Tuesday, 12 October 2021
Budget 2022: Statements
I am pleased to have the opportunity to appear before the Seanad today to contribute to the debate on budget 2022, which the Minister for Finance presented to Dáil Éireann a few hours ago. This year's budget has been prepared against a much more positive backdrop than the situation we faced this time last year. Forecasts of GDP growth in the economy have been revised upwards to around 15.5% this year, with modified domestic demand – a better measure of domestic conditions – expected to grow by about 5.25%.
We are now finally emerging from an unprecedented period which saw our economy and our society suffer at the hands of a terrible virus. I am acutely conscious of the impact the Covid pandemic has had on people’s lives and livelihoods. It has not been easy, yet we have shown immense resilience. We prioritised each other, limited our interactions, respected public health restrictions and got vaccinated in massive numbers. As we take the next steps on the road to recovery, we remember those loved ones whom we have lost and acknowledge the tremendous efforts we have made to get to where we are, particularly the dedication and commitment of our front-line workers.
Our collective efforts have helped facilitate the reopening of the economy and return to a more normal social life, and will see the removal of almost all of the remaining public health restrictions late next week. While we will remain vigilant, we must embrace this next phase in shaping our future. Budget 2022 will play an important role in this regard, adding to the significant policy actions that we have already taken to mitigate the impact of the pandemic. To date, the Government has made over €48 billion available to support household incomes, businesses and our healthcare system. This response was only feasible because of the careful management of our national finances in the years leading up to the pandemic.
This year’s budget represents the next phase of our national policy response. It will help us to prepare for a sustainable recovery that renews our public services and living standards, strengthens our economy and repairs our public finances. The approach the Government is taking is two-pronged. First, we will continue to invest in the productive capacity of our economy and, second, we will return the public finances to a sustainable trajectory on a phased basis.
Given the continued levels of uncertainty, the budget is based on a number of underlying assumptions. One of the most important is that the virus remains contained at levels that do not jeopardise the capacity of our healthcare system. Over recent months, the successful vaccination programme and associated easing of public health restrictions have supported a strong rebound in economic activity. In the second quarter, modified domestic demand surpassed its immediate pre-crisis level. It must be acknowledged that the relatively fast return to pre-pandemic levels of activity is not uniformly reflected across all sectors. As such, supports continue to be required to facilitate the transition of workers and businesses to a more secure position.
Overall, the strong near-term outlook is feeding through to the labour market, where the number of people in employment is expected to increase by around 275,000 in 2022. Unemployment is expected to ease to approximately 6.5% by the end of next year. The Government remains committed to supporting the transition to employment for those who need help, including through training and reskilling programmes.
All of the actions we take must be consistent with maintaining stability in our public finances. A key budgetary objective is to ensure the deficit remains manageable and is steadily brought down to a balanced position over the medium term. Public expenditure will amount to €87.6 billion next year, which is below the ceiling set in the summer economic statement. The improving economic outlook is feeding through to the public finances, with the combined deficit forecast for this year and next reduced from just over €34.5 billion to €21.5 billion. However, while we are reducing our borrowing, the amounts involved remain substantial.
The budget represents an appropriate balance between tapering supports and continued investment. By 2023, the remaining deficit will solely be due to capital spending. The deficit is expected to be around €8 billion next year, but almost €11 billion of this is capital expenditure. We are, therefore, borrowing only for investment in 2022, which is a year earlier than targeted.
The staged repair of the public finances is crucial to our recovery and to insulate the economy from future shocks. It will ensure fiscal sustainability, bringing our borrowing needs back down within the limits established by EU fiscal rules. It is in this context that budget 2022 sets out a range of measures to support the recovery in the economy. The budgetary package amounts to €4.7 billion. Some flexibility has been built in to allow for any unexpected deterioration in the outlook and exceptional supports for Covid-19. The expenditure measures amount to €4.2 billion, with a further €500 million allocated to tax measures.
Turning to specific budget measures, the employment wage subsidy scheme, EWSS, will remain in place until 30 April 2022 to support vulnerable but viable businesses. For the period from December this year until February 2022, a two-rate structure of €151.50 and €203 will apply, with a flat-rate subsidy of €100 in place for March and April. Businesses availing of the EWSS on 31 December will be supported until 30 April 2022.
On remote working, the Government wants to facilitate a blended approach and support a better work-life balance. As such, an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and broadband while working from home is being introduced.
On income tax, a package of over €500 million will be introduced to support workers in light of cost of living pressures. The standard rate band will be increased by €1,500 and the personal tax credit, employee tax credit and earned income credit by €50 per credit.
On the universal social charge, USC, the ceiling of the second USC rate band will be increased to €21,294 to ensure that the salary of a full-time worker on the minimum wage remains outside the top USC rates. The exemption from the top USC rate for all medical card holders and those aged over 70 years earning less than €60,000 per annum is being retained. In addition, the national minimum wage is being increased by 30 cent to €10.50 per hour.
Housing is a key priority for this Government, with the recent Housing for All strategy setting out clear targets in this area. In this regard, a zoned land tax is being introduced which will apply to land that is zoned suitable for residential development and is serviced. It will be linked to the market value of the land, with the rate set at 3% per annum. The tax will replace the existing vacant site levy.
Also on housing, the help-to-buy scheme is being continued at the current rates for 2022 and will be subject to a review next year. In addition, the relief for pre-letting expenses for landlords is being extended for a further three years to encourage landlords in the residential rental sector to return empty properties to the market as quickly as possible.
Another key priority I will highlight is climate change. The Finance Act 2020 provided for annual increments in the carbon tax of €7.50 out to 2030. In order to ensure a just transition, the additional revenue will be used to fund climate-related policy measures, including a socially progressive national retrofitting programme, and to address fuel poverty.A modest tax disregard is also being introduced on personal income received by households who sell surplus electricity back to the national grid. In addition, further changes to the vehicle registration tax system are being introduced to help reduce road transport emissions, with the VRT relief for battery electric vehicles being extended to the end of 2023. The scheme for gas vehicles and refuelling equipment is also being extended for three years and hydrogen powered vehicles and refuelling equipment are being included in that scheme. I want to say very clearly that supporting farming families will play an important role in protecting the environment. As such, various farming stock relief measures are being extended.
Entrepreneurs and the business sector are another integral part of our domestic economy. Budget supports will include amendments to the employment investment incentive, extending it for three years and opening it up to a wider range of investment funds. The innovation equity fund, which is due to be launched in early 2022, will increase the availability of financing for Irish SMEs. In addition, corporation tax relief for certain start-up companies is being extended. A new tax credit for the digital gaming sector is being introduced to support digital games development companies by providing a refundable corporation tax credit for expenditure incurred on the design, production and testing of a game. The relief will be available at a rate of 32% on eligible expenditure of up to a maximum limit of €25 million per project.
In terms of revenue raising measures, excise duty is being increased on a pack of 20 cigarettes by 50 cents, with a pro rataincrease on other tobacco products. The bank levy will be extended for a further year and will be subject to a review next year. The transposition of the anti-tax avoidance directives will be completed in the Finance Bill 2021. As regards preparing for future needs, the work of the independent Commission on Taxation and Welfare, which is due to launch a public consultation shortly, will be crucial in ensuring that the Government supports a sustainable recovery over the coming years.
The key objectives underlying today’s budget are to ensure that we recover from the pandemic, restore our public services and living standards, and repair the public finances. The budget package and individual measures seek to balance these three priorities, harnessing our resilience and determination to deliver a sustainable economy and a truly inclusive society.
I thank the Minister of State for his comments. The running order for speakers who are present at the moment is Senators Casey, Norris, Maria Byrne, Pauline O'Reilly and Paul Gavan. I call Senator Casey on behalf of Fianna Fáil.
This is the second budget of this historic Government coalition, which aims to give the people of Ireland value for the money they pay in taxes by investing wisely in public services such as health and education, and strategically investing in the needs of our people, particularly in the area of housing. We also need to begin the budgetary policies required to make a meaningful contribution to the global problem of climate change. As if achieving these tasks were not serious enough, we also have to take into account the shattering effects of the Covid-19 pandemic on our society and our economy. The value of our front-line workers in the health service, and those in essential economic services such as food production, has been brought home as never before. The people of Ireland have risen to this challenge with a remarkable solidarity. That solidarity must be reflected in Government policy and that is exactly what this budget does.
Fianna Fáil in government has to deal with the reality of the ability of the Irish economy to provide the taxation income that drives our investment policy while ensuring our economy remains attractive for economic growth and business opportunities. There are populists in our politics who promise spending left, right and centre - or should I say left, left and left again - while also cutting taxes on people. This fantasy economics, based on populist communication strategies that would make Donald Trump and the Brexiteers blush, is being heralded as the change that Irish people want. Change indeed, but it would lead to an economic disaster that would decimate Irish jobs, shatter our public investment portfolios in health and housing, and condemn a generation to rebuilding a shattered society. It is important that the fantasy budgetary policies of the main Opposition party are challenged by all who regard themselves as patriots.
Unlike many on the front line of Irish politics, I know what it takes to run a business in Ireland. I know the sacrifices that family-run businesses make to create sustainable jobs, pay our taxes and grow our businesses from year to year. I have lived through several recessions and, being involved in the tourism industry, I know better than most the shattering consequences of the economic shutdown caused by Covid-19 on the tourism and hospitality sector. Budget 2022 is an ambitious budget by the Government, which is internationally recognised as having steered the State correctly through the Covid crisis. This Government is ensuring, through this budget, that all the people of Ireland receive solutions based in reality, on the problems we face in rebuilding our economy, building homes and ensuring we have a health and education service to be proud of. As a rural businessman I also am very much aware of the challenges facing the rural economy and farm families as we make the transition to an Ireland where all people are treated equally regardless of where they live or the significant challenges we face. Childcare supports, increased fuel allowances, social protection payments and pensions are proof that Fianna Fáil and this Government are delivering for all people, not just promising fairy tale stories that have no basis in reality. An increase in the income tax bands will give a tangible and progressive reward to all Irish workers and help those who are the backbone of our economy to benefit from their work and their contribution to our tax base.
The guiding principle of Fianna Fáil has always been and remains the common good of all Irish people. We do not demonise any part of our great nation. We value the contribution of businesses, workers, farmers and our public servants. Housing, healthcare, climate change and the cost of living are all being heavily invested in by this budget. The common good of the people of Ireland demands a Government that has a vision based in the reality of the challenges and opportunities we face, not just empty slogans, populist rhetoric and political division.
I will move on to the specific measures that were announced in the budget today. I welcome the overall budgetary package of €4.7 billion, including expenditure measures of €4.2 billion, taxation measures of €500 million and revenue-raising measures of €230 million. I also welcome the contingency fund of €4 billion that has been created. We are not out of this crisis yet. Sometimes we think we are because of the way we are going but we are not quite there.
On personal taxation measures, I welcome the income tax deduction of 30% of the cost of vouched expenses for heat, electricity and broadband incurred while working from home. As the Minister of State pointed out, the budget includes €520 million in income tax packages, increasing the band rate by €1,500 and increasing the personal tax credit, employee tax credit and earned tax credit by €50.
