Tuesday, 9 October 2018
Budget 2019: Statements
I apologise for being late but I was detained in the Lower House.
As a former Member of this House, I am very pleased to have the opportunity to contribute to the Seanad’s debate on the Budget Statement 2019, which the Minister for Finance and Public Expenditure and Reform presented to Dáil Éireann earlier today.
The budgetary measures announced today are being made in the context of a strong and growing economy. Gross domestic product, GDP, is expected to grow by 7.5% in 2018 and 4.2% in 2019. There are an 380,000 more people at work today than there were in 2011 and the rate of unemployment is at its lowest level in a decade. The progress that has been made since the economic crisis has been extraordinary. Significant challenges remain, however. We continue to suffer the longer-term impacts of the crisis, most notably in the slow recovery of the construction industry. We also need to guard against the competitive pressures that inevitably arise in a fast growing economy. The measures outlined in today’s budget will help address these issues.
There are also significant external factors that may significantly impact on society and the economy, not least Brexit. The Minister for Finance, Deputy Donohoe, stated today that Brexit is the political, economic and diplomatic challenge of our generation. I fully agree. While we continue to work to achieve an agreement that minimises the impact of Brexit, we are preparing for all eventualities. This budget will help to ensure that Ireland is in the best possible position to respond to the challenges that Brexit will bring. It does so by eliminating the headline deficit; achieving the medium-term budgetary objective of balancing the budget; building up the rainy day fund; reducing the debt burden; and investing in infrastructure and education.
Due to the strength of our economy our public finances have improved. The progress we have made means that we will reduce our deficit to 0.1 % in 2018. Building on this progress, the Government will balance the budget next year for the first time since 2007, a significant achievement.
In a growing economy with low unemployment and strong public finances, it is only right that central government act responsibly by future-proofing the public finances and preparing for the next inevitable slowdown. For this reason, we have also committed to run budget surpluses in the future and to use them to reduce debt. The Government has also created the rainy day fund to increase the State’s resilience to larger economic shocks. The fund will be capitalised with €1.5 billion from the Ireland Strategic Investment Fund and supplemented with an annual contribution of €500 million from the Exchequer, starting from 2019.
Our commitment to responsible budgeting is also reflected in the decision to withdraw the temporary stimulus measures introduced for the hospitality and tourism sector. Given current economic buoyancy, it is appropriate to do so. It is clear that the measure achieved its objectives. Ending the special rate of VAT will raise €466 million in 2019 and allow the Government to avoid reliance on once-off increases in other tax heads, particularly corporation tax. It also allows us to reprioritise expenditure to a number of key areas. The decision to restore the 13.5 % rate of VAT for this sector enables funding to be reassigned to priority areas such as housing and health. It is prudent and responsible management of the public finances.
I will now outline some of the key measures contained in today’s budget. Along with further developing our preparations for the inevitable disruption Brexit will bring, the budget is focused on addressing the housing crisis, protecting the most vulnerable in our society and ensuring we continue to improve our competitiveness. The largest increase in expenditure in budget 2019 is in housing, to which the Government is allocating €2.3 billion. When added to the additional funding local authorities are allocating for housing next year, this amounts to an increase of 25% on the 2018 allocation. This level of support underlines our continuing commitment to addressing the housing and homelessness crisis. Some of the figures cited in the Lower House are wrong. Sinn Féin Deputies indicated the increase in funding for housing was €80 million. That is absolutely wrong. The State has never spent as much money on housing as it will spend next year.
Although all the key indicators of supply are positive and activity is ramping up considerably, there is still a long way to go to improve access for those at risk of homelessness and to increase affordability for low and middle income earners. Slightly less than €1.25 billion has been allocated for social housing. This funding will help deliver 10,000 new social homes in 2019 through a combination of construction, acquisition and leasing. This investment will bring the number of new social housing units provided under Rebuilding Ireland since 2016, to almost 31,000 units. In recognition of the extreme challenges being faced by those experiencing homelessness, an additional €30 million has been allocated for homelessness services. This will bring spending on homelessness services to €146 million in 2019.
To help address the real problems young people have in buying a home, the Government has allocated €89 million to the serviced sites fund. This will be followed by further funding in 2020 and 2021, bringing total funding available under the fund to €310 million. This funding is being provided to local authorities to deliver low cost affordable housing. It will provide for a discount of up to €50,000 per affordable home and will support the delivery of approximately 6,000 affordable homes over the lifetime of the fund.
Providing suitable accommodation to our citizens is just one of the priorities of Government. Others include provision of a modern, fit-for-purpose health system and ensuring the most vulnerable in our society are provided for through the social welfare and education systems. The Government is providing an additional €1.05 billion to the Department of Health for 2019. This will bring the health allocation to a new record of €17 billion in 2019. We are committed to using these resources to protect the most vulnerable in our society. The 2019 allocation will include an additional €84 million for mental health services, bringing the total available funding for mental health to €1 billion. There is also an increase of €150 million in funding for disability services. Total spending on disability services next year will be almost €2 billion.
The allocation for health will also facilitate a range of additional services, including initiatives proposed under Sláintecare. These include a €25 increase in the weekly income threshold for general practitioner visit cards, a 50 cent reduction in prescription charges from €2 to €1.50 for all medical card holders over the age of 70 and a €10 reduction in the drugs payment scheme threshold from €134 to €124 per month.To further the Government's policy of discouraging smoking, the excise duty on a pack of 20 cigarettes will rise by 50 cent, with a pro rata increase on other tobacco products. That will bring the price of cigarettes in the most popular price category to €12.70.
The social welfare system is there to protect all citizens and I am pleased to say that the Government has today increased all weekly social welfare payments by €5. The 100% Christmas bonus payment to all social welfare recipients has also been restored this year at a cost of €265 million.
The Government is also investing more than €1.8 billion to support children with special educational needs, allowing for an additional 950 special needs assistants, SNAs, to be recruited in 2019. That will bring the total number of SNAs to more than 15,900, a substantial commitment to help those most in need of assistance in the education system. The funding is part of a total of €10.8 billion that is being allocated to the Department of Education and Skills, a 6.7% increase on 2018. It includes funding of €66 million to meet our changing demographics and will allow for almost 1,300 additional posts in schools in 2018.
In response to the recommendations of the independent review of the national training fund, the Government will establish a multi-annual, ring-fenced human capital initiative of €300 million over the period 2020 to 2024. The initiative will increase investment in higher education courses across the country.
Our ability to continue to invest in education, and social services more generally, depends on our ability to maintain competitiveness. That is why this budget contained measures to continue the Government's support for small businesses. SMEs provide most of our employment and additional Government support for this sector is crucial in light of Brexit. A total of €950 million has been allocated to the Department of Business, Enterprise and Innovation in 2019. That is an increase of 9% on last year. Earlier, the Minster, Deputy Donohoe, announced the launch of a future growth loan scheme for SMEs in the agriculture and food sector. The scheme will provide €300 million in funding and together with last year's Brexit loan scheme, which also amounted to €300 million, forms an important part of the Government's Brexit response.
The year 2018 has been a difficult one for farmers. With that in mind, the Government is renewing the existing stock relief measures for a further three years. To help support more farmers cope with the problem of income volatility, the Government is extending income averaging to farms with off-farm trading income. In further support to farmers, an additional €57 million has been allocated in current expenditure to the Department of Agriculture, Food and the Marine in 2019. Some €60 million in current and capital Brexit-related supports will also be provided to improve resilience in the farm sector as well as supporting productivity improvements in the food sector.
To maintain our competitiveness, it is crucial that we continue to invest in the transport network. In 2019, €286 million will be made available to invest in new transport infrastructure such as: the N4 Collooney to Castlebaldwin road and the Dunkettle interchange; completion of the runway overlay project at Knock Airport and; design, planning and implementation of cycling and walking projects around the country. We are also improving and expanding public transport infrastructure and services through the provision of new buses, new and extended trams on the Luas and by increasing the amount of funding available to retrofit older parts of the public transport infrastructure.
