As I said in my opening statement before lunch, many people are very disappointed with this budget. They had great expectations, given the many opportunities open to the Minister for Finance in preparing the 1994 Budget. There was a great build-up to it and the Minister for Finance and other Ministers made good use of the PR opportunities available to point out that the money that would be saved would be used to benefit the people in terms of tax reform.
However, as the days pass and the budget is analysed, it can be seen there are many "sleepers", as they are sometimes described. Already difficulties have been caused by the residential property tax. Another proposal in the budget which has not yet hit the headlines but will — I am glad the Minister of State at the Department of Social Welfare is present in the House — is the proposal to attack the incomes of widows. This is going to come back on the Government.
It is not just a question of the Government selecting one of the most vulnerable groups in society to attack — the Minister referred to some of their benefits as perks — it is an attack on the entire system of social insurance which people pay into. Before I became a Member of this House I worked in industry and paid into the social insurance fund. I did so in the knowledge that at a certain stage I would be able to benefit from these contributions in terms of pension rights and so on. People understand that if one pays into this fund they will receive benefits and that they will not be attacked.
In attacking the contributory widow's pension in the budget the Government has undermined the entire system. While people accept that the various allowances, such as unemployment assistance, will change from time to time, they did not expect when they started to pay contributions to the social insurance fund that their benefits would be attacked by the Government. As time goes by, people will come to realise that they will be affected. I realise that existing recipients of widow's pension will not be affected, but sooner rather than later all widows and widowers will have their contributory pensions means tested. It is reprehensible for the Government to introduce on the one hand a widower's pension — this is to be welcomed as there must be equality on these issues — but on the other to place the burden on widows.
The Government has driven a wedge between widows and widowers. Widows who have been affected will deduce that they are being hit because the Government decided to bring in pensions for widowers. It is the most subversive proposal in this budget with regard to our system of social insurance and, as time goes on, the Minister and her colleagues in Cabinet will begin to realise what they have done to the social insurance system. It is difficult enough to make people recognise how important it is to prepare for retirement and old age. Now they will feel that if they make any provision and are thrifty and careful they will be hit. People will be frightened by this measure. Men will worry because many women outlive their husbands and, therefore, there are more widows than widowers. The Minister has not heard the end of that element of the budget.
I listened to a series of speeches from Government backbenchers. However, I have not heard any since the flurry of parliamentary party meetings so even as I speak a new bombshell could be dropped by some Government backbenchers who pretend that they were not really aware of what they were voting for on budget night and that it is their right now to cherry-pick between the bits they like and the bits they do not like. The Labour Party and Fianna Fáil formed a Government with a majority of over 30 and they must take what goes with that. They cannot have it both ways. They cannot have a group of Fianna Fáil backbenchers demanding a meeting with Minister Ahern to negotiate changes and, on the other hand, take all the perks of office.
I am glad the Government is beginning to realise the mistakes made in the budget, but this is not the right way to do business. At the very least it is incompetent to start renegotiating the budget when the ink is hardly dry on the page. As far as this side of the House is concerned this debate is a bit of a farce because we do not know from day-to-day what behind-the-scenes deals might be going on and what changes might be made. We are told we will see it all in the Finance Bill, but that will not be out for a number of weeks. Maybe it is the Government's hope that opposition to various elements of the budget will die. Let the Minister be warned, it will not die and, as some of the elements of this budget take hold and affect people's wage packets, many of the issues will come back to haunt the Government.
There were high expectations of this budget. Every 1 per cent decrease in international interest rates gave us a saving on our repayments of £285 million. This budget did not give back even 1 per cent of a drop in interest rates. The total package given back in the budget is £194 million when all its elements are taken into account.
Of course there are elements in the budget with which I do not disagree. I am glad that widowers are getting pensions. I am glad to see extra money going to a number of groups and I am glad that some areas have been singled out and given money in he budget. We are disappointed in the lack of an overall thrust in view of the fact that this Government, more than any other for many years, had the opportunity to make relevant changes in the taxation system. It had the money, the flexibility and the majority — it was not on a knife edge as many Government's have been for the last ten years. The Government could have got anything through and this was exactly the year when there should have been fundamental changes in tax. However, all the Government has done is tinker and some of that tinkering is very damaging.