It is an objective of this Government to tackle, once and for all, this housing crisis. Financial measures relating to housing include the extension of the help-to-buy scheme for another year and the introduction of the zoned land tax. The Minister of State will be aware of the vacant site levy and how it really has not worked as it was implemented differently across the different local authorities. While I welcome this measure, there is a huge amount of work to be done to work out exactly how this is going to work, how transparent it will be and how each local authority will apply it. If it is to be implemented it has to be done universally across the board. That has not worked with the vacant site levy. On the extension of pre-letting expenses for landlords, while people criticise supporting landlords, they are a critical part of the housing solution. We have seen landlords vacate the housing market and we need to keep them in it so I welcome that.
I refer to the specific business supports. The employment wage subsidy scheme has been the lifeblood of the survival of many businesses across this country.I thank the Government for those supports. While I also welcome today's news that the supports will be in place in some form until the end of April next year, I will make an observation to the Minister of State, which he might relay to the Minister. Applications for supports will close from January of next year. The Minister for Public Expenditure and Reform, Deputy Michael McGrath, mentioned today that 115,000 people have been displaced to a different sector. One sector that has been most affected by the hollowing out of staff has been the hospitality sector. To bring in this measure in January, when we will be at our lowest employment levels and when we are trying to build our employment up for the season, will have severe implications for the industry. I ask the Minister of State to see if can he do anything about that. Finally, while I welcome the extension of the VAT rate to the end of August 2022, equally, the Minister should look at that over the next nine months to see if there a way that we can extend that VAT rate further because I do not believe the hospitality sector will be anywhere close to the position it was in in 2019, before Covid-19 hit.
First, in the Minister of State’s speech, he refers to changes in the vehicle registration system introduced to help reduce road transport emissions. That will not work. He needs to put the tax on petrol, on the basis that the polluter pays. This is the only way that it will work. I had this out with Ministers before and they agreed but they said it would be politically unpopular. I believe the Government needs to take unpopular choices.
I want to raise the question of children and books in school. We have a history here. Until 2008, primary schools received funding to stock libraries with new books to help students to learn and develop and to support their well-being. That was an excellent idea. It was forward looking. This grant, however, was cut in 2008 and has never been restored. I ask that the Minister restore this grant. Allocating just €10 to every primary school child in the country to help schools buy books for the libraries would mean a budget 2022 allocation of only €5.68 million. That would be well worth it as an investment into our future. We are always told people come to Ireland because of our well-educated young people. While that is true, we need to continue to help support them.
I received a good briefing, as usual, from Fr. Seán Healy and Social Justice Ireland. As a preface to this, I notice that flats are being bought up en masse by hedge funds, which is dreadful. I see the Government has moved to stop them doing this in respect of houses but that must be extended to take account of flats as well, as an increasing number of people in this country live in flats.
I will raise what I might describe as a slightly sectarian matter, namely, the question of the Church of Ireland school, Ballinlough National School, County Roscommon. As I am a member of the Church of Ireland, I acknowledge special pleading here. However, it is important that we look after our minorities, particularly in light of the Covid-19 pandemic. They are looking for a retention number of eight pupils, thereby allowing minority-ethos schools to hold onto their second teacher. As this was the retention number for many years prior to the 2008 recession, I ask for this to be continued.
As for the Irish Cancer Society - again I have some special interest here because I am a survivor of cancer and have had cancer three times - I wish to pay tribute to St. Vincent's Private Hospital and the superb work of Mr. David Quinlan and his staff there. Without them, I am not sure I would be alive today. I ask the Government to provide €45 million in new funding for cancer services, on top of supporting improvements for the wider healthcare system. Unfortunately, all of us actually are going to die. That is one of two facts of life. One is taxes and the other is death. I am asking for supports for people to die well at home. That would cost a mere €500,000. That is cheap. Funding improvements in the delivery of person-centred pilots of end-of-life and bereavement care in residential settings would cost €1.5 million. Investment in bereavement community support would cost €250,000. Supports for people to plan for their end-of-life care would cost €150,000. Again, this money would be well spent.
I want to ask for an increase in basic social welfare payments, especially those that help support people with disabilities to live independently. People with disabilities face particular difficulties, especially in time of pandemic. I am 77 years old and I never remember anything remotely like this Covid-19 pandemic. It really is an emergency. I ask for a focus on unemployment issues for people with disabilities, including improving supports on the wage subsidy scheme. I also believe that tax reliefs should be fully extended to counselling and psychotherapy as a qualifying health expense. People's mental well-being is an important aspect.
I have received a submission from Trócaire, which I believe is a fine organisation. In 2021, one in 33 people worldwide will need humanitarian assistance. Despite the fact that around the world, more than enough food is produced to feed the entire global population, 9.9% of people worldwide are going hungry. Some 82.4 million people fled wars, violence, persecution and so on. It is estimated that due to the Covid-19 pandemic, the time that it will take for the gender gap to close grew by 36 years in the span of just 12 months. The estimated trajectory is now 135 years. I point out this has the approval of the Irish people, in that 77% of those surveyed by Dóchas in January and February 2021 felt that it was important for the Irish Government to provide overseas aid and 81% - a huge majority of those surveyed - indicated that they feel that Covid-19 has reinforced the need for international co-operation in addressing global problems. Trócaire continues by urging the Government to outline a pathway to reach the historic UN target of spending more 0.7% of gross national income, GNI, on overseas aid. This is something that has been going on for years, as has the situation of women.
I received an amusing submission in this regard or the title was amusing at least, “We are not sitting in our corner knitting”. This came from women who wrote to me. They say that as women have greater unpaid care responsibilities and are more likely to be in low-paid, part-time, or carer work, it is more difficult for women to qualify for the full pension. On average, women have 29% less pension income than men. Women account for only 33% of those in receipt of a full State contributory pension, even though women outnumber men among the over-65s. Only 28% of women of pension age have an occupational or private pension, compared with 55% with men.
Finally I ask for some special consideration to given to artists, particularly those in the entertainment industry. I seek an increase in the allocation to the independent live entertainment industry from €50 million in budget 2021 to €75 million. I also seek the implementation of the pilot universal basic income for artists and the creation of a pilot scheme for artists with disabilities. Once again we come back to the question of disabilities.
I am grateful to the Minister of State for listening to everything I have to say. I realise that in these difficult times, not everything can be granted but I ask him to look with particular favour at the issues I have raised.
I welcome the Minister of State to the House on this historic day. The Government has a proven track record in managing the economy and helping Ireland to recover from the economic crash. We were beginning to recover back in 2011. Then, when the pandemic struck in 2020, because our finances were in such good stead, the Government was able to bring in exceptional measures such as the pandemic unemployment payment, PUP, and wage support schemes. Many lives were lost and many livelihoods were destroyed by the pandemic. The Government has provided supports amounting to over €48 billion for over three years. I welcome that there are now approximately 100,000 people in receipt of the PUP, which is a reduction from a figure of more than 500,000 people.I pay tribute to the Government for putting in place supports for businesses. People are going back to work and employment. Some €17.5 billion was paid through the pandemic unemployment scheme, the employment wage subsidy scheme, and supports to individual families and businesses. I thank the Minister of State and the Minister, Deputy Donohoe, for keeping in sight the three "Rs" for our public finances, namely, recovery, restoration and repair. This gives us a clear and concise plan for pathways to the future.
Quality of life issues and rising costs have been considered in the budget. It will invest in our future while meeting the needs of today. Our domestic economy seems to be recovering ahead of schedule and consumer spending is growing. There is a strong increase in spending but also rising costs, with price inflation expected to reach 3.7% in September, the highest rate since 2008. There are many challenges such as labour and material shortages, as well as rising energy prices, combined with Brexit. The unemployment rate is expected to fall to about 6.5% next year but this is still higher than prior to the pandemic in 2020, when it was about 5%. It is forecast that 400,000 more jobs will become available by the end of next year, which is most welcome. This will bring us back on track to reach our target.
The budget strikes a balance between the tapering of supports and investment in the domestic economy. Core current expenditure will grow by 4.6% in line with our economy. By 2022, it is expected we will only be borrowing for capital spending, which is to be welcomed. We have to remember that the pandemic is still with us. Senator Casey referred to what many hospitality businesses are going through. Having listened to many of them, I agree with the Senator that they will not be at a respectable level of activity by April or August of next year. I implore the Minister of State and the Ministers, Deputies Donohoe and McGrath, to revisit and review this matter. The incentives put in place by the Government have kept many businesses afloat and many employees in employment. I welcome the reduced VAT rate of 9% for the hospitality sector.
I know that Sinn Féin is proposing €1 billion of taxes on high-income earners, including employer PRSI for all workers. This would be a direct tax on jobs.
I welcome that €126 million has been available for the aviation sector. I am from the mid-west. Shannon Airport is core to the region and I welcome that it will now come under the regional airport support scheme. It was announced today that an aviation company has been taken over by another company, leaving 180 people in fear of what will happen to their jobs.
The budget provides for a tax allowance for 30% of the costs for remote working, a €1,500 increase in the standard rate tax band and a €50 increase in tax credits. These changes will benefit all who pay income tax. The cost of living is increasing. The minimum wage is being increased by 30 cent early next year. The universal social charge will change.
Housing is important to all of us. The Housing for All strategy, which was great, was launched a couple of weeks ago. Many Opposition Members have said the Government is not reaching its targets. Some 89,000 social houses have been built since 2016. That is not to be laughed at. Some 33,000 houses per year will be delivered under Housing for All. I welcome that the help-to-buy scheme will be extended because this has been a successful initiative to date.
We have to listen to and think of future generations when considering climate change, which is why a carbon tax is so important. Studies have shown that carbon taxes are likely to be the single most efficient and effective climate change policy which can be pursued by government. It is not the only one and it will not deliver the required emissions reductions on its own. For this reason, money raised will be used and invested in targeted social welfare initiatives to help to prevent fuel poverty and ensure a just transition.
Additional revenue from carbon tax will also be invested in a progressive national retrofitting programme. The Labour Party alternative budget refers to a retrofitting programme which would be limited to households with incomes of less than €50,000. Most couples living in a house would fall outside that threshold. In addition, houses would have to have a building energy rating of less than B2. This would exclude many couples from availing of retrofitting, as well as recipients of fuel allowance. I believe the plan put forward by the Government is to be welcomed.
There is an extension of the tax relief on battery-powered electric vehicles because many people are waiting for cars to arrive due to the current shortage of microchips. That is welcome.
There are reliefs for agriculture. It is important to make farms more sustainable and support young farmers. The stamp duty and general stock reliefs are welcome.
There is support for businesses, especially start-ups. I had a Commencement matter debate with the Minister of State, Deputy English, on the wonderful work that local enterprise offices do. They have been instrumental in many businesses starting. This support is, therefore, welcome.
There is a 50 cents increase in the price of most tobacco products. The number of cigarettes in a packet should not exceed 20. We are playing into the hands of some tobacco companies, which are lowering prices. We have to stamp out smoking.
Families are at the heart of budget 2022. The €23.3 billion social welfare package supports the most vulnerable in society, from our youngest to our ageing population. That is most welcome. I look forward to working with the Minister of State to deliver this budget.
It is nice to see the Minister of State. I apologise in advance as I need to head to a meeting later but I will take note of his comments at the end. I appreciate his understanding about that.
