development. It also contains positive measures for tourism, construction, agriculture and other areas. For the majority, the budget will be broadly neutral. A PAYE worker’s payslip will be exactly the same in March as it is now. Pensions and basic social welfare weekly payments have been protected once again. There has been no increase in VAT or excise on petrol, diesel or home-heating oil, as well as no cut to child benefit. While there are cutbacks for some sectors of society which will affect the money in people’s pockets, for the broad range of people the budget has been neutral. I hope it will allow us to restore some confidence in the economy and assist a rise in consumer confidence in the months ahead.
I welcome the opportunity to contribute to the budget debate.
The Government is successfully rebuilding our economy and society. Budget 2014 is a further progressive step along that road with fiscal responsibility, job creation and social reform its hallmarks. Neither element can be taken in isolation. This budget is a coherent package of measures designed to promote growth, regain our economic sovereignty and rebuild the fabric of our society. It will achieve all these goals.
I share the Tánaiste’s view that this should be the last of the difficult budgets. In looking to a more positive future, we must also recognise the significant sacrifice that the citizens have borne in recent years. Everyone has contributed to the necessary restructuring of our national finances and again difficult choices had to be made in this budget. In implementing these decisions, we have worked to ensure those with the most, shoulder most of the burden while the core living standards of the most vulnerable are protected.
Innovations contained in budget 2014 will impact significantly on housing in the corning year. I estimate an additional 4,500 new social homes will come on stream in 2014 with the continued transfer of NAMA, National Asset Management Agency, units, increased completion of mortgage-to-rent arrangements, the delivery of construction projects and units delivered through social leasing initiatives.
Next year will also see radical reform of housing assistance support. Working in conjunction with my colleague, the Minister for Social Protection, Deputy Burton, a new housing assistance payment will be introduced in 2014. Work on the necessary legislation is under way and I expect test phases of the new payment to begin next year in seven local authority areas. The housing assistance payment will play an important role in the Government's job creation agenda. The new system will allow people take up work opportunities and retain a level of housing support. The present rent supplement system does not allow that flexibility and reform is long overdue.
Budget 2014 will herald two new capital housing initiatives. With the support of my colleague, the Minister for Public Expenditure and Reform, Deputy Howlin, an additional €30 million will be invested in a new capital building and refurbishment programme. As the Minister stated yesterday, this initiative, while a modest start, is a significant signal that the Government sees traditional local authority housing construction playing an important role in social housing supply in the coming years. Approximately half the fund will be invested in new build developments while the other half will be used to bring back into social use those local authority houses which have remained vacant, and in some cases derelict, for too long. This investment will provide additional homes, enhance local communities and ensure we utilise the assets we have to provide people with high quality housing.
Up to €10 million will also be invested in a new fund for the most marginal of unfinished estates. Good progress is being maintained in resolving this most visible scar of the boom years with more than 40% of unfinished estates now resolved. The most difficult estates to resolve are those where no developer contribution for public infrastructure is available. In many cases, these estates are effectively frozen where owners and funders will not advance a capital investment to finish out works because facilities such as paths, roads and drainage are not in place. The result for hundreds of families is that they have to live, day in, day out, in a wholly inadequate development with little prospect of resolution. The €10 million fund is designed specifically to break this logjam. Public infrastructure will be provided which has the capacity to unlock external investment on the estate, while also bringing tangible benefits to existing residents. Developments that put forward a community gain in terms of housing units or amenity facilities will be strongly favoured when applying to the fund. Details on both schemes will issue to local authorities shortly.
Budget 2014 is fair, innovative and reforming. Across all Departments, as is evident in the housing area, the Government is successfully adjusting public spending to sustainable levels while implementing an ambitious reform agenda. It is vital that these two approaches go hand in hand. As we emerge from the bailout and regain economic sovereignty, we do not want to get back to where we were. That is not the mandate the Government holds. We have a more challenging, more important mandate. Our goal is to reform policy so the citizens have a sustainable economy and a fair society. Given the sacrifices our people have made it is the least they deserve.
In the Department of the Environment, Community and Local Government one of the significant changes that has taken place is the question of how we deal with our water and water infrastructure. The responsibility for public water supply and waste water, currently with local authorities, will pass to Irish Water from 1 January 2014. Irish Water will have a general duty to provide safe and efficient water services and infrastructure in a manner which takes full account of public policy regarding proper planning and sustainable development. The water sector reform programme will ensure more cost-effective and efficient water services delivery based on the user pays principle and fairness, guaranteeing security of quality water supply for the future for the public and for our economy.
Capital funding of Irish Water will be by way of direct Exchequer equity investment of €240 million. It will support projects set out in the Irish Water capital investment plan, including some 80 projects currently in progress, and will ensure that the new utility will be in a position to take on the water services investment programmes of the current 34 water services authorities. Economic regulation of water and waste water services will commence following enactment of the Water Services (No. 2) Bill 2013, to be published shortly. The Commission for Energy Regulation, CER, will scrutinise and regulate Irish Water's operational and capital expenditure. CER will also ensure consumer interests are protected in the sector. Public consultation will form an essential part of the regulator's decision making.
Domestic water charging will be introduced in quarter four of 2014 with first bills due in quarter one of 2015. A free allowance will be allocated to each household, with supports provided to those with affordability issues and those with high water usage necessitated by medical needs. Substantial progress has been made and work will accelerate through 2014 on the ambitious metering programme. Domestic water charging will begin towards the end of next year based on metered usage. The rural water programme will continue to be administered by the Department and will fund the progression of water services projects in the private and group water sector.
One of the key benefits of this budget is that it is very strong on family-friendly measures. In particular, child benefit and class sizes are protected. There is free GP care for children aged five and under. These are very important and significant developments and retentions of existing benefits in this most difficult time. Budget 2014 will protect middle and lower income families. The free GP care for children aged five and under is a very important, significant development and a significant boost to families with young children. This budget will particularly help the families I spoke about. Despite significant economic pressure, we have protected child benefit and class sizes because we need to prioritise young people and their education.
This Government is committed to the delivery of universal health insurance and the roll-out of free GP care to all children under five is a key component of this. Before today's announcement, 43% of Irish people were covered by free GP care. This is more than at any stage in the history of the State. The home renovation tax incentive scheme will mean people will get a VAT refund of 13.5% on extensions and renovations to their homes. The VAT will be returned on amounts over €5,000 and under €30,000. This will enable people to make significant improvements to their family homes and generate employment for people in the hard hit construction sector.
The majority of people, when they open their first pay check in January to pay for their first grocery bill, fill up their car with petrol or diesel to go to work or eat out at a local restaurant, will see no change as a result of this budget. Budget 2014 is about giving taxpayers something back for the money they provide to run the State. Middle and lower income families are the backbone of our society and our economy and it is only right that, despite current constraints, the State can provide these families with vital services.
I will share time with Deputy Sean Fleming. There used to be a time when people were not so fearful of budgets. They approached them in the expectation that something would come from them, and something usually did, whether a small increase in the old age pension, social welfare or the Christmas bonus, which is still very badly missed in inner city communities. Today people are approaching the budget in a very fearful way and the question is how much will be taken from them. This budget takes from significant groups of people. I listened to the speeches of the Ministers, Deputies Howlin and Noonan yesterday. Obviously they accentuated the positive, and there were positives in it. However, when it goes into the detail for the various Departments we see the real picture, where the cuts are and whom they are impacting. There are plenty of people in this country who can absorb cuts. The question is who are most and least affected by what happened yesterday. I wish it were more proportionate and that those who can afford to absorb the cuts were doing so.
This morning I went to the Centre for Independent Living, CIL, event in the Macro Community Resource Centre off North King Street. I met people with severe and multiple disabilities, all with a great zest for living and playing a part in their communities and wanting to continue to do so, and I listened to their reactions to the budget. The first thing that disappointed them was that equality was not at the centre of the budget. They were watching the coverage and awaiting clarification on the issues that most affect them. They are still awaiting that clarification, and that scares them. They are still awaiting the mobility allowance because they wanted to stress the difference between that and free travel. They are still awaiting information on aids and appliances and especially on personal assistants, PAs. A year ago PAs were cut and we know the anxiety and stress that caused those people. PA hours are being replaced with home help hours, which is not the same because home helps do not have the time or hours to do services such as shopping and cooking and people told me that impacts on their access to healthy food.
People with disabilities have a fear of getting mixed up in the new moves on medical cards because they saw what the random checks did to people who genuinely had medical cards. They were faced with the additional pressure and stress of gathering the evidence and forms to get those medical cards back. The phone allowance really hit some of those, including the €9.50 allowance because they need that landline. Some of them have that landline connected to their alarm system because some of them have PAs who leave at 10 p.m. or 11 p.m. So much of the information they need for day-to-day living is accessed through the Internet, which is connected to their landline. It is also a contact for social interaction. Some of them will lose their exceptional need payment.
The Disability Federation of Ireland, DFI, also commented that the budget does not protect people with disabilities. While the DFI acknowledges the positives in the budget, it says the plans for social inclusion have been weakened. The group this morning told me they are still awaiting the sectoral plans that were supposed to have been drawn up for when austerity is over. It would have been so positive to have come from this morning's meeting and report that a group of people who have multiple and severe disabilities say this budget is allowing them to live their lives independently and with dignity, but they were not saying that.
I am part of the Oireachtas group on mental health. We made a pre-budget submission and had a number of exchanges in this House with the Minister on the provision of the €35 million in previous budgets. This budget commits €20 million, so it is down €15 million. Will what was not spent of the previous €35 millions be added to the €20 million, or is the €20 million what was not spent out of the previous €35 millions?
I am sorry the Minister has left because I have said here before that there is a major housing crisis in Dublin Central. There is a lack of local authority housing, adequate private rented accommodation and social housing and an increase in homelessness. In the budget there is €30 million from the sale of the national lottery to recommence the State's house building programme and €10 million for the unfinished housing estate resolution. How many houses will that cover? It is scratching the surface. There is something about 4,500 new apartments and houses for Dublin but, again, there was no clarity about where that is coming from. There are positive steps but they do not go nearly far enough. When it comes to local authorities absorbing funding cuts there is a need to ensure there is no direct or indirect pass on to those providing services for the increasing number of homeless people.
Many people have spoken about youth unemployment. I am speaking from Dublin Central where we have higher than average numbers of people who are unemployed and lone parents.
Some of these are under 25. I also see wonderful, young, well educated people going abroad, where they support the economies of other countries rather than their own. There is so much riding on the youth guarantee that I hope it works out. There is also a serious issue with regard to apprenticeships. In years to come we will not have enough tradesmen or women. We see in the budget that FÁS apprentices now have to pay a student contribution for their time in the institutes of technology.
On the elderly, we know the better-off have been able to save and were encouraged to do so, but now they are being penalised for it. Ironically, we will see an increase in their spending because there is no point in them saving if the Government is going to keep clipping away at their savings. In the last budget there was dismay at the application of the 50 cent prescription charge. This may seem a minimal amount to some, but for people on a basic social welfare payment who must pay several prescription charges, the 50 cent charge adds up. Now it is to be €2.50. This will cause problems and I hope the Department will provide for exceptional needs. The loss of the bereavement grant will also cause problems. I heard the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, say there was no problem in that regard, but I know there is because funeral costs are so expensive. The grant makes a significant difference for low income families.
The VAT rate for the tourism and hospitality sector is being kept at 9%, which has been welcomed by the industry which lobbied strongly on the issue. However, when I submitted some questions to the Minister, I was intrigued to discover that lap dancing clubs also benefited from the 9% rate. I suppose it depends on one's interpretation of what constitutes hospitality, but the rate could have been increased in some areas.
I have spoken previously about corporation tax where the rate of 12.5% is being retained. I hope the 12.5% will be collected in full. I note that the budget states the Government is committed to being part of a solution to the issue of global tax exchange and that the Minister wants to ensure Irish registered companies are not stateless in terms of tax residency. I hope his commitment also applies to ensuring Ireland does not become a tax haven for the multinational companies that are avoiding paying their just taxes in other countries and that we will commit to stopping capital flight and country by country accounting.
I was glad to see that the lump sum payable to the ladies of the Magdalen laundries would be tax exempt. I would have assumed that would be the case.
There is a 3% cut in overseas development aid. We are under the figure of 0.5% in this regard and getting further and further away from the 0.7% target. People of this country support aid for those who are hardest hit by poverty and hunger.
The One Family organisation has made its concerns known because it sees as retrograde the removal of the one-family tax credit. This credit had facilitated the collaborative approach of parents who had separated and shared responsibility for their children.
I would like to mention the issue of drugs. Drugs and youth projects in my constituency are doing phenomenal work in areas of high unemployment where many families are on low incomes. Families in other areas have disposable income for after-school activities for their children. Youth projects provide this service in my area. Whatever cuts are made in this regard, I hope they will be minimal. I hope for the same in regard to those who are working with addicts and individuals in recovery. The drugs issue presents a massive problem and I am still waiting to see implementation of the report on the alcohol strategy.
I welcome the proposals in regard to education, including that there is to be no change to the pupil-teacher ratio. This is a positive move, as is the proposed recruitment of teachers, in particular resource teachers. I value the work of SNAs, but getting children with special needs into schools is not enough, unless they are taught by teachers with a special qualification in providing special needs assistance.
Taking an overall look at the budget, we can see who benefits from it. Businesses, investors and those who are comfortable have benefited. I understand the driving factor behind the budget is the repayment of debt, but this is happening at the expense of supporting essential and additional services. I listened to the Minister for Agriculture, Food and the Marine and heard him list the benefits and grants on the way for farmers. I look at low income families in the constituency I represent and wonder what benefits there are for them in the budget. There are no benefits for them, indicating the basic unfairness and inequality of the budget. Tomorrow, 17 October, is international day for the eradication of poverty. However, low income families suffer further hurt in the budget. The Minister for Finance has said the recovery is well under way and on the grand scale the statistics show that it is. However, it is not filtering down to many individuals, families and communities. For them, austerity continues.
This budget is a mixture of polarised extremes, further austerity for the lower and middle classes, the elderly, the disabled and young jobseekers, in contrast to the positive measures such as the retention of the 9% VAT rate for the hospitality sector, which is welcome. Hotels, restaurants and allied services will receive enormous benefit from the retention of that rate, which will allow the upsurge in the sector continue. So far, the measure has had a positive impact on many struggling small businesses and ensured their viability, with a spin-off for other businesses in local towns. This aids the recovery of communities and offers our talented young people an alternative to emigration.
On the downside of this good news is the ten cent increase in duty on beer and spirits. This is a devastating blow for the licensed vintners and will undo much of the good achieved through the 9% VAT rate. We are all aware that the public house trade is on its knees. This is exemplified by the closure weekly of several small businesses which up to now have provided a viable livelihood for families and other workers involved in the pub trade during the years. The traditional Irish pub was identified as a major asset for the country in a survey carried out by The Lonely Planet, a publication recognised worldwide. Tourists visiting Ireland seek the genuine article, but this hike in prices will add to the demise of such pubs. It will also turn off the many loyal customers who have kept these businesses afloat and viable during the years.
The abolition of the air travel tax is a positive move. Mr. Michael O'Leary of Ryanair has stated it will lead to 1 million extra passengers being brought to the country in the next 12 months. The initiative will also help regional airports. I am sure Kerry regional airport will benefit from this measure, as well as from the retention of the 9% VAT rate.
I welcome the provision of €8 million for the development of the Wild Atlantic Way on the western seaboard. It is a good move by the Minister for Finance and the Minister for Transport, Tourism and Sport to promote it, as this area is probably one of the most panoramic and picturesque in the world. It is important that we maximise the potential of the terrain and countryside along the western seaboard and the development of the Wild Atlantic Way will bring significant benefit to the public and communities located along the route. We must promote it to the best of our ability in the coming years as it will add significantly to our tourism product.
The budget proposes a 13.5% tax rebate for home renovation works.
This is most welcome to the householder and the construction industry. There was a great opportunity to introduce this immediately to kick-start the building trade coming into the winter season when there is normally a lull. I encourage the Government to review this and consider introducing it immediately. Many skilled people are dependent on the building industry and this would give them an opportunity. As it would also take people off social welfare it would be a win-win situation.
The reduction of social welfare for the younger generation will certainly accelerate the flight of this category of people which we have seen in recent times. They are our greatest resource and a major factor in our efforts to reinvigorate the economy of the country. There is certainly huge negativity attached to these people at present and they are just about coping. I know from anecdotal evidence and listening to these people on the ground they pursue jobs on a daily basis. They call to firms with their CVs to try to promote their opportunities. They are trying to achieve something which will keep them more or less viable over the coming years until they move on to something better, but in many cases they do not even receive an acknowledgement of their applications. This is very demoralising for these people, many of whom are well educated and qualified. Perhaps it will help them if they can live at home, but many of them must find other accommodation, and many of them have family responsibilities. Some of these people have told me they are caught in a trap and cannot save enough money to get out of the country. I call on the Government to examine and review the measures introduced in the budget. Very good incentives exist to go on courses and upskill, but it is not the answer because these people are looking at a cul-de-sac and see no future or light at the end of the tunnel except to get out and see what is available in Australia, Canada, England, the United States and elsewhere. The reductions in social welfare will have a huge detrimental effect on this category of people.
It was stated probity will save €113 million with regard to medical cards. No matter what name we use it will certainly affect access to medical cards. This will be a minefield for people with existing medical cards and those who will make future applications. Very worthy people are at the end of their tether trying to retain medical cards, including people with various disabilities and long-term illnesses. I ask for restraint and that we take cognisance of the hardship and show compassion to this particular sector of society. The surcharge of €2.50 will mean extreme hardship for many people. We are well aware of the fact they are on their knees.
I welcome the retention by the Minister for Education and Skills of the pupil-teacher ratio.
As we come to the end of Ireland’s bailout, there are increasing reasons to be optimistic about our future. That said, we all know this year’s budget will ask more from our people, and more from our public services. Education is no different from other areas in needing to contribute to the stabilisation of the nation’s finances, but I firmly believe protecting the education system is one of the best ways to invest in Ireland’s recovery.
The current education budget for 2014 will be €8.219 billion. This is a decrease of €236 million on the outturn figure for 2013, but most of these savings will come from the Haddington Road agreement, which will hardly come as a surprise given that we employ approximately 100,000 teachers. As has been widely discussed, savings of €44 million in addition to the measures announced in previous budgets were required to stay within our spending ceiling for 2014. This was the opening task set for us. Yesterday, I announced policy measures which will deliver €33 million of these savings, while a further €11 million has been found in administrative reductions throughout the education Vote.
There have also been some new pressures which had to be managed in preparing for this year's budget. Funding was secured for the final redress payments to victims of institutional child abuse, and an additional €33 million has been added to the budget to support children with special needs. Thankfully, expenditure savings identified in other areas of the Vote, in particular in superannuation expenditure, reduced the scale of savings required to be secured through policy measures. A firm picture of the extent of these offsetting savings only crystallised recently, when departmental expenditure returns for the end of September were submitted. Historically, teachers tend to retire at the end of August and the Department does not receive this information until September. Most teachers do not retire because of chronological age but when they have the time served, so we have no way of predicting with any certainty. Fewer people retired than we anticipated which gave us a saving.
I was glad to announce yesterday that for the third year in a row the standard pupil-teacher ratio at primary level has been protected, and will remain at a level of 28:1. The same is also true at second level, and the ratios will remain at 18.25:1 in DEIS schools, 19:1 in other free schools, and 23:1 in the fee-charging sector. An additional 900 mainstream teachers have been recruited in 2013 to cater for increasing student numbers. As a result of the decision taken by Government earlier this year to protect individual resource teacher allocations at 2012 and 2013 levels, up to 500 additional resource teachers will shortly be recruited for our schools. The budget allows for similar increases in mainstream and resource teachers in 2014. Between the recruitment of additional classroom teachers and the increase in resource teachers, up to 2,800 new teaching posts will be created in 2013 and 2014 in our schools. Newly qualified and unemployed young teachers will particularly benefit from these new job opportunities.
I acknowledge the full implementation of some earlier budget measures will continue to impact on schools this year. From September 2014, the final changes to the staffing levels of small schools, which were announced two years ago, will take effect. This is with regard to adjustments to the pupil-teacher ratio. September 2014 will also see the final changes resulting from the previous Government’s decision to reduce language support posts in schools. The rates of capitation paid to schools will also reduce by a further 1% in 2014, and again by 1% in 2015.
These have been signalled well in advance to give schools time and space to do some forward planning.
Let me turn now to further education and training. There are also no changes to staffing or direct funding levels in further education and training, a sector which is being completely transformed by the creation of the 16 education and training boards to replace the 33 VECs that were there before, and also the replacement body for FÁS, known as SOLAS, the board of which was agreed at Cabinet yesterday. While provision is being protected, three measures are being introduced which will have an impact on participants in further education and training courses. In some instances, participants on FÁS or Youthreach training courses can retain their social welfare payments while also receiving FÁS or Youthreach training allowances. These concurrent payments, which are not available to those on community employment schemes or VTOS courses, are now being ended for those on FÁS or Youthreach courses. This measure will yield €5 million of savings next year. The payment of an additional €20 bonus to the long-term unemployed for participating in FÁS, VTOS and Youthreach courses will also come to an end, saving €2.1 million next year and €6.7 million in a full year. Participants on these courses will continue to be entitled to receive meal and travel allowances in addition to their social welfare payments. Both of these changes will affect only new entrants.
