Wednesday, 13 October 2021
Budget 2022: Statements (Resumed)
Budget 2022, with an overall expenditure allocation of €87.6 billion, reflects the Government's commitment to return the public finances to a more sustainable position, address challenges in the key areas of housing and climate action, enhance public services and social supports and ensure a balanced recovery from the pandemic.
To respond to the pandemic, the Government made available over €30 billion in funding for direct expenditure supports. This funding was targeted at supporting our health service to respond to the crisis, to provide income supports to people who lost their jobs and to ensure the survival of enterprises beyond Covid. Next year it is appropriate that these support measures be withdrawn in a phased manner. Therefore, €7 billion is being made available to continue our fight against the pandemic. In reflecting on this year's experience, where the €5.5 billion that was set aside in contingency funds in budget 2021 was ultimately all required following the resurgence of the virus, the Government is holding €4 billion in reserve to allow us to respond if there is an unexpected deterioration in the situation with the virus.
Turning to core expenditure, the summer economic statement sets out a strategy for incremental increases in public expenditure over the period to 2025 and by setting a growth rate for expenditure in line with growth in the economy, the Government is seeking to ensure that these increases are sustainable. In aggregate, core expenditure is being increased by €4.2 billion to €80.1 billion in 2022. This represents an increase of 5.5% on this year, with current expenditure growing by 4.6% and core capital expenditure up by 11.5%.
An allocation of over €22 billion will support our health service to protect lives, including an amount held in contingency. Up to €1 billion of this will be used for Covid-related expenditure, including for testing and tracing, the vaccination programme and PPE. Included in this amount is €250 million to tackle hospital waiting lists. The additional €1 billion in core current funding for health underscores the Government's commitment to the delivery of Sláintecare, the progressive reform of the health system to implement universal healthcare. This funding will also enable the hiring of up to 8,000 additional health service staff next year.
In order to protect the most vulnerable in society, the Government will provide more than €22.2 billion in core current expenditure for the Department of Social Protection next year. Additional funding of €558 million is being provided for a package of welfare measures, including a general €5 rate increase for working age and pension age recipients, increases to rates for qualified children and those living alone and for measures to improve the quality of life for carers and people with disabilities. The Government is very aware of the impact of increasing energy costs on households and the need to protect the most vulnerable. In response to this, the weekly rate of fuel allowance will increase by €5.
Providing educational opportunities to all children is essential to supporting equality in our society. In this context, there is an increase of €440 million in core current expenditure to the Department of Education. This education funding will allow for the recruitment of 1,165 additional SNAs, bringing the total number of SNAs to almost 19,200 and the recruitment of an additional 350 teachers to reduce the primary school staffing schedules by one point. It will also allow for the recruitment of an additional 980 special education teachers and an increase in the number of schools and children benefiting from supports within the DEIS programme.
An increase of €149 million in core current expenditure for the Department of Further and Higher Education, Research, Innovation and Science and funding under the National Resilience and Recovery Plan, NRRP, will allow for the provision of new apprenticeships, new Springboard places, student supports and a range of upskilling and reskilling opportunities among other measures. This will include training to support jobseekers and to address climate and low-carbon economy issues, including 8,900 places on skills to compete programmes, 35,000 learners on green skills modules and additional retrofit and Nearly Zero Energy Building, nZEB, expansion places.
Additional funding is being provided for childcare, targeted at delivering sustainability for providers, parents and children. This will support improvements in the quality of services by enabling providers to attract and retain staff, including degree-qualified staff. Reforms to the national childcare scheme will extend the universal subsidy to children under 15 from September 2022, benefiting up to 40,000 children and will remove the practice of deducting hours spent in preschool or school from the entitlement to subsidised hours under the scheme.
Increased core current funding of over €140 million for the justice Vote group will provide for recruitment of an additional 800 trainee gardaí and 400 civilian staff in An Garda Síochána. The increased allocation will also support Courts Service modernisation, enhanced prisoner services and additional staffing for the Data Protection Commission, DPC.
Addressing key infrastructure requirements in areas including housing and climate action is a key priority of Government. The revised National Development Plan, NDP, provides an historic package of-€165 billion over the period 2021 to 2030 to transform our country. The plan will support economic, social and environmental development across all parts of the country and will play an essential role in shaping our responses to the challenges of the present while preparing us for the challenges of the future. In support of the ambition in the NDP, capital spending for 2022 will rise to over €11 billion. This represents a very substantial commitment and supports the process of increasing voted capital expenditure to 5% of GNI* by 2025.The increased funding will support housing delivery, as set out in the recently published Housing for All strategy, with an overall capital allocation to the Department of Housing, Local Government and Heritage of €3.4 billion in 2022.
Record funding to the Department of the Environment, Climate and Communications will help support Ireland in meeting its climate targets through the new climate action plan and will also support the continued roll-out of the national broadband plan. It will transform our transport system through investment in active travel and public transport and will deliver key health capital projects, including the continued construction of the national children's hospital and of primary care centres.
To foster new investment and development opportunities on a North-South basis and to support delivery of key cross-Border initiatives, €50 million is being made available under the shared island fund in 2022.
Also for 2022, there will be a total official development assistance package of more than €1 billion. That will enable a particular focus to be placed during 2022 on responding to the global impacts of the pandemic.
The sustainable increases in core expenditure that are laid out in the budget, coupled with the phased unwinding of the exceptional Covid-19 expenditure, will ensure a pathway back to a more sustainable budgetary position while also ensuring that the necessary resources are available to enhance our public services to further develop critical social supports and to transform our infrastructure.
I commend this budget to the House and I look forward to engaging with colleagues on these important matters.
I welcome the Minister of State to the House and thank him for his work on delivering a budget that invests in the needs of all the Irish people as we emerge from the devastation of Covid-19.
Being in government means being responsible for managing the money Irish people pay in taxes. There is no magic money tree. We live in a globalised economy and our membership of the European Union provides massive opportunity with a massive Internal Market and a very strong currency but, crucially, we also have a shared responsibility to ensure the credibility of our economic policies. The endless spending promises by the main Opposition party come with severe consequences for the Irish people. They would crash the credibility of the Irish economic model, which for the past 50 years has steered our people out of poverty and into one of the most advanced diverse, dynamic and successful economies in the world. That is a fact that not only the Opposition but many commentators fail to acknowledge.
Politicians who have the honour of serving in our national Parliament should always have the common good at the centre of their policies. Fianna Fáil is rooted in the common good and this budget, the second budget with the Minister, Deputy McGrath, in charge of public expenditure, has produced a spending portfolio that is ambitious in the area of housing, health and education but also fair in the protections that must be in place for pensioners, those in receipt of welfare and farm families and in fighting the scourge of crime and drugs.
As a Wicklow Senator, I can appreciate the different priorities and challenges the Government and urban and rural Ireland face. Budget 2022 will make Ireland a better and fairer place to live. It is about the Government being there for people when it is most needed. Budget 2022 is a progressive one. The less well off and the most vulnerable in society will benefit most from it. Analysis published alongside the budget shows that the poorest 30% of families will see the biggest gain from yesterday’s budget, namely, a 1.3% increase in the disposable income on average.
Education has been historically one of Fianna Fáil’s most important political priorities. Fianna Fáil-led Governments have always invested in education because we believed that to educate all our people was to liberate all our people. The budget provides an allocation €9.2 billion to the Department of Education in 2022, including a capital budget of €792 million. This allocation will support the Department’s school building programme, which involves in excess of 200 projects. On completion this will deliver more than 30,000 school places, with many of them being in Wicklow. This Government's commitment to children with special educational needs will allow for the hiring of 980 additional teachers and 1,165 additional special needs assistants, supporting those with special educational needs in special classes in special schools and mainstream settings. With more than 19,000 special needs assistants, this will bring investment in special education to the highest level in the history of the State.
Crime, in particular the rampant supply of illegal drugs and the resultant antisocial behaviour and criminal activities that this terrible scourge brings, must be met with additional resources for our front-line gardaí. The recruitment of more than 800 new gardaí is supplemented with an additional 400 civilian staff, which will free up our highly trained police to do the job that is needed to protect the people. As we merge back to normal life after the pandemic, it is vital we do not allow criminals and those who terrorise their neighbourhoods to thrive. This Government will provide our gardaí with the tools to do their job.