In addressing this budget, I will start by saying that on television last night, RTÉ quoted Government sources as saying this budget was quite socialist. I smiled to myself and thought it was great because we would see taxes on the super-wealthy and the Government finally tackling the rental crisis and committing to capital expenditure on public housing. Unfortunately, that Government source was mistaken, much to the relief of Senator Casey, no doubt, given his contribution earlier. Let us start with the facts. As the Minister of State will know, like many other Senators, I am passionate about housing. This budget does nothing for renters. I met some people in my village of Castleconnell yesterday who are paying rents of €1,300 a month. Once people heard that we were in the village, they came out just to talk to us about how desperate the housing crisis is and how much they are struggling. The Government has done absolutely nothing for them in this budget. It is a failure of the highest order.
The talk of a zoned land tax is so disappointing. We all know about the crisis with vacant sites and the need to get people to develop on those sites. Rather than take action, what we have seen today from the Government is an action plan to delay and dither for at least another two years and to reduce the tax on vacant sites. This plays to the heart of the ideological differences in this House. I make no bones about that. I am proud to be on the left. This Government is firmly on the right. Rather than tax vacant sites effectively and get them back into play, the Government is determined to avoid taxing them at any cost.
We must also acknowledge that nothing was done in this budget to tackle the ridiculous tax breaks for vulture funds. It is some contrast. There are tax breaks for vulture funds, while working families face tax hikes to heat their homes. It is an incredibly regressive tax. A point I made to the Minister of State last year about the regressive nature of carbon taxes was that the fuel allowance just does not cover ordinary working people. It is a narrowly focused allowance. The budget has broadened it but it is only ever so slightly. People working for the minimum wage still do not qualify for the fuel allowance.What answers does the Minister of State have for working families throughout the country facing hikes to their fuel bills in addition to the already outrageous increases in energy prices this year? His answer is to do nothing. He had an opportunity to makes choices which we should consider for a moment. Some argue that the Government cannot do everything and accuse others of being populist if they say that, as Senator Casey highlighted. Let us get down to brass tacks. The Government could have made different decisions, including scrapping the special assignee relief programme which is a real humdinger. It is a tax break which helps multimillionaires avoid paying two thirds of their tax bill to the tune of €1 million each. Some 55 millionaires in 2018, for which is the last year we have figures, helped themselves to €110,000 each of tax breaks and cost €42 million. On the one hand, there are people in poverty struggling desperately and the Government decided it could only give them a €5 increase while on the on there hand, the Government believes there is no problem in keeping those multimillionaire tax breaks rolling in for the richest people in this State. Another example is the gold plated pensions. The Government could have raised €183 million by cutting back on those gold plated pensions, which only benefit the super-rich in this country, but it chose not to.
Tonight, people face the news that they will get a €5 rise in their unemployment payment. Let us put that into perspective. In 2009, the unemployment benefit was €197 per week. Following the Government's increase today it will increase to €208. Over the last 13 years of Fine Gael-Fianna Fáil Governments we have seen a total increase of €11 per week in unemployment benefit. Why was this done? It was done because the Government chose not to exact fairness in this budget, not to tackle the super rich and not to introduce a solidarity tax for which I make no apologies for suggesting. Sinn Féin's solidarity tax would apply only to individual incomes of €140,000 and above. It would be a 3% tax which would be a moderate tax that would have shown solidarity and would have distributed funds to give us a more equitable and fair society. However, it is clear this Government has no interest in that. One of the real benefits of this budget - it is clear to all of us now - is that there is absolutely no pretence of any difference between Fianna Fáil and Fine Gael. This is a sound conservative Government introducing conservative policy year after year at the expense of our people, and at the expense of the ongoing housing crisis and the entire failure to tackle the health crisis.
I met with the management of the University Hospital Limerick last Friday. Yesterday morning, there were 87 people on trolleys and management knows the hospital is 200 beds short. We need a massive investment in our health services but the Government has not made that choice today. It made different choices for different classes of people. "Class" is a word we do not use often enough in this Chamber. I come from a working class family and am proud to represent working class people and ordinary workers who have nothing to gain from this budget. The facts show that Fine Gael and Fianna Fáil consistently support the elite in this country. That special assignee relief programme is shameful. Funnily enough, I recall two years ago the then Minister of State, Michael D'Arcy, defend it passionately. Whatever happened to him?
Childcare is another missed opportunity. I want to be fair here and I welcome the fact that the Government has ring-fenced money for the joint labour committee that will be established. That is a welcome initiative and I hope it will deliver some kind of justice for workers in the sector. I credit my union, SIPTU, and the Big Start campaign in that regard. It has campaigned vigorously for years on this issue. The Government had the opportunity to make a real difference to working people. Sinn Féin's budget outlined how the cost of childcare could be cut by one third this year and the next year. What the Government has done is lock in the cost of childcare. We know the average cost is €750 per month. That is like a second mortgage to many families. This should be compared with anywhere else in Europe, where people in many countries typically pay less than €100 per month. We have not invested in childcare and the Government had the opportunity to do so. It could have not given that ridiculous tax break, which only benefits two out of ten taxpayers, and instead ring-fenced the €300 million to fix childcare and cut its cost for all working families, but it chose not to. When one looks into the detail, this budget looks after those at the top and ignores those at the bottom.
How does the Government believe a €5 increase in social welfare is, in any way, enough? The Green Party Minister of State, Deputy Joe O'Brien, said to me at a sitting of the social protection committee that we need to see a significant shift in social welfare rates this year. He did not receive that because, once again, the Tories in Fine Gael and Fianna Fáil triumphed at the expense of our people.
The Minister of State, Deputy Sean Fleming, is very welcome. It is good to see him in the Chamber. I should say bienvenido al Ministro de Estadobecause it is the national day of Spain and I did not get the opportunity to say it earlier.
In speaking about this budget, I will use factual data because much of what the previous speaker said was untrue. On disposable income, for instance, this budget increases it by 0.85% with the lowest 20% of earners gaining the most. It is factually untrue to say that people have been left behind when their disposable income has increased, with the poorest in society benefiting the most. On carbon tax, we made it very clear in the programme for Government that funding was ring-fenced and this was done three ways. First, for the poorest in society, we increased the fuel allowance last year in budget 2021 and we continued that this year. We also ring-fenced funding in the carbon budget for those in social housing to ensure retrofitting could be carried out. Third, we supported small farmers which is an obligation in the programme for Government and continued into this budget.
On childcare, the previous speaker would do well to remember the fact that there is a crisis for childcare workers which this budget deals with. It is not enough to simply reduce all fees because who would pick up the tab for that? It would be the people working in the industry. We have to ensure that people's incomes are increased and that children have continuity of care because, at present, workers are leaving the childcare industry. There has been a massive increase in the childcare budget this year and, not only that, but there will be a significant budget next year in childcare to deal with this issue, and this is welcome.
The zoned land levy was raised. I understand how people on the outside might look at the old 7% versus the new 3% rate. Let us be clear on this, last year the vacant sites levy generated €21,000 from across the whole island. If one considers the zoned land levy, a parcel of land worth €1 million would generate a levy of €30,000 per annum. That amount is more than the entire island generated under the vacant sites levy. Let us be honest and not pull the wool over people's eyes. We know there are many people who have not paid the vacant sites levy which is the primary problem. In the context of the zoned land levy, 50% of residential zoned land will be applicable which will generate a lot more money with which more can be done. Anyone who cares about housing or generating funding should not focus on the 7% versus the 3% rate, but should instead look at it in real practical terms, which is what I do and what the Government must do. It must be practical in finding money to bring about the changes it wants, and that is exactly what we are doing.
I will consider the detail of the budget and what the increases are. In every Department there is an increase in core funding. I have no problem with the Opposition seeking transparency, however, that transparency must be seen in reverse as well. There is a 11.2% increase for the Department of the Environment, Climate and Communications. We have a 9.7% increase for the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media and a 7.8% increase for the Department of Children, Equality, Disability, Integration and Youth.The area for which I am my party's spokesperson, education, has received a 5.6% increase and at third level we have a 5.3% increase. I could go on and on.
There is an 8.5% increase for housing. The Housing for All strategy was announced a couple of weeks ago. We have already discussed all its details. We also know it is €4 billion per annum, and that is what is in the budget. Thus it is nonsense to say there is not enough in housing. There is never going to be enough but this is the most funding we have seen since 2008. That is actually what is in this budget. Let us be honest with people. Nobody deserves to have to worry unnecessarily that the Government is not doing its job regarding these Departments because we take it incredibly seriously. That is why we stepped up to the mark. It is very easy to point the finger but I would rather people pointed the finger with actual facts.
On climate action, I believe the Minister, Deputy Donohoe, mentioned earlier that the planet is on fire. This is our number one priority. This is why the Green Party went into government and this budget continues the work we did in the last budget. Not only that, we now have the climate Act in place, so as far as I am concerned, this is act 2. The climate Act is passed and act 2 is putting in place the measures we need in order to make everybody's lives better but also to make the future secure for our children and their children's children. We have continued our €360 million on active transport and we also have over €1 billion for public transport. We have, as I said, 11.2% on other measures in the area of environment, climate and communications. Part of that is to roll out broadband and since we came into government we have decreased the length of time it is going to take for people across the country to get broadband. We are now putting in place more funding for retrofitting. The list could go on and on but my time is nearly up.
I wish to address in detail some of the measures in education. We know difficulties have been faced with upskilling, probably across the globe. We have passed the climate Act but how do we ensure that we have the workers in place for the new future and the green economy? This means training people. There is much that needs to happen in primary and secondary school in order to make it attractive for people to go into apprenticeships and other kinds of craft skills but this budget has record funding. In fact there are 35,000 green skills places in this budget, along with numerous other initiatives related to apprenticeships and other green funding. That is essential. We need the workers but we also must create the opportunities for people right across the island. Sometimes people hear of green opportunities and think it is just a cycle lane in a city. It is not. It is retrofitting, it is jobs, it is energy. It is everywhere. It is every single part of this country and that is what this budget is doing.
On education, because of the amount that actually went into the budget last year, I was a little worried we would not see increases this year but again I was stunned to see over 1,000 new SNA posts, 350 extra teaching posts, a further reduction from last year on class sizes of one pupil per class and record funding for DEIS schools to bring more and more children into them. This is a budget for the most vulnerable in society. People can pick one or two holes. Obviously, I am always going to say we could have done this and ask why we could not do that, but I believe that overall this budget is a really good budget for every family, especially those most vulnerable.
My last point is the amount of measures that are in the budget regarding women's health. I could go on and on about those. In this Chamber, the Greens brought a motion on free contraception. It is now being funded in this budget and I thank the Minister for that.
I am really delighted to address the zoned land tax and what it actually is because it has been raised by the previous speaker and is important.
From a housing perspective, this budget contains three measures. It is a budget for landlords and landowners. There is absolutely nothing in the budget for renters. There is nothing in the budget for people who are on the housing assistance payment, HAP. HAP limits have not changed since 2016 and in that time rents have gone up by 25%. What is in the budget is a tax cut for land hoarders and no incentive for those who own empty homes to either sell or rent them. There is no mention whatsoever of an empty home tax.