When the history of this time is written Minister Smith will be remembered as the Minister for potholes, although he did have a competitior; Minister Pádraig Flynn was known for a while as the Minsiter for potholes. However, they were baby potholes. Now we have fathers and mothers of potholes on our roads and I am not talking about roads which do not have heavy traffic. Every road needs attention bar, perhaps, some of the new main roads. Everywhere I go in my constituency there are potholes, and ditches collapsing. The reason is that for years we have not looked after our county roads. Because of the cutback in the rate support grant county councils have been allowing things like clearing and filling in ditches to go by the board. As a result water gathers on the roads so that now you have almost to be a stunt driver to make your way along some of them. You must have a very good lock on steering to manoeuvre round potholes. I am not talking about Cavan; I am talking about places like Rush, Lusk, Balbriggan, Malahide and Swords, towns on the outskirts of this city where the daily traffic movements are double and three times the traffic movements on some of our national primary routes.
On the Malahide Road coming out from Dublin there is a daily traffic count of over 12,000 vehicles. That is an enormous level of traffic. Many of our national primary routes would not have that level of traffic in a week, let alone in a day, and yet we cannot convince the Minister for potholes, Deputy Smith, that it is his responsibility. In the budget £15 million was allocated from the tax amnesty. This was an opportunity for the Minister to say that for every £1 spent on a road beginning to deteriorate another £10 is saved. If roads are allowed to deteriorate badly a decent job will cost ten times more than it would if councils were allowed to cut out bad bits and redo them instead of throwing in a bucket of tarmacadam and tamping it down with the back of a spade which most of the councils are now forced to do. They just about manage to keep a hole filled until the next shower of rain. The Minister spoke about the large sums of money he spent on the roads, but if he is spending that kind of money it is not effective and he must take the blame for the condition of roads all over the country.
The budget may be good for some people but not for those who pay a mortgage and VHI, own a house worth over £75,000, drive a car and have a frequent drink, a frequent — or even a casual — smoke. If you are not a widow and do not do all those other things there are some good elements in the budget. I do not like using a word like "mean" about a budget because I do not think politicians necessarily set out to be mean. However, elements of this budget are mean and that is the only way I can describe them. It is a direct attack on the perceived wealth of the middle income earners. I do not know if that is the result of Labour's participation in Government. The message, loud and clear, of the Tánaiste the other day was that this is a joint budget and that one side cannot be sniping at the other. In other words he was saying that people should put up or shut up. This budget was prepared by a Coalition Cabinet, but it has mean elements and attacks middle class people. I am not talking about people who have vast wealth.
There is a perception in the Labour Party that if people own their houses, pay health insurance, have two cars to allow the husband to travel to work and the wife to take the children to school and, also, perhaps, go on a continental holiday every two or three years that they are very wealthy. I listened to a Fianna Fáil backbencher earlier today make a plea for educational grants for rural people. He instanced a typical person earning £27,000 per annum, who would be over the income limit in respect of the property tax if his or her house is valued at more than £75,000. More than likely that person pays PRSI, a mortgage and so on. The Deputy gave a breakdown of the income to make a case for a third level grant for his client who, he stated, had only £80 or £90 per week to spend after paying the bills. I suggested to the Deputy he ought to have shown those figures to the Minister for Finance when he was preparing his budget and arranging to squeeze the 350,000 people in the so-called well-off middle income group. Those people, many of whom live in the suburbs of Dublin, Cork, Galway and Wexford, provide for themselves and their families, but the Minister has gone out of his way to deprive them of their last bit of self-reliance, self-provision and effort. They cannot take any more.
People living in areas perceived to be good middle class areas do not have a spare pound to give to collections in their areas because they are on such a tight budget providing for themselves, paying for their health care, etc. They pay for their children's dental treatment, school outings, third level education and so on. They are always just above the limit in respect of third level grants and medical cards and receive very little from the State. Many of them live in hope of getting free travel if they live long enough but, of course, some of them may end up widowed and suffer in another manner. That is all they hope to get for what they have put into society.