It is in the area of housing and the provision of the largest intervention by an Irish Government in the increase of housing supply that I can finally see some delivery to tackle the most serious social crisis all our people face. This is the single largest investment in housing in the history of the State. A multi-annual budget has been agreed of €4 billion per year for the next five years. That will deliver 4,000 affordable houses a year, 2,000 cost-rental units a year and 9,500 new-build social housing. What does that mean? More than 50% of all the houses built between now and 2025 will be controlled by the State, not by the market. This State will hand the keys to people who qualify for these houses, be they affordable, social or cost rental. This is the largest intervention ever by the State in the housing market. Legislation has been brought through these Houses by the Minister, Deputy O’Brien. When I sat on the housing committee with Deputy Eoin Ó Broin, we a shared a view on the Land Development Agency. The Minister, Deputy O'Brien, has delivered on that. One hundred percent of public land will be for public housing in the cities of Dublin, Cork and Limerick. That is what we must do and are doing. Everybody agrees that the problem in the rental market is supply. We were criticised yesterday for providing an incentive to attract landlords into the market to provide additional homes for people to rent. We know landlords are leaving the rental market. Following discussion on the removal of the 4% cap on annual rent increases for the past four years, the Minister, Deputy O'Brien, removed that cap and replaced it with a link to the consumer price index, CPI. He will be returning to the House to amend that legislation. Legislation on short-term lettings will be introduced, which will have a major impact. We saw that in the way that helped to deal with the homeless crisis at the start of Covid-19. The new legislation will be more easily dealt with. It will bring additional properties into the rental market and allow us to further deal with the homeless crisis. On top of that, the Minister, Deputy O'Brien, will provide additional funding of €50 million to return vacant properties in all of our towns and villages. That is another area we failed to deliver on in the past four years.
The budget will provide for a €1.6 billion investment in water services and water infrastructure. We cannot build houses with the current infrastructure but the Government has committed €1.6 billion to investment in water infrastructure. This is a serious investment by Irish taxpayers ensuring the greatest home building programme in our history. I am pleased Fianna Fáil’s commitment to the common good of Housing for All will see results.
The fiscal space was mentioned yesterday. We have had an opportunity to operate outside of the fiscal space and a review of that will happen. The Government has placed strong emphasis on the social impact of housing and, with respect to Europe, it has made the case that the delivery of social housing should be excluded form the fiscal space as we move forward.
I warmly welcome the Minister of State, Deputy Ossian Smyth, and acknowledge that he is one of the Deputies who represents the constituency in which I live. I do not doubt his enormous commitment and that of the Government. I recognise the difficulties faced by the Minister for Finance and the Minister for Public Expenditure and Reform and support them. In these early days in government it is their prerogative to set out the national development plan. It is also their prerogative to set out a plan for housing, agriculture, healthcare and all of the other areas but where they are failing they must be called out. As I have said two or three times here in recent days, there is an issue with healthcare. We have not heard the full amount allocated today but I understand the Minister for Health will later set out the finances and resources that he needs and has secured to address the enormous waiting lists. There are more than 900,000 people on waiting lists and I read out a list of them today. I intend tomorrow and every day that I am in the Seanad to pick ten hospitals and read the waiting lists into the record of this House until we see a reduction because healthcare is important.
I recognise and pay tribute to the Ministers, Deputies McGrath and Donohoe for doing an exceptionally hard job. It is too easy to come in here and criticise people but I will not do so as it is early days in government. Both Ministers have set out the budget and financial parameters and now they must deliver on them, which I respect.
Earlier during the Order of Business there was a suggestion by a particular Government Senator, whom I shall not name, that the Independent Senators were not represented last night when we discussed finances. That is not correct. Senator David Norris, who is an Independent Senator and a member of my group, arrived here and made a very successful contribution. Another one of my Senators has asked to let it be known that she took sick and is currently in hospital. Nobody knows people's personal circumstances. It is unfair, inappropriate and wrong to single out Members who are not in the House when a debate is going on but I hope the matter will be addressed tomorrow by the Senator who raised the issue. As a member of the Seanad and leader of the Seanad Independent group in the House, I want the record to show that we were represented or endeavoured to be here. If a Member or a Government Senator has an issue with attendance in this House then call it out for what it is, have a debate and, if necessary, have a daily roll-call to show attendance. I am happy to support such a proposal but I will not be challenged or contradicted about membership.
I am glad that the Cathaoirleach has clarified the matter.
The Government faces huge challenges in healthcare and housing in Ireland. We must deliver housing and homes for people. In fairness, arrangements have been mentioned in the budget.
We must demystify financial figures and I commend the Government on producing an excellent publication called The Budget in Brief - A Citizen's Guide to Budget 2022. I call for more of such publications. We must engage with citizens about what the budget means to them and the publication sets out the key measures. I am not going to comment on the measures as we all know them but it is important to deliver on them. The publication should be circulated widely, at least online. A lot of money has been spent on advertising in the national press about a Government of Ireland initiative. The budget is such an initiative and should be explained using simple infographics as used in this publication. I ask the Minister of State to convey my suggestion to the Departments. The social welfare changes in the budget have been listed point by point, which I commend. I and other Members have received ten copies of this important document.
Finally, I genuinely wish the Government well with its national development plan, the plans for agriculture and plans regarding the Housing for All policy. I accept that these are early days in the life of this Government, that we must address the financial situation, that we have just come out of Covid, that we have had to deal with Brexit and will continue to face the many challenges brought about by Brexit. I wish the Government well but it is important the Opposition calls out failures and shines a spotlight on challenges from time to time.
I commend the Minister of State, the the Minister for Public Expenditure and Reform, Deputy McGrath, and all of the Cabinet on their work on the budget, on the public expenditure side, as announced yesterday. Additional details will be given in briefings conducted in sectoral Departments. There is a lot of information that has not yet been released but it will be over the next number of days.
It is important to acknowledge that we have experienced two of the largest challenges ever to face this country - Covid and Brexit. When we dealt with Brexit issues in 2018 and 2019 we were not fully aware of what the consequences might be so provisions had to be made for a worst-case scenario, which had an impact on budget 2020. Then the pandemic beset us in early 2020. It is important to acknowledge that the ability of the State to respond to the challenges was due to the stewardship given to public finances over the past decade. Difficult decisions were made that resulted in the books being balanced in 2020 and a reserve of funding being built up. The good name of the country was also restored so we could borrow on the international market to fund all that was required under Brexit.
The parameters of the budget were outlined in the summer economic statement. I welcome the substantial increases in each Department and, in particular, I acknowledge the work that has been done by the Minister for Social Protection, Deputy Health Humphreys. If Covid has taught us anything it is that the people who never dreamed that they would have to rely on direct financial support from the State found themselves needing that. It is important to recognise that social protection is a safety net for anyone in this country who needs support. The State exists for a number of reasons but the main one is to help people who need support and I welcome the general increases in weekly social welfare rates such as pensions and the living alone allowance. The fuel allowance has also been increased. From July, the duration of parents' benefits will increase from two weeks to seven weeks. The income threshold for the working family payment has been increased. The school meals programmes has now been extended to all DEIS schools. Yes, there are still anomalies; there are certain schools that should be DEIS schools but are not due to parameters but I do not know why they are not and it is hard to explain. There are schools in my area I consider should be on the top of the DEIS schools list but are not so there are serious anomalies.
I welcome the changes that have been made to the carer's scheme. One just never knows in what circumstances one might have to step up and provide care to a family member or loved one. Carers do tremendous work and are often very stressed. As I have said before, every family is different. Some families may have a lot of siblings who can help while other people are left to provide care on their own or with just one other person. I welcome the increase in income and capital disregards for carers as well as the increase in the earnings limit from €350 to €375. I also welcome the increase in the general weekly means disregard for the disability allowance and the provisions for certain treatment benefits.The tax changes I discussed yesterday are important in giving a break for the general public.
I spoke this morning on the health matters and issues relating to the waiting lists. I urged that we need to put the same focus into tackling the waiting lists that we did with Covid and that we must treat this situation as the priority that it is. It requires the same energy and enthusiasm. Our consultants and theatre nurses have so much expertise and there is so much equipment in our operating theatres. We need to maximise their use in order to clear the backlogs. That is important. I welcome the €4 billion in exceptional funding provided in the budget for health. I also welcome the funding for the initiative to tackle waiting lists.
The education budget is certainly welcome with the additional teachers and special needs assistants. There are changes to further and higher education. The changes to the Student Universal Support Ireland, SUSI, grant are particularly welcome, including the increase in the maintenance grant and the reduction in the distance required for the non-adjacent grant from 45 km to 30 km. This will be an important change for families. The problem with thresholds is that very often people are just above the threshold and it is difficult because they are trying to rummage around to see if they can get under it. It is a particular difficulty for families. Any support that helps to increase the possibility of getting that grant is extremely important for families.
On the Department of Justice allocation, provision is made for some 300 additional gardaí - after we account for those who are retiring - and an additional 400 civilian staff members to allow for more gardaí on the beat. People in every part of the country like to be able to see gardaí on patrol, particularly in urban areas where visibility is important. I certainly hope there can be increased visibility in our capital city, in provincial cities and our large towns. It is of course important to have Garda patrol cars on the rounds in rural areas also. I welcome that.
I welcome the changes in respect of public transport which the Minister of State's party has been involved with in the reduction of the cost for public transport.
There is one matter about which I am disappointed. I had called for the establishment of a community centre fund. While it has been done for upgrades of community centres, there is no fund of scale for new community centres or new centres in towns or in areas of growing population. It is a particular gripe in my area in Moycullen where the population is growing, land is zoned, and there is an expectation that the number of houses will increase, but there is nowhere the community can go to get up to €4 million or €5 million for an infrastructure of that size. I raised this issue previously. Perhaps the community centre fund is a start, but it is for upgrades. This is something of which we need to be conscious. If we want people to support new development, there has to be something for communities and for their children. Community centres and other amenities are hugely important.
