Thursday, 12 October 2017
I wish to raise the issue of pension discrimination against up to 35,000 pensioners in Ireland, the vast majority of whom - in excess of 23,000 - are women. The Tánaiste will recall that back in 2012 the then Minister for Social Protection, Deputy Burton, introduced the averaging rule in respect of the calculation of a person's entitlement to the State pension. Yesterday, the Minister of Finance, Deputy Donohoe, participated in the annual phone-in radio programme with Seán O'Rourke on RTÉ and it was quite revealing. He was challenged by a caller from County Longford who outlined his wife's situation. She had entered the work force as a student and then taken a number of years out to be a homemaker and to raise her family. She had also been disbarred from working in the Civil Service because of the State ban on married female civil servants. She is now being financially discriminated against and disadvantaged to the tune of €35 per week, which amounts to almost €1,800 per annum. She is not even entitled to the increase which was announced in the budget. When challenged, the Minister's reply was that he found the situation to be bonkers and unbelievable.
To say that people are outraged at this, as well as at the Minister's reaction and comment, would be an understatement. It is inconceivable that the Minister for Finance would react like that without having anything substantial to offer these people who are being blatantly discriminated against by the State. It is a shameful indictment of the decision made by the Government of the day, to which the Tánaiste, her colleagues and the Labour Party were party.
As a former leading light in the National Women's Council of Ireland, the Tánaiste will have heard its comments and how it has been campaigning and reacting in this regard. Age Action Ireland also lobbied Oireachtas Members on a number of fronts in advance of the budget. My own party, other parties and individual Deputies have been raising this issue in recent years. Apart from platitudes and soundbites from the Minister, such as those he gave yesterday during his interview with Sean O'Rourke when challenged quite succinctly, what exactly do the Tánaiste and the Government intend to do to address this blatant inequality? It is gender-based inequality in the main because it impacts on women, as I have said. It must be borne in mind that many women took time out of the workforce to rear their families, to look after sick relatives or elderly parents and to look after their homemaking responsibilities. Will the Tánaiste outline the Government's intentions for the many thousands of pensioners who are being discriminated against in this fashion, and the women in particular?
In his comments yesterday, the Minister was referring to the marriage bar and the impact it had. It is almost impossible to believe that was in place up until the 1970s. I am acutely conscious of the problems women are experiencing in accessing adequate pension provision. We had extensive discussion on this as we formulated the National Strategy for Women and Girls 2017-2020, which I published in May of this year. The actions in that strategy include increasing women's access to pensions in their own right, improving their access to private and occupational pensions and assessing the impact any future reforms to pension policy in this area will have on women and taking actions if appropriate. That has been accepted by the Government in the national strategy in respect of dealing with this issue. In line with the national strategy the Minister, Deputy Flanagan, and I also launched a public consultation on tackling the gender pay gap in August. We need to drive a whole-of-Government agenda to deal with these gender pay issues, including the pension issue, female entrepreneurship, child care, skills, STEM subjects and so on.
This is clearly a complex issue. Of course we do not want to see gender discrimination in our pension provisions. It is a complex issue to resolve in the sense that we do not want to create any new anomalies which would discriminate against people who have a contribution history. The current rate plans applying to the contributory State pension were introduced with effect from September 2012 and reduced the previous rates which had been introduced in 2000.
These rate bands now reflect the social insurance contributions history of a person more closely than those that were in place between 2000 and 2012. It is estimated that to revert to the previous bands from January 2018 would result in a cost of more than €60 million in 2018, which would increase by an estimated €10 million in each following year. It would be expected to cost some €70 million in 2019. Spending this money on reverting to the old rates would not generally benefit the worst-off pensioners who are dependent upon the State pension. This is because the main beneficiaries would be those who have other income means such that they do not qualify for a non-contributory pension, which is 95% of the contributory pension. Given that the funds would come from the general pension provision, less well-off pensioners could expect to be worse off if such a course were taken.
The savings created by the new rate bands were an alternative to cutting the core rate of pensions at a time when Exchequer savings were required and other social protection payments were being reduced across the board. Had a similar approach been taken with pensions, affecting everyone over State pension age regardless of their means or their contribution record, the hardest hit would have been pensioners with no additional income, notably those paid a non-contributory State pension and widows and widowers living alone. A significantly higher portion of such pensioners are women and this approach would have been expected to result in more women over 65 experiencing difficulties in terms of income.
