Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State, Deputy Brian Hayes, and thank him for his speech. The first point to make is that we are making progress. The situation remains difficult, however, and we are relying on luck that the 0.2% growth to which the Minister referred will increase to 2% next year. There are many imponderables, including what will happen in the United States and the rest of the European Union. We certainly require a degree of good fortune.

Some 1.7 million people are in receipt of medical cards on income grounds, of whom 540,000 were granted cards in the past five years. I would not have chosen to extend the medical card to all children aged under five regardless of their parents' income in a situation where 1.7 million have been shown by means testing to require them. This particular provision gives cause for concern. As the Brennan commission reported, the extension of medical cards to over 70s some years ago was expected to benefit 39,000 people at a projected annual cost of €19 million. As we know, however, it ended up applying to 77,000 people and costing €51 million. Perhaps the costs have been more carefully calculated in the case of universal provision for the under fives, but we all know that when one reduces the price of something to zero, the demand is bound to be greater. In addition, GPs are saying that the Government has not engaged in negotiations with them on implementing the new system. In the case of the over 70s, even very wealthy older people were eligible to avail of the scheme. It is a shame we have taken the same tack once again. When we engage in social expenditure, it should be biased towards those who are objectively in a state of need. In this instance, all children under five would not have been my target group.

I heard Seán Whelan on the radio earlier today pointing out that €3.1 billion will be realised by the interest reductions plus the €2.5 billion adjustment set out in the budget. If Mr. Whelan is making that statement on the airwaves, it is good news for the Government in that the €3.1 billion target has been reached.

I welcome the abolition of the air travel tax and the retention of the 9% VAT rate for the tourism sector. The Department of Finance must ensure there is joined-up thinking in this area. The remaining obstacle to attracting tourists back into this country arises out of the decision to increase airport charges by 44% when the new terminal at Dublin Airport opened. In fact, the previous Minister for Transport, Tourism and Sport overruled the regulator on that occasion - the Commission for Aviation Regulation was effectively rendered useless - by insisting the charges be increased to recoup the cost of the new terminal. I hope the airlines will enter into the spirit of this - including Ryanair, which is the largest. I commend the Government on its efforts in the area of tourism.

The budget makes provision for an increase in the DIRT rate to 41%. The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, said recently that he was somewhat annoyed that the banks had intervened to reduce the rate of interest paid on post office deposits on the basis of there being unfair competition. I took that issue up with representatives of the banks at a meeting of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. Surely an organisation like An Post, which is solvent, should be able to pass on some reward to its savers, compared with those banks which are insolvent and made the country insolvent. A 41% rate of DIRT comes on top of the virtually non-existent interest rates being paid by the banks. The post office would like to pay more, and the Minister, Deputy Rabbitte, would like to see it paying more. As it stands, we are cleaning out savers with the reduction in interest rates and the imposition of DIRT at 41%.

The pension levy has been up and down, rising to 0.75% but with the promise it will reduce to 0.15%. The stamp duty on financial institutions will probably be passed on-----