Dáil debates

Wednesday, 22 October 2014

Financial Resolutions 2015 - Financial Resolution No. 3: General (Resumed)

 

Debate resumed on the following motion:THAT it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.- (Minister for Jobs, Enterprise and Innovation)

10:40 am

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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The next speaker is Deputy Durkan who is sharing time with Deputy Kyne.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I am delighted to have an opportunity to speak, although it would take much more than the time available to me to discuss the range of issues which have been dealt with in the country over the past three and a half years and the magnitude of the task handed to the present Administration. I acknowledge the efforts of the people, particularly during the past three and a half years when the almost insurmountable task was handed to them of bearing up under the financial burden thrust upon them through no fault of theirs. I congratulate the Government, collectively and individually, on the way in which it handled the issue. Members of the Government could have run away from their responsibilities, pretended it did not happen and continued down the road advised by some and borrowed more money, lashed it out and assuaged the population on this basis. They could have addressed the issue raised by those who called it austerity. They did not. They were responsible and did their job. They did their accounting properly and put forward and implemented proposals which were sustainable and remedial. This needed to be done.

Against this were those who call themselves anti-austerity. They come in a variety of shapes and sizes on the other side of the House. They stated there was no need for this austerity and what we wanted was more stimulus, in other words, more borrowing. Little thought was given to the fact there was no place from which we could borrow. Our credit rating was gone. I cannot understand for the life of me why people still come forward and state what we need is more stimulus.

We have another contradiction at present, which is that perhaps this is the wrong budget for now. The reason for this is some of these commentators have been so wrong so often about so much, they are afraid to adopt a position on any side on anything any more, and rightly so. They are discredited. I say well done to the Government, especially the Minister for Finance, on a difficult job and a great result so far.

There is much more to be dealt with in the future. It remains to be seen the extent to which that commitment and support for it will remain in the future.

It has been said in the past of certain issues that one could not see the wood for the trees. At least we can see the trees now. The national ship has been hauled off the rocks and is now drying out before the next move ahead. Three, four or five years ago that was not so. Some people on the other side of the House repeatedly say this Government is the same as Fianna Fáil, the Green Party, the Progressive Democrats and all those people who came before us. What does that mean? It simply means that this Administration had to do things that the previous Administration did with money. This Administration had no money with which to do it and no borrowing facilities available to it. It is a great tribute to the Minister for Finance that he has managed in the face of all these difficulties to achieve the kind of credit rating that we now have internationally while at the same time being able to go forward with reasonable growth expectations for the future.

One feels sympathy towards those who remain prophets of doom and gloom because they have been continually wrong. It is sad when people are wrong all the time. There are those who have, for example, introduced the word "austerity", a kind of dirty word. Austerity is something a government introduces when it has options and when it can decide to inflate its economy by introducing particular measures. Frequently during the lifetime of previous administrations we were told that everything was controlled from Brussels, that because we could not change interest rates we could do nothing, and that credit and everything else were out of our hands and dealt with elsewhere. However, when the crunch came, it soon became possible to do all these things ourselves - all these things that could not have been done before. It is remarkable and, as the Minister for Finance said, it was not a miracle but it was done with great effort and concentration by a great number of people.

A few issues still need serious and urgent attention. I do not have time to deal with them at present, but water and housing are two such issues. For 20 years I have been tabling parliamentary questions - they are there on the record for all to see - asking when we would have a proper investment programme to provide a sustainable supply of domestic drinking water incorporating adequate treatment works. All we hear from the other side is how outrageous it is that it actually costs money. If they can find somebody who can produce a commodity of that nature without the requirement to pay, I want to hear about it. Even Archimedes could not do that and he came before my time.

10:50 am

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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The Deputy should be made a Minister after that.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I have been there.

Photo of Seán KyneSeán Kyne (Galway West, Fine Gael)
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I welcome the opportunity to say a few words on the budget, the first, hopefully, of a series of budgets that will start giving money back to people. As the previous speaker and the Minister have said, this is not by accident. It is because of the work we have done over recent years to correct our finances that we are in a position to do this. We have got our deficit under control. That is because of the growth in the economy in recent years which has occurred because of the series of measures introduced in the tourism and other sectors to boost growth.

I welcome some of the budget's taxation changes. Obviously, work must pay and the budget measures are designed to help working families, including raising the standard rate tax band by €1,000; cutting the top rate of income tax from 41% to 40%; and the changes in the USC reductions, including increasing the bands at which people become liable to pay the USC. Many people have an aversion to paying tax but especially the USC, which is regarded as a temporary tax, an austerity tax and even a Fianna Fáil tax. Over the forthcoming years it is important that we see a gradual reduction in the USC.

The pension levy has been used over a number of years to boost job growth and it has had a positive effect on the sectors for which it was used. We have seen growth in those sectors - tourism and hospitality. It has worked and it is now time to end that levy. I welcome the commitment that it will be abolished at the end of next year and reduced from 0.75% to 0.15% in 2015. In the area of social protection, there has been an increase in child benefit and we need to push on with the housing assistance payment which helps a person with housing costs. Unlike the rent supplement, something needs to be provided after a person takes up a job.