I also support the changes in respect of the childcare sector and the increased funding. This is a hugely important area for providing the additional support. There are challenges for providers regarding costs and in the context of staff retention and pay. I am aware that work is going on in that regard between the Minister for Children, Equality, Disability, Integration and Youth, Deputy O'Gorman and the Minister of State at the Department of Social Protection, Deputy English. I compliment and commend the Minister of State, Deputy Smyth, on the work he and his colleagues have done in this budget.
I welcome the Minister of State. There are many different tests that can be applied when assessing and measuring the impact, be it positive or adverse, of budgets. For the commentariat, an initial preliminary test is whether there is a banana skin in the budget. Perhaps this dates back to the budget introduced by the then Minister for Finance, John Bruton, in 1982 - which members may recall - whereby an 18% VAT increase was imposed in respect of footwear and clothing. An inadvertent and unintended consequence of that was the collapse of the Government of the day. It is still not clear from history whether it was collapsed by the now deceased Jim Kemmy or Seán Dublin Bay Rockall Loftus. Ever since, there has almost been a preoccupation with banana skins. There are many expert groups that will parse the budget forensically in order to give their views, and they have given their views. Many of the people of Ireland, however, would consider the test to be, first of all, if the budget has some credibility. Is the budget prudent? Then there is the vexed question of whether it is fair. The latter is so difficult to measure because a balancing act must be struck, with countervailing rights between how far one can go - and the Government loves to do as much as possible - and still retain and maintain credibility, stability, and financial prudence.
I have detected in this budget a clear step change, which is the buzzword of the week. In the EU Parliament 30 years ago, the buzzword would have been "subsidiarity". The term "step change" has definitely come up quite a lot this week. There is a continuance of the step change for significant investment in key public services. This should be music to the ears of some members of the Opposition. As has been stated previously, there has been investment in housing, healthcare and childcare. In reality, according to the Minister for Public Expenditure and Reform, Deputy Michael McGrath, €9 out of every €10 being made available in this budget is going towards improving public services. The context provided by the Ministers, Deputies Donohoe and McGrath, was also important. It is very difficult to escape the context, which is that last year Ireland had an €18 billion deficit - it is expected to be bigger this year - but the Tánaiste was correct when he said that the economy was taking off like a rocket, because it the deficit is down to €13 billion. I remember the late Brian Lenihan, as the Minister for Finance of the day, coming in for sharp criticism when he said that the building industry was about to come to a shuddering halt. He was right, however. The Tánaiste is also right when he says that the economy is taking off like a rocket. The deficit has decreased from €18 billion to €13 billion. The biggest and most glaring figure of all is that which indicates that the national debt will stand at €240 billion by the end of the year. There could never be giveaway budget if we are going to be kind, thoughtful and forward-looking to the next generation, whereby we do not want to labour them with the debt of this generation. Of course we would love to do more but that has not been possible.
The biggest investment, which has been well flagged, is the €4 billion for public housing. This level of investment is unprecedented in the history of the State, with more than €3 billion to be spent over the course of the next year. That includes funding for 9,000 social houses. Notwithstanding the obstacles that have held us back, namely, Covid and last year's shutdown, according to the Government these houses will be built next year, along with 4,000 cost-rental and affordable homes.
The Green Party is particularly happy with the youth travel card and the 50% discount. Members are here, as parliamentarians, on this day and at this time when this departure for the better happened. I hope we will revisit the matter next year and that these provisions will be incremental. Just as there was a willingness in bringing the doctors with us for the free GP surgery services for under fives and the medical card, this budget makes provision for children aged six and seven. If the Green Party has anything to do with it and if the finances allow, next year we will be opening that out further. We would love to have covered a greater age cohort in the context of the reduced travel costs, but, in a sense, it is revolutionary, especially when one considers the amount that students spend on public transport as a result of the impact of the housing crisis.That is one step in the right direction. The free contraception for women aged 17 to 25 is to be welcomed. I have heard people say the Government could have done so much more and they are right. It could have but, again, it is a change. The Green Party does not claim sole credit for any of these measures but it is a step in the right direction that we can build on that for future years.
The Green Party is particularly pleased about the €350 million, or €1 million per day, for active travel such as walking and cycling. I would like to see a translation of that, see it measured and see the actual roll-out of those projects. The retrofitting of homes is particularly pleasing for the Green Party. Some €202 million will be spent on retrofitting, which is 22,000 houses to be done in 2022. That is part of the just transition. It cannot just be meaningless words. We have to translate words into actions and while that is not a complete action, it is a step in the right direction because under the programme for Government 500,000 homes have to be retrofitted by 2030. The €50 million for the shared island unit will please many people but again we can do more. We have to get more links between North and South, including a railway line connecting the north west, Donegal and the Ulster canals. Much more can be done there.
The electric car grant is included in the budget but it has been flagged that it will not be there forever. The €5,000 grant has just been extended to 2023. That is good but even if everyone had an electric car in the morning we still have congestion and that will not help quality of life. It is a step in the right direction but there is an affordability issue with buying new cars for many and that will have to be addressed in the coming years if we are to realise our goal of changing the fleet from fossil fuel to electric power. The 165 new electric buses is to be welcomed, as are the 24 hybrid buses, 81 new regional buses and 41 more carriages. The MetroLink, BusConnects and DART+ are all set to proceed next year with planning.
I commend the Government on compiling a budget. There are many other issues I could mention but I do not have time. It is not perfectly fair but it is a step in the right direction which keeps at its heart prudence, financial stability and making sure we get Ireland up and running and restore its reputation as a place that is financially prudent. It is very hard to do that and be as fair as you would love to be.
The Minister of State is very welcome. It is nice to see him. I will start with housing. It is a shame that our good Senator Casey is not here because I was struck by something he said in his speech. Speaking about housing he said that he could finally see some delivery. Those were his words. That is some statement to make. This is the sixth Fianna Fáil-Fine Gael budget and it raises the question, what have they been doing for the last five years? He can finally see some delivery. I do not agree by the way, about the delivery, but I will get to that point.
There is nothing in this budget for renters. I heard the response from the Government side on the Order of Business this morning. The Government said it is going to improve supply and that that is the only way to deal with this. That is not factually true. What the Government could have done is heeded Sinn Féin's suggestions and put a freeze on rents. Not only that, it could then have reduced rents via a tax credit that would save people one month's rent each per year. That would actually make a huge contribution to the challenge that working families face as regards the cost of living. That was an option the Government had but it is one that has consistently been rejected by Fianna Fáil and Fine Gael and now, I am afraid to say, by the Green Party in government as well.
As I explained yesterday, I met people in my village of Castleconnell on Monday. They came out to speak to us because they are suffering horrendous rents of €1,300 or €1,400 a month in a small village and they cannot afford it. The truth of the matter is there is nothing in this budget to help them. They cannot afford to save to buy their own house because all their money is going on outrageous rents. I remind my colleagues in Fine Gael in particular that over the last ten years rents have increased by two thirds. That was not on the Minister of State's watch as he has only been in government for the last 18 months but it is a hell of a record and that is why I am often stunned when people in Fine Gael stand up here to give lectures on housing. They have failed on housing, not for one year or two but for a full decade. Housing crises do not arise as some kind of natural phenomenon. They arise as a result of consistent failures of Government policy and in Fine Gael's case its consistent failure to build public housing. Even now, it is still attached to tax breaks for vulture funds. Again I would like the Minister of State, Deputy Smyth's opinion on that as a Green Party Minister of State. Why is he supporting tax breaks for vulture funds? Rather than public authorities buying housing, they lease it. According to this budget, 2,600 houses are going to be leased next year. What an incredible waste of money. Fine Gael, the party of fiscal responsibility, is insisting that councils, rather than building and buying their own housing, lease it so there is nothing left after paying money for 25 years. Is that good economics? I do not think so. There is so much more I could say about housing but I will move on to the other issues.
I am particularly appreciative of having a Green Party Minister of State here because I want to talk to him about the social welfare increase. The Minister of State, Deputy Joe O'Brien, came into the social protection committee earlier this year. He made a good contribution and acknowledged that we needed a significant increase in social welfare rates. As I pointed out before, in 2009 the rate was €197. Here we are 13 years later and it has gone up now by just over €10. That is a huge indictment of Fine Gael and the fact that it is not that bothered about people who are poor. Social Justice Ireland's commentary on the budget is absolutely condemnatory. It states, "Budget 2022 is the second budget produced by this Government and demonstrates a disappointing and worrying trajectory ... Those on the lowest incomes ... are being let fall further behind."