I begin with the issue of the zoned land tax, which is effectively a tax reduction for landowners. The criticism of the vacant site levy and its enforcement is valid. With respect to what has been raised, the €21,000 last year is a disgrace but local authorities have not been resourced to go after it. There were arguments it should be going through Revenue, and that is happening. There were many sites which should be on it. There were too many get-out clauses, including, for example, landowners saying sites were being used for car-parking and were thus in use. That should be taken out of it. There were, as such, plenty of operational issues with the vacant site levy but it could have been reformed, given to Revenue and the site size abolished. What this is doing is putting some lipstick on a pig and saying this is being changed but effectively bringing it down from 7% to 3%. Senator Pauline O'Reilly says it is up to the Government to bring in the money and the levy was not bringing it in. However, when I was listening to the Minister, Deputy O'Donohoe, he was saying it is not a revenue-raising measure; instead the idea is it is going to activate land. The problem was that land was not being activated. One does not cut tax to try to activate land management. That was the problem and that was the issue with it. This is just dressing up what is a tax cut for land hoarders and that is the headline issue that comes from it.
We can also look at what is happening for renters. Is there anything included for renters or for people on the HAP? The answer is "No". The one measure announced for the rental sector is that landlords are able to claim more expenses when they are turning it around, which is the equivalent of void funding. I have no problem with that. I do not want landlords feeling it is too expensive for them to do a property up in order to be able to rent it out. I do have a problem when there are tax breaks for landlords and none for renters. I have a problem in terms of the affordability. Let us look at the root causes of the housing issue, which the Government keeps on saying is supply. Indeed it is but supply is being hindered by the vested interests who at every single step frustrate the policy framework of getting us to affordable housing. In Housing for All we saw the mention of 20% affordable housing. I acknowledge we went from 20% to 10% of land value but we see a situation where we are now announcing it is going to be 10% social housing and an additional 10% affordable but that is not going to kick in. We can look at things like the vacant homes tax, where in my own area build-to-rent institutional investors leaving homes empty in order to artificially keep rents high. We see it in things like build-to-rent apartment standards which are not in line with apartment standards. In the long term we will have people who will not be able to have balconies in such developments. We see it with apartments being brought under the stamp duty rules at the time when there was outrage from first-time buyers about institutional investors buying properties instead. What happened was the rules were put in place for people who lived in suburban areas and those who lived in dense cities were not included.
The Labour Party would introduce a vacant homes tax. We would increase a vacant site levy, or zoned land levy, or whatever one wishes to call it, to 10% and tackle the underlying issues of land speculation and hoarding. That was a question of the operation of the tax, not the fact, amount, or rate of it to begin with. The Government keeps on saying it is in favour of homeownership. For some reason this seems to give them a get-out clause and ignores the need of renters, who are a growing cohort of people in this country. There have been no changes to the HAP limit at a time of runaway rents when rates have increased by 25% during this time.That is the housing section of this budget and what it proposes does not give much flesh beyond Housing for All.
I will address the working from home tax breaks because it is a serious issue that we need to discuss. We must not sleepwalk into essentially subsidising the private sector for its employees. The proposal will lead to a massive transfer of expenses that employers would have incurred to the State, employees and taxpayers. The costs of running an office have been shifted from the shoulders of employers to employees for the days that the latter are working at home. The costs of infrastructure involved in that, such as adequate housing or access to a spare room from where to work, are being shifted onto the shoulders of workers. That is fine for someone who has a spare room many people do not have a spare room. Are we locking people from working-class backgrounds out of access to the professions because they cannot afford the infrastructure that would enable them to work remotely? That is a serious issue that we need to think through before we sleepwalk into a revolution whereby employers get out of that. My Labour Party colleague, Senator Marie Sherlock, published a working from home Bill which would have required employers to make daily payments in respect of utility costs rather than receive a State subsidy.
I spoke last week about an arts capital programme. I welcome some of the measures in this area in the budget. The Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Deputy Catherine Martin, fought hard for the arts sector and arts groups. However, I draw attention to a missed opportunity, namely, the absence from the budget of an arts capital programme. Since 2015, there has been a crisis in working spaces for artists in Dublin city. We are seeing studio space after studio space for artists close down. The first was Broadstone Studios on the north side, which estimated it had paid €1 million in rent to its landlord. Now, in my area of Dublin 8, Pallas Studios will have to close down. The Arts Council gives artists money to pay for rent but they must keep moving on. We need to take a serious look at long-term funding for arts infrastructure and provide loans to arts organisations to allow them to pay off a mortgage. The failure to include something like that in the budget was a missed opportunity.
In discussing the budget, I will look at more than the question of what and how much we are spending. The problem is that we have missed the opportunity in this budget to spend better. The fiscal rules have been suspended for years and we are allowed to do things for the long-term benefit of the State. The balancing of the books is no longer a constraint because the fiscal rules have been suspended. We are always told we cannot do certain things because we would have to create a special vehicle to do them and the State is not allowed to give much in terms of public investment. Those restrictions did not apply, so this was the budget where we could have spent better on strengthening long-term public services and public supports.
The budget should also have been used to spend better on gender and equality proofing. Remember that. Five years ago, we supposedly made the decision to gender and equality proof all budgets. This used to get referenced but now seems to have vanished because I do not see evidence of gender and equality-proofing in this budget.
We should also be spending in a way that will allow us to achieve our commitments such as implementation of the UN Convention on the Rights of Persons with Disabilities and our international climate commitments, to name but two.
The suspension of the EU fiscal compact rules was not only a response in terms of the emergency measures to deal with Covid but also a recognition that the constraints on public investment had left EU states in a situation where their social fabric was not as resilient and their public services were not as robust as they should have been facing into a crisis. We talked about recovery, restoration and repair. I worry that the language all seems to be about bringing back what we had before. The challenge at European and international level is to create resilience, build and protect ourselves from the next crisis, have services and infrastructure that are better and reimagine. This is the "better" in "build back better" and it seems to have been lost.
On housing, we still see the routing of public money into private profit. If we want to talk about the figures, we see it specifically in the €1.37 billion for the delivery of 2,600 houses through leasing schemes. That figure includes local property tax, and I wonder why this local revenue is being included in the national figures. Despite what we have heard, leasing schemes are still at the centre of housing provision planning, even though we know that the plan for five more years of signing leases, with implications for perhaps 20 years, is a problem because it is doing out the next generation and giving a profit when, in fact, we could be creating a public asset. Dermot Desmond has described this as investment funds "having a laugh". The rationale given for leasing in the correspondence released this week was that it had to be off balance sheet. That does not apply. Leasing should be nowhere in this budget.
Senator Moynihan spoke clearly about the land valuation tax. The vacant site levy is a cut for land hoarders. The levy was not being collected and it should be collected. I would appreciate clarification from the Minister of State on what plans are in place to collect the €21.5 million that is still owed. This change in policy should not get that money out of the mix. It still needs to be collected.
The idea is that we will move from a 7% liability to a 3% liability. If the Government will not impose a levy of 7% or 10% for all, as has been proposed, a 7% levy should be paid on strategic housing developments for which fast-track planning permission has been availed and which have not been commenced or built. That is a failure to deliver not only on land with potential zoning for development but land which has received active planning permission and has not been delivered. Where does this leave apartment buildings which have been built and are lying empty? A vacant property tax has been called for. There is a crisis with vacant properties. Is this measure, a new rebranding and a slight dilution, another way of getting owners off the hook? The capital flight arguments we usually hear when the Government is busily reducing the tax that we ask for do not apply in this case. I do not see the rationale for a reduction rather than an increase in liability.
People have said there is nothing in this budget for renters. I would disagree to the extent that there is one thing, which is a big warning sign in terms of inflation. We heard in the Minister for Finance's speech how inflation can spike and be driven by external factors. There is a concern, if we end up with rent tied to inflation, that unusual spikes in inflation will be allowed to become an opportunity for landlords.
It is extremely disappointing that the opportunity to address the shameful exemption from stamp duty liability for apartments was not taken. That measure is the product of lobbying on what developers want. In fact, the measure has been extended. We heard this week that own-door apartments will somehow also be exempt from the stamp duty. That is what is happening this week. Yet again, we see more giveaways rather than the Government seizing this moment for the State to be the leader in this area.
Let us be clear on the issue of tax avoidance and the 15% rate we are proudly boasting of having reduced. The measures from the OECD will not address global tax inequity.They still will not address the issue of the carve-outs and the exemptions and the fact that the developing world is losing $100 billion to $200 billion every year in terms of tax breaks. I commend Christian Aid and Oxfam on their detailed analysis of the OECD measures. We are aware that those exemptions include research and development and the research and development knowledge box, which has so little information.
I will ask the Minister of State, Deputy Fleming, one last thing as I conclude. I will be speaking to the Minister for Public Expenditure and Reform about pensions. Why we are still seeing the variable rate tax relief for private pensions? Why have we not addressed the gender inequality bit? In the modelling of households, given that lone-parent households comprise 20% of the households in the State, why are they not there in the sample families that we look at?
Lastly, I note that climate financing is entirely separate to overseas development aid, ODA. It would be a disgrace and a shame if there is any attempt to reframe ODA as delivering on our climate financing obligations to the developing world.
I am delighted to address the Chamber this evening on budget 2022. I thank the Minister of State for his work, along with his Department and his colleagues, the Ministers for Finance and for Public Expenditure and Reform, Deputies Donohoe and Michael McGrath, for this budget. I listened to both Ministers that afternoon and I recalled George W. Bush's famous quote on receipt of his first budget when he said, "It's clearly a budget. It's got a lot of numbers in it." The budget this afternoon clearly has a lot of numbers, some €88 billion. I thought about that and when, as a kid in the 1980s and the 1990s, my parents could never have imagined such an amount of money in public expenditure. We should not forget that as the debate ranges here this evening, including those who want to bemoan it.
Sometimes, the importance of budgets like today's can get lost in the swathe of huge figures and what those figures really mean for people and their lives and how it will impact them when they come home this evening and reflect on that. The fact that there was not a screed of a protester at the gates here this afternoon is indicative that people know this budget provides stability. It provides improvements in a range of key areas, including housing. On the subject of housing, when they are talking in here, Members forget that 12,000 social homes will be provided next year. The budget also provides for improvements in health, including real things such as dental care and GP care, which will make a difference in people's lives, and improvements in education and energy costs also.
I will start on the issue of childcare. Last year people were bemoaning its omission from the budget, and rightly so. The sector gets plenty of plaudits from politicians of all hues, but I wonder if politicians really know what they are talking about when they address the topic. My wife of 21 years has worked in this sector for all her life as the county childcare co-ordinator in Meath. She holds a doctorate in this topic. I am privy to better daily briefings than the Minister, Deputy O'Gorman, receives.
The childcare sector and the particular issues involved are varied and many-layered. When the Department of Children was created, and really strengthened under the stewardship of the late Brian Lenihan 20 years ago, the sector as a regulated entity was in its embryonic and formative stage. People forget that 20 years ago there really was no childcare sector in the State. We were grappling with seeing its establishment. It coincided with a huge population surge, urbanisation and the demand for good, high-quality childcare. A lot has been done in that 20 years but, critically, a lot was done badly in the formative times. We looked primarily towards the private sector to provide this crucial education, which is the first rung in the education ladder. There were flawed policies in the past when cash was thrown at parents rather than looking at the fundamentals of the actual system. It must be remembered that we expect all childcare providers to implement government policy and HSE standards in these private settings, with staff working on a minimum wage. I really welcome the intervention of the State today and look towards the payment of staff properly under the implementation of the joint labour committee report. As the Minister, Deputy Michael McGrath, has said, this is a turning point in the approach towards the early years sector, with €716 million in funding and €78 million in additional core funding.