Another important part of maintaining competitiveness is to reward work. The Government has repeatedly stated that the point at which people begin to pay the marginal rate of tax is too low. A key element of staying competitive is to remove disincentives to work additional hours for those on low pay. To continue the process of remedying that, the entry point to the higher rate of income tax for all earners has been raised by €750, from €34,550 to €35,300 in the case of a single worker. The third rate of the universal social charge, USC, has also been reduced from 4.75% to 4.5% to give a further targeted benefit to low and middle level incomes. For the 150,000 self-employed workers who make up an important part of the economy, the earned income credit will be also be increased by €200, to €1,350. The income tax changes announced today are responsible, sustainable and provide relief for those on lower and middle incomes.
Yesterday's report from the Intergovernmental Panel on Climate Change outlined the serious consequences of inaction on reducing greenhouse gas emissions. Budget 2019 builds on the commitments made in the national development plan, which represents a step change in funding commitments relating to climate action. One in every €5 in Exchequer investment in that plan will be devoted to addressing climate change. In 2019, the Department of Communications, Climate Action and Environment will invest more than €164 million in targeted measures to achieve Ireland's energy efficiency and renewable energy objectives, in line with the Government's national mitigation plan. Additional climate related measures across other Departments in 2019 include: €103.5 million for improvements in grant and premium rates for planting forests; the introduction of the beef environmental efficiency pilot, BEEP, to further improve the carbon efficiency of beef production; and €70 million for the targeted agriculture modernisation scheme, TAMS.
Turning to the area of policing, three weeks ago saw the publication of the report of the Commission on the Future of Policing in Ireland. The Government is committed to reform and modernisation in An Garda Síochána. To reflect this support, the allocation for An Garda Síochána has been increased by €60 million, or 3.5%. The increase allows for recruitment of up to 800 gardaí and will support Commissioner Harris to drive the reforms that citizens, and the gardaí themselves, deserve.
Other important initiatives announced today include: support for the first round of projects under the rural regeneration and development fund; major investment in the Defence Forces; and an extension of the three year tax relief for certain start-up companies until the end of 2021. The measures announced earlier will build resilience in the economy, ensure fiscal stability and, crucially, help prepare us for Brexit, in whatever form it takes. Budget 2019 continues the process of embedding the progress we have made in recent years. It provides record levels of funding for housing and health and eases the burden for those on low and middle incomes. Budget 2019 represents a progressive budget, with an emphasis on addressing real social needs and it does so in a sensible, responsible and sustainable way. I commend the budget to the House.
I thank the Minister of State for addressing us this afternoon. I was in the Lower House for the Budget Statement from the Minister for Finance, Deputy Donohoe, and for the contributions of my party colleagues, Deputies Michael McGrath and Cowen. They had an hour between them and the Minister's speech ultimately took approximately 75 minutes. I have eight minutes so I will try to summarise some of what is involved and point out some of the parts I wish to highlight.
I welcome the opportunity to speak on budget 2019. Fianna Fáil remains committed to providing stability in the middle of crucial Brexit talks. Following the confidence and supply agreement, many people thought we would not get to one budget let alone three. However, here we are delivering our third budget and facilitating the minority Government. It is important to remember that Fine Gael has 49 Deputies in the Lower House and if one includes the Ceann Comhairle, our party has 45. As a result., there is not that much of difference between the parties. The gap is narrower than it was. Our approach to this budget was to provide stability.
We will reset the clock.Our approach has been to provide stability and address policy issues during an immensely difficult international period, with Brexit and potential difficult trade negotiations with the United States emerging as serious threats to our prosperity, as outlined by the Minister of State and the Minister for Finance earlier in the Dáil. This has provided the framework for economic growth for several years. We need to be cognisant of our significant reliance on tax receipts from US corporations. While welcome, it is certainly a challenge, of which we need to be aware.
Our priorities in the budget were Brexit, housing and the health service. We have secured an increase in the budget for social housing, while a further €60 million has been targeted at dealing with homelessness. While not sufficient, it is a step in the right direction to end the scandal of homeless families living in hotels and bed and breakfast accommodation. Fianna Fáil has also secured a €310 million package for an affordable housing scheme in the next three years. This investment will be used to construct at least 6,000 homes by 2021 and includes a subsidy of up to €50,000 towards building costs on State-owned land. This will help to make homes available for around €200,000 for those who qualify. The fund will act as a subsidy for local authorities in building units which will then be sold to buyers at the build price, minus the subsidy. The moneys from the sales will then be recycled to build more homes. The scheme will be open to households with a single earner earning up to €50,000 and those with a dual income of up to €75,000. The average house price will be just over €200,000. While it is a small initiative relative to the size of the problem, it is certainly welcome.
The National Treatment Purchase Fund was abolished by a previous Fine Gael Minister, but it has been restored under the confidence and supply arrangement, for which the Minister for Health, Deputy Simon Harris, claims great credit. It has been increased to €75 million and expanded to encompass a wider range of services such as mental health supports. Up to €3 million has been allocated for disability assessments, while personal assistant hours, home help hours and home care packages have been increased significantly. Prescription costs are to be cut by 50 cent for those aged over 70 years, while the threshold for the drug payment scheme is to reduced by €10.
Fianna Fáil has again secured an increase in social welfare payments of €5 this year. That gives a total increase of €15 under the confidence and supply arrangement in pension, carer's allowance and unemployment assistance payments. There will also be changes to the entry point to the tax system. Fianna Fáil has focused on reducing USC for low and middle income earners. The 4.75% rate is to be cut to 4.5% as a result of our negotiations. The national minimum wage is due to be increased in January 2019.
Sinn Féin has overseen a world record-breaking period in which there has been no government in Northern Ireland. It issued a pre-budget document with a black hole in it and took a ten-week holiday when government formation talks took place in 2016.
I will need an extension of my time as I have so much more to say.
Sinn Féin's budget makes no provision for a rainy day fund in case there is a downturn in the future and breaks the fiscal rules by spending all of the money available. It advocated raising an extra €3 billion in taxes, including over €1 billion in corporation tax, scaring investment and jobs away. Ultimately, Fianna Fáil has taken the more difficult path of responsible politics and worked to give effect to our manifesto, while keeping faith with its pre-election promises. It is important to remember that Fianna Fáil is the main Opposition party by a fair margin. While this is a Fine Gael and Independents' budget, we have used our position to reduce the right-wing tendencies of parts of Fine Gael and halt its indifference to dealing with the housing crisis.
As a result of the confidence and supply arrangement, Fianna Fáil has ensured a minimum 2:1 investment in services to tax cuts ratio and a switch to progressive budgets. We have focused USC reductions on low to middle income earners, raised the old age pension and increased carer's, disability and unemployment benefits payments by €15. Fianna Fáil has extended mortgage interest relief, increased the home carer tax credit and earned income credit and secured 2,400 new gardaí. We have restored postgraduate grants for low-income students, had a 10% increase in capitation grants and reintroduced guidance counsellors to secondary schools. We have also reactivated the National Treatment Purchase Fund, abolished water charges, restored group water scheme funding and boosted third level funding.
In agreeing to the third budget Fianna Fáil has provided for economic stability for 2019 while we all face the consequences of the United Kingdom exiting the European Union. We are all hopeful of a Brexit deal as it would be in the interest of these two islands and the wider European Union. The Government's focus must now be on successfully concluding the Brexit talks. Fianna Fáil will continue to act in good faith and responsibly in the coming weeks which will be crucial. As in the confidence and supply arrangement, a review will be undertaken by both parties. I thank the Minister of State for giving of his time. Brexit is everybody's focus.
While welcome, we need to be cognisant that there is a significant reliance on corporation tax receipts from large multinationals. We must also look at ways to get people to retrofit and insulate their homes to ensure they will spend less on energy costs in the longer term to combat climate change. We should use the moneys we would be spending on climate change fines to get more people to retrofit their houses, as well as to have more energy efficient transport. It is not a problem for us but for the whole world.
I welcome the Budget Statement. I am happy that my party is facilitating its progression through the House.
I welcome the Minister of State, Deputy Michael D'Arcy. I acknowledge that this is a progressive budget and that it seeks stability and the sustainability of the public finances, which is to be welcomed. Nobody needs to hear that the next general election, whether it is held in a few weeks' time or the spring, is coming our way. The issues about which people are most exercised are housing, health and education.