The Government had options. It could have raised money in other ways. I want to ask the Minister of State about the special assignee tax relief programme in particular. That is the tax relief for millionaires, which I have raised here before. Top executives can write off two thirds of their tax up to the value of €1 million for each of their own earnings. It has been in place since Michael Noonan introduced it in 2013. It is a scandalous waste of taxpayers' money, directly subsidising some of the richest people in this State. Some 55 millionaires helped themselves to €110,000 each of taxpayers' money through this scam. That is what this is. When the Government decided not to heed the Minister of State, Deputy O'Brien's, call for a significant rise in welfare, why did it not address that issue and say maybe we should not be subsidising the very richest people in this State and could use that money to increase welfare rates? That tax relief was worth €42 million. We do not know what it is worth now because the Department is very reluctant to give figures since 2018 but I would imagine it is upwards of €60 million at this point in time. Equally, the Government could have chosen to put an end to gold-plated pensions and the tax reliefs there. The figures calculated by the Department of Finance tell us that €183 million could have been saved by doing that. That would have been a way to raise funds and build in progressive measures because let us face it, those social welfare rates are appalling. The Minister of State's own colleague acknowledged that. We are talking about a fiver.
Let me talk about tax. As has been pointed out by no less than Patricia King of ICTU yesterday, the decision to implement a package of tax cuts that favours only two out of every ten taxpayers, who are the top end of the scale, is entirely regressive.How can the Government stand over regressive tax measures? Patricia King said it was a retrograde step the Government had allocated one third of the €1.5 billion discretionary package to tax cuts, much of which will go towards increasing the standard rate band. She said that it was a measure that will do nothing for the many low paid essential workers who we have relied upon over the last 18 months. The Government's examples provided in yesterday's budget document confirmed that someone on €30,000 will benefit by €2 per week, whereas someone on €60,000 will benefit by more than €400 per year. Indeed, Ministers will benefit from these measures. Why is the Green Party supporting regressive taxation? I gave my second preference vote to the Greens at the last election because I assumed the party shared certain common values with us. This is a regressive budget and these are regressive measures.
I refer to the cost of living because it is a significant issue for working families. The Government has only made things worse with the carbon taxes which are regressive. They do not improve the situation of, or give other options to, people. Most working families have no choice but to heat their homes using the systems currently installed. They cannot afford the significant retrofits envisaged. I know some money has been allocated for retrofitting but it is not half enough. The Sinn Féin budget signalled a more significant package in that regard.
What will the Government do in regard to the northern distributor road in Limerick and the M20 motorway? I was concerned with comments the Minister of State made last week on that. We need the M20 motorway in order to complete the Atlantic corridor and we need the delivery of the northern distributor road, which was not even mentioned in the national development plan. Will Limerick be left behind again by this Government?
I welcome the Minister of State to the House today. There is no doubt we were all looking forward to a post-Covid Ireland. Many people who have spoken to me do not want to return to what they experienced before. They want a new Ireland where their loved ones can get a hospital appointment within a reasonable time, where they do not have to pay the equivalent of a second mortgage for caring for their children, and where there is the prospect of houses built in their towns and villages that they can afford to rent or even buy as a family home. This budget could have paved the way to this new Ireland, but in many ways, it has failed to deliver for those who need it most.
In County Kildare, where I live, the cost of childcare equates to a second mortgage for many families. Time and again, I receive representations from families who take their young children from their beds in the early morning to avail of the available places in their nearest local childcare facility. This may have stopped to some extent due to Covid as parents had the chance to work from home. However, if one travels on the M9 or M7, as I did this morning, one will realise that parents have returned to travelling by car once again. The M9 and M7 have returned to being akin to car parks. Of course we welcome the efforts to increase the wages of those working in the sector, which is long overdue, but the provisions in the budget announced yesterday will not mean any reduction of the cost equivalent to a second mortgage for many families in south Kildare, who will be put to the pin of their collar in order to afford childcare.
On the issue of commuting, to which my Green Party colleague from Kildare referred earlier, there does not seem to be any attempt to increase the short-hop zones to cover the train stations of south Kildare. My Green Party colleague lives in north Kildare where one can board a train in Sallins and avail of short-hop prices. Unfortunately, the same cannot be said of south Kildare, hence the motorways leading into the capital have once again become akin to car parks. We see commuters driving from the likes of Newbridge to avail of short-hop zones, and who can blame them when they can save €200 per month notwithstanding the increase cost of car fuel.
In recent weeks, I highlighted the cost on students to travel to Dublin colleges by train and I welcome the Green Party initiative of the youth travel card. I have seen copies of train tickets that have cost more than €20 per day for students because they cannot use their Leap card in stations such as Monasterevin, Newbridge, Athy, Portarlington and Kildare town. The Leap card system is already set up and could be rolled out without delay. I note the Minister of State said that a combination of both will be used. We should see this new system put into action straightaway with the use of the Leap system. I am told all it requires is a Leap card machine at each station to accommodate that. Students typically have Leap cards already. I hope the Green Party initiative will include that, thereby saving badly needed money for students and their hard-pressed parents. I received many queries this morning as to why this initiative is to begin at the age of 19 years. I note the child fares extend to the age of 18 years but there is much concern from students who are in college, particularly those in their first year, who are 18 years of age and are asking whether they can avail of this new youth travel card. Perhaps the Minister of State will come back to us on that important point.
I wish to raise the issue of the Defence Forces. Yesterday, in a lengthy speech, the Minister of Public Expenditure and Reform, Deputy Michael McGrath, stated that he acknowledged "the work of the Defence Forces in supporting the public health strategy over the last 18 months, through contact tracing, logistics and medical support, to name a few examples". He went on to say that he noted "the work of the Commission on the Defence Forces is ongoing and that the commission is due to report by the end of this year." He said that, "[T]he Government will carefully consider any recommendations it makes" and that he is very much looking "forward to engaging positively in this process". These few lines from the Minister will mean nothing to the Defence Forces' families who continue to seek proper pay and conditions. The indication that the Minister will address these issues after the publication of the Commission on the Defence Forces report at the end of the year is just another can-kicking exercise down another road. I have been informed that we may not see that report until at least early next year, which is three months from now. Defence Forces' families should not be forced to rely on social welfare payments, as many are at present, in order to make ends meet. Core pay, as we all know, is a primary cause of the recruitment and retention crisis in the Defence Forces. While we welcome the additional €35 million allocation in the budget, the defence budget is not seeing the investment it needs to bring about the 9,500 serving personnel referred to in the White Paper. There is no specific reference to the post-1994 contracts that could result in hundreds of experienced personnel leave the Defence Forces by the end of next year. There is no specific reference in the Minister’s speech about the investment programme, apart from the proposed development of a cadet school in the Curragh. In a recent Seanad debate, the Minister informed me that he would invest in the Curragh, which he described as the flagship of the Defence Forces. The budget failed completely to address the issue of core pay, which is at the heart of the crisis that is threatening the viability of the forces. The Defence Forces' budget continues to be underfunded.
Many Members here today have referred to the housing crisis. There is no doubt that this issue continues to dominate every representation I receive almost daily. There was a chance to assist renters and address the matter of vacant sites. Unfortunately, the Government has missed the opportunity to do this. It is unbelievable that the budget does not assist renters. The reply we hear time and again is that renters want more houses built to increase supply. For the many renters I deal with, they simply cannot wait for more houses to be built. They are already put to the pin of their collar and need assistance now, not in a surplus-supply dominated market that may, with the greatest respect to my Fianna Fáil colleagues, be a few years away.
I continue to highlight the issues surrounding the housing assistance payment, HAP, that I deal with daily. There was no increase in HAP limits yesterday and no help for single people who have been unable to afford rising rents and are now borrowing to pay top-ups to keep a roof over their heads. There was no standardisation of bands that would allow hard-pressed renters to rent available properties in neighbouring counties. I have raised this issue here on countless occasions. It is a problem that continues for many people in south Kildare.
I raise the case of carers, which has been highlighted by colleagues across the House today. It is welcome that the carers income disregard has increased to €750 a week. However, I received a number of phone calls from carer's families who provide 24-7 care for loved ones who still will not qualify for the allowance. They are asking us why it is a means tested payment and why the care they provide 24-7 is not recognised by this Government? This is an area the Government needs to look at again, notwithstanding that it is welcome more families will be included in that schedule of social welfare payment.
The reality of this budget is to give a little in the hope that it will help a lot.Unfortunately for many of those who contacted me last night and this morning, the giving will not reach their pockets or it will be taken from them by the rising fuel costs and the day-to-day increase in living expenses. The hope of living in a new post-Covid Ireland will unfortunately be lost in the car parks along the M7 and M9.
I thank the Minister of State for being in the Chamber. I always find this time of year particularly difficult to comment on and I usually sit down, read the budget and try to make sense of it and understand it. I then try to break down the figures and comment on this million euro or that percentage. To be honest, every time I do that I give up and I have to go back to people's lives and to what is behind them.