Senator Gavan made a political charge that Fianna Fáil only represents the elite of this country. When we see the €68 million in additional investment in higher education today and a total spend of €3.7 billion, with €35 million in new supports a new supports for students who need assistance to cover the costs to get to higher education, is this looking after the elite? Consider the free GP care for six and seven-year-old children, who can always be at the doctors and need that assistance the most and whose parents had to fork out the €60 fee. Is that looking after the elite? There are an extra 1,200 special needs assistant posts for the most vulnerable children in our society. Is that looking after the elite? There is provision for 800 extra gardaí, to take the scum and the drug lords off the street in this country and to deal with antisocial behaviour. Is that looking after the elite? I think boys need to have a hard look at themselves and wonder who are the elite and who are the ordinary people. The ordinary people were always looked after in Fianna Fáil. Those who will benefit from the widening of the tax bands and who will have extra money in their pocket are the ordinary people. That is what this budget does.
I want to touch on one technical point and I ask the Minister of State, Deputy Fleming, to raise this with the Minister, Deputy Donohoe. This afternoon, the Minister announced tax credit relief for the digital gaming sector at a rate of 32% of expenditure of up to €25 million on the design, production and testing of games. This sector deals primarily with games targeted at teenagers but the gambling industry has sought to rebrand itself under the gaming sector title. Casino products and so on want to be branded as gaming. When this tax credit relief is detailed in the Finance Bill I ask that the Minister of State and the Minister for Finance look at this in order that we do not allow a loophole for the companies that provide gaming casino platforms for online gambling. I ask that they not be allowed to avail of a loophole that would provide tax relief for something that actually fuels addiction to gambling in the State. The Minister, Deputy Michael McGrath, announced funding today for a gambling regulatory authority. It would be a travesty if with the one hand we do that and with the other, we might provide assistance for those who want to get people addicted to gambling. I thank the Minister of State.
The Minister of State is very welcome to the Chamber to discuss the budget today. I thank the Minister of State and the Ministers, Deputies Donohoe and Michael McGrath, for their stewardship of our economy throughout the pandemic and for making sure that supports for families and businesses were put in place.
I want to concentrate on the measures in the areas in the Department for which I am the spokesperson, which are the areas of arts, media, tourism and sport, rather than across the budget because Members have already spoken on those issues.
Tourism has been devastated through the pandemic and it probably will take at least until 2024 to recover. I welcome the business continuity supports of €50 million, as well as the €39 million for tourism promotion and product development to help the industry to recover and grow in a sustainable way. I welcome the extension of the VAT rate in hospitality until August 2022, which was brought in previously. I feel, however, that we need to extend this for longer. This is a big mistake we have made here. It was shown previously back in 2009 and 2010 that when we extended that low VAT rate for a number of years, it helped to reboot our economy and brought us up to a situation where we had nearly 300,000 working in tourism. This is one thing we have missed in this budget.
The projections for international tourism in 2022 are that Ireland will be down at least 30%. This is based on advance bookings. I welcome the aviation fund that will help to restore the connectivity from key markets, which is lacking at present and was highlighted by Members with the Minister of State, Deputy Naughton, just a few weeks ago.
As for the bus and coach industry, bar I had missed it in the booklet, that industry is not capable of claiming back VAT on diesel for their vehicles. This is the industry that will ferry the tourists around Ireland when they do come. The reality is that the bus companies in Northern Ireland are capable of claiming that tax back but our bus companies are not and are at a distinct disadvantage with regard to tendering for work. I ask that this measure be looked at again.
On the arts, the decision to maintain the funding of €130 million for the Arts Council is significant. This will help to promote and develop Ireland's world-class artistic and creative strengths. I recently met Mona Considine, the artistic director of the Backstage Theatre, and with a number of other people involved in the arts industry in Longford. They highlighted to me - and I brought it to the floor in the Chamber - that this funding should be maintained.They highlighted that, thanks to the funding, a significant amount of work took place during the pandemic, for example, workshops, in order to have material ready for the stage for when crowds were able to return to their venues. They also highlighted the basic income guarantee scheme. As such, I welcome the €25 million that is being allocated towards that as well as the €25 million in supports for the live entertainment industry.
Recently, Fine Gael made a submission to the Future of Media Commission. One of our core proposals was the replacement of the television licence with a public services media charge, which would increase the funding available to the media industry by between €50 million and €70 million. That funding would also be available to all regional newspapers, regional radio stations, community radio stations and so on instead of 93% of it just going to RTÉ. I welcome the funding that has been put in place for the establishment of the media commission, which has an important role to play, particularly in light of the online safety and media regulation Bill, which will be published in the coming months.
I am disappointed with the additional funding that has been allocated to sport. There have already been applications totalling nearly €200 million to the sports capital programme this year, yet it only has a €40 million budget and the additional funding to be put in place will only be €6.6 million. A significant number of sporting clubs throughout the country will be disappointed and their projects will not be funded. We are allocating millions of euro to Sport Ireland's high-performance units, yet we will not even be sending representatives from it to the boxing world championship. This needs to be examined.
Overall, it is a good budget for everyone and I wished to highlight a number of its specifics, particularly those relating to the areas for which I am spokesperson.
I welcome the Minister of State to the Chamber. It is incredible that, in budget 2022, we are discussing the spending of such large amounts of money across so many sectors when we are still coming out of the pandemic and recovering from what has been an extraordinarily difficult time for Ireland. Given that there are other jurisdictions very close to ours that are looking at their budgets and proposing cuts to spending rather than additional spending, we can be proud of our country and Government for delivering a budget that provides for every citizen and will ease the burden in many ways, particularly the cost of living.
I am pleased to see a budget that, for the first time ever, really seeks to tackle women's health. For the first time, I saw a Minister for Public Expenditure and Reform get to his feet and discuss all of the spending that the health sector will provide for women's health initiatives across many areas. I commend the Minister for Health, Deputy Stephen Donnelly, on securing the necessary funding for the free contraception scheme. It was no easy task, but that scheme will be transformative for the country and assist many young girls and women in having full control and access to reproductive healthcare. Providing free access to contraception was one of the key ancillary recommendations of the Oireachtas Joint Committee on the Eighth Amendment of the Constitution. Those in the 17 to 25 age cohort have been identified as the most vulnerable to not being able to afford the contraceptives that are most appropriate for them. As such, this is a welcome initiative.
In the women's health package, we will see the following: more obstetric consultants and funding for our national maternity strategy; additional funding supports for specialist menopause clinics in Dublin, Cork, Limerick and Galway; measures to tackle period poverty; the opening of six additional see and treat gynaecology clinics; the expansion of our endometriosis specialist service in Tallaght; and additional funding for our sexual health units across the country. It is a remarkable budget in terms of what it will deliver, and is already delivering, for women's health and I am proud to be in a Government party that is doing that. This is the first time in the State we have seen this level of investment - in excess of €30 million - for women's health initiatives.
I welcome the childcare package. Many colleagues have mentioned it today and many more will do so over the coming days. The more than €700 million for the childcare sector is a substantial investment that will have a significant impact. It is right and proper that these supports be targeted in the first instance towards childcare workers, who are considerably underpaid. This will help to stabilise the sector so that we can, piece by piece, build the type of community childcare sector that we need and reduce the cost burden on families.
The funding that is being allocated for young people is welcome. Many times over the past year, we have spoken in the Chamber about the impact that the pandemic has had on young people and how they have suffered the most, and given up the most, in the past year and a half, which they did primarily to protect the most vulnerable and older people in society. We have commended them for that, but it was important to reward them in this budget for their hard work. It is commendable and significant to see half-price public transport for our young people aged 19 to 23 years. I am sure that young people across the country are saying that they can for the first time see a budget that caters for them and not just older people, which is something that we have not seen for many years. This is tangible and will make an impact in the daily lives of those travelling to socialise, to college, to work or to school. There is also a €200 increase in the Student Universal Support Ireland, SUSI, grant. More importantly, accessing that grant will be made easier. The threshold will be increased and many more families and students will be able to access it, thereby ensuring that every young person in this country can have access to third level if he or she so wishes.
It is important to acknowledge the increase in the minimum wage, which predominantly affects younger people in lower paid jobs. Following the past year and a half, we now more than ever realise the importance of those jobs in the service industry, retail and hospitality, where many young people start their working lives and many continue to make their careers. It is important that the minimum wage was increased.
While there are many aspects of the budget that I welcome and it has been a fair budget for everyone, the support for carers is particularly fantastic and welcome. The carer's allowance will increase by €5, the weekly earnings disregard will increase as well, and the capital disregard has gone from €20,000 to €50,000 in acknowledgement of the considerable work, sacrifice and service that carers across the country make in caring for their loved ones. It is only right and proper that they be front and centre in budget 2022 and will be rewarded financially for the work they do on behalf of the State and for their loved ones. There is no greater gift than to care for someone in his or her own home and to keep that person at home in the community, but carers need to be helped in doing that.
I have touched on the few key aspects that I believe are ambitious and visionary and have shown the resilience necessary to deliver for many people as we come out of the pandemic.
I am proud of this budget and am delighted that it will tackle the cost of living for families, with a record €716 million investment in childcare as well as the extension of a range of housing, health, education and welfare supports.
Addressing the cost of childcare has been a top priority for Fine Gael. The investment total of €716 million in early years services includes a new €69 million funding stream for childcare providers from next September that will ensure the sustainability of those services and attract others into the childcare sector. That is a provision of €200 million in a full year. These moneys are planned to support the outcome of the joint labour committee under my party colleague, the Minister of State, Deputy English, who is working in conjunction with the Minister, Deputy O'Gorman, and establish minimum rates of pay and conditions for workers in the childcare sector. These much-needed supports will help providers and their staff. Some 4,700 employees across the country will benefit. A condition placed on this investment is the cap on childcare fees, which will be of great help to parents.
We will see the continuation of the EWSS until April 2022. There will also be a one-off bridging scheme to span the period between April and September when the new scheme will kick off, costing €5.5 million per month, to ensure that there is no cliff edge for childcare providers. The national childcare strategy, NCS, universal subsidy is being extended to all under-15s from next September, bringing an additional 40,000 children into its provision. I am delighted that the practice of deducting the hours spent in preschool and school from the entitlement to NCS subsidised hours will be stopped, thereby bringing 5,000 children from low-income families into the net. This will address an anomaly that caused the risk of exclusion for children from disadvantaged communities, as was particularly highlighted in my home constituency of Dublin South-Central.
The budget sees us build on the previous Fine Gael Government's initiative and continues the implementation of the universal early childhood care and education, ECCE, programme, which provides for more than 100,000 children for the two years before they begin primary school.We see the continuation of AIM - access inclusion model - workers to support children in the ECCE programme who have special education needs.
Fine Gael is focused on assisting families with financial pressures through a range of measures targeted specifically at parents and children. Along with childcare, housing remains an issue of concern for families with many looking to own their own home and provide security for their children. I am thrilled that the help-to-buy scheme, which has already helped over 28,300 people previously locked out of the property market to own their first home, will be extended for another year.