I acknowledge the Government's allocation of a total of €2.3 billion for the housing programme in 2019. Up to €1.25 billion is to be allocated for the delivery of 10,000 new social homes through a combination of construction, acquisition and leasing. It is disappointing that we continue to top up the private sector disproportionately. I have no problem with supporting that sector, but I am interested in building new homes, regardless of who builds them. Given that there is a substantial number of landbanks owned by the local authorities, it is questionable that we are not directing finances directly to local authorities to build houses. It is the local authorities that are best placed to build them as they have the knowledge of the needs of local communities.
I acknowledge and welcome the extra €121 million to be provided for the housing assistance payment, HAP, scheme to provide for an additional 16,760 new tenancies next year. However, the level of mortgage interest relief for landlords will be raised to 100%. I do not believe in giving additional mortgage interest relief to landlords who refuse to accept HAP tenants. There should be a connection between the HAP scheme and mortgage interest relief. We have a problem when landlords do not accept HAP tenants. Why, therefore, should we be facilitating them with a 100% mortgage interest relief rate? Will the Minister of State feed this into ongoing considerations? While nothing will change at this stage, it is important to acknowledge this.
I acknowledge the extra €30 million to be allocated for homelessness services. Ideally, we want to put the focus on getting people into permanent homes. The increase in the allocation for the serviced site fund to support local authorities in bringing forward lands for subsidised and more affordable housing schemes is to be welcomed. It is planned that the funding will be increased by €20 million to €89 million, thus facilitating the delivery of around 6,000 affordable homes over the lifetime of the fund of three years.
There has been much excitement and talk about the Land Development Agency, but we have yet to see the legislation that will underpin it. Until such time as we see it, we do not know what funding will be necessary to get the organisation up and running. One has to question the difference with NAMA's role, functions, remit, landbanks and assets and how it will dovetail with the Land Development Agency. Is it just another fancy word for the same agency?We need to look at it but that is for another day.
We must put all of this housing related funding into context because at the end of the day, it means nothing to the people out there. Today there are 10,000 people, including 3,600 children, who are homeless or living in unsuitable accommodation such as hotels, bed and breakfast accommodation and emergency accommodation. We all know the Minister who stood up in the House and said that within six months there would be nobody living in hotels. What is the story? Statistics and numbers mean nothing unless we see action. We know that there are 10,000 people living in unsuitable, emergency accommodation. We also know that there are 85,000 households on social housing waiting lists across 31 local authorities and 30,000 people in receipt of the housing assistance payment, HAP. There are 70,000 home mortgages in arrears, 13,000 of which have been in arrears for more than five years. At the same time, we have State-owned landbanks, which once again relates to the issue of where we are directing the funding. There is a massive serviced site out in Thornton Hall and another substantial site at Shanganagh Castle. Approximately 26 acres will be available at the site of the Central Mental Hospital in Dundrum in eight or nine months. I know from my work on the Oireachtas Joint Committee on Housing, Planning and Local Government that there are over 300,000 ha. of State-owned lands which are ready to go but we are not seeing housing developments on those lands.
I wish to turn to health. I welcome the increase of €1.5 billion in health funding for 2019, bringing our overall health budget to €17 billion but we need an emphasis on value for money. Tomorrow we will be discussing the HSE in this House. What about value for money and accountability for how that money is used? What about how it impacts on the thousands of people who are waiting for essential hospital treatment? I welcome the €84 million for mental health services and I particularly welcome the increase of €20 million for the National Treatment Purchase Fund, NTPF. I was a director of that organisation and am very familiar with its good work and its ability to deal with the longest waiters. This Administration had sought to wind down the NTPF so the additional funding represents a U-turn, which is welcome.
I wish to refer to bed closures at the National Rehabilitation Hospital in Dún Laoghaire, which I have been championing for the past two years. I ask the Minister of State to commit today to asking the Minister for Health and the Minister for Finance to confirm when we will have the 12 beds that were closed in 2017 at the aforementioned hospital reopened. When will the children's ward of six beds that was closed in August be reopened? When will the consultant who ceased working there in August be replaced? I have continuously met with opposition every time I have asked about this. I have only two questions for the Minister of State today. Is there provision in the budget to get the 12 beds reopened so that the hundreds of people lying in acute hospital beds around the country can move to the National Rehabilitation Hospital? When will the paediatric consultant post be funded at the hospital?
These are the simple things that matter. Tonight people want to know what their chances are of buying or renting a home. Tonight they are worried about whether they will be able to have their cataracts removed or whether they will have to wait for another two years for health services. These are the things that matter to people. The job of balancing the books is a difficult one and I have acknowledged the Government's commitment to managing the public finances. This budget is a progressive one but it is the little things that matter. I ask the Minister of State to come back to me on the question of the National Rehabilitation Hospital in Dún Laoghaire.
I welcome the Minister of State to the House. In the relatively short time available to me, I wish to speak about the principles underpinning the budget. This budget is very much based on the themes of the previous two budgets. First, it is about ensuring that we are managing the public finances in a sound manner. In that context, we will have a budget surplus next year and are bringing the deficit down to 0.1% this year.
Second, it is about improving living standards and dealing with the vulnerable in our society. The Government has raised the point at which people start paying the top rate of income tax by €750 to over €35,000. We have also reduced the 4.75% rate of USC by 0.25%. We are increasing the minimum wage and are making sure that those earning that wage remain outside the tax net. I am particularly pleased with the announcement that jobseeker's benefit will be available to the self-employed from 2019. My colleague, Senator Ray Butler, has been championing this for many years. I was self-employed for between ten and 12 years. I had an accountancy practice and was self-employed in terms of my bread and butter. I feel strongly that we must look after the self-employed.
We now have full employment and in that context, the Government must ensure that living standards improve. Equally, we must ensure that additional taxes are used to look after the vulnerable. Social welfare payments have increased by €5 and additional funding has been directed towards the affordable childcare scheme. We are looking after those who are vulnerable and those in difficult situations in many ways. We are increasing the exemption limits in the context of the lone parent payment. Improvements have been made across a range of areas and are very welcome.
Given that we are now at full employment, we must direct money to drive investment. A total of €7.3 billion has been provided for capital investment this year, a 24% increase on last year. Significant investment will be made across a range of areas. In Limerick, the prison will be redeveloped and a new wing built onto the female prison. There will also be major investment in Shannon Foynes Port. A tax relief scheme will benefit Troy Studios, which has been a major investor in Limerick. It will be able to avail of more relief because it is investing outside the Dublin region. We are seeking to build a regional film industry and Troy Studios is an example of regional development in practice.
On housing, we should be working together and not point scoring. This year's budget will see €2.3 billion going into housing and €6 billion will be spent over three years. An affordable housing scheme is already in existence through the Land Development Agency, the aim of which is to build affordable housing on public lands. What was announced today in terms of affordable housing is not new. The Government already has an affordable housing scheme in place. Housing is about a range of measures. Do people have to go into the rental market? Yes, they do, which is why we need to provide more money for the HAP scheme. Would I like to see a strong social housing building programme undertaken by the local authorities? Yes I would and that is now happening. We must remember, however, that we came from a standstill. Little or no local authority housing had been built since 2008. Such activity was gone but we have now brought it back.
I feel very strongly about the need to build social housing but we must do it in a prudent way. Over the last four years, the level of current spending has increased by around 20%, which is way below the growth rate for the same period. By contrast, in the period between 2005 and 2009, current spending increased by nearly 10% per annum. We have to operate within budgetary constraints. In this budget, current spending is increasing by 4% but our growth rate is 4.2%. Our debt to GNI* ratio is coming down.While that is something I am very conscious of, we must proceed in a way that allows us to look after the interests of people.
Brexit is the biggest variable and unknown that we will face since the economic crash and the bailout of the banks. Provision is made in this budget for €300 million to go into a fund for SMEs and the agricultural sector, and €110 million to various Government agencies. Further funding is going to the Peace programme. There is investment in human capital, a training initiative that will get €300 million. That comes to more than €700 million. We should not lose sight of the fact that in the next ten days we expect a withdrawal agreement to be reached that ensures the backstop will be in place so that there will not be a hard border in the North.
The theme of this budget, similar to previous budgets, is that the Government wants to improve the lives of people who are working as well as the lives of people who are going through difficult times, whether they happen to be unemployed or disabled, but we must do it within the constraints of the public finances.