It is a complex issue and to resolve it is between €200 million and €300 million overall. We do not want to see gender discrimination and the Minister for Employment Affairs and Social Protection is having ongoing discussions with the Minister for Finance.
It is just not good enough for the Tánaiste to come in here and say that this is a complex issue. What is basically happening is that women in the main and some men are being blatantly discriminated against because they were not in the workforce for a number of years. That is not complex. The years they were not in the workforce are being used to average down their contributions. There is nothing complex about that. It is just pure discrimination. It has got to be fixed. Is the Tánaiste happy for this to pertain indefinitely into the future? Has the Government got a realistic plan?
When my colleague, Deputy O'Dea, who is our spokesperson on this area, questioned the Minister for Employment Affairs and Social Protection earlier this month, he was pointed towards an exercise of total contribution approach. That is not going to solve anything in the short term. I want to get from the Tánaiste a sense as to whether this issue will be addressed. Can she at least commit to addressing it incrementally? She indicated that it may cost up to €60 million, a sum which she then revised upwards to €240 million. How much is it going to cost? It is simply not fair to be discriminating against people who took time out, bearing in mind that the State forced many of them to do so because they were in the civil and public services.
I have said to the Deputy that any gender-based discrimination is unacceptable in terms of any of our policies and approaches. This is a serious issue for women who took time out. Some women are suffering every year in their pensions because of this. We are all very familiar with the individual cases. What I am pointing out is that to resolve this anomaly, I am informed that an overall sum of €200 million to €300 million would be involved. I have stated that the Minister for Employment Affairs and Social Protection has had discussions with the Minister for Finance. Clearly that is a huge sum of money to be found in the current context. I have no doubt those discussions will continue to see precisely what remedies can be put in place.
We do not want to create further anomalies. I am informed that some of the changes could put other groups at risk. On contribution history, for example, if one disregarded the contributions and moved towards a more universal payment, one would risk that the contributions people had actually made were not resulting in them getting a commensurate pension. We do not want to create that situation either.
Go raibh maith agat, a Leas-Cheann Comhairle. I also want to raise the way in which budget 2018 perpetuates the discrimination faced by many, but particularly by women, when it comes to the State pension. As has been said, 35,000 people have been left with a lesser pension payment than they would have received had they retired before 2012. As the Tánaiste knows, this is the result of measures introduced by the Fine Gael-Labour Party Government, which changed eligibility criteria. Deputy Burton's decision made it more difficult for those without an unbroken, full-time, long-term work history to qualify for the maximum payment. The changes to the bands in addition to the averaging rule regarding PRSI contributions were completely unfair and have had an absolutely disproportionate impact on women, many of whom left the workforce to raise children or to care for their families. Some people are down by as much as €30 a week and, astonishingly, almost 25% of women on a State pension are losing out to this extent.
Some talk about this situation as though it were a mistake, oversight or oddity but it was not an oversight. The 2012 changes were implemented in the full knowledge of their impact on women. It was not a mistake. The Government knew it was going to put thousands of women in this position. It was a conscious decision. The current Government continues to make decisions against the welfare of these women. The Minister, Deputy Donohoe, has described the situation as bonkers and unbelievable. What is really bonkers and unbelievable is that he drafted and announced a budget on Tuesday that does absolutely nothing to rectify this matter. I suppose that comes as no surprise. This Government and its friends in Fianna Fáil have form in preventing a just rectification of this problem. The Tánaiste may recall that last December, Sinn Féin put forward a motion to try to address this issue. We attempted to address the pension inequality against women by reversing the changes introduced by Deputy Burton in 2012. I remind Members that the motion was rejected by Fine Gael and Fianna Fáil.
In our alternative budget, which is a balanced budget, Sinn Féin provides for the funding to reverse the 2012 changes, which so viciously discriminate against women. The Government could have made that choice too but it refused. It chose not to do right by the women affected. Doling out tea and sympathy does not cut it. Fine Gael is in government to bring forward solutions and resolutions. Notwithstanding strategies on women, the long-term view and the Tánaiste's personal views on gender discrimination, I want to know what she is going to do in the here and now to reverse the changes introduced in 2012.