I have mentioned the tourism sector which is very important in my constituency, Galway West, and along the west coast. We have seen the success of the wonderful initiative that is the Wild Atlantic Way, introduced by the previous Minister for Transport, Tourism and Sport. This has been hugely successful along the west coast. The 2015 edition of the Lonely Planet' guide has cited the Wild Atlantic Way as one of the "must see" places in the world, which will be very positive. The 9% VAT rate introduced in 2011 has been a huge success in terms of the hospitality and tourism sectors. There was a big campaign to retain it and I am very happy that it has been retained. As the Minister said, it is important that those reductions are passed on to consumers.

I also welcome the decision not to increase excise duty and its impact on the drinks industry. I raised this matter in the Dáil in the week before the budget. It is not that I am promoting alcohol or anything like that, but I cited the importance of supporting the retention of jobs and creating more jobs particularly in our rural pubs which in many ways form the mainstay of the tourism sector. They are also a focal point for rural areas in many of which the population is falling.

I welcome the funding for the sports capital grant which is very successful. One cannot have enough money for sports capital grants, which is highly sought finance. It is very important for clubs to put in place much-needed sports and community facilities.

The previous speaker mentioned housing. We have a housing shortage and we know that building houses creates jobs. Any initiatives that can boost and stimulate the construction sector are to be welcomed. I welcome the commitment of €2.2 billion for social housing in the coming years. It is very important that this money is provided. The home renovation initiative has been extended to tenants to allow them to renovate the houses they are letting up to the end of 2015. The standard of some of the accommodation in the rental market is not good enough. Hopefully this scheme will allow people to do up houses for that market. I also welcome the living city initiative, on which discussions with the EU are at an advanced stage, to help regenerate urban areas and safeguard architectural heritage in Galway and other cities. I commend the range of taxation measures in the agricultural sector to stimulate our most important primary indigenous industry.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I call Deputy Ross, who is sharing time with Deputies Finian McGrath, Seamus Healy and Richard Boyd Barrett.

Photo of Shane RossShane Ross (Dublin South, Independent)
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From this side of the House I always struggle to find measures in the budget that I welcome. However, people on all sides of the House should welcome the proposed abolition of the pension levy. It is a bit like congratulating a highwayman on stopping robbing carriages. It caused great hardship to many people and was unjustified if not unlawful. On this side of the House we should acknowledge the Government's realisation that it was wrong. It caused great pain to many people who depended upon these savings for their existence.

The Government has been able to do remarkable things in the budget. The most peculiar feature of it was the debate coming up in the past few weeks where the figures suddenly changed and from it having a choice between cutting expenditure or increasing taxes by a diminishing amount, suddenly if found it could give some money away. We have to ask why this happened and why it happened so suddenly. The answer of course lies in the Minister's Budget Statement, in which he came out with some sensational and spectacular growth rates. He is not alone in that - they came from the Department of Finance. I believe his growth rate projection was 3.9% following the budget measures - it was 3.6% before that. It has to be asked how the growth rate projections changed so suddenly and whether they are questionable.

The basis of the entire budget will be undermined if these growth rates are not correct. The Minister is not alone. IBEC, an organisation that is not particularly reliable in any way and one I would not commend to people to study for their thesis on economics, changed its growth rate projection for next year from 3.1% to 6.1% in the space of three months, which is utterly extraordinary. The Central Bank is more conservative saying the growth rate will be 3.5% while the ESRI says it will be 5.3%. The Minister and the Department of Finance have come in somewhere in the middle at just under 4%. How and why has this happened? Are there dangers in this? If a growth rate projection can change from 3.1% to 6.1% in three months and the first projection is unreliable, like the initial projections from other sources, then surely the current projections we are relying on are just as vulnerable to being changed or to not being reliable in the future.

The basis for the projections is the US and UK economies because while the Minister said last Tuesday that the economic growth rate next year would be 3.9%, later in the week bad news came out of Germany, France and almost the entire eurozone area. Germany is on the verge of recession, France is missing all its targets and other European countries such as Italy are not living up to the expectations the European Commission has asked of them. Europe is contracting while Ireland apparently has a rocketing growth rate. It sounds unnatural but the explanation for this lies in the fact that the US and UK economies were up to recently the best preforming economies in the western world. Ireland has relied on them because we luckily have a large proportion of our trade with them, which is unusual for a European country. We are expanding in that direction and that is expected to continue next year.

However, as the Minister outlined in his Budget Statement, the stock markets of the world were taking fright the same day. The stock markets, which we are told rightly by Deputy Higgins are the masters of our destiny rather than ourselves, were saying they were spooked by the prospects for the US, in particular, because of bad retail figures last week, and the UK for other reasons. If the US and UK economies do not perform to the expectations of the budget arithmetic, Ireland will be in trouble as well because these economies will not fuel the export-led growth predicted in the budget. That is a serious danger, which was signalled to us by the stock markets last week.

11:00 am

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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I am grateful for the opportunity to contribute to the debate. It is a pity that Mr. Austerity himself, Deputy Bernard Durkan, is not in the House. It was interesting to hear him praise austerity in his contribution because I thought the Government was claiming that this would be the last of the austerity budgets. However, I wonder whether people such as Deputy Durkan who talk like that are living in the real world. They refer to the end of the austerity. They should say that to the long-term unemployed, the disabled, the low paid and all our senior citizens. They know the reality of austerity on the ground and the real pain people have suffered over the past number of years and they know we have a less equal society, particularly following the budget.