We are putting €500 million into a rainy day fund. Such a fund is needed because the winds of Brexit are coming downstream. There is a major increase in investment in education and health.
We have an ageing population and must make decisions on health spending. We want to ensure that we deal with the health concerns of people. We have a project for 60 modular beds at University Hospital Limerick. I am very confident that the Minister for Health, Deputy Harris, will deliver as he has given a commitment that he expects that this project will be included in his capital budget for this year. There is a major capacity issue in terms of beds in the region. The two areas with capacity issues are Drogheda and Limerick. The situation in Drogheda is being remedied and we need to ensure that we get the funding at local level.
This is a caring and responsible budget. It follows a theme of giving back to the people, investing for the future, and ensuring that we can deal with Brexit and that our public finances are sustainable. One of the problems was that current spending went out of control on the back of unsustainable tax receipts from stamp duty. We can never go back to those days again.
I commend this budget to the House and I thank the Minister of State, Deputy D'Arcy for his presence.
I welcome the Minister of State, Deputy D'Arcy. Where do I start? I have to refer to my colleague here on the left. I was very confused because I was trying to figure out whether it was a Fianna Fáil or a Fine Gael budget. My colleague kept referring to "we". I am not sure if he was referring to the royal we or what.
I always listen with interest but what strikes me is that there is lots of confidence but there is still very little supply. The reason I say there is very little supply is that if one is earning €30,000 per annum, one will benefit by 10 cent a day extra or 75 cent per week. If one earns €40,000 per annum one will get a total sum of 58 cent per week in saving in income tax. That is why there is more confidence than supply.
There is a great deal of talk about sustainability and stability. We have a debt of more than €200 billion and we are facing a number of external factors, Brexit, the situation in Italy, the trade wars between America and China and other things that are on the horizon. We find €1 billion in the drawer and we are not quite sure where it comes from. That does not fill me, as an Irish citizen, with confidence. Will we lose €1 billion next week, as we happened to find €1 billion? It reminds me of the time when the Fianna Fáil Party enjoyed 15 years in Government and each year, because of stamp duty, we had an extra this and that, and no one seemed to know what was going on. Then it was all revealed. No one knew what was going on, except the bankers.
Fianna Fáil’s attempts to present this budget as containing good bits that they influenced and bad bits that are the fault of Fine Gael is pathetic. There are, however, areas of this budget where the Government is looking to repeat the mistakes of the past that were made by Fianna Fáil in Government. In this budget there was hardly any mention of the instability of relying on unpredictable and unsustainable corporate tax receipts. This strikes me very much as a budget for the wealthy and they must be delighted because, on first reading of the Budget Statement, they seem to go untouched. Landlords are rewarded with 100% mortgage relief, and the question is whether they are required to reward their tenants in any way. We are spending €120 million on this relief, which could build a great many social homes.
This budget will be known as the tweaking budget. The Minister for Finance, Deputy Donohoe, was keen to talk about this year’s unexpected €1 billion, yet there is no mention of the years ahead. What if those receipts are not matched next year? This reminded me of the American Senate subcommittee hearing on corporate taxation when the situation around taxation in this country was exposed. I think we owe John McCain a debt in terms of the pressure that was put on multinationals so that they realise more and more that there is no place for them to hide. Even though we have taken the Apple case to the Europe Court of Justice and we do not want to take the money involved, multinationals understand that the net is closing and that is why the additional €1 billion appeared out of nowhere.
This is a volatile model which is a deceptive way of funding the health system. It reminds me, as I said of the over-reliance on increasing receipts from stamp duty more than a decade ago. This budget offered the opportunity to set out a sustainable and credible funding path for health to address capacity issues, funding shortages, and produce a sustainable delivery plan for Sláintecare, but it appears that this will not happen in the near future.
Last week, we met the Irish Hospital Consultants Association and it is of the view that the Government has entirely failed the health system. Deputy Cowen spoke of the reopening of beds in hospitals and the restoration of home care hours, which were cut. I nearly fell off my seat at such neck on the part of a member of the Fianna Fáil Party saying that and genuinely looking for praise for restoring home help hours or reopening hospital beds, when in government it insisted on closing them, giving our money to the banks and nationalising the debt. Now the party wants praise because a few euro will be spent on opening hospital beds and restoring home care hours. One could not make it up. It is like a black comedy.
Fianna Fáil’s fingerprints can be seen in the increased spend on the National Treatment Purchase Fund, NTPF, which will not address the chronic lack of investment in staff and facilities. The NTPF channels money into the private healthcare system and leaves no incentive to invest in the public healthcare system. That is why I say this is the tweaking budget. It changes nothing in terms of the privatisation of services, between housing and the health service. We are still giving away more and more power and authority to the markets and to the private providers and we are not taking responsibility as a nation for the essential services that need to be delivered.
Earlier this year we welcomed the ratification of the UN Convention on the Rights of Persons with Disabilities.The Minister of State says that money has been allocated for disabilities but there is a big hole there. Are parents of children with autism and other disabilities going to get the services they need through this budget? Are they going to get the physiotherapy, for which they currently have to wait for months, or the occupational therapy and the education they need? Are we going to continue to siphon off the responsibility for young adults with autism, other mental health difficulties and challenging behaviour? That is what is happening at the moment. We are pawning off these people, the most vulnerable in society, to other agencies which are not able to deal with them.
Another winner from today's budget were the banks. Two of the banks will not pay a penny in corporation tax for the next 13 and 20 years, respectively. They effectively have a tax holiday, though they earned well over €2.6 billion last year. There is an increase in the betting tax, which will raise up to €52 million over a full year. Why was this not higher? I worked in the betting industry in London when betting tax was 10%. I have many other things to say which I will reserve for the Order of Business.
This is clearly an election budget. There is something in it to keep some people quiet until we get through the next election.
This is a more than disappointing budget. After the dramatics of red lines, carefully planned leaks and statements on the plinth, it is a huge missed opportunity. Last week, I and my colleagues in the Civil Engagement group called for a very prudential policy to be adopted and we urged the Government to heed the cost of not investing in public services. We highlighted the need for the Government to demonstrate a commitment to lone-parent families, climate change, education, addiction support services and people living with disabilities. These areas have suffered from years of underinvestment and austerity era cuts.
I will begin with the subject of disability. Every one of us in Ireland was shell shocked, confused, disorientated, frightened and angry ten years ago. We could not believe what was happening. Over the next 12 months, another 60,000 people and families will experience disability for the first time. In March of this year the UN Convention on the Rights of Persons with Disabilities, CRPD, was to be ratified but it was a false dawn. There has been no announcement of a Government project or plan or any ambition to make things right for people with disabilities. There is horrendous unemployment, rising poverty, poorer education outcomes, a long-term housing crisis and huge waiting lists for children’s services and therapies and personal assistance services. There is apartheid in public transport provision.
I am not naive. The Minister says we have more special needs assistants but they are there because of demographic pressures. Funding for the disability allowance has increased to €150 million and a further €80 million has been provided for mental health but that is a post-ratification response. These announcements are an improvement on last year’s budget, which I welcome. The response, however, must be made redundant because the Government and the Dáil ratified the UN Convention on the Rights of Persons with Disabilities unanimously. I welcome the 2020 commitment to disability proofing.
I ask the Minister not to say we cannot do everything in one year. I know that is the case. This budget did not consider it important enough to unveil a whole-of-Government disability inclusion project with the ambition of implementing the CRPD over time. Níl aon tosach maith anseo - there is no good start here. The intent of Government in ratification is now in question, or at any rate its capacity to implement a Government policy, which was agreed last March, is in question.
In his Budget Statement, the Minister for Finance, Deputy Paschal Donohoe, said that Brexit was the challenge of our generation. I put it to the Government that unanimous ratification of the CRPD made disability inclusion a challenge for our generation and, more particularly, a challenge for our Government. This Budget Statement reneged on that challenge. People with disabilities were brought to the top of the hill last March and today they rightly feel that they have been slapped down. I challenge the Minister to prove me wrong. If the Government does that, I will be the first to acknowledge it.