I am not talking merely about middle income PAYE families, but about many middle income self-employed people who create one or two jobs. Yesterday I received a letter from a constituent who runs a small nursery business. She employs her daughter and another young relative who might otherwise be on the dole. Last year her business was severely affected by bad weather and all her stocks were destroyed. She has practically nothing left from her investment and needs a little assistance to maintain her business. She has paid every step of the way and now her business will go down the Swanee. She is not entitled to any assistance to make up for that natural disaster because she is outside the limit which applies to schemes for other horticulturists. I am at a loss as to where to advise her to go for assistance to keep her business operational. It will be by the inexorable effort of such small businesses — but which this budget has hit hardest — that we will make inroads into our high unemployment level.
We must be realistic about attracting large firms here which will create 500 or 1,000 jobs in certain areas. Recently I visited Taiwan with the chairman of the Joint Committee on Foreign Affairs, Deputy Lenihan. It was a very interesting exercise. They have experienced an economic miracle there. For example, 20 years ago their per capita income was $500 per head compared with $10,500 today. They have a good work ethic and people there work very hard. They also face many problems. The country has suffered severe environmental damage which they are trying to rectify. I spoke to many owners of small businesses employing approximately ten people who told me their government gives them an opportunity to get on their feet. It does not hound them about owing £185.30 in VAT. Regulations are set down and new businesses are allowed an opportunity to reinvest the money they make in their first few years of business. In that way, businesses can expand. In contrast, when people here start a business we batter them down with a host of regulations.
People often ask why big businesses who get into trouble have been allowed to run up such high bills in tax, PRSI and so on, to the State. They wonder how they get away with it to the point where the amount owing is frequently millions of pounds, while a small business person running a shop on a main street is hounded each month by somebody knocking on the door looking for payments. The system is inequitable and the drift of this budget, the second introduced by this Government, is to squeeze those who the Labour Party, and perhaps Fianna Fáil, believe are wealthy. It has been the Labour Party's line for a long time that those people are not paying their fair share, but if they revolt the result will be serious. If they are squeezed to the limit and can take no more, they will react.
Middle income families are willing to pay their fair share but they would like to see value and effectiveness for the money they pay. They are not getting value for money at present and that is why the Minister is getting the backlash about the proposed residential property tax charges. They do not take into account the fact that in general the people it will affect do not own their houses; the banks and building societies own them. I recently heard a person on a radio programme say that the bills should be sent to the banks and building societies because they own most of the houses in this city and in other cities and towns around the country. Many people with their own houses will die before they have paid for them and only if a mortgage protection policy is taken out will the children inherit a non-encumbered house.
In the past few weeks we have had a débâcle in respect of the Fingal and South Dublin County Councils. In his budget speech the Minister referred to the new Dublin councils and stated:
...this marks a quite historic change as these are the first new county councils established since the last century. The new arrangements will ensure more relevant and accessible local government in the Dublin area with a stronger focus on the needs of the areas served.
Those are wonderful words, but we did not get adequate finance to deal with the huge start-up costs of the new councils. We received £1 million to cover the start-up costs of the three new county councils after inheriting a debt of £21 to £22 million from the former county council. That is like tying a heavy weight around the neck of a baby and expecting it to learn to walk, and carry the weight wherever it goes. Members of Fingal Council and South Dublin Council were forced to decide whether to allow democracy to die in the counties and an individual to do the Minister's bidding, or to protect people's rights in a democracy by way of council members remaining as the elected representatives.
The Minister for the Environment comes in here and adopts a parish priest image. He raises his hands, his voice softens, he nods to Deputies and gives a little homily as if he were in the pulpit; but that is not good enough. He is responsible for ensuring that local government is local. At a time when he knew that councils would be forced into making either drastic cuts or introducing charges, he sat at the Cabinet table and allowed the Minister for Finance, Deputy Ahern, through the extension of the residential property tax, to raid the money a council might be able to collect from people to enable it provide better local services.
I hope the public recognises who is to blame for the condition of local services. The blame lies with the shenanigans of Fianna Fáil in 1985, when it abolished charges at a time when people had become accustomed to them, and the games it played during the past five to six years when it was responsible for Dublin county. During that time it raided development levy funds, which were properly used to provide services for people, but not for the services for which it had been hoped to use them. The Government might consider matters are difficult now because of the introduction of the residential property tax, but they should beware of the muster of widows, the unemployed and the many other groups who have been meanly attacked in the budget. As they say in the best parlance, "You ain't seen nothing yet, Minister".