There has been no focus on the issue of services for people with disabilities in the budget and there was no climbdown on the respite care grant. That could been considered. Many people with disabilities live in poverty while a significant number of them who are well qualified are unable to secure employment. A deaf man attended my clinic recently and he commented that he was "coursed" out. He is a man in this 30s who is fed up doing courses and he would love to get back into the workforce. I also met a person with cerebral palsy who is highly qualified having done loads of courses and who would love to get an administrative job. These people have been going around for the past two or three years looking for an opening, which is not acceptable.

On the broader issue of the economy, the Government says it will support small businesses, the low paid and the poor. The haulage industry, which employs approximately 50,000 people, is being hammered by motor taxation. Industry representatives sought a meeting with the Minister for Transport, Tourism and Sport but he did not want to meet them to discuss the issue and they had to block Dublin Port to highlight their case. It is a national scandal that 2,000 people who worked in this industry have had to move to other European countries and beyond because of the high tax rates on their businesses. The 50,000 jobs in the industry are an important part of the economy. The Minister and the Taoiseach need to wake up and talk to these people before they are forced to block Dublin Port again. It is not an option to say: "I am not going to talk to them." They have to face the reality that jobs are at stake. The notion of supporting small and medium-sized business should been considered in the budget because many of them employ between five and ten people.

This is another disappointing and regressive budget. It widened the gap between rich and poor by €499 a year. The gap between the disposable income of a single unemployed person and a single person in work on €50,000 a year was measured. For example, the budget will result in a 90 cent a week increase in income for an unemployed single person while giving €14.30 a week to a single person earning €75,000 annually. Does the Minister call that a fair and responsible budget? An unemployed couple will receive €1.51 a week or €78.52 a year extra while a couple with two earners on €125,000 a year will receive an additional €23.50 a week or €1.225.64 a year as a result of the budget changes. These figures are being ignored in the debate. There is a huge gap between the rich and poor in this society and it was not bridged. The Minister had an opportunity to do something for the poor and the long-term unemployed and to restore the respite care grant for families of people with disabilities. The Government cannot say this is a positive budget when many important measures could have been taken. This is why I strongly oppose the budget.

Photo of Séamus HealySéamus Healy (Tipperary South, Workers and Unemployed Action Group)
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This is the fourth regressive budget in a row introduced by the Government, which is deeply disappointing. It is a slap in the face to families who simply have had enough and who cannot make ends meet. As previous speakers said, according to Social Justice Ireland, the gap between rich and poor has widened by €499 a year. This measures the gap between the disposable income of a single unemployed person and a single person in work earning €50,000 a year. The gap is higher when higher salaries are taken into account. As a result of this and previous regressive budgets, those who took the greatest hits during the recession have been left behind again and priority has been given to reducing the top income tax rate, favouring the wealthy in our society.

The two groups particularly badly impacted by the budgets from 2008 to 2015 are families dependent on social welfare, who lost approximately 12.5% of their income, and working poor families, who lost approximately 11.5% of their income. This budget does nothing to reverse their situation. Indeed, it adds insult to injury.

The people of Ireland are facing huge challenges. Some 750,000 people in this country live in poverty. Some 20%, or 1 in 5 children, live in poverty. The deprivation rate is 26.9%. We have 150,000 people who are long-term unemployed, 90,000 families on local authority housing waiting lists and emigration rates of huge proportions. Up to end April this year, 21,000 people had emigrated. Between 2009 and 2014, 84,000 graduates left this country. This challenge will not be met by continuous regressive budgets which favour the rich and powerful in society. It can and should be met. All objective research indicates that Ireland is one of the richest countries in the world. The problems we face are two-fold. The super-rich in this country are coining it and we are paying approximately €8 billion per annum - which equates to the entire education budget - in interest on foreign debt. These issues must be addressed if budgets are to be fair and we are to meet the challenges ahead.

Money to fund State job creation programmes and the restoration of services must come from a number of sources. We should do first as the French have done and defy the fiscal treaty. The provisions of this treaty in respect of Ireland are perverse and should be reversed. That is what this country needs. We must raise income by way of significant taxes on the incomes and assets of the super-rich in this country and we must insist on the mutualisation of bank related debt. We must stop servicing bank debt until realistic negotiations in that regard have been concluded.

It has been said time and again that this country is broke. Nothing could be further from the truth. We were told not too long ago by former Minister of State, Deputy Joe Costello, that Ireland is the eighth richest country in the world, which is true. The gross domestic product per head of population in the Republic is greater than it is in Germany, France and the UK. Despite that Ireland is one of the richest countries in the EU, studies indicate that when it comes to the distribution of wealth Ireland is at the bottom of the table along with Greece, Romania, Bulgaria and Latvia.

Significant income can be raised by way of the imposition of higher taxes on the super-rich who have gained from the recession in respect of their incomes and assets.

11:10 am

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I take great satisfaction from the fact that on Saturday, 11 October the Government's spin and trumpeting of recovery were blown out of the water by an unprecedented mobilisation of 100,000 people taking to the streets-----

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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Does the Deputy want to see people returned to work or to remain unemployed?

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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Did Deputy Boyd Barrett count them?

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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-----and saying, "We don't buy-----

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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Does the Deputy want to see people unemployed or in jobs?

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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A Leas-Cheann Comhairle-----

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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Does the Deputy want to see people in or out of work?

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Deputies, please.

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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I am asking a question.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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No, Deputy Buttimer.

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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Perhaps Deputy Boyd Barrett will answer my question as to whether he wants to see people in or out of work.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Stop the clock.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Deputy Buttimer please allow Deputy Boyd Barrett to continue as he has only four minutes remaining.