A range of supports from the Department of Social Protection under the Minister, Deputy Humphreys, will also help families. Parents will feel the benefit of budget 2022 and see an uplift as children return to school, with a €10 increase in the back-to-school clothing and footwear allowance by June of next year. The duration of parent’s benefit, introduced under a Fine Gael-led Government in 2019, will increase. Parents will receive an extra two weeks off as leave rises to seven weeks from July 2022. The income threshold for the working family payment will also be increased by €10 for all families. Children aged six and seven will now also benefit from free GP care, with the intention of extending this to all children up to the age of 12. The financial burden of hospital charges for children under 18 will also be reduced. An additional 980 special education teachers will be hired, alongside an unprecedented 1,165 new special needs assistants, bringing the total number of SNAs in Ireland to a record 19,169. This will bring investment in special education to the highest level in history.
This is a budget for parents and children. It will help families with the high cost of living and, critically, it will tackle rising childcare costs which will come as a great relief to many families across the country.
For all the climate measures in the budget today, we are still completely in the dark about what it will achieve in terms of emissions reductions. Renters in particular are no better off in terms of knowing how private rental accommodation will be retrofitted and how the split incentive can be addressed.
It is disheartening to see the disconnect between today’s fiscal budget and the carbon budget to be announced later this month. Earlier this year, a report by the Irish Fiscal Advisory Council stated that our climate change targets need clear costings and revenue raising mechanisms. I have no doubt the disconnect is because of the decision to accept last-minute amendments to the Climate Action and Low Carbon Development (Amendment) Bill in this House, which have delayed the carbon budget process.
We also have no idea what the climate impact of the measures announced today will be. We could do with taking a leaf out of the Scottish Government’s book and assessing the carbon cost of all the measures in the budget. Greater transparency around the emissions associated with Government measures would clarify the debate around getting a whole-of-government approach. For example, if we had proper carbon assessments of the Fine Gael, Green Party data centre policy, it would become clear that it is costing billions in tax write-offs for such centres to set up here. This comes at a huge cost, not only to the climate and environment but also to electricity bill payers through the PSO levy.
As we know, fiscal policy is climate policy. The budgetary process is so important in implementing change in terms of how we spend or do not spend and how we tax or forgo tax. I hope the Government takes steps to integrate its fiscal budgets with its future carbon budgets.
I will now focus on a few measures in the budget in the context of the climate and biodiversity crises. We face a biodiversity crisis. Indeed, we declared a biodiversity emergency just over a year ago but one would not know it from listening to the Ministers in the Dáil today. Biodiversity was not mentioned once by the Minister for Finance or the Minister for Public Expenditure and Reform. Worse, there was no additional allocation for the National Parks and Wildlife Service, NPWS, which is at the forefront of the biodiversity crisis. Sinn Féin supports the NPWS being put on a statutory footing and would have increased its budget by €5 million this year. The lack of any reference to the biodiversity crisis does not bode well in terms of the urgency to establish a citizens' assembly on biodiversity. We still have no date or funding allocation for it. In fact, the Government recently admitted in response to a parliamentary question that it has not even agreed the terms of reference or the scope of such an assembly.
I welcome the Minister for Finance's expansion of the accelerated capital allowance scheme for energy efficient equipment to include machinery powered by renewable hydrogen. Hydrogen undoubtedly has an important role to play in our energy system but we do not need a piecemeal approach to it. We need a fully thought-out approach but unfortunately Ireland is one of only two EU member states that does not have a full strategy. If we want investment in this sector, we must have a plan to encourage such investment.
I also welcome the additional spending on animal welfare. However, I wish the Government had gone further because this was a missed opportunity to make real change. I am glad to say that Sinn Féin’s alternative budget promised 20% more for animal welfare organisations, which are on their knees. Only today there were further reports of shelters having to turn away animals due to a lack of capacity.
We know politics is about choices. The choices Governments make reveal their priorities and those priorities were laid bare today. What does this budget do to tackle sky-high rents, unaffordable childcare or a health system bursting at the seams? There was nothing in today's budget for renters; nothing at all. There is no tax break or rent freeze. Renters are forced to suck up the increased costs of energy while tax breaks for landlords are extended.
Another clear example of the Government's priorities is in the changes made to the tax bands. Moving the standard rate by €1,500 costs the Exchequer €312 million. This tax break will only benefit 24% of workers yet it will more than double the estimated annual cost of returning the State pension age to 65. It is clear where this Government’s priorities lie. It is time for a new Government that puts the interest of ordinary people first, a Government that is in touch with the cost of living crisis that we currently face, particularly those in the rental sector who have been left behind once again.
I will focus on some of the climate action measures in the budget, as I did last year. Some weeks ago, I said in the House that I was worried by a report from the Department of Finance on plans to increase VRT, including on electric vehicles. I am happy to see the Government realised the importance of extending the VRT relief for electric vehicles until the end of 2023. At the time, I referred to Finland which has seen a massive uptake of electric vehicles in the space of three or four years thanks to various financial measures, including an eco-tax on diesel and petrol. In Finland, it has reached the point where it is financially insane not to drive an electric vehicle. The Finns have also invested huge sums in improving their electric vehicle charging network, which I would like to see addressed in next year's budget. We already have a substantial network but we need a dedicated financial strategy to improve our charging systems, particularly in the major cities of Dublin, Cork and Galway. If substantial funding is put into the charging network, it will make the shift to electric vehicles easier.
Today's announcement on the retrofitting scheme is extremely impressive, with €202 million provided to retrofit 20,000 homes over the next year. In County Louth, €2 million has been given to the local authority. It has started retrofitting homes already and I have seen how well that is going.
I also welcome the measures related to apprenticeships. People do not need to go to college and we need to show them that an apprenticeship provides an equally good chance of a good career, salary and future. That was not the belief for the last ten or 15 years in this country, for whatever reason, but I am pleased to see what we are doing with apprenticeships. They will feed into the retrofit schemes in terms of the creation of green jobs.
I also welcome the youth travel card initiative under which €25 million has been provided for people between the ages of 17 and 25.That, too, is an excellent initiative. It is a progressive way of getting people onto public transport while saving them money. I would love to see it extended at some stage in the future.
While we are on the issue of travel cards, it would be remiss of me not to mention the idea of introducing a three-day taxsaver ticket for commuters. As the Minister of State will be aware, as a result of 1997 legislation, taxsaver tickets must be provided on a monthly or annual basis. Last week, the Minister for Finance, Deputy Donohoe, clarified the issue when he stated a legislative change was not necessary and we could introduce a 100-day taxsaver ticket or similar. I would appreciate if the Minister of State and the officials conveyed to the NTA the message that legislative change is not necessary and, consequently, there should be no delay in introducing a simple ticket that will save commuters money. We have known for some time that these tickets are required.
On green hydrogen, it is important that hydrogen features in the budget and that the Government recognises it. A hydrogen strategy is necessary and I hope one will be published in the climate action plan, which is due to be published imminently by the Government.
Considering the points I have made, this budget, as with all budgets in the past few years, has been very progressive. A huge amount of money has gone into it but it is being spent well in a smart and strategic way. We can see that in the area of climate action. The Ministers, Deputies Donohoe and Michael McGrath, and their officials should be commended on the work they have done. It is important to have so many green initiatives with so much funding in the budget. More than €360 million has been provided for active travel and greenways. So much funding in this budget is aimed at getting people out of their cars and into active travel modes such as cycling. Safe access to schools is also important. If we are to make any headway with tackling the climate crisis, it must be done in a financially viable way that is financially accessible to people from every sector of society. We will ensure people are able to do that by investing in addressing the climate crisis in the budget.
I welcome the Minister of State. I will comment on the finance side of the Budget Statement, which was made by the Minister for Finance, Deputy Donohoe. We have come through a severe pandemic. Thankfully, owing to the solid foundations put in place over the last decade, including balancing the books at the end of 2019, the nation had the resources to cope. We restored our good name and reputation which meant we could afford to borrow the money required to invest and support businesses throughout the country.
I acknowledge the supports provided for workers in the budget through the increase in the standard rate band of €1,500 and increases in the personal tax credit, employee tax credit and earned income tax credit of €50. Cutting the rate of tax might get bigger headlines but increasing the bands is also important. If we stand still and do not change the bands, everyone eventually ends up paying the higher rate of tax. It is important that they keep pace with income. I welcome the 30 cent increase in the minimum wage, bringing it to €10.50 per hour, and the associated increase in the USC band. We do not want people who benefit from the increase in the minimum wage losing out by paying additional USC. I also welcome the tax deduction for working from home, which amounts to 30% of the cost of vouched expenses for heat, electricity and broadband. Covid, by necessity, has increased the popularity of remote working and working from home. There are many positives from that but the costs were a concern raised by many people. Thankfully, the budget has responded to that concern in providing a 30% flat rate for these costs.
I welcome the support for businesses on the tax side, including tax credits for the digital gaming sector. In my area of Galway we have seen growth in this area recently. The budget also provides relief from corporation tax for start-up companies under section 486C and additional funding for the innovation equity fund. The employment wage subsidy scheme, which has been extremely important and has done a great deal to protect jobs and companies, is to be extended to April 2022.
Foreign direct investment is very important in many parts of the country, including Galway. Recent discussions about changes in corporation tax caused concern. I compliment the Minister for Finance and his team in the Department on agreeing to the recent deal and also on taking a strong stance and achieving the best deal for Ireland by ensuring a minimum corporation tax rate of just 15%. They also ensured many companies here will continue to pay the 12.5% rate because their revenues are less than €750 million. This is a very important issue for the country. These companies have done much for the tax take and employment up and down the country. It is important, therefore, that we got the best deal for Ireland. I compliment the Minister on that achievement. That goes for the team at the Department of Finance, including the Minister of State, Deputy Sean Fleming.
I welcome the extension of the help-to-buy scheme to the end of 2022. The zoned land tax is, as the Minister highlighted, not a revenue-raising initiative but one to boost the supply of houses. That is important because there is always a strong focus on the demand side initiatives on housing, whereas it is the supply side that needs to be boosted. There are many examples of people sitting on serviced zoned land. If this initiative helps to kick-start moves by some of them to advance to the planning and construction stage soon, that will be a welcome boost to supply.
Those are some of the issues on the finance side of the budget as we recover from the pandemic, restore our public services and living standards and repair our public finances. I thank the Minister of State for his work.
Cuirim fáilte roimh an Aire Stáit go dtí an Teach. Doing a national budget is very difficult, especially coming out of a Covid pandemic. Despite all we have been through, I feel positive and hopeful about this budget. That is what people need to hear at this time. Is maith an t-iománaí an fear ar an gclaí. The hurler on the ditch has the easy job but we were busy playing senior hurling when we were working very hard on this budget. I commend everyone involved, including civil servants, NGOs that made submissions, voluntary organisations, the Minister and all his staff.
There are lots of problems in lots of sectors and in this budget the Government is trying its best to deal with many of those issues. Senator Boylan remarked that there is a biodiversity emergency. She obviously did not realise what job the National Parks and Wildlife Service does given that its budget was increased by two thirds from last year. Maybe she does not know because she lives in a nice house in Dublin but where I live the whole job of the NPWS is biodiversity protection. Maybe the Senator will look up what the service's job is and be happy about what the Minister of State, Deputy Noonan, did on that. There was a lot in this budget for biodiversity. That is just a point of information for the Senator.