Apprentices, who are paid, attend institutes of technology for two ten-week periods over the course of a four-year apprenticeship. They will now be required to pay a pro ratacontribution themselves. This will amount to a contribution of around €540, payable twice over the course of a four-year apprenticeship, providing savings of €1.6 million in 2014.
Turning to higher education, I announced last year that the student contribution for third-level students would rise to €2,500 in 2013 and by a further €250 per year in 2014 and 2015. I set out the changes to the student contribution over that period in order to allow families to plan for the cost of college. There are no further changes to the student contribution included in this budget. The rates of grant payable to students and the income thresholds for student grants have also been protected this year. However, it has not been possible to entirely shield the higher education sector from changes in this budget. Department figures suggest that cash balances in higher education institutions can be as high as €450 million, although it is recognised that not all of this funding is publicly sourced and that institutions must carefully manage their cashflow. On this basis, it is clear that the higher education institutions have some capacity to deal with reduced allocations, even bearing their cashflow needs in mind. Last year, the allocations to third-level institutions were reduced by €25 million. This €25 million will be restored to the third-level institutions in 2015 rather than in the forthcoming year, as was previously planned. I expect that services should not be diminished, particularly front-line services, but that existing cash balances should be managed by the institutions to deliver the same level of services.
Since taking office, I have made clear that I believe back-to-school costs simply must be reduced for parents, particularly in these difficult times. Over the last three years, the annual budget of €15 million for schoolbooks has been preserved, and that remains the case this year. However, we know some primary schools still do not have book rental schemes, which can reduce the cost of schoolbooks for parents of young children by up to 80%. For the next three years, in addition to the €15 million that is in place, we will invest a further €5 million per year in ensuring book rental schemes exist in all of our 3,200 primary schools. Funding of €100 per child, and €150 per child in DEIS schools, will be made available to help schools that do not have book rental schemes to establish them.
Schoolbooks are not the only back-to-school costs with which parents are burdened. I am also working on a policy that will require all schools to give parents control over the cost of uniforms. I will make a separate announcement on this issue over the coming weeks.
I believe passionately that continuing to invest in education will help Ireland's recovery. With regard to protecting class sizes and increasing the investment in resource teachers in our schools, up to 2,800 additional staff will be recruited to our schools between 2013 and 2014. In order to help tackle youth unemployment, a minimum of 2,000 training places will be ring-fenced for under-25s who are out of work in 2014, at a cost of €6 million. Since our taking office, 2,700 new classrooms have been constructed under the school building programme, which has provided high-quality classrooms for more than 66,000 children at a cost of €800 million. The announcement of the 2014 school building programme in November will continue this momentum, including major school building projects, which will cost a further €470 million. This investment will create 4,300 direct jobs and 860 indirect jobs.
This year, the Government is making it very clear that education is important to all of us and that investing in education means investing in our recovery.
I am very glad to have this opportunity to address the House about the 2014 Health Estimates. I am pleased to announce that I have secured additional funding of €37 million to provide free GP care for all children up to and including five years of age as a key element of the Government's programme of health reform. This will bring an end to Ireland's two-tier health service with the introduction of universal health insurance. I am also pleased that we can continue to invest in mental health, with a further €20 million ring-fenced for mental health services in 2014, to be used primarily to fund community mental health teams.
The gross current budget for the health sector for 2014 is €13,263 million. The overall health expenditure ceiling has been reduced by €361 million. This includes additional funding of €37 million secured to provide GP care free at the point of use for all children aged five and under. A total of €666 million in health savings measures have been identified. Clearly, the health sector faces very serious challenges in continuing to provide the optimum level of safe services within budgetary limits. The health services that can be delivered within the available funding will be set out in the HSE's national service plan for 2014. Given the budgetary constraints on the health services in recent years, my priority continues to be on patient safety and improving the way services are organised and delivered.
The savings measures agreed by Government include the following: implementation of generic substitution and reference pricing following commencement of the Health (Pricing and Supply of Medical Goods) Act 2013; ongoing savings as a result of agreements on price reductions negotiated by the Department of Health and the HSE in 2012 with the Irish Pharmaceutical Healthcare Association and the Association of Pharmaceutical Manufacturers in Ireland; an increase in the prescription charge to €2.50 and an increase in the monthly cap to €25; the de-listing of products from GMS and community drugs schemes; the full-year effect of FEMPI fee reductions; the achievement of further efficiencies in the general medical services scheme through targeted probity measures focusing on both health service providers and medical card validity; the introduction of a new system of charges for private inpatients using public hospital facilities; the maximising of savings from the Haddington Road agreement; a further reduction in health service numbers; and the introduction of a nurse bank initiative, both to improve the continuity of nurse care provided and to contribute towards savings in expenditure on agency nursing staff in the health service.
The Government has approved the provision of a GP service without charges at the point of use to children up to and including the age of five - that is to say, six years of access to a free GP service. This is a critically important health reform which brings us a step closer to the introduction of universal health insurance, and one to which I and the Minister of State, Deputy Alex White, have been very committed. This means GP services will be extended to a further 5.3% of the population, so that by the end of next year, almost half of our people will be able to access GP services without having to pay consultation fees. This health reform is evidence of the Government's ongoing commitment to a universal GP service for the entire population under universal health insurance. It marks the continued movement away from a hospital-centred approach to health care back to a community-centred approach.
As a result of this health reform, approximately 240,000 children aged five years and under will be able to access a GP service without their parents having to worry about the cost of a GP appointment. A total of 43% of the population in this age group are already covered by the medical card or GP visit card and this reform will extend coverage to the remaining 57% in this age group. This is critically important as we drive to have more care provided in the community, rather than in the more costly hospital environment. This measure is estimated to cost €37 million. Primary legislation, however, must be drafted and enacted to provide for this new entitlement. Therefore, while the scheme's organisation and administration will be fully set up and implemented during the course of 2014, a precise date cannot be given at this early stage.
In 2014 the Government has again committed to continuing development and enhancement of the mental health service. Although options for additional spending generally are very constrained, the Government is determined to provide the services needed by very vulnerable people in these extremely challenging times. I welcome our continued commitment to this task, as does the Minister of State, Deputy Kathleen Lynch. In both 2012 and 2013 the Government provided €35 million in additional funding for mental health services. A further €20 million is now being provided to build mental health services in 2014. This will fund adult community mental health teams, child and adolescent mental health teams and specialist community teams. It will also allow us to recruit additional resource officers for suicide prevention and related initiatives.
The prescription charge will increase to €2.50 per prescribed item, with a monthly cap of €25 per household. It is envisaged that the new rate will take effect on 1 December 2013 and it is expected to raise €43 million in a full year. As Minister for Health, this is a measure I was reluctant to introduce, but very difficult choices have had to be made.
The gross income limit for a medical card for people aged 70 years and over will be set at €500 a week for an individual and €900 a week for a couple. This means that a single person aged 70 years or over with an income of up to €700 a week and a couple with an income of up to €1,400 a week will continue to have access to free GP care. Approximately 35,000 people, or one eighth of the wealthiest of the over-70s population, will now qualify for a GP visit card, instead of a medical card, with an expected saving of €25 million in 2014. After this measure is implemented, over 97% of people over 70 years of age will continue to have access to GP services without any charge. The aim is to have legislation in place before the end of the year or early 2014, depending on Oireachtas time. Savings are expected to start to accrue during the first half of 2014.
Savings in the region of €113 million in 2014 have been targeted through continued probity measures in the GMS scheme. The examination will cover areas such as claims from GPs and pharmacists, as well as the validity of medical cards. There is no question that this is challenging. For this reason I have requested a validation exercise to be overseen by the Secretaries General of my Department, the Department of Public Expenditure and Reform and the Department of the Taoiseach. This will involve a full assessment and validation of these savings, with an assessment of their impact on health services.
In 2012 a targeted eligibility review was carried out of 40,000 medical card holders who had not accessed medical services for at least one year. About four in ten medical card holders did not respond to confirm that they were still living in the country. It is important to note that even where a medical card holder is not accessing medical services, the State continues to incur costs. In addition, as medical cards are valid for three to four years, it is likely that changes in the circumstances of some medical card holders during that time would mean they no longer qualify for this entitlement. In our current economic circumstances it is more important than ever that our resources are directed to those who need them most. However, I stress that nobody who is eligible for a medical card will be affected by this measure. It is also important to remember that probity measures in the GMS scheme are not restricted to medical card holders - claims from doctors, dentists and pharmacists will also be examined to ensure compliance with the terms of the scheme.
As I stated, the health sector is facing challenging times and my Department will work closely with the HSE to ensure we deliver a safe health service and minimise any negative impact on services. We will continue to reduce costs in the health system. Collaboration with the HSE, the unions and staff will be vital to find ways of changing how we do our business, identifying how we can maximise the resources we have and minimise the adverse effects.
Health reform will continue in 2014, with the decision to provide free GP care for those aged five years and under and the reorganisation of hospital services into hospital groups. Furthermore, we will continue with progressing the national paediatric hospital, the National Maternity Hospital, Holles Street, and the Central Mental Hospital. Many of the improvements we have seen in the health service are due to the really hard work of the men and women who work in the service.
My Department will continue to work closely with the health service to maximise resources and maintain services to the greatest degree possible. The HSE now has the difficult task of developing a service plan for 2014 that will deliver the maximum level of safe, quality, services possible within the funding available, prioritising services to meet the most urgent needs of citizens. I have no doubt, however, that this is the most challenging year yet the health sector has experienced.
I appreciate the difficult task the Government faces and the significant strides which have been made. While I am deeply concerned about certain aspects and individual elements of the budget - I will work to change some of them - I will not vote against any of the measures contained in the budget. I strongly support the overall objective of getting Ireland back on a sound fiscal footing. However, I worry a great deal when I hear Ministers such as the Tánaiste this morning on RTE radio pretending that this is the end of the difficult budgetary choices we face as a nation. That is simply not the case and it is irresponsible of senior Ministers to make such misleading statements. Irish citizens have been disappointed by political leaders often enough. It is time there was much greater truth and honesty on the part of the Government and Ministers with the people. The reality is that we still have a long way to go to get the public finances on a sound and sustainable footing. That is the mandate the Government has and it cannot afford to drop the ball midway. It is worth remembering that Ireland is not projected to exit the European Union's excessive deficit procedure until 2016, for example; therefore, a great deal more work has yet to be done.
This budget was introduced on 15 October because of the new EU budgetary procedures which were agreed in the past two years or so. It is right that we share information with other EU member states and that the European Commission has a much more interventionist approach in vetting budgetary measures in all member states. It is not right, however, that our draft budget figures are shared with the European Union, the IMF, the ECB and, on occasion, other EU member states before there is any substantive discussion in this Parliament. Prior to 2011, it was a frequent demand of the then Opposition of Fine Gael and the Labour Party that the budgetary process begin in the Dáil and Oireachtas committees long before budget day. This would be the mature, transparent and democratic way of approaching our budgetary planning.
In 2009 Deputy Richard Bruton said in Business & Finance magazine that a Fine Gael Government "will make the budgeting process much more transparent and give the Dáil a clear and meaningful role. The current budget set-piece debate is little more than political theatre. The budget is presented to the Dáil in December as a fait accompli to be rubber-stamped by the Oireachtas. It commits taxpayers to huge spending programmes without any information as to what this spending will achieve and no targets as to how the spending will be judged." I agree with the sentiments expressed by the Minister, but, unfortunately, nothing has been delivered to honour this commitment. Instead, once again, elected parliamentarians must hear of budget measures via the Irish Independent. We are forced to race into the Dáil Chamber to participate in limited debates, with little or no information, and then vote on measures that are to become law at midnight. We have no opportunity to offer constructive alternatives or suggestions. Is this a reasonable, rational and responsible way to plan how best to spend taxpayers' money or to hit vulnerable taxpayers at a time of great stress?
I believe this is not the way to do it. The worst example in yesterday's budget was the reduction in tax relief for medical insurance premiums. We were told in the Dáil by the Minister for Finance that this would only hit wealthy people with gold-plated insurance schemes. Virtually no reliable information was made available to the House but we have since learned that the measure will lead to a net increase in insurance premiums for up to 90% of policy holders, affecting up to 1.8 million people. The claim that only gold-plated policies are affected is nonsense and misleading. What are we to do? The measure entered into force at midnight after a mere 55 minutes of debate in the House. It is far from a transparent and open process and our citizens deserve better.
I welcome the retention of the 9% VAT rate, which helps the labour-intensive tourism and hospitality sectors. The reduction of the VAT rate from 13.5% to 9% has created more than 15,000 jobs, and any extension is important from a tourism point of view in my constituency, where areas such as Howth and Clontarf are tourism-oriented. It has helped employment in the restaurant and hotel industries. The reduction in the air travel tax is one aspect of an incentive for airlines to bring more people to Ireland. It is crucial that the Minister for Transport, Tourism and Sport achieves increased tourism targets.
In respect of education measures, I welcome the fact that there has been no increase in pupil-teacher ratios and that education remains as is. It is welcome news, particularly to the parents of children in my constituency, Dublin Bay North. There was concern about pressure on the pupil-teacher ratio, which would have had an adverse effect on pupils, giving teachers less time to deal with them and less help in dealing with issues such as bullying. The fact that there are no further increases in charges for fee-paying schools is very good news. There was an intensive campaign to the effect that parents are already paying plenty and that, with insurance costs, lighting, heating and maintenance costs in various schools, any threat to cut funding would have resulted in a loss of teaching jobs. This would be detrimental.
I am concerned that the pensions levy, which was supposed to be temporary, has become a permanent pensions levy. Last December, the Minister went out of his way to say the pensions levy, announced as part of the jobs initiative, would not be renewed after 2014. This was important for certainty in the pension industry, but it is no longer the case. There has been an extension of the pensions levy, with an increase to 0.75% of the pension fund next year. From 2015 on, the increase will amount to 0.15% per annum. This will have an adverse effect on people's retirements and on encouraging people to save and partake in pension provision. It was foreseen that the cost would be spread over the public and private sectors, not just the private sector, but that has not happened. The Minister's pension will not be subject to this levy, which is wrong.
I am concerned at what the Irish Cancer Society had to say about the 10 cent increase in the price of a packet of 20 cigarettes. It is a token measure and much more must be done to discourage young people, particularly young women, from taking up smoking. It is disappointing in that regard. I am also concerned about the reduced tax credit for health insurance. This will adversely affect older people, while younger people will cancel their policies. There will be a much greater drain on the public health service as a consequence. The issue of medical cards is also of concern. Hopefully, the people who need medical cards on illness grounds will retain them.
The Minister for Finance, Deputy Noonan, opened the budget with a quote from Yeats: "Too long a sacrifice/Can make a stone of the heart." He neglected to continue with the line "O when may it suffice?". The answer to this question is being sought in households across the country. Different groups in our society have had to endure different levels of sacrifice. Some must be wondering whether their sacrifices have been sufficient to satisfy their contribution to the recovery of the economy.
Last year's budget was by any measure an anti-women budget, with the main measures that attacked them being cuts to child benefit and taxation of maternity benefit. This year's budget, almost as an afterthought, imposed an average cut of €32 on women on maternity leave. The Government will argue it has compensated people with the introduction of the GP visit card for those under five years. This measure is the centrepiece of the budget, with both Government parties hoping to earn praise from bringing it in. I welcome this initiative as an important step on the road towards universal health care, but my welcome is tempered by caution as the devil lies in the detail. Will the funding for these new GP cards for children under five come from money saved by the withdrawal of full discretionary medical cards from other children suffering from serious illness or disability? The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, announced that he was looking for a further cut of €133 million from spending on medical cards in 2014, which leads me to the suspicion that we will see further withdrawal of these medical cards.
Those with a serious long-term illness have also been hit with a significant rise of €1 in their prescription charges. That may not sound like much but for those on limited incomes and resources it is a significant increase, particularly for homeless people who may be in recovery and who need four or five prescriptions a month. They must pay €2.50 and that is mean.
The budget has also been mean in targeting the elderly. The Government has targeted cuts to the medical cards of those with long-term illness. Cuts to the household benefits package will mean that many of our older citizens, particularly in rural areas, will lose links to their families and will also lose the use of their personal alarm systems.
Young people, some of whom are protesting at the gates today, have also been targeted with reductions to jobseeker's payments, particularly for those under 26 years. The Minster for Finance, Deputy Michael Noonan, claimed the Government could take credit for growth in the economy, but this is entirely false. The Government lowered its expectations from 1.7% to 0.2%. The Government is forecasting 2% growth for next year despite confirmation from the CSO that manufacturing output and export are down 7.4%. In the absence of strong export-led recovery, the domestic economy is flatlining and the very groups proportionately paying more are those on lower incomes.
With regard to the statement on the budget made by the Minister for Health, Deputy James Reilly, there is a significant variation from the programme for Government with respect to A Vision for Change and mental health. At the outset of the lifetime of this Government, a commitment was given for a ring-fenced sum of €35 million for the development of mental health services. I would like clarification on whether the €20 million that has been announced is on top of the commitment of €35 million, or is it the case that the sum of €35 million has been reduced to €20 million? This is a demonstration of the most odious cut to the most vulnerable people in society who are not in a position to protect themselves.
It is targeting those who had no hand, act or part in the economic collapse in this country. It is despicable that we would sit here in this Chamber and facilitate a cut against those who are not complicit in the scene of this crime - the economic crash.
In four minutes, it is hard to know where to begin. Yesterday, our budget day, the German Finance Minister, Mr. Wolfgang Schäuble, had, according to The Irish Times, the temerity to say on the fringes of an EU finance Ministers' meeting in Luxembourg that "the retroactive bank recapitalisation is not probable for the time being. In Germany, we need a change of German legislation," adding that such a step could be "as difficult as a referendum in Ireland". Retroactive direct recapitalisation for Ireland was "not probable," he said. He went on:
I don't see any necessity for this. We think Ireland is doing very well. Ireland did what Ireland had to do ... now everything is fine.If that is his understanding of where the 4.5 million fellow citizens of mine stand, he needs to clear his eyesight and come over and spend a bit of time here. With families in distress, citizens taking their own lives and families breaking up, how dare he say that?
I am on the Government's side. I have been on the Government's side since I came to this House but nobody wants to listen to the truth. Ireland's debt-to-GDP ratio is not 124%. Ireland's Government-debt-to-GDP ratio is 124%. When one adds in household and business debt, the non-financial corporate debt, as it is defined, it is the highest in the world. We will keep flailing around desperately in a swamp unless we get that swamp drained. Where are our colleagues in Germany, with a remark like that on the day of our budget?
Of course, there were some good things done in terms of the maintenance of the pupil-teacher ratio, the recruitment of teachers, the retention of the 9% VAT rate, etc. That is fine but on the other side, where was the corporate contribution to the position of this country? What about new mothers, the telephone allowance for the elderly and the VHI tax relief cap? The result of the medical insurance tax relief cap, when one takes it for two adults on a fairly modest VHI cover of Plan B Options, is €329 in extra tax they each must pay if they keep their policy in force. For two, it is €658. The multiplier effect, the IMF tells us, of a reduction in spending in the economy in a recession time is three-fold and if one takes out €658, one can multiple it by three to give its contracting effect on the economy for those affected.
I refer to Mr. Wolfgang Schäuble and the so-called partners in Europe. By the way, we have what they call a syndication of creditors in the form of the EU and the ECB and it is those creditors that are insisting that our banks pay back all the money that they lent our banks in order to pay off bondholders. The banks are zombie banks at present and they are unable to clear their loan portfolios and reduce the mortgage and other debts of households and businesses because they have not enough capital. The only way they will get capital is if they get creditor buy-in or participation, and the creditors are the EU, the ECB and the Central Bank of Ireland. Those creditors are the three cogs that all interconnect. There is not a chance of households being relieved of their debt burdens and being able to resume normal spending and investment patterns without those reductions, and there has to be real, honest participation by the EU. We saved the system and we have got nothing for it, and they are telling us we can go and sing for it.
I note a budget document the Government brought out. It is a little pull-out leaflet with the headlines. If one looks at the front page, in the confusion, it looks like the design for a play. There are words such as "international", "available", "deficit", "stimulus", "investment", "growth", "jobs" and "fair", but hidden in the middle are three words - "particular", "people", "pleased". That about sums it up.
There are few such people. They are the privileged people who will be pleased with this budget, and that is unfortunate. Maybe it is by accident that those three words can be seen, if one looks at the centre of the leaflet.
One can see that - merely by coincidence, luck and haphazard - these words fall together, but it is significant because we need greater fairness.
I commend Deputy Higgins on his speech earlier. Everybody should listen to it. We need to give backbone and spine to the Government to go in and negotiate - to get a really effective team to tell the story. If Mr. Schäuble thinks that is where we are, it is all wrong. I myself tried to tell the story in January 2012 to the Bundestag budgetary committee and it was news to them that €75 billion of private banking losses had been put on the shoulders of the people of Ireland.