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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Does Deputy Boyd Barrett want to see people working or not?

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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One voice, please.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The people who are sovereign made clear their views on all of the Government's spin and claims of success. They came out to declare that they have had enough and that all of the Government's trickery in terms of the hated regressive water charges and property taxes is meaningless. People want them abolished and to be given real relief. The Government is panic stricken and back peddling at a rapid rate in the face of that rebellion on the streets in regard to water charges. The people will not be fooled by the measures taken by Government in recent days, which were driven by panic and fear. The Government's spin will be further exposed on 1 November by, not 100,000 people on the streets of Dublin, but 100 or more demonstrations of thousands more people from across the country, thus reminding it of its real job, namely, to give genuine relief to the hundreds of thousands of ordinary families who are innocent of any of the crimes that led to the crisis in this country and have been battered for six years by this and the previous Government in terms of their being asked to continually pay the price. That is the important response to this budget.

Water charges and property taxes aside, there is more dishonesty in this budget by way of the claims of an end to austerity. Let us take the health budget. Last year, the health allocation was €12.7 billion. This year the allocation is €13.1 billion despite that there was a €500 million over-run last year. When one adds €12.7 billion and €500 million one gets €13.2 billion. According to the Department of Health, because of demographic pressures of an aging population it requires an additional €200 million this year. In reality there has been a cut in the health allocation for this year in that it will be €300 million short of what is needed to maintain services in the public health service. What is the human cost of this? I will give some examples. April, a young woman, severely disabled, requires 24-7 care. In 2013, her mother had 24, four-day, weekends of respite care. She now gets only 12, 3-day weekends per annum and is at her wits end. Also, her respite care grant has been withdrawn. There is no end to austerity for her. I am also dealing with two cases involving people waiting for hip replacements at Cappagh Hospital who have been told the waiting time for their operation is 16 months. When I contacted the Minister and asked if there was anything he could do I was told there was nothing he can do.

On education, the Department of Education and Skills requested an additional €500 million to deal with upward pressures of 10,000 extra children joining primary education this year. It got only €60 million of that €500 million, which is a de factocut in the resourcing per student in the education system. This is against the background where one in four of our children are in classes of 30 or more. When one considers that a few years ago the stated aim of the then Government was to have a ratio of 1:20 the current situation is a disaster. The cuts in respect of SNAs and so on is leading to much greater disruption, with teachers in half of the schools in this country simply engaged in riot control.

On housing, what is provided for is a joke. It is proposed to build only 2,500 houses next year against the backdrop of 96,000 families on the housing waiting list. In my area alone, 1,200 people a year are joining that list. This means the number of houses to be built next year will not even cover the number of new applicants joining the housing list never mind make a dent on the massive 13 or 14 year housing waiting list. There is no end to austerity. Austerity continues. It is about this time this Government was honest and fair with people. It will get its answer on 1 November.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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The next speaker is Deputy Eoghan Murphy who is sharing time with Deputies James Bannon, Jerry Buttimer and Dan Neville. The Deputies have five minutes each.

11:20 am

Photo of Eoghan MurphyEoghan Murphy (Dublin South East, Fine Gael)
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Deputy Buttimer wants a debate but he will not get one because that is not how this process works.

I welcome the budget and the presentation of it but I cannot welcome the process around it. Six years ago this country's economy crashed and six years later, nothing has changed when it comes to Dáil Éireann and the way we prepare, debate and approve budgets as a Parliament. Where is the role of parliamentarians in this budget? Where is the role of Dáil Éireann? Something was presented to us as a fait accompliand we debate it after the fact. That is not acceptable.

People will say that these issues around Dáil reform are not that important, that they only matter to a few people, that they do not matter when the economy is getting better, that the budget seems to be a good one and people are happy with it, and that the crisis is over, but it matters to us in Fine Gael because we said it matters. Prior to coming into Government, when we examined the problems around the economy and how they arose we did not just blame the bankers, the developers, the speculators and the Financial Regulator; we put the political system at the heart of that failure. It was in our 2011 manifesto - political failure lies at the heart of Ireland's economic collapse. In our programme for Government we said we would open up the process of the budget to the full glare of public scrutiny, and a senior Minister of Government came into the Committee of Public Accounts and said that the idea of a big-bang budget day was a nonsense and that someone coming into the Dáil to reveal the secrets decided by Cabinet on one given day was crazy.

The Government has done much that is good but if we set ourselves a standard we must meet that standard and hold ourselves to it. In the simple case of having a functioning Parliament around the budgetary process, that means looking abroad and taking best practice. In so many other aspects of Irish political and public life, we talk about best practice from abroad or best practice from the private sector yet here in the Parliament, six years after the economic collapse, we are failing woefully in catching up to what a modern day parliament should look like and how it should operate.

In terms of what that means, we need a dedicated committee to budgetary matters sitting on a year-round basis to examine the forecasts and determine if they are being met to see how budgets are being implemented, and to plan for the year ahead. It means debating elements of the budget months in advance of a vote being taken on them in a dedicated committee. That might be boring to some but it is necessary work. It means Ministers coming in to the committee to defend their money requests ahead of a decision being taken on them so that all of us can be across the detail. It means also an independent Oireachtas budgetary office where any Deputy in Government or in opposition can have their ideas properly costed and then debated thoroughly.

