Nicky McFadden (Fine Gael)

To add to Senator Feeney's point, someone earning €98,000 will pay a 1% levy, the same rate as someone on the minimum wage.

While cautiously welcoming the small increase in social welfare payments, some of the measures to save money, such as the removal of medical cards from the over 70s, the increase in the pupil-teacher ratio, the removal of children's allowance for youngsters over 18 years of age and the increase in college fees, will negatively impact on lower income families. The increase in the pupil-teacher ratio should have been untouchable by the Minister for Education and Science. We will now officially move to a ratio of 28:1, the largest primary school pupil-teacher ratio in the EU. The cruellest part is that it will affect our children's chances of learning and their life chances in an increasingly competitive world. Consequently, there will be no jobs for 400 new teachers.

While recognising that we are in difficult times and a recession, it is regrettable that the Minister has chosen to step back from a progressive policy towards young people aged 18 years and over in full-time education by withdrawing the child benefit for this age group. It will lead to earlier school leaving because parents will find it more difficult to fund their children's education. The increase of €600 in registration fees for third level students is, as Senator McCarthy stated, essentially re-introducing fees, making it impossible for people from lower socio-economic groups to obtain third level qualifications.

While there was a basic increase in social welfare payments, what is €6.50? It would buy one pound of mince and half a dozen eggs. Given inflation, it does not add up to much. Likewise, the meagre increase of €2 in the qualified child allowance is not sufficient to help parents meet their children's needs. It beggars belief that our €6 billion surplus of last year was turned into a €15 billion deficit.

The 1% levy on incomes under €100,000, including those on the minimum wage, is a scandal and is the harshest aspect of this budget along with the abolition of the universal medical card for those over 70 years of age. On average, families will lose out to the value of €2,500 per annum, which will have a knock-on effect for small businesses. People will not have that €2,500 in their pockets to spend, thereby putting small businesses at risk. It was stated in the House how important small business and employing people in them are for the economy.

The spatial strategy was also given the kick. The gateway towns and innovation fund were scrapped. In Athlone, we were awaiting significant money for infrastructure projects, but it is gone. The reduction of 5% in the local government fund is another slight on communities and small businesses. There will need to be rates and increases in refuse and recycling charges. Small businesses must already endure the increase in energy costs. It is almost impossible to survive in small business in this downturn, but it will be impossible with the extra cuts.

This morning, Age Action Ireland made a presentation to the Joint Committee on Social and Family Affairs. The group spoke about fuel poverty, a matter that we have debated, and its effects on older people. The delegates expressed considerable disappointment with the removal of the medical card for those over 70 years of age and the 1% income levy. The €2 increase in the fuel allowance and its extension by two weeks is a pittance because €2 would not even buy half a bale of briquettes. Elderly people go to bed early to keep warm and to cut their energy bills or stay out with their friends in warm shopping centres. It is no way to treat people who have contributed to the economy by paying taxes all of their working lives. It is cruel and harsh. Every year, an extra 1,500 to 2,000 people die during the winter in comparison to the summer months. The stark reality is that we have the highest percentage increase in winter deaths in Europe.

I wish to raise the issue of housing aid for the elderly, now administered by local authorities, the scheme having being transferred from the HSE. Given the 5% cut in local government funding, I question how local authorities will be able to implement the scheme. In County Westmeath, there is a €600,000 shortfall in the housing budget for essential repairs and DPGs. I have serious doubts concerning how we will look after the elderly. People are in acute hospital beds waiting to go home. Age Action Ireland highlighted the need for a fuel poverty strategy, which we do not currently have. There must be joined-up action by all Departments to ensure that fewer elderly people die from fuel poverty.

The budget will make the country worse and lead us into a depression. We are going to borrow more this year, doubling our national debt. While everyone accepts that there is a downturn, other countries are not as badly off as we are. The Government has failed in the budget. Why were there no wage freezes, redundancy packages or serious levies placed on bank CEOs as promised?

I wish to refer to the disgraceful closure of Connolly Barracks in Longford at a time when the town needs to be supported by those working in the barracks and when real estate has devalued. It is a foolhardy fire brigade action.