Prudent investments in home care were mentioned. Let us talk about the hundreds of millions of euro being spent wastefully on residential care and long stays in hospital for people with dementia. There is €330,000 being spent for hospital beds per person per year on people who cannot be discharged due to a severe lack of funding for home care. An increase in social welfare benefits for carers of only €5 per week and a modest increase of €300 in the home carer tax credit have been announced. That is all welcome but falls far short of what is needed to address the needs of carers in Ireland. Earlier, Senator Kelleher called on the Minister for Health and the Minister of State with special responsibility for older people to come into the Seanad to address directly how this budget will close the dementia gap and to elaborate on the HSE national service plan and its delivery on dementia. I echo that call now.
It is welcome that some attention has been paid to the education sector, but the adjustments here are minor. The 950 new special needs assistants and the increase in the per-pupil capitation rate by 5% are a step in the right direction, but we are still way behind where we were in 2010, and we have no plan to reduce class sizes this year. Increasing the National Training Fund levy is the right thing to do, but simply providing for 3,500 new undergraduate higher education places is failing to address the fundamental problems that sector is facing. Education must be accessible to everyone in order for us to build a true Republic of opportunity and this budget has done little more than nod in the direction of that aspiration.
A commitment to gender and equality budgeting was articulated in the programme for Government and with the national strategy for women and girls, and progress has been recommended by the Committee on Budgetary Oversight in its report this year, as well as in the Government’s document accompanying last year's budget. What steps have been taken this year? Has the tax incentive for landlords, for example, been analysed for its impact on gender inequality, specifically in the context of lone-parent families? Senator Higgins has been calling for significant increases in support for lone parents who have disproportionately borne the burden of budget cuts and the failure to invest. She welcomes the €5 increase in qualified child payment for teenagers and the increased income disregard for those on one-parent family payments. However, lone parents are also disproportionately affected by homelessness and it is concerning that the refurbishment tax incentive for landlords may push the most vulnerable tenants out. Much more could and should be done. Failing to invest in lone-parent families means they are more likely to live in deprivation, they are more likely to be homeless and their children are three times more likely to live in consistent poverty.
There was a chance to invest in real, functioning and caring addiction support services in this budget. The potential longer-term effects of failing to do this are serious, putting pressure on mental health services and impacting children, as well as devastating families. Alcohol harm alone costs the State €2.3 billion every year.
On the environment, yesterday the Intergovernmental Panel on Climate Change made public the shocking finding that we have just a few years to ensure we do not exceed the 1.5° Celsius global temperature increase to which we committed. It is staggering that the Government has today decided not to rebalance the cost of fuels or to encourage and incentivise non-polluting and more efficient fuels, despite this having been well flagged in advance. This decision was described today by the environmental pillar as two fingers to everyone under 35, two fingers to the Paris Agreement, and two fingers to the hundreds of millions living in Africa, Asia and Latin America.Actions speak louder than words. Today, the Government has sent a message that will be heard loud and clear, that Ireland does not take its international commitments seriously, does not take climate change seriously, and does not take the responsibility to protect our beautiful country. What makes all of this worse is that we will face EU fines of between €150 million and €600 million as a result of reneging on our binding promises to the rest of the world. That is a waste of money, a waste of time and a wasted opportunity to green our economy. We have a carefully crafted budget today, a budget for the moment, but one that, sadly, weakens the achievement of long-term social improvements.
I, too, welcome the Minister of State to the House. I was a Member of the Lower House in 2011 when a budget was produced and there were cuts everywhere and it was hard to face the public on decisions that were made at the time. They had to be made because we were in deep trouble. In the budget in 2010, there was a difference of €17 billion between what we took in and what we spent. The budget today is virtually balanced. The progress that has been made over the past seven to eight years has been remarkable, not alone by our standards but by international standards.
The Minister for Finance spoke today about the future and the prudence of budgets going forward. Putting €500 million into a rainy day fund and using €1.5 billion from the Ireland Strategic Investment Fund for investment is planning for the future. We do not know what is going to happen. There is Brexit, which we are discussing at the moment, and a President in America who wants to look after his own country with trade barriers and protectionism. We do not know what will happen in the future and it is prudent that we plan for the future. This is what this budget does.
Whenever a windfall arose previously, Governments spent it on unsustainable wage and salary increases that had to be continued annually. The corporation tax windfall that has come about this year, however, is being spent on capital projects. That is what is important, that we build for the future.
I very much welcome the 25% increase in capital project funding for next year. My political opponents told me in 2016 that the Sallins bypass and the M7 road widening would not happen, but those projects will be finished next year because we are increasing the capital budget as a result of this spending.
The strange thing when I hear Sinn Féin talk about budgets is that there is no budget in the North. It is being dictated by Westminster. There was some form of government which had control. It makes me laugh to hear Sinn Féin talk in this House about what we do down here with the budget when there is no budget in the North and it is being dictated by civil servants from Westminster and not by the people who have been democratically elected in the North of Ireland. This is a shame.
There is a trend I want to talk about and about which I have been strong. I have been talking about childcare because it is almost a second mortgage for most householders each month. Most of them are in the country. There are many families in my community in Kildare where both parents are working and they need childcare. The measures introduced in the budget in respect of childcare have been very much welcomed. These include an increase in the basic income threshold so that people can get a grant, an improvement in the deduction where there is more than one child, which is very helpful, and the additional two weeks’ parental leave, which has been discussed. It now covers almost the whole first year, and it was the Minister's intention to do this over time. That has to be welcomed.
On education, Senator Dolan was critical of the additional 950 special needs assistants, SNAs. In 2011, we were struggling to maintain the number of SNAs, which was less than 10,000. We were fighting hard to keep the budget for that. That we have increased the number to 15,500 SNAs is unbelievable. The capitation rate increase of 5% is something which parents have been looking for, and when children leave school, we are investing in third level education.
I love the human capital initiative, which is building for the future. Those who have jobs or who will have the jobs we will create in future may need to upskill in light of the new technologies that will bring about change. Some of these changes will have an impact on people who are working at the moment. I am thrilled that additional funding is being provided for apprenticeships, and that we have ten new apprenticeships coming forward is excellent.
Another of my pet projects is overseas development, and an increase of €110 million in this area in the budget signals where we stand and where we are going.
The Minister of State is very welcome. This is one of the most progressive and most sustainable budgets we have had in this economy since the 1970s and 1980s, when, again, Fine Gael was in charge.
I enjoyed Senator Lawlor's contribution because he, I and many others in this House served either in this House or in the Lower House for the period of the previous Government. I do not think we will ever forget the hand that we were dealt and the difficult decisions that had to be made to refloat this economy to make sure it and this society had a future. After many tough years we know that the economy has indeed recovered. Now it is time for a social recovery.
This budget was an opportunity to fix the housing crisis structurally, to start to make education genuinely free, and to create a health service that works for everyone when they need it, not just for those who can afford to pay for it themselves. What we got instead was tinkering around the edges with bits and pieces here and there. It was a "Late Late Show" budget, with something small for almost everyone in the audience. When one tries to be all things to all people, there is sometimes the tendency to end up dissatisfying everyone.
In that sense, it is a budget without a clear focus. I am still not sure of its purpose other than the fact that it was designed to facilitate staying in office and potentially to buy an election that may very well be around the corner. It has not manifestly tackled head on any of the major issues facing us a society. I disagree with what Senator Kieran O'Donnell said earlier on. He tried to discern some kind of principle that is central to this budget. I cannot discern any particular theme, central narrative or single big objective or idea that would convince me, at least based on this and the previous budget, that the Government has any real interest in truly tackling the big social issues head on and transforming our society in the way it should be transformed.
The annual budget is a ritual that gives the Government of the day the chance to stamp its philosophy and complexion on the direction of the country. Today, we know a little more about the raison d’êtreof this Administration. For the first time in more than a decade, which was a very difficult period for many thousands of people in this country, we have real choices to make as a State. Do we use all of the extra resources that we have to provide as many homes as we can for our people, or do we decide to cut taxes? I know what side my party and I are on.
This is a conservative budget package in every sense of the word that objectively gives most in terms of tax cuts to the better-off in our society. To those who say they pay for everything and get very little in return, the most effective and proven way to make a real difference is more public housing, affordable accommodation, free schoolbooks and a radical shift to free primary care. It is the social wage and the value of that. It is utterly bogus to seek to convince citizens that the best way to improve their living standards is by spending €300 million on tax and USC adjustments that will be worth a pittance each week to most working people.