Since I started paying attention to the budget as a young mother, it has become a big event every year. I used to wonder how it would impact on me and then when I went into the addiction sector I looked at how it would impact on the work I did and the people I worked for. This year, there was zero increase in funding for drugs initiatives and drugs task forces. Over the past two years, there has been a huge amount of commentary on mental health, dual diagnosis and the increase in drug use but there is no increase in funding for treating people who are the most vulnerable. When I look at the budget I visualise in my head a line of people, some of whom will be positively affected or impacted by the budget. The people I work and volunteer with in my community are not even at the back of that line because they do not know where it is.
Working from home in the past two years, I have reintegrated in the community through voluntary work. I spent a lot of time working in addiction and homeless services again to give some time when I could so as I did not have to be in this Chamber. I was struck yesterday, while reading through the budget, by many of the experiences that have had an impact on me. I saw how little it benefits addiction services and the community and youth sectors and how it will leave poverty untouched.
Driving along the Tallaght bypass in the past few months, I had to pull my car over underneath a bridge because I saw a man tie a noose around his neck and drop. What he did in that moment was so symbolic. I watched the light go out his eyes as he stood there having made a decision to do that. He ended up in Beaumont Hospital and they managed to save him. He landed head first at my feet under the bridge over the bypass. He made the decision to go onto that bridge. There are thousands of others like him who sit at home every day contemplating who they are, what their lives are about or for and if they can build lives that are worth living.
I also pulled up outside a Centra shop a few months ago and watched pre-teenage kids in my estate encourage a woman who sits outside the shop begging to go into treatment. Imagine being 11 years old and having the vocabulary to do that. It was lovely to see that the kids cared about her and wanted to encourage her into treatment but that is not what they should be thinking about at their age, nor is it the kind of conversation they should be having outside their local shop.
This budget, like every other budget, does nothing to get to the heart of the problem or to what poverty does to people's lives. Nothing in this budget gives me any hope that we are even close to getting there. That is not because I think my colleagues in other parties do not care; I believe they care. I do not speak in this House on some budgets because I do not want to be seen as being in here to engage in some sort of political point-scoring. That does not benefit the people I am talking about who are dying in my community. I want to come in here and know that something positive will happen.
I do not know if other Senators have seen someone who wears poverty. When I walk around my community and meet people, I see women my age on the one parent family payment who have been impacted by trauma and cannot access services or supports for their kids with additional needs. Some of them look 30 years older than me. That is because poverty and trauma have seeped into their bodies to the point that they are hunched and walk in a shuffle. These women do not know how they will pay their rents. Other one parent families in my community, both friends and people who just come to me for support, have to change where they live every year. The moment their children make a few friends on the road, the landlord wants back in. The housing assistance payment has to go. It interrupts children's lives every year when these families have to move house again. They have to pack up their things again and move on to the next landlord who might give them a house at a rent they can afford.
I listen to the narrative or story in the budget in which we tell ourselves that it will reach the most vulnerable, protect a particular group or make transformative change in a particular area. I have been hearing those phrases every year and everyone I worked with ten years ago is still in the same hole they were in then. We cannot keep telling ourselves this story, attaching ourselves to that narrative and convincing ourselves that the political decisions we make have an impact because they do not. When we sit down to decide where we spend money we have to match it with how we spend that money and the aggressive action we have to take to make sure it does what those with good intentions around the table say they want it to. The problem is that people are so far at the back of the line that €5 cannot and will not reach them.
The Minister for Finance made a comment yesterday that has been in my head since I heard it. He said: "Our country now reaches for a better, brighter future." I felt sad when I heard that phrase because that is the aspiration of people who can see a future. Better and brighter applies if you are already in an okay position where your future could be brighter. I am working with people who just want to feel they have a future, never mind a better and brighter one. Just a future would do them but that is not happening. I ask the Minister of State, and all colleagues, to watch the narrative and story we tell ourselves when we talk about how a budget will impact the lives of people whose lives we do not have a decent analysis and grasp of because they are at so much of a distance from the lives we live. They are so far away we can never understand the impact the budget will have.
For me, budgets need a strategy because without that, we will not get anywhere. We need to have two-year and three-year budgets for addiction services, drugs initiatives and the youth sector so that communities can even begin to build their capacity to advocate for and care for themselves and feel like they are part of that service so that they may have a better and brighter future.
As chair of a drugs task force and as part of that network, I know the Senator gave a commitment to speak strongly on that issue. I am proud of the Senator and the drugs task forces would be proud of how she has represented their needs. I trust the Minister of State is on a trajectory of engagement that will have a positive outcome in the review.
I thank the Minister of State for attending. I also thank the Minister, Deputy Michael McGrath, for his support in recent weeks and months. There is a lot of positive news in the budget and I welcome the increased rates for core social protection schemes in particular. Similarly, the recruitment of additional special needs education teachers and assistants will surely be welcomed by all, as will the recruitment of a significant number of additional gardaí, who are especially needed in inner city Galway, where I come from, and throughout the county. The significant and substantial investments being made in health and housing are, likewise, positive and necessary.I receive representations in respect of waiting lists on a daily basis, as I am sure do all Members of this House. In that context, the €250 million being targeted at reducing those lists is very welcome.
The ambitious Housing for All plan has been backed by financial commitments in budget 2022, with €2.5 billion aimed at increasing social housing next year, as outlined by the Minister for Housing, Local Government and Heritage, Deputy O'Brien, in recent months. The record investment in childcare reflects a turning point in the State's approach to the early years education and childcare sector. In west Galway, childcare is one of the most challenging aspects of life for families with young children. While the commitment to ensuring that there is no fee increase for parents will come as a great relief to those families, we must do more on childcare.
Budget 2022 provides the first increase in the SUSI grant for more than a decade, as well as a broadening of the eligibility criteria for same. The budget also provides half-price public transport for those aged between 19 and 23. These are measures which will greatly assist students. They are hugely progressive and will have a very positive impact.
I also welcome the increase in the carer's allowance as outlined by previous speakers and the broader eligibility for that allowance. Carers provide enormous support for their loved ones and deserve the support of the State in turn. I am delighted to see that move and also believe that carers should be included in any gratitude shown to front-line workers.
From a business standpoint, there is lots of very welcome news in this budget, particularly the aviation sector support scheme and the recovery package aimed at festivals and the night life economy. Obviously, Galway is well known for the various brilliant festivals that are held there in normal years and in that context, I am especially pleased that the Government has recognised the need for assistance going forward. The extension of the employment wage subsidy scheme is a welcome move which will greatly enhance the ability of businesses to rebound from Covid-19 and survive a crisis that was not of their own making. Likewise, the waiver of commercial rates up to the end of 2021 is a significant boost for SMEs in particular.
Senator Casey has already referred to the VAT rate for the tourism and hospitality sector. As Members will be aware, the rate was reduced to 9% in autumn 2020 and will remain at that level until September 2022. I am sure there will be many discussions on that VAT rate in the meantime. I am sure the Minister of State appreciates that both sectors have been hit incredibly hard by the pandemic and are facing a challenging period ahead. Most European countries apply a VAT rate of 9% on tourism and hospitality. There are strong concerns across both sectors that if our VAT rate increases to 13.5% in August it will be a significant blow to their recovery and will have a negative impact on their competitiveness vis-à-visother European countries which apply a 9% rate. The rate is projected to increase by 50% next year. I ask the Minister of State to offer his view on this matter and to advise whether there is a possibility that the reduction in the VAT rate for hospitality and tourism will be extended.
The Minister of State is very welcome. I will start by acknowledging the contribution of my good friend and colleague, Senator Ruane. The points she made are very pertinent and the Government must listen. A knee-jerk response is not what is needed; we need a multi-annual and intensive programme to deal with the communities that Senator Ruane spoke about. The issues she referred to will only be resolved with resources and money and a willingness to do it over a protracted period of time, starting immediately. This also needs all-party agreement.
Overall, the budget has done a small amount for a lot of people. It is a post-pandemic budget and a certain amount of realism about what we can achieve is required. During the pandemic we learned that our health services are not really fit for purpose and need significant investment. In that context, I welcome the fact that we are looking at an investment of €22.5 billion in our health services, including €250 million in a targeted response to waiting lists. I do not know how far that €250 million will go because I presume it will be used to buy capacity in the private hospitals to get procedures done as quickly as possible in some form of catch-up programme. We need a little more information on that.
The health service will employ 144,000 people - up from 103,000 - within the next couple of years. This includes administrators, nurses, doctors, consultants and so on. It is a huge investment in human resources and we really need to see a benefit from that for the people of this country. If we want any legacy from the pandemic that is positive, it should be that we have a health service that we can stand over. At this moment, we do not have a service we can stand over. In spite of the fact that €23 million was spent building a 60-bed modular unit as part of the accident and emergency department at Limerick University Hospital, there were still 83 people on trolleys there last week. There is something wrong somewhere when a 60-bed unit is built to alleviate overcrowding in an accident and emergency department and still there are 83 people on trolleys. We have been told that there will be a 90-bed unit and that is very welcome but when we build that unit, will we still have 83 people on trolleys? There is a problem somewhere and I do not know the solution. I am not the Minister for Health but it must be addressed. We need to do more than just throw money at the problem. That is just one issue. I very much welcome the provision of free contraception for girls up to their mid-20s but would like more detail on the roll out of that service. Overall, I want to be positive and an investment of €22.5 billion in health is significant by any standards. I look forward to teasing through the details with the Minister at the Joint Committee on Health and in this House in the coming weeks.