It is not too radical to suggest that a member of the Opposition, be they an Independent or of a party, would have to have their proposals properly costed before they came in to participate in the debate on the budget. It is not too radical to suggest that a member of the Government backbenchers would be aware of the detail of the decisions they will be endorsing when they cast their vote on the budget. Even if it is radical, we said we would do it so we should.

On the details of the budget, we have unexpected buoyancy in the economy. That means we were not in a position to continue to reduce spending but to reduce taxation and increase spending. I fear that might have been a mistake. The caveat on this is that we have another chance to have this properly debated in terms of the recommendations from the Fiscal Advisory Council, the warnings from the European Commission or even the opinions put forward put forward by the Central Bank. We continue to borrow to run this State and given that position and with the increased buoyancy, we should have injected it into one-off capital expenditure that would benefit the economy. The important time to invest in capital expenditure is not at the top of the economy but as it begins to grow so that the economy can benefit from that expenditure and continue to grow in later years.

I welcome the decreases in taxation. That was important because there is too much taxation in this society and because decreasing taxation in certain areas will help continue the recovery so that there will be more money in the economy for expenditure, but not while we are still borrowing to run the State. I would have liked to debate the possibility of a neutral budget. I did not see a spending increase on the spending side.

On the spending side, I am concerned that this now signals the end of reform in the public sector because the necessity that was brought about by the financial crisis to cut costs and define efficiencies no longer exists. Reform of child welfare is imperative. A universal payment of child welfare is very difficult to stand over. Some very wealthy individuals are getting it and rather than reforming that system, we increased the payment. Having imposed the difficult cuts we have now undone those difficult decisions and increased the payment. I am concerned about that.

I am concerned also about replacement rates. The replacement salary some people who are unemployed are getting on social welfare is not an incentive for them to seek work again and because that is a problem in society, we have introduced an additional social welfare payment to encourage them back to work. There is something perverse about that logic and it must be debated.

We continue to see registration fees for third level increase with no serious debate on whether the State can afford a free fees scheme at third level. That must be discussed as well.

I understand the rationale behind the mistreatment of people who are self-employed with the high universal social charge applied to them but self-employed people take a huge risk. Not only do they deserve a reward for that risk but the gains to the economy from them being self-employed in terms of them starting up businesses are disproportionate. They are much greater, and that must be recognised also.

Photo of James BannonJames Bannon (Longford-Westmeath, Fine Gael)
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I spent the last week listening to the contributions of other Members on budget 2015 with great interest. I first entered this Chamber in May 2007 and for the first time in seven years I have seen the introduction of a non-austerity budget. I am pleased about that and I commend the Ministers, Deputy Noonan and Howlin, for their hard work to date.

This is the coalition Government's fourth budget and the measures introduced in budget 2015 are a clear sign that we have turned a corner in the economic cycle. It is very important that this economic recovery spreads out to the regions, particularly the midlands. After seven years of austerity measures, some of which were necessary for this country's financial survival, there is finally light at the end of the tunnel for the Irish people.

In his contribution the Minister, Deputy Noonan, acknowledged that many people have not yet experienced the fruits of recovery. He is right. There is still a large section of society that needs some support from Government. Regardless of what the Opposition says, it is clear to me and Members on the Government benches that the concessions in tax and welfare will benefit the families who have yet to feel the positive effects of economic recovery.

I have limited speaking time in this debate and as a result I will focus my comments on agriculture. Budget 2015 was a very good budget for thousands of farming families and rural communities across the country. For the first time since 2009, the agriculture budget has been increased. The agricultural measures introduced will allow us achieve the maximum potential from our biggest home industry.

I come from a rural constituency where farming is the lifeblood of the community. In past years there were only three routes to starting a career in farming: one had to inherit a farm, buy a farm or marry into a farming family. However, thanks to measures introduced in this budget we are sending out a clear message that anyone who wants to do so can enter farming.

This budget will make it easier to get land into the hands of young productive farmers. The 50% rise in income tax exemption levels for all long-term leases is a good example of the incentives we need to make land available and accessible to young farmers. We can now realistically aspire to having a larger and more sustainable group of young farmers driving this industry.

I have raised the issue of farm safety many times in this House. As a farmer I have a history of near misses in that regard. As the saying goes, complacency is the enemy of success and when it comes to farm safety, there is no room for complacency. Regardless of one's experience or how well one knows the farm, the machinery or the animals, there is always the possibility of a serious or fatal accident occurring.

According to the Health and Safety Authority, farming is the most dangerous occupation in the country. Unfortunately, this year's statistics reinforce that bleak reality. This year alone, 23 people have been killed. That is 23 families who have lost a loved one as a result of a farming accident. I congratulate the Minister in the strongest possible manner on the announcement of the €12 million farm safety scheme. The scheme is subject to EU approval but when enacted it will provide 40% grants to a maximum of €20,000 for safety-related farm improvements.

I hope this will work to reduce the number of fatalities on farms.

I also welcome the decision to retain the 9% value added tax, VAT, rate for the hospitality sector. This will help create a significant number of jobs in rural Ireland. In my home county, Longford, the reduction in VAT on food and tourism services since July 2011 has been a fantastic success. In Longford alone ,173 jobs have been created. In my neighbouring county, Westmeath, a total of 412 jobs have been created since July 2011, according to the report from the Restaurant Association of Ireland, as a result of maintaining the 9% rate. I believe I will be in a position to again tell Members of this House how decisions taken last week will have resulted in the creation of even more jobs in the food, tourism and hospitality sector in the midlands.