It is hard to believe that we are at the seventh austerity budget and that over €30 billion has been taken out of the hands of Irish families. In his speech, Deputy Mathews tackled the misnomer with regard to the level of debt in the State and there were a number of misnomers spouted yesterday with regard to the expunging of the promissory note. What we have seen is the latter translated into a 40-year bond, which put the debt on the generations to come.
One of the most significant issues from next year's budgetary figures that I have seen is that €9 billion will be paid in interest on debt - a figure that is higher than the complete education budget for the year, which is shocking. In part, that interest is at its height due to the failure of the Government to get a deal on the retrospective recapitalisation of bank debt.
On a human level, this budget has angered hundreds of thousands throughout the State. It again targets the sick, the elderly and the vulnerable. This morning I spoke to a pensioner who rang and asked if he should get rid of his telephone line and the panic button in the house, and I had to persuade that pensioner to do all in his power to keep those in his house for safety reasons. Outrageously, TDs in Labour will vote for 20,000 families to lose the bereavement grant.
The Tara mines are in my constituency. Many of the former workers are on pensions of no more than €10,000 a year. Because of the pension levy, these individuals lost 2.5% of their pensions. The Government promised to get rid of this pension levy this year, but it increased the pension levy, which will result in an increase in the loss in these individuals' pensions.
With all the talk in this House of maternal health over the past number of months, we have seen maternity leave targeted for a second year in a row, culminating in each mother being up to €140 per week worse off, not including child benefit reductions.
The health position is a complete disaster. The fact that eligibility for medical cards for the over 70s will be restricted shows the disdain of the Government for the over 70s. Some €130 million worth of medical cards will be excluded next year, on top of the poor and sick who have been excluded already this year.
In health, 8,000 beds, 10,000 staff and €3 billion have been taken out of the system in recent years. The Government's answer this year is to take €666 million out of the service. That will mean that accident and emergency departments, such as the one in Navan serving all of County Meath, will be closed. It will mean that the ambulance services, that are already 20 to 30 minutes late in responding to cardiac and stroke victims in my region, will be later again in the year to come. The Government is playing with patients' lives in this regard and it is desperately reckless for the Ministers opposite to vote for these measures.
A lack of focus on the key ingredient, growth, and its consistent overestimation by the Government, has made the path to recovery even steeper. Emigration is outstripping job creation in this State by three to one and those who are coming off the live register find themselves now in an ecosystem of low-wage activation campaigns and random training. At the height of the Celtic tiger, 4% of the population were unemployed - that level of chronic unemployment is considered to be full employment in this State. Now under 14% of the workforce are unemployed. That 10% differential who, through no fault of their own, have lost their jobs would take up work if they were allowed but there is no work available for them. The youngest of that cohort are having their welfare supports slashed and, in effect, are being told to get out of the country altogether.
That is not the response to encourage job creation. I ask the Ministers to focus on growth.
We can now say that in the first half of the lifetime of the Government we have pulled the country back from the brink, restored stability to its finances and its reputation abroad. The second half of the Government's lifetime must be focused on recovery and job creation, starting with this budget. The country's hard-won independence was undermined by Fianna Fáil's cavalier recklessness and negligence in government. It will take Ireland decades to put the nightmare behind it, but we have turned an important corner and 15 December will be a milestone in the history of the country.
Given where their negligence led us, it is difficult to listen to the pious emissions from the Fianna Fáil benches. Fianna Fáil's protestations on the budget are like vandals who feign opposition to the rebuilding of a house that they themselves burned down because they do not like aspects of the new architecture. Of course, this budget is difficult for some, only because of the mess in which Fianna Fáil left the country. The hardship is not nearly so acute as would have been the case if another €600 million had been taken out of the economy, as was advocated by some. The Labour Party and the Government were determined that we would not dampen the recovery now apparent. We will still make our targets with a little to spare. This is prudent if we are to be able to stand on our own two feet and borrow money at affordable rates in the bond markets.
I have been requested to maintain the grants-based Better Energy programme during the transition to a PAYS-type scheme. I am very pleased to confirm that the €30 million in stimulus funding secured yesterday will now continue the investment in the Better Energy and Warmer Homes energy efficiency schemes to a total of €57 million. Meanwhile, we will continue to adapt a PAYS-type concept for launch next year. The experience of the green deal in Britain should mean that we can learn from that experience. The Warmer Homes scheme provides energy efficiency measures free of charge for low income households. Over 15,000 homes are expected to benefit from an upgrade under the programme in 2014. The estimate for 2014 under the Better Energy homes scheme is that a further 17,000 homes will be retrofitted next year. This is separate from an additional 14,000 social housing units that will achieve improved energy efficiency through a retrofitting programme in the Department of the Environment, Community and Local Government's social housing programme. Earlier this year I also established a €70 million energy efficiency fund to encourage similar works in public and commercial buildings, which will also boost employment, a key initiative of the Government's Action Plan for Jobs. The projections are that the fund will deliver up to 675 direct and indirect jobs for every €10 million of expenditure.
The thrust of the budget is to stimulate economic activity and grow employment. In that regard, in addition to jobs in home insulation and the refurbishment of public buildings, my Department is piloting a trading online voucher scheme. Under the pilot scheme, vouchers of up to €2,500 will be provided for 50 small companies to help them develop an online trading presence. The scheme will be administered by the Dublin City Enterprise Board and will target small enterprises employing fewer than ten people that have a turnover of less than €2 million per annum. Following the pilot scheme, we will roll out the scheme country-wide. I am setting aside €5 million in 2014 to assist the roll-out of the national trading online voucher scheme aimed at getting 2,000 new small Irish businesses trading online. This is in keeping with the national digital strategy which I launched earlier this year and sets out a compelling case for increased digital adoption across society, with particular emphasis on small businesses, education and citizens. I am also continuing the basic training programme, Benefit 4, to facilitate what are termed non-liners on how to make practical use of the Internet for everyday chores and social purposes.
By this time next year, every second level school in Ireland will have been provided with world class broadband infrastructure. Any Member of the House who has had the opportunity to visit any of the schools already connected cannot but have been impressed by the exciting new learning possibilities opened up for young people. My Department will continue to support the digital hub, where there are cover 70 digital enterprises providing some 900 high value jobs. I have also renewed the mandate of the national digital research centre for a further five years. My Department is also designing a new high speed broadband intervention to facilitate delivery in areas of the country where it is not commercial for the market to invest. When combined with the commercial interventions under way, this will radically change the broadband landscape in Ireland by ensuring high speed broadband is available to all citizens and businesses.
In the postal sector a new national postcode system will provide a unique code for every letter box in the State by 2015. Under the new system, Ireland will be the first country in the world to have a public database of unique identifiers for all properties that will assist citizens, public bodies and businesses to locate every individual household in the State. The groundwork in designing the postcode and updating private and public sector databases to accommodate the new postcode system is now being undertaken. Money is set aside in the Vote next year to substantially progress work on this project.
While over €180 million in television licence revenue will flow through my Department's Vote next year, work is being progressed to introduce a public service broadcasting charge to transform the funding of public service broadcasting in the State. My Department has just completed a public consultation on the proposed charge. The new charging mechanism will reduce the level of evasion and also ensure commercial enterprises will make an equitable contribution to public sector broadcasting.
After years of retrenchment, we are at a turning point. This view is shared by the IMF, the European Union, the OECD and the ESRI. The country is getting back on its feet and now on the road to economic recovery. On the jobs front, the live register is falling and the number of people at work is rising. In the 12 months to the end of last September, there were 38,700 more people at work. The budget is designed to maintain this momentum, build on the recovery and put people back to work.
I compliment the Minister on the significant investment he is making in the area of communications, energy and natural resources. The schemes are commendable and very good for householders and businesses and job creation and retention. As Minister of State with responsibility for small business, I am acutely aware that the operating environment for small businesses in Ireland remains difficult. That is why the Government is completely focused on delivering practical measures to help improve and support the small business sector. Budget 2014 is another pro-small business budget and further proof of the Government's commitment to this important sector.
I am chairman of the departmental advisory group on small business. The group consists of representatives of the small business community from across the country. This group and the high level group on business regulation ensure that the voice of small business is heard at the very centre of government. The Action Plan for Jobs has delivered some key initiatives which have made incremental improvements in the business environment. Access to finance has been improved through initiatives such as the microfinance fund and the SME credit guarantee scheme. The available fund is €90 million and direct applications are accepted. The fund will be distributed through local offices. The stipulation to have been refused a loan by a bank has been removed. We are also examining the credit guarantee scheme. I know of a company employing 15 workers which got its start under the credit guarantee scheme, which is beginning to play a role and will play a greater role in the future.
We have also sought to tackle the issue of late payments through the transposition of the EU late payment directive into Irish legislation, the development of a single licensing application portal that will see 33 licences operated by 15 different authorities for the retail sector and the reform of the county enterprise boards through the establishment of new local enterprise offices. That went through Seanad Éireann today.
The 2013 Action Plan for Jobs also contains a number of measures specifically aimed at supporting the retail sector. These include a project to increase the number of small businesses trading online, as mentioned by the Minister, Deputy Rabbitte, and an initiative to streamline business licence application procedures. We have also set up an interdepartmental group on the retail sector, which has just recently concluded a consultation process with retail representative bodies, and it is currently assessing proposals and considering if we can introduce any further possible measures to assist this critical sector.
The action plan for 2014, which is currently being finalised, will seek to build on the progress already made and is set to deliver a suite of actions to support enterprise. Small and medium enterprises, SMEs, will continue to be a key element of this process, and a number of proposed actions are currently being examined, the focus of which will be aimed at supporting this vital sector of the economy. I am very happy the voice of small business has been heard and is receiving very specific attention in budget 2014. I am pleased that so many of the ideas and recommendations brought to the Minister for Finance, Deputy Noonan, through the advisory group on small business and the high level group on business regulation have been addressed in this budget.
Micro and small enterprises are a central part of our economy and their ability to succeed and grow underpins our future potential for jobs, growth and prosperity, as 98.5% of all firms are small and employ over 650,000 people throughout the country. Budget 2014 will enable the continued delivery of over €2 billion in new, non-bank credit schemes, targeted at the full range of businesses from micro-enterprises through SMEs to mid-sized Irish exporting businesses and high-growth technology firms. It includes the micro-finance scheme, credit guarantee scheme, the National Pensions Reserve Fund SME schemes, development capital scheme and the seed and venture capital scheme.
This Government is now also putting in place a major package of new supports for small business start-ups and existing small businesses. This package includes €3.5 million in additional funding for the county enterprise boards or local enterprise offices, LEOs, and a package of measures to support start-ups. This will help to support the expected creation of a further 4,500 jobs in 2014. This funding will further support the important role of the LEOs as a one-stop-shop for businesses, to be located in every community, and ensure that there are locally accessible supports available to nurture entrepreneurship - the theme of the budget - and promote the creation and maintenance of employment.
Further job creation measures included in budget 2014 include the retention of the 9% VAT rate for the hospitality sector in order to support and encourage growth in small businesses in the tourism sector, a reduction in the air travel tax to 0% from 1 April in order to encourage the development of new routes and follow on from The Gathering and anti-fraud measures to protect compliant business from unfair competition by tackling the shadow economy.
The Minister also announced a package of measures aimed at supporting start-ups and growing businesses, including the Start Your Own Business scheme to encourage individuals who are long-term unemployed to start their own unincorporated business. With this, people will be able to avail of a two-year exemption from income tax, up to a maximum of €40,000 per annum, if they have been unemployed for at least 15 months prior to starting their own business. Capital gains tax relief will encourage investment in new business, which is very important, and the employment and investment incentive will be removed from the higher earners restriction in order to incentivise higher levels of investment in SMEs. There will be an increase in the threshold for the Credit Review Office from €500,000 to €3 million, meaning it can consider cases from the many businesses which are over the €500,000 figure. Cashflow in the small business sector will be supported by increasing the VAT cash threshold from €1.25 million to €2 million.
Building Business Capacity, a training and mentoring programme consisting of two days' dedicated off-site training with export mentoring support, will seek to enhance an SME's business and financial capacity with regard to understanding and utilising a broader range of financial products, as well as equipping them with the necessary tools to make a strong business case when applying for credit. The programme will be launched on a pilot basis with 1,000 SMEs. There will be an SME communications strategy to increase awareness of State supports among SMEs, and this will also ensure that there is a greater awareness among businesses of the soon to be relaunched credit guarantee scheme. There will also be a package of improvements in the research and development tax credit, aimed particularly at small Irish companies.
In spite of the difficult economic circumstances in which we find ourselves, Ireland has many strengths. The Global Entrepreneurship Monitor reported in July 2013 that 19,000 people started a new business in Ireland in 2012, and we want that figure to be even higher for 2013 and 2014. Through budget 2014 we will be able to provide continued supports for the small business sector, which is central to economic recovery, job creation and the development of the Irish economy.
The Government is committed to the vision of using research and innovation to generate jobs and economic growth. Within the constraints of our economic circumstances, we are maximising the funding available for research, development and innovation and, critically, maximising the impact of this investment on jobs and the economy. I am confident the 2014 Exchequer capital allocation, together with both the capital carry-over to be decided in November and reinvestment of income generated by agencies, will maintain research and innovation allocations in line with the 2013 expenditure. In 2014, Science Foundation Ireland, SFI, and Enterprise Ireland will continue to leverage EU and private sector funding for research programmes, building on the successes to date. In 2012, Irish researchers across the country both in industry and in the public research system leveraged over €100 million in funding from the EU's research and development funding programme, the Seventh Framework Programme, up from €93 million in 2011. To date in 2013, over €86.5 million has been leveraged from this funding source.
In the coming years, there will be a roll-out of the European Union's next research and development funding programme, Horizon 2020, which was negotiated during the Irish Presidency, and I had the privilege of chairing those negotiations. With a total budget of over €70 billion to 2020, our national research and development community is well placed to win significant funding from Horizon 2020, in the order of €1 billion over the period to 2020, along with funding from other non-Exchequer sources.
Significant improvements were made to the research and development tax credit in budget 2014, along with a statement of intent that the research and development tax credit base year will be phased out entirely over time as resources allow in order to improve the overall international competitiveness of the regime. These improvements, which include an increase in the amount of expenditure allowed on a full-volume basis - without reference to the base year - from €200,000 to €300,000 and an increase in the outsourcing limit from 10% to 15%, will increase Ireland's attractiveness as a location for research and development activity and result in additional jobs in 2014.
The evidence indicates that the Government's strategy of accelerating the economic and societal return from our science, technology and innovation investment is paying off, as Ireland has just been ranked third in the EU, according to the new indicator of innovation output, which measures the extent to which ideas from innovative sectors are able to reach the market, providing better jobs and making Europe more competitive. This proves that we are investing smartly in this area and that our investment is delivering jobs.
I will outline some of the research, development and innovation initiatives that will be supported through my Department in 2014. Science Foundation Ireland will establish up to three new large-scale research centres, supporting between 200 and 300 jobs, in areas of national strategic importance, such as medical devices, software, diagnostics, telecommunications, smart grids, and sustainable food production and processing. There will be significant industry engagement and co-funding, at a minimum of 30%, of these sectors. Exchequer funding for these new centres will amount to between €10 million and €15 million in 2014. Additionally, four or five research "spokes" will be established by SFI to enable the addition of new industry and academic partners and projects to existing SFI research centres to allow them to expand and develop in line with new priorities and opportunities. SFI will fund 3,000 researchers and over 20 world-class research centres in 2014. These are a key magnet for foreign direct investment and will help ensure that Ireland will become one of Europe's most attractive locations for foreign direct investment, and they underpin existing jobs with world-class research.
We have clear evidence of the link between research funding and job creation from foreign direct investment. To date this year, more than 45% of IDA jobs announcements have come from companies with links to Science Foundation Ireland research teams. That is over 3,700 jobs in companies linked to SFI-funded researchers.
Foreign direct investment companies play a vital role in the economy, with one in seven jobs being accounted for by foreign direct investment. In addition, foreign direct investment companies contribute €19 billion to the economy, generate more than 70% of corporation tax - some €2.8 billion in 2011 - and account for more than 70% of national exports - €115 billion in 2011.
Enterprise Ireland and Science Foundation Ireland will continue to promote and drive effective industry-academic collaboration which is essential for the successful translation of the best new ideas from the laboratory into innovative new products and services and, ultimately, the delivery of good quality, sustainable jobs for the people. In 2014 Enterprise Ireland and Science Foundation Ireland will continue to drive commercialisation from State-funded research, facilitating the emergence of new products and services which will underpin export growth and employment.
-----but they come into the Chamber to deliver them without politically proofing them in any way. Some of the comments I heard from Ministers and other contributors on the Government side outlined some of the advantages of this budget and the positives, but they completely ignored the issues at stake. I heard comments and glowing references about the health service, for example, when nothing could be further from the truth. Waiting times for operations and assessments in hospitals are getting longer, while patients are on trolleys waiting for consultants' reports. Priority-listed patients move from Waterford Regional Hospital to Cappagh Hospital and back again and have to wait at length. I was dealing with one urgent priority case that had been referred in 2010 and the lady in question had not had her operation. That is scandalous.
I refer to medical cards. Long before this budget was announced the Government was refusing to give out medical cards. There was consternation when the administration was moved to a central location, a move that led to all compassion and understanding being removed from the medical card system. Cancer patients were refused medical cards. Even before the budget was announced, people were being notified either by the practice they were attending or their chemist that their medical card had been withdrawn. Yesterday in Kilkenny when the son of an 80 year old woman went to collect her medication, he was told that his mother was no longer the holder of a medical card. She only receives the old age pension and this happened before the changes to be brought about by the budget kick into place.
Either God or the devil is in the detail, but in this budget it is the devil. When one examines the finer print, one sees that it excludes people from receiving medical cards. The changes made to income levels and age qualifications, such as those for persons aged over 70 years, will impact hugely in a negative way on the people queueing to obtain services from the HSE, a body which, from a financial perspective, is in a complete shambles. Only two weeks ago the Secretary General of the Department of Public Expenditure and Reform said there would be no overrun. He then corrected that comment to say that as of then there was no overrun. However, we know that by the end of the year there will be a serious overrun in the Department of Health, one that will be almost uncontrollable. In April the HSE applied to the Department of Public Expenditure and Reform to have an information technology system built in that would give it all of the facts, figures and management tools it wanted. This application has not yet been dealt with or approved. What is counted is done. Either the HSE or the Government is not willing to count what is being done and as a result, millions of euro are going to waste in the health system.
Let us turn to the business sector and be straight. The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, has left the Chamber; I had hoped he would stay. He cannot utter a sentence without referring to events prior to 2011, Fianna Fáil and "that Government." Fine Gael and the Labour Party received a mandate in 2011 and have introduced three budgets since. The Minister's party camped out in a shop on Grafton Street, demanding an end to upward-only rent reviews, but it abandoned ship on that issue very quickly when it entered office and walked away from it. The shop on Grafton Street is now closed and yields no rental income. I am sure an institution somewhere owns it, but the actual business has suffered. Throughout the country small businesses are closing down or reducing numbers. That is a fact.
Certain parts of the economy are doing well. Enterprise Ireland is making an enormous impact abroad in terms of trade promotion. Ms Julie Sinnamon, who has replaced Mr. Frank Ryan as chief executive officer, will make an excellent contribution. I know of her work and she is an excellent public servant. That, however, amounts to Irish companies doing it for themselves abroad, with the help of the State, whereas we all know that the indigenous sector, the retail trade, is not merely flat but out cold on the ground. People have no confidence to go out and spend. If one looks at any high street in any city, town or village, one will see establishments with old trading names which have closed and that shops have been boarded up. People and families who provided decent employment in rural Ireland are gone.
The Government's answer to the plight of publicans was to increase their difficulties further in the pricing of alcohol and the structure for how we sold it. It refused to recognise the big issue of the day, namely, that people were taking drink home rather than enjoying the social aspect of a pub or hotel. On the one hand, the 9% VAT rate worked, for which I credit the Government. However, on the other, the increases in rates, insurance and every other cost, including of how publicans administer their books for the State, are now proving so costly that they are putting people out of business or causing them to take a second look at the possibility of remaining self-employed. That is wrong. Some of the finest people who have left would have become wonderful entrepreneurs had they been encouraged to stay. Nothing in the area of self-employment would encourage a person to enter it and create jobs. The Government has completely neglected the sector and now it intends to overturn the county enterprise boards and include them with local authorities. That is a daft idea. If something is working, why bother tampering with it? That is what the Government is doing. I find it incredible that it has overlooked all of these issues.
I refer to social welfare payments. The Labour Party is now asking people to live on €100 a week. It is taking them off the dole and sending them on courses that have no relevance to the possibility of finding employment. It will not even listen to the people affected who are willing to offer ideas, saying that if they were to do such and such, it might work for them. The attitude is: "You do it this way or not at all." That is not helping the jobs market. It does not lead to the creation of the courses necessary to enable people to gain employment. The Government is making little or no impact, although vast sums of money are going towards this purpose.
I have a final point on Government expenditure. Every Thursday the Committee of Public Accounts, of which the Minister of State, Deputy John Perry, was once both a member and Chairman, sees vast sums of money going to waste.