I also welcome the travel card initiative for young people, through which they will get discounts on public transport. However, I want to see an equalisation of travel costs. For example, a person working in Galway who travels by train from Ennis pays €7.50 whereas a similar journey from Maynooth to Dublin costs €4.90. Why is there a difference in price when the distance is the same? The journey from Ennis to Limerick is a little cheaper and works out at €6.19. While the travel card is very welcome, an equalisation of the cost of public transport funded by the State throughout the country is necessary. Why should somebody living in Ennis, Ennistymon or Kilrush pay more to travel to work than somebody in Maynooth or Leixlip? That said, the travel card is a good initiative.
Overall, the budget was framed by people who want to do their best, who are committed to public service and doing their best. On the whole, it is very welcome. Did any of us think we would be in a situation where we are only borrowing €20 billion as opposed to the projected €30 billion? That is significant and there are a lot of positives in it. That said, a note of caution is important and I would like some more details on the travel card scheme and the roll out of contraception for young girls.
I thank the Minister of State for coming to the House. We know that no budget is a panacea. Each budget has to be ambitious and try to change people's lives. Our representative in the Department, the Minister, Deputy Michael McGrath, and his counterpart, the Minister, Deputy Donohoe, have come up with a progressive budget that lays the foundations to ensure that people have better lives, especially when it comes to childcare, and in some other aspects. It is not perfect but it goes some way to giving a little back. We have to remember that we are still in extraordinary times. Covid figures are still at nearly 2,000 daily. There was significant caution when I was coming in that our vaccination rates, coupled with our reopening, leave us on a tightrope. We are not out of the woods yet. We have to remember that this budget has Covid as a backdrop. We still have Covid. We are not out of it.
We have to remember the significant impact Covid has had on society, our communities, services, many people's jobs and on the Exchequer. Covid masked significant faults in our public services. Many operations were cancelled. We saw a beautiful young boy who is waiting for a scoliosis operation. His family were given an excuse of Covid for months and months. It is not right or fair. Hopefully he will get the operation he needs. Many people's operations were cancelled and treatments were delayed. People were cut off from seeing their loved ones at the end of life. This will simmer up. We will see the devastating consequences of Covid. Budgets like this have to go some way in looking at alleviating the devastation left by Covid and trying to repair society.
I am not the Minister for Finance and everyone can relay the statistics but it has been a progressive budget. There is €520 million in income tax reductions. It is not a huge amount but it goes some way towards giving people extra disposable income. As some of my colleagues have noted, the hospitality sector has been given a commitment that the VAT rate will remain at 9% until the end of August, which is welcome. It would like to see the VAT rate remain in the longer term. We have seen an increase in the second band of USC. We saw a minimal increase in the minimum wage. As a House, we need to do more to ensure that there is a living wage for people on low incomes. We have seen allowances made for people working from home, who can offset 30% of their utility bill against their income tax. There is a €600 million fund for the Department of Social Protection. There has been an increase of €5 for the old age pension and jobseekers' payments and in the fuel allowance. Many people who we come across do not qualify for the fuel allowance, so I have advocated for an increase in the threshold to qualify for the fuel allowance. We did not see that in this budget but I hope it will be looked at again.
My colleague, Senator Conway, outlined the substantial investment in women's health. There is a €31 million investment in women's health initiatives, with free contraception for 17 to 25-year-olds. We have seen a significant increase in funding for the national maternity strategy, which includes funding for the recruitment of obstetricians, doctors and midwives. We have seen endometriosis clinics open. Many of my colleagues in the Seanad have done tremendous work in advocating for those with endometriosis, including Senators Chambers, McGreehan and Clifford-Lee. I also have advocated for those with endometriosis. We have seen perinatal genetics clinics open. There is significant investment in the sexual assault treatment unit, SATU, in the Rotunda, which does amazing work to support those who have been sexually assaulted. We also have seen menopause clinics opening and have started to address period poverty.
I was hoping to see more investment in therapies for children with additional needs. I was disappointed that we did not see that. Like many of us have said today, we will see a health budget in December and hopefully we will see a large portion of money put towards additional services for those with additional needs. The waiting lists for assessment for occupational therapy, speech and language and psychology are outrageous. Even once people are assessed and approved for treatment, they may only get two or three treatments in a year. It is shocking. Hopefully the health budget will address some of that.
Cuirim fáilte roimh an Aire Stáit. The Irish Fiscal Advisory Council described this budget as a prudent path. That is probably what we need to see today. We acknowledge the many challenges that we face as a society. This morning on the Order of Business, I commented that our budgetary process should be amended. I said that in three contexts. Almost everything that was in yesterday's budget has been well promulgated. Budgetary oversight and our role as Members of the Oireachtas must be amended for future budgets in order that we can look at the issues that should be addressed in the budget, whether gender-proofing or climate change and so on. The list is endless. We as Members of the Oireachtas deserve and should have a better role in that. As referred to by Senator Ruane, there is a need to look at how our budget can help to empower and enhance people's lives. The fundamental point missed by some in this House is that what the Government does is for people, an gnáthduine, as I say, the citizen. That is why the contributions of Senator Ruane and others are to be commended, because they are sincere. Some members of the Opposition fail to account for their own budgetary provision of €3.25 billion and I ask Sinn Féin, in particular, why it has not accounted for that in its budget. Why was it underestimated? The reality is, whether we like it or not, that Sinn Féin is about high taxes and high spending. It is an anti-jobs and anti-worker party, despite all its rhetoric.
In his contribution in the Dáil this morning, the Taoiseach observed that one budget does not solve everything. While this budget is the largest income support measure ever given, there needs to be a fundamental debate for us as a society about people. We have become obsessed with everybody being funnelled through third level education. I would like to have a debate in the House in future about the apprenticeship model, how we can value work and what work means in the future.
I will comment on air connectivity. I welcome the regional airports programme and that Cork Airport is included in it. This budget recognises the importance of our aviation sector. This is recalibration of our spending as a Government as we emerge from Covid-19. I was going to say post Covid-19 but we will be living with Covid for a while. We are moving towards a carbon-neutral world. That requires the national development plan to be debated in the House and the Our Rural Future policy document, which is in the portfolio of the Minister, Deputy Humphreys, should be discussed too. Any recalibration of our spending or a reconfiguration of the national development plan towards a more sustainable model of delivery of a low-carbon, climate-resilient society requires a debate, education, empowerment and information. We are emerging from Covid-19 and, looking at our roads, the traffic is back. What does it mean for the person living in Tirelton or Kilmichael who does not have direct access to a bus route to get to Cork city? How do we create that sustainable, friendly model for everybody?The important point for me is that this budget is about people and about promoting an alternative. It has also ensured that in the case of Cork, Cork Airport will be included in the regional airports programme. It should receive fair funding from that.
I hope the Leader will facilitate a debate in the future on our budgetary process? It is important that we do that as Members of the Houses of the Oireachtas.
Go raibh maith agat, Leas Cathaoirleach, agus gabhaim buíochas roimh an t-Aire Stáit, an Teachta Ossian Smyth. Beidh mé críochnaithe i gceann cúig nóiméad.
I will not going to stand here and say that €2 was given here, €5 was given there and €30 was given somewhere else. However, in my view, considering that we are not yet out of Covid-19, this is an extraordinary budget. This view does not just come from me. I rang a number of people in my part of the country last night and this morning to get an independent analysis. The general consensus was that this was a good budget. We still have to deal with Covid-19, which makes the situation more difficult for the Government. The level of spending in the budget and the way the money has been distributed are extraordinary given the times we live in. It is only right that people who need assistance and help get support.
I will deal with a couple of myths or arguments that have been put forward. Everybody is entitled to make an argument. If I were in opposition, I would probably make some of the comments Opposition Senators have made. I respect everybody's comments, and I listen to them. While I might necessarily agree with people, I listen to them. There is a myth that nothing is being done about housing. More than €4 billion in capital funding for housing has been committed in Housing for All. Of this, €2.6 billion will come from the Exchequer and €1.5 billion from the Land Development Agency, LDA, and Housing Finance Agency, HFA. Current funding for housing stands at €1.4 billion. Regardless of where they stand in politics, all fair-minded people will agree that this is a joint step forward in trying to solve what is probably the biggest problem in society at moment.
I am sure everybody, from the top of the Government down to the councillor at local level and members of the public, wants to see housing solved. Nobody in this Chamber, no matter which party he or she represents or in the Dáil, for that matter, is going to fix housing overnight. That is simply not going to happen. More schemes are up and running and within months, we will see small improvements occurring to stabilise the situation of people in rental accommodation and allow people to get their own homes. I firmly and honestly believe that will become a reality for quite a number of people in the coming years because the Government is committed to the area of housing.