I have outlined the actions that have been taken already. We recognise that women who have taken time out are at risk in terms of pension rates. It is expected that the total contribution approach will replace the yearly average approach for new pensioners from 2020. The aim of this approach is to make the rate of contributory pension more closely matched to contributions made by a person. This is a very significant reform with considerable legal, administrative and technical elements in its implementation. An important element in the final design of the scheme will be the position of women who have gaps in their contribution records as a result of caring duties. That factor is of course being considered very carefully in terms of developing this reform. The Minister, Deputy Regina Doherty, is currently working with her Department on the detailed development of the total contribution approach with a view to making proposals for consideration later in the year.
It is then intended to have a public consultation which will provide an opportunity for people to submit their views on the proposals. Following this consultation process, proposals on the final details of the scheme will be made to the Government. That is an important element of dealing with this issue. The Minister is engaging on that work and an important part of it will be to examine the issue of women who have gaps in their contribution records as a result of caring duties. Serious account will be taken of this when dealing with this reform.
If one committed to backdating the homemaker's scheme or changing the rate bands, it would cost between €200 million and €300 million. The rate changes reversal would come to €60 million in 2018, rising by an additional €10 million per year. The issue is on the agenda and is being considered by the Minister. It will be an important part of the reform she is examining with the total contribution approach. The whole aim of that is to ensure the rate of contributory pension more closely matches the contributions made by a person but taking account of gaps in women's contribution records.
Is the Government seriously asking women to wait until 2020 for this matter to be resolved? That is bonkers, unbelievable and unacceptable. Every Member accepts the changes introduced in 2012 disproportionately affect and impoverish women. I have told the Tánaiste that almost 25% of women in receipt of a State pension are discriminated against to the tune of €30 a week. That is a lot of money for people on a fixed income. Something needs to be done about it now.
The Tánaiste deliberately and cynically conflated two matters. The retrospective application of the homemaker's scheme would cost several hundred millions of euro. What needs to happen in the here and now is a reversal of the band and rate changes introduced in 2012. The Tánaiste was correct that the cost to the Exchequer of that would be €70 million. That is what needs to happen.
The women affected campaigned on this issue before the budget. Fine Gael and Fianna Fáil were aware of this issue before they signed off on the budget. The women in question have been led to believe there is unanimous support in the Dáil for the reversal of the 2012 changes, and that the Dáil understands and will end this discrimination against women. That is what needs to happen. I am putting it to the Tánaiste that she makes that happen now.
In the timeframe I outlined, I stated the Minister would make some recommendations later this year. The 2020 date related to the implementation of the total contribution action, TCA, to replace the yearly average approach. The Minister is working with her Department on the detailed development of that with a view to making proposals for consideration later in the year.
It is worth pointing out the many positive changes in the budget for families such as reducing costs and supporting child care.
Many other budgetary decisions were taken this year which were important in increasing income for working families, reducing taxes for those in work and supporting families in a whole range of other ways.
This is a particularly challenging issue. I have already accepted that we do not want discriminatory elements in pension provision.
Women have to deal with the impact of this on an ongoing basis. The Government is examining the issues and, in particular, the Minister in the context of the total contribution approach. She is conscious of this particular issue for women who have gaps in their contribution record which impacts on their current pension.
I am seeking clarification and detail on the Brexit fund for small and medium-sized enterprises, SMEs, announced in Tuesday's Budget Statement. Connected to that is the issue of the European Union-Mercosur trade deal.
Agriculture is Ireland's largest indigenous sector with over 300,000 people employed directly or indirectly in the agrifood sector. County Tipperary has a proud tradition of excellence in the agrifood sector with many famous brands produced in the county. The Tipperary Food Producers organisation is a community of SMEs working in the agrifood sector in the county, showcasing the best of Tipperary food, with over 30 members producing quality artisan products such as Cashel Blue Cheese, Crossogue Preserves, Lough Derg Chocolates, Crowe's Farm bacon and many others. Their main concern is Brexit. Tipperary is also home to many dairy co-ops which process milk into a wide range of dairy products such as cheese, butter, milk powders and baby powder for the home and export markets.