Tomorrow we will deal with the case of a seven-storey building that costs €1.4 million in rent, of which only one floor is rented. The State picks up the tab. The lease runs until 2034. The Government must dismantle all of those things. It must examine what is coming before the Committee of Public Accounts. I introduced a Bill based on comments from the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, and many others, yet the Government voted it down. The Government would not allow us to examine expenditure in the local government area. It voted the Bill down. Yet it took the Comptroller and Auditor General to find waste of €119 million in local government. If that side of the balance sheet is not joined up then the Government will continue to fund useless projects and projects that go to waste. If the Government had had that money available to it in the budget then it would not have needed to crucify those whom it did crucify, namely, the marginalised, the less well-off and the elderly. All of those will suffer. If the devil is in the detail of the budget, the Labour Party certainly is not.
I welcome the opportunity to say a few words on the budget. I listened with interest to the Minister of State, Deputy Perry, speak about the Action Plan for Jobs and SMEs. I welcome his reference to action but I wonder how it will filter down to businesses in smaller towns such as Enniscorthy, New Ross, Gorey and Wexford. Currently, the retail sector in particular is experiencing major difficulties. Most town centres are dying and most businesses located there find it difficult to make ends meet. Many of those who run small businesses, particularly in my area, have never darkened my door during my long time in politics, but they are now coming to my office expressing serious concern about their inability to make a profit, do business and get paid for it. They are calling for major action, particularly from the Government.
Some of the problems lie in previous planning decisions allowing large supermarkets to go out of town. Out-of-town shopping was the be-all and end-all of town planning in recent years. Parking charges apply in towns and Tesco, Lidl and Aldi are located just out of town and can provide free parking. As a result, very few people now come into town centres to shop. The issue must be addressed in the context of a comprehensive examination of how town centres will be expanded and developed and win back shoppers in order for businesses to survive.
The Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, referred to the Better Energy and Warmer Homes schemes, which we all welcomed at the time. I raised an issue of concern with the Minister on a number of occasions, namely, while the Warmer Homes project is a great idea, grants for window replacement are lacking. According to the experts, much of the heating in a building escapes through poor-quality windows. In many houses around the country the windows are obsolete and are not in keeping with modern standards. I urge the Minister to introduce a window replacement scheme. Companies operate a scheme whereby one can keep the frame and replace the pane, which is proving to be successful. However, the costs are prohibitive and I urge the Minister to seriously consider the introduction of a grant to replace windows in addition to the Warmer Homes project, which has been successful.
Returning to the budget, I compliment Brian Dowling from RTE on his ability, on Sunday night, to tell us 99% of what the budget would contain yesterday. There was not much point in our coming into the Chamber to sit patiently and hear what Brian Dowling told us on Sunday night. The message on the booklet warned that it should not be removed from the Chamber before the Minister had finished his speech, yet everyone knew from what Mr. Dowling said on Sunday night what was in the budget. We were probably better prepared than usual to criticise the Government because we knew the good and bad things contained in the budget. I welcome some of the job creation initiatives that will help to create jobs and act as a stimulus.
The Minister for Public Expenditure and Reform, Deputy Howlin, made great play yesterday of the provision of moneys to build 500 houses, yet when 500 is divided among 41 constituencies that comes to 12 houses per constituency, which will not solve the major housing problem and address the local authority waiting lists. I welcome the initiative, but it is a small-scale measure and will not do much for the building industry.
The Minister of State, Deputy Brian Hayes, appears to be very well informed about the banks, of which he has been critical. I read recently that 20,000 couples per year get married and at least 10,000 of them want to buy or build their own homes. The difficulty is acquiring funding from the banks. It is time to encourage the banks to return to an 80:20 approach to mortgage loans, as used to be used in the past. If we were building 10,000 houses per year it would create many jobs and would get unemployed people in the sector off the live register. As the Acting Chairman, Deputy Twomey, is aware, we are very much dependent on the building industry in Wexford. We should seriously examine how we can get the banks to lend money. People have come to me saying the bank will offer them 50% or 60% of the loan but they must come up with the rest, which is causing major problems as they are not able to do so. Many couples with good jobs would be capable of meeting loan repayments and if they were given mortgages it would help to develop the building industry and create jobs instantly.
I support what Deputy McGuinness said about county enterprise boards being subsumed into local authorities. That is not a great idea. I fear that when enterprise funding is allocated to local authorities, the county manager will discover a scarcity of funding for road works or house repairs towards the end of the year and siphon it off for that purpose. We have a very successful county enterprise board in Wexford, namely, Wexford Local Development, which has created a significant number of jobs by developing one or two jobs in many small enterprises. The enterprise board has much expertise at present that has been built up in the past ten to 12 years. It is a mistake to bring the enterprise function under the remit of local authorities. I accept the Minister’s intention is to have a one-stop-shop for development in a county but I am not sure the local authority is the best place for it.
To return to the budget, it has not been a fair one. The reduction in jobseeker’s allowance from €144 to €100 per week for young people sends the wrong message to them. I accept there may be merit in the Minister’s approach in that he has said he will provide courses, education and training. However, Enniscorthy Vocational College, which provides a significant number of post-leaving-certificate courses, made a submission to the Department for extra teachers for the 2013 to 2014 school year to provide for 50 students who wanted to do courses, but the principal was refused. The 50 students went on the dole and drew unemployment assistance when they would have preferred to do a course. This is an area that must be developed through FÁS, which is more or less at a standstill at present because it has come under the remit of the Department of Social Protection. FÁS says it does not have funding at present to run courses or develop new courses.
Only this week I received a letter from FÁS in Waterford on the redundant apprentice placement scheme. People were made redundant and had a year and nine months to finish their apprenticeships. The course was very successful. The letter, received on 10 October, said the programme would not be funded in 2014. That is a major mistake because many young people are within a year and nine months of finishing their apprenticeships and of being certified. If they finish their apprenticeships, they will have a skill, even if they must emigrate. The certificate will enable them to get jobs elsewhere. I ask the Minister of State, Deputy Brian Hayes, to find out why the Government took the decision to abandon the very worthwhile scheme. If the measure is anything to go by, the young people whose unemployment benefits will be cut will not be helped.
The abolition of the bereavement grant is nothing short of a disgrace. The withdrawal of the telephone allowance is certainly causing major problems. I received a number of telephone calls to my office on this. People depend on the landline for the operation of their panic buttons. Older people are probably now the only people who have landlines. Some elderly people are not able to use mobile telephones and some have panic buttons. I ask the Minister to re-examine this issue seriously as it is causing major concern.
The Minister for Health, Deputy Reilly, said he was going to abolish prescription charges but he has increased them by 300%.
The medical card waiting lists are getting longer. A considerable number of people are having their medical cards withdrawn. A doctor colleague of Deputy Twomey told me today that if the Government reduces the allocation for medical cards by what is proposed in the budget, 30,000 people over 70 will be affected and at least 60,000 others. This is of major concern to people with medical cards.
I welcome the opportunity to contribute to the debate on budget 2014. As Minister for Children and Youth Affairs, I welcome the measures outlined in yesterday's budget which will support families while seeking to ensure the best outcomes for children, in particular by delivering important investments to underpin real reform for children and families.
I welcome the broader economic strategy being implemented by the Government, of which strategy this budget forms a key part. This strategy will reassert our economic sovereignty by allowing Ireland to exit the bailout programme on 15 December. It is succeeding in getting people back to work, which is critical. Having lost 250,000 jobs under the previous Government – 7,000 job losses per month – we now see 3,000 new jobs being created every month. We have now seen 15 consecutive months of reductions in the number on the live register. The number on the live register will next week likely drop below 400,000 for the first time in four and a half years. This is a start. There is no question but that much more must be done but I am confident that the significant focus in yesterday's budget on job-creation measures, including the capital investment measures and the €500 million tax package of 25 measures to support SMEs and entrepreneurs, will further stimulate job creation in 2014.
Findings from the CSO SILC surveys have indicated that, in 2012, a quarter of Irish children were growing up in jobless households. More generally, it was found that children in jobless households are three times more likely to experience consistent poverty than children in the broader population. Of course they are, so getting people back to work is critical. The best way out of poverty is to have a job and that is why the creation of 3,000 jobs per month is so critical. We need far more. It is imperative for families, including children, that we continue on that path.
For those families who are working, this budget has ensured that there is no increase in income tax or the universal social charge. That is important for all families. For all families, we have ensured that there will be no cuts at all to child benefit. For all children, we have ensured that there will be no increase in class sizes and that 1,400 additional teachers will be recruited to schools next year. We have protected the universal free preschool year again this year.
We have announced the extension of free GP care to all aged five and under. This measure, while being a building block on the road to universal health care, is also about much more. It is about securing the health of our under-fives and improving the future health of the nation. The children of today are the adults of tomorrow.
As Minister, I have spoken time and again on the need for early intervention and a greater focus on those under six. We have not had that focus. This is a huge contribution to building the focus, getting in early and interrupting patterns of bad health and making a difference. We have so much to gain from early intervention in order to address the major challenges we face and the crisis in our health system and to improve literacy and numeracy, which are critical. If we want to achieve this, we must start early. If we want to disrupt the crisis of childhood obesity, which is so serious and which has lifelong consequences, we must start early. A quarter of our three year olds are overweight or obese.
Free GP care for children of five years offers a unique opportunity to make a difference to the health of the nation’s children. The implementation of free GP care for children under five demonstrates the Government's commitment to early intervention. This is early intervention in action. It is a development I very much welcome.
I welcome the plans of the Department of Social Protection to spend well over €1 billion in 2014 on work, training and education places and related supports for jobseekers. This is an increase of almost €85 million on its projected expenditure this year. It is important to note the initiatives in the budget in respect of youth-related measures that can be pursued in 2014. These include incentivising employers to offer more job opportunities to young people by reducing the threshold for JobsPlus eligibility, providing for an additional intake of 1,500 young people to the JobBridge national internship scheme and ensuring that yet another 1,000 places on the Department's Tús community work placement scheme are targeted at young people. These are real opportunities that will make a difference to young people who are finding their way back into the workforce. It gives them an opportunity to experience the world of work, get better educational opportunities and have more training. The Department of Education and Skills plans to provide a minimum of 2,000 training places for under-25s as a follow-up to the successful Momentum programme that has operated in 2013.
These measures all form part of a focused whole-of-government shift from income support to services, with a total of €46 million to be invested in youth employment initiatives across a number of Departments. These changes are about emphasising the importance of services over income support. While income support exists, so too do services. For too long there has been a focus on direct cash benefits, as I said very often in regard to the development of the child care system. We have not had a focus on developing the kind of infrastructure that is needed, be it in regard to child care or job opportunities.
Young people face a very difficult jobs market, as we all know, and need assistance in the shape of work, training and education services. An increased income support is built into each of those opportunities, and that is very important. My Department is actively engaged in preparing for the implementation of the youth guarantee.
I also emphasised during our Presidency the very important role that youth work can play in supporting youth employability. Many of our youth services are working with young people who are very often quite excluded and marginalised but the services have the contact with them and can help them to avail of work, training and education opportunities. That has been increasingly recognised. I am also very pleased that I have been able to protect the youth sector from the level of cuts that had been envisaged originally.
As Minister for Children and Youth Affairs, I welcome the 2014 Estimate for my Department which further demonstrates this Government's commitment to delivering important reforms and service developments to support Ireland's children and families. The Estimate provision will be €449 million, an increase of almost €15 million over the 2013 allocation. It consists of €414 million in current and €35 million in capital spending. This is significant when one takes into account that €9 million is allowed for in that, built in as a result of commitments made in the comprehensive review of expenditure.
We must reform our child protection services. We have had decades of reports about the challenge in this country in the context of those services and the new child and family agency is due to be established in 2014. This is a key commitment in the programme for Government and we are delivering on that. I welcome the extra provision in that area of €6 million, rising to €12 million in a full year, but I must say that there are huge pressures in this area, with the increase in population and the increase in referrals to the child protection services from the courts and elsewhere. The new agency will co-ordinate the services in a way that has not been done before.
The 2014 Estimate for the HSE child and family services is €535 million and has been adjusted to take into account the Haddington Road agreement. I have also announced the implementation of the pre-school quality agenda, which I said earlier this year was needed in this country. There is provision to hire more inspectors for the preschool sector and to develop a mentoring system so that we can invest in staff training and support. There will be opportunities for staff in this sector to undertake further training through the training fund which I have now put in place. These are all very important investments in the quality agenda for our early years services.
The other child care programmes in the Department will continue to the tune of €260 million. I will shortly be announcing projects for the new area-based approach to child poverty. This initiative was announced in budget 2013 with an allocation of €2.5 million. Now, with support from Atlantic Philanthropies, for which I am grateful, we will be able to deliver the programme in a number of areas around the country. We will have €30 million in funding to ensure that area-based initiatives can be taken to support those children and families in the most disadvantaged areas and also to ensure that we can mainstream some of the learning from the programmes that have taken place.
Budget 2014 represents an investment in real reforms for Irish children and families. It is about supporting parents and working families and ensuring that more families are working. It is also about early intervention to secure young people's health and providing opportunities for children and young people. It is about protecting children and improving preschool standards. It is also about a whole-of-Government approach, working together for Irish children and families. I thank my colleagues in the other Departments who have worked with me to ensure that we can develop this wide-ranging programme.
I rise to welcome the budget published yesterday by my colleagues, Deputies Howlin and Noonan. In saying that, on behalf of the Government I want to thank the people of this country who, over the past six years, have had to put up with a very difficult situation because of the fact that over that period of time some €28 billion had to be taken out of the Irish economy by way of tax increases and expenditure cuts. It is only right that we recognise the fortitude, patience, hard work and determination of the Irish people. It is their efforts which have allowed us to restructure this country. Obviously there is austerity fatigue in the country, given the scale of the adjustment and the scale of the collapse. People want to get to a new place in the Irish economy and with the budgetary measures announced yesterday, hope is in sight after this very long period which is as long, if not longer than the Second World War, given the devastation that caused.
This country would be in a much worse position now were it not for the support of the international community, especially the European institutions, the European Union and the International Monetary Fund. People talk about austerity as if there is some fundamental choice between having austerity and not having it. The truth of the matter is that if we did not obtain the support of the lender of last resort as we did over the past four years, this country would be an economic wasteland. It would be no different from the kind of junta-driven economic wasteland of Argentina, where one quarter of the population went hungry. That country is still locked out of the international money markets. It is the fortitude of the Irish people and the maturity of our political system which have allowed this country to get back on its feet again. I believe we are heading into better days. The restructuring that has taken place in the Irish economy is something to which other countries can look. While we were the second country to enter into a bailout programme - in which there are currently four countries - we will be the first country to exit that programme. It is the historic task of this Government and all Governments that follow us to make sure that we never again suffer the humiliation of going into another programme. Once we are out we need to stay out.
That is why it is important to put one salient fact on the record of this House, a fact that is known to every Irish person, regardless of age. In this budgetary process it is the Government's intention to spend €53 billion next year, of which we hope to bring in about €43 billion through taxes. There is a gap there of €10 billion and as anyone who manages a household budget, a business or a school will know, that is not sustainable. That is the fundamental reality the Government has to face in making these hard choices. An enormous deficit was left to us by the previous Administration. It is crucial that we continue to make progress in reducing that deficit as a percentage of our national wealth and I believe we are making steady progress in that regard.
When one talks about GDP, GNP and so forth, one can sometimes be blind to the actual reality on the ground. The new economic indicator of how well or badly this country is doing should be the number of people who are working here. In the last 15 months an additional 47,000 net new jobs have been created in the private sector, the real economy. That is an enormous tribute to enterprise, innovation and to small businesses. It is also a tribute to the hope and optimism of people who are prepared to set up businesses in a very challenging environment. As everyone knows, we have turned the corner in respect of employment. When we came into office we were losing 7,000 jobs every month. Now we are creating 3,000 jobs. However, I must make it clear that Governments do not create jobs. It is the people with good ideas, those who are prepared to risk their houses and to put their shoulder to the wheel who create jobs for other people.
That is why it is crucial that we have a proper taxation system that encourages people to work, take entrepreneurial risks and invest in their businesses.
Over the past three years, unit labour costs in Ireland have gone down by 12% when in other eurozone countries they have gone up by 8% or 9%. We are more productive, more competitive and obviously working longer for less money. This is a significant structural advantage for our economy which IDA Ireland can highlight to potential multinational investors. That is why it is important that we continue to make progress in reducing our deficit and getting more people back to work. We are not a Mediterranean economy like Spain, Portugal or Greece. Ours is a highly privatised, nimble and deleveraged economy which is export-focused. We do not have a large public sector; it comes to only 17% of the total workforce. This is totally out of kilter with southern European countries. We are much closer to the British and German model of entrepreneurship and export-focus. We can come back much quicker than other countries affected by the crisis because our economy is highly privatised.
There are better days ahead. We must continue in all our efforts - both the Government and the Opposition - to make sure the hope the people want is one that can be realised by getting people back to work. Members raised the issue of emigration. It is a scandal that some of the best and brightest, on whose education significant Irish taxation was spent, are leaving our shores. Up to 80,000 people left this country in the past 12 months; half of these were not Irish but were going back to their home countries. Yet 50,000 people came back into the country. No one ever talks about the Irish returning home to take up new job opportunities in the emerging economy. It is the Government’s task to continue to provoke domestic demand and help the process of getting more people back to work.
I hope this budget will be seen in the round. I appreciate the difficulties in this budget, particularly against the background of cuts over the past several years. Had we followed the proposals from the hard left and the hard right to give the two fingers to the troika, this country would be in economic Armageddon. We are on our feet again. We are close to the end of this crisis. This is an important point that our people need to hear. When they hear this, they will see there is real hope for this economy to take off as we see further progress in the British and eurozone economies.
It would be easy for me to simply attack budget 2014 without outlining alternatives. Sinn Féin has put a serious amount of work into providing an alternative budget. However, there is much to attack in the budget, such as cuts to medical cards, jobseeker’s allowance, maternity benefits, telephone allowances and housing grants. The meanest cut in recent years is the abolishment of the bereavement grant. The Government has attacked everyone from the very young to the very old. The list is lengthy and the cuts are deep. These cuts will hurt and will be remembered, as will those who inflicted them.
In some sort of irony, the Labour Party manifesto for the 2011 general election stated, "Labour wants older people to be heard in their local communities." What does the Labour Party do two years later? It cuts the telephone allowance for the elderly, which means phones will be cut off in some cases. These often can be the only connection to the outside world for an elderly person, and their personal alarm systems may require a land line. Whatever about Fine Gael standing over a budget of savage cuts, it beggars belief that the Labour Party could endorse and support it.
The budget sees funding for public housing reduced by €700 million from what it was in 2010. To put that in context, the Labour Party supports the cutting of funding for social housing from €780.9 million in 2010 to a miserly €80.9 million for next year. Yet local authority housing lists continue to grow. In previous recessions, Governments of all shades invested in public housing because it gave a return to the State in rent and house sales. This Government, however, through rent allowance and long-term leases, is handing money over the developers and landlords instead. At the end of five or ten years, people who avail of these still do not have a permanent home.
There are now more than 100,000 people on housing waiting lists. The Government applauds itself for having made a once-off €30 million donation to housing from the sale of the national lottery. This will build 500 homes, a mere drop in the ocean. Not happy with that, it has cut funding for housing adaption grants for the elderly and disabled from €80.9 million in 2010 to a paltry €28 million for next year. Funding for estate regeneration has been cut from €203 million in 2011 down to €109 million for 2014. Those residents living in poor-quality, overcrowded local authority housing will have to wait even longer.
It does not have to be this way. The Government, just as in its two previous budgets, had choices. Sinn Féin outlined in detail the budget choices we would have made. Like the Government, we would have made the choice of reducing the budget deficit by €2.45 billion because the State’s finances must be put in order. However, this must be done in a fair way. Our budget would have reached this figure through savings of €1.044 billion and tax measures of €1.4 billion. Sinn Féin, unlike the Government, would reduce the tax burden on low- and middle-income families and would take 296,000 people out of the universal social charge tax net. These are employees who earn the minimum wage. As they do not have any saving power and spend every penny they earn, their wages go back into local businesses and jobs. Any help for this cohort would be good. The Government spoke much about keeping people in employment. It must help those on the lowest income to retain as much of their income as possible. Sinn Féin would abolish the property tax, saving households an average of €278 per annum. We would give 86,000 carers an extra €325 in their respite grant by restoring it to its 2011 level.
Only two years ago the Labour Party stated in its general election manifesto, "Labour sees forced emigration as a stark failure of government, not a solution." Now in government, it is overseeing the highest levels of emigration ever witnessed in the State. This budget will only serve to increase those figures. Sinn Féin would not force more young people on to jobseeker’s allowance. In fact, we would offer every unemployed young person access to a decent job or to real training. We would do this, and more, by reforming the tax system and cutting out waste. Several of our tax reform measures include a new third tax band of 48% on income earned in excess of €100,000, which would bring in €365 million.
We would reintroduce the non-principal private residence charge of €400, which would raise €151 million. We would increase capital gains tax to the level it was at in the 1990s before Fianna Fáil slashed it, which would bring in €98 million. Last week I heard Ministers say this would damage job creation. People on the other side of the House have often bragged about the number of jobs created in the mid- to late 1990s. Some 1,000 jobs per week were being created, so the capital gains tax at the former level of 40% did not have a negative impact on job creation. The Government's record shows that, so it should stop saying it.
