Simon Harris (Wicklow, Fine Gael) | Oireachtas source

So would I. I am sure we will be back again, and the discussions on the social welfare Bill and the finance Bill will give us plenty of opportunities to tease out some of the issues raised by Senator O'Donnell and many others. I will endeavour to get through as many as I can.

I thank Senators for their contributions which I have found useful and positive. I also found the constructive criticism to be useful. Senator Bacik and others made the point the budget is modest. It must be modest in its ability to spend additionally and we had to try to target this. There will always be political debate on all sides of the House on whether the Government got it right or wrong, but it is important to note that no Member of this or the other House or the public expected the Government to be in any position this year to increase in spending or alleviate the tax burden.

We find ourselves in a political and budgetary environment in which, if we were all being honest, nobody in the House expected us to find ourselves. In this sense the Government has made an honest effort to begin the process of investing in a targeted manner in the public services we require, which all Senators know are important enough to call for increased investment in them. We must also look at how to begin to reduce the tax burden in a manner which incentivises and rewards work and increases the differential between working and not working, while providing support to those not in a position to work to enable them access work or, should they not be able to, to provide them the standard of living they should be able to expect.

It is now very clear to everybody the economy is in recovery. The budget targets the limited resources available to the best effect to accelerate this recovery, spread throughout the economy and country and provide support to those individuals and families who need it. I am the first to acknowledge we still have a good way to go, but from now on the journey will not be marked by austerity but rather by a debate on how we increase living standards and get more people back to work. This is a debate of which we all want to be part. We all got involved in politics to be involved in this debate. We are now at the point that we can look to have this debate again and ask where do we want the economy to go and how we want to use economic growth to create the society in which we wish to live.

We are very conscious not to return to the errors of the past which wrecked the economy, destroyed jobs and mired the lives of millions of people. We have heard from Senators on all sides about some of the impact of this destruction on the lives of people today. We now know how to restore the public finances and bring the economy back to full health. The Government will not deviate from the path and we will continue to realise these goals.

I want to get through many points but I may not be able to do so. I will start with Senator O'Brien, who made a very constructive and generous contribution, perhaps more constructive and generous than the contribution made by his party's spokesperson in the other House. Senator O'Brien began by acknowledging the positives in the budget. He welcomed the DIRT exemption for first-time buyers and will think about giving up cigarettes. He also raised important policy issues which we can tease out, such as child care. He welcomed the living alone allowance, which is a modest but important payment and an important signal of the intent of the Government. He spoke about a number of health issues. These will be fleshed out by my colleague, the Minister for Health, in the coming weeks and during debates in the House.

Senator Michael D'Arcy spoke about the need for a more realistic health budget. It is important that we have a budget which can realistically be expected to deliver on the desires of the Irish people and on the commitments in the programme for Government, such as free GP care and extending BreastCheck to women up to the age of 69. Senator D'Arcy made a point on the status of DEIS schools and he should take this up with my colleague, the Minister for Education and Skills.

The 80,000 people taken out of the universal social charge today and the in excess of 300,000 people who were already outside it, means that in the lifetime of the Government 410,000 people who were paying universal social charge when we came to office no longer pay it. A further 700,000 people will directly benefit from a rate reduction from 41% to 40%. The changes we made to the universal social charge at the higher rate with regard to 8% for those earning more than €70,000 is a signal the Government wants to target the relief at the squeezed middle, which is the colloquial term we now use, by ensuring people earning more than €70,000 do not benefit disproportionately. This is quite important.

People will benefit. There are many people earning €30,000 or €40,000 who are paying the higher rate of tax from €32,800. After today they will not pay it until €33,800 and they will also experience a rate reduction from 41% to 40%. That is not all we want to do. The statement of Government priorities from the Taoiseach and the Tánaiste during the summer is very clear on this and this is just a first step. I take Senator O'Donnell's point about the bands. We will have the Finance Bill and I will raise her concerns with the Minister for Finance and suggest that we can have that discussion on the Finance Bill.

I want to be very clear to Senator Zappone that I am not engaging in self-congratulation. That would be entirely inappropriate - far too many people are unemployed and far too many are in mortgage arrears. It is important to note, however, and I do genuinely feel this point, that when something goes wrong in the country, no matter who is in government, Government gets the blame, and when something goes right in the country, there is a tendency to say "Ah, sure, it would have happened anyway". I do not believe that.

My colleague, the Minister for Finance, has made the point that the economy did not recover by an act of God. I think it recovered for three reasons, so far. As Senator Craughwell has quite eloquently acknowledged, massive credit must go to the Irish people, if one looks at the industrial unrest in other countries, compared with how the Irish people engaged with the Haddington Road or Croke Park agreements and got on with the job, delivering vital public services in tough times. Second, the work that we have done internationally on restructuring our debt is not finished yet, but we have improved the cashflow of the country over the next decade by €40 billion. Whatever one thinks of the promissory note deal, before it was in place the Minister for Finance would have had to sit down and find in excess of €3 billion to give to Anglo Irish Bank.

The third reason is policy. Policies like the 9% VAT rate have been welcomed today. There are also policies like the home renovation incentive scheme and the abolition of the air travel tax. All of this together has got us to this point. I would argue that the tax changes are progressive, for the reasons that I have outlined. When one talks about actual numbers - amounts in people's pockets as opposed to percentages - that is a debate we can continue to have, but we did target these changes at removing as many people as we could from the USC. The process will continue, reducing the higher rate of tax, but targeting it at people on middle incomes. That is quite important.

The issue of mental health was raised by many Senators. My colleague, the Minister of State with responsibility for mental health, Deputy Kathleen Lynch, has secured €35 million for this area. However, I take the point made by Senators van Turnhout and Gilroy, among others, that it is about the delivery of that service. Deputy Lynch feels passionate about this issue and I am sure it will be debated in this House. The Minister for Public Expenditure and Reform's speech did refer today to the issue of more front-line staff, more psychologists, access to counsellors, and that is something we must flesh out.

Senator Hayden set the budget in context, where we have come from and the point we have reached. She talked about how we have invested €3.1 billion more in the economy through this budget than we thought we ever had. She commented on the "double Irish" issue. It is important to me in my role in relation to the financial services sector that we continue to ensure our economy is competitive to attract more investment. The important factors are rates, regime and reputation. By getting first move, or advantage, on the "double Irish", rather than having the OECD base erosion and profit sharing, BEPS, process drag countries there, Ireland is showing its intent to work with that process and to take a leadership role. I expect other countries with similar practices, be it the "Dutch sandwich" or whatever else, will follow.

The issue of homelessness and social housing, on which Senator Hayden is far more an expert than I am, came up on all sides of the House. We have today seen a major investment. Some Senators wanted to know why we were not doing more or why we were looking at various vehicles. There is a limit to the amount one can do on the Government balance sheet, but the innovative solutions proposed today looking at public private partnerships and a financial vehicle to deliver through affordable housing bodies, constitute a step in the right direction. It is not fair to categorise it as a small step. Some €2.2 billion of an investment is a pretty major step.

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