Let us look at the figures. On the income tax changes, according to Central Statistics Office, CSO, figures, only 22% of people pay tax at the higher rate.The Government is therefore spending a large wedge of public resources, part of €300 million, on a tax package for one in five workers that might be better deployed in reducing their mammoth childcare bills as opposed to providing a tiny increase in their take-home pay that amounts to damn all a week. I will give the Minister of State another example, which is both striking and revealing. Someone on the national minimum wage working a full week will gain 15 cent a week from the USC changes the Minister proposed earlier today. This will buy a grand total of two slices of Brennans bread per week. It is not two slices of bread a worker on the national minimum wage needs, it is a roof over his or her head. This tax package will deliver much more in these terms to someone on €75,000. It will deliver about a fiver a week. This is a scandalously inefficient use of available public resources.
At a time when more needs to be declared on housing supply, this budget objectively does not go anywhere near fixing the scale of the problem we face. Rather than listen to the 10,000 people who assembled on Molesworth Street last week, the Government caved into the landlords. Fianna Fáil really has some neck trailing this budget as a housing budget. It is not a housing budget but a landlord's budget. We are back to the future and it seems that the Fine Gael Party is becoming more like its colleagues in Fianna Fáil by the day. This severe case of what might be described as Stockholm syndrome sees the Fine Gael-Fianna Fáil partnership announce that landlords will have 100% mortgage interest relief restored but there will be no relief whatever for hard-pressed renters who work hard for a living. To expand on this point a little more, developers will get a subsidy to build on serviced land, much of which is probably in State ownership, and landlords will be handed an incentive to buy more houses with 100% mortgage interest relief. This will see young families priced even further out of the market, competing with professional property owners who will now have additional purchasing power to buy a home. This is mind-boggling stuff and utterly self-defeating. We cannot hope to meet the current and future housing needs of our people if we continue to rely excessively and unduly on the market to do it for us. The market has never delivered and never will deliver. There is no structural solution available that does not involve the mass construction of public housing. My party has produced a large-scale, detailed, comprehensive and fully funded project for 80,000 homes to meet the most fundamental needs of people across society over the next five years, but the dearth of ambition in this budget in housing terms is absolutely unforgivable.
It would, though, be churlish of me not to recognise the increases in weekly social welfare rates and the very welcome changes to the income disregard for those who are parenting alone. This is one policy area that unites everyone in this House, and rightly so. It is concerning, however, that welfare increases will only be paid from around the middle of March unlike the tax cuts which will apply from 1 January. It is unfortunate that welfare recipients will have to wait until the middle of March for what amounts to a €4 per week annual increase, not a €5 per week increase, if one looks at it across the 12 months.
It is good to see the Christmas bonus fully restored. I only regret that it never features in the annual budget line. To avoid any confusion in September and October, we should deal with this annually and put it into the budget lines, end of story. The Labour Party proposed investing, for example, €170 million and providing a universal back-to-school clothing and footwear allowance because we know to our cost that families of small children at school are those most at risk of poverty and experiencing high levels of poverty as it is. If we are to eradicate this cruelty and give all children every opportunity they need to be the best they can be, regardless of who they are or where they are from, we need to tackle areas such as this and make primary and second-level education truly free. For under €100 million, we could provide free schoolbooks for everyone in second and primary level and end contributions that are, unfortunately, far from voluntary. This is the full-year cost, by the way, of the small USC cut, which is worth, as I said earlier, two slices of white bread to the worker in a restaurant or a shop who is on the national minimum wage. These are the kinds of choices we face, and the chance to really make monumental changes to the way in which this society and economy are structured has unfortunately been passed up yet again.
I was glad to see Sinn Féin and the Labour Party mention Fianna Fáil so many times in their contributions on the budget. At least Fianna Fáil made a confidence and supply agreement for three years and did not run to the hills like Sinn Féin. Sinn Féin criticises everything from the minute it comes into this Chamber, and I see the Labour Party is doing the same. I know we need many changes and people need to see improvements, and Fianna Fáil wants this, but when I hear a Sinn Féin Senator mention Fianna Fáil at least seven times in an eight-minute speech today, it worries me that the party is so concerned. At least we did not run and I can say that as a Fianna Fáil Senator. Today's budget must be more than spin. We need to see action now. Spending is one thing, but promises of spending without timescales are another thing altogether and that is crucial. We need delivery on these promises, value for money, help where help is sought and action on the ground for people to see real change.
I welcome the movements on housebuilding but I would have preferred to see the projects that were promised in previous budgets come to fruition. I attend meetings of the Joint Committee on Housing, Planning and Local Government every week and we speak to the Minister, Deputy Eoghan Murphy. The delivery and timescales need to be looked at. I know there is an increase in the funding provided for homelessness services and I welcome the €310 million package for affordable housing over three years but, again, it is all about delivery. We need to see real houses for real people and we need to ensure that this housing crisis does not get worse.
Announcements of improvements over time for the public health system will not do anything now when we see that 525 people were on trolleys in hospitals last night. This is unacceptable. I know Fine Gael is putting money into the health system, but unless we see those 525 people on trolleys last night looked after, it defeats the purpose. I ask the Minister of State for a commitment that we will not see any patients, including old people and children, on trolleys. This is unacceptable and needs to be addressed now. Looking through the budget, which we are all still going through, we see an increase in funding for mental health services. This is welcome, but unless it is done properly and unless everything is worked on straight away, people will not see it.
Farmers have had a tough year and I have called for supports for them. The budget makes some acknowledgement of the difficulties in agriculture. I note there is a €20 million pilot scheme for suckler farmers, which is important because farmers are worried about Brexit and about what will happen next year. Brexit is mentioned several times in this budget as something from which we must protect ourselves. I am concerned, however, where investments are to be made as to whether protective measures are being put in place or whether we are just hoping Brexit goes our way and not making a plan B. If we have learned anything from the past, we know we need a plan B.
I note the education provisions in the budget and I welcome the provision of an additional 950 special needs assistants for 2019. We must ensure we deliver on this commitment.
Decent climate action is missing from the budget. It is shocking the Government did not take the opportunity to introduce incentives and imaginative ways to encourage more carbon-neutral lifestyle choices. There was a chance to be brave here. There is a lack of targets, timescales and commitment. I am concerned that while there are people who will be glad to see some of the cuts reversed, all anyone really wants is a better, fairer society in which promises are made and real change is delivered. This is all about timescales and delivery for people on the ground. We have the working poor and people trying to pay mortgages and paying rents.
I welcome all the changes, such as the €5 weekly social welfare payment increases and the Christmas bonus. People depend on these payments. All I ask is that we have delivery and that we do not find this time next year that there has not been delivery. People are counting on us. We are still in a housing crisis. I heard Sinn Féin, the Labour Party and others making criticisms.This is about the people - the poor people, the people who are in need, and the homeless. This is what we have to do now. This is up to us. We have given a commitment that we in Sinn - I mean, Fianna Fáil-----
-----will stick with the confidence and supply agreement. I was very disappointed with the way Sinn Féin criticised everything here today. I ask the Minister of State to ensure that promises that have been made will be delivered to the people because we need that.
I warmly welcome the Minister of State to the Chamber. I also warmly welcome budget 2019. The reality is that if we are to be prudent financially in the face of Brexit and the extensive debt we carry in this country, we do not want to face into more borrowing. We had a package of €1.5 billion to divide between tax cuts and spending increases or spending measures, as appropriate. There are many good cases and many sectors needing support, including health, education, and infrastructure. The list goes on. This budget is very considered in the sense that it tries to speak to so many priorities and, in fact, does. It is quite detailed.
I have a short period of time so I will just particularly welcome a number of issues which affect Mayo and the west, for which I have been fighting tirelessly and which have been recognised and begun to be addressed in today's budget. I very much welcome that because everything we decide here in terms of spending has an impact on people on the ground. It is to be hoped that, in all of this, we will see some positive outcomes from the money that is there to spend.