On health, the budget for health is more than €22 billion, which is a lot of money. Free GP care will be extended to six and seven year-olds. The drug payment scheme threshold will be lowered to €100. An additional €105 million will be allocated to disability services. An additional €37 million will be provided to fund the expansion of mental health services. I received a note from Ms Fiona Coyle, the CEO of Mental Health Reform, in which she states that the Government commitment to €37 million in budget 2022 recognises the need to address the ongoing mental health pandemic. People in the mental health sector are speaking up and telling us this is what is needed and that it is good.
As Senator Ardagh said, a package of €31 million will be allocated to women’s health. Budget 2022 allocates €8.6 million to the national maternity strategy and an additional €8 million for the National Ambulance Service. These measures will all help people. Like everyone else, I recognise that there are issues with waiting lists. It is in everybody's interest to tackle them.
My time is limited so in the short time left I will refer to agriculture. It is a myth - misinformation - that the budget for agriculture was cut. It was not cut. A sum of €250 million has been secured for the areas of natural constraints, ANC, scheme and €40 million has been secured for the low carbon agri-environment scheme, GLAS, which will benefit 43,000 farmers. An amount of €40 million has been provided for the beef data genomics programme, BDGP, and a further €40 million for the beef environmental efficiency programme, BEEP. The sheep welfare scheme has been allocated €19 million, an increase of €2 million on last year. An additional €60 million has been provided for organic farming and €80 million is available for the target agricultural modernisation scheme, TAMS. It is important to make those points in order that people clearly understand that the budget for agriculture was not cut.
I thank Senator Lombard. People have used the phrase "missed opportunity" a lot to describe this budget. It seems like a cliché, but it is true. This was an unusual budget and we had an unusual opportunity. This was the budget in which the fiscal rules and constraints that have often blocked us from long-term thinking and investment were suspended. As Senator Ardagh said, this was done in recognition that the pandemic exposed that our public services, national infrastructure and social fabric had been strained by years of austerity and the need for states to invest in order to become more resilient. That is why the fiscal rules on limiting expenditure were suspended. It is why we have recovery and resilience funding. However, it is clear that this Government has chosen to act as if the fiscal rules are still in place. We know that the Minister for Finance, Deputy Paschal Donohoe, is a strong advocate of bringing them back as quickly as possible at EU level.
We had a window of opportunity. The effort seems to have been put into closing it, rather than seizing it. One example of why that is bad economics and bad spending is the fact that we still have 2,600 houses being provided for by leasing and leasing schemes. The Department of Housing, Local Government and Heritage stated it only uses these leasing schemes because it is forced to do so by the fiscal rules on the government balance sheet. Those rules do not apply at the moment, yet in this budget €1.37 billion is going towards 2,600 houses in leasing schemes. This ties us to a bad deal for the State in the long run. That is not prudent. Applying licks of paint when we need to deal with dry rot or create structural transformation is also not prudent.
On the recovery and resilience funding, which is linked to this, €120 million on retrofitting is a pittance. To be clear, we need massive changes on this. We know energy costs will go up because they must go up. They have been subsidised globally and the costs of oil and gas are being felt across the world in climate change. However, retrofitting needs to be funded. The Government had resilience money from Europe for public investment and it was not alone in that regard. However, it chose to direct that money into the banks to encourage them to give loans for retrofitting, rather than delivering direct retrofitting. The Government is using the Department of the Environment, Climate and Communications as an example of its retrofitting of public buildings.
The Government should not have produced this budget. It should have piloted measures that we know work. This was a budget to be used not for incremental schemes but for transformation. Measures that cost us money for no reason are still in the budget, including the schemes for special assignee employees which offer massive tax breaks. We randomly decided that we do not need Ulster Bank to pay the bank levy next year because it is leaving Ireland. Are we rewarding Ulster Bank for leaving the State and closing branches? Those expenditure choices are not being questioned, yet the Government has taken a nickel-and-dime approach to things we actually need.
I hate to correct Senator Eugene Murphy, but Mental Health Reform has made clear that we need €85 million in investment. While €37 million is a start-----
An €85 million investment is particularly needed in the light of the Covid crisis, whenThe Lancethas said mental health issues and anxiety disorders are at the highest level they have ever been globally.
I welcome the proposals for budgetary reform but I note gender and equality proofing of budgets was a reform we were promised six years ago. The system was being piloted over two or three years and it has now vanished. Where is the gender and equality proofing and the process for proofing of this budget? If it was to be replaced by wellness indicators, they are not even mentioned this year.
I would appreciate clarity from the Minister of State that overseas development aid is separate from our global climate funding commitments under the green climate fund - the €100 billion that the developed world owes to developing countries. In the Minister for Public Expenditure and Reform’s speech, he seemed to suggest they may be the same thing.
I welcome the allocation of nearly €90 billion in this budget, which is a very significant sum. It will do an awful lot across the three major areas we need to look at, namely, health, housing and climate action. These are the three principal issues on which the Government has worked hard towards getting solutions.
For the agricultural community, the real budget they are looking for is probably in regard to what the carbon budget is going to be in the next few months. We should take into consideration that over 5,000 people were at a march in Cork last Friday night, with families and everyone from three-year-olds up to grandmothers. The farming community are very concerned about where that carbon budget is going. It is a real issue for the community.
On the agricultural front, €1 million was budgeted last year for the food ombudsman and €4 million has been provided this year but we have no legislation and it is not even on the legislative programme for this Dáil term. We need clarity on when the Government is going to put legislation on the Statute Book in regard to the food ombudsman, which is the game changer. We have had funding for it in two budgets but we have no legislation.
I seek clarity in regard to the flat rate of VAT on agricultural products, which has decreased by 0.1%, as that will literally take €7 million out of the agriculture budget. What are the macroeconomics behind that equation? I sought clarity today and I got very little response.
The Minister of State might also bring clarity to the sports capital grants and where they are going to lie in the budget. There is talk of a slight increase. Will money be used that has not been used previously, in other words, moneys that have not been claimed? We must ensure we have a significant budget when it comes to sports capital grants.
I hope the Finance Bill will give us clarity on the zoned land initiative, where we are putting in place a 3% tax. Will the Minister of State clarify how that will work where significant services have not been put in place, for example, Irish Water services for water and sewerage? Will the tax be applicable in that scenario or when a county development plan is drafted and there is a development boundary, not zoned land, but where it is still land for development? What is the definition of zoned land going to be? I realise the Chair is caught for time so I will leave my time to other speakers.
I welcome yesterday's budget, which shows significant promise. It is a budget that has to be viewed in the round and we cannot look at any one individual measure and say that, in and of itself, it is significant. However, when we look at all of the measures together, it does add up to a very significant package. We are making modest tax and welfare changes to support those who are working, those who cannot work and those who have finished their working life. We have an additional 800 gardaí and 400 civilian staff to make our streets safer, additional support for remote working and support for carers, who provide a vital service. There are more supports for businesses, especially the retention and extension of the employment wage subsidy scheme, as well as more supports for primary, secondary and further education, including the extension of maintenance grants and the clothing and footwear allowance. There is more support for families in terms of childcare and it is an area in which other speakers have said we need to do more. We are also supporting young people in terms of contraceptives and half-price travel, which is a very welcome move. We have increased investment in health. It is a very significant package of supports across the board.
I have to give a wry smile when I hear representatives from Sinn Féin in particular talking about their fully costed alternative. If we look at the housing section, they promise in their alternative budget to deliver 20,000 public homes at a cost of €3 billion. That is €150,000 per house, despite their housing spokesperson having received a response to a parliamentary question from the Minister for Housing, Local Government and Heritage stating that the average cost of providing a social home in Ireland is €240,000. A primary school child could tell us that if we multiply that, it is €4.8 billion. Where is the black hole of €1.8 billion in the Sinn Féin alternative budget, which they claim is fully costed? A primary school child could tell us it does not add up. It does not even contain support in terms of help-to-buy for first-time buyers to get their foot on the ladder, which is critical and has rightly been extended by this Government. I look forward to hearing representatives from the main Opposition party explaining where the money is.
I thank Senator Cummins for sharing his time. I welcome the Minister of State to the House. Senator Ruane raised a very important issue and a very important aspect of the budget. I share Senator Ruane's view and I support her on this point. This needs resources and I hope it is an area that will be looked at in the future as it is very important.
I want to raise two aspects. I cannot let the opportunity go without raising the issue of the closure of bank branches by Bank of Ireland, three of which were in County Mayo, at Swinford, Charlestown and Ballyhaunis. Ballyhaunis is a town of more than 2,000 population and it now has no bank. In that town, there is the second largest chicken processor in the country, a large meat plant, several medium-size engineering companies, sand and gravel quarries and some of the biggest plant operators in the country, in addition to pubs, restaurants and other small businesses. This is a town that has opened its doors to immigrants yet the town has no bank. I ask the Minister of State to look at this. We are now asking the post office service to take up the slack but it does not have the capacity to provide a service to those types of business. It is an area that should be looked at.