Agriculture in Tipperary is an important employer supporting thousands of jobs in our rural economy. Ireland exports 90% of its agricultural produce which is worth €1.1 billion per year to the economy. The sector has already been hit by a dramatic fall in the value of sterling against the euro from 76 pence, just before the UK Brexit referendum in June 2016, to 89 pence currently.
It is against this background that I welcome the announcement in Tuesday's budget that a new €300 million Brexit loan fund is to be established for SMEs facing unknown Brexit challenges. Several representative groups have asked me about the detail of this particular scheme. To whom will it apply? What are its terms and conditions? They have also expressed concern that the loan applications would not be taken until next March.
What is the Government's position on the current Mercosur trading bloc deal, taking into account that the IFA stated it could reduce Irish beef prices by at least 30% which would inflict losses of €500 million per annum on the industry? Will the Tánaiste give me some detail on both these matters?
The new €300 million Brexit loan scheme will ensure there is affordable financing available to businesses which are either currently impacted by Brexit or could be in the future. For example, it could apply to the type of firms and businesses referred to by the Deputy which have a high dependence on the UK market and whose supply chain could be disrupted by Brexit.
The scheme is to ensure accessible finance is available to viable businesses at a lower rate of 4%. The scheme will be delivered through SCBI, Strategic Banking Corporation of Ireland, and will be provided through commercial lenders. A tender process will occur over the next several weeks and SCBI will have a website up by the end of this month with the details.
Although details have to be worked out in association with SCBI and the providers, there is agreement with and strong support for this scheme at EIB, European Investment Bank, level. We are confident about the introduction of this scheme. It will provide loans ranging from €25,000 to €1 million, and perhaps slightly beyond. The details are not finalised yet but they will become available in the next period. Firms will be in a position to apply and register their interest towards the end of September. The scheme will get under way in the new year.
I expect finance will then very quickly become available to appropriate firms that meet the criteria to be developed by the Strategic Banking Corporation of Ireland, SBCI, in association with the providers in the next period.
As regards the European Union-Mercosur trade deal, the Minister for Agriculture, Food and the Marine is working closely with other countries that have difficulties with the terms that are emerging, in particular regarding the beef sector. We are working with those like-minded countries. The Taoiseach raised the issue with the President of the European Commission, Jean-Claude Juncker, a little over a week ago in Tallinn. We are concerned by the deal because we are aware of the high dependency of the country on beef exports, in particular to the UK, and that any change or diversification of that market will take time. The prices are right in terms of exports to the UK and this issue is very challenging. We support trade agreements and, as an open economy, want to ensure the new trade agreements on which the EU is working are put in place but we also want to protect our vital sectors such as the beef industry as much as possible.
I appreciate the Tánaiste's clarification on the fund that is available. The reaction of people to the measure since it was announced leads me to believe €300 million will not be sufficient but it is a genuine effort to help small companies that have trading difficulties with the UK. There are many such companies and they are a huge source of employment, in particular in rural areas. I hope there will be flexibility and that additional funds will be made available to support them if required.
It is very important that the Government is aware of the impact on Irish beef farmers of the trade deal currently being negotiated and the difficulties that will arise in terms of the number of cattle that will be required to fulfil the deal. That will have an impact on beef prices and the Government needs to be very strong on this issue, in particular when one considers the traceability, labelling and quality standards of Irish beef compared with that which comes from South American producers. The products are not comparable and it is unfair and unjust for that type and quality of beef to be allowed into the European market. In particular, consumers should be aware that the deal is under negotiation. I believe they would object to inferior beef of that type being brought into the marketplace.
I assure the Deputy that the Minister for Agriculture, Food and the Marine, the Taoiseach and all other Ministers are very conscious of the situation he has outlined, the potential threat that exists and the possible impact it could have on the beef industry at a very difficult time. We will be working very hard, in particular with like-minded countries, to ensure we get the best deal possible.
As regards the demand for financial support, my Department has filed for a rescue and restructuring package of about €10 million with the Commission to ensure that is available should it be needed by companies that may be impacted by Brexit. The current €300 million scheme will be in place for two to three years: loans will be for periods of up to three years and the fund will run for two years. A longer-term fund is also being considered that would support businesses and provide funding over a six to seven-year period. We are conscious of the need to ensure finance is available to companies that may be impacted by Brexit in both the short and medium term.