This is but a small selection of the many initiatives outlined in our budget proposals. When the spin and headlines have faded, people will be left struggling to make ends meet. Those low- and middle-income families will remember that what the Government did here yesterday, and in previous budgets, did nothing to help them. The Government has made the situation worse by imposing more cuts and austerity on them. The pensioners in rural areas who can no longer call an ambulance or the pensioners in Dublin who can no longer call their GPs will remember who cut the phone allowance. According to the Government's figures, more than 100,000 families will lose medical cards. The families who cannot afford to visit the doctor or buy medicine will remember. The young person who is forced to live on dole of €100 per week, whose choice is between Frankfurt, Boston and Australia, will remember. Our job is to continue to highlight that there are alternatives. I appeal to the Government to examine those alternatives and to allow people to have a decent life in this country.
This budget will directly contribute to homelessness. The Minister's recent launching of an initiative to end homelessness was farcical and nothing but a PR stunt. The budget continues the slashing of the housing budget, which has been cut by over €1 billion since 2008. Most spectacularly, it continues the Government's practice of attempting to spin a hit as a gift. This summer, when the Department of the Environment, Community and Local Government announced it would cut less than had been planned in budget 2013, it heralded this as a boost in funding. The budget has been cut by many times this supposed boost. The Department even claimed that it would specifically help the disabled and the elderly shortly before Dublin City Council announced that its adaptation grant scheme was to close early due to funding running out following a 40% cut.
This Government is fond of moving figures around, redesignating funds from one place to another and claiming boosts left, right and centre. It has no time for being honest, properly funding housing or upholding the right of the people to adequate housing. Some €30 million has been promised for social housing in this budget, but €58 million has been cut from the housing budget. This much-prized €30 million will deliver, it is hoped, 500 homes. In the context of 112,000 people on the housing waiting list and a further 5,000 people in homelessness, every little helps, but this is minuscule. It is also hard to take seriously when the Government has been promising thousands of NAMA homes since 2011, with fewer than 500 delivered. No doubt we will have some restating of this promise over the course of 2014 in the hope that we have all forgotten and think this is something new. This is before we even consider the fact that these homes remain in the ownership of the developers bailed out by the public purse. They will be paid handsomely for the use of their properties and will have them returned in a few years refurbished at public expense. This failure to address housing is likely to continue the growth in homelessness seen in recent years, but the cut to rent supplement will, as shown in 2012, put people out of their homes. This is taking from those who have nothing to give.
Rent supplement is a poverty trap. The Minister, Deputy Burton, admitted this. Rent supplement recipients are in poverty, yet the Government expects couples on rent supplement to fork out another €5 a week, €260 a year. It expects them to do this while their landlords are trying to raise their rent and even taking extra payments under the table. They are expected to do this as they are already being pressured by the State to get their rents lowered, even as rents all around them go up, in part because the Government is intent on spending more than €500 million subsidising private landlords and less and less on providing affordable, secure housing.
The cut to young people on the dole will also put many people, especially vulnerable young people who have been in care or similar circumstances, in a very precarious situation. Focus Ireland proposed a pathway last year to help young people affected by similar cuts already in place. Nothing has been done on this. This Government does not care about housing people. It cares about meeting targets that the EU and IMF set so that in a year's time it can set its own targets and finally have the opportunity to initiate its own very Irish version of right-wing, anti-worker, pro-privatisation Reaganomics.
The Minister for Transport, Tourism and Sport mentioned Smarter Travel in his contribution. The only thing smart about this Government's approach to transport is from the perspective of those who wish to profit from the public need for a transport system. There is nothing smart about allowing private operators to cherry-pick from public service obligation, PSO, routes currently served by Bus Éireann or Dublin Bus. There is nothing smart about making public service compete with private profit. The only result will be public loss and the downfall of Dublin Bus and Bus Éireann, organisations that are vital to the social and economic life of this State. What is smart about actively discouraging people from using public transport? There have been fare increases, cuts to routes, cuts to fleets, fewer DARTs, and pay cuts for workers, which inevitably results in industrial action, as I warned in advance. These policies make public transport less attractive and make the Government's own argument: sell it off and be done with it. That is what Fine Gael wants, and what hope is there that the Labour Party has the guts or the wit to do anything to stop it?
The €10 million announced for remediation of pyrite-damaged houses is wholly inadequate and will not repair much more than a quarter of the 1,000 homes in most severe need of reparations and the thousands of other homes affected. This announcement also means that the public purse will foot this bill entirely while the quarries and construction firms that used pyritic materials go untouched. We accept that people have to manage their own budgets. The Minister knows that if one manages one's own budget, one cuts off all the excesses and extra expenses, particularly the high expenses. The Labour Party is the bones on which Fine Gael sharpens its teeth.
I had intended to spend my five minutes addressing issues relating to my brief - that is, communications, energy and natural resources - but the Minister, Deputy Rabbitte, will be disappointed that I changed my mind this morning. I changed my mind because I received this document. Every Deputy, Minister and Senator received one this morning. It is a four-page newsletter from Irish Autism Action, Down Syndrome Ireland and Inclusion Ireland. It poses three fundamental questions, as follows. Why do people with a disability have to battle for the most basic supports? When was the last time a Cabinet Minister made a statement on issues affecting people with a disability and their families? Where is the Government commitment to treating people with a disability as equal citizens?
This document also paints through numbers a very dark picture of where we are. I dislike reading figures, and I hope no person of a nervous disposition is listening, but these figures need to be put on the record of the Dáil. There are 763 children in this State who have been waiting six months or more for an assessment of need under the Disability Act. There has been a €325 annual cut to the respite care grant. The cumulative annual reduction in disability allowance since 2008 is €847. There has been a 15% reduction in resource teaching hours since 2011. Some 1,900 children await assessment by a primary-care occupational therapist.
One percent of adults in receipt of disability allowance were engaged in community employment schemes in 2012; 34,617 people are awaiting speech and language therapy; 450,000 home help hours were cut in August 2012; 200 home care packages per month were cut in 2012; 121,353 pupils are in a class of 30 or more; 5% of adults with an intellectual disability are in open employment; and 20,000 people with an intellectual disability will require a new or enhanced multidisciplinary support service between 2012 and 2016. I could go on and mention the motorised transport grant, the carer's allowance reduction, the by now infamous and dreaded medical card probity review - whatever that means - and so on.
Earlier this year, Sinn Féin proposed that all budget decisions and choices should be equality- and poverty-proofed. It is clear to everyone who gets behind the Government spin and reads the budget documentation that budget 2014, far from improving the situation for people with a disability and their families, will make matters infinitely worse. The continuing reduction in public services by State and non-governmental agencies and the flat refusal of the Government to equality and poverty-proof its choices has ensured this. When Irish Autism Action, Down Syndrome Ireland and Inclusion Ireland ask whether the Government will make people with a disability a priority, the answer jumping out from the pages of budget 2014 is "No, it will not."
I know there are decent, honourable Ministers and decent backbenchers on both sides of the House, but the Government needs to make one decent and honourable move. It is in its power to do so. Tomorrow, we will debate a Private Members' motion put forward by Sinn Féin which could improve the quality of life of deaf children and their families if the Government authorised immediately the fitting of bilateral cochlear implants instead of the current mean-spirited, uncaring practice of fitting one implant. Imagine if we were talking about the Minister's child or grandchild. Would he consider it decent that the child should go from hearing to deafness because of the failure of a single implant? Would he consider it decent that the child could never fully enjoy the beauty of music, because the State, acting on behalf of the people, does not care enough to fund bilateral implants? This measure would cost €12.8 million and would transform the lives of 200 children. That is value for money.
I urge the Government to do the right thing and do it now. Not only is this good value for money and not only would it transform the lives of 200 children, it would restore some semblance of decency to a mean-spirited budget 2014.
When the Minister for Finance spoke yesterday he said that the purpose of the budget was to continue the progress the Government had made, to reinforce policies that increase the economy, to establish the conditions that will create jobs, and to prepare for exiting the bailout programme. We must not lose sight of this goal and every Department has a role to play in achieving this objective.
My Department has policy responsibility for the conservation, preservation, protection, development and presentation of Ireland's heritage and culture. It also seeks to promote the Irish language, to support the Gaeltacht and to assist the sustainable development of island communities. A gross provision of over €238 million is available to my Department for these purposes in 2014. A further €7.5 million is provided separately for the National Gallery of Ireland. In broad terms, the 2014 allocations are as follows: almost €123 million for arts, culture and film, including almost €56 million for the Arts Council and €14 million for the Irish Film Board; almost €45 million for the conservation and protection of Ireland's built and natural heritage; almost €40 million for the Irish language, the Gaeltacht and the islands; and over €38 million for North-South co-operation, including support for two North-South implementation bodies, Waterways Ireland and An Foras Teanga.
For 2014, there has been a core reduction of approximately €16.9 million, 7%, in Exchequer funding to my Department. Therefore, as with every Minister, I had to make difficult choices with regard to funding for next year. Notwithstanding this, even with a reduced Departmental budget, every week more than €2.3 million will be invested in arts, culture and film next year. This funding will go to agencies including the Arts Council and the Irish Film Board, the national cultural institutions, and regionally-based museums and arts centres.
Cultural institutions funded by my Department attract approximately 3.5 million visitors a year. I have taken that into account by allocating as much as possible to the National Museum and National Library, and holding allocations steady to the National Archives. I want to enable institutions to maintain services to the public over the course of 2014, and I have, therefore, prioritised these national institutions as much as I can for next year. These institutions are also doing more with less. Last week, the National Gallery, IMMA and the Crawford Art Gallery signed a shared services agreement. The three galleries will co-operate more closely together and will share certain skills or processes so as to increase efficiency and save money. The sharing of services at these three institutions should save €100,000 by the end of this year.
The allocation of more than €2.3 million for every week of 2014 will help to maintain and support the important role the arts play in innovation and expression, job creation and economic recovery. In addition, funding for three jobs-rich initiatives, totalling €17 million, is also being made available. This will have a considerable positive impact on the arts and heritage sectors throughout 2014. This €17 million in additional funding, coming from the proceeds of the national lottery licence transaction, includes €6 million for the Limerick national city of culture 2014 project; €6 million for projects relating to the decade of centenaries, 1912-1922; and €5 million for the traditional skills and buildings at risk jobs leverage scheme 2014.
When I announced a new national city of culture initiative last year - to commence next year in Limerick - it was with the aim of delivering a programme of cultural and artistic events and engagement in a city for one year, but also with the aim of having a longer-term positive impact nationally. This funding is an investment in the arts in the mid-west, and coincides with an important year for Limerick, when the new amalgamated local authority will come into being. The allocation offers Limerick a fantastic opportunity to hang out its brightest colours, to unlock the tremendous creativity that has been associated with the city for centuries and to put on a programme of events of national importance.
The funding for the decade of centenaries is also significant, as it allows us to move ahead with major building projects to mark the centenary of the 1916 Rising. The allocation of €5 million for heritage buildings is the most important investment in heritage buildings in Ireland in recent times. This will allow for urgent repairs on protected heritage buildings to take place across the country, improving our heritage stock, adding to Ireland's attractiveness as a place to live and work and generating employment in the construction and skilled crafts trades.
I also welcome the decision to extend the Living City initiative, introduced last year to Cork, Galway, Kilkenny and Dublin for all buildings built prior to 1915. This incentive targets Ireland's historic building stock. It is a tangible example of Government's commitment to sustainable development, so that we do not repeat the mistakes of the past, and it focuses on our existing urban core. The scheme complements the new investment scheme in the traditional skills and buildings at risk jobs leverage scheme and will ensure that Ireland's major urban cities are enhanced, continue to have vibrant city centres, and encourage increased tourism and direct inward investment.
Following the reopening of the Irish Museum of Modern Art in Kilmainham, provision has been made for the extensive renovation of the historic wings of the National Gallery of Ireland. This work, which will generate approximately 270 jobs, will be one of the most significant additions to the cultural infrastructure of the country, and I am delighted and proud that it is going ahead.
Funding to my Department for 2014 will continue to support the national parks at Glenveagh, Ballycroy, Connemara, Killarney, Wicklow and the Burren. Ireland recently received a prestigious European Diploma of Protected Areas for the sustainable management of the Burren, a first for the country. Funding for 2014 will also contribute to the management of heritage areas, to biodiversity, and to special schemes, including the reintroduction of protected species such as birds of prey.
I welcome the announcement by the Minister for Finance, Deputy Noonan, that he intends to bring forward the new regime for film tax reliefs to 2015, and also extend the definition of "eligible individual" in the scheme for film relief to include non-EU talent. This is a matter I and the officials have been working on over the course of 2013. The film sector is competitive, but it can drive investment into Ireland and employment growth here. The changes announced yesterday are already receiving attention on the international stage, including in trade magazines such as the The Hollywood Reporterand Variety, which have noted that Ireland is redoubling efforts to attract international film investment.
I am committed to developing North-South co-operation within the broader arts, heritage and commemorative activities of the Department as well as through the funding of North-South bodies. A provision of €38.3 million will be 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. The provision will enable Waterways Ireland to deliver on its core activities and targets, which include keeping the waterways open for navigation during the main boating season and promoting increased use of the waterways resource for recreational purposes. This expenditure should also assist in developing and promoting the waterways, attracting increased numbers of overseas visitors and stimulating business and regeneration in these areas. Capital funding of almost €4 million will be made available to Waterways Ireland to facilitate the ongoing maintenance and restoration of Ireland's inland waterways, thereby increasing recreational access along the routes of waterways.
The Government has reaffirmed its commitment to continuing to make progress, to improving the economy, to exiting the bailout, and to helping to create jobs. The Department and the sectors it represents will make a significant contribution to this work over the course of 2014.
I welcome the opportunity to speak in this important debate. I will start by welcoming some of the positive elements of the budget, and it would be wrong not to acknowledge that there are some positive elements. The retention of the 9% VAT rate is positive for the hospitality sector, given this sector is labour-intensive and has created in the region of 15,000 jobs since the measure was introduced. I compliment the hospitality sector for its intensive lobbying campaign. It seems to have worked because, as late as two weeks ago, the Minister, Deputy Noonan, indicated that this policy was not to be extended.
The removal of the travel tax, albeit three years overdue, is a welcome development. I have no doubt my fellow Westmeath man, Mr. Michael O'Leary, will honour his commitment and ensure an increase in the number of passengers coming to Ireland.
With regard to education, I welcome the fact there is a retention of the pupil-teacher ratio, which is another very positive development. I compliment the INTO, the parents and the staff of the many schools who came out and held public meetings to demonstrate their concerns and worries. It is positive that the Minister took those concerns and worries on board.
In my area of responsibility concerning the Department of Children and Youth Affairs, I welcome the positive developments, albeit small, in particular the additional funding for the implementation of the preschool quality agenda and for reforming child protection. However, while in one breath the Minister, Deputy Frances Fitzgerald, highlights the increase in this regard, she fails to highlight there is to be €8 million in savings in another arm of her budget. Here, we see a €2 million reduction in youth programmes, which are extremely important across the length and breadth of Ireland in supporting vulnerable young children. Moreover, we see a cut of €1.7 million in the area of school completion.
Commentators are saying this is a Labour budget and that Labour Deputies have got their way. If Labour Deputies are happy with this budget, it raises more questions than it answers. This is a regressive budget where the burden of adjustment disproportionately falls on those who can least afford it and which targets the old, the disabled and the vulnerable. It is a budget which targets working women who decide to have a family and young people who, through no fault of their own, are out of work. It is a budget which targets people who are clinically and chronically ill and who will lose their medical cards. It is a budget which reneges on the commitment given in the programme for Government to provide €35 million per annum for the area of community mental health. If this pleases Labour Deputies, they are a lot more similar to Fine Gael than even I had thought.
With regard to the cuts to young people's social welfare, the Labour Party made a promise to protect core payments but it never once mentioned that this would depend on the age of the recipient. What happened to the Equal Status Act 2000, which outlaws discrimination in employment, vocational training, advertisement, collective agreements or the provision of goods and services and other opportunities to which the public generally have access on nine distinct grounds, one of which is age? The Taoiseach and various Ministers have highlighted this as a labour activation measure. What an insult to the intelligence of our young people. Some people in this age bracket are highly educated and have degrees and master's degrees, but they cannot get a job.
We witnessed in last year's budget an increase in the pupil-teacher ratio from 17:1 to 19:1 for PLC and VEC courses, which meant there was a reduction in the number of courses and places on offer for young adults who wished to retrain. Following the recent changes to third level grants and the increase in the student registration fees, we must remember the promise that they were not going to increase. All of those increases act as a barrier to young people who wish to return to education.
Please do not insult the intelligence of our young people. Say it as it is. This is a discriminatory cut to young people in order to save €32 million per annum. It is telling the young people of Ireland, "You are not welcome here. You are not valued here. Join the 170,000 other young people who have emigrated in the last two years".
Only last week, the Minister, Deputy Fitzgerald, launched the expert advisory group report on the early years strategy, where she said she was personally in favour of it and would fight for it. I commend her for that. Unfortunately, the fight did not go too far. That report recommended extending maternity benefit from six months to 12 months. What happened in this budget? There was a reduction of €30 million in support for working women. What happened to the Minister, Deputy Fitzgerald? She said that whole-of-government support for children and families is also evident in the free GP care for children aged five and under. Where was the whole-of-government support for families and working mothers? The Minister, Deputy Fitzgerald, talks about early intervention. The most formative years of a child's life are their early years yet the Government's policy is advocating that women go back to work as soon as possible.
We saw older people tackled in this year's budget, including through the complete abolition of the telephone allowance. When this is taken in conjunction with the 2013 budget, it is a reduction of €6 per week. People will no longer be able to afford their landline and they will run the risk of losing the panic alarm which hangs around their neck, which is a lifeline for so many elderly and disabled people who live alone and have nobody with them on a daily basis.
The reduction in the medical card threshold is another cynical attack on the elderly in society. I heard so many Ministers quoting the ESRI earlier but it is the ESRI which states that medical care is a progressive anti-poverty measure.
It is a pity the Ministers did not look at that report from the ESRI.
Mental health is an issue we discuss frequently in the House. It is an issue all sides of the House wish to see addressed. There has been an alarming rise in the rate of suicide in the last number of years, yet the Government has still failed to honour the commitment in the programme for Government to ensure that €35 million will be spent on community health every year, including in 2014. That has been reduced to €20 million. With regard to the 2013 element, it was promised that 477 staff would be appointed in 2013, but at the end of last September only 4% of this was complete. One would have to question where the priority for mental health lies with this Government.
Working parents who have separated have been unfairly targeted in this budget. Working parents who share the caring and financial responsibility for their children are being penalised. From January next year, only the primary caregiver will be able to avail of the tax credit. This discourages parents who separate from working together to ensure the well-being of their children.
What happened to the principle that those who can afford to pay more should pay more? Will the three Ministers of State who are present explain what measure in this budget will knock one red cent from the net take-home pay of senior executives in the financial institutions and across the board? What single effect will this budget have on high-earning people in this country? There is none. Look then at what effect it will have on those who have the least to pay. Once again, I predict the ESRI will confirm that this is another regressive budget that fails to protect the less well-off and most vulnerable in our society.
I am grateful for the opportunity to make a brief contribution to the budget debate.
The chief executive officer of ALONE claims yesterday's budget is another example of how this Government fails to support those in need. ALONE supports older people in need through a befriending service, long-term housing and crisis support in the community. It said:
The measures detailed in Budget 2014 will further isolate a significant percentage of older persons, specifically the cut to telephone allowance. We find the additional cuts to the bereavement grant, invalidity pension and increase in prescription charges are more examples of how the government each year "chips away" at various funding for the most vulnerable in Irish society.The abolition of the telephone allowance is the third round of measures which are hitting the living standards of older people. This allowance enables older people to keep in touch by telephone with their family and neighbours. It gives them the comfort of keeping in touch without breaking the bank. It makes them feel safe and secure in their homes. It is a miserly cut affecting the older generation, which feels isolated enough already. The Government is in the process of gutting the household benefits package while failing to recognise its social and economic value. It goes against every instinct of Irish people, who have always valued the principle of social solidarity and intergenerational support. These decisions are shameful and totally unfair.
Electricity prices increased by 15% in 2011 and 6% in 2012, and are going up by another 2% this month. Gas prices are up by over 30% since the Government came to power. Further increases will be directly felt by the 410,000 recipients of the telephone allowance. Mr. Eamon Timmins of Age Action Ireland stated today:
Older people are struggling to make ends meet as a result of the cumulative impact of a succession of austerity budgets. Many are part of a generation that did not spend money it did not have. Our concern in the wake of the budget is that the most vulnerable of older people may now be left facing even more difficult choices with dwindling incomes as a result of the budget changes.The abolition of the telephone allowance over the last two years has taken €26 a month from pensioners and others who qualified. This is the equivalent of a cut in the basic State pension of €6 per week. The cumulative impact of the cuts to the household benefits package represents an unprecedented attack on older people, carers and people with disabilities. The elderly must be protected. They helped shape and support our great nation. Now is the time to show leadership and reverse these charges against the elderly.