I also ask the Minister of State to look at the Ireland Strategic Investment Fund, which is money borrowed by the Government at cheap rates to build the economy, build houses and fund small builders, developers and small businesses at low interest rates. I am being told that the people availing of those loans are being fleeced by legal charges, not by the developers’ or the builders’ own legal people, but by legal people representing the banks. In some cases, it is costing up to 10%. Therefore, where a person is borrowing €1 million, which is not a lot in regard to developing housing or a small business, 10% of it goes in legal charges to the legal people representing the banks. It is criminal. If we look at this situation, the builder or developer only has one person looking after the legal aspect but, at the banks’ end, there is a whole raft of legal people looking after it, mostly from the big four. This is putting off people from borrowing and developing, particularly if 10% of the money they are trying to draw down is going on legal fees.I thank the Acting Chairperson, Senator Seery Kearney, for the latitude.
I thank all the Members who made contributions. I found them interesting and informative and I will try and address some of them for a start.
Starting with Senator Casey. I agree it is important to have a credible economic policy. One of the reasons for that is that if we do not have it we cannot borrow on international markets and we cannot get the money that we need at the price that we need to supply the services that we need when we are in a difficult situation, as we have been for the past two years. It is also true that a lot of work was done during the preparation of the budget to see where the redistribution of the money would go, who would be better off as a result of the budget, to divide the population into ten sections or deciles, and to see for each tenth of the population, from the poorest to the richest, who would do best. It is true, and the ESRI will verify this, that the bottom three deciles, the poorest 30% of society, are the ones who have seen the largest increase in their net income as a result of the changes to tax and social protection.
The social protection budget has been increased by €550 million. It is, I believe, the largest social protection package in the history of the State. It is three times the amount of the carbon tax increase. It is not only on fuel allowance. It is also on the living alone allowance, carer's allowance, disability allowance and right across the spectrum. It will be felt by many people.
Senator Boyhan praised the budget. The Senator said a lot of work had gone into it and he acknowledged that there was progress in that regard.
Similar to Senator Casey, Senator Kyne pointed out that the national reputation has been sustained and that this puts us in a situation where we are able to maintain our borrowing.
In response to Senator Gavan on the point of the carbon tax, I did look at the Sinn Féin alternative budget and I was pleased to see that Sinn Féin is not proposing to abolish carbon tax. I am also pleased that Sinn Féin supported the climate Act, made constructive contributions at Oireachtas committee level and ultimately supported the goal of reaching a 50% reduction in emissions. For all the details of political insults, slagging, etc., at the core there is a consensus across all parties, including the major Opposition party, that climate change is real, that it is caused by humans and that we need to take massive actions all across society to deal with it. I welcome that constructive opposition.
Senator Martin pointed out that €9 out of every €10 being spent in this budget is going on improving public services. I suppose it is another way of saying that only one tenth of this is going on income tax relief. Income tax reductions would not have been my first choice for how to spend money in a budget. It is only a tenth of it. We did agree to it in the programme for Government and it is true that we have inflation at present. Inflation means that if we do not do anything on income tax, working people will get poorer. It was important to provide an enormous package of social welfare increases but there was also a very large package for income tax reductions.
I hear some people saying that it was spread too thinly - that seems to be an emerging narrative - but it was targeted. Young people did well out of this budget and women's health did well out of this budget. Older people suffering from energy poverty also did well out of this budget. There was targeting.
A number of Senators welcomed the youth travel card and asked if it could be extended and if it applied to somebody who is 17. I understand there are child fares as well. In general, the whole fare structure of public transport needs to be simplified. It is being reviewed. It needs to be straightforward, simple and rational. Absolutely, there is room for reform across the board. It will attract more people on to public transport.
As Senators have said, the number of people who are driving has come back to where it was previously and yet public transport has not. People have a residual fear of being inside a bus or they have changed their habit over the period of time. We need to take some actions to get people to change back and to come back.
Senator Ruane made a heartfelt contribution and talked about the effect on drug treatment and in deprived areas or areas where people lost hope for years. Senator Ruane is absolutely right. A budget is about allocating money. It is about slicing up a pie. It is about cash but one also has to think of the effect from previous budgets. That is what performance budgeting is about. If somebody comes to you and asks if he or she can have an extra €50 million for whatever, you have to ask what that person has been doing last year. Performance budgeting is a part of the budgeting process. One needs to go back and see what is the effect, are we missing certain areas and are there places that are not getting this. I can say there is €550 million extra for social protection or there is a €22 billion budget for health but if it is not reaching the people who need it, that is a problem.
One also needs equality budgeting. One needs to make sure that everybody is being reached and not just certain groups that are favoured in society. There is a whole process around equality budgeting. There are reports that will be published in the spring, etc., on that. It is an annual process. It is to make sure that people are not left out. I am happy to talk to Senator Ruane outside of the Chamber on any of those issues, to engage with her or to invite her to take part in the budgeting process if she thinks that things could be done better or that there are things that are wrong in it or that are being missed. The Senator knows that is not by intention. For example, the mental health budget has been increased a lot, this year and last year, but what is the root cause of long-term addiction problems?
Senator Crowe asked about the VAT rate on hospitality. It has been extended and can it extended further. There will be a lot of lobbying from the Restaurant Association of Ireland and from the hotel sector, etc., on that issue. That sector has been greatly damaged during the pandemic. No decision has been made on that.
Senator Conway asked what we can do for additional capacity on waiting lists. Waiting lists, after the pandemic, are emerging as the primary concern in healthcare after Covid. A lot of it is caused by Covid. We already had a problem but it was made worse because many people could not attend their appointments for whatever reason and the HSE was distracted by the pandemic. I welcome the significant increase in funding to tackle waiting lists. We will see progress on that issue.
There was a question about the fairness or equality of public transport fares across the country. Why does it cost a different amount to travel between Ennis and Limerick than between Maynooth and Dublin when they are similar distances? This comes back to rationalising the fare structure and making sure that it is fair, simple and straightforward.
The details of the contraception roll-out were requested. I can get those for Senator Conway. I would say to any Member that if he or she contacts my office, I will help him or her. If a Senator wants to meet me in person I will, of course, always meet anybody.
Senator Ardagh is somebody who I met before the election last year when I was meeting with a group of parents with special needs children to advocate for their education. The Senator can see in this budget that there is a huge allocation towards new special needs assistants, SNAs, towards special needs teachers and towards the capital for special classes. What really came to the fore at the start of last year was that, particularly in certain areas of the country, we are under provided for when it comes to special needs education. At the start of the year, after the Covid wave around Christmas time, special needs education came into focus again. There is a huge body of work being done to tackle it. I trust in the efforts of the Minister of State, Deputy Madigan, in that regard.
Can I keep going?
Senator Cummins asked about the closure of banks. An Post has stepped in and said that it will run services for one of the major banks. An Post reports to the Minister of State at the Department of the Environment, Climate and Communications, Deputy Naughton. She has been dealing with An Post management and workers and can inform the Senator on that matter.Senator Lombard also asked about the hospitality VAT rate, which is the same thing, and about what happens to the unspent sports capital grants. I will have to come back to him on that one. He also wished to know the definition of zoned land that is serviced. That is actually something I also want to find out because it is absolutely key. The existing vacant site levy has not worked. It does not raise money. People say it was at a 7% rate but it was 7% of nothing. I am reading it collected €21,000. We need a proper, effective vacant land tax that applies at any rate and brings in money and has the effect of behavioural change.
The core expenditure funding set aside is €80.2 billion. That provides resources to deliver public services and infrastructure that can provide opportunities for children and a better quality of life. In committing to this scale of expenditure there is an ongoing requirement to ensure value for money in the delivery of services and infrastructure projects and to ensure expenditure is having a positive impact on the lives of our people. Achieving this aim will require a focus on disciplined, accountable budget execution and delivery and ongoing reform to our public expenditure budgetary process. To maximise the impact of every euro invested as part of the new NDP, enhanced project and programme governance is being implemented and particular focus will continue to be placed on improving the delivery of investment. This will mean increasing the efficiency with which investment is delivered, while achieving greater value for money within the budget that is available. Increasing construction sector capacity, innovation and productivity will all be key to ensuring the successful delivery of the NDP. Work is ongoing in these areas to communicate with industry partners to secure the skills needed, particularly in relation to apprenticeships, and through forums such as the construction sector group and its innovation and digital adoption team. These will drive productivity improvements across the sector.
Challenges remain as we deal with recovery from the pandemic and manage the impact of Brexit. Funding set aside for Covid-19 measures and available from the Brexit adjustment reserve provide the resources to address these challenges. The steady growth in expenditure planned over the medium term provides funding to improve our public services infrastructure while ensuring we do so in a fiscally sustainable manner. Just from talking to people I feel this is a good budget. It is broad, it is prudent, it reaches a number of groups that really needed attention and it provides for people who are working and those on welfare.