I thank the Leas-Cheann Comhairle. The young have long been treated as an easy target for budget cuts. In the first few austerity budgets, young people were singled out for particularly vindictive treatment. Third level fees skyrocketed, there were cutbacks to unemployment benefits for those under 25 and youth services were cut to the bone. The message of successive Governments, first that of Fianna Fáil and the Green Party and then that of Fine Gael and Labour, was that the country could not afford young people and perhaps they could try their luck elsewhere. As a result, tens of thousands of people, including dozens I grew up with, left for Western Australia, Canada, London, the United States and countless other places. Those left behind faced unemployment or underemployment and miserly supports if they could not find a job.
The Taoiseach is fond of telling the House of his republic of opportunity. Young people do not want a hand-out or any special pleading but only the opportunity to have a decent standard of living. However, my generation is being denied the opportunities that previous generations took for granted. There was little in the budget to convince those who travelled to the four corners of the world there is anything in this republic of opportunity for them to come home to. Some 15,000 students marched outside Leinster House last week seeking respite from the crippling fees that are discouraging many from pursuing the education that could give them real opportunities. However, the Government appears deaf to their demands. The Government also appears to be militantly opposed to equal pay for equal work for young workers in the public sector. I remind the Tánaiste that the youth unemployment rate remains at 15%. Those who do not have work face discrimination because of reduced unemployment benefit regardless of circumstance or whether they have mouths to feed or rent to pay.
Earlier this year, the Taoiseach, who was then Minister for Social Protection, confirmed to me that Ireland had drawn down none of the Youth Guarantee funding available to it in the previous year, so the indifference of the Government to young unemployed people should come as no surprise.
Housing is the key issue for young people. The average rent is Dublin is now €1,700 and the average purchase price of a property is €250,000 countrywide and much higher in Dublin and Cork. People are breaking their backs just to keep the roof of a cold poky flat over their heads.
The young of this country have the opportunity to be blocked from getting a third level education, to face discrimination in pay and unemployment benefits, to live from one short-term contract to the next while earning pathetic pay, to pay a third or half their income on rent and to be locked out of the housing market. When will the Government begin to deliver a republic of opportunity for my generation and to give them the opportunity to ever own their own home? At present, that is nothing but a pipe dream.
The best message from the Government to the next generation is that we have a republic of opportunity, which is created by managing the economy and ensuring there is money to invest in services. If the economy is not managed properly there will not be funding available to invest in services such as education and the others the Deputy mentioned. The budget contained the highest-ever allocation for education, involving an increase of €554 million or 5.8% to more than €10 billion. It provided for 2,000 new teachers and special needs assistants. Overall Government investment increased by more than €1 billion in budgets 2017 and 2018. We have moved from having an unemployment rate of more than 15% to full employment being expected next year. That is a message of hope for the children in the country and for the people who left the country, many of whom, thankfully, are returning to take up the jobs the Government is ensuring are available. Job creation offers hope to young people in the country and those who have gone abroad but who can now return to jobs. That is the reality of the situation. It is a different reality to that depicted by the Deputy. This is the first time in ten years that a Government has been able to ensure that we can live within our means and doing that means we can provide the kind of future we want, one in which people have access to housing, a health service that works for them and the kind of education that is needed.
In terms of training for young people, there will be a fund to ensure that training courses are available for young people to develop the kind of skills that employers need. There is an increase in apprenticeships, which is a very important route to jobs for many young people and one in which there was underinvestment previously. However, decisions made by the Government will ensure that a range of training initiatives will be available to young people to ensure they will be skilled and will have the education for the kind of work that will come on stream in the new digital economy.
There has been very successful ICT training for young people which has ensured they have been job ready. Taken together, all of this gives hope to young people and ensures they will have a bright future in their own country.
The Tánaiste referred to 15% unemployment. As I said, that is still the rate for young people. She spoke of the reality I outlined. That is the reality for young workers. Any young workers to whom I speak are on a treadmill that is getting faster and faster as the cost of everything that matters to them in their lives, whether insurance, housing or anything else, increasingly outstrips any increases in their pay. They simply cannot keep up and they feel locked out. I meet such people in my clinics every week.