Young people are seen as a soft target, and these proposals [the cut to jobseeker's allowance for people under 25 years of age] threaten to hit hard those most in need of support. Social welfare payments to young people under 21 are already disproportionately lower at €100 per week. These proposals would extend this lower rate to those aged 24, and also reduce payments to those under 26.That was said by Mary Cunningham of the National Youth Council of Ireland. Fianna Fáil condemns the Government's latest insult to young people by slashing jobseeker's allowance for new applicants under the age of 25 years to €100 and extending the €100 rate to existing recipients who reach 22 years of age. The cut in the core-rate income support along with the failure of the Government to implement effective labour activation measures will push more young people towards emigration. These cuts are discriminatory in nature. This is shown by the fact the Government is willing to hit those under the age of 25 with core payment cuts. This policy also shows that the Government is intent on using emigration as a policy tool to reduce unemployment numbers. Ireland once had the largest youth cohort in the OECD, at 16% of the population. The figure was 12% in 2012. Emigration has been a central reason for this dramatic decline. The Government is using emigration as a policy tool to reduce unemployment numbers. This budget measure may well reduce unemployment numbers further, but it will also reduce the number of young people who plan their future in Ireland. The youth of today are our future. We must create jobs so our educated workforce gets a chance to utilise its skills and work in Ireland. Not only will cuts to the jobseeker's allowance increase emigration, but confidence is at an all time low. We must all work together so people between the ages of 18 and 26 years are supported.
With regard to agriculture cuts, over €70 million will be taken from Irish farmers in 2014 following the budget when account is taken of the various adjustments to the Common Agricultural Policy budget, along with today's announcement of a cut in the suckler cow and rural environment protection schemes. The only good news for farmers in the budget is the new genomics scheme for suckler cows, which will benefit farmers with suckler herds, at a cost of €23 million. The Minister must ensure that assistance is given to as wide a group of farmers as possible through the advisory service, Teagasc and others so they can avail of this new scheme. With over 1 million suckler cows in the country, it is absolutely vital that as many farmers as possible who have suckler cows can participate in this scheme. I cannot emphasise strongly enough the importance of the suckler herd for the beef supply, which has been such an integral and important part of our export statistics for a number of years. Many farmers who have not had any dealings with genomics previously may need significant assistance to become used to the new scheme. Agriculture and agri-food is a success story for Ireland and continued support is welcome.
The cut to maternity benefit is anti-women and anti-family. The slashing of child benefit, the taxing of maternity benefit, the failure to progress child care provision and cutbacks to the vital back-to-school allowance have been felt most by women and families.
Child benefit, which is a vital source of income for mothers, has been cut by €10 in 2013 following cuts in previous budgets. The back to school allowance was slashed by €50. Announcements on child care have fallen desperately short of the Scandinavian child care model promised by the Minister for Social Protection, Deputy Burton. The Minister for Education and Skills is overseeing a €250 increase in the student contribution fee in 2013, with a further €500 to come.
Standardising maternity benefit at €230 per week is absolutely anti-women and anti-family as it means a de factoreduction of €32 per week for the vast majority of women. This will hit women and their families at a time when they are already struggling with reduced income and increased costs. A reduction of maternity benefit will force many women to go back to work earlier than intended. This is not in the best interests of women, children or society.
I propose to share time with the Minister of State at the Department of Transport, Tourism and Sport, Deputy Michael Ring, and Deputies Noel Harrington and Peter Fitzpatrick. I welcome the opportunity to speak on budget 2014, a budget that maintains the Government's focus on economic stability and job creation. The progress made over the past few years has enabled the fiscal adjustment to be reduced from €3.1 billion to €2.5 billion, a significant improvement. I have responsibility for the Government overseas aid programme and I am pleased that, in the most difficult circumstances, we are in a position to provide over €602 million for Ireland's official development assistance in 2014. Of this, some €482 million will be managed under Vote 27 under the Department of Foreign Affairs and Trade, which manages the overall aid programme. A further €120 million will be accounted for by Ireland's share of the European Union development co-operation budget and development contributions of the other Departments. In the context of an overall fiscal adjustment of €2.5 billion, the Government had no option but to reduce public expenditure for a further year. Unfortunately, no area of Government can be immune. In these circumstances, the small reduction in overseas development assistance, of 3% on 2013, is a fair and balanced outcome.
The allocation of €602 million to the fight to end extreme poverty and hunger in the world is a hugely significant decision, which was only possible because of our commitment and the commitment of the Irish people to working with and on behalf of those in the world who face life and death choices every day as they struggle to feed themselves and their families and provide for the basic human needs. Ireland's aid programme is recognised internationally for its effectiveness, for its strong focus on Africa, particularly sub-Saharan Africa, and hunger and malnutrition, and for its partnership approach. During our recent EU Presidency and at the United Nations last month, we took the lead role in the development of a new policy framework to build on the millennium development goals post-2015 until 2030.
Our credibility internationally is built on our work in some of the poorest countries and communities in the world. The Government has reinforced our commitment to international development and its centrality to Irish foreign policy in its new policy document, One World, One Future, which we launched earlier this year. Our policy document reaffirms our commitment to reaching the United Nations target of providing 0.7% of GNP for overseas development aid when our economic circumstances permit. On current estimates, our percentage should stand at 0.46% in 2013 and 0.43% in 2014. We can be proud of what we are achieving with this funding. We can be proud of stabilising the aid budget after seven years of heavy reductions. With sustained growth in our economy and credible prospects in the years ahead, we can begin to move again towards the achievement of international aid targets.
Regarding job creation, the Labour Party in government is committed to fixing our broken economy and getting people back to work. Under the previous Government, 250,000 people lost their jobs between 2008 and 2011. While it will take time to recover, things are moving in the right direction. The latest figures show that more than 3,000 jobs are being created each month. This is a substantial number considering that the last time we were in government, in 1996, we were creating 4,000 jobs and it was the beginning of the Celtic tiger. We are getting there rapidly.
I supported the introduction of a 9% VAT rate for tourism-related activities and I was in favour of its retention this year. The tourism sector is a key sector in the Irish economy and the measure helped to lower costs during a difficult time, thereby boosting tourism and creating additional jobs. Employment in the accommodation and food service sector has increased by over 30% between the second quarter of 2011 and the second quarter of 2013, an increase of 15,000 jobs in the sector. Clearly, this is a major success. As the Minister of State with responsibility for trade, I was keenly aware of the importance of The Gathering initiative introduced in 2013 and of the hospitality sector in boosting Ireland's economy. In the area of trade, we had an increase of 6% in 2011 and 5.5% in 2012. We wait to see what the increase will be in 2013.
There was a record level of exports, at €182 million, and foreign direct investment and Enterprise Ireland activities are exceeding targets. Within that sector, there has been considerable progress. There is much in this budget that is productive and jobs orientated, considering that we are still in a bailout situation. I look forward to seeing us exit the troika arrangement on 15 December and regaining economic sovereignty.
This is a great day for sport. Last year, I announced a sports capital programme, the first since 2008, and I promised we would have another round before 2016. I am glad to say I was able to get the funding to have another programme, which I hope to announce in the near future, with payments being made in 2014. This is great news for the community sports clubs across the country. With increased participation in sports, clubs will be able to apply for essential works like new changing rooms, pitches, lighting and other projects for the second time since the Government took office. It also means the clubs that missed out in the last round can make another application and provide new jobs in local communities.
I was disappointed in the reaction to the budget from certain media commentators and, particularly, the Federation of Irish Sport. Cuts were made on the current side, which will have an impact on the funding to the Irish Sports Council, but there must be an acknowledgement of the amount of funding we have achieved on the capital side. Sport benefits from this and while I understand the concerns about the cuts to the current side, the Minister for Transport, Tourism and Sport, Deputy Varadkar, and I will look at the overall allocation to the Department over the coming weeks to see how we can rebalance the current funding.
However, this must be based on a comprehensive submission from the council on how current funding will be allocated in 2014 and beyond. My priority is to see the taxpayers' hard-earned money is spent on sport and not wasted.
I also welcome the additional funding being provided for the indoor arena at the National Sports Campus. Since I first visited the campus two years ago, I have become a strong supporter of what it is trying to provide. The indoor arena is the final piece of major sport infrastructure missing and the gap is being addressed at last. This will help our athletes to compete with the best on the international stage.
Again, I saw some criticism of this because we have an indoor track at Athlone IT but the criticism misses the point. I was delighted to be at the opening of the facility in Athlone and we should have other such facilities around the country. The funding we have provided for sport demonstrates the Government's commitment to sport because we know the benefit it brings. It has an impact on jobs, the economy, social policy and, most importantly, the health of the nation.
I also welcome the retention of the 9% VAT rate. I compliment the Minister for Finance, Deputy Noonan, and the Government for making a brave decision. Since the introduction of the 9% VAT rate, we have created 15,000 jobs in the tourism sector. I was delighted to see that the Minister for Finance got rid of the travel tax. Certain airlines have said they will bring 1 million extra passengers into the country next year. We have now reduced the tax and we want to see the airlines delivering on their promise.
We delivered on ours and I am saying to the airlines that they must now deliver and bring these passengers into Dublin, Shannon and Knock. We want to see those extra 1 million passengers next year.
When we have this done, we will have so many visitors in the country that they will say this was the greatest tourism measure ever taken in this country. The €8 million will be spent on signage and viewing points to show the natural beauty.
I listened to the previous speakers and I just cannot let this opportunity go. I remember three years ago when I was sitting over on that side of the House where Deputy Mattie McGrath is sitting. I must say it is better over here because one can do things over here that one cannot do over there.
We are doing it now.
I remember the saddest day since I came into politics and that I ever saw was December of that year when I saw the Taoiseach, the Minister for Finance and other Ministers sitting in Government Buildings and speaking about the economy and the country. Five minutes later, they got off the stage and walked away and their seats were taken by the troika. I want to remind the Members over on that side-----
I know it upsets Deputy Mattie McGrath. He was part of it. It was the saddest day for me. My grand uncle died for this country and we got the Free State. They handed over the Free State to the troika. We will have the troika out by the end of this year and we will have our economy back again. I want to say to those who are lecturing us today, "We did not create the mess. We are cleaning up the mess and that is why we have to make the decisions now for the good of this country, for the future and for the young people of this country."
I apologise to the Minister of State for stopping him in such a flow. Everything he says is correct.
I am pleased to have a chance to speak for four minutes on budget 2014. The three main objectives of this budget are: to continue to correct the public finances, to continue to create more jobs, and to support hard-working families on average incomes which have given the most since this crisis began.
I cannot help but wonder when I hear of Members who were previously in these benches talking about being outraged at some of the corrections that have taken place. It gives us no pleasure to have to take decisions to take €2.5 billion out of a yearly budget. That is not easy to do, but almost everyone in this House agreed that the €2.5 billion correction had to be made. All of a sudden, we see the outrage, the mock anger and statements coming from the benches opposite.
They have short memories. They state that this is troika-based, that it all came from Lehman Brothers. When these parties, particularly Fianna Fáil, sat on these benches ably supported by some of the Deputies in this House from 1997 until 2007, we lost €7.3 billion because of Government mismanagement, waste, cost overruns and they simply not being at the helm when they should have been. That equates, to put it in simple terms, to €10 million per annum per Fianna Fáil Deputy and his or her supporters for that ten-year period. We are living with those decisions today and that is the reason we must come in and make these cuts. If they do not believe what I am saying, these matters all are highlighted in the Comptroller and Auditor General reports since then, and no action taken. I would be quiet about the mock outrage from the benches opposite.
We are getting there slowly.
We are creating 3,000 jobs per month when not that long ago we were losing 7,000 jobs.
There are progressive measures within this budget that, I believe, will help constituencies such as mine, Cork South-West-----
There is also the abolition of the tax on flights. This afternoon Ryanair confirmed that it hopes to create 1,000 jobs in the airports around the country. That must be welcomed.
Equally, there is a need to welcome the progressive measures that will help the small construction players. Those in every part of the country will derive benefit from the tax rebates on small renovation jobs of up to €30,000. These are positive progressive moves.
Maybe it is difficult for some Deputies opposite to understand, when they were used, I suppose, to inflating a pyramid scheme of construction over the past two decades.
It does not work anymore. It cannot work like that. The economy Fianna Fáil inherited in 1997 was one that was functioning based on production, based on work, and based on initiative and reward, and the party blew it. We must get back there again.
It gives nobody any pleasure to take €2.5 billion but one does it in the fairest way.
Budget 2014 has been crafted in as fair a manner as possible, which will allow us to continue to make progress in getting people back to work. Since coming to office, the Government has been focusing on our biggest challenge, which is getting people off the live register and back into the workforce. These efforts are starting to bear fruit, with the unemployment rate falling for the past 15 consecutive months and 3,000 additional jobs now being created every month, but there is still much work to be done.
By introducing 25 separate measures that support job creation as part of a €500 million pro-job package, and ensuring that it pays to work, we can build on the progress we have been making in encouraging investment in Ireland so that our young people can build a future here at home.
I am delighted that the Minister, Deputy Noonan, has decided to retain the lower VAT rate for tourism services, which no doubt has played a significant role in boosting the visitor numbers here over the past two years. The Government has identified the tourism sector as one with considerable growth potential and as a result, a number of measures have been introduced to encourage as many as possible to holiday in Ireland. The boost in tourism figures is having a direct impact on job creation. Employment in food and accommodation services is up by more than 13% since the Government took office, meaning thousands of additional jobs are being created in the tourism sector. This has an effect in every town and village in the country. The 9% VAT rate was originally introduced as a short-term interim measure to provide a boost to the tourism sector. Deputy Noonan has clearly listened to those involved in the sector and this will safeguard jobs in the sector and come as welcome news to everyone involved in it.
Every effort has been made to protect education front-line services in this year's budget and I am delighted that we will be able to employ 1,400 new teachers at primary and post-primary levels next year. This will also allow us to protect the standard pupil-teacher ratios as the school-going population continues to grow. Additional resource teachers for children with special needs will be recruited and, crucially, the €1.3 billion budget for special education is being protected. A new book rental scheme is being introduced to reduce the cost burden on parents with young families.
The recruitment of teachers and additional investment in the reform of the junior cycle programme are planned for second level education.
At least 2,000 training places are being ring-fenced for the under 25s to help young people attain the right skills to secure employment. This is being provided for as part of a €45 million funding package for the youth guarantee scheme which will ensure young people are in training, education or employment.
Free GP care for children aged five years and under is great news for young families across the country. With GP fees averaging at €50 a visit, this will lift a financial burden from parents. One can never tell when a young child will get sick and this can have a big impact on a family's monthly budget, especially if medication is required on top of the GP fee. This measure is separate from the current wider medical card system and additional funding is being provided by the Government for the Department of Health. This is the first step on the way to free GP care for all.
A home renovation tax incentive scheme is to be introduced to help families to renovate their homes. A VAT rebate of 13.5% will be available for extensions and renovations. The VAT will be returned on amounts over €5,000 and under €30,000. This will generate employment and improve the standard of family homes.
Confirmation that Garda recruitment will commence shortly is particularly welcome. New recruits will enter the Garda College for the first time in five years and the Garda force will be maintained at 13,000 members. An additional €9 million will be spent on a Garda fleet which will allow for the purchase of 700 new Garda cars.
The €23 million increase for the suckler cow scheme is a clear statement of the confidence of the Government in the beef sector. This money will be allocated to the beef genetics study and is a wise investment in the future of the national herd which will be of benefit to farmers in the short and long term.
With the raising of additional funding from the sale of State assets, the Government has organised an additional €200 million capital programme in 2014. The package includes items such as additional sports capital grants, 5,000 housing adaptation grants for the elderly and the disabled, the recommencement of social housing construction and maintenance of the current network of local roads.
It is a pity that the Minister of State, Deputy Michael Ring, had to run away and hide in the corridors. He is afraid to come back to debate. It is not the first time he ran away.
Ireland is in a very difficult posiion. It is important to examine the details of this budget in a professional and independent manner. I represent the constituency of Dublin Bay North and my agenda has always been to put the issues affecting the lives and quality of life of my constituents at the heart of my politics. If a budget is not about people's lives, we are going nowhere. The issues of job creation, health, education, disability services and the care of senior citizens must be at the top of the political agenda.
The details of this seventh-hour budget show that it hits the sick, the old, the disabled, young mothers and jobless young people. It is also a blitz on the poor and more about vote grabs with gimmicks and stunts for future elections. We saw the recent attempt at a power grab in the Seanad referendum and the waste of €14 million on the Taoiseach's pet project. It was a waste of public money, while millions of euro are taken from services. Disability services in St. Michael's House and Prosper Fingal services in Swords lost €12 million. Parents and staff are crying out for support and sick with worry. The other side of the House should not praise this budget as a good or fair one. They should not say they are protecting the vulnerable. The budget includes cuts in the jobseeker's allowance for under 25s; maternity benefit is to be reduced to €230 a week for new claimants; the income thresholds for the over 70s medical card have been lowered; the telephone allowance has been discontinued; there will be a 41% DIRT rate and the abolition of the €850 bereavement grant. These are the real issues in the budget and it is not fair. I challenge the Minister of State, Deputy Michael Ring, and Deputy Noel Harrington. This horror budget hits the sick, the old, the disabled and young mothers. It hits jobless young people and pensions. It is a blitz on the poor. It is said the saving of €113 million on medical cards will not impact on senior citizens. There is the money to throw at pet projects, yet tonight in Beaumont Hospital there are queues and there is no bed available in the accident and emergency department. Where are the big ideas and the vision for the country? There is none. I will not take lectures from the Minister of State, Deputy Michael Ring. He was one of the ringleaders in respect of the figure of €3.1 billion which eventually came down to €2.5 billion. The under 25s were hammered.
Overall, this is a mean and miserable budget and the Disability Federation of Ireland shares my view. It has expressed its disappointment at the Government's failure to protect people with disabilities and their families. It is also disappointed to see the €113 million savings from medical cards and the abolition of the telephone allowance. At this late stage I ask the Minister and the Government to consider the promises made in the programme for Government, the commitment to disability services made by both parties prior to the general election when they stated they would be their top social justice priority. I refer to the publication last July of the national disability strategy implementation plan. These are the issues I want to push in this debate as they are important to people. There is a growing gap between the demand for services and the resources available to meet this demand and further cuts have caused it to widen even further. It is time to stop the budget cuts and begin to bridge the gap that threatens to undermine essential disability services.
Disability organisations have experience of reduced expenditure in the past three years. Waiting lists for essential residential care, respite care and other support services have grown significantly in the past six years, while budgets have also been reduced. Service providers continue to do everything possible to minimise costs and maximise efficiencies and the Government has the brass neck to talk about job creation.
The State wants to change the budget format to suit EU deadlines. The Minister and the Government should wake up and smell the coffee. Jobs will be destroyed and businesses placed under massive pressure if they are forced to file early tax returns next year to suit the new budget timetable. This budget is the first under the new European rules which demand that all member states publish their draft budgets by 15 October and that they be finalised by the end of the year. Some 600,000 people are expected to file tax returns by the end of this month, with self-employed persons accounting for more than 40% of this number. In order to meet this new deadline, the Department of Finance wants to bring forward the pay and file date in order that officials have all the information needed to finalise the earlier budget. The date proposed is either the end of June or mid-September. The Chartered Accountants of Ireland has argued this would create significant cash flow difficulties for self-assessed taxpayers who are typically small, home grown businesses. Early tax payment dates will increase the cash flow pressure on small businesses. I warn the Minister and the Government that more jobs will be lost.
I refer to the household package announced by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin. In order to reduce costs, he decided to discontinue the telephone allowance for all recipients from 1 January 2014. This measure will save in the region of €44 million. The rate of maternity benefit will be standardised at €230 a week for new claimants from January 2014. This will save €30 million. The number of waiting days for entitlement to illness benefit is being increased from three to six, which it is claimed will save €22 million. These are the issues. The Minister also said it was planned to include social procurement contract clauses in schools capital works projects for the first time to ensure a proportion of the workforce would be drawn from the long-term unemployed. I welcome this proposal. The late Deputy Tony Gregory proposed a similar measure about 20 years ago in the House. Someone is listening at long last.
Let them claim credit, but the late Tony Gregory was one of the first to suggest it.
I notice Priory Hall was mentioned in yesterday's Budget Statement, and I welcome the resolution of the issue. It was a sad day for Ireland when it took the death of Mr. Fiachra Daly and a heartfelt plea to the Taoiseach, Deputy Kenny, from Mr. Daly's partner, Ms Stephanie Meehan, to get movement on the matter. I am one of many who raised the issue repeatedly in the Dáil and we were ignored, so it took somebody's death to bring the Government to deal with the matter.
The Minister for Finance, Deputy Noonan, yesterday stated:
Ireland's corporate tax strategy has three key elements: rate, reputation and regime. The tax rate is settled policy. We are 100% committed to the 12.5% corporation tax rate. This will not change.I support this, but the Government should collect the 12.5% in tax and stop codding the people. The Irish National Organisation of the Unemployed has expressed its dismay about some of the policies in the budget, and we must also deal with homelessness. Housing demand in Dublin is increasing and rents in the capital are up 5%; rent allowance for single people does not cover the average rental cost in Dublin.