I am the Green Party spokesperson on enterprise, trade and employment. We did much work on submissions around helping the SME sector go green because that is the way we must now move forward. There will be €10 million in the climate transition fund to help businesses to decarbonise. I made a submission to the Tánaiste and Minister for Enterprise, Trade and Employment on this. It was good to see we can work together in coalition.
There was also €5 million for regional enterprise development fund to help encourage small businesses. They are the backbone of the economy where I live as we do not have any big businesses in north County Clare. We have a few in Shannon but most of the jobs in Ireland are in small businesses. It is good, therefore, to see that sector getting serious funding in the budget.
As the mother of a 22-year-old who got into college through the Access programme, it is good to see the Access programme getting more support and the SUSI grant being increased. The number of students who will now be eligible has also been increased. These measures make third level education more accessible to all.The significant supports for apprenticeships is extremely important. Apprenticeships are rated up there in importance with the achievement of six A1s and qualifying for medicine because we need those who complete apprenticeships to retrofit this country. It is great to see them validated.
On rural transport, there are wins in the budget for LocalLink and safer routes to school. Even in the case of rural schools children deserve to be able to walk or cycle to school safely or at least cross the road safely. There are also wins for greenways, which are not only good tourist attractions but they link people and communities who, otherwise, might not meet each other. I have seen that in Mayo and Waterford. You meet old people on them and they get to meet their neighbours and friends again and people from all over the world. It is good that the development of greenways is not only considered a Green Party policy but they provides social and mental health benefits which are empowering.
It is important to recognise the great supports the Minister, Deputy O’Gorman, secured for childcare provision, for young people and for those supporting young families. Childcare provision has long been an issue for this State. Finally, there will be serious investment in this sector, which recognises the importance of investing in our youngest in society - not only those at third level - and the people who give of their time to care for them.
The budget provides for a €90 million innovation equity fund, which will invest in early stage companies for potential growth to scale. That is also welcome.
The provision of free contraception for girls aged 17 to 24 is welcome. I would like that provision to be followed up with free contraception for boys, so they can share the responsibility for contraception.
The provision of 60 new posts for community workers under the social inclusion and community activation programme, SICAP, is extremely welcome. Community development workers operating through local development companies do amazing work all over Ireland. It is great to see that improvement coming through the offices of the Minister, Deputy Humphreys, and the Minister of State, Deputy O'Brien.
The allocation of €60 for a low cost retrofit loan scheme is vital. The carbon tax yield has been ring-fenced to retrofit the social housing stock, which is great for the people who are in social housing. We also have the squeezed middle, for want of a better term. They will be able to get low cost loans to retrofit their homes.
This budget is helping us all move towards the future we want to see for ourselves, our children and our grandchildren. It is important we bring a message of hope to people today. We cannot get everything right in one budget. It is easy to throw mud at it from across the room. A great deal of work has gone into this budget. There are many positive wins in it for people in every sector of society. We are trying to do our best here. They must be acknowledged today by everybody. You will never get it all right and no one is perfect, but this is a good budget and something we should celebrate.
I welcome the Minister of State to the House and wish him well with the budget. I have seen many budgets come through this House. This is a very fair budget. The Minister of State will be well aware that even in the boom years no matter how much money was available it was not enough. That is the reality. I have seen budgets coming through this House and the budgetary spending provided was never enough for people. In this budget with its package of measures covering personal taxation, the minimum wage, health services, infrastructure, climate action, social welfare and small businesses, there is something in it everybody. It is a very balanced budget and very fair to many people. It will help many people, particularly the less well off.
Those in the small business sector have gone through a very difficult time during the past year and a half. The incentives for those in that sector are to be welcomed. After all, they are the risk-takers in this country and risk-takers should rewarded. Whether you are starting up or in a small business, you need certain supports. Those in this sector go through very difficult periods. It is not plain sailing to be in business. Those in the sector are always worried about whether the business will survive, there are difficulties in employing staff and they have to plan ahead. Those are all difficult decisions that must be made by the business person. I am delighted there are some small rewards in the budget to help small businesses because they are the backbone of this country.
I am delighted the deficit, which is forecasted to be €13.2 billion, or 3% of GDP, this year, will be reduced next year to €8.3 billion, or 1.8% of GDP. I am delighted the Government recognised this must be provided by way of tax measures. We cannot have a runaway train. We cannot have money for everything and that is why decisions have to be made. Some people in these Houses would provide money for everything and not factor in that the finances must be structured and certain proposals must be put in place.
The help-to-buy scheme and the employment wage subsidy scheme will be extended to 2022. That will be welcomed by people who are trying to buy a house, particularly first-time buyers. Those employing people will also welcome that the wage subsidy scheme will be extended into 2022.
The tax on vacant sites is a big issue whether it be on vacant or greenfield sites. The Minister of State will know in some towns, particularly provincial towns, there are quite a number of listed buildings. There are quite a number in Dublin's inner city. Substantial funds would be needed to restore those buildings. It is not viable for any developer to do that. If local authorities acquire those buildings, the taxpayer would be saddled with the task of funding the cost of restoring those buildings, be it for accommodation or commercial purposes. I suggest a special low interest rate should be provided for works to listed buildings. They are in every town throughout the country and quite a number of them are in the capital and they are all derelict. It is not viable for any developer or builder to progress work on them, develop them or whatever. Do we want the taxpayer to be saddled with the cost of putting them back into use, be it for commercial or residential purposes? A very low interest rate should be provided for such works. The Government can borrow funding at very low interest rates. If a very low interest rate was offered it would be possible to incentivise the owners or developers to proceed with such works. I welcome the budget. Did the Acting Chairman ring the bell?
It was very lightly struck. I wish the Minister of State well with the budget. I hope he will take on board the latter point I made. It should be taken on board because those derelict listed buildings are eyesores throughout the length and breadth of the country.
I support the Government's 2022 budget of €87.5 billion in spending announced by Minister for Finance, Deputy Donohoe. All the steps the Government took to protect people's lives and income through the pandemic unemployment pay and the temporary wage subsidy scheme have now proven to be effective in saving jobs. Close to 0.5 million people were in receipt of the pandemic unemployment payment and 100,000 are in receipt of it this week. There is a clear commitment to extend the employment wage subsidy scheme until April 2022.. The Government has committed to a balanced budget to restore public finances, only borrowing for capital expenditure. Under a Fine Gael Government we went into this pandemic with a €2 billion surplus due to prudent spending.
As spokesperson on further and higher education, research, innovation and science, I am heartened by the supports for students. The Student Universal Support Ireland, SUSI, grant will be increased by €200. The qualifying distance for the student grant will be reduced from 40 km to 30 km. That is crucial in the regional area I come from in east Galway and Roscommon, where people have to travel a distance to get to college, people of all ages who are studying. There will be 3,320 extra CAO places to accommodate the extra demand with the points system. That is vital for universities. We have a clear policy and a strategy on future funding. We also have our new technological universities, including the Technological University of the Shannon: Midlands and Midwest in Athlone and Limerick and the Connacht-Ulster Alliance, comprising Galway-Mayo Institute of Technology, GMIT, Institute of Technology Sligo, ITS, and Letterkenny Institute of Technology, LIT.There are a wide range of opportunities apart from the traditional routes to college. People can also earn and learn. Another way to get into college and acquire a qualification, including a degree or PhD, is through an apprentice. There is also a focus on skills development and Skillnet has been extended to include a scheme called Skills to Advance.
I am an advocate within Fine Gael of increasing expenditure on research and development as a percentage of GDP and supporting research as a way of meeting the challenges ahead as we move out of the pandemic. Research has been integral to us surviving this virus. It was researchers who developed vaccines and accelerated clinical trials at a rate that had never been done before. The speed of progress in the past 18 months has been incredible in scientific terms. We now know how important it is to support researchers in the arts, science, engineering and medicine. That is how we have embedded multinationals in Ireland. Research is more important than ever, considering developments with corporation tax.
Science Foundation Ireland is doing roadshows around the country. Research is no longer done behind the high walls of colleges; it is in communities. Science Foundation Ireland is rolling out a roadshow that will visit every county in Ireland between now and 25 October. It will be in Ballinasloe, County Galway, on 22 October. Members of the public will be able to have a chat with researchers and tell them what research they want us to invest in for the future.
Our researchers in laboratories at third level are also developing solutions. I am delighted that funding was allocated in the budget to the disruptive technologies innovation fund, DTIF. A total of 29 projects were successful under the fund this year. The projects will share €95 million over the next three years. The funding was announced by the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Leo Varadkar, the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Simon Harris, and the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Robert Troy. The areas covered arelife sciences, medtech, ICT, artificial intelligence, manufacturing and environmental sustainability. All of the projects involve collaborations between three and eight partners and include small and medium enterprises, multinational companies and research organisations. It is incredible that there are 62 SMEs among the 111 organisations involved. These are Irish companies participating in world-class research. This will link universities with healthcare and small and medium enterprises. Projects include research on a regenerative treatment for knee osteoarthritis using hydrogel-based therapeutics and to develop an adhesive that will stick broken bones together following a fracture. These are technologies and healthcare that will change our lives.
A sum of €30 million has been allocated to the innovation equity fund through Enterprise Ireland. This has been done through the Ireland Strategic Investment Fund. The allocation will be combined with a previous commitment of €30 million and the European Investment Fund will match the funding. Therefore, €90 million will be allocated to seed stage Irish SMEs. These projects come out of campus spin-outs. How do they get the investment to go ahead? They are high risk and are at a stage where development is necessary. This funding of €90 million is crucial in this regard. The Government has said it will support Irish start-ups and campus start-ups, and I back that.
The fund will promote regional development and build on the links with technological universities in every region. It will support female entrepreneurship and climate action. All of this is timely in the west because we can see in Galway the innovation triangle of top global medtech companies working with the National University of Ireland Galway, companies and the Saolta University Health Care Group.
Remote working is crucial for Counties Roscommon and Galway. We need to keep people working and living in towns and villages as they will support local shops by shopping locally, especially if they use the connected hubs that are being built around the country. We must develop communities centres and there is a grant that will help fund them. Funding for LEADER programmes, rural regeneration and grants for community centres have also been increased.
Sinn Féin Senators commented on taxes and housing. Sinn Féin's alternative budgets do not stand up. How can Sinn Féin Senators come in here and tackle us on a budget that will deliver for so many people in communities? All I can say is that the housing budget in 2022 will be over €3.7 billion, which is the largest budget that has ever been allocated to housing. A moratorium was put in place for renters this year and legislation will come through for renters this year. As a renter and somebody who hails from a small farm in the west, I am delighted to say that Fine Gael represents every town, village and county in this country. I am very proud to be part of Fine Gael. It is not a party for people who come up with budgets that cannot withstand scrutiny.
I welcome the Minister of State to the Seanad. The Chamber is full of representatives of the Government but there are no Opposition Senators present. If there is anything telling about today's announcement by the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and the Minister for Finance, Deputy Donohoe, it is that no Opposition Senator has been here since before I arrived to make a contribution. Budget day is the most significant day of the year, yet I have a choice of all of the seats on the Opposition side. That is telling in terms of the response to today's announcements.
