Michael McCarthy (Labour)

I welcome the Minister of State, Deputy Mansergh, to the House and congratulate him on his appointment. As we all know, he was a Member of the last Seanad.

The measures in this budget come as no great surprise but the severity of it has disappointed many of us. It is only now that the chickens are coming home to roost and the ordinary compliant taxpayers, the hard-working families, are paying for the decades of cute-hoorism. The Minister for Finance, Deputy Lenihan, talked about the need to restore calm in the public finances and to bring back some type of order. However, we should not forget that it was this Government that brought about the mess that represents the financial capability of this country — the lack of money and the state of public finances. The budget has mercilessly attacked middle-income families. It has gone after those people with a vengeance. It has failed to protect those it sought to protect — those whom the spin says it is protecting — and has left the super-wealthy free of contributing their fair share to the recovery of our economy.

Despite that fact that we are seeing the most serious increase in the numbers out of work in recent times — there has been a mammoth increase — there is not one initiative in the budget to deal with the number of job losses or to deal adequately with those who lose their jobs by providing education and training. The people who will suffer most as a result of this budget will be the nurse, the teacher, the garda or the skilled tradesman — people who are struggling to make ends meet, pay mortgages or child care costs or send their children to university. These families will pay more in tax and more for the range of public services, and the full extent of these charges will not be clear for a number of days. The social welfare package is only half of what was announced in last year's budget and it is clear that those at the bottom of the pile are going to fall even further behind. The Government has inflicted the maximum possible pain on middle-income families and done nothing to ensure that those who have made vast fortunes out of the Celtic tiger are contributing to the recovery of the economy.

This budget has done little to encourage younger people to join the agricultural sector. The measures announced to extend the farm stock relief and stamp duty relief schemes for trained young farmers are welcome, but they could have been bolder in bringing the over-35s into the equation with regard to stamp duty. The suspension of further entry into the young farmer installation scheme sends a clear message from the Government to those who might enter the sector to stay away. In order for farming to be viable we need young blood. We need young people and new people to come into it. That is not happening.

The protection of the vulnerable in the area of social affairs has failed to materialise. The budget is €515 million, half of what it was last year. The general increase of €6 in social welfare payments will do little to offset the increases in food costs and the general inflation-based increase of 4.3%. It misses the point in terms of protecting the vulnerable. People are now finding themselves on the dole queues after years of economic prosperity and jobs for everybody. Last night the standard entitlement to unemployment benefit was cut from 15 months to 12 months. These cuts have been applied to people who are already on the live register and who have effectively been hit with a double whammy. Why? It is because in the first instance they have had the misfortune of losing their jobs at the beginning of a very difficult recession, and now they find they cannot even rely on the welfare income to which they thought they were entitled — the same welfare income to which they had been contributing while they were working. This aspect of the budget has all the hallmarks of a move to encourage emigration. That is despicable and disgraceful.

With regard to the removal of the entitlement to medical cards for those over 70, we must go beyond the spin put on the by Government. Let us begin with the inception of the scheme. The scheme, termed the "gold card" because of the fees being paid to GPs, which was four times what they were being paid under the ordinary medical card scheme, was introduced in 2001. The political thinking behind that move was to win the 2002 general election. There was nothing else. The Minister who introduced it, former Deputy Charlie McCreevy, would have been well advised by civil servants, colleagues and others, if he consulted with them, of the financial implications of the move. However, it was political opportunism at its worst. Now the Government wants to withdraw it. It wants to take people out of the scheme and put them back in a means-tested system. These are the people who have the greatest need of health care — those who depend and rely on this card for a wide range of services, including access to public health nurses, GPs and therapists.

My telephone has been hopping and I am sure every public representative, whether Government or Opposition, has been contacted by people who are now fearful of losing their medical cards. Research has already indicated that people who cannot afford a GP and who do not have a medical card will stay away from their GPs. This will contribute to ill health among that section of society. It is despicable. This move was first leaked to the media two or three weeks ago and became a talking point. The spin was that only those over a certain limit — the retired bankers, consultants or barristers who could well afford to do without it — would lose it, so there was not much sympathy. Thus, a spin campaign was begun to ease people into the knowledge that the scheme was being ended. However, we now realise that many more people than we originally thought will lose their cards. Fear has been created among these people, and that is unforgivable.

Third level fees, registration costs or whatever one wants to call them are an expense for those attending third level institutions. I got a call yesterday evening from a constituent who was attending University College Cork and was already living hand to mouth. I will say no more other than that this is a genuine case of hardship. He now has to countenance a payment of €1,500 which he does not have. It is because the Government is intent on reversing the brave and visionary decision of the rainbow Government under the stewardship of Niamh Bhreathnach when she was Minister for Education, to abolish third level fees. This Government is intent on reintroducing third level fees. We have seen a number of Ministers fly the flag on their reintroduction, including the former Minister for Education and Science, Deputy Noel Dempsey, who was bailed out by Deputy Harney, and more recently the Minister, Deputy Batt O'Keeffe, who relied on a golf-playing dental economist, who must be very adept at education economics, to push the case for reintroducing them.

The Government is sneakily doing it through the back door. The charge of €1,500 is a scandal and a disgrace. The descendants of the visionary education Minister, the late Donogh O'Malley, who abolished second level fees, must be appalled by this move. What will be next on the Government's agenda for education? Will costs and fees for second level education be introduced? Why is it so against third level education? Why is it so opposed to people from less well off backgrounds going to university? These are the people on whom we will rely to reboot the economy and to provide the services and qualifications needed to keep this country vibrant and turn the corner from the recession.

We were promised 4,000 extra teachers by the Government. What has it done? It has slashed 400 teaching jobs. We were promised 20 pupils per teacher. We all know the classroom size issue. Every single candidate who contested the general election last year would have been lobbied extensively by educationalists about this matter. What has happened? The ratio has increased from 27:1 to 28:1. Is that not some indictment of the Government's educational policy? School transport fees have gone up to €300, an increase of 150%. Of all the moves, taking the medical cards from the over 70s and registration fees are the most despicable.

I conclude on a point I made on the Order of Business this morning. The Government should be honest and call the income levy what it is. It is an increase in the income tax levels from 20% to 21% and from 41% to 42%. We got a distorted political lesson from a colleague in this House a while ago, who supported the income levy being introduced, but opposed the one introduced because of dire financial consequences in the 1980s brought about by reckless spending on behalf of Fianna Fáil after the 1977 general election. Senators should bear in mind there are no allowances or reliefs for this particular taxation. The Government should be honest and call it what it is. It is not an income levy; it is an increase in taxation. Throughout this debate, the Government Senators will support and the Opposition will oppose. I am dumbfounded that any Senator could possibly ride both horses in this Chamber this evening.