It is important to deal with facts. There was no effort to row back last year's cut to the respite grant. The Government has hammered the families of people with physical and intellectual disabilities. It had the opportunity to act this year, as all the groups made lobbying efforts and we put questions in the Dáil. There have been other cuts, as exemplified by the 763 children waiting six months or more for assessment of need under the Disability Act and a 15% reduction in resource teaching hours last year. There are 1,900 children waiting for assessment by a primary care occupational therapists, and there are 34,000 waiting for speech and language therapy. We are talking about the real world but the Ministers in the Cabinet seem to be ignoring it. This budget hammered the elderly, the sick, the young unemployed, the disabled and young mothers. There is no big idea or vision in the budget, and there is nothing in it for the future or the people of the country.
Tá áthas an domhain orm bheith anseo anocht. Tá dhá Airí Stáit as Tiobraid Árann anseo anocht freisin. I am delighted to see two of my colleagues tonight in the Chamber, but I do not know how they could return to Tipperary to begin to sell this budget.
I welcome the positive initiatives.
I welcome the home improvement retrofit scheme, which I have sought for the past four or five years in submissions. I welcome and salute it. I also welcome the retention of the 9% VAT rate for the hospitality trade. It has been a success and it would have been nonsense to change it.
I also welcome some of the other grant schemes, even the new scheme for suckler cow herds. A pound a week for a heifer is not a lot, but it is a start. Tosach maith leath na hoibre, but it is a paltry amount that is only worth around €1 per week - €60 per year. It is thruppence ha'penny; it would not give a tip to the young fellow at the mart. What can I say other than that? It is a savage budget that attacks the old, the young, the vulnerable and ordinary people. Unlike the Labour Party, Deputy Hayes's party has never looked after those people since Ernest Blythe took the shilling off them in the pension. I am glad a Labour Party Deputy has come in. Tá dhá cheann anseo - two of them have come in. I thought they had abandoned the budget-----
It is a savage attack on young people who want to go to college. What are we doing to them? We are raising the fees by €250 per year. I wonder if the Minister of State, Deputy Alan Kelly, saw Labour Youth outside tonight with banners objecting to the savage attack on young people. He is telling them they must have less money. I am not saying we should pay young people to stay at home, as the vast majority I know do not want to be at home and would prefer to be in college or, as Deputy Donnelly noted this morning, furthering their education or doing voluntary work in schemes or programmes. They want to try to get into the labour market. That is what they want to do, and not to be cut the way they have been cut. Increasing the fees as they return to college is another savage blow. But those in the Government should not worry. The people are waiting, as they were waiting last week for them, when they tried to demean politicians - all of us in our noble trade, who do our best and make many mistakes. The man who never made a mistake never made anything. What did they say on their cheap posters? "Save €20 million. Fewer politicians." They got their answer from the people and they will get it again. They will not be long waiting for it. The Ministers of State opposite will get it more than anyone. In north and south Tipp, east and west Tipp, from Carrick-on-Suir up to Moneygall, they are waiting in the grass for them, and why would they not be?
I am very disappointed about the cut to the household benefits package. Muintir na Tíre is based in Tipperary town, as the Minister of State, Deputy Hayes, knows, and the Minister of State, Deputy Kelly, might find it if he goes looking for it. It runs the community alert scheme and put in panic alarms for hundreds of thousands of people throughout the country. Neighbourhood watch groups, community alert groups - the Government is going to banish them, because its members do not want people phoning them up with their problems. It wants to lock people in their homes and deny them a vote, but they do not use the phone to vote, thank God. They will come out in their wheelchairs and they will come out with their walking aids to rid the Government out of office. Fine Gael and the Labour Party might condemn what happened with the last Government. For previous budgets, the Minister of State, Deputy Kelly, was in Brussels, where he said he was going to stay. He was not long coming back, but he might return there. The people will be waiting for the Government, because what it has done to people who depend on alarms is an insult.
We also had to bow the head to Angela Merkel. We could not have a budget without Angela. We had to say, "We are keeping the 12.5% corporation tax rate, but we are going to examine it." We are going to be good boys, confess all our sins and look for absolution from Angela. Well, I say to hell with her. We should have our own sovereignty. The Minister talked about getting it back, but we will never get it back while she is reigning over us and while we are showing the white feather. The Taoiseach is going over and asking "How high should I jump, Ms Merkel?", which is a disgrace. He got his answer last week. The people told him where to jump, and they did not tell him to jump in front of Angela - they told him to jump in the sea. A Minister of State, Deputy Ring, was talking about fishing boats a while ago. He can go off with them.
The property tax will be doubled next year. When the Ceann Comhairle allowed me in on the Order of Business this morning to speak about freedom of information and data protection, I said that WikiLeaks would be in the ha'penny place compared to what happened before this budget. The details were leaked. I heard every syllable of the budget on "Today with Sean O'Rourke" coming up the road yesterday. It was a professional leak by spin doctors. At least they are doing something good, for all they are costing millions. When Deputy Hogan was a Minister of State he leaked half a page of the budget half an hour before it was to be announced, and he was sacked. All the good bits of this budget were leaked, but not the bad bits. We are getting some of them today; we will get more tomorrow, and we will get much more over the next few weeks, but the Government Deputies will get it when they go back to the people.
Such leaking is an insult to the House. The Taoiseach wanted to banish the other House, but this has undermined every Member of this house, including me and the Deputies opposite. That the budget was sent to the media before we saw it in the House was an utter disgrace. The Government members think that with all their PR they can get over that and ignore the people of Ireland-----
I will not say any more. The budget is an attack on the working class, ordinary people, the disabled, the elderly and vulnerable people. The Government will live to regret it. Smoke screens, WikiLeaks and public relations people will not hide the Government members from the wrath of the people. I can only speak for Tipperary; I will not speak for any other county. The people are waiting in Tipperary-----
Very good. I thank Deputy Finian McGrath and the Technical Group for allowing me some of their speaking time, which I appreciate. A Deputy who has since left the Chamber pointed over here and accused people of displaying mock outrage at this budget. In his absence I will say this: For a Deputy who could not deliver a scratch to an itch to come in here and accuse us of mock outrage is a disgrace. Let him go back to his constituency and let him explain the budget to elderly people who are worried tonight about whether they will have enough money next week or whether their medical cards will cover their medication and trips to the doctor. The medical cards issue is one of the biggest outrages of this budget. The Government has indicated it will take €113 million in savings from medical cards, despite the fact that medical cards are already being reviewed, refused and taken from people who have had them for many years. They are being withdrawn from people who had them already, and now we are told there is another €113 million of savings to be made. If a medical card costs an average of €1,000 per year, how many medical cards will be taken from the system? These people will be left unable to take care of their medical needs.
The cut to the telephone allowance was low and mean. It is not just that people may lose their telephones, but in many instances - as Deputy McGrath has already pointed out - they may lose their alarm pendants. How will people have connectivity with their neighbours and family members so they can contact them if they are in trouble?
There has also been a cut to maternity benefit. Before children are born at all they are now being cut by the Government. When they die they are also being cut, because the Government has had the cheek and audacity to do away with the bereavement grant. Good God, how low could they possibly go?
I refer to young people having their jobseeker's allowance cut. That is the reason I christened this budget the Ryanair budget - the Government wants to hound the under 25 age group out of this country, sending them away on flights, getting rid of them.
Another important issue that cannot be overlooked is the cutting of sick benefit, with the first couple of days being extended to six days. This means that for struggling families who have only one income, if the income earner becomes sick and is unable to go to work and is not working in a State job, the employer will not pay him or her for being sick - a small employer could not afford to do so - so that family will be left with no income of any kind. Did the Ministers sitting around the Cabinet table have any comprehension of what they were doing, and what it would mean for people? It beggars belief.
On a positive note, it is 100% welcome that the 9% VAT rate for the hospitality sector is being retained. That is due to the campaign, however. Let us remember it is only a week or ten days since the Minister for Finance stated publicly it was his intention not to retain the rate. I applaud all the people involved in the business, and the politicians on this side of the House, who campaigned vigorously and put their shoulders to the wheel. It was a massive effort. Had the Government been awake, this was a no-brainer from the start. The system is self-financing because keeping the rate at 9% creates jobs and keeps people at work. It was the campaign, the people on this side of the House and the actual sector, that shoved it on.
Is Deputy McCarthy the Ceann Comhairle? I compliment Michael O'Leary for agreeing to keep his promise. In respect of the travel tax arrangement, it will be very welcome that Mr. O'Leary is committing to bring more people into the country, thereby increasing jobs.
I begin by sharing a short story from last week, when I had the pleasure of leading a trade mission to Russia on behalf of this country. As part of such trips, one meets emerging business leaders who have an Irish background - this was in one of the world's largest growing economies. One member of the diaspora I met was the director general of a large multinational in Russia and the wider CIS region. He spoke with nothing but pride about Ireland's economic prospects. From the perspective of Russia, he saw his homeland as a country that had been in the mire but which has now bounced back and is beginning to emerge and reassert itself. Not many countries or people have faced their difficulties with the same honesty as the Irish have. The same gentleman fully recognised, as all of us do, that it has been a painful process and that people are hurting. From his perspective, given what I saw and what he said, we are restoring pride in Ireland, slowly and gradually, but we are getting there. I assure the Deputies we will get there.
This is not an easy budget - I will be the first to say that and there is no point pretending otherwise. After seven years of austerity some of these measures are very difficult. This country has gone through an extraordinary journey during those years. Among other things, we have had to deal with pension levies, the Croke Park and Haddington Road agreements, promissory notes, Anglo Irish Bank, NAMA and mortgage arrears. Not too long ago there were rocketing interest rates on our bond yields. In 2007, we never thought we would have such problems. Greedily, we thought growth would continue unabated, our banks would stay healthy and consumers could continue to spend, based on cheap credit. This greed, espoused by Fianna Fáil, of which party Deputy McGrath was a member, the Progressive Democrats and, dare I say, certain other Independents, produced a recipe for complete and utter disaster.
All of us are still paying for this greed and will be doing so for some time. I only say this to put the budget in context. As a general rule, I do not like to dwell on the past because Irish people do not need to be reminded of how bad previous Administrations have made their country. We all know this and will know it forever. I view this budget as a further step for our great country away from that situation. We are finally beginning the process of abandoning mass unemployment and higher bond yields and we are escaping the shame in which we have existed as a bailed-out state for the past four years.
This budget is about building for recovery. It is indeed painful but is being done in the name of recovery. Signs of progress are growing more visible by the day. There is an overarching backdrop to the budget. In terms of history, if this is the budget that sees the exit of the troika, as it will be, history will judge it well as the last of the bailout budgets. In my own brief, I want this to be the last budget where, for example, we have to cut the public transport subsidy. Passenger numbers are beginning to grow again in this sector which is another good sign for the economy.
As a Government, we have introduced a series of measures to stimulate activity in business, tourism, sports, construction and other commercial sectors. We reduced VAT on tourism-based activities to 9% and have retained this rate. We have abolished the air travel tax and have seen tourism numbers grow by 7%. Again, in or of itself this will not make us rich but it is part of a process that increases business activities. As a Minister of State in the Department of Transport, Tourism and Sport, I pushed hard for these measures with my Government colleagues and am delighted they are in place.
I commend my Government colleagues, in particular, the Minister of State, Deputy Alex White, for his tireless work to ensure that free GP care will be extended to every child aged under five years. This is not a final but a first step towards universal health care, which I believe to be crucial. The move will benefit more than 250,000 children in this age profile. It will greatly ease pressure for families who will no longer have to fork out more than €50 for every GP visit for their child. Where a child has a condition that requires repeat medical attention, such as asthma, this step will provide major financial relief and will make trips to the doctor less stressful.
There will be 1,400 additional teachers. This means there will be 2,800 new staff in the educational system during 2013-14. There will no increases in class sizes. These are serious achievements in this economic climate; let nobody forget that.
There are no increases in income tax or in the universal social charge; no decrease in child benefit, the fuel allowance, the free travel pass or the electricity and gas allowances. More than 80 other allowances have been retained in full.
There will an increase of €30 million for social housing programmes. Against a backdrop of a €2.5 billion adjustment, these all represent substantial progress and show that when Ireland recovers it will be on the basis of a social and fair structure. Not only have class sizes been protected, so has child benefit. We will also be investing an additional €46 million in training initiatives for young people. This is part of an overall investment package that will see €1.08 million spent on supports to help jobseekers become job ready. We are slowly beginning to see the benefit of this step, with the numbers of unemployed people going down towards 400,000, as opposed to the 500,000 towards which the number had been heading.
Without hiding from the fact that this is a tough budget, it is part of a process of restoring not only our pride but our sovereignty. It is about giving Irish people the chance to realise their goals and ambitions and restoring the international credibility of our reputation. Ireland in 2011 and Ireland going into 2014 are two very different places. This is something I am proud of but I will not brag about it. We have done our job and will continue to do so. We will not seek praise or admiration. This Government just gets on with it.
I ask people to look at the direction this country is taking. Some 3,000 jobs are being created each month, as opposed to the 7,000 per month that were being lost only a short while ago under the previous Administration, which has supporters in this Chamber. Live register numbers are going down, not up. Property prices are slowly recovering. Ireland still remains a very attractive place in which to invest. I ask the people not to judge us on one budget alone but on the economic direction in which we have taken the country, and on a brighter future. It has been hard, but we are now saying goodbye to the troika. We are on the way and recovery has begun.
We have heard much in the past two days about the effect of the budget on the country as a whole. I wish to focus on what the budget will do for a single constituency, namely, the one I represent, Wicklow. The main headline in this morning's The Irish Times tells us that the budget has given the country a €500 million jobs stimulus package. That is a simple sum, which adds up the incentives for job creation outlined in the budget but each of those incentives is worth far more to the economy than simply the cost of the incentive. For the people of Wicklow alone, the effect of the incentives in the budget represents an employment investment opportunity worth an estimated €500 million directly, and much more indirectly, through increased economic activity and tourism growth that cannot yet be quantified. It certainly means jobs for young people. The budget offers real hope for unemployed construction workers and opportunities for construction-related small industries to grow and expand.
Let us look at the detail. There is the new home renovation incentive.This tax incentive will put an estimated €1.7 million in tax relief directly into the pockets of householders in Wicklow. If that encourages only 10% of the households in Wicklow to renovate a bathroom, repair a roof or tile a kitchen it could generate a further €50 millionor more in the local economy of County Wicklow. Under the start your own businesstax exemption scheme, people who are unemployed for more than 15 months who start up a business can claim up to €40,000 for each applicable year in income tax exemptions. This measure applies to approximately 4,500 long-term unemployed people in Wicklow. Enterprise Ireland tells us that 8% of the population are aspiring entrepreneurs. Even if only 8% of the currently unemployed entrepreneurs in County Wicklow take up the challenge it will put €14 million into the local economy. It will of course generate far more than that in economic value through the businesses it creates.
I am very pleased about what the new film relief schemewill do for my constituency. Wicklow has a long history in film production that stretches back to the 1950s with the opening of Ardmore Studios in Bray. We have seen big Hollywood names such as Julie Andrews and Fred Astaire to the stars of today such as Daniel Day-Lewis and Meryl Streep. Wicklow film sets have hosted hundreds of the world's best loved actors. This new incentive, which will extend tax relief to non-European citizens, opens the door to one of the most lucrative film sectors, the Bollywood blockbuster. A few months ago I was invited to tour the new Ashford Studios where the hit television drama “The Vikings” was being filmed. The plans to expand the studio are to make it rival the great Pinewood Studios in England. Around the same time that I visited Ashford Studios, it hosted five producers from India's biggest studios. The Indian film executives also viewed several spectacular outdoor locations in Wicklow including Luggala and Powerscourt Gardens. There seemed to be no doubt that those influential film-makers liked what they saw.
Tax breaks in this sector are well proven. The €11 million in tax breaks last year generated ten times that amount in foreign investment. The planned €15 million in this budget will easily generate €150 million of film work in Ireland. Given the long established film-making culture in Wicklow and the modern facilities at Ashford and Ardmore, the economy of Wicklow could benefit directly by up to €50 million from the film revenue generated through this incentive.
The budget will help tourism in County Wicklow in other ways. The retention of the 9% VAT rate for the restaurant and hotel sector is something for which I lobbied long and hard. I am pleased the campaign worked.
The living city initiative offers generous tax incentives for the remediation of pre-1915 houses in Dublin. Many people engaged in the construction sector, including architects who live in Wicklow, will benefit directly from that.
I welcome the fact that the adjustment in the budget was €600 million less than the proposed €3.1 billion. Deputies in this House argued for a cut of €3.1 billion but it was a key achievement for us on this side of the House to maintain the adjustment at €2.5 billion. There is no doubt the situation remains difficult.
I concur with the sentiments that were previously eloquently expressed by the two Deputies to my left, Deputy Mattie McGrath and Deputy Healy-Rae, in welcoming the retention of the 9% VAT rate. That was an important initiative and is one that has worked well. For an economy that in many ways is struggling outside The Pale, it was very important in terms of tourism and tourism-related activities. It is no coincidence that tourism numbers are up. The reduced VAT rate was of critical importance to the industry which provides much needed jobs. That, in itself, was a welcome retention. I accept it created some difficulty in terms of finding an alternative source for the €300 million but I am pleased the Government paid heed to that particular campaign and retained the important 9% VAT rate.
For years, groups of people have not benefited in any shape or form from what is on offer in that they qualified for nothing. Free GP care for children aged five and under is a key Labour Party initiative.
That is a key initiative and it is worth a lot to people who are squeezed. It is also worth a lot to young couples who are struggling and who are doing their best to survive. Two and a half years into the lifetime of the Government we have seen that particular policy introduced.
Another issue of importance was the safeguarding of class sizes for a third successive year. That is most important. There was much interpretation of pupil-teacher ratios. The budget has assuaged much fear and has calmed nerves. Hiring 1,400 new teachers for primary and post-primary schools is very important.
I welcome the construction initiative. It will weed out the black economy and will also stimulate the rural economy. The disabled person's grant and local authority home improvement grants are an important initiative for those in the construction sector who have seen an unfortunate dip in recent years.
Sinn Féin's €800 million wealth tax was puffed up. It was fairytale economics; it disappeared. It was like "Puff the Magic Dragon". There are Deputies in this House who subscribed to the second issue to which I wish to refer.
With this budget we are leaving behind us the road to ruin that we have been on for a number of years. The exit signs are everywhere. These signposts include one on exiting the bailout regime and returning to economic sovereignty.
On the cusp of the centenary of 1916, would it not be shameful if our economy was still beholden to any external body? Thanks to the Irish people and to the Government no such spectre awaits us.
Let me briefly refer to just a few of the many positives in the budget. In education, for example, the pupil-teacher ratio has been protected, the employment of additional resource teachers has been sanctioned and a book rental scheme is being introduced, which will represent significant savings for parents.
On employment and jobs in the construction sector, provision has been made for the funding for building houses and renovating homes. That will give a significant boost to the construction sector. The initiatives based on the announcement that €188 million has been secured for the new DIT campus at Grangegorman, as well as the fact that €200 million has been secured for the national children’s hospital at St. James’s Hospital will have a transformative impact on the construction sector in the city of Dublin.
In health care the announcement of free GP care for children aged five years and under is the foundation stone for a universal health care system, which has always been a key Labour Party policy.
With regard to social protection, the full protection of child benefit is a very great relief to parents. With regard to tackling unemployment among young people, an investment of up to €46 million is to be made in education, training and job opportunities. This will empower and enable young people to live constructive and productive lives in their own country. We are leaving the road to ruin but some Members, in Fianna Fáil and Sinn Féin, are not one bit pleased.
In our difficult environment, in which we have lost our sovereignty and in which our day-to-day operation depends on the generosity of our European neighbours, whose money must be paid back, no great credit is due to those who destroyed our country. It was difficult sitting here yesterday and today taking lectures from people who drove our children, including my own, out of the country. The other half of the population has been driven into the dole queues.
I am supporting this budget because any effort to get this country up off its knees is one that I will support. It has been acknowledged right across the political spectrum, including by me, that there are good measures in the budget. All my colleagues have referred to it. There are just two shortcomings. We have included measures in the budget on social welfare fraud. I am all for eliminating it, saving €30 million per year, but it must be realised that white-collar and corporate crime in this country cost the taxpayer 17 times more. Despite this, we are not doing anything about it. There is nothing in the budget to address it. I hope there will be in the next one.
Second, the Minister for Education and Skills, Deputy Ruairí Quinn, has included a sum of €9 million to support the elimination of adult illiteracy. I thank him for it. We have one of the worst records in this area. Some 18% of people between 16 and 65 have inadequate reading and writing skills. We must do something about it. However, although we give €9 million to solve the problem of adult illiteracy, we give €100 million to the children of the great and the good to go to private schools. We did not take a cent from them. There is nothing fair about that. I would like the budget to be fair and I expect that the next one will be fairer.
All budgets are about choices. I strongly opposed the Labour Party entering government since I feared that serving under a Fine Gael-led Government would do fundamental damage to the people who sent my Labour Party colleagues and me to this Chamber. I always wanted a Labour-led Government only. After four austerity budgets having been implemented or planned by the Government, the core aspirations and interests of our people have been harshly subjected to the aspirations and interests of the wealthy and powerful, represented in this Chamber by Fine Gael, Fianna Fáil and some of the conservative Independents. The Labour Party support base is decimated as a result.