The budget is welcome. I am sure people will recognise that the budget supports families, communities and businesses and recognises the challenges we have faced over the last 18 months. We could talk about many issues but I will focus on a couple of significant announcements made today. As someone who hails from Tipperary, I welcome the announcement of extra funding for law and order and the Department of Justice. Next year, there will be 800 new gardaí which will increase Garda strength to 14,600. The programme for Government committed to having a Garda force of 15,000 by the end of the Government's term. The extra 800 gardaí will mean we will be close to hitting that target by the end of 2022, which is significant.
I welcome the continuation of the first-time buyer's grant. The scheme has benefited people throughout this country. Many people in Tipperary, including friends of mine, have benefited from the first-time buyer's grant to build their own homes. I do not understand how some parties in this House do not see the benefit of giving people the opportunity to build or buy their own homes. Certain parties talk about giving a month's rent to somebody. The Government is trying to get people a house to own, not one month's rent. We want to give people the opportunity to buy and build their own home and live in rural Ireland if they so choose. That is the statement being made by this Government with the scheme. More than 26,000 people have built houses using the first-time buyer's grant. How does Sinn Féin expect people to save money if we do not help people by providing a first-time buyer's grant? I welcome the continuation of the scheme.
The Government will invest €716 million in childcare. I have a young child and understanding the costs and implications that having a child has on parents is new to me. This funding shows that the Government will tackle childcare, both by supporting parents with the cost of childcare and supporting childcare providers to provide a service and pay their staff what they deserve. The service provided by childcare providers is top-notch. My child goes to the Play and Learn crèche in Clonmel, County Tipperary, which provides a top-quality service. Childcare providers need the support of the Government and today's budget shows the priority we will attach to childcare in the coming years, which is welcome.
It is important to acknowledge carers and the supports we have announced for them. For the first time since 2008, the income threshold for carers has been raised. The income disregard for carer's allowance will increase from €332.50 to €350 per week for a single person and from €665 to €750 for a couple. Family carers have called for an increase for a long time. Fine Gael Senators met Catherine Cox from Family Carers Ireland and Councillor Richie Molloy in Clonmel. One of their asks was to increase the income disregard. This increase will allow many people who did not qualify for carer's allowance until now to do so for the first time.
I appreciate the Acting Chairperson has been very lenient as regards time.
In that case, I have a number of initiatives to welcome but Senators from the Opposition are free to come in and interject. From my own perspective, as someone coming from a rural constituency I welcome that as a Government, we have decided to again increase funding for all rural projects across the country. Since its establishment in 2017, the Department of Rural and Community Development has been very beneficial. The rural regeneration and development fund, LEADER, the town and village renewal scheme and CLÁR will get extra funding in 2022. I acknowledge the role of the Minister, Deputy Humphreys, in that regard. This is extremely positive. The public will see it as a way out of Covid.
I have welcomed the opportunity to listen to the contributions of Senators for more than two hours. I kept note as best I could of all of the contributors. It is worth noting that 18 Senators contributed, 13 of whom were Government Senators. That says a great deal. I have been a Member of the Dáil for many years. I remember a time when on budget day voting in the Dáil could go on up to 12 midnight. but these days, the Dáil sometimes adjourns at 7.30 p.m. or 8 p.m. because the Opposition has nothing to say. We are in that space here tonight, as reflected by the number of contributors here. I take on board everything said by Government Senators and by the Opposition. I was intrigued by the marked contradiction in some of what was stated by the Opposition Senators.
I will not reference what every Senator said because several Senators touched on the same topic. The first topic touched on by Senator Casey was the new zoned land tax, which is an important issue. I found the debate on that very interesting. In terms of how the new 3% rate will work, the maps will be prepared by the local authorities but, importantly, the scheme will be administered by Revenue such that we will not have a situation whereby no tax is being levied or some tax is being levied but not properly collected. In terms of taxes that require to be collected, it is up to the local authorities to collect that money. They should not be approaching the Department of Housing, Local Government and Heritage next year looking for additional funds if they have not collected the debts validly owed to them. They must make all reasonable efforts in that regard. Some of those will have to work their way through the system. This is a worthwhile scheme. It is not about collecting money. Rather, it is about forcing people who are sitting on zoned land, serviced by Irish Water and open to connection to the sewerage system, to move on it or pay tax on it. We want them to move on it. They can either develop houses on the land themselves or move the land on to somebody who can do that. If local authorities and landowners have agreed zonings in local authority area plans over a period of years and there is land lying idle, serviced at significant cost to the taxpayer, it is only right that those lands should be used for housing. It is an asset that belongs to all of us. If it is not being used, it is fair that the landowner should make some contribution back to the State. This tax might encourage people to move on land.
I found it interesting that an Opposition Senator stated this was really a tax cut for the wealthy farmers and landowners on the edges of various towns and that all the Government is doing in this measure is cutting the tax rate from 7% to 3%. The next Opposition Senator - there were many of them in the House during the course of the afternoon - stated that under the existing regime, nothing is being collected. I do not understand how going from zero tax being collected to a new regime of 3% to be operated by the Revenue Commissioners is a reduction in tax. Those Members were looking at what we call the headline rate, which does not exist. The actual rate of what was being levied was almost zero in most cases. I am sure that under these new arrangements, the tax will be collected by the Revenue Commissioners. People know that. I encourage people in that situation to get moving. We need houses. If landowners are sitting on an asset, it is important they move on it. Those who own zoned land on the edge of towns and cities, which is very valuable, will be well compensated for the disposal of that land, in particular those in the farming community. They will also find land elsewhere that is not zoned at a much better price and as such they may be able to increase their landholdings should they wish to continue farming.
Many Senators complimented the retention of the EWSS, in particular in the hospitality sector, but they also said that to make the changes in January will be difficult to do. That is a fair point. I will raised that directly with the Minister, Deputy Donohoe. The VAT rate for the hospitality sector will continue up to the end of August 2022. It was requested that it be extended. We take everything on board. A Senator said that the quickest way of getting people off the road is to increase the tax on petrol and diesel. That Senator lives in Dublin city centre and so it is easy for him to say that. Those of us who do not live in Dublin 1 or 2 would have a different view on that.
Another Senator raised issues that are more relevant to a debate on public expenditure, including the pupil-teacher ratio in particular schools. The budget provides for an increase in teacher numbers and a reduction in the pupil-teacher ratio by one. There was also a request for more funding for cancer and palliative care, which is also addressed in today's budget. On the question of reaching our overseas development aid target of 0.7% of GDP, this year, more than €1 billion, the largest amount ever in this particular area, is being provided. It is important to acknowledge that.
Other Senators mentioned that the number of people in receipt of the pandemic unemployment payment, PUP, is now under 100,000, which is a fantastic improvement from where we were, and that the issues of inflation and remote working will have to be closely monitored. They also welcomed the measures in regard to carbon taxes and retrofitting. The latter was mentioned by a number of Senators.
The fuel allowance was mentioned, with the increase being deemed too narrow. There will be further improvements in this area. As we all know, those who are living alone and in receipt of the fuel allowance and the State pension will see their incomes increase by €13 per week. It is welcome that the €5 fuel allowance comes into force at midnight tonight. That is a good measure.
The childcare initiative, SIPTU and the Big Start campaign were mentioned. Many of us met the SIPTU representatives in recent times. I am pleased to see the matter is progressing through the Labour Relations Commission. There is funding in the budget for childcare, to which the Minister specifically referred. There are a lot of improvements provided for in the childcare area in terms of funding. I note the preference of those involved in this area that it be referenced as the early years sector rather than the childcare sector. I rap myself on the knuckles for getting that phrase wrong. I note it is also wrong in some of the documentation before me today. I was told by the people from the Big Start campaign that it is not about childcare; it is about the first start in children's education. That is the way we should look at it.
What we are doing today will help everybody. It will help parents in that costs are to be contained. It will also help the service providers. Once the arrangements come through the Labour Relations Commission and an employment regulation order, ERO, is available to set the pay rates, that will help the staff working in those areas. Everybody is a winner in that situation. We have laid the ground work for that here. There will be funding to deal with an ERO as required in the course of the coming year. We all look forward to that being agreed on behalf of that dispersed group of employees countrywide. I credit SIPTU on the effort it put into recruiting up to 7,000 members such that it was able to satisfy the Workplace Relations Commission in regard to that particular issue. In fairness, SIPTU is entitled to credit for doing that. The Government is responding appropriately. I hope that everything will work out.
I was intrigued by the comment of one Opposition Senator, who said it is all well and good spending all of this money while at the same time challenging everything we are doing today by saying that we should be spending better. I thought that was hilarious. We are providing money for childcare, increasing the fuel allowance from midnight tonight, increasing the living alone allowance and helping carers in terms of the means test. The back-to-school clothing and footwear allowance is being increased next year.There are several measures in respect of workers such as, for example, increasing the standard rate tax band, increasing tax credits and increasing the minimum wage. We will also introduce an income tax deduction for remote workers. We are extending free GP care for six- and seven-year-olds. For the first time, we are introducing free contraception for 17-year-olds to 25-year-olds. I take the point that it should not always be the responsibility of the female to deal with that. Us fellas have a responsibility in this area, too. That point was well made.
Regarding students, we are increasing the SUSI grant by €200 and its threshold by €1,000. Importantly for those of us in rural areas, the distance threshold for the higher education non-adjacent student grant is being reduced from 45 km to 30 km. In old English, that is a reduction from nearly 30 miles to nearly 20 miles and is very important. Many people in County Laois where I live are a little too close to Carlow or wherever the case may be. This is a fantastic change and will be a major advantage to people in every county because more will be able to get the non-adjacent grant. This is the grant that makes it possible for some people to get to third level. They can get the SUSI grant, but the costs they incur are still high. If they will now be able to get the non-adjacent grant, it will make the difference between them being able to get third level education and not being able to get it. The youth travel card was also mentioned.
Most of this is appropriate to the debate that the Seanad will have tomorrow on public expenditure, but I was intrigued when I was told that we were not spending the money well. I suppose that the Opposition has to say something when it is here, but I found that to be an extraordinary comment.
Childcare has been mentioned by several Senators. Regarding VAT for the hospitality sector and coach and bus tour companies, I will convey the comments to the Minister for Finance.
We were challenged on the gender proofing of this budget. I will read from the document that was circulated to everyone today:
The CSO has conducted an equality data audit and a data strategy is currently being drafted to ensure this data source is kept up to date, addresses gaps identified during the audit, and ensures the information is utilised in the intended way. A focused equality data audit has been conducted on all national data sets held by Tusla and a report on that audit has been published alongside Budget 2022.
The audit is out there for people to follow up on, so I found it extraordinary that such a challenge was made. As one Senator mentioned, we have a dedicated women's health package of €31 million in the budget. This includes access to free contraception from next August for women of between 17 and 23 years of age, further investment in measures identified in the women's health task force, progress in the period poverty implementation group, additional funding for sexual assault treatment units, the implementation of the national maternity strategy and gynaecological model of care, and dealing with endometriosis and the many other issues that women must deal with. How could someone say that the budget was not gender balanced? It is the most gender-balanced budget that I have encountered, and I have been around here for a few years.
I commend the budget and I thank the Senators. I will not take their time, but if I had another ten minutes, I could go on more. I have responded as best I can. We all look forward to what is in the budget being implemented. Its measures are for the benefit of families, parents, children, older people, workers and renters, and the public have been seeing that over the past couple of hours.