The decision to increase the living-alone allowance to €9 a week is important, particularly for those in rural Ireland. Rural isolation has always been a serious issue and I am glad the Minister has recognised this and increased the allowance. I am also very pleased to see the allocation of €1 million for the establishment of the rural innovation and development fund. Rural areas such as the midlands have yet to feel the effect of economic recovery. This fund will support innovation and small scale pilot initiatives that are designed to aid our economic recovery. The fund will support rural communities. I am pleased to see it is part of the wider programme to support and encourage economic development in rural Ireland.

11:30 am

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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I commend the budget. After years of difficult and prudent decisions it helps to relaunch the next phase of our country’s recovery. None of us on this side of the House is complacent. The model promulgated by Deputy Boyd Barrett - I am sorry he is not here - is one of spend, spend, spend. We need to be prudent in our economic management, create jobs, and get more people back to work. Over the past six years every household and family in the country has been affected. The sacrifice the people have made has helped bring us to the point where we have a non-austerity budget.

As Deputy Eoghan Murphy said, we have for too long allowed a certain few to participate in the delivery of a budget. I support the reform of that process. We need an independent budgetary office and more oversight of how the budget is presented and to find ways in which we as Members of the Parliament can participate by having our ideas and suggestions costed, probed and analysed. I fully support Deputy Eoghan Murphy in that regard.

This budget is the result of a collaborative effort on the part of the Irish people and a Government that could steer a ship and be strong in its course of action. It is important that people feel the economic benefits. Growth of 4% means nothing to the person at home. A reduction in unemployment to 11% means 70,000 jobs have been created and those people are back at work. This budget contains measures that will put people back to work and assist those who rely on social protection payments.

Members opposite are peddling a narrative that this is a budget for the rich. Let us dispel that notion: the taxation measures contained in this budget are progressive. It has prioritised those on low and middle incomes by taking 80,000 on low incomes out of the universal social charge, USC, net and increasing the income level at which the top rate of tax is paid. Since coming into office this Government has relieved more than 400,000 people of having to pay USC. This is the first year of a three year reform package to reduce the tax burden and which will have at its core the tenets of fairness, job creation and economic growth. We have heard nothing but misinformation from the Opposition about the fairness of this budget. Low-paid workers were prioritised. The tax bill of a PAYE worker earning €25,000 a year will be cut by 4.6% whereas tax on a person earning €70,000 will be cut by just 2.9%. After this budget 80% of the taxes of the nation will be paid by the top 24% of earners, a fact not acknowledged by the prophets of doom and gloom opposite. Under Fianna Fáil someone earning €12,000 a year would pay €160 in USC. Under this Government the same person will pay no income tax, yet we do not hear that from Fianna Fáil.

This budget has provided much relief for people on fixed incomes and contains measures which help those who rely solely on social welfare payments. I very much welcome the return of the Christmas bonus of 25% on the weekly payment and the new water subsidy of €100 per annum for all those on the household package or fuel allowance. The budget helps families by increasing child benefit by €5 per month. Working families will be helped to pay water charges by a tax deductible allowance up to €500 per annum at the standard rate. I would like to see reform in the cost of childcare and the payment of child benefit and would very much like to see a White Paper of some description and a conversation on the cost of childcare.

After the damage caused by Fianna Fáil, which was in Government for 12 of the past 17 years, our sovereignty has been restored, having been betrayed by Fianna Fáil when it forced us into an EU-IMF bailout. Returning the country to a position of growth, employment, prudent economic management and fairness has been the hallmark of this Government.

Photo of Dan NevilleDan Neville (Limerick, Fine Gael)
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I welcome the fact that an extra €35 million has been allocated to the development of mental health services. Up to this year, €90 million extra was allocated overall in the budgets. We had hoped to get €15 million extra because last year we got €20 million when we expected €35 million. This year that sum has been allocated, bringing the total investment in the mental health service to €125 million since 2012 for its development and modernisation in line with the recommendations of the expert report, A Vision for Change. The additional funding for mental health will be directed towards the continuation of the prioritised development and reconfiguration of the general adult teams, including psychiatry of later life and child and adolescent community mental health teams. This will be delivered through further recruitment and investment in agencies and services in order to achieve consistent service provision across all areas.

To put into context the low contribution this country makes toward mental health services, in 1986, 13% of the total health budget was allocated to the mental health services. The lowest point was 2011, when it was just 5.31% of the total allocation. In 2014 this will increase to 6.63%, which is still very low by comparison with our neighbours and European partners. In England and Wales, 12% of the total health budget is allocated to the mental health services and in Scotland the figure is 18%. In most other European countries the allocation is approximately 20%. While ours has improved in the past three years we are coming from a very low base and there is a long way to go.

There is a low budget, starting from a low base, for the National Office of Suicide Prevention. In 2013, the most recent date for statistics, 475 people died by suicide. There were 65 undetermined deaths.

Such deaths are included in the suicide statistics in the UK, in Northern Ireland and in most European countries. There is a view that unidentified suicides are happening. We often hear about single-occupancy vehicular deaths that take place without any skid marks being evident. In such cases, it cannot be conclusively said that it was suicide. We know that coroners are very slow to bring in suicide verdicts in cases of deaths from drowning, etc., if they can avoid doing so. This can really be attributed to the stigma around the whole area of mental health and suicide. It is said that it is done to protect families. The same problem exists in the UK. I recently attended a conference at which it was mentioned that a coroner in London brought in 30 verdicts of accidental hanging. Such decisions show us the difficulty associated with the whole area of statistics.