Last week, Deputies Catherine Murphy, John Halligan, Thomas Pringle, Patrick Nulty and I showed how there could be another way. Our key proposal was for a wealth tax modelled on the French solidarity tax and yielding up to €450 million. Deputy Ross tells us in the media such a tax would kill entrepreneurship, but it has not killed it in France, Norway, Switzerland or the Netherlands. The IMF itself said the wealthier countries should be seeking to have the top 1% or 2% of wealthy people contribute much more. I have over 25 years’ experience in supporting small business and business start-ups in community business centres in my constituency and do not believe a modest additional tax on millionaires would have any impact on the development of entrepreneurship in Ireland. Deputy Ross is protecting the very class that he sometimes berates in his columns.
Last week, we supported a higher rate of tax on very high incomes and the introduction of a tiny financial transaction tax. Even one or two items in the menu of measures presented by the Independent left Members would have removed the need for the most shameful new cuts in budget 2014. However, Fine Gael would not have permitted such changes. No real Labour person should be associated with the resulting austerity measures. We learned this evening from RTE that the levy on the domestic banks is effectively cost neutral. It will not cost anything.
I welcome the introduction of free GP care for the under-fives, which is possibly the first step on the way to a universal health care system. Powerful medical vested interests, including the Minister for Health and Children, Deputy James Reilly, in his earlier career, have prevented the development of an NHS-type system for the State throughout its history. I welcome the critically needed additional €20 million for community mental health services.
The stimulants for the building trades and construction industry from the new tax credit for home renovations, the tax exemption for long-term unemployed starting a business and the further development of the strategic investment fund are all very welcome. I opposed the sale of the national lottery licence but I acknowledge that the €400 million is being put to very useful and many purposes. It is to be hoped that the retention of the 9% VAT rate will produce additional jobs, especially for people on the Irish live register although there is no such linkage in this massive tax expenditure. I welcome the fact that Garda recruitment is resuming and that key public service vacancies will be filled in 2014.
It is particularly important in my constituency that €10 million is being set aside at long last to refurbish Priory Hall in my constituency after the appalling four-year struggle for justice for the owner-occupiers and residents of that apartment complex. I commend the Taoiseach on this.
I welcome the announcement by the Minister for Finance, Deputy Noonan, that provision will be made in the Finance Bill to close off the loophole so that Irish-registered companies cannot be stateless in terms of their place of tax residency. It is very notable how the international community, especially the United States, has welcomed this so strongly.
There is profound relief that the education cuts did not go above €44 million, although there seems to be €84 million missing in the 2014 budget. The 1,250 new teachers will ease the pressure on many schools but our burgeoning child population means that class sizes are rising. The Minister for Education and Skills has scored a number of spectacular own goals in the Department of Education and Skills. In another political system, as Pat Leahy said recently of the Minister for Health and the Minister for Justice and Equality, the Minister for Education might be off the pitch or long gone out of the Department.
Despite the small gains referred to and the halting of some cuts, the overall impression of budget 2014 is that the juggernaut of austerity rolls on across the Irish population and landscape. The fateful and appalling banking decision of September 2008 continues to crush the most vulnerable sectors of society. Sadly, Fianna Fáil and Sinn Féin have no credibility on this issue because they supported the decision. Neither does Fine Gael whose members were clearly well briefed on the blanket bailout. They supported it, as we can now see from reports. Unfortunately, thanks to the current Rabbitte-Gilmore leadership, Labour’s credibility on this issue is also in tatters.
The results of these decisions for budget 2014 are the despicable cuts to young unemployed citizens’ jobseeker's allowance, cuts to maternity benefit, the household benefits package and supplementary welfare payments, and the carry-over cut to child benefit. Among the most egregious cuts are the ending of the bereavement grant and the mortgage interest supplement for new applicants. Sadly, the credibility of the Minister for Social Protection has almost evaporated in budgets 2013 and 2014. I still urge her to cross the Chamber and join us on this side of the House.
The cop-out on taxation by the Tánaiste, Deputy Gilmore, produced a range of obnoxious changes which will deeply affect lower- and middle-income families. It will be deeply damaging to what Deputy Donnelly calls middle Ireland. Younger people have taken a big hit in this budget and €8 million will be taken from the small budget of the Minister for Children and Youth Affairs, Deputy Fitzgerald. Her vital programmes assist the most marginalised young people. Along with the cuts to the jobseeker's allowance rates, the aforementioned cuts represent an unjust attack on younger citizens.
I have always believed in an NHS-type health system for Ireland but given the extreme pressure on health services, the restrictions on tax relief for medical insurance premiums will have a significant negative impact on families' incomes. This is why I voted against the measure last night. This proposal seems a typically careless idea from unelected and totally out-of-touch “West Wing”-type advisers in the Department of Finance and the Tánaiste's Department. They seem to be the kinds of people former Deputy Charlie McCreevy would not send to the village shop for a bottle of milk and a pan. They do not seem to have any idea how families have already been downgrading, year after year, to cheaper health plans so that they could keep their medical insurance.
The cuts in the one-parent family tax credit are equally reprehensible. The increase in the pension levy in 2014 is also inexcusable and a soft option by the people to whom I referred.
The increase to a tax of 41% or higher on nest eggs is another totally wrong-headed approach by a Government which is now starting its run-in to political oblivion. I received a number of angry and poignant e-mails last night from citizens with small savings who asked why the Government is punishing them by grabbing nearly half of the interest on their savings, given that they paid income and other taxes on the funds concerned. It was for that very reason that my colleagues on the independent left and myself did not consider such a tax hike in our menu of suggested tax changes published last week.
The increase in prescription charges to €2.50 an item will hit many of my senior constituents and the cut in income limits for over 70s medical cards is also deplorable. Senior community leaders have asked, for example, why the €500 income limit is not simply doubled to €1,000 for a married couple. Yesterday, the Minister for Health, Deputy Reilly apparently had no answers for journalists on from where the €113 million so-called probity savings will come on the medical cards. The immediate removal of a secondary benefit like a medical card for people returning to work is also harsh. We will all easily remember six, six, six, the €666 million of health cuts in budget 2014 and there is a fear, as 2014 unfolds, that not just the Minister for Health but the whole health system may go into meltdown.
One of the persistent failures of this Government as the Acting Chair, Deputy Catherine Byrne knows well, coming as she does from the south side of Dublin, has been the failure to address the housing crisis. The increases of €5 per week in contributions from recipients of rent supplement and mortgage interest supplement will further squeeze those struggling to remain in their homes. The closure of the mortgage interest supplement scheme to new applicants is equally deplorable. Of course, it is welcome that the Government is investing in the building of new social housing units. However, 500 units is wildly short of what is required to address the incredibly long housing waiting lists. Focus Ireland says that at least 9,000 new social housing units need to be built annually in the next few years. I acknowledge that the Minister of State at the Department of the Environment, Community and Local Government has said that around 4,500 housing units will be provided for social housing in 2014 through leasing and existing capital programmes. These will be through transfers from NAMA and the increased uptake of the Rental Accommodation Scheme, RAS. While 4,500 additional units are welcome, the policy of relying on the private market to fill the gap in social housing provision has utterly failed. It has been a disaster for the past 20 years or more. There are 5,000 people on the housing waiting list in my area of Dublin Bay North, or housing area B and 20,000 people on the list in the whole city but the number of vacant units coming on stream is minuscule. It is unbelievable that, for example, Dublin City Council has not yet received any NAMA units. I have asked the new Dublin City Council Manager to start giving leadership to the city, particularly in terms of the provision of new housing.
In two months' time Ireland will be exiting the bailout era but the huge debt burden resulting from the blanket bank guarantee and interest repayments will continue to weigh heavily on our nation. It is clear that a totally new approach and hopeful determined leadership is essential. Regrettably, the Tánaiste, Deputy Gilmore, is not the person to give that leadership.
We all know how fond the Taoiseach was of the famous five-point plan he announced before the last general election. This time he and his Government colleagues have surpassed themselves. They have come up with a ten-point plan which is specifically targeted at older people. Cumulatively, it will result in older people who are already under severe pressure being hammered by the impact of this budget.
The long list is there for all to see. The removal of the telephone allowance is a really mean-spirited cut, withdrawing what is a life line for many elderly people, especially very old people who, through disability or age, are house bound. They very much depend on their telephones to keep in touch with the outside world and with their families, as well as for security reasons. This is a horrible cut that will affect many people on very low incomes.
The pension levy is a very sneaky one that was originally introduced in 2011 and we were told at that time that it would finish next year. However, it was announced yesterday that the levy will increase next year and part of it will continue into 2015. That pension levy has already taken €2 billion out of pension funds from an estimated total of €80 billion. That translates into real cuts for people who are often on very small occupational pensions. Again, this is about the bailout of the banks and the transfer of the cost of that bailout onto the shoulders of the poorest people in this country.
The changes to DIRT will also hit older people, many of whom have a small amount of money put aside to leave to their loved ones or to pay for their funerals when they die. People with savings and who are over the very meagre limit in place at the moment will now find themselves not paying 33% but 41% in DIRT. That is of grave concern to many older people. As Deputy Broughan has said, we are getting a lot of feedback on that issue from our constituents.
The abolition of the bereavement grant is another miserable cut. When people are at their worst and their lowest, the Government is taking away what small help there was available. The property charge, of course, particularly affects older people because their incomes are lower but they may be living in a house that is subject to a considerable property tax. The doubling of the charge this year will impose an enormous burden on people.
The change to the invalidity pension for those over 66 was hidden in the small print of this budget. In some circumstances, an invalidity pension recipient approaching retirement age and claiming for an older spouse stands to lose more than €100 per week. That is indefensible. The increase in prescription charges will hit the poorest and the elderly. As Eamon Timmins of Age Action Ireland pointed out yesterday, this is a charge which quite literally targets the sickest and the poorest. I wonder if those who were crowing yesterday about this budget are proud of that. Are they proud that they are hitting the sickest and the poorest?
The Government is withdrawing 35,000 of the over 70s medical cards from couples with an income of more than €900 per week. The important point to bear in mind is that the figure is for gross income. The medical card is the only way for people to access home help services, public health nursing services and other community health services and that is the big loss to people-----
-----as well as the loss of security which the medical card gives. There also will be medical card losses for people who are under 70 and the Government is targeting €113 million to be withdrawn from those people. That equates to approximately 100,000 medical cards being withdrawn next year. We all know how squeezed people are already because of the tight income limits.
Large numbers of people in their 60s with very meagre incomes will lose their medical cards through this austerity budget. We also have the reduction in tax relief for those who have very modest cover with health insurance companies. These people do not have the gold-plated policies to which the Minister for Finance referred yesterday.
The Minister very dishonestly portrayed this as something entirely different. People on very modest incomes who have been already put to the pin of their collars to maintain their health insurance because the health service is so unresponsive to older people in particular, will now lose the tax relief which will make health insurance even less affordable for them.
We now have a totally contradictory approach in the Department of Health. What is happening in that Department is completely incoherent.
On the one hand, the policy is to introduce universal health insurance and to develop an insurance-based health care system. On the other hand, through various Government policies, including those announced yesterday, health insurance is being made less affordable for people. The Government is squeezing more and more people out of private health insurance. Thousands of people are leaving private insurers every week and this measure will simply exacerbate that.
Another example of a lack of coherence in the Department of Health is that, on the one hand, the Department speaks about expanding access to primary care and to GP services - an objective of the programme of Government - while, on the other hand, the Government is reducing the number of medical cards.
The Government announced an extra €37 million for GP visit cards. It is giving with one hand while taking back on the treble with the other by withdrawing €148 million from medical card provision which includes the over-70s and under-70s. This will also result in substantial numbers of people being left without access to basic health care. There was great fanfare when it was announced that money was provided for this scheme. However, the money was provided this year for the first phase of the free GP care programme. In the budget last December it was announced that €30 million would be provided to allow for the first phase of the programme. Where has that €30 million gone? Why was it not used to open access to free GP care for a group of people, as promised in the programme for Government? It was ring-fenced, but it has not been spent. Where is it and what has happened to it?
Many of the figures we are getting from the Department of Health are funny. Up until last Sunday, it could not produce figures for the spend this year, let alone the budget for next year. These figures will not stand the test of time. We will, again, find ourselves in the middle of the year with a major hole in the health budget. There are two and a half months before the end of the year. This allows for European scrutiny. I would find it hard to imagine the troika could approve these figures because they are so dodgy.
The other despicable act was the dishonest way the budget was presented. None of the carryover measures was included in it. For example, the other half of the property tax has not been included. Not only has there been a hike in DIRT where people will be expected to pay 41%, PRSI will also be applied to it. Anyone putting money away in savings to provide for the future will be paying tax on almost half of the interest earned. How on earth could that be fair?
At the beginning 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 could achieve for Ireland, expanding its revenue base through growth in export earnings. I welcome, in particular, the suckler cow scheme, the allocation of over €105 million for the 2014 forestry programme, €10.9 million for Bord na gCon, €4.2 million for the commercial horticulture sector and over €84 million for food safety, animal health and welfare and plant health measures.
Over €105 million has been allocated to the forestry sector, which is more than half of the Department's capital allocation. This will be enough to maintain the 7,000 hectares of new planting which is consistent with the figure for the previous two years. Funding for this sector is also unique in that it is entirely funded by the Exchequer. I welcome the funding for the forestry programme which encompasses the provision of grants for the establishment of new forestry, the payment of forestry premiums and the continuation of other forest support schemes such as the forest road scheme which has been allocated an increase in funding.
The provision of Government funding has been a major factor in the development of forestry for several decades. I am pleased the Government has been able to commit €105 million towards its continued development. Many of the forests which were planted, with Government support, are now at or approaching thinning stage. Forest owners and the State can now derive tangible returns in the form of income for owners from thinning, as well as at a national level from the supply of raw material to the timber processing and wood energy sectors.
As the budget has been announced earlier this year, there has as yet been no firm indication as to the area of new forestry for which payments will issue in the full year of 2013. The level of demand for the afforestation grant and premium scheme has been relatively constant for several years. While all of us in the forestry sector realise that a higher level of afforestation needs to be achieved to meet industry demands, we have to be realistic and work together to grow awareness of the returns from forestry as a land-use option and cultivate that demand. The continued allocation by the Government of funding for the forestry programme is a crucial element in that process. The current allocation, on the basis of take-up in recent years, should meet the current level of interest.
I am pleased the Government will continue to support the greyhound racing industry through the horse and greyhound racing fund. The greyhound racing industry forms an important element of the fabric of life in this country, particularly in rural areas. Bord na gCon estimates that the industry supports in excess of 10,000 jobs and provides €500 million in economic output. I want to ensure this indigenous industry is appropriately structured to face the challenges that lie ahead. Accordingly, I have arranged that the Department will commission a wide ranging review of Bord na gCon. The call for tenders document has been issued. I have also arranged that stakeholders will have an opportunity to make their contribution to the review by way of a stakeho!der consultation process. Submissions received will be provided, without comment, for the successful tenderer for consideration. The closing date for receipt of submissions from stakeholders is 22 November 2013.
I am delighted support for specialised capital investments has been increased by almost 30%, with €4.2 million allocated to the scheme of investment aid for the development of the commercial horticulture sector in 2014. The late Minister of State Shane McEntee always recognised the value of this scheme and constantly fought to maintain its funding during the recession. Given the improved economic situation, I am delighted to be in a position to significantly increase the level of funding available for this competitive grant aid scheme. It represents the main source of State funding for horticultural producers and is seen as vital to improving growers' competitiveness, as well as the quality of output. It also allows growers to innovate and diversify production in a sector where output per annum is approximately €300 million at farm gate level, with further gross value added of approximately €70 million. I intend to launch the 2014 scheme in the next month.
Up to €84 million has been allocated by the Department for food safety, animal health and welfare and plant health measures, which encompass a broad array of measures, including meat inspection, brucellosis and TB testing. This funding will protect the industry, of which we are very proud.
The Government has provided more than €1.84 million specifically for the support and development of the organic sector in 2014. The funding has been maintained at the same level as in 2013. The sector has a significant role to play in the food industry.
It is not good enough for Ireland to import organic products when we can and should grow them here. The outlook for the agri-food sector remains very bright and the sector will continue to contribute strongly to national economic recovery. There is a new awareness of the vital economic importance of the sector and I am confident that the measures introduced in budget 2014, in a very challenging fiscal environment, will help us to continue on the path towards national recovery.
I congratulate Deputy Tom Hayes on his appointment as Minister of State at the Department of Agriculture, Food and the Marine. He has first-hand, on-the-ground experience of farming issues and I have no doubt he will carry out his duties with distinction. We are here to discuss the budget and it is important to state the major challenges Ministers were presented with in preparing this budget that required a further €2.5 billion adjustment against the backdrop that we are borrowing €1 billion per month to run the country.
As a Deputy who represents the constituency of Cavan-Monaghan and lives on a farm I am very pleased that this budget reaffirms and supports the key role agriculture has in our economic recovery. This budget, as the farmers would say, has done no harm to the industry. The farming organisations should be satisfied that all of the main schemes for farmers remain in place and I commend the farming organisations on taking the time to meet their public representatives and put their case forward. The farmers are probably one of the best lobby organisations in the country.
This is the first agriculture budget that does not cut existing schemes but introduces new schemes. I very much welcome the announcement that there will be a major investment in the beef industry. I have been lobbying the Minister for some time now for the need to introduce a suckler cow support scheme. As I have said on many occasions, our suckler herd is the maternity ward of our beef industry and it is vital that this sector is given the necessary support because it was becoming unviable to keep suckler cows and cows were not being put in calf. I am pleased with this new scheme, which will include €23 million for a new beef genomics scheme, €10 million for the continuation of the beef data programme, €5 million for the beef technology adoption programme and residual payments of €2 million for the suckler cow welfare scheme.
Under the new beef genomics scheme, the Irish Cattle Breeding Federation, ICBF, will genotype and carry out a genetic evaluation on 15% of the participating farmers' cows and stock bulls. This will greatly accelerate the collation of the national DNA database for the suckler herd and represents an additional investment of €23 million in the beef sector. ICBF estimates that increase in genetic gain alone could mean an additional €50 million in increased output and reduced costs per annum at farm level. Improving beef efficiency at farm level will help to increase the contribution of the beef sector to job creation and the wider economy. Together with the beef data programme, this will provide for payments of up to €60 per calf in the suckler herd.
When it comes to property it is always location, location, location, but when it comes to beef it is quality, quality, quality. I welcome the €15 million for targeted agricultural modernisation schemes, TAMS, which will give support to the dairy sector and assist investment in new equipment to make operations more efficient and productive especially in the run up to the abolition of milk quotas in 2015. I am pleased the sheep industry has also gained in this budget by increasing the grassland sheep scheme up to €15 million. That will support the expansion of sheep herds.
On VAT, the farmer's flat-rate addition is being increased from 4.8% to 5% which is another positive development as it will put €10 million back into farmers' pockets. While it is disappointing that there is no new agri-environment options scheme, AEOS, I ask the Minister to examine if any supports could be put in place for special areas of conservation in so far as they are very limited and restricted in what they can do on their holdings.
I thank the Irish people, who have stayed not alone with this Government but with the programme that has been put in place over the last five years. They have showed remarkable resilience in the face of the onslaught that was brought about by Deputy Calleary's side over the last 14 years when they were partying or sleeping while the economy was driving along this roadway over which they had no control.
We are nearly at the end of the tunnel and can see the light which is starting to shine brightly. Hopefully this might be the last budget in which we are trying to balance the books and set the footprint to ensure our economy is resilient in the future. Earlier, Deputy Broughan mentioned that he voted against the Bill to sell the national lottery. He did not like the lottery being sold off, which generated €400 million, yet he thanked the Government for what it did with that money. It is all about trust. It is about time the Opposition understood that this is a Government they can trust. This Government will say what it is going to do and use the money generated by the sale of State assets in a proper manner to generate jobs for the people of this country.
We have often spoken about young people and one key aspect of the jobs committee is to highlight the plight of young people. I am delighted to welcome the fact that more young people are taking up the microfinance fund option as young entrepreneurs. I was very happy to be here when the Minister announced the start your own business scheme. I encourage the Minister to give as much of that funding as possible to young people because they are the young entrepreneurs of the future. I have always mentioned that young people would not have a track record to help them get capital. This is an opportunity for them to start up. I hope the Minister might ring-fence a portion of that funding for young people who may have come out of training. I am delighted to see there is extra funding being given to mentoring, which is very important for young entrepreneurs starting up a small business.
When I came in here I was always told that backbenchers on either side have no say in framing the budget. I was delighted to be part of a group that pushed hard to get some measures into this budget. I am also delighted the home renovation incentive scheme was established. This scheme was set up to help small builders start up again. They are the small guys from Belmullet to Clane in Kildare, all around the country, who were deserted by Fianna Fáil when the boom started to turn. They were left out there. There are more than 65,000 people on the live register from the construction sector. Hopefully this scheme will allow the small builder in rural and urban areas to take on extra employees. At the very beginning we said that if every small business took on an additional person it would halve the people on the live register.
The economists on television talking through their rear ends say there is no imagination in this Government. What has happened here today and what both Ministers announced yesterday have shown that we have the capacity to extend the successful programmes and create new programmes that will lead this country out of the morass left by Fianna Fáil.