First, I will address the issue of pyrite. Pyrite is a plague on the houses of quite a number of people in north and west Mayo. It is devastating as a house can nearly fall down around a person because of pyrite in the blockwork. I know that, at Cabinet today, a pyrite remediation scheme, which will provide financial assistance to homeowners in Mayo on a phased basis to fix the blockwork in their houses, was approved in principle. I understand the scheme will be developed by the end of December and that money will be provided next year to carry it out on a phased basis. I expect and I understand that what this will mean for Mayo homeowners is that there will be a system of priorities with regard to which houses will be done first and that this will be done not on the basis of some politician asking that this house or that house be done. Clearly, some houses are more degraded than others. Some have been more exposed and the pyrite has reacted in the more exposed coastal areas. Clearly, there is a case to be made for prioritisation. This is a scheme that we can see going on for a number of years. I know that, on the east coast, problems with pyrite heave have been remediated in 1,000 houses with the financial assistance of the existing scheme. I look forward to seeing some positive results on the ground for hard-pressed homeowners. These are homeowners of private houses in Mayo. A person’s home is his or her key asset. These people have nowhere to turn. I also acknowledge that the State did not create the faulty blockwork, so this is a significant intervention by it. It will cost a lot of money but these people have nowhere to turn and are quite desperate. I welcome that.
The next issue is hard-pressed farmers in the west. Many farmers are trying to eke out an existence on marginal lands. We all know of the weather we have been having in recent years and of the fodder crisis. We know that beef farmers are battling low prices in factories and at the mart and are facing cashflow problems, Brexit, and Mercosur. It is very difficult. The bottom line is that they have not been making money. Unless we move to address this, we are going to see many of the younger farmers we want to get into the system saying that they have more options, that they have education and that they are going to do something else. That would be disastrous for our beef sector. I have lobbied the Minister for Finance and the Minister for Agriculture, Food and the Marine very hard on behalf of these farmers. I have been meeting farmers and farming organisations. I welcome the €20 million for the beef environmental efficiency programme pilot scheme. That will help underpin beef production and support the suckler cow farmer. There is also a €23 million top-up for the areas of natural constraint scheme. This will help not just the suckler cow farmer, the beef farmer, but also the sheep farmer because we have an awful lot of poor land in the west and in Mayo.
On infrastructure investment, without a doubt the greatest potential driver of economic growth in the west and north west is Ireland West Airport Knock. I very much welcome the commitment by Government to €8.2 million in funding for pavement overlay of the runway which was announced today. This is what we need to be doing to ensure that there is economic growth in the west. I give credit to the board, the staff and the people of the west who have supported the airport. It came into being against the odds. It was the people's airport, a community airport. It was never a State airport. It is highly efficient and it deserves all the support we can give it. I look forward to more. Today is a good day for the west. I welcome all of that.
I welcome the Minister of State. We will end discussion on budget 2019 on a happy note. Seven and a half years ago I came into this building as a self-employed person. I had seen what the crash had done in 2010 and 2011. While out canvassing, I had met many self-employed whose businesses had gone during the crash. I remember one particular time in Kildalkey in County Meath. I was canvassing this man and he brought me into his front room, which was his office. He showed me all his VAT returns, tax returns, and PRSI documentation. When he looked for something after his business went, he was entitled to nothing. He brought me down to his yard where he showed me a machine that was rotting away. He had made payments totalling €100,000 on it but he could not lodge it in the bank or send his kids down to eat it. I personally saw how self-employed people were treated during the crash. I was one of those self-employed people. I lost my business. When I needed help, I was entitled to nothing. It was so sad to see the frustration of that man in Kildalkey, who was not even able to pay his mortgage or put food on the kitchen table for his kids. It is very sad to say that we lost many self-employed people because many self-employed people went into dark places during the crash. They went down to fields and sheds and never came back because they were very proud men and women. We should also remember them today because this is a very good day for self-employed people.
When I was first elected, we met Department officials and they said that a stamp could not be put in place. They said it would cost 30% of a self-employed person's wage to put any stamp in place. We have come a long way. Today we hear the Minister say that we are to bring in a new stamp in 2019 that will entitle self-employed people to jobseeker’s payments. I give credit to Fianna Fáil for putting this in the programme for Government and I thank everyone around the House. We had a motion in this House, Members from all parties spoke passionately about this issue and we pushed it on. It is fantastic to see that we have recognised self-employed people through social protection for the first time ever in this country. I am talking about a stamp that should have been put in place 30 or 40 years ago. I am thankful that we have now got the message and a start has been made. I would like to see, if at all possible, sick pay also being brought on board next year.According to the online comments and from listening to self-employed people, they are very happy about today's budget. I thank everybody involved. It is a good day for the self-employed.
I welcome the Minister of State, Deputy D'Arcy, and thank him for his participation in this discussion. I also commend him on his stewardship of the cost of insurance working group, which is doing much important and necessary work. This is the starting point for me. The prudent management of our nation's finances is what today is about. I ask Senators to cast their minds back to where we were a decade ago. We should never look away from or forget that image. Today, our economy has almost full employment and we have a balanced budget. This may not mean much to people, but when the next cyclical downturn comes, as it must, we will be able to borrow money to provide for services and pay public servants, which we could not do the last time.
I listened to Senator Dolan's contribution. I am impressed that this budget will protect the most vulnerable and those who most need Government intervention. It will promote an improvement in living standards for all of our people. The budget will deliver an investment in capital but also in people. We have issues with housing whereby fellow citizens, husbands, wives, partners, girlfriends and children are in temporary accommodation. People also want a better pupil-teacher ratio and seek to gain access to the health service in a more timely manner. The budget is about putting people at the heart of what government is about. Senator Dolan spoke about disability. This is a good budget for the disabled community because it will help to improve their lives.
A decade ago, the then Fianna Fáil-led Government cut social welfare. This Government has not only reversed those cuts but it has also increased spending on social protection. An additional €3.50 per person is spent on social welfare now than was spent in 2007 and 2008. This will improve people's lives and living standards.
As a teacher and an adult education director in my previous existence, I am impressed that this budget invests in education. It will give people a gateway and pathway to a better type of life. I welcome the budgetary changes in education, whether at primary level through an improvement in the pupil-teacher ratio and increased capitation grants or at third level. Last year, the Minister for Education and Skills, Deputy Richard Bruton, had the best and biggest education budget in the history of the State. Today, he has been given a further increase.
The allocation for health has reached €17 billion. We now need to see delivery. The Health Service Executive (Governance) Bill 2018 will come before the House this week.
I thank Senator Dolan. It is time we had real reform in the health sector with accountability and delivery on behalf of the patient.
I compliment the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, on the budget of €2.4 billion he secured for housing. This budget will deliver for people by putting them in houses and getting them back to work. I thank the Acting Chairman for allowing me to speak in this debate. I commend the budget to the House.
I welcome the Minister of State, Deputy D'Arcy, and commend today's budget. In his budget speech, the Minister for Finance, Deputy Donohoe, said that for the first time in a decade we have balanced our books. As a result, we are more secure as a country and better able to care for people and families. I have been a Member of these Houses for more than 16 years and I remember the first few budgets during my time in the Oireachtas. It was a mix between a rock concert and a fleadh. All the various interest groups came into Leinster House in December to tell the Government what to do and every bar within half a mile was full. Now we have a prudent budget, which passes quietly through the House in October. This shows how things have changed in politics, thankfully. Rather than engage in megaphone politics, the Government has listened to the various interests and delivered a budget which gives something back to the hard-pressed middle and lower income families.
I welcome the increase by €750 in the entry point to the higher rate of income tax for all earners. This change raises the threshold for the marginal tax rate from €34,550 to €35,300 in the case of a single person. Middle income earners will also benefit from the reduction in the third rate of the universal social charge from 4.75% to 4.3%. Communities will benefit from the new healthcare and childcare measures, including greater access to GP visit cards, a €1 billion investment in mental health services and an increase in the number of families benefitting from affordable childcare schemes. This makes for a progressive budget for 2019.
The budget contains a range of new, fair and sustainable measures to care for the most vulnerable in our communities. It makes life easier for families. These measures include a €25 increase in the weekly income threshold for GP visit cards, a 50% reduction in prescription charges from €2 to €1.50 for all medical card holders over the age of 70 and a €10 reduction in the monthly drugs payment scheme threshold from €134 to €124. As a new parent, I welcome these measures. I also welcome the extra €84 million for mental services in 2019, which brings the total available funding for mental health to €1 billion, an increase of 9%. The provision of an additional €150 million for disability services for next year is also very welcome.