I raised with the Tánaiste the specific issue of housing. The Government and Fianna Fáil said this budget would be measured on the basis of what it did in housing. If that is so, it has surely failed in that there will be no new social housing beyond what has been already announced and, incredibly, literally nothing on affordable housing. This is a hammer blow to the ambitions of thousands. This is a huge category of people, ranging from those in the tech professions in Dublin to tradespeople in Limerick. It is a wide variety of people from all sorts of backgrounds who are unable to qualify for social housing and cannot get mortgages, and this Government is doing literally nothing for them. They come to my clinics and ask me what options they have. They have none, and this Government is doing nothing about it. It made an announcement about the possibility of an affordable housing scheme this year. There was nothing in this budget on that. For seven years Fine Gael has been in Government. The Government talks about working families. That is absolute cant to those who are simply paying a fortune on rent and have no prospect-----
Budget 2018 removes remaining significant obstacles to the building of more homes more quickly and at more affordable prices through a number of measures, for example, by investing more in direct housebuilding, removing the capital gains tax initiative to hold on to residential land, escalating penalties for land hoarding, introducing new affordability measures and providing a new, more affordable finance vehicle for builders.
The various initiatives that have been taken will ensure a more affordable supply of housing. Home Building Finance Ireland, the new entity announced by the Minister, will provide finance at commercially competitive rates for developers with sites ready to go. The second local infrastructure housing activation fund, LIHAF, of €50 million will also make a difference. A whole range of initiatives is being taken that will ensure a more affordable supply of housing-----
As well as being budget day, last Tuesday was World Mental Health Day. It is a day of increasing importance, given the explosion of reported mental health problems in Ireland and right around the world. The World Health Organization estimates that by 2030, depression will be the largest contributor to disease burden. In Ireland, at least one in four people will have a mental health problem in the course of their lives, and for young people the figures are even more striking. By the age of 13, one in three young people will have experienced a mental health problem. By the age of 24, that will have increased to more than one in two. Tragically, Ireland now has the highest rate of child suicide of girls in Europe, and ten people die by suicide every week in Ireland. Why is this massive rise taking place? It partly relates to a reduction in stigma surrounding mental health and, therefore, a rise in reporting. However, it is also hard to avoid the conclusion that we face an epidemic of mental health problems or, as Mark Fisher put it, a mental health plague. There are multiple contributing factors but there is increasing recognition of the role of social and environmental factors. To be blunt, neoliberal capitalism has created a society with deepened, dramatic inequality. It has driven the atomisation of people and the breakdown of communities. These are the conditions in which, unfortunately, mental health problems thrive. The Royal College of Psychiatrists in the UK reported that inequality is a major determinant of mental illness. The greater the level of inequality, the worse the health outcomes. Children from the poorest households have a threefold greater risk of mental ill health than children from the richest households. This risk is particularly strong for those facing homelessness. A new study reveals the results for both parents and children are devastating and lifelong. The risk is strong for those facing oppression such as young LGBTQ people, who are four times more likely to have mental health problems, and Traveller communities, which face suicide rates six times those of settled communities.
What needs to be done about this? The stigma needs to be taken out of mental ill health. We need to fight fundamentally for a society without alienation and in which people do meaningful work, have control over their lives and are connected to others in their communities. We need proper funding and staffing of mental health services right now. We need universal access to counsellors in primary care and 24-7 direct-access mental health clinics supported by round-the-clock telephone support, but we do not have this. We had A Vision for Change in 2006, which still has not been implemented. The Government's announcement in the budget of €35 million extra was not honest because €20 million of that was announced last year. It is an additional €15 million. I know the Government sent a letter this morning to Mental Health Reform stating that the money will be given and that A Vision for Change will be implemented, but I do not see the figures adding up. It is stated in the confidence and supply arrangement that A Vision for Change will be implemented.