I would like to put together some of the figures I have mentioned. Approximately 600 people die each year from suicide. In 2011, the allocation to the National Office for Suicide Prevention was €4 million. That figure has been more than doubled, to €8.8 million, since then. It is still at a very low base. A great deal of work needs to be done. The same point applies in the case of mental health services. Some of the additional €35 million that was allocated for such services this year will go the National Office for Suicide Prevention. I urge the Minister and, in particular, the HSE, which manages the budget allocation, to ensure the National Office for Suicide Prevention receives several million in funding to develop the excellent work it is doing. I hope we can improve our mental health services and reduce the rate of suicide and deliberate self-harm.

11:40 am

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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I compliment Deputy Neville on his contribution. The work he has been doing in this House and around the country to highlight the issue of suicide is to be commended. Since the Deputy first raised this issue, the number of people committing suicide has grown to a frightening level. It is correct to say we are not investing sufficient funds in mental health to deal with all of these issues, to assist the families that are affected by these problems and to inform people, particularly men, about the need to talk about these matters. I heard on the radio yesterday that a taxi driver talked two people who were contemplating suicide down from a bridge in Kilkenny last weekend. There are many other cases like that. The figures are not being manipulated. As Deputy Neville said, we are not calling it the way it is, which is what we need to do. Much more needs to be done. For example, a great deal of money needs to be invested in the community aspect of the mental health services in my constituency. Although we are breaking down the institutionalised settings, we are not providing sufficient funds in the community to support the individuals and families affected by mental health problems. As a result, those who are directly affected are suffering very badly in terms of their health and their quality of life. We have to do much more on this issue.

I listened to the previous speakers telling us that this budget marks the end of austerity. They said that austerity is finished. I have to reflect on the 2011 general election, when the outgoing Government lost 58 seats. Undoubtedly, it was rightly punished for the view that people had about how the economy was handled and what had happened in their lives. The 2011 general election moved everything on. The parties that are now in government promised reform. They said they would use their massive majority in this House to deal with all of the issues in an upfront manner. People were looking forward to the fulfilment of the promises the Government made to the electorate. It has not fulfilled those promises, however. The Deputies opposite can dress the budget up any way they like, but when they go back to their constituencies and meet local authority tenants whose rents are going through the roof, will they tell them not to worry because austerity has ended? It has not ended for such people. What will they say to the 12% of people who are unemployed? I remind the House that this figure would be higher if many members of the current generation had not left the land. They are gone. We can play the blame game, but I suggest we should look at the facts. They have gone. They have left the country. They are not here any more. What does the Government say to those who have gone away? Is there anything in this budget to attract them to come back and find jobs here? No, there is not. The Deputies opposite know there is not.

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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In fairness, we cannot fix it overnight.

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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They know the various programmes the Government is promoting within the social welfare system are not working to the benefit of the hardcore 12% of people who are unemployed. Individuals are being let go from jobs, only to be replaced within weeks by people on the JobBridge scheme. Real courses for real jobs are not being implemented. The Government is messing around with the statistics. It is not actually doing anything. The numbers are coming down because a few jobs are being created and because the vast bulk of young people have left. During the 2011 general election campaign, I was struck by the sadness of grandparents who will not see their children's children reared near them. The reality is that they will probably not see them at all other than on Skype. The reforms the Government promised have not been implemented and will not help those people. As a result, people are even more cynical about politicians at election time. Deputy Rabbitte let the cat out of the bag when he said that regardless of what one tells the people at election time, one can do what one likes if one gets in.

Photo of John LyonsJohn Lyons (Dublin North West, Labour)
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He did not say that.

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Deputies opposite promised new politics, but that is not new politics. None of what they have said today is new politics. Can they tell people involved in the SME sector that austerity is over? That might apply to some businesses in urban centres, but it does not apply to family-run SMEs all over the country that have been in business for generations. These families have spent all their savings to keep their shops and services open, and now they are left with nothing. This Government, like its predecessor, has been saying it has given the banks €3.5 million this year to lend to the SME sector. The banks are not lending. They are spoofing. They are telling the Government porkies and the Government is taking them on board. Why does it not tell the banks not to act in this manner? Where is the bank that the Government said it would put in place for the SME sector?

I am talking about companies on the high street that provide two, three or four jobs in local communities. They cannot get the money they need to stay open. They are pushed to the pin of their collars. The Government is doing nothing about it. This is happening on the Government's watch. It should tell AIB that it wants to see weekly returns on the investments it is making in the SME sector. AIB will not be able to provide such details. It is paying a fortune for newspaper advertisements about being brave or something. It is a joke. The Minister of State with responsibility for the SME sector, for whom I have the greatest respect, knows it is a joke. AIB needs to be called in because it is not just bluffing the Government - it is bluffing every single one of us in this House. Some 800,000 people were employed in the SME sector at one time. As that number has dwindled dramatically, the response from the banks and, as a result, the Government has been absolutely pathetic. The Government should not allow the banks to get away with this. It should tell the banks to fulfil the Government's policy and commitment to facilitate lending to the SME sector.