An increase of €5 per week in all weekly social welfare payments and the restoration in full of the Christmas bonus payment to all social welfare recipients will be a timely boost for many.
The creation of 1,300 additional posts in schools and 950 special needs assistants will be a major boost to many schools in the State. There is also considerable investment in the area of childcare and the early learning sector.
On transport, I am delighted that funding approval has been given to the N4 Collooney to Castlebaldwin road in Sligo as part of an extra €1.26 billion in capital funding made available to the Department of Transport, Tourism and Sport. This project, which is referred to in the 2040 development plan, is very welcome.
Provision has been made for a new paid parental leave scheme, which provides two extra weeks leave to every parent of a child in its first year. This must be welcomed by many families. I understand the Minister for Finance intends over time to increase paid parental leave to seven weeks. It is a very welcome change.
I commend some of the measures that benefit the farming communities. An extra €57 million has been provided to the Department of Agriculture, Food and the Marine to support the agriculture sector. The young trained farmers stamp duty relief and stock relief measures have been extended for a further three years. All in all, this is a very fair budget. It is nice to see it has been introduced in a measured way against a calm background, unlike the madness associated with the budgets introduced when I first entered the Houses.
I thank the Senators for their contributions. I remind people that it is ten years and ten days since the introduction of the bank guarantee, the worst political decision in the history of the State.It cost €64 billion gross and, according to the former Governor of the Central Bank of Ireland, Mr. Paddy Honohan, €37 billion net. Whether we like to hear it, that is from where we started. That is ground zero. Budget 2019 is the first balanced budget since that era. It has been particularly difficult for some people who were much more badly affected by the downturn than others. Some lost their businesses or homes, while others will lose their homes in the future. None of us can forget the difficulties people have faced, are facing and will face in the future. As public representatives, we must never lose sight of those who, unfortunately, find themselves in a worst case scenario. However, we have come a long way to be able to balance the budget. Not alone have we done that, we have also reduced the 2018 deficit by 0.1% or €350 million and are a year early in so doing such that rather than the deficit being 0.1%, it will be zero. That is from where we have come and where we are going.
I wish to touch on some of the issues raised and only have a short time in which to so do. On the issue of the self-employed raised by Senator Ray Butler, they are entitled to be in receipt of a social protection payment, as are employees. That will happen in 2019. Perhaps it might have been done some years ago, but at least we are doing it now.
Senator Michelle Mulherin raised the issue of pyrite. A sum of €32 million has been allocated in budget 2019 for 460 homes affected by pyrite. The Senator has been described to me in many ways, but “determined” describes her best. She has pursued this issue with a sharp determination and was correct to do so. The State is intervening to help people who have been affected by this issue. Better standards should have been in place. The Senator deserves much credit for her work on the issue.
I am particularly pleased by the beef environmental efficiency pilot project which will be expanded to include the dairy sector. Senator Ian Marshall, a fellow dairy man, is present. Although we have less stock than we did 25 years ago, we now must deal with the huge impact of climate change, of which we were unaware 25 years ago. I believe in the expansion of the dairy sector, but we can expand the dairy and beef sectors with better stock. We can produce as much product with fewer animals through better genetics and feed values. The improvements in technology and feed will also help to reduce methane emissions. That is the future. It is not only about stock numbers. Farmers will have to farm better than before and be prepared to change their work practices. Just because things were done in a certain way three, four or five years ago does not mean that we will continue to do it in that way. The industry is changing very quickly as the technology to facilitate such change is available.
I point out to Senator Jennifer Murnane O’Connor that we are spending €17 billion on health services, which is a significant amount of money. There will come a point at which we will not be able to keep spending money and will, instead, have to bring efficiencies and rationalisation to the health sector, in which there is enough money. If one factors in the private spend on health services in Ireland, we have one of the highest expenditure figures. It is important to note that a huge number of people enter the system and receive an excellent service at every level. Others do not and that is the area in which we must improve. It is not good enough that nobody is accountable to those who receive a poor service. The buck must stop somewhere.
Senator Gerald Nash questioned the logic of cutting income taxes. I have outlined previously in the Seanad the doubling of the income tax take from €11 billion to almost €22 billion over a six-year period, which is unheard of in any jurisdiction without being accompanied by riots, chaos and carnage. The Government got on with making that increase, as did the workers of Ireland. I do not apologise, therefore, for removing as many as possible - approximately 60,000 - from the higher tax band. To put the matter in context, the limit has been increased by €750 to over €35,000. It is my strongly held view that we should raise it to €40,000 as quickly as possible because the average industrial wage in Ireland is approximately €36,000 but for a person who works 40 hours per week it is €44,000. People earning the average industrial wage for a 40 hour week pay tax at a rate of 50% on approximately €10,000 of their income. It is hugely expensive for those in that bracket to work. It is a tax wedge which is doing damage. I do not apologise for the fact that €291 million will be forgone.
The USC rate changes will impact on approximately 1.5 million workers. On the homecarer's tax credit, an issue about which I am very passionate, 85,000 families with a stay-at-home parent will benefit from the €21 million allocated. Some 230,000 people will benefit from the €27 million allocated for the earned income credit for the self-employed. The raising of the point at which people move into the higher tax band by €750 will benefit 60,000 people. Some 61% of households will benefit from income tax reductions of €291 million. Senators must remember that the amount collected in income tax will decrease by €291 million after a period in which we increased the quantum over a six-year period by €11 billion. I do not apologise for giving some workers a small reduction in the amount of tax they pay.
On tax incentives for landlords and lone parent families, it is something we could consider. I do not know if it has been done, but I will look into it.
I point out to Senator John Dolan that we are now spending €2 billion in the disability sector. I am very pleased that we are spending more in it than we were. There could always be more, but the Minister, Deputy Paschal Donohoe, has ensured the budget is sustainable. We cannot spend more than what we predict we will collect next year. Some €700 million of the €1.1 billion collected in corporation tax arises from an international readjustment of how corporation taxes are calculated and will not recur. Therefore we will not allocate such an amount next year. It is prudent to do this, rather than pretend it will be available next year. Of the €700 million, €500 is going into the rainy day fund, while €200 million is going towards meeting the overrun in the health budget. It is the right thing to do. The health budget is also being funded from €250 million arising from under-expenditure in other Departments, as well as a third source.
Senator Rose Conway-Walsh is correct that two banks will not pay corporation tax for the next 13 and 20 years, respectively. Deferred tax assets are available to all companies, not just banks. We cannot change the provision for one sector only. If it were to be changed for the banks, it would also have to be changed for everybody else, which would cost a lot of money. We do not want to do so. Of course, the €100 million bank levy has been in place for several years. It is a matter for the Government to consider the matter on each appropriate occasion.
A split approach is to be taken to betting tax which is to rise from 1% to 2%.It is bringing in half of the amount. The other half comes from an increase in betting tax and the duty on the commission earned by betting intermediaries or exchanges from 15% to 25% for online betting, which is very good. I have huge concerns about gambling addiction and, in particular, online betting.
Senator Rose Conway-Walsh referred to the modest tax reductions, on which I touched earlier. However, her party's proposed tax increases of €3 billion are not modest at a time when we have increased the income tax take from €11 billion to €22 billion.
Senator Kieran O'Donnell spoke about many of the areas on which we have touched.
Senator Victor Boyhan suggested mortgage interest relief should not be available to landlords who did not accept HAP tenants. That is something at which we could look. I do not know if it would be possible, but I will try to find out for certain.
I do not have the details of the €17 billion health budget. The Senator had three questions about the National Rehabilitation Hospital in Dún Laoghaire related to the paediatric consultant, the six-bed children's ward and having 12 beds reopened. I do not know the answers to them, but I will try to find out for him.
The figure given in the Dáil for the increase in the housing area of €80 million is wrong. It took a little time to find it. The increase in capital and current expenditure in the housing budget is €728 million, not €80 million. It is a large increase. We expect to build or acquire 7,700 new local authority units, either by purchase or with approved housing bodies and others. The budget for the Department of Housing, Planning and Local Government will be €2.3 billion.
I really have an issue. I am happy to argue with people at any stage and anywhere about the facts. However, they should not present something that is not correct. It is wrong to be presented with a figure of €80 million when the actual increase is nine times that sum. It is both misleading and dishonest.