Mental health and dealing with mental health issues must be priorities for any society. I absolutely accept the point Deputy Murphy makes in this regard because of the personal cost and the societal cost of mental health issues and the personal suffering. As a Government, we want to support in whatever way we can the development of proper mental health services throughout the country. A Vision for Change is the blueprint on which the Government is working. The funding has been increased substantially over the years, with more than €900 million in 2018 going on mental health services. The issue to which the Deputy refers is new funding for mental health services, and budget 2018 allocates an additional €35 million to develop mental health services in 2018. The figures published are accurate. The Minister for Health and the Minister of State with responsibility for mental health have also committed an additional €55 million in funding for 2019. This means a total of €105 million in additional funding for the implementation of A Vision for Change, which is due for review.
A review is ongoing because the policy is many years old. That total of €105 million in additional funding for the implementation of A Vision for Change over the three-year period 2017 to 2019 and that extra €35 million will help build on the work that was commenced in 2017 on the enhancement of what we need, namely, community care teams for children and adults, later life and mental health care, and intellectual disability services. It will also help to continue our move towards a full 24-7 service, with an initial focus on increasing the provision of services on a seven-day-week basis. The HSE has been asked to prioritise this in 2018. The mental health budget will rise from €711 million in 2012 to over €912 million in 2018. This is an increase of 28% in six years.
If the budget shows our values in terms of putting more money into mental health care, it is very clear that we absolutely recognise the need to increase the budget to have a proper mental health service for all our population throughout the country. The overall increase in 2018 in mental health spending will be just under €60 million when the €35 million for service development is combined with the €24 million in additional funding for pay increases. In finalising the HSE national service plan, there may be some adjustments to these figures to take account of procurement savings or other HSE-wide efficiency initiatives.
The budget will increase and fund more staffing in CAMHS, adult psychiatry and later life psychiatry. In addition, further resources will be provided to programmes for eating disorders, dual diagnosis, mental health of homeless people, perinatal mental health, prison inreach services, mental health and intellectual disabilities services and service users' participation. We can see there are significant increases this year, next year and the following year which meet fully the commitment for that €35 million per year. The total that has been decided will ensure the implementation of A Vision for Change is allowed for in those years. As the Deputy said, that has been given in writing to the HSE by the Minister, who has asked it to make sure it starts the staff recruitment that is necessary to have that development of the services.
Some 20% to 25% of overall ill health is caused by mental health problems but less than 7% of the health budget is going on mental health. The Government has played with figures. It played with figures last year in terms of mental health and has done the same in this budget, as opposed to properly allocating the funding to bring us up to the percentage levels that apply in other European countries. The latest figures this morning still do not make sense. There is an answer in the Dáil record in July from the Minister of State, Deputy Jim Daly, stating that just to meet the staffing gap in order to meet A Vision for Change requirements would cost an extra €128 million in a year. If we accept the €35 million figure, that would still require an increase for the next budget of €90 million, and that applies without dealing with any of the capital costs. To actually implement A Vision for Change, if the Government is not going to do it next year and will instead do it in 2019, it would need to allocate an additional €150 million next year. I do not see the Government doing that, although it should. The Government should spell out how the figures match up. If it is going to meet the staffing gap that has been outlined and identified by the Government, and allocate the capital necessary, how is it going to happen?
What is very clear in the budgetary figures is that the total figure for implementing those developments we have been speaking about under A Vision for Change has been costed at €105 million, and that is now allocated between the budgets going up to 2019. The Minister has made it absolutely clear to the HSE that this is the funding it will have so it can plan, prepare and recruit staff, and start that recruitment in time to make sure the staff are in place in each of the years. Obviously, that has already started for 2017, 2018 and 2019.
That is what it has been estimated it will cost but the Deputy should bear in mind what I have said, which is that this is just part of the funding for mental health services. There is also, for example, the capital investment that is being made in Portrane and there is the over €900 million overall in the Department of Health budget for mental health. There is a very serious commitment to the development of mental health services, although we also need to review A Vision for Change and that review is under way, as I have said. The Minister, Deputy Harris, and the Minister of State, Deputy Jim Daly, have written to the Mental Health Reform group confirming an increased allocation for mental health over the three-year period, 2017-19, and they will meet that group, which does such excellent work, in the near future to discuss plans for mental health. There is that key commitment for the budgets up to 2019 to ensure A Vision for Change is implemented.