The Government said there would be no upward-only rent reviews, but that went out the minute it came into office. People out there are still affected by it. Are Members aware that the Government is one of the biggest holders of leases with upward-only rent reviews? When representatives of the various harbour companies appeared before the Committee of Public Accounts last week, we learned that 54 properties have little or no leases attached to them.

The Government is not doing its homework or introducing the necessary reforms.

What about commercial rates for the small to medium-sized enterprise, SME, sector? The Government claimed to understand the difficulties in that regard. SMEs have cut their costs and minimised everything. The last cost, which they cannot effect, is the commercial rate, but the Government is doing nothing about it. When an enthusiastic entrepreneur builds an extension to his or her pub, shop, warehouse or whatever, the first visit he or she receives is not from government wishing him or her well, but from a local authority's rates section, organised by government, seeking to revalue his or her property. Is this the type of country that the Government wants? Should everyone who attempts to create or sustain jobs be taxed and penalised? It happened prior to this Government's tenure, too, but the Government promised reform. It has not delivered, and has instead continued to tax and shame SMEs up and down the country. If the Minister of State told them that austerity had ended, they would not believe him.

We in the south east have argued for a university in the region. The Minister of State's party colleague agreed that one was needed and recognised the fact that outside investors looked for the best quality services for them and their employees, for example, schools, housing and universities. We promoted our campaign and Institute of Technology, Carlow linked with the Waterford Institute of Technology, but the project has been derailed.

11:50 am

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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Locally. Not by the Government.

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Government has a leadership role. It should insist that the original plan to bring Carlow and Waterford together to form a new university be executed. It is about time that the vested interests, including those in the education sector as well as the Department who probably do not want a university anyway because it would cost money, do what they are told. If the project is good for the south east and Ireland and creates jobs, let us have it. Why is the Government not declaring that, in the interests of business and our international profile, we need this university and vested interests will not be tolerated? The Government should make a point of supporting its backbenchers and Opposition Deputies from the constituencies involved, award university status to Carlow and Waterford together and stop the games being played with the process.

I touched on the issue of mental health, but the Government is an absolute and utter disgrace on the wider issue of health. It spent five years and more on this side of the House telling us how health could be handled and that it would implement best practice and abolish the HSE. It went half-cocked down that road and listened to no one. Alongside Irish Water, the HSE is now the largest quango of which we know. From its appearances before the Committee of Public Accounts, I can tell the Minister of State that it is not fit for purpose. Every waiting list is growing and older and marginalised people are not being accounted for or supported with services. The Government should hang its head in shame, given the number of people awaiting serious hospital operations. The medical card fiasco happened on the Government's watch. An administrative issue, it gained the State nothing financially and destroyed older people's belief that the Government would do what it was supposed to do, namely, care for the State's people. The Government failed them. To this day, it is only when people try to collect their prescriptions from chemists that they discover their medical cards have been withdrawn. Letters have been lost in the post, information sent to the centre has not been dealt with and communications from Deputies have been ignored.

Not only has the Government failed to learn from the situation with the HSE or to take account of the people it represents who are in hardship as regards their health, it has decided to create a similar quango in the form of Irish Water, leaving it in the greatest mess. Irish Water's board should be gone. If it was a private business, its board would be thrashed out the door and one would never again hear tell of its members. Indeed, we have not heard from the board or been told why its qualified members are not performing. The Government is encouraging Mr. John Tierney to take the flak. The Government members are a great bunch of lads. Why do they not take the flak? They created it. According to Deputy O'Dowd, doing so was wrong and he told the Government as much.

The Government is shouting about the end of austerity. All of the quarter Christmas bonus that it gives will be taken back in January by Irish Water. Let us examine what has happened. Assets owned by the State were transferred to Irish Water, a semi-State company. All of the corporate knowledge was also transferred to it free of charge. It has a magnificent budget of millions upon millions of euro to be spent on consultants. This happened on the Government's watch. Irish Water is of the Government's design, yet the Government expects people to pay for what has been spent on those consultants before they even get a drop of water. Some €300 million has been spent on water meters and €1 billion on fixing the infrastructure. Look at all of the money the Government has spent on consultants. Ownership of the State's assets went to Irish Water from the Irish people. The Government then told it that it could charge people for them as well. It is a disgrace and has led to the current fiasco.

While in opposition, those opposite asked for something that is never debated in the House, but they were not interested in it come government. The Comptroller and Auditor General produces a report every year and lays it before the House and the Committee of Public Accounts, forming our programme of work, but the House and Government do not discuss it. Nor does the Government take the actions proposed by the committee to stop wastage of money in the public sector. The Government might claim that there is not much waste, but there is. Some €31 million spent on a site in Dublin was lost simply because of incompetence and a lack of leadership in two Departments. The Department of Justice and Equality knocked down the State pathology lab that was being built, amounting to a further €4 million lost, because it did not know whether it would have funding available for the next two year. None of the €2.3 billion that is spent on local government is accounted for properly. I have not seen a single value for money report or special report from local authorities that means anything. The local government sector is an in-house operation-----

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I must ask the Deputy to-----

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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-----and does not answer to the Dáil because it is supposed to be separate.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I am sorry, Deputy McGuinness, but it is now 12 noon. I ask the Deputy to move the debate's adjournment.

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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I will finish on this point.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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That is enough.

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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Local authorities should be made accountable to the Committee of Public Accounts as a first step. If the Government stops the amount of money being wasted, it might not need to take so much in taxes.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Stop the lights.

